CINERGY CORP, U-1/A, 1997-04-23

CINERGY CORP
U-1/A, 1997-04-23
ELECTRIC & OTHER SERVICES COMBINED

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File No. 70-8993

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

__________________________________________
AMENDMENT NO. 1 TO
FORM U-1 DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________________________________

Cinergy Corp.
139 East Fourth Street
Cincinnati, Ohio 45202

(Name of company filing this statement
and address of principal executive office)

Cinergy Corp.

(Name of top registered holding company parent)

William L. Sheafer
Treasurer
Cinergy Corp.
(address above)

(Name and address of agent of service)

Applicant requests that the Commission send copies of all notices, orders
and communications in connection herewith to:

Jerome A. Vennemann James R. Lance
Associate General Counsel Manager - Corporate Finance
Cinergy Corp. & Financial Risk Management
(address above) Cinergy Corp. (address above)

William T. Baker, Jr.
Reid & Priest LLP
40 West 57th Street
New York, New York 10019

The application-declaration as previously filed in this proceeding
("Application") is hereby amended and restated in its entirety to read as
follows:

Item 1. Description of Proposed Transactions

A. Summary of Requested Authorization

Cinergy Corp. ("Cinergy"), a registered holding company under the
Public Utility Holding Company Act of 1935, as amended (the "Act"),
requests authorization to issue and sell from time to time through December
31, 2002 unsecured debt securities (the "Debentures") in an aggregate
principal amount not to exceed $400 million at any time outstanding,
subject, however, to an aggregate indebtedness limitation currently
applicable to Cinergy by prior Commission order. Cinergy proposes to apply
net proceeds from the issue and sale of the Debentures to general corporate
purposes, primarily the repayment of outstanding short-term indebtedness
incurred to finance Cinergy's investment in Midlands Electricity plc
("Midlands"), a U.K. regional electricity company and "foreign utility
company" within the meaning of section 33 of the Act in which Cinergy
acquired a 50% equity interest in 1996. Cinergy also proposes to use
various interest rate risk management instruments in connection with the
issuance and sale of the Debentures.

B. Terms of Debentures

Cinergy proposes to issue and sell from time to time through December
31, 2002 up to $400 million principal amount of Debentures in one or more
series, subject to the aggregate debt limitation specified in Item 1.C
below. The Debentures (a) will not be convertible into any other
securities of Cinergy, (b) will have maturities ranging from one to 40
years,(c) may be subject to optional and/or mandatory redemption, in whole
or in part, at par or at various premiums above the principal amount
thereof, and (d) may be entitled to mandatory or optional sinking fund
provisions. In addition, Cinergy may have the right from time to time to
defer the payment of interest on the Debentures of one or more series
(which may be fixed or floating or "multi-modal" debentures, i.e.,
debentures where the interest is periodically reset, alternating between
fixed and floating interest rates for each reset period), with all accrued
and unpaid interest (together with interest thereon) becoming due and
payable at the end of each such extension period. The Debentures will be
issued under an indenture (the "Indenture") to be entered into between
Cinergy and The Fifth Third Bank, an Ohio banking corporation, as trustee
(the "Trustee," including any successor trustee appointed pursuant to the
Indenture), with a supplemental indenture to be executed in respect of each
separate offering of one or more series of Debentures (each, a
"Supplemental Indenture"). Forms of Debenture, Indenture and Supplemental
Indenture are filed herewith as Exhibits A-1, A-2 and A-3 respectively.

Cinergy contemplates that the initial series of Debentures would be
issued and sold directly to one or more purchasers in privately negotiated
transactions or to one or more investment banking or underwriting firms or
other entities who would resell the Debentures without registration under
the Securities Act in reliance upon one or more applicable exemptions from
registration thereunder. A form of Purchase Agreement with respect to such
anticipated private offerings of Debentures through investment banking or
underwriting firms is filed herewith as Exhibit B-1. From time to time
Cinergy may also issue and sell the Debentures of one or more series to the
public either (i) through underwriters selected by negotiation or
competitive bidding or (ii) through selling agents acting either as agent
or as principal for resale to the public either directly or through
dealers.

The maturity dates, interest rates, redemption and sinking fund
provisions, if any, with respect to the Debentures of a particular series,
as well as any associated placement, underwriting or selling agent fees,
commissions and discounts, if any, will be established by negotiation or
competitive bidding and reflected in the applicable Supplemental Indenture
and Purchase Agreement or underwriting agreement setting forth such terms;
provided, however, that (1) Cinergy will not issue and sell any Debentures
(a) at a price higher than 102% or lower than 98% of the applicable
principal amount thereof or (b) at interest rates in excess of those
generally obtainable at the time of pricing or repricing of such Debentures
for securities having the same or reasonably similar maturities and having
reasonably similar terms, conditions and features issued by utility
companies or utility holding companies of the same or reasonably comparable
credit quality; and (2) any placement, underwriting and selling agent fees,
commissions and discounts to be paid by Cinergy in connection with the
issue and sale of any series of Debentures will not exceed 3.5% of the
aggregate principal amount thereof.

C. Applicability of Aggregate Debt Limitation

The Debentures would be issued and sold in an aggregate principal
amount not to exceed $400 million at any time outstanding, subject,
however, to the aggregate limitation on outstanding Cinergy indebtedness
("Cinergy Corp. Debt Limitation") imposed by the Commission in its order
issued in File No. 70-8521 on March 12, 1996 (Release No. 35-26488),
together with any further order or orders of the Commission that may raise
or lower the Cinergy Corp. Debt Limitation. Currently, the Cinergy Corp.
Debt Limitation is $1 billion and applies to certain short-term bank
borrowings, commercial paper, letter of credit transactions and
guarantees/1/ issued and sold from time to time generally through December
31, 1999. Cinergy anticipates that it will shortly file with the
Commission an application seeking to increase the Cinergy Corp. Debt
Limitation.

D. Use of Proceeds/Source of Funds

Cinergy proposes to use the proceeds from the issue and sale of the
Debentures, after deduction of any applicable fees, commissions and
expenses, to repay outstanding short-term indebtedness incurred to finance
Cinergy's investment in Midlands. To preserve financial flexibility,
Cinergy also seeks authority to use proceeds from the issue and sale of the
Debentures for other lawful corporate purposes, including (1) investments
in exempt wholesale generators ("EWGs") and other foreign utility companies
("FUCOs"); energy related companies within the meaning of rule 58; and
Cinergy subsidiary companies; and (2) repayment of other short-term
indebtedness and Debentures outstanding from time to time.

With regard to potential additional investments in EWGs and FUCOs
with the proceeds of Debentures, Cinergy has a pending amended application-
declaration in File No. 70-9011 (see Release No. 35-26698, March 28, 1997)
("100% U-1") seeking authority to apply the net proceeds of certain debt
and equity securities issued by it - including the proposed Debentures - to
acquisitions of interests in EWGs and FUCOs, provided that Cinergy's
aggregate investment therein would not at any time exceed Cinergy's
consolidated retained earnings within the meaning of rule 53. Currently,
under prior Commission orders, Cinergy may apply such proceeds for such
purposes provided that Cinergy's aggregate investment does not exceed 50%
of consolidated retained earnings.

Cinergy anticipates that interest due on the Debentures would be
paid from internally generated funds, including dividends from
subsidiaries. Cinergy expects that the principal of and premium, if any,
on the Debentures would be paid from the proceeds of additional series of
Debentures or shares of Cinergy common stock/2/ or, on a bridge basis, from
the proceeds of short-term debt issued by Cinergy.

E. Interest Rate Risk Management

In connection with the issuance and sale of the Debentures, Cinergy
proposes to mitigate interest rate risk through the use of interest rate
management instruments commonly used in today's capital markets, consisting
of interest rate swaps, caps, collars, floors, options, forwards, futures
and similar products designed to manage and minimize interest costs.
Cinergy expects to enter into these agreements with counterparties that are
highly rated financial institutions. The transactions will be for fixed
periods and stated notional amounts.

Fees, commissions and annual margins in connection with any
interest rate management agreements will not exceed 100 basis points in
respect of the principal or notional amount of the related Debentures or
interest rate management agreement. In addition, with respect to options
(such as caps and collars), Cinergy may pay an option fee which would not
exceed 10% of the principal amount of the Debentures covered by the option.

F. Benefits of Proposed Transactions

For the reasons discussed below, Cinergy believes that the proposed
Debentures are a prudent financing device, appropriate in the ordinary
course of Cinergy's business, and not detrimental to the interests of
Cinergy's shareholders and customers or the public.

Cinergy's present intention is to issue and sell up to the entire
aggregate principal amount of the proposed Debentures for the purpose of
refinancing a like principal amount of short-term debt issued by Cinergy to
finance its Midlands investment. In effect, therefore, the proposed
transactions would result in Cinergy substituting short-term unsecured bank
debt with longer term unsecured debt. Because Cinergy considers the
Midlands investment to be a long-term investment, Cinergy considers it
appropriate to fund at least a portion of this long-term asset with long-term
securities, thereby locking in long-term capital at known fixed
rates./3/

At March 31, 1997, Cinergy had outstanding approximately $534
million in aggregate principal amount of short-term indebtedness,
constituting Cinergy's only outstanding indebtedness and comprised
exclusively of unsecured bank loans. Of that figure, approximately $485
million represented short-term bank debt incurred to finance Cinergy's
indirect 50% ownership interest in Midlands, acquired in 1996 in a joint
venture transaction with GPU, Inc. Cinergy and GPU, acting through Avon
Energy Partners plc, commenced their cash tender offer to acquire Midlands
in May 1996 and completed the acquisition in the third quarter of 1996.

Cinergy used unsecured short-term bank debt to finance the
acquisition of its entire $503 million equity investment in Midlands, with
(i) Cinergy originally borrowing $471 million of short-term funds under its
$600 million Credit Agreement, dated May 6, 1996 ("$600 Million Credit
Agreement"), with certain banks and Barclays Bank plc ("Barclays") as
administrative agent, and (ii) Cinergy UK, Inc., a special-purpose indirect
wholly-owned subsidiary of Cinergy, originally borrowing $32 million of
short-term funds under its $40 million Credit Agreement, dated May 6, 1996
("$40 Million Credit Agreement"), with Barclays as administrative agent.
/4/ For further information with respect to Cinergy's acquisition and
financing of its interest in Midlands, reference is made to the 100% U-1
and to Cinergy's quarterly certificates of notification in File No. 70-8521
commencing with the certificate covering the second quarter of 1996.

Because Cinergy financed the acquisition of its equity investment
in Midlands solely with short-term debt, and has continued to finance its
investment in Midlands entirely with short-term debt, Cinergy necessarily
has been and continues to be exposed to fluctuations in short-term interest
rates. Given that Cinergy's equity investment in Midlands amounts to
roughly half a billion dollars, this exposure is significant.

More specifically, under the $600 Million Credit Agreement, Cinergy
may borrow short-term funds priced at various interest rates at Cinergy's
option, including borrowings for terms of one, two, three or six months
currently priced in each case at applicable LIBOR plus 35 basis points. In
general, all of the short-term borrowings and reborrowings by Cinergy under
the $600 Million Credit Agreement prior to March 31, 1997 have been priced
using the 1-month LIBOR option (i.e., LIBOR in effect at the time of
borrowing applicable to a one-month maturity plus 35 basis points). As of
April 16, 1997, 1-month LIBOR and 6-month LIBOR (including the additional
35 basis points Cinergy is required to pay under the $600 Million Credit
Agreement to access either of these borrowing options) were about 6.0% and
6.4 % respectively. LIBOR rates are subject to constant fluctuation based
on the general level of interest rates, economic conditions and supply and
demand for capital.

