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PSI ENERGY, INC.
AND
FIFTH THIRD BANK,
Trustee
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Fifth Supplemental Indenture
Dated as of December 15, 1998
To
Indenture
Dated as of November 15, 1996
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6% Putable/Callable Notes Due December 14,
2016, Putable/Callable December 14, 2001
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NYDOCS01/573375 8
FIFTH SUPPLEMENTAL INDENTURE, dated as of December 15, 1998 (this "Fifth
Supplemental Indenture"), between PSI Energy, Inc., a corporation duly organized
and existing under the laws of the State of Indiana (herein called the
"Company"), having its principal office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, and Fifth Third Bank, an Ohio banking corporation, as Trustee
(herein called the "Trustee") under the Indenture dated as of November 15, 1996
between the Company and the Trustee (the "Original Indenture").
Recitals of the Company
The Company has executed and delivered the Original 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 in the Indenture provided.
Pursuant to the terms of the Original Indenture, the Company desires to
provide for the establishment of a new series of its Securities to be known as
its 6% Putable/Callable Notes due December 14, 2016, Putable/Callable December
14, 2001 (herein called the "Notes"), in this Fifth Supplemental Indenture.
All things necessary to make this Fifth Supplemental Indenture a valid
agreement of the Company have been done.
Now, Therefore, This Fifth Supplemental Indenture Witnesseth:
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Notes, as follows:
ARTICLE ONE
DEFINED TERMS
Section 101. Defined Terms. Except as otherwise expressly provided in this
Fifth Supplemental Indenture or in the form of Note or otherwise clearly
required by the context hereof or thereof, all capitalized terms used and not
defined herein or in said form of Note that are defined in the Original
Indenture shall have the meanings assigned to them in the Original Indenture.
The Original Indenture, as supplemented from time to time, including by this
Fifth Supplemental Indenture, is hereafter referred to as the "Indenture". For
all purposes of this Fifth Supplemental Indenture:
"Call Price" means a price equal to 100% of the principal amount of the
Notes.
"Closing Date" means December 15, 1998.
"Coupon Reset Date" means December 14, 2001.
"Exchange Notes" means any securities of the Company containing terms
identical to the Notes (except that such Exchange Notes shall be registered
under the Securities Act) that are issued and exchanged for the Notes pursuant
to the Registration Rights Agreement and the Indenture.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Market Disruption Event" means any of the following in the reasonable
judgment of the Calculation Agent and the Company: (i) a suspension or material
limitation in trading in securities generally on the New York Stock Exchange or
the establishment of minimum prices on such exchange; (ii) a general moratorium
on commercial banking activities declared by either U.S. federal or New York
State authorities; (iii) a material adverse change in the existing financial,
political or economic conditions in the United States; (iv) an outbreak or
escalation of major hostilities involving the United States, or the declaration
of a national emergency or war by the United States; or (v) a material
disruption of the U.S. government securities market, U.S. corporate bond market,
or U.S. federal wire system.
"Non-U.S. Person" means a person who is not a U.S. Person (as defined in
Regulation S).
"Notes" means any of the securities, as defined in the second paragraph of
the recitals hereof, that are authenticated and delivered under the Indenture.
For all purposes of the Indenture, the term "Notes" shall include the Notes
initially issued on the Closing Date, any Exchange Notes to be issued and
exchanged for any Notes pursuant to the Registration Rights Agreement and the
Indenture and any other Notes issued after the Closing Date under the Indenture.
For purposes of the Indenture, all Notes shall vote together as one series of
Notes under the Indenture.
"Offering Memorandum" means the Offering Memorandum dated December 8, 1998,
offering the Notes for sale as provided therein.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated December 15, 1998, between the Company and Warburg Dillon Read LLC and
certain permitted assigns specified therein.
"Registration Statement" means the Registration Statement as defined and
described in the Registration Rights Agreement.
"Regulation S" means Regulation S under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
ARTICLE TWO
TERMS OF THE NOTES
Section 201. Establishment of the Notes. There is hereby authorized a
series of Securities designated the 6% Putable/Callable Notes due December 14,
2016, Putable/Callable December 14, 2001, limited in aggregate principal amount
to $50,000,000 (except as provided in Section 301(2) of the Indenture). The
Notes shall be substantially in the form set forth in Exhibit A hereto and shall
include substantially the legends set forth on the face of the form of Note so
long as the Notes are Restricted Securities (as defined below).
Section 202. Terms of the Notes. The Notes will be issued and maintained in
the form of registered Global Securities without coupons, registered in the name
of Cede & Co., as nominee of The Depository Trust Company (the "Depositary" or
"DTC") except (a) in the limited circumstances described in Section 305 of the
Original Indenture and (b) for Restricted Securities transferred in accordance
with Section 703 hereof, and beneficial interests therein may be acquired, or
subsequently transferred. The provisions of Section 305 of the Original
Indenture applicable to Global Securities shall apply to the Notes.
The Stated Maturity of the Notes shall be December 14, 2016, and they shall
bear interest at the rate of 6% per annum, from December 15, 1998 or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, as the case may be, payable semi-annually on June 14 and December
14, commencing June 14, 1999 until the Coupon Reset Date, whereupon (x) if the
Notes are purchased by the Callholder (as defined below) pursuant to its Call
Option (as defined below) on the Coupon Reset Date, the Notes shall bear
interest from the Coupon Reset Date to their Final Maturity Date (as defined
below) at the Coupon Reset Rate (as defined below) determined in accordance with
the Coupon Reset Process described in Section 304 hereof, payable semi-annually
on June 14 and December 14, commencing on June 14, 2002, or (y) the Notes shall
be redeemed by the Company pursuant to the exercise of the Put Option (as
defined below) by the Trustee on behalf of the Holders of the Notes.
The principal of and interest on the Notes shall be payable at the office
or agency of the Trustee in the City of Cincinnati maintained for such purpose
and at any other office or agency maintained by the Company for such purpose;
provided, however, that at the option of the Company payment of interest may be
made by wire transfer or by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
The Notes shall not have the benefit of a sinking fund.
The Notes shall not be superior in right of payment to, and shall rank pari
passu with, all other unsecured and unsubordinated Indebtedness of the Company.
The Notes shall be subject to defeasance at the option of the Company as
provided in Section 1302 of the Original Indenture and they shall be subject to
an assignable Call Option and to a Put Option to be exercised under certain
conditions by the Trustee for and on behalf of the Holders as provided in
Article 3 hereof.
Section 203. Denominations. The Notes shall be issued in denominations of
$100,000 or any integral multiple of $1,000.
Section 204. Form. Notes offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more permanent global Notes in registered
form, substantially in the form set forth in Exhibit A (the "U.S. Global
Notes"), registered in the name of the nominee of the Depositary, deposited with
the Trustee, as custodian for the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the U.S. Global Notes may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for the
Depositary or its nominee, in accordance with the instructions given by the
Holder thereof, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more permanent
global Notes in registered form substantially in the form set forth in Exhibit A
(the "Offshore Global Notes"), registered in the name of the nominee of the
Depositary, deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Offshore Global Notes may from
time to time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depositary or its nominee, as hereinafter
provided.
The U.S. Global Notes and the Offshore Global Notes are sometimes referred
to herein as the "Global Notes."
The definitive Notes shall be typed, printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the Officers executing such Notes, as evidenced
by their execution of such Notes.
ARTICLE THREE
CALL AND PUT OPTIONS
Section 301. Call Option. (a) The Company (or its successors or assigns)
shall have the right to purchase the Notes from the Holders on the Coupon Reset
Date, in whole but not in part (the "Call Option"), in exchange for an amount
equal to the Call Price. The Company, as holder of the Call Option, or any
Person to whom the Call Option is assigned in accordance with subsection (d)
below, is referred to herein as the "Callholder".
If the Callholder exercises its rights under the Call Option in accordance
with Section 301(b) hereof, then
(i) subject to Section 305, no later than 2:00 p.m., New York time, on
the Business Day prior to the Coupon Reset Date, the Callholder shall
deliver an amount equal to the Call Price in U.S. Dollars in immediately
available funds to the Trustee for payment of the Call Price on the Coupon
Reset Date;
(ii) if the Callholder is not the Company, promptly upon delivery by
the Callholder of the Call Price to the Trustee (and in no event later than
2:00 p.m. on the Business Day prior to the Coupon Reset Date), the Trustee
shall notify the Company of such delivery of and receipt of the Call Price;
and
(iii) the Holders of the Notes shall be required to deliver the Notes
to the Callholder against payment therefor on the Coupon Reset Date.
If the Call Option has not been exercised, or in the event the Callholder is not
required or fails to deliver the Call Price to the Trustee at or prior to 2:00
p.m., New York time, on the Business Day prior to the Coupon Reset Date, the
Trustee shall give notice of such occurrence to the Company.
(b) The Callholder must, in order to exercise its rights under the Call
Option, deliver irrevocable, written notice (the "Call Notice") to the Company
(unless the Company shall be the Callholder) and to the Trustee of its exercise
of the Call Option prior to 4:00 p.m., New York time, on the day that is fifteen
(15) calendar days prior to the Coupon Reset Date. The Call Notice shall contain
the requisite delivery details, including the identification of the Callholder's
Depositary account. The Trustee shall send a copy of the Call Notice to the to
the Holders of the Notes no later than the immediately succeeding Business Day.
No Holder of Notes shall have any rights or claims against the Callholder as a
result of the Callholder electing to purchase or not purchase the Notes.
(c) If the Callholder elects to exercise the Call Option, the obligation of
the Callholder to pay the Call Price and the corresponding obligation of the
Trustee to deliver the Notes to the Callholder pursuant to exercise of the Call
Option is subject to the following conditions precedent that, after the Call
Notice is given:
(i) (x) no Event of Default with respect to the Notes or (y) no (A)
event of default with respect to any senior indebtedness of the Company
other than the Notes (as such event of default is defined in any notes,
indenture, credit agreement, or other similar document relating to such
senior indebtedness) which shall have resulted in such senior indebtedness
becoming, or becoming capable at such time of being declared, due and
payable under such document before it would otherwise have been due and
payable or (B) a default in making a payment on the due date thereof under
documents relating to senior indebtedness (after giving effect to any
applicable notice requirement or grace period) shall have occurred;
(ii) until 2:00 p.m. New York time, on the Business Day prior to the
Coupon Reset Date, no Market Disruption Event shall have occurred;
(iii) at least one Dealer (as defined below) shall have provided a
timely Bid (as defined below) in the manner provided in Section 304 hereof;
(iv) no legal defeasance or covenant defeasance with respect to the
Notes shall have occurred; and
(v) none of the Notes shall have been purchased by the Company.
The Call Option will automatically and immediately terminate without any
further action by the Callholder, Company or Trustee, and the Trustee will
exercise the Put Option pursuant to Section 302 on behalf of the Holders, upon
the occurrence of any one or more of the following events:
(i) at any time, an Event of Default with respect to the Notes under
Section 501(1), (2), (5) or (6) of the Original Indenture;
(ii) prior to 2:00 p.m. New York time on the Business Day prior to the
Coupon Reset Date, a Market Disruption Event shall have occurred;
(iii) after the Call Notice is given, no Dealer shall have provided a
timely Bid in the manner provided in Section 304 hereof; and
(iv) at any time, a legal defeasance or covenant defeasance with
respect to the Notes shall have occurred.
The Call Option will immediately terminate upon the election of the
Callholder following the occurrence of any one or more of the following events
at any time:
(i) an Event of Default with respect to the Notes under Section 501(4)
or (7) of the Original Indenture;
(ii) (A) an event of default with respect to any senior indebtedness
of the Company other than the Notes (as such event of default is defined in
any notes, indenture, credit agreement, or other similar document relating
to such senior indebtedness) which shall have resulted in such senior
indebtedness becoming, or becoming capable at such time of being declared,
due and payable under such document before it would otherwise have been due
and payable or (B) a default in making a payment on the due date thereof
under documents relating to senior indebtedness (after giving effect to any
applicable notice requirement or grace period) shall have occurred;
(iii) any or all of the Notes shall have been purchased or redeemed by
the Company.
The Company will promptly notify the Trustee in writing of any termination
of the Call Option.