To illustrate the variability of applicable LIBOR, and therefore
the exposure that Cinergy has to the ultimate level of interest expense it
pays, noted below is the maximum value for certain LIBOR indices during the
time periods indicated:

Maximum Rate Maximum Rate
Since 1990 Since 1985

1-mo. LIBOR 8.75% 10.0625%
6-mo. LIBOR 8.875% 10.6875%

Cinergy proposes to address this exposure to potentially volatile
short-term interest rates by issuing longer term unsecured debt securities
with fixed rates of interest - the Debentures./5/ Based on market
conditions at April 16, 1997, Cinergy estimates that Debentures with 2-40
year maturities issued on such date would have been priced at a fixed
coupon rate of interest between 6.25% and 8.50%, respectively (excluding
underwriting fees and commissions); the lower end of this range is
comparable to or only slightly above the current rates applicable to 1- or
6-month LIBOR borrowings by Cinergy under the $600 Million Credit Agreement
(see above).

Thus, the Debentures would permit Cinergy to mitigate its exposure
to short-term interest rate swings, in exchange for interest rates likely
to be somewhat higher than prevailing short-term interest rates on the date
of issuance. Of course, over time, the issuer of debentures with an
initially higher rate of interest may realize net interest cost savings if
short-term interest rates rise.

Another important relative benefit of the Debentures is avoidance
of the repricing risk of short-term bank debt. The common practice of
continually reborrowing or "rolling-over" short-term bank loans necessarily
subjects the borrower, as each proposed rollover date approaches, to the
risk that, given the supply and demand ebb and flow conditions of the U.S.
capital markets, the rollover or repricing may be prohibitively expensive
or even effectively unavailable. For example, if the issuer must reprice
short-term loans on the same day that huge capital demand exists (such as
days when the U.S. Treasury is issuing securities), available interest
rates offered by bank lenders are likely to be adversely affected (i.e., to
be marginally higher, potentially significantly higher, than otherwise
would have been the case). Likewise, the short-term borrower may not be
able to satisfy the applicable conditions of the existing bank credit
agreement for a rollover, due to these or other external events or other
circumstances that have arisen since the original advance of funds, such as
adverse developments in the borrower's industry generally. In short,
external or supervening events, beyond the corporate issuer's control and
often difficult or impossible to anticipate, may jeopardize the ability of
the borrower to reprice or reborrow expiring short-term bank loans.

In contrast to this repricing risk of short-term debt, the
Debentures, with their locked-in funding rates for longer maturities, are
conducive to maturity management and afford a level of financial security
unavailable through short-term debt alone. Debentures enable the issuer to
slot or schedule maturities, at regular or staggered intervals, in a
coordinated fashion consistent with the issuer's expected future capital
needs.

A third important comparative advantage of the Debentures concerns
credit ratings: the longer term nature of the Debentures should yield
incrementally more favorable credit ratings for Cinergy as opposed to
shorter-term debt securities issued by Cinergy on the same date./6/ This
reflects the basic fact, discussed in the prior paragraphs, that with
debentures the funding rate is known for an extended period of time, not
subject to being withdrawn by the lender or lenders as in the case of
short-term bank debt. Cinergy has met with the major credit rating
agencies and expects to obtain ratings for Debentures sometime in the
second calendar quarter of 1997. Based on these meetings, preliminary
conversations with investment bankers and past practices of the ratings
agencies, Cinergy anticipates that its long-term, senior Debentures will
receive ratings in the BBB range, an investment grade rating.

Yet another notable benefit of the Debentures and of debentures
generally vis-a-vis short-term debt is freedom from restrictive covenants
in the underlying contracts. Generally, the applicable contracts under
which U.S. investment-grade debentures are issued and sold do not contain
any restrictive covenants, negative pledges or other similar commitments of
the issuer, other than the basic obligation to make timely payments of all
amounts due in respect of the debentures./7/ This is in sharp contrast to
credit agreements for short-term bank loans, which typically contain
numerous covenants restricting the borrower's business activities. This is
not an academic distinction. Defaults under restrictive bank loan
covenants may trigger cross-defaults under other agreements of the borrower
and accelerate payment obligations under other outstanding securities of
the borrower.

Given these important advantages, it is hardly surprising that
debentures are commonly used financial instruments in today's energy
industry. In 1996 alone, electric utility holding companies and electric
utilities issued in excess of $1.6 billion principal amount of unsecured
long-term debt, not including private sales. The Commission has issued a
number of recent orders authorizing electric utilities or electric utility
holding companies to issue debentures./8/

Additional factors support Cinergy's belief that the Debentures
will be accorded BBB investment-grade ratings by the major ratings
agencies. Even assuming that none of the Debentures were to be issued to
refinance short-term debt - an assumption at odds with Cinergy's present
intentions, pursuant to which the entire principal amount of the Debentures
would be issued to refinance short-term debt relating to the Midlands
acquisition - Cinergy has ample room to issue additional debt while still
remaining within the target debt/capitalization ratios of Standard & Poor's
for investment grade electric utilities. The total debt/total capital S&P
guideline for BBB-rated electric utilities is in the range of 48% to 59%.
At December 31, 1996, Cinergy's comparable consolidated ratio was 54.9%.
Cinergy could thus issue up to approximately $600 million of additional
debt without running afoul of the S&P guidelines./9/

G. Rule 53 Analysis

As previously noted, Cinergy has requested Commission authorization
in the pending 100% U-1 to apply proceeds from the issue and sale of (among
other securities) Debentures to investments in EWGs and FUCOs so long as
the aggregate investment therein does not exceed Cinergy's consolidated
retained earnings. In that U-1, Cinergy sets forth a detailed analysis of
the proposed transactions under rule 53(c), reference to which is hereby
made for the details thereof, establishing compliance with the standards
thereof.

Item 2. Fees, Commissions and Expenses

Applicant estimates that in addition to the fees, commissions, margins
and expenses ("Fees") described in Item 1, the following Fees will be
incurred directly or indirectly by it or any associate company thereof in
connection with the proposed transactions:

Legal Fees ................................. $60,000
Trustee Fees ............................... $20,000
Printing Fees .............................. $40,000
Rating agency Fees.......................... $186,000
Fees of Cinergy Services.................... $15,000
Blue sky Fees............................... $5,000
Accountant Fees............................. $30,000
TOTAL ...................................... $356,000

Item 3. Applicable Statutory Provisions

The proposed issuance and sale and application of the proceeds of
the Debentures is subject to sections 6(a) and 7 of the Act and rule 53
thereunder.

Item 4. Regulatory Approval

No state or federal regulatory agency other than the Commission
under the Act has jurisdiction over the proposed transactions.

Item 5. Procedure

Applicant requests that the Commission issue a public notice of the
proposed transactions as soon as possible, but in any event not later than
May 9, 1997; that the Commission's order authorizing the proposed
transactions be issued as soon after the expiration of the public comment
period as the Commission's rules allow; and that there be no waiting period
between the issuance of the Commission's order and its effective date. In
addition, Applicant waives a recommended decision by a hearing officer or
other responsible officer of the Commission and consents that the Staff of
the Division of Investment Management may assist in the preparation of the
Commission's order.

Item 6. Exhibits and Financial Statements

(a) Exhibits:

A-1 Form of Debenture (included as part of Exhibit A-2 and
Exhibit A-3)
A-2 Form of Indenture
A-3 Form of Supplemental Indenture
B-1 Form of Purchase Agreement
C Not applicable
D Not applicable
E Not applicable
F Preliminary opinion of counsel (to be filed by amendment)
G-1 Revised form of notice of proposed transactions for
publication in Federal Register

(b) Financial Statements:

FS-1 Cinergy Pro Forma Consolidated Financial Statements dated
December 31, 1996
FS-2 Cinergy Pro Forma Financial Statements dated December 31,
1996
FS-3 Cinergy Consolidated Financial Data Schedule (included as
part of electronic submission only)
FS-4 Cinergy Financial Data Schedule (included as part of
electronic submission only)

Item 7. Information as to Environmental Effects

(a) The Commission's action in this matter will not constitute
major federal action significantly affecting the quality of the human
environment.

(b) No other federal agency has prepared or is preparing an
environmental impact statement with regard to the proposed transactions.

<PAGE>

SIGNATURE

Pursuant to the requirements of the Act, the undersigned company
has duly caused this statement to be signed on its behalf by the
undersigned thereunto duly authorized.

Dated: April 23, 1997

CINERGY CORP.

By: /s/ William L. Sheafer
Treasurer

Endnotes

/1/ The guarantee authority was granted pursuant to the Commission's order
dated August 25, 1995 in File No. 70-8587 (Release No. 35-26362) and
currently is due to expire on June 1, 1997. Cinergy has filed an
application, docketed in File No. 70-9015, seeking to extend that guarantee
authorization through December 31, 2002 and expand its scope.

/2/ Under prior Commission orders (Release No. 35-26477, February 23, 1996;
see also Release No. 35-26159, November 18, 1994), Cinergy may issue and
sell less than one million shares of common stock (apart from common stock
issued in connection with Cinergy stock-based benefit plans), representing
the balance of authorized shares originally totaling eight million.
Cinergy plans shortly to file with the Commission an application requesting
authority to issue additional shares of common stock and to increase the
Cinergy Debt Limitation.

/3/ As noted above, Cinergy has limited common stock issuance authority
under prior Commission orders and expects to file an application soon
seeking authority to issue additional shares of common stock (among other
securities), the proceeds of which Cinergy would apply to (among other
uses) refinancing indebtedness. Although Cinergy may thus seek to issue
common stock to finance or refinance in part its interest in Midlands or in
other FUCOs or EWGs, common stock is a more expensive long-term financing
alternative than debentures and accordingly Cinergy would not seek to rely
solely on common stock as a long-term vehicle for financing such
investments.

/4/ As of March 31, 1997 (i) Cinergy UK had repaid a total of approximately
$13 million of the funds originally borrowed under the $40 Million Credit
Agreement and (ii) Cinergy had incurred a corresponding amount of
incremental short-term borrowings under the $600 Million Credit Agreement.

/5/ As previously discussed, from time to time Cinergy may also determine
to issue and sell Debentures with floating rates of interest as well as
multi-modal Debentures, i.e., Debentures that through a periodic reset
feature may alternately carry both fixed and floating rates of interest.

/6/ None of Cinergy's outstanding short-term debt is currently rated by any
ratings agency. Cinergy has not issued any commercial paper since
consummation on October 24, 1994 of the merger that created Cinergy.

/7/ Cinergy's utility subsidiaries - The Cincinnati Gas & Electric Company,
PSI Energy, Inc. and The Union Light, Heat and Power Company - issued and
sold over $400 million of debentures in 1995 and 1996, none of which
featured restrictive covenants.

/8/ See, e.g., General Public Utilities Corporation, Release No. 35-26559,
August 23, 1996 (authorizing registered electric utility holding company to
issue and sell up to $300 million aggregate principal amount of debentures
from time to time through December 31, 2001); Central and South West
Corporation, et al., Release No. 35-26687, March 17, 1997; Alabama Power
Company, et al., Release No. 35-26560, August 26, 1996; Jersey Central
Power & Light Company, Release No. 35-26246, March 6, 1995.

/9/ Of course, the S&P guidelines are more restrictive than the 65/30
consolidated debt/common equity ratio (the balance generally being
preferred equity) that the Commission traditionally required registered
holding companies and their subsidiaries to satisfy as one of the
conditions to approving security issuances under the standards of section 7
of the Act.

Exhibit G-1

SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- _____________)

Cinergy Corp., a registered holding company ("Cinergy"), with
headquarters at 139 East Fourth Street, Cincinnati Ohio 45202, has filed a
declaration under sections 6(a) and 7 of the Act and rule 53 thereunder.