(d) The Callholder may at any time assign its rights and obligations under
the Call Option; provided that (i) such rights and obligations are assigned in
whole and not in part, and (ii) such assigning Callholder provides the Company
(unless the Company is a participant in the assignment) and the Trustee with
written notice of such assignment contemporaneously with such assignment. Upon
receipt of notice of assignment, the Trustee shall treat the assignee as the
Callholder for all purposes hereunder. A Callholder may assign its rights under
the Call Option without notice to, or consent of, the Holders of the Notes.
Section 302. Put Option. (a) By its purchase of a Note, each Holder
irrevocably agrees that if either (i) the Call Option has not been exercised, or
(ii) the Callholder is not required, as set forth in Section 301(c), or fails,
to deliver the Call Price to the Trustee not later than 2:00 p.m., New York
time, on the Business Day prior to the Coupon Reset Date, the Trustee shall, for
and on behalf of the Holders of the Notes, have the right to require the Company
to purchase the Notes, in whole but not in part, on the Coupon Reset Date (the
"Put Option") at a purchase price equal to 100% of the aggregate principal
amount thereof and accrued and unpaid interest thereon (the "Put Redemption
Price"). The Trustee shall be required to exercise the Put Option, for and on
behalf of the Holders, if the Call Option has not been exercised or in the event
the Callholder is not required or fails to deliver the Call Price to the Trustee
when due. If the Put Option is exercised, the Trustee shall promptly thereafter
notify the Holders of the Notes that the Trustee, on behalf of the Holders, has
exercised the Put Option.
(b) If the Trustee exercises the Put Option, then the Company shall deliver
the Put Redemption Price to the Trustee by no later than 12:30 p.m., New York
time, on the Coupon Reset Date, and the Holders of the Notes shall be required
to deliver the Notes to the Company against payment therefor on the Coupon Reset
Date. No Holder of any Notes or any interest therein has the right to consent or
object to the Trustee's exercise of the Put Option.
Section 303. Calculation Agent. (a) The Company shall appoint a calculation
agent with respect to the Notes (the "Calculation Agent") which initially shall
be Warburg Dillon Read LLC, as acknowledged in the letter attached hereto as
Appendix A.
(b) The Calculation Agent shall incur no liability for, or in respect of,
any action taken, omitted to be taken or suffered by it in such capacity in
reliance upon any certificate, affidavit, instruction, notice, request,
direction, order, statement or other paper, document or communication reasonably
believed by it to be genuine. Any order, certificate, affidavit, instruction,
notice, request, direction, statement or other communication from the Company
made or given by it and sent, delivered or directed to the Calculation Agent
under, pursuant to, or as permitted by, any provision of the Indenture shall be
sufficient for purposes of the Indenture if such communication is in writing and
signed by any officer or attorney-in-fact of the Company. The Calculation Agent
may consult with counsel satisfactory to it, and the advice of such counsel
shall constitute full and complete authorization and protection of such
Calculation Agent with respect to any action taken, omitted to be taken or
suffered by it hereunder in good faith and in accordance with and in reliance
upon the advice of such counsel.
(c) The Calculation Agent, in its individual capacity, may, as if it were
not the Calculation Agent, (i) buy, sell, hold and deal in Notes and may
exercise any vote or join in any action which any Holder of Notes may be
entitled to exercise or take or (ii) engage in any financial or other
transaction with the Company or any of its Affiliates.
(d) In acting in connection with the Notes, the Calculation Agent shall be
obligated only to perform such duties as are specifically set forth herein, and
no other duties or obligations on the part of the Calculation Agent, in its
capacity as such, shall be implied by the Indenture. In acting under the
Indenture, the Calculation Agent in its capacity as such does not assume any
obligation towards, or any relationship of agency or trust for or with the
Holders of the Notes.
(e) The Calculation Agent may resign at any time as Calculation Agent, such
resignation to be effective ten Business Days after the delivery to the Company
and the Trustee of written notice of such resignation. In such case, the Company
shall appoint a successor Calculation Agent. In addition, the Company may at any
time remove the existing Calculation Agent and appoint a successor Calculation
Agent if Reasonable Cause (as defined below) exists at such time by giving
written notice to the existing Calculation Agent and the Trustee and specifying
the date when the termination shall become effective. "Reasonable Cause" shall
mean the failure or inability of the existing Calculation Agent to perform any
obligations it may have hereunder for any reason.
(f) Any successor Calculation Agent appointed by the Company pursuant to
the provisions of subsection (e) shall execute and deliver to the predecessor
Calculation Agent, the Company and the Trustee an instrument accepting such
appointment and thereupon the successor Calculation Agent shall, without any
further act or instrument, become vested with all the rights, immunities, duties
and obligations of the initial Calculation Agent, with like effect as if
originally named as initial Calculation Agent hereunder, and the predecessor
Calculation Agent shall thereupon be obligated to deliver, and the successor
Calculation Agent shall be entitled to receive, copies of any available records
maintained by the predecessor Calculation Agent in connection with the
performance of its obligations hereunder. The Company shall notify the Trustee
in writing upon any such appointment.
(g) The Company shall indemnify and hold harmless the Calculation Agent and
any successor thereof, and its officers and employees, from and against all
actions, claims, damages, liabilities, losses and reasonable expenses (including
reasonable legal fees and reasonable disbursements) relating to or arising out
of actions or omissions of the Calculation Agent hereunder, except actions,
claims, damages, liabilities, losses and expenses caused by the bad faith, gross
negligence or wilful misconduct of the Calculation Agent or its officers or
employees. This subsection shall survive the termination of the Indenture and
the payment in full of all obligations under the Notes, whether by redemption,
repayment or otherwise.
(h) Notwithstanding any other provision of the Indenture, the parties
hereto acknowledge that the rights and obligations of the Calculation Agent
hereunder are those of the Calculation Agent and its legal successors. Any
entity into which the Calculation Agent may be merged, converted or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Calculation Agent may be a party, or any entity to
which the Calculation Agent may sell or otherwise transfer all or substantially
all of its business, shall, to the extent permitted by applicable law,
automatically succeed the Calculation Agent.
Section 304. Coupon Reset Process. If the Callholder has exercised the Call
Option, the Company and the Calculation Agent shall complete the following steps
(the "Coupon Reset Process") in order to determine the interest rate ("Coupon
Reset Rate") to be paid on the Notes from, and including the Coupon Reset Date
to, but excluding, the Final Maturity Date, provided that the Coupon Reset
Process shall be discontinued if, at any time prior to and including 2:00 p.m.,
New York time, on the Business Day prior to the Coupon Reset Date, (i) an event
shall have occurred following which the Callholder is not required to pay the
Call Price pursuant to Section 301(c) hereof or (ii) the Call Option shall have
terminated pursuant to Section 301(c) hereof. The Company and the Calculation
Agent shall use reasonable efforts to cause the actions described below to be
completed in a timely manner.
(i) The Company shall provide the Calculation Agent with a list (a
"Dealer List"), no later than seven Business Days prior to the Coupon Reset
Date, containing the names and addresses of up to five dealers, one of
which shall be Warburg Dillon Read LLC or its successor, from which it
desires the Calculation Agent to obtain the Bids for the purchase of the
Notes.
(ii) Within one Business Day following receipt by the Calculation
Agent of the Dealer List, the Calculation Agent shall provide to each
dealer (a "Dealer") on the Dealer List (a) a copy of the Offering
Memorandum, (b) a copy of the form of the Notes, (c) a written request that
each Dealer submit a Bid to the Calculation Agent at 12:00 noon, New York
time (the "Bid Deadline"), on the third Business Day prior to the Coupon
Reset Date (the "Bid Date") and (d) an estimate of the Purchase Price (as
defined below) (which shall be stated as a U.S. Dollar amount and be
calculated by the Calculation Agent in accordance with clause (iii) below).
"Bid" means an irrevocable written offer given by a Dealer for the purchase
of the Securities at the Purchase Price, such purchase to settle on the
Coupon Reset Date, and such Purchase Price shall be quoted by such Dealer
as a stated yield to maturity on the Notes (the "Yield to Maturity").
(iii) The purchase price to be paid for the Notes by a Dealer (the
"Purchase Price") shall be equal to (x) the aggregate principal amount of
the Notes plus (y) a premium (the "Securities Premium") which shall be
equal to the excess, if any, on the Coupon Reset Date of (A) the discounted
present value to the Coupon Reset Date of a bond with a maturity of the
Final Maturity Date which has an interest rate of 6%, semi-annual interest
payments on each June 14 and December 14 commencing June 14, 2002, and a
principal amount of $50,000,000, and which is discounted at a rate equal to
the Treasury Rate over (B) $50,000,000.
"Treasury Rate" means the per annum rate equal to the offer side yield to
maturity of the current on-the-run ten-year United States Treasury Security
appearing on Telerate page 500, or any successor page, at 11:00 a.m., New York
time, on the Bid Date (or such other date or time that may be agreed upon by the
Company and the Calculation Agent) or, if such rate does not appear on Telerate
page 500, or any successor page, at such time or date, the rate appearing on
GovPx End-of-Day Pricing at 3:00 p.m., New York time, on the Bid Date.
(iv) Immediately after receiving the Bids on the Bid Date, the
Calculation Agent shall provide written notice to the Company, setting
forth (a) the names of each of the Dealers from whom the Calculation Agent
received such Bids on the Bid Date, (b) the Bid submitted by each such
Dealer and (c) the Purchase Price. Except as provided in the first
paragraph of this Section 304, on the day that Bids are received by the
Calculation Agent, the Calculation Agent shall select the Bid with the
lowest Yield to Maturity (the "Selected Bid") from the Bids received by the
Bid Deadline, provided, that at least one Bid is properly received in a
timely manner, and establish the Coupon Reset Rate (the "Coupon Reset
Rate") equal to the interest rate which would amortize the Securities
Premium fully over the remaining term of the Notes at the Yield to Maturity
indicated by the Selected Bid; provided, however, that if any two or more
of the lowest Bids submitted are equivalent, the Company shall in its sole
discretion select any of such equivalent Bids (and such Bid selected shall
be the Selected Bid).
(v) Immediately after calculating the Coupon Reset Rate, the
Calculation Agent shall provide written notice to the Company and the
Trustee, setting forth such Coupon Reset Rate.
(vi) The Company shall thereafter establish the Coupon Reset Rate as
the new interest rate on the Notes, effective from and including the Coupon
Reset Date to, but not including, the Final Maturity Date, by delivery to
the Trustee on or before the Coupon Reset Date of an Officer's Certificate
setting forth such Coupon Reset Rate.
(vii) The Callholder shall sell the Securities to the Dealer that made
the Selected Bid at the Purchase Price, such sale to be settled on the
Coupon Reset Date in immediately available funds.
Section 305. The Company as Callholder. If the Company becomes the
Callholder subsequent to an exercise of the Call Option, the Company, so long as
it shall be the Callholder,
(a) shall have no obligation (i) to initiate, participate in or conclude,
as the case may be, the Coupon Reset Process or (ii) to pay the Call Price by
2:00 p.m. on the Business Day prior to the Coupon Reset Date; and
(b) if the Company does not pay the Call Price by 2:00 p.m. on the Business
Day prior to the Coupon Reset Date, the Trustee shall exercise the Put Option
pursuant to Section 302 on behalf of the Holders.
Section 306. Third Party Beneficiaries. Each of the Callholder and the
Calculation Agent shall be a third party beneficiary of the Indenture and may
enforce the obligations of the Company and of the Trustee hereunder running in
favor of the Callholder and the Calculation Agent, as applicable.
ARTICLE FOUR
REDEMPTION
Subject to the terms of Article Eleven of the Original Indenture, the
Company shall have the right to redeem the Notes, in whole but not in part, from
time to time and at any time (such redemption, an "Optional Redemption", and the
date thereof, the "Optional Redemption Date") upon not less than 30 days' notice
to the holders, at a redemption price equal to the sum of (A) the greater of (i)
100% of the principal amount of the Notes to be redeemed or (ii) the sum of the
present values of the Remaining Scheduled Payments thereon discounted to the
Optional Redemption Date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Make Whole Treasury Rate plus 20
basis points, less the Applicable Accrued Interest Amount plus (B) the
Applicable Accrued Interest Amount.