Cinergy proposes to issue and sell from time to time through
December 31, 2002 up to $400 million principal amount of unsecured debt
securities ("Debentures") in one or more series, subject to an aggregate
debt limitation described below. The Debentures (a) will not be
convertible into any other securities of Cinergy, (b) will have maturities
ranging from one to 40 years,(c) may be subject to optional and/or
mandatory redemption, in whole or in part, at par or at various premiums
above the principal amount thereof, and (d) may be entitled to mandatory or
optional sinking fund provisions. In addition, Cinergy may have the right
from time to time to defer the payment of interest on the Debentures of one
or more series (which may be fixed or floating or "multi-modal" debentures,
i.e., debentures where the interest is periodically reset, alternating
between fixed and floating interest rates for each reset period), with all
accrued and unpaid interest (together with interest thereon) becoming due
and payable at the end of each such extension period. The Debentures will
be issued under an indenture (the "Indenture") to be entered into between
Cinergy and The Fifth Third Bank, an Ohio banking corporation, as trustee
(the "Trustee," including any successor trustee appointed pursuant to the
Indenture), with a supplemental indenture to be executed in respect of each
separate offering of one or more series of Debentures (each, a
"Supplemental Indenture").

Cinergy contemplates that the initial series of Debentures would be
issued and sold directly to one or more purchasers in privately negotiated
transactions or to one or more investment banking or underwriting firms or
other entities who would resell the Debentures without registration under
the Securities Act in reliance upon one or more applicable exemptions from
registration thereunder. From time to time Cinergy may also issue and sell
the Debentures of one or more series to the public either (i) through
underwriters selected by negotiation or competitive bidding or (ii) through
selling agents acting either as agent or as principal for resale to the
public either directly or through dealers.

The Debentures would be issued and sold in an aggregate principal
amount not to exceed $400 million at any time outstanding, subject,
however, to the aggregate limitation on outstanding Cinergy indebtedness
("Cinergy Corp. Debt Limitation") imposed by the Commission in its order
issued in File No. 70-8521 on March 12, 1996 (Release No. 35-26488),
together with any further order or orders of the Commission that may raise
or lower the Cinergy Corp. Debt Limitation. Currently, the Cinergy Corp.
Debt Limitation is $1 billion and applies to certain short-term bank
borrowings, commercial paper, letter of credit transactions and guarantees
issued and sold from time to time generally through December 31, 1999.
Cinergy states that it anticipates filing an application with the
Commission shortly seeking to increase the Cinergy Corp. Debt Limitation.

Cinergy proposes to use the proceeds from the issue and sale of the
Debentures, after deduction of any applicable fees, commissions and
expenses, to repay outstanding short-term indebtedness incurred to finance
Cinergy's investment in Midlands Electricity plc, a foreign utility company
in which Cinergy acquired an indirect 50% ownership interest in 1996
through in a joint venture transaction with GPU, Inc. Cinergy states that
it also may use proceeds from the issue and sale of the Debentures for
other corporate purposes, including (1) investments in exempt wholesale
generators and other foreign utility companies; energy related companies
within the meaning of rule 58; and Cinergy subsidiary companies; and (2)
repayment of other short-term indebtedness and Debentures outstanding from
time to time.

With regard to potential additional investments in exempt wholesale
generators and foreign utility companies, Cinergy has a pending amended
application-declaration in File No. 70-9011 (Release No. 35-26698, March
28, 1997) ("100% U-1") seeking authority to apply the net proceeds of
certain debt and equity securities issued by it - including the proposed
Debentures - to acquisitions of interests in exempt wholesale generators
and foreign utility companies, provided that Cinergy's aggregate investment
therein would not at any time exceed Cinergy's consolidated retained
earnings within the meaning of rule 53. Cinergy states that under the
terms of prior Commission orders it is authorized to apply such proceeds
for such purposes, provided that Cinergy's aggregate investment does not
exceed 50% of Cinergy's consolidated retained earnings.

Cinergy states that (a) interest due on the Debentures would be
paid from internally generated funds, including dividends from
subsidiaries, and (b) the principal of and premium, if any, on the
Debentures would be paid from the proceeds of additional series of
Debentures or shares of Cinergy common stock or, on a bridge basis, from
the proceeds of short-term debt issued by Cinergy.

Cinergy asserts that the in the 100% U-1 it sets forth a detailed
analysis of the proposed transactions under rule 53(c), which analysis
purports to establish Cinergy's compliance with the standards of rule
53(c).

In addition to those previously described, Cinergy estimates total
fees, expenses and commissions of approximately $356,000 in connection with
the proposed transactions.

For the Commission, by the Division of Investment Management,
pursuant to delegated authority.

CINERGY CORP.

AND

THE FIFTH THIRD BANK, Trustee

________________________________

Indenture

________________________________

Dated as of _________, ____

<PAGE>

TRUST INDENTURE
ACT SECTION INDENTURE SECTION

Section 310(a)(1). . . . . . . . . . . . . . . . . . . .609
(a)(2) . . . . . . . . . . . . . . . . . . . . . . .609
(a)(3) . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . Not Applicable
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .608
. . . . . . . . . . . . . . . . . . . . . . . . .610
Section 311(a) . . . . . . . . . . . . . . . . . . . . .613
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .613
Section 312(a) . . . . . . . . . . . . . . . . . . . . .701
. . . . . . . . . . . . . . . . . . . . . . . . .702
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .702
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .702
Section 313(a) . . . . . . . . . . . . . . . . . . . . .703
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .703
(c). . . . . . . . . . . . . . . . . . . . . . . . .703
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .703
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . .704
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . .101
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1004
(b). . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
(d). . . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . .601
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .602
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .601
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .601
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .514
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . . . . .101
(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . . . . .502
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .512
(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . . . . .513
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . .Not Applicable
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .508
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104
Section 317(a)(1). . . . . . . . . . . . . . . . . . . . . . . . .503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . .504
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . .107

<PAGE>
CINERGY CORP.
Indenture
Dated as of _________, ____

TABLE OF CONTENTS
Parties. . . . . . . . . . . . . . . . . . . . . . . . . .8
Recitals of the Company. . . . . . . . . . . . . . . . . .8

ARTICLE ONE

Definitions and Other Provisions of General Application

Section 101. Definitions. . . . . . . . . . . . . . .8
Act. . . . . . . . . . . . . . . . . . . . . . . . . .9
Affiliate; control . . . . . . . . . . . . . . . . . .9
Authenticating Agent . . . . . . . . . . . . . . . . .9
Board of Directors . . . . . . . . . . . . . . . . . .9
Board Resolution . . . . . . . . . . . . . . . . . . .9
Business Day . . . . . . . . . . . . . . . . . . . . .9
Commission . . . . . . . . . . . . . . . . . . . . . .9
Company. . . . . . . . . . . . . . . . . . . . . . . .9
Company Request; Company Order . . . . . . . . . . . 10
Corporate Trust Office . . . . . . . . . . . . . . . 10
corporation. . . . . . . . . . . . . . . . . . . . . 10
Covenant Defeasance. . . . . . . . . . . . . . . . . 10
Defaulted Interest . . . . . . . . . . . . . . . . . 10
Defeasance . . . . . . . . . . . . . . . . . . . . . 10
Depositary . . . . . . . . . . . . . . . . . . . . . 10
Event of Default . . . . . . . . . . . . . . . . . . 10
Exchange Act . . . . . . . . . . . . . . . . . . . . 10
Expiration Date. . . . . . . . . . . . . . . . . . . 10
Global Security. . . . . . . . . . . . . . . . . . . 10
Holder . . . . . . . . . . . . . . . . . . . . . . . 10
Indenture. . . . . . . . . . . . . . . . . . . . . . 10
interest . . . . . . . . . . . . . . . . . . . . . . 11
Interest Payment Date. . . . . . . . . . . . . . . . 11
Investment Company Act . . . . . . . . . . . . . . . 11
Junior Subordinated Securities . . . . . . . . . . . 11
Maturity . . . . . . . . . . . . . . . . . . . . . . 11
Notice of Default. . . . . . . . . . . . . . . . . . 11
Officers' Certificate. . . . . . . . . . . . . . . . 11
Opinion of Counsel . . . . . . . . . . . . . . . . . 11
Original Issue Discount Security . . . . . . . . . . 11
Outstanding. . . . . . . . . . . . . . . . . . . . . 11
Paying Agent . . . . . . . . . . . . . . . . . . . . 12
Person . . . . . . . . . . . . . . . . . . . . . . . 13
Place of Payment . . . . . . . . . . . . . . . . . . 13
Predecessor Security . . . . . . . . . . . . . . . . 13
Redemption Date. . . . . . . . . . . . . . . . . . . 13
Redemption Price . . . . . . . . . . . . . . . . . . 13
Regular Record Date. . . . . . . . . . . . . . . . . 13
Responsible Officer. . . . . . . . . . . . . . . . . 13
Securities . . . . . . . . . . . . . . . . . . . . . 13
Securities Act . . . . . . . . . . . . . . . . . . . 13
Security Register; Security Registrar. . . . . . . . 13
Senior Debt. . . . . . . . . . . . . . . . . . . . . 14
Special Record Date. . . . . . . . . . . . . . . . . 14
Stated Maturity. . . . . . . . . . . . . . . . . . . 14
Subsidiary . . . . . . . . . . . . . . . . . . . . . 14
Trust Indenture Act. . . . . . . . . . . . . . . . . 14
Trustee. . . . . . . . . . . . . . . . . . . . . . . 14
U.S. Government Obligation . . . . . . . . . . . . . 14
Vice President . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 102. Compliance Certificates and Opinions . . . . . . . 15
Section 103. Form of Documents Delivered to Trustee . . . . . . . . .15
Section 104. Acts of Holders; Record Dates. . . . . . . . . . . 16
Section 105. Notices, Etc., to Trustee and Company. . . . . . . 18
Section 106. Notice to Holders; Waiver. . . . . . . . 19
Section 107. Conflict with Trust Indenture Act. . . . 19
Section 108. Effect of Headings and Table of Contents . . .19
Section 109. Successors and Assigns . . . . . . . . . 19
Section 110. Separability Clause. . . . . . . . . . . 20
Section 111. Benefits of Indenture. . . . . . . . . . 20
Section 112. Governing Law. . . . . . . . . . . . . . 20
Section 113. Legal Holidays . . . . . . . . . . . . . 20
Section 114. Certain Matters Relating to Currencies . . . . . . . . .20
Section 115. Immunity of Incorporators, Stockholders, Officers
and Directors . . . . . . . . . . . . . . . . 21
Section 116. Counterparts . . . . . . . . . . . . . . 21
Section 117. Assignment to Affiliate. . . . . . . . . 21

ARTICLE TWO

Security Forms

Section 201. Forms Generally. . . . . . . . . . . . . 22
Section 202. Form of Face of Security . . . . . . . . 22
Section 203. Form of Reverse of Security. . . . . . . 25
Section 204. Form of Legend for Global Securities . . 29
Section 205. Form of Trustee's Certificate of Authentication 29

ARTICLE THREE

The Securities

Section 301. Amount Unlimited; Issuable in Series . . 30
Section 302. Denominations. . . . . . . . . . . . . . 33
Section 303. Execution, Authentication, Delivery and Dating 33
Section 304. Temporary Securities . . . . . . . . . . 35
Section 305. Registration, Registration of Transfer and Exchange 35
Section 306. Mutilated, Destroyed, Lost and Stolen Securities 37
Section 307. Payment of Interest; Interest Rights Preserved 38
Section 308. Persons Deemed Owners. . . . . . . . . . 39
Section 309. Cancellation . . . . . . . . . . . . . . 40
Section 310. Computation of Interest. . . . . . . . . 40
Section 311. CUSIP Numbers. . . . . . . . . . . . . . 40

ARTICLE FOUR

Satisfaction and Discharge

Section 401. Satisfaction and Discharge of Indenture. . . .41
Section 402. Application of Trust Money . . . . . . . 42