"Applicable Accrued Interest Amount" means, at the Optional Redemption
Date, the amount of interest accrued and unpaid from the prior interest payment
date to the Optional Redemption Date on the Notes subject to the Optional
Redemption determined at the rate per annum shown in the title thereof, computed
on the basis of a 360-day year of twelve 30-day months.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity 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 Notes to be redeemed pursuant to the
Optional Redemption. "Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Trustee after consultation with the Company.
"Comparable Treasury Price" means, with respect to the Optional Redemption
Date, the average of the Reference Treasury Dealer Quotations for such Optional
Redemption Date.
"Reference Treasury Dealer" means a primary U.S. Government securities
dealer in New York City. "Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any redemption date, the average,
as determined by the Trustee, 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.
on the third Business Day preceding such redemption date.
"Remaining Scheduled Payments" means, with respect to any Note, that amount
of interest that is unpaid and would but for the Optional Redemption accrue to
but excluding the Coupon Reset Date or, if the final Optional Redemption Date
occurs on or after the Coupon Reset Date, the Maturity Date plus 100% of the
principal amount thereof scheduled to be received on the Coupon Reset Date or
the Maturity Date, as the case may be.
"Make Whole Treasury Rate" means, with respect to the Optional Redemption
Date (if any), the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Optional Redemption Date.
ARTICLE FIVE
ORIGINAL ISSUE OF NOTES
Section 501. Notes in the aggregate principal amount of $50,000,000, may,
upon execution of this Fifth Supplemental Indenture, or from time to time
thereafter, be executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver said
Notes upon a Company Order without any further action by the Company.
ARTICLE SIX
PAYING AGENT AND SECURITY REGISTRAR
Section 601. Fifth Third Bank will be the Paying Agent and Security
Registrar for the Notes.
ARTICLE SEVEN
Special Transfer Provisions
Section 701. Legend on Restricted Securities. Until the earlier of (a) the
date a Registration Statement is declared effective and (b) December 15, 2000,
any Note including any Note issued in exchange therefor or in lieu thereof,
shall be deemed a "Restricted Security" and shall be subject to the restrictions
on transfer provided in the legends set forth on the face of the form of Note;
provided, however, that the term "Restricted Security" shall not include any
Securities as to which restrictions have been terminated in accordance with
Section 703 hereof. All Notes shall bear the applicable legends set forth on the
face of the form of Note. Except as provided in Section 305 of the Original
Indenture and Section 703 hereof, the Trustee shall not issue any unlegended
Notes until it has received an Officers' Certificate from the Company directing
it to do so.
Section 702. Book-Entry Provisions for Global Notes. (a) The U.S. Global
Notes and Offshore Global Notes initially shall (i) be registered in the name of
the Depositary for such Global Notes or the nominee of such Depositary, (ii) be
delivered to the Trustee as custodian for such Depositary and (iii) bear legends
as set forth in Section 701.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Note held on their
behalf by the Depositary, or the Trustee as its custodian, or under such Global
Note, and the Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of such Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee,
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a holder of any Note.
(b) Transfers of a Global Note shall be limited to transfers of such Global
Note in whole, but not in part, to the Depositary, its successors or their
respective nominees. Interests of beneficial owners in Global Notes may be
transferred in accordance with the rules and procedures of the Depositary and
the provisions of Section 703. In addition, certificated Notes shall be
transferred to all beneficial owners in exchange for their beneficial interests
in the U.S. Global Notes or the Offshore Global Notes, as the case may be, if
(i) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for the U.S. Global Notes or the Offshore Global Notes,
as the case may be, and a successor depositary is not appointed by the Company
within 90 days of such notice, (ii) an Event of Default has occurred and is
continuing and the Registrar has received a request from the Depositary or (iii)
in accordance with the rules and procedures of the Depositary and the provisions
of Section 703.
(c) Any beneficial interest in one of the Global Notes that is transferred
to a person who takes delivery in the form of an interest in another Global Note
will, upon transfer, cease to be an interest in such Global Note and become an
interest in such other Global Note and, accordingly, will thereafter be subject
to all transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains such an
interest.
(d) In connection with any transfer of a portion of the beneficial
interests in a Global Note to beneficial owners pursuant to paragraph (b) of
this Section 702, the Security Registrar shall reflect on its books and records
the date and a decrease in the principal amount of such Global Note in an amount
equal to the principal amount of the beneficial interest in such Global Note to
be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more certificated Notes, as the case may be, of
like tenor and amount.
(e) In connection with the transfer of the U.S. Global Notes or the
Offshore Global Notes, in whole, to beneficial owners pursuant to paragraph (b)
of this Section 702, the U.S. Global Notes or Offshore Global Notes, as the case
may be, shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall authenticate and deliver, to
each beneficial owner identified by the Depositary in exchange for its
beneficial interest in the U.S. Global Notes or Offshore Global Notes, as the
case may be, an equal aggregate principal amount of certificated Notes of
authorized denominations.
(f) Any certificated Note delivered in exchange for an interest in the U.S.
Global Notes pursuant to paragraph (b), (d) or (e) of this Section 702 shall,
except as otherwise provided by Section 601, bear the legend regarding transfer
restrictions.
(g) The registered holder of a Global Note may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
Section 703. (a) Transfers to QIBs. The following provisions shall apply
with respect to the registration of any proposed transfer of a Note constituting
a Restricted Security to a qualified institutional buyer as defined in Rule 144A
(a "QIB"):
(i) the Security Registrar shall register the transfer if such
transfer is being made by a proposed transferor who has checked the box
provided for on the form of Note stating, or has otherwise advised the
Company and the Security Registrar in writing, that the sale has been made
in compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the form of Note stating, or has
otherwise advised the Company and the Security Registrar in writing, that
it is purchasing the Note for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information and
that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided
by Rule 144A; and
(ii) if the proposed transferee is an Agent Member and the Notes to be
transferred consist of certificated Notes which after transfer are to be
evidenced by an interest in the Global Security, upon receipt by the
Security Registrar of instructions given in accordance with the
Depositary's and the Security Registrar's procedures, the Security
Registrar shall reflect on its books and records the date and an increase
in the principal amount of the Global Security in an amount equal to the
principal amount of the certificated Notes to be transferred, and the
Trustee shall cancel the certificated Notes so transferred.