ARTICLE FIVE

Remedies

Section 501. Events of Default. . . . . . . . . . . . 42
Section 502. Acceleration of Maturity; Rescission and Annulment 43
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee. . . . . . . . . . . . 44
Section 504. Trustee May File Proofs of Claim . . . . 45
Section 505. Trustee May Enforce Claims Without Possession
of Securities . . . . . . . . . . . . . . . . 46
Section 506. Application of Money Collected . . . . . 46
Section 507. Limitation on Suits. . . . . . . . . . . 46
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest. . . . . . . . . . . . . 47
Section 509. Restoration of Rights and Remedies . . . 47
Section 510. Rights and Remedies Cumulative . . . . . 48
Section 511. Delay or Omission Not Waiver . . . . . . 48
Section 512. Control by Holders . . . . . . . . . . . 48
Section 513. Waiver of Past Defaults. . . . . . . . . 48
Section 514. Undertaking for Costs. . . . . . . . . . 49
Section 515. Waiver of Usury, Stay or Extension Laws. . . .49

ARTICLE SIX

The Trustee

Section 601. Certain Duties and Responsibilities. . . 50
Section 602. Notice of Defaults . . . . . . . . . . . 50
Section 603. Certain Rights of Trustee. . . . . . . . 50
Section 604. Not Responsible for Recitals or Issuance of Securities 51
Section 605. May Hold Securities. . . . . . . . . . . 52
Section 606. Money Held in Trust. . . . . . . . . . . 52
Section 607. Compensation and Reimbursement . . . . . 52
Section 608. Conflicting Interests. . . . . . . . . . 53
Section 609. Corporate Trustee Required; Eligibility. . . .53
Section 610. Resignation and Removal; Appointment of Successor 53
Section 611. Acceptance of Appointment by Successor . . . . . . . . .55
Section 612. Merger, Conversion, Consolidation or Succession
to Business.. . . . . . . . . . . . . . . . . 56
Section 613. Preferential Collection of Claims Against Company 57
Section 614. Appointment of Authenticating Agent. . . 57
Section 615. Indemnification. . . . . . . . . . . . . 59

ARTICLE SEVEN

Holders' Lists and Reports by Trustee and Company

Section 701. Company to Furnish Trustee Names and Addresses
of Holders. . . . . . . . . . . . . . . . . . 59
Section 702. Preservation of Information; Communications
to Holders. . . . . . . . . . . . . . . . . . 60
Section 703. Reports by Trustee . . . . . . . . . . . 60
Section 704. Reports by Company . . . . . . . . . . . 61

ARTICLE EIGHT

Consolidation, Merger and Sale

Section 801. Consolidation and Mergers Permitted. . . 61
Section 802. Rights and Duties of Successor Company . . . .61
Section 803. Opinion of Counsel . . . . . . . . . . . 62

ARTICLE NINE

Supplemental Indentures

Section 901. Supplemental Indentures Without Consent of Holders 62
Section 902. Supplemental Indentures With Consent of Holders 64
Section 903. Execution of Supplemental Indentures . . 65
Section 904. Effect of Supplemental Indentures. . . . 66
Section 905. Conformity with Trust Indenture Act. . . 66
Section 906. Reference in Securities to Supplemental Indentures 66

ARTICLE TEN

Covenants

Section 1001. Payment of Principal, Premium and Interest . .66
Section 1002. Maintenance of Office or Agency. . . . . 66
Section 1003. Money for Securities Payments to Be Held in Trust 67
Section 1004. Statement by Officers as to Default. . . 68
Section 1005. Maintenance of Properties. . . . . . . . 68
Section 1006. Payment of Taxes and Other Claims. . . . 69
Section 1007. Waiver of Certain Covenants. . . . . . . 69
Section 1008. Calculation of Original Issue Discount . . . . . . . . .69

ARTICLE ELEVEN

Redemption of Securities

Section 1101. Applicability of Article . . . . . . . . 70
Section 1102. Election to Redeem; Notice to Trustee. . 70
Section 1103. Selection by Trustee of Securities to Be Redeemed 70
Section 1104. Notice of the Redemption . . . . . . . . 71
Section 1105. Deposit of Redemption Price. . . . . . . 72
Section 1106. Securities Payable on Redemption Date. . 72
Section 1107. Securities Redeemed in Part. . . . . . . 72

ARTICLE TWELVE

Sinking Funds

Section 1201. Applicability of Article . . . . . . . . 73
Section 1202. Satisfaction of Sinking Fund Payments with Securities 73
Section 1203. Redemption of Securities for Sinking Fund. . .74

ARTICLE THIRTEEN

Defeasance and Covenant Defeasance

Section 1301. Company's Option to Effect Defeasance or Covenant
Defeasance. . . . . . . . . . . . . . . . . . 74
Section 1302. Defeasance and Discharge . . . . . . . . 74
Section 1303. Covenant Defeasance. . . . . . . . . . . 75
Section 1304. Conditions to Defeasance or Covenant Defeasance 75
Section 1305. Deposited Money and U.S. Government Obligations
to Be Held in Trust; Miscellaneous Provisions . . .78
Section 1306. Reinstatement. . . . . . . . . . . . . . 79

ARTICLE FOURTEEN

Junior Subordinated Securities

Section 1401. Certain Securities Subordinate to Senior Debt 79
Section 1402. Payment Over of Proceeds Upon Default. . 80
Section 1403. Payment Over of Proceeds Upon Dissolution, Etc 80
Section 1404. Subrogation to Rights of Holders of Senior Debt 81
Section 1405. Trustee to Effectuate Subordination. . . 83
Section 1406. Notice to Trustee. . . . . . . . . . . . 83
Section 1407. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights. . . . . . . 84
Section 1408. No Waiver of Subordination Provisions. . 84

Testimonium . . . . . . . . . . . . . . . . . . . . . . . . .85
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

<PAGE>

INDENTURE, dated as of _________, ____ , between Cinergy Corp., a
corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at 139
East Fourth Street, Cincinnati, Ohio 45202, and The Fifth Third Bank, an
Ohio banking corporation, as Trustee (herein called the "Trustee").

Recitals of the Company

The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture
provided.

All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.

Now, Therefore, This Indenture Witnesseth:

For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, subject to
Article Fourteen, if applicable, for the equal and proportionate benefit of
the Holders of the Securities of each series thereof, as follows:

ARTICLE ONE

Definitions and Other Provisions
of General Application

Section 101. Definitions.

For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;

(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;

(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;

(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Indenture; and

(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.

"Act", when used with respect to any Holder, has the meaning specified
in Section 104.

"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.

"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.

"Board of Directors" means the board of directors of the Company, or
any duly authorized committee of that board, or any Person duly authorized
to act on behalf of that board.

"Board Resolution" means a copy of a resolution or resolutions
certified by the Secretary or an Assistant Secretary of the Company to have
been duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification, and delivered to the Trustee.

"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment are authorized or
obligated by law or executive order to close.

"Commission" means the Securities and Exchange Commission, from time
to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act,
then the body performing such duties at such time.

"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person.

"Company Request" or "Company Order" means a written request or order
signed in the name of the Company either by (i) its Chairman of the Board,
its Vice Chairman, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee, or (ii) any two Persons designated in a Board
Resolution, or in a Company Order previously delivered to the Trustee
signed by any two of the foregoing, and delivered to the Trustee.

"Corporate Trust Office" means the office of the Trustee for
Securities of any series at which at any particular time its corporate
trust business shall be principally administered, which office at the date
of execution of this Indenture is located at 38 Fountain Square Plaza,
Cincinnati, Ohio.

"corporation" means a corporation, association, company, joint-stock
company or business trust.

"Covenant Defeasance" has the meaning specified in Section 1303.

"Defaulted Interest" has the meaning specified in Section 307.

"Defeasance" has the meaning specified in Section 1302.

"Depositary" means, with respect to Securities of any series issuable
in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Exchange Act that is designated to act
as Depositary for such Securities as contemplated by Section 301.

"Event of Default" has the meaning specified in Section 501.

"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.

"Expiration Date" has the meaning specified in Section 104.

"Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or
such legend as may be specified as contemplated by Section 301 for such
Securities).

"Holder" means a Person in whose name a Security is registered in the
Security Register.

"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions
hereof, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively. The term "Indenture" shall also include the terms
of particular series of Securities established as contemplated by Section
301.

"interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.

"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.

"Investment Company Act" means the Investment Company Act of 1940 and
any statute successor thereto, in each case as amended from time to time.

"Junior Subordinated Securities" shall have the meaning specified in
Section 1401.

"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes
due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or
otherwise.

"Notice of Default" means a written notice of the kind specified in
Section 501(4).

"Officers' Certificate" means a certificate signed in the same manner
and by Persons as provided for in a Company Request or Company Order, and
delivered to the Trustee.

"Opinion of Counsel" means a written opinion of counsel, who may be
an employee of or counsel for the Company.

"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.

"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:

(1) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;

(2) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities; provided that, if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been
made;

(3) Securities as to which Defeasance has been effected pursuant
to Section 1302; and

(4) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken
any request, demand, authorization, direction, notice, consent, waiver or
other action hereunder as of any date, (A) the principal amount of an
Original Issue Discount Security which shall be deemed to be Outstanding
shall be the amount of the principal thereof which would be due and payable
as of such date upon acceleration of the Maturity thereof to such date
pursuant to Section 502, (B) if, as of such date, the principal amount
payable at the Stated Maturity of a Security is not determinable, the
principal amount of such Security which shall be deemed to be Outstanding
shall be the amount as specified or determined as contemplated by Section
301, the principal amount of a Security denominated in one or more
foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such date
in the manner provided as contemplated by Section 301, of the principal
amount of such Security (or, in the case of a Security described in Clause
(A) or (B) above, of the amount determined as provided in such Clause), and
(D) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall
be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other
action, only Securities which the Trustee actually knows to be so owned
shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such
other obligor.

"Paying Agent" means, if not the Company, then any Person authorized
by the Company to pay the principal of or any premium or interest on any
Securities on behalf of the Company.

"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.

"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium
and interest on the Securities of that series are payable as specified as
contemplated by Section 301.

"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed
to evidence the same debt as the mutilated, destroyed, lost or stolen
Security.

"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.

"Responsible Officer", when used with respect to the Trustee, means
any vice president, any assistant vice-president, any trust officer or
assistant trust officer of the Trustee assigned to the Trustee's corporate
trust department and customarily performing functions similar to those
performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of his knowledge of and familiarity with
the particular subject.

"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.

"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.

"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.

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

"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.

"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.

"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or
by one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such
voting power by reason of any contingency.

"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, except as
provided in Section 905.

"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include each Person who is then a
Trustee hereunder, and if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean
the Trustee with respect to Securities of that series.

"U.S. Government Obligation" has the meaning specified in Section
1304.

"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or
a word or words added before or after the title "vice president".

Section 102. Compliance Certificates and Opinions.

Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish
to the Trustee such certificates and opinions as may be required under the
Trust Indenture Act. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer of the
Company, or an Opinion of Counsel, if to be given by counsel, and shall
comply with the requirements of the Trust Indenture Act and any other
requirements set forth in this Indenture.

Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include,

(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;

(2) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and

(3) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.

Section 103. Form of Documents Delivered to Trustee.

In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one
such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some
matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or
several documents.

Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel
may be based, insofar as it relates to factual matters, upon a certificate
or opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.

Section 104. Acts of Holders; Record Dates.

Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given, made
or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person
or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section.

The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall
also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the
Trustee deems sufficient.

The ownership of Securities shall be proved by the Security Register.

Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee
or the Company in reliance thereon, whether or not notation of such action
is made upon such Security.