(b) Transfers to Non-QIB Institutional Accredited Investors. The following
provisions shall apply with respect to the registration of any proposed transfer
of a Note constituting a Restricted Security to any Institutional Accredited
Investor which is not a QIB (excluding Non-U.S. Persons):
(i) The Security Registrar shall register the transfer of any Note, if
the proposed transferee has delivered to the Security Registrar (A) a
certificate substantially in the form of Appendix C hereto and (B) if the
aggregate principal amount of the Notes being transferred is less than
$100,000, an opinion of counsel acceptable to the Company that such
transfer is in compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the Global Security, upon receipt by the Security
Registrar of (x) the documents, if any, required by paragraph (i) above and
(y) instructions given in accordance with the Depositary's and the Security
Registrar's procedures, the Security Registrar shall reflect on its books
and records the date and a decrease in the principal amount of the Global
Security in an amount equal to the principal amount of the beneficial
interest in the Global Security to be transferred, and the Company shall
execute, and the Trustee shall authenticate and deliver, one or more
certificated Notes of like tenor and amount.
(c) Transfers of Interests in the Offshore Global Notes. The following
provisions shall apply with respect to any transfer of interests in Offshore
Global Notes:
(i) prior to the removal of the Legend from the Offshore Global Notes
pursuant to Section 701, the Security Registrar shall refuse to register
such transfer unless such transfer complies with this Section 703, and
(ii) after such removal, the Security Registrar shall register the
transfer of any such Note without requiring any additional certification.
(d) Transfers to Non-U.S. Persons at Any Time. The following provisions
shall apply with respect to any transfer of a Note to a Non-U.S. Person:
(i) The Security Registrar shall register any proposed transfer to any
Non-U.S. Person if the Note to be transferred is an interest in U.S. Global
Notes, upon receipt of a certificate substantially in the form of Appendix
D hereto from the proposed transferor.
(ii) (a) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Notes, upon receipt by the Security
Registrar of (x) the documents, if any, required by paragraph (ii) and (y)
instructions in accordance with the Depositary's and the Security
Registrar's procedures, the Security Registrar shall reflect on its books
and records the date and a decrease in the principal amount of the U.S.
Global Notes in an amount equal to the principal amount of the beneficial
interest in the U.S. Global Notes to be transferred, and (b) if the
proposed transferee is an Agent Member, upon receipt by the Security
Registrar of instructions given in accordance with the Depositary's and the
Security Registrar's procedures, the Security Registrar shall reflect on
its books and records the date and an increase in the principal amount of
the Offshore Global Notes in an amount equal to the principal amount of the
U.S. Physical Notes or the U.S. Global Notes, as the case may be, to be
transferred, and the Trustee shall cancel the Certificated Note, if any, so
transferred or decrease the amount of the U.S. Global Notes.
Section 704. General. By its acceptance of any Note bearing the legends set
forth on the face of the form of Note, each Holder of such a Note acknowledges
the restrictions on transfer of such Note set forth in the Indenture and in such
legends and agrees that it will transfer such Note only as provided in the
Indenture.
The Security Registrar shall retain, in accordance with its customary
procedures, copies of all letters, notices and other written communications
received pursuant to this Section 704. The Company shall have the right to
inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Security Registrar.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
Section 801. The Company and the Trustee shall not enter into any
supplemental indenture pursuant to Sections 901 and 902 of the Original
Indenture that would modify, amend or eliminate any provision of the Notes that
materially adversely affects the interest of the Callholder without the prior
written consent of the Callholder.
ARTICLE NINE
SUNDRY PROVISIONS
Section 901. No exchange of Notes for Exchange Notes pursuant to Section
305 of the Original Indenture shall occur until a Registration Statement shall
have been declared effective by the Commission and that any Notes that are
exchanged for Exchange Notes shall be canceled by the Trustee.
Section 902. The Original Indenture, as supplemented by this Fifth
Supplemental Indenture, is in all respects ratified and confirmed, and this
Fifth Supplemental Indenture shall be deemed part of the Indenture in the manner
and to the extent herein and therein provided.
--------------------------------------------------------------
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 Fifth Supplemental
Indenture to be duly executed as of the day and year first above written.
PSI ENERGY, INC.
By /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President and Treasurer
FIFTH THIRD BANK
as Trustee
By /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
NYDOCS01/573375 8
EXHIBIT A
(FORM OF FACE OF NOTE)
No. R-1 $50,000,000
CUSIP No. ▇▇▇▇▇▇▇▇▇
PSI ENERGY, INC.
6% PUTABLE/CALLABLE NOTES DUE DECEMBER 14, 2016,
PUTABLE/CALLABLE DECEMBER 14, 2001
[Each Global Security, whether or not an Exchange Note, shall bear the following
legend: 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 ANY 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.]
[Unless and until a Note is exchanged for an Exchange Note or sold in
connection with an effective Registration Statement pursuant to the Registration
Rights Agreement, Notes shall bear the following legend: THE NOTES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY
WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT UPON THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO THE TRUSTEE AND THE COMPANY, OR (E) PURSUANT
TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT UPON THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO THE TRUSTEE AND THE COMPANY SUBJECT, IN EACH
OF THE FOREGOING CASES, TO A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THE OTHER SIDE OF THIS NOTE BEING COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
THE RESALE RESTRICTION TERMINATION DATE.]
PSI ENERGY, INC., a corporation duly organized and existing under the
laws of the State of Indiana (herein called the "Company", which term includes
any successor Person under the Indenture hereafter referred to), for value
received, hereby promises to pay to _______________________________, or
registered assigns, the principal sum of Fifty Million and No/100 Dollars
($50,000,000) on December 14, 2016, and to pay interest thereon from December
15, 1998 or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on December 14 and June 14 in each
year, commencing June 14, 1999, at the rate of 6% per annum, until the principal
hereof is paid or made available for payment. 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
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 premium, if any) and interest on this
Security will be made at the office or agency of the Company 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 wire transfer or 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 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.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, including those describing the Call Option and the
Put Option, 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.
PSI ENERGY, INC.
By_____________________________
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 NOTE)
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 November 15, 1996 as supplemented by
the fifth supplement to the Indenture dated December 15, 1998 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument, as supplemented), 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,
limited in aggregate principal amount to $50,000,000.