The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to
be given, made or taken by Holders of Securities of such series, provided
that the Company may not set a record date for, and the provisions of this
paragraph shall not apply with respect to, the giving or making of any
notice, declaration, request or direction referred to in the next
paragraph. If any record date is set pursuant to this paragraph, the
Holders of Outstanding Securities of the relevant series on such record
date, and no other Holders, shall be entitled to take the relevant action,
whether or not such Holders remain Holders after such record date; provided
that no such action shall be effective hereunder unless taken on or prior
to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities of such series on such record date.
Nothing in this paragraph shall be construed to prevent the Company from
setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be
canceled and of no effect), and nothing in this paragraph shall be
construed to render ineffective any action taken by Holders of the
requisite principal amount of Outstanding Securities of the relevant series
on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Company, at its own expense, shall cause
notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Trustee in writing and to
each Holder of Securities of the relevant series in the manner set forth in
Section 106.

The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
join in the giving or making of (i) any Notice of Default, (ii) any
declaration of acceleration referred to in Section 502, (iii) any request
to institute proceedings referred to in Section 507(2) or (iv) any
direction referred to in Section 512, in each case with respect to
Securities of such series. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Securities of such series on such
record date, and no other Holders, shall be entitled to join in such
notice, declaration, request or direction, whether or not such Holders
remain Holders after such record date; provided that no such action shall
be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph
shall be construed to prevent the Trustee from setting a new record date
for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no
effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount
of Outstanding Securities of the relevant series on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph,
the Trustee, at the Company's expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to
be given to the Company in writing and to each Holder of Securities of the
relevant series in the manner set forth in Section 106.

With respect to any record date set pursuant to this Section, the
party hereto which sets such record date may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to
any earlier or later day; provided that no such change shall be effective
unless notice of the proposed new Expiration Date is given to the other
party hereto in writing, and to each Holder of Securities of the relevant
series in the manner set forth in Section 106, on or prior to the existing
Expiration Date. If an Expiration Date is not designated with respect to
any record date set pursuant to this Section, the party hereto which set
such record date shall be deemed to have initially designated the 180th day
after such record date as the Expiration Date with respect thereto, subject
to its right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the
180th day after the applicable record date.

Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.

Section 105. Notices, Etc., to Trustee and Company.

Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,

(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at its Corporate Trust Office, Attention:
Corporate Trust Administration, or

(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the
Company addressed to it at the address of its principal office specified in
the first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.

Section 106. Notice to Holders; Waiver.

Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, to each Holder affected by such event,
at his address as it appears in the Security Register, not later than the
latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice when
mailed to a Holder in the aforesaid manner shall be conclusively deemed to
have been received by such Holder whether or not actually received by such
Holder. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.

In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose
hereunder.

Section 107. Conflict with Trust Indenture Act.

If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act which is required under such Act to be
a part of and govern this Indenture, the latter provision shall control. If
any provision of this Indenture modifies or excludes any provision of the
Trust Indenture Act which may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to
be excluded, as the case may be.

Section 108. Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.

Section 109. Successors and Assigns.

All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.

Section 110. Separability Clause.

In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

Section 111. Benefits of Indenture.

Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto, their successors
hereunder, the Holders, and the holders of any Senior Debt, any benefit or
any legal or equitable right, remedy or claim under this Indenture.

Section 112. Governing Law.

This Indenture and the Securities shall be governed by and construed
in accordance with the law of the State of New York, without regard to
conflicts of laws principles thereof.

Section 113. Legal Holidays.

In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of
the Securities (other than a provision of any Security which specifically
states that such provision shall apply in lieu of this Section)) payment of
interest or principal (and premium, if any) need not be made at such Place
of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on
the Interest Payment Date or Redemption Date, or at the Stated Maturity,
and no interest shall accrue with respect to such payment for the period
from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, to such next succeeding Business Day.

Section 114. Certain Matters Relating to Currencies.

Whenever any action or Act is to be taken hereunder by the Holders of
Securities denominated in different currencies or currency units, then for
purposes of determining the principal amount of Securities held by such
Holders, the aggregate principal amount of the Securities denominated in a
foreign currency or currency unit shall be deemed to be that amount of
Dollars that could be obtained for such principal amount on the basis of a
spot exchange rate specified to the Trustee for such series in an Officers'
Certificate for exchanging such foreign currency or currency unit into
Dollars as of the date of the taking of such action or Act by the Holders
of the requisite percentage in principal amount of the Securities.

The Trustee shall segregate moneys, funds and accounts held by the
Trustee in one currency or currency unit from any moneys, funds or accounts
held in any other currencies or currency units, notwithstanding any
provision herein that would otherwise permit the Trustee to commingle such
amounts.

Section 115. Immunity of Incorporators, Stockholders, Officers and
Directors.

No recourse shall be had for the payment of the principal of (and
premium, if any), or the interest, if any, on any Securities of any series,
or for any claim based thereon, or upon any obligation, covenant or
agreement of this Indenture, against any incorporator, stockholder, officer
or director, as such, past, present or future, of the Company or of any
successor corporation, either directly or indirectly through the Company or
any successor corporation, whether by virtue of any constitution, statute
or rule of law or by the enforcement of any assessment of penalty or
otherwise; it being expressly agreed and understood that this Indenture and
all the Securities of each series are solely corporate obligations, and
that no personal liability whatever shall attach to, or is incurred by, any
incorporator, stockholder, officer or director, past, present or future, of
the Company or of any successor corporation, either directly or indirectly
through the Company or any successor corporation, because of the incurring
of the indebtedness hereby authorized or under or by reason of any of the
obligations, covenants or agreements contained in this Indenture or in any
of the Securities of any series, or to be implied herefrom or therefrom;
and that all such personal liability is hereby expressly released and
waived as a condition of, and as part of the consideration for, the
execution of this Indenture and the issuance of the Securities of each
series.

Section 116. Counterparts.

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

Section 117. Assignment to Affiliate.

The Company will have the right at all times to assign by indenture
supplemental hereto any of its rights or obligations under the Indenture to
a direct, indirect, or wholly owned Affiliate of the Company; provided
that, in the event of any such assignment, the Company will remain liable
for all such obligations.

ARTICLE TWO

Security Forms

Section 201. Forms Generally.

The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or Depositary
therefor or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution thereof. If the
form of Securities of any series is established by action taken pursuant to
a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such
Securities.

The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.

Section 202. Form of Face of Security.

[Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]

CINERGY CORP.

..................................................................

No. ......... $
.......
CUSIP NO. _______

Cinergy Corp., a corporation duly organized and existing under the
laws of the state of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to
.............................................., or registered assigns, the
principal sum of ...................................... Dollars on
........................................................ [if the Security
is to bear interest prior to Maturity, insert: , and to pay interest
thereon from ............. or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, ................... on
............ and ............ in each year, commencing ........., at the
rate of ....% 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 such
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 ....... or
....... (whether or not a Business Day), as the case may be, next 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 said Indenture].

[If the Security is not to bear interest prior to Maturity, insert:
The principal of this Security shall not bear interest except in the case
of a default in payment of principal upon acceleration, upon redemption or
at Stated Maturity and in such case the overdue principal and any overdue
premium shall bear interest at the rate of ....% per annum (to the extent
that the payment of such interest shall be legally enforceable), from the
dates such amounts are due until they are paid or made available for
payment. Interest on any overdue principal or premium shall be payable on
demand. Any such interest on overdue principal or premium which is not paid
on demand shall bear interest at the rate of ......% per annum (to the
extent that the payment of such interest on interest shall be legally
enforceable), from the date of such demand until the amount so demanded is
paid or made available for payment. Interest on any overdue interest shall
be payable on demand.]

Payment of the principal of (and premium, if any) and [if applicable,
insert: any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in ............, 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 [if applicable,
insert: ;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 force and effect as if
made on the due date and no interest shall accrue for the period from and
after such date.

Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, [if subordinated, insert: including,
without limitation, provisions subordinating the payment of the principal
hereof and any premium and interest hereon to the payment in full of all
Senior Debt as defined in the Indenture] which such 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.

CINERGY CORP.

By...............................................

Section 203. Form of Reverse of Security.

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 , 1996
(herein called the "Indenture", which term shall have the meaning assigned
to it in such instrument), between the Company and The 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 [if applicable, insert: , limited in aggregate
principal amount to $...........].

[If applicable, insert: The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable,
insert: (1) on ........... in any year commencing with the year ......
and ending with the year ...... through operation of the sinking fund for
this series at a Redemption Price equal to 100% of the principal amount,
and (2)] at any time [if applicable, insert: on or after ..........,
19..], as a whole or in part, at the election of the Company, at the
following Redemption Prices (expressed as percentages of the principal
amount): If redeemed [if applicable, insert: on or before
..............., ...%, and if redeemed] during the 12-month period
beginning ............. of the years indicated,

Redemption Redemption
Year Price Year Price

and thereafter at a Redemption Price equal to .....% of the principal
amount, together in the case of any such redemption [if applicable, insert:
(whether through operation of the sinking fund or otherwise)] with accrued
interest to the Redemption Date, but interest installments whose Stated
Maturity is on or prior to such Redemption Date will be payable to the
Holders of such Securities, or one or more Predecessor Securities, of
record at the close of business on the relevant Record Dates referred to on
the face hereof, all as provided in the Indenture.]

[If applicable, insert: The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ............
in any year commencing with the year .... and ending with the year ....
through operation of the sinking fund for this series at the Redemption
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2)
at any time [if applicable, insert: on or after ............], as a whole
or in part, at the election of the Company, at the Redemption Prices for
redemption otherwise than through operation of the sinking fund (expressed
as percentages of the principal amount) set forth in the table below: If
redeemed during the 12-month period beginning ............ of the years
indicated,

Redemption Price For Redemption Price For
Redemption Through Redemption Otherwise Than
Operation of the Through Operation of the
Year Sinking Fund Sinking Fund

and thereafter at a Redemption Price equal to .....% of the principal
amount, together in the case of any such redemption (whether through
operation of the sinking fund or otherwise) with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close
of business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.]

[If applicable, insert: Notwithstanding the foregoing, the Company
may not, prior to ............., redeem any Securities of this series as
contemplated by [if applicable, insert: Clause (2) of] the preceding
paragraph as a part of, or in anticipation of, any refunding operation by
the application, directly or indirectly, of moneys borrowed having an
interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than .....% per annum.]

[If applicable, insert: The sinking fund for this series provides
for the redemption on ............ in each year beginning with the year
....... and ending with the year ...... of [if applicable, insert: not
less than $.......... ("mandatory sinking fund") and not more than]
$......... aggregate principal amount of Securities of this series.
Securities of this series acquired or redeemed by the Company otherwise
than through [if applicable, insert: mandatory] sinking fund payments may
be credited against subsequent [if applicable, insert: mandatory] sinking
fund payments otherwise required to be made [if applicable, insert: , in
the inverse order in which they become due].]

[If the Security is subject to redemption of any kind, insert: In the
event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.]

[If subordinated, insert: The indebtedness evidenced by the Securities
of this series is, to the extent and in the manner provided in the
Indenture, expressly subordinate and subject in right of payment to the
prior payment in full of all Senior Debt of the Company (as defined in the
Indenture) whether outstanding at the date of the Indenture or thereafter
incurred, and this Security is issued subject to the provisions of the
Indenture with respect to such subordination. Each holder and owner of
this Security, by accepting the same, agrees to and shall be bound by such
provisions and authorizes the Trustee in his behalf to take such action as
may be necessary or appropriate to effectuate the subordination so provided
and appoints the Trustee his attorney-in-fact for such purpose.]

[If applicable, insert: 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] [, in each case] upon compliance with certain conditions set
forth in the Indenture.]

[If the Security is not an Original Issue Discount Security, insert:
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.]

[If the Security is an Original Issue Discount Security, insert: If
an Event of Default with respect to Securities of this series shall occur
and be continuing, an amount of principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided
in the Indenture. Such amount shall be equal to insert: formula for
determining the amount. Upon payment (i) of the amount of principal so
declared due and payable and (ii) of interest on any overdue principal,
premium and interest (in each case to the extent that the payment of such
interest shall be legally enforceable), all of the Company's obligations in
respect of the payment of the principal of and premium and interest, if
any, on the Securities of this series shall terminate.]

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 hereof 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 indemnity reasonably satisfactory to the Trustee, 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 any
premium 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 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 $....... 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.

Section 204. Form of Legend for Global Securities.

Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Global Security authenticated and
delivered hereunder shall bear a legend in substantially the following form
(or such other form as a securities exchange or Depositary may request or
require):

This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Security may not be exchanged in whole or in part for
a Security registered, and no transfer of this Security in whole or in part
may be registered, in the name of any Person other than such Depositary or
a nominee thereof, except in the limited circumstances described in the
Indenture.

Section 205. Form of Trustee's Certificate of Authentication.

The Trustee's certificates of authentication shall be in substantially
the following form: This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.

THE FIFTH THIRD BANK,

As Trustee

By...............................
Authorized Signatory

ARTICLE THREE

The Securities

Section 301. Amount Unlimited; Issuable in Series.

The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.

The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section
303, set forth, or determined in the manner provided, in an Officers'
Certificate, or established in one or more indentures supplemental hereto,
prior to the issuance of Securities of any series,

(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);

(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906 or 1107 and
except for any Securities which, pursuant to Section 303, are deemed never
to have been authenticated and delivered hereunder);

(3) the Person to whom any interest on a Security of the series
shall be payable, if other than the Person in whose name that Security (or
one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest;

(4) the date or dates on which the principal of any Securities of
the series is payable;

(5) the rate or rates at which any Securities of the series shall
bear interest, if any, the date or dates from which any such interest shall
accrue, the Interest Payment Dates on which any such interest shall be
payable, the manner of determination of such Interest Payment Dates and the
Regular Record Date for any such interest payable on any Interest Payment
Date;

(6) the right, if any, to extend the interest payment periods and
the duration of such extension;

(7) the place or places where the principal of and any premium and
interest on any Securities of the series shall be payable;

(8) the period or periods within which, the price or prices at
which and the terms and conditions upon which any Securities of the series
may be redeemed, in whole or in part, at the option of the Company and, if
other than by a Board Resolution, the manner in which any election by the
Company to redeem the Securities shall be evidenced;

(9) the obligation, if any, of the Company to redeem or purchase
any Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of the Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which any Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;

(10) the denominations in which any Securities of the series shall
be issuable;

(11) if the amount of principal of or any premium or interest on
any Securities of the series may be determined with reference to an index
or pursuant to a formula, the manner in which such amounts shall be
determined;

(12) if other than the currency of the United States of America,
the currency, currencies or currency units in which the principal of or any
premium or interest on any Securities of the series shall be payable and
the manner of determining the equivalent thereof in the currency of the
United States of America for any purpose, including for purposes of the
definition of "Outstanding" in Section 101;

(13) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the Company
or the Holder thereof, in one or more currencies or currency units other
than that or those in which such Securities are stated to be payable, the
currency, currencies or currency units in which the principal of or any
premium or interest on such Securities as to which such election is made
shall be payable, the periods within which and the terms and conditions
upon which such election is to be made and the amount so payable (or the
manner in which such amount shall be determined);

(14) if other than the entire principal amount thereof, the portion
of the principal amount of any Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof pursuant
to Section 502;

(15) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more
dates prior to the Stated Maturity, the amount which shall be deemed to be
the principal amount of such Securities as of any such date for any purpose
thereunder or hereunder, including the principal amount thereof which
shall be due and payable upon any Maturity other than the Stated Maturity
or which shall be deemed to be Outstanding as of any date prior to the
Stated Maturity (or, in any such case, the manner in which such amount
deemed to be the principal amount shall be determined);

(16) if applicable, that the Securities of the series, in whole or
any specified part, shall be defeasible pursuant to Section 1302 or Section
1303 or both such Sections;

(17) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities
and, in such case, the respective Depositaries for such Global Securities,
the form of any legend or legends which shall be borne by any such Global
Security in addition to or in lieu of that set forth in Section 204 and
any circumstances in addition to or in lieu of those set forth in Clause
(2) of the last paragraph of Section 305 in which any such Global Security
may be exchanged in whole or in part for Securities registered, and any
transfer of such Global Security in whole or in part may be registered, in
the name or names of Persons other than the Depositary for such Global
Security or a nominee thereof;

(18) any addition to or change in the Events of Default which
applies to any Securities of the series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the
principal amount thereof due and payable pursuant to Section 502;

(19) any addition to or change in the covenants set forth in
Article Ten which applies to Securities of the series;

(20) the applicability of, or any addition to or change in, Article
Fourteen with respect to the Securities of a series;

(21) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).

All Securities of any one series shall be substantially identical
except as to date and principal amount and except as may otherwise be
provided in or pursuant to the Board Resolution referred to above and
(subject to Section 303) set forth, or determined in the manner provided,
in the Officers' Certificate referred to above or in any such indenture
supplemental hereto.

If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.

Section 302. Denominations.

The Securities of each series shall be issuable only in registered
form without coupons and only in such denominations as shall be specified
as contemplated by Section 301. In the absence of any such specified
denomination with respect to the Securities of any series, the Securities
of such series shall be issuable in denominations of $1,000 and any
integral multiple thereof.

Section 303. Execution, Authentication, Delivery and Dating.

The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman, its President, one of its Vice
Presidents, or its Treasurer. The signature of any of these officers on the
Securities may be manual or facsimile.

Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the
Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.

At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed
by the Company to the Trustee for authentication, together with a Company
Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and deliver
such Securities. If the form or terms of the Securities of the series have
been established by or pursuant to a Board Resolution as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in <PAGE>
relation to such
Securities, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating,

(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such form
has been established in conformity with the provisions of this Indenture;

(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
and

(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights to general equity principles and
to such other matters as such counsel shall set forth therein.

If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.

Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at
one time, it shall not be necessary to deliver the Officers' Certificate
otherwise required pursuant to Section 301 or the Company Order and Opinion
of Counsel otherwise required pursuant to such preceding paragraph at or
prior to the authentication of each Security of such series if such
documents (with appropriate variations to reflect such future issuance) are
delivered at or prior to the authentication upon original issuance of the
first Security of such series to be issued.

Each Security shall be dated the date of its authentication.

No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided
for herein executed by the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.

Section 304. Temporary Securities.

Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate
and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in
lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing
such Securities may determine, as evidenced by their execution of such
Securities.

If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary
Securities of such series at the office or agency of the Company in a Place
of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor one or more definitive Securities of the same series, of
any authorized denominations and of like tenor and aggregate principal
amount. Until so exchanged, the temporary Securities of any series shall in
all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series and tenor.

Section 305. Registration, Registration of Transfer and Exchange.

The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any
other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "Security Registrar" for the
purpose of registering Securities and transfers of Securities as herein
provided.

Upon surrender for registration of transfer of any Security of a
series at the office or agency of the Company in a Place of Payment for
that series, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one
or more new Securities of the same series, of any authorized denominations
and of like tenor and aggregate principal amount.

At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations
and of like tenor and aggregate principal amount, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive.

All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.

Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed,
by the Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 906 or 1107 not
involving any transfer.

If the Securities of any series (or of any series and specified tenor)
are to be redeemed in part, the Company shall not be required (A) to issue,
register the transfer of or exchange any Securities of that series (or of
that series and specified tenor, as the case may be) during a period
beginning at the opening of business 15 days before the day of the mailing
of a notice of redemption of any such Securities selected for redemption
under Section 1103 and ending at the close of business on the day of such
mailing, or (B) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except the unredeemed portion
of any Security being redeemed in part.

The provisions of Clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:

(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global
Security or a nominee thereof and delivered to such Depositary or nominee
thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.

(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered,
in the name of any Person other than the Depositary for such Global
Security or a nominee thereof unless (A) such Depositary (i) has notified
the Company that it is unwilling or unable to continue as Depositary for
such Global Security or (ii) has ceased to be a clearing agency registered
under the Exchange Act, (B) there shall have occurred and be continuing an
Event of Default with respect to such Global Security or there shall
exist such circumstances, if any, in addition to or in lieu of the
foregoing as have been specified for this purpose as contemplated by
Section 301.

(3) Subject to Clause (2) above, any exchange of a Global Security
for other Securities may be made in whole or in part, and all Securities
issued in exchange for a Global Security or any portion thereof shall be
registered in such names as the Depositary for such Global Security shall
direct.

(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Section, Section 304, 306, 906 or
1107 or otherwise, shall be authenticated and delivered in the form of, and
shall be, a Global Security, unless such Security is registered in the name
of a Person other than the Depositary for such Global Security or a nominee
thereof.

Section 306. Mutilated, Destroyed, Lost and Stolen Securities.

If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and the
Trustee shall authenticate and deliver, in lieu of any such destroyed, lost
or stolen Security, a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected
therewith.

Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series duly
issued hereunder.

The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.

Section 307. Payment of Interest; Interest Rights Preserved.

Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is
payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name that Security (or
one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest.

Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to
the Holder on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:

(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this Clause provided. Thereupon
the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than
10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be given to each Holder of Securities of such
series in the manner set forth in Section 106, not less than 10 days prior
to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names
the Securities of such series (or their respective Predecessor Securities)
are registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following Clause (2).

(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed practicable
by the Trustee.

Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such
other Security.

Section 308. Persons Deemed Owners.

Prior to due presentment of a 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 such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and any
premium and (subject to Section 307) any interest on such Security and for
all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the
Trustee shall be affected by notice to the contrary.

None of the Company, the Trustee, any Paying Agent (if not the
Company) or the Security Registrar shall have any responsibility or
liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of a Global Security or for
maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.

Section 309. Cancellation.

All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall,
if surrendered to any Person other than the Trustee, be delivered to the
Trustee and shall be promptly cancelled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired
in any manner whatsoever, and may deliver to the Trustee (or to any other
Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and
sold, and all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Securities held by the Trustee
shall be disposed of as directed by a Company Order; provided, however,
that the Trustee shall not be required to destroy such cancelled
Securities.

Section 310. Computation of Interest.

Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall
be computed on the basis of a 360-day year of twelve 30-day months.

Section 311. CUSIP Numbers.

The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee may use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any
notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers.

ARTICLE FOUR

Satisfaction and Discharge

Section 401. Satisfaction and Discharge of Indenture.

This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

(1) either (A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter repaid
to the Company or discharged from such trust, as provided in Section 1003)
have been delivered to the Trustee for cancellation; or (B) all such
Securities not theretofore delivered to the Trustee for cancellation (i)
have become due and payable, or (ii) will become due and payable at
their Stated Maturity within one year, or (iii) are to be called for
redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee in the name, and at
the expense, of the Company, and the Company, in the case of (i), (ii) or
(iii) above, has deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose, money in an amount sufficient to pay
and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal and any premium
and interest to the date of such deposit (in the case of Securities which
have become due and payable) or to the Stated Maturity or Redemption Date,
as the case may be;

(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and

(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the
obligations of the Company to any Authenticating Agent under Section 614
and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of Clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.

Section 402. Application of Trust Money.

Subject to the provisions of the last paragraph of Section 1003 and to
Article Fourteen, if applicable, all money deposited with the Trustee
pursuant to Section 401 shall be held in trust and applied by it, in
accordance with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the
Persons entitled thereto, of the principal and any premium and interest for
whose payment such money has been deposited with the Trustee.

ARTICLE FIVE

Remedies

Section 501. Events of Default.