The Securities will not be subject to any sinking fund. The terms of the
Securities include those stated in the Indenture. The Securities of this series
are subject to all such terms and Holders (including the Holder hereof) are
referred to the Indenture for a statement of those terms. Capitalized terms used
but not defined herein shall have the respective meanings assigned to them in
the Indenture.
Interest Rate, Interest Payment Dates and Maturity Date.
The Securities will bear interest, payable on each Interest Payment Date to
holders of record on the fifteenth calendar day (whether or not a Business Day)
immediately preceding such Interest Payment Date, at 6% per annum until December
14, 2001 (the "Coupon Reset Date"), whereupon (x) if all of the Securities are
purchased on such date by the Callholder pursuant to its Call Option, the
Securities shall bear interest from and including the Coupon Reset Date to, but
excluding, December 14, 2016 (the "Final Maturity Date") at the Coupon Reset
Rate determined in accordance with the Coupon Reset Process described in the
Indenture, or (y) the Securities shall be redeemed by the Company pursuant to
the exercise of the Put Option by the Trustee on behalf of the Holders of the
Securities.
If (a) the Exchange Offer Registration Statement is not filed with the
Commission on or prior to the 120th calendar day following the Closing Date or
(b) the Exchange Offer Registration Statement is not declared effective on or
prior to the 180th calendar day following the Closing Date or (c) a Shelf
Registration Statement is not declared effective when required, in accordance
with the terms of the Registration Rights Agreement dated December 15, 1998
between the Company and Warburg Dillon Read LLC (the "Registration Rights
Agreement"), the annual interest rate borne by the Notes shall be increased by
0.25% from the rate shown above accruing from such dates specified in clauses
(a), (b) or (c) above. Upon the filing of the Exchange Offer Registration
Statement, the effectiveness of the Exchange Offer Registration Statement or the
effectiveness of a Shelf Registration Statement, as the case may be, such
additional interest will cease to accrue from the date of such filing or
effectiveness, as the case may be; provided, however, that, if, after the date
such additional interest ceases to accrue, a different event specified in clause
(a), (b) or (c) above occurs, additional interest may again commence accruing
pursuant to the foregoing provisions. The Holder of this Note is entitled to the
benefits of such Registration Rights Agreement.
Call Option; Put Option
The Callholder may call the Securities (the "Call Option") by notifying the
Trustee by 4:00 p.m., New York time, on the day that is fifteen calendar days
prior to the Coupon Reset Date of its intention to purchase all, but not less
than all, of the Securities at a price equal to 100% of the principal amount of
the Securities on the Coupon Reset Date. If the Call Option terminates in
accordance with the terms of the Indenture, then the Trustee is obliged, without
further action by any holder of Securities or any owner of any beneficial
interest therein, to exercise on behalf of such Holders their right to require
the Company to repurchase the Securities at a price equal to 100% of the
principal amount of the Securities on the Coupon Reset Date (the "Put Option").
Optional Redemption
The Securities of this series are subject to optional redemption, in whole
but not in part, from time to time and at any time (such redemption, an
"Optional Redemption", and the date thereof, the "Optional Redemption Date")
upon not less than 30 days' notice to the holders, at a redemption price equal
to the sum of (A) the greater of (i) 100% of the principal amount of the
Securities of this series to be redeemed or (ii) the sum of the present values
of the Remaining Scheduled Payments thereon discounted to the Optional
Redemption Date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Make Whole Treasury Rate plus 20 basis points, less
the Applicable Accrued Interest Amount plus (B) the Applicable Accrued Interest
Amount.
"Applicable Accrued Interest Amount" means, at the Optional Redemption
Date, the amount of interest accrued and unpaid from the prior interest payment
date to the Optional Redemption Date on the Securities of this series subject to
the Optional Redemption determined at the rate per annum shown in the title
thereof, computed on the basis of a 360-day year of twelve 30-day months.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity 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 of this series to be redeemed
pursuant to the Optional Redemption. "Independent Investment Banker" means one
of the Reference Treasury Dealers appointed by the Trustee after consultation
with the Company.
"Comparable Treasury Price" means, with respect to the Optional Redemption
Date, the average of the Reference Treasury Dealer Quotations for such Optional
Redemption Date.
"Make Whole Treasury Rate" means, with respect to the Optional Redemption
Date (if any), the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Optional Redemption Date.
"Reference Treasury Dealer" means a primary U.S. Government securities
dealer in New York City. "Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any redemption date, the average,
as determined by the Trustee, 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.
on the third Business Day preceding such redemption date.
"Remaining Scheduled Payments" means, with respect to any Securities of
this series, that amount of interest that is unpaid and would but for the
Optional Redemption accrue to but excluding the Coupon Reset Date or, if the
final Optional Redemption Date occurs on or after the Coupon Reset Date, the
Maturity Date plus 100% of the principal amount thereof scheduled to be received
on the Coupon Reset Date or the Maturity Date, as the case may be.
[INCLUDE IF SECURITY IS A GLOBAL SECURITY -- In the event of a deposit or
withdrawal of an interest in this Security, including an exchange, transfer,
repurchase or conversion of this Security in part only, the Trustee, as
custodian of the Depositary, shall make an adjustment on its records to reflect
such deposit or withdrawal in accordance with the rules and procedures of the
Depositary.]
[INCLUDE IF SECURITY IS A RESTRICTED SECURITY -- Subject to certain
limitations in the Indenture, at any time when the Company is not subject to
Section 13 or 15(d) of the U.S. Securities Exchange Act of 1934, as amended,
upon the request of a Holder of a Restricted Security, the Company will promptly
furnish or cause to be furnished Rule 144A Information (as defined below) to
such Holder of Restricted Securities, or to a prospective purchaser of any such
security designated by any such Holder, to the extent required to permit
compliance by any such Holder with Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act"). "Rule 144A Information" shall be such
information as is specified pursuant to Rule 144A(d)(4) under the Securities Act
(or any successor provision thereto).]
Discharge and Defeasance
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Security upon compliance with certain conditions set forth
in the Indenture.
Events of Default
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.
Amendments to Indenture; Waiver of Defaults
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 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.