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

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

(2) default in the payment of the principal of or any premium on any
Security of that series at its Maturity; or

(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or

(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with or which has expressly been included
in this Indenture solely for the benefit of a series of Securities
other than that series), and continuance of such default or breach for a
period of 90 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 35% in principal amount of the Outstanding
Securities of that series a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or

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

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

(7) any other Event of Default established pursuant to Section 301
with respect to Securities of that series.

Section 502. Acceleration of Maturity; Rescission and Annulment.

If an Event of Default (other than an Event of Default specified in
Section 501(5) or 501(6)) with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 35% in principal amount of the
Outstanding Securities of that series may declare the principal amount of
all the Securities of that series (or, if any Securities of that series are
Original Issue Discount Securities, such portion of the principal amount of
such Securities as may be specified by the terms thereof) to be due and
payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable. If
an Event of Default specified in Section 501(5) or 501(6) with respect to
Securities of any series at the time Outstanding occurs, the principal
amount of all the Securities of that series (or, if any Securities of that
series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified by the terms
thereof) shall automatically, and without any declaration or other action
on the part of the Trustee or any Holder, become immediately due and
payable.

At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences
if,

(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay (A) all overdue interest on all Securities of that
series, (B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate or rates prescribed
therefor in such Securities, all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel; and

(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.

No such rescission shall affect any subsequent default or impair any
right consequent thereon.

Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.

The Company covenants that if

(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or

(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities, the whole amount then due and payable on
such Securities for principal and any premium and interest and such further
amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.

If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such
series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other
proper remedy.

Section 504. Trustee May File Proofs of Claim.

In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding
or otherwise, to take any and all actions authorized under the Trust
Indenture Act in order to have claims of the Holders and the Trustee
allowed in any such proceeding. In particular, the Trustee shall be
authorized to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section
607.

No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding; provided, however, that the Trustee may, on behalf of the
Holders, vote for the election of a trustee in bankruptcy or similar
official and be a member of a creditors' or other similar committee.

Section 505. Trustee May Enforce Claims Without Possession of Securities.

All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any
of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought
in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.

Section 506. Application of Money Collected.

Any money collected by the Trustee pursuant to this Article, subject
to Article Fourteen, if applicable, shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or any premium or
interest, upon presentation of the Securities and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully
paid:

First: To the payment of all amounts due the Trustee under Section
607; and

Second: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due
and payable on such Securities for principal and any premium and interest,
respectively

Third: The balance, if any, to the Company.

Section 507. Limitation on Suits.

No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless

(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;

(2) the Holders of not less than 35% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;

(3) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;

(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and

(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series; it being
understood and intended that no one or more of such Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
of such Holders, or to obtain or to seek to obtain priority or preference
over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and
ratable benefit of all of such Holders.

Section 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.

Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section
307) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.

Section 509. Restoration of Rights and Remedies.

If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case, subject to
any determination in such proceeding, the Company, the Trustee and the
Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such proceeding had been
instituted.

Section 510. Rights and Remedies Cumulative.

Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.

Section 511. Delay or Omission Not Waiver.

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

Section 512. Control by Holders.

The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that

(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and

(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.

Section 513. Waiver of Past Defaults.

The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all
the Securities of such series waive any past default hereunder with respect
to such series and its consequences, except a default

(1) in the payment of the principal of or any premium or interest on
any Security of such series, or

(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.

Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.

Section 514. Undertaking for Costs.

In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, a court may require any party
litigant in such suit to file an undertaking to pay the costs of such suit,
and may assess costs against any such party litigant, in the manner and to
the extent provided in the Trust Indenture Act; provided that this Section
shall not apply to any suit instituted by the Trustee or to any suit
instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of Outstanding Securities (of any
series), or to any suit instituted by a Holder for the enforcement of the
payment of the principal of or any premium or interest on any Security on
or after the Stated Maturity thereof (or, in the case of redemption, on or
after the Redemption Date).

Section 515. Waiver of Usury, Stay or Extension Laws.

The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any usury, stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect
the covenants or the performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law
had been enacted.

ARTICLE SIX

The Trustee

Section 601. Certain Duties and Responsibilities.

The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of
this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it. Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.

Section 602. Notice of Defaults.

If a default occurs hereunder with respect to Securities of any
series, the Trustee shall give the Holders of Securities of such series
notice of such default as and to the extent provided by the Trust Indenture
Act, unless such default shall have been cured or waived; provided,
however, that in the case of any default of the character specified in
Section 501(4) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the occurrence thereof.
For the purpose of this Section, the term "default" means any event which
is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities of such series.

Section 603. Certain Rights of Trustee.

Subject to the provisions of Section 601:

(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;

(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;

(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;

(4) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;

(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee security or indemnity reasonably satisfactory
to the Trustee against the costs, expenses and liabilities which might
be incurred by it in compliance with such request or direction;

(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit.

(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.

Section 604. Not Responsible for Recitals or Issuance of Securities.

The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements
of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of
the Securities. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of Securities or the
proceeds thereof.

Section 605. May Hold Securities.

The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.

Section 606. Money Held in Trust.

Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.

Section 607. Compensation and Reimbursement.

The Company agrees

(1) to pay to the Trustee from time to time such compensation as
shall be agreed to in writing between the Company and the Trustee for all
services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust);

(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and

(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.

The Trustee shall have a lien prior to the Securities as to all
property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section 607, except with respect to
funds held in trust for the benefit of the Holders of particular
Securities.

When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(5) or Section 501(6), the
expenses (including the reasonable charges and expenses of its counsel) and
the compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency
or other similar law.

The provisions of this Section shall survive the termination of this
Indenture.

Section 608. Conflicting Interests.

If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and
subject to the provisions of, the Trust Indenture Act and this Indenture.
To the extent permitted by such Act, the Trustee shall not be deemed to
have a conflicting interest by virtue of being a trustee under this
Indenture with respect to Securities of more than one series.

Section 609. Corporate Trustee Required; Eligibility.

There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder
for Securities of one or more other series. Each Trustee shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has
a combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the
purposes of this Section and to the extent permitted by the Trust Indenture
Act, the combined capital and surplus of such Person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee with respect to the
Securities of any series shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article.

Section 610. Resignation and Removal; Appointment of Successor.

No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.

The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611
shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.

The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of
the Outstanding Securities of such series, delivered to the Trustee and to
the Company.

If at any time:

(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or

(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or

(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,

then, in any such case, (A) the Company by a Board Resolution may remove
the Trustee with respect to all Securities, or (B) subject to Section 514,
any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee
with respect to all Securities and the appointment of a successor Trustee
or Trustees.

If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities
of one or more or all of such series and that at any time there shall be
only one Trustee with respect to the Securities of any particular series)
and shall comply with the applicable requirements of Section 611. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the
Securities of any series shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the
successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in
the manner required by Section 611, any Holder who has been a bona fide
Holder of a Security of such series for at least six months may, on behalf
of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.

The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any
series to all Holders of Securities of such series in the manner provided
in Section 106. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its
Corporate Trust Office.

Section 611. Acceptance of Appointment by Successor.

In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers
and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder.

In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series as to which the retiring Trustee
is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein
or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee
of a trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture the resignation or removal of
the retiring Trustee shall become effective to the extent provided therein
and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates;
but, on request of the Company or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates.

Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.

No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible
under this Article.

Section 612. Merger, Conversion, Consolidation or Succession to Business.

Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper
or any further act on the part of any of the parties hereto. In case any
Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor
Trustee had itself authenticated such Securities.

Section 613. Preferential Collection of Claims Against Company.

If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to
the provisions of the Trust Indenture Act regarding the collection of
claims against the Company (or any such other obligor). For purposes of
Section 311(b) (4) and (6) of the Trust Indenture Act, the following terms
shall mean:

(a) "cash transaction" means any transaction in which full payment
for goods or securities sold is made within seven days after delivery of
the goods or securities in currency or in checks or other orders drawn upon
banks or bankers and payable upon demand; and

(b) "self-liquidating paper" means any draft, bill of exchange,
acceptance or obligation which is made, drawn, negotiated or incurred by
the Company for the purpose of financing the purchase, processing,
manufacturing, shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession of, or a lien
upon, the goods, wares or merchandise or the receivables or proceeds
arising from the sale of the goods, wares or merchandise previously
constituting the security, provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship with the
Company arising from the making, drawing, negotiating or incurring of the
draft, bill of exchange, acceptance or obligation.

Section 614. Appointment of Authenticating Agent.

From time to time the Trustee may appoint one or more Authenticating
Agents with respect to one or more series of Securities, which may include
the Company or any of its Affiliates, with power to act on behalf of the
Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 306, and Securities so authenticated shall
be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and
delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication
and delivery on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing
business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less
than $50,000,000 and subject to supervision or examination by Federal or
State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section, such Authenticating Agent shall resign immediately in the manner
and with the effect specified in this Section.

Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent,
shall continue to be an Authenticating Agent, provided such corporation
shall be otherwise eligible under this Section, without the execution or
filing of any paper or any further act on the part of the Trustee or the
Authenticating Agent.

An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in
case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Company.
Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.

The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.

If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon,
in addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
<PAGE>
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.

THE FIFTH THIRD BANK

As Trustee

By....................................,

As Authenticating Agent

By.......................................
Authorized Officer

Section 615. Indemnification.

The Company agrees to indemnify the Trustee for, and hold it harmless
against, any loss, liability or expense incurred by it, arising out of or
in connection with the acceptance or administration of this Indenture or
the trusts hereunder or the performance of its duties hereunder or under
any related document, including the reasonable costs and expenses of
defending itself against or investigating any claim or liability with
respect to the Securities, except to the extent that any such loss,
liability or expense was due to its own negligence or bad faith. The
Company need not pay for any settlement made without its consent. The
obligations of the Company to the Trustee under this Section shall survive
the satisfaction and discharge of this Indenture and payment in full and/or
retirement of the Securities.

ARTICLE SEVEN

Holders' Lists and Reports by Trustee and Company

Section 701. Company to Furnish Trustee Names and Addresses of Holders.

The Company will furnish or cause to be furnished to the Trustee:

(1) on each Regular Record Date, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders of
Securities of each series as of such Regular Record Date, and

(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished; provided, however, that if and so long as the
Trustee shall be the Security Registrar, no such list need be furnished.

Section 702. Preservation of Information; Communications to Holders.

The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most
recent list as provided in Section 701 and the names and addresses of
Holders received by the Trustee in its capacity as Security Registrar. The
Trustee may destroy any list furnished to it as provided in Section 701
upon receipt of a new list so furnished.

The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by
the Trust Indenture Act.

Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.

Section 703. Reports by Trustee.

The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto. If required by Section 313(a) of the Trust Indenture Act, the
Trustee shall, within sixty days after each May 15 following the date of
this Indenture deliver to Holders a brief report, dated as of such May 15,
which complies with the provisions of such Section 313(a).

A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company.

Section 704. Reports by Company.

The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and
such summaries thereof, as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant to such Act; provided
that any such information, documents or reports required to be filed with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be
filed with the Trustee within 15 days after the same is so required to be
filed with the Commission.

ARTICLE EIGHT

Consolidation, Merger and Sale

Section 801. Consolidations and Mergers Permitted.

Nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of the Company with or into any other
corporation or corporations (whether or not affiliated with the Company),
or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any
sale, conveyance, transfer or other disposition of the property of the
Company or its successor or successors as an entirety, or substantially as
an entirety, to any other corporation (whether or not affiliated with the
Company or its successor or successors) authorized to acquire and operate
the same; provided, however, the Company hereby covenants and agrees that,
upon any such consolidation, merger, sale, conveyance, transfer or other
disposition, the due and punctual payment of the principal of (premium, if
any) and interest on all of the Securities of all series in accordance with
the terms of each series, according to their tenor, and the due and
punctual performance and observance of all the covenants and conditions of
this Indenture with respect to each series or established with respect to
such series to be kept or performed by the Company, shall be expressly
assumed, by supplemental indenture (which shall conform to the provisions
of the Trust Indenture Act as then in effect) satisfactory in form to the
Trustee executed and delivered to the Trustee by the entity formed by such
consolidation, or into which the Company shall have been merged, or by the
entity which shall have acquired such property.

Section 802. Rights and Duties of Successor Company.

In case of any such consolidation, merger, sale, conveyance, transfer
or other disposition and upon the assumption by the successor corporation,
by supplemental indenture, executed and delivered to the Trustee and
satisfactory in form to the Trustee, of the due and punctual payment of the
principal of, premium, if any, and interest on all of the Securities of all
series outstanding and the due and punctual performance of all of the
covenants and conditions of this Indenture or established with respect to
each series of the Securities to be performed by the Company with respect
to each series, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named
herein as the party of the first part, and thereupon the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities. Such successor corporation thereupon may
cause to be signed, and may issue either in its own name or in the name of
the Company or any other predecessor obligor on the Securities, any or all
of the Securities issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee; and, upon the order of
such successor company, instead of the Company, and subject to all the
terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver any Securities which
previously shall have been signed and delivered by the officers of the
predecessor Company to the Trustee for authentication, and any Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Securities so issued
shall in all respects have the same legal rank and benefit under this
Indenture as the Securities theretofore or thereafter issued in accordance
with the terms of this Indenture as though all of such Securities had been
issued at the date of the execution hereof.

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

Section 803. Opinion of Counsel.

The Trustee may receive an Opinion of Counsel as conclusive evidence
that any such consolidation, merger, sale, conveyance, transfer or other
disposition, and any such assumption, comply with the provisions of this
Article.

ARTICLE NINE

Supplemental Indentures

Section 901. Supplemental Indentures Without Consent of Holders.

Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory
to the Trustee, for any of the following purposes:

(1) to evidence the succession of another Person to the Company to
the assumption by any such successor of the covenants of the Company herein
and in the Securities pursuant to Article Eight or Section 117; or

(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; provided, however, that in respect of any such additional
covenant, such supplemental indenture may provide for a particular period
of grace after default (which period may be shorter or longer than that
allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the
Trustee upon such default or may limit the right of the Holders of a
majority in aggregate principal amount of the Securities of such series to
waive such default;

(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events
of Default are to be for the benefit of less than all series of Securities,
stating that such additional Events of Default are expressly being included
solely for the benefit of such series); or

(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or

(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that any
such addition, change or elimination (A) shall neither (i) apply to any
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (ii) modify the
rights of the Holder of any such Security with respect to such provision or
(B) shall become effective only when there is no such Security Outstanding;
or

(6) to secure the Securities; or

(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or

(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by one or more successor Trustees, pursuant to the
requirements of Section 611; or

(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action pursuant
to this Clause (9) shall not adversely affect the interests of the Holders
of Securities of any series in any material respect.

The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations which may be therein contained.

Any supplemental indenture authorized by the provisions of this
Section may be executed by the Company and the Trustee without the consent
of the holders of any of the Securities at the time outstanding,
notwithstanding any of the provisions of Section 902.

Section 902. Supplemental Indentures With Consent of Holders.

With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by
such supplemental indenture, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding
Security affected thereby,

(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security or any other Security
which would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502, or change any Place of Payment
where, or the coin or currency in which, any Security or any premium or
interest thereon is payable, affect the applicability of Article Fourteen
to any Security, or impair the right to institute suit for the enforcement
of any such payment on or after the Stated Maturity thereof (or, in the
case of redemption, on or after the Redemption Date), or

(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or

(3) modify any of the provisions of this Section, Section 513 or
Section 1007, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to require
the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 1007, or the
deletion of this proviso, in accordance with the requirements of Sections
611 and 901(8).

A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely
for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect
the rights under this Indenture of the Holders of Securities of any other
series; provided that no such supplemental indenture shall modify any
provision of this Indenture so as to adversely affect the rights of any
holder of outstanding Senior Debt to the benefits of Article Fourteen.

It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.

Section 903. Execution of Supplemental Indentures.

In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.

Section 904. Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all
purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.

Section 905. Conformity with Trust Indenture Act.

Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.

Section 906. Reference in Securities to Supplemental Indentures.

Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and
shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If
the Company shall so determine, new Securities of any series so modified as
to conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.

ARTICLE TEN

Covenants

Section 1001. Payment of Principal, Premium and Interest.

The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any
premium and interest on the Securities of that series in accordance with
the terms of the Securities and this Indenture.

Section 1002. Maintenance of Office or Agency.

The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may
be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities of that
series and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to
receive all such presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.

Section 1003. Money for Securities Payments to Be Held in Trust.

If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of
the principal of or any premium or interest on any of the Securities of
that series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal and any premium and
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or before each due date of the principal
of or any premium or interest on any Securities of that series, deposit
with a Paying Agent a sum sufficient to pay such amount, such sum to be
held as provided by the Trust Indenture Act, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.

The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument
in which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will (1) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent
and (2) during the continuance of any default by the Company (or any other
obligor upon the Securities of that series) in the making of any payment in
respect of the Securities of that series, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent for payment in respect of the Securities of that series.

The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any Paying
Agent to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or any premium
or interest on any Security of any series and remaining unclaimed for 18
months after such principal, premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in
a newspaper published in the English language, customarily published on
each Business Day and of general circulation in the Borough of Manhattan,
The City of New York, New York, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30
days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.

Section 1004. Statement by Officers as to Default.

The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance
of any of the terms, provisions and conditions of this Indenture (without
regard to any period of grace or requirement of notice provided hereunder)
and, if the Company shall be in default, specifying all such defaults and
the nature and status thereof of which they may have knowledge.

Section 1005. Maintenance of Properties.

The Company will cause all properties used or useful in the conduct of
its business or the business of any Subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment
of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all
times; provided, however, that nothing in this Section shall prevent the
Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Subsidiary.

Section 1006. Payment of Taxes and Other Claims.

The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary
or upon the income, profits or property of the Company or any Subsidiary,
and (2) all lawful claims for labor, materials and supplies which, if
unpaid, might by law become a lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to
pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.

Section 1007. Waiver of Certain Covenants.

Except as otherwise specified as contemplated by Section 301 for
Securities of such series, the Company may, with respect to the Securities
of any series, omit in any particular instance to comply with any term,
provision or condition set forth in any covenant provided pursuant to
Section 301(18), 901(2) or 901(7) for the benefit of the Holders of such
series if before the time for such compliance the Holders of at least a
majority in principal amount of the Outstanding Securities of such series
shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or
condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until
such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition
shall remain in full force and effect.

Section 1008. Calculation of Original Issue Discount.

The Company shall file with the Trustee promptly at the end of each
calendar year a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of such year.

ARTICLE ELEVEN

Redemption of Securities

Section 1101. Applicability of Article.

Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for such Securities) in
accordance with this Article.

Section 1102. Election to Redeem; Notice to Trustee.

The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or in another manner specified as
contemplated by Section 301 for such Securities. In case of any redemption
at the election of the Company the Company shall, at least 45 days prior to
the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date
and of the principal amount of Securities of such series to be redeemed. In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.

Section 1103. Selection by Trustee of Securities to Be Redeemed.

If less than all the Securities of any series are to be redeemed
(unless all the Securities of such series and of a specified tenor are to
be redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such
method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of a portion of the principal amount of
any Security of such series, provided that the unredeemed portion of the
principal amount of any Security shall be in an authorized denomination
(which shall not be less than the minimum authorized denomination) for such
Security. If less than all the Securities of such series are to be redeemed
(unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to
the Redemption Date by the Trustee, from the Outstanding Securities of such
series not previously called for redemption in accordance with the
preceding sentence.

The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any
Securities selected for partial redemption as aforesaid, the principal
amount thereof to be redeemed.

The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less
than the minimum authorized denomination) for such Security.

For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.

Section 1104. Notice of the Redemption.

Notice of redemption shall be given by mail not less than 30 nor more
than 60 days prior to the Redemption Date, to each Holder of Securities to
be redeemed, at his address appearing in the Security Register.

All notices of redemption shall identify the Securities to be redeemed
and shall state:

(1) the Redemption Date,

(2) the Redemption Price,

(3) if less than all the Outstanding Securities of any series
consisting of more than a single Security are to be redeemed, the
identification (and, in the case of partial redemption of any such
Securities, the principal amounts) of the particular Securities to be
redeemed and, if less than all the Outstanding Securities of any series
consisting of a single Security are to be redeemed, the principal amount of
the particular Security to be redeemed,

(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,

(5) the place or places where each such Security is to be surrendered
for payment of the Redemption Price, and

(6) that the redemption is for a sinking fund, if such is the case.

Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company and shall be
irrevocable.

The notice if mailed in the manner herein provided shall be
conclusively presumed to have been given, whether or not the Holder
receives such notice. In any case, failure to give such notice by mail or
any defect in the notice to the Holder of any Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security.

Section 1105. Deposit of Redemption Price.

On or before any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an
amount of money sufficient to pay the Redemption Price of, and (except if
the Redemption Date shall be an Interest Payment Date) accrued interest on,
all the Securities which are to be redeemed on that date.

Section 1106. Securities Payable on Redemption Date.

Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless
the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon
surrender of any such Security for redemption in accordance with said
notice, such Security shall be paid by the Company at the Redemption Price,
together with accrued interest to the Redemption Date; provided, however,
that, unless otherwise specified as contemplated by Section 301,
installments of interest whose Stated Maturity is on or prior to the
Redemption Date will be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such at the close of business
on the relevant Record Dates according to their terms and the provisions of
Section 307.

Section 1107. Securities Redeemed in Part.

Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of
such Security without service charge, a new Security or Securities of the
same series and of like tenor, of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for
the unredeemed portion of the principal of the Security so surrendered;
provided, however, that a Depositary need not surrender a Global Security
for a partial redemption and may be authorized to make a notation on such
Global Security of such partial redemption. In the case of a partial
redemption of a Global Security, the Depositary, and in turn, the
participants in the Depositary, shall have the responsibility to select any
Securities to be redeemed by random lot.

ARTICLE TWELVE

Sinking Funds

Section 1201. Applicability of Article.

The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise
specified as contemplated by Section 301 for such Securities.

The minimum amount of any sinking fund payment provided for by the
terms of any Securities is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by
the terms of such Securities is herein referred to as an "optional sinking
fund payment". If provided for by the terms of any Securities, the cash
amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities as provided for by the terms of such Securities.

Section 1202. Satisfaction of Sinking Fund Payments with Securities.

The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of
the Company pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant to the
terms of such Securities, in each case in satisfaction of all or any part
of any sinking fund payment with respect to any Securities of such series
required to be made pursuant to the terms of such Securities as and to the
extent provided for by the terms of such Securities; provided that the
Securities to be so credited have not been previously so credited. The
Securities to be so credited shall be received and credited for such
purpose by the Trustee at the Redemption Price, as specified in the
Securities so to be redeemed, for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.

Section 1203. Redemption of Securities for Sinking Fund.

Not less than 45 days prior to each sinking fund payment date for any
Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment
for such Securities pursuant to the terms of such Securities, the portion
thereof, if any, which is to be satisfied by payment of cash and the
portion thereof, if any, which is to be satisfied by delivering and
crediting Securities pursuant to Section 1202 and will also deliver to the
Trustee any Securities to be so delivered. Not less than 30 days prior to
each such sinking fund payment date, the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 1103 and cause notice of the redemption thereof to be
given in the name of and at the expense of the Company