Obligations Unconditional
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 any premium and interest
on this Security at the times, place and rate and in the coin or currency,
herein prescribed.
Transfer and Exchange
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 any premium 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 $100,000 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.
CUSIP Number
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused a CUSIP number to be
printed on this Security as a convenience to the Holder hereof. No
representation is made as to the accuracy of such number and reliance may be
placed only on the other identifying information printed hereon.
Governing Law
The Indenture and this Security shall be governed by and construed in
accordance with the laws of the State of New York.
ASSIGNMENT FORM
If you want to assign this Security, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Security to:
-------------------------------------------------------------------------------
Print or type name, address and zip code and social security or tax ID number of
assignee)
and irrevocably appoint ___________________________________,
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Date:_____________ Signed:_______________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee: _________________________
In connection with any transfer of this Security occurring prior to the
earlier of (a) the date a Registration Statement is declared effective or (b)
December 15, 2000, the undersigned confirms that it has not utilized any general
solicitation or general advertising in connection with the transfer and that
this Security is being transferred:
[Check One]
(1) |_| to the Company or a subsidiary thereof; or
(2) |_| pursuant to and in compliance with Rule 144A under the Securities
Act; or
(3) |_| outside the United States to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act; or
(4) |_| pursuant to the exemption from registration provided by Rule 144
under the Securities Act; or
(5) |_| pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities evidenced by this certificate in the name of any Person other
than the registered Holder thereof; provided that if box (3), (4) or (5) is
checked, the Company may require, prior to registering any such transfer of the
Securities, in its sole discretion, such legal opinions, certifications
(including an investment letter in the case of box (3) or (4)) and other
information as the Company may reasonably request to confirm that such transfer
is being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act.
If none of the foregoing boxes is checked, the Trustee or Security
Registrar shall not be obligated to register this Security in the name of any
Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Article 6 of the Supplemental
Indenture shall have been satisfied.
Date:___________ Signed:___________________________________
(Sign exactly as your name appears
on the other side of this Security)
Signature Guarantee:___________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Date:_____________ Signed:___________________________________
APPENDIX A
December 15, 1998
Acknowledgment
PSI Energy, Inc.
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Fifth Third Bank
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Ladies and Gentlemen:
Reference is made to the Indenture dated as of November 15, 1996, as
supplemented by the Fifth Supplemental Indenture (the "Supplemental Indenture")
dated as of December 15, 1998 (as supplemented, the "Indenture") between PSI
Energy, Inc., an Indiana corporation, and Fifth Third Bank, an Ohio banking
corporation, as Trustee, in connection with the offering of $50,000,000
aggregate principal amount of 6% Putable/Callable Notes due December 14, 2016,
Putable/Callable December 14, 2001. Capitalized terms used but not defined
herein shall have the meaning given to such terms in the Indenture.
The undersigned hereby acknowledges its obligations as Calculation Agent
under Article 3 of the Supplemental Indenture. The acknowledgment shall be
binding upon any Persons who are successors to the Calculation Agent.
Very truly yours,
Warburg Dillon Read LLC
By:_________________________
Name:
Title:
By:_________________________
Name:
Title:
NYDOCS01/573375 8
APPENDIX B
Form of Put Notice to be Delivered by the Trustee
to the Company Upon Exercise of the Put Option
PSI Energy, Inc.
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Attention: Treasurer
Fifth Third Bank, as Trustee for PSI Energy, Inc.'s $50,000,000
aggregate principal amount of 6% Putable/Callable Notes due December 14, 2016,
Putable/Callable December 14, 2001, issued under the Indenture dated as of
November 15, 1996, as supplemented by the Fifth Supplemental Indenture (the
"Supplemental Indenture") dated as of December 15, 1998 hereby gives notice of
exercise of the Put Option (as defined in the Supplemental Indenture) pursuant
to Section 302 of the Supplemental Indenture.
Fifth Third Bank
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Authorized Officer
NYDOCS01/573375 8
APPENDIX C
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
Fifth Third Bank
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Attention: Corporate Trust Department
Re: PSI Energy, Inc. (the "Company")
6% Putable/Callabale Notes due December 14, 2016 (the "Notes")
Dear Sirs:
In connection with our proposed purchase of $ _________________ aggregate
principal amount of the Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is subject to
certain restrictions and conditions set forth in the Indenture dated as of
November 15, 1996, as supplemented by the Fifth Supplemental Indenture dated as
of December 15, 1998 (as supplemented, the "Indenture") relating to the Notes
and the undersigned agrees to be bound by, and not to resell, pledge or
otherwise transfer the Notes except in compliance with such restrictions and
conditions and the Securities Act of 1933, amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold except as permitted in the following sentence. We agree, on our own behalf
and on behalf of any accounts for which we are acting as hereinafter stated,
that if we should sell any Notes within the time period referred to in Rule
144(k) of the Securities Act, we will do so only (A) to the Company or any
subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to
a "qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and, if such
transfer is in respect of an aggregate of less than $100,000, an opinion of
counsel acceptable to the Company that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available) or (F)
pursuant to an effective registration statement under the Securities Act, and we
further agree to provide to any person purchasing any of the Notes from us a
notice advising such purchaser that resales of the Notes are restricted as
stated herein.
3. We understand that, on any proposed resale of any Notes, we will be
required to furnish to you and the Company such certifications, legal opinions
and other information as you and the Company may reasonably require to confirm
that the proposed sale complies with the foregoing restrictions. We further
understand that the Notes purchased by us will bear a legend to the foregoing
effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes purchased by us for our own account or for
one or more accounts (each of which is an institutional "accredited investor")
as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
Authorized Signature
APPENDIX D
Form of Certificate to Be Delivered in
Connection with Transfers Pursuant to Regulation S
Fifth Third Bank
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Attention: Corporate Trust Department
Re: PSI Energy, Inc. (the "Company")
6% Putable/Callable Notes due December 14, 2016 (the "Notes")
Dear Sirs:
In connection with our proposed sale of U.S.$______________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of 1933
and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United States;
(2) at the time the buy order was originated, the transferee was outside
the United States or we and any person acting on our behalf reasonably believed
that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation
S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
Authorized Signature
NYDOCS01/573375 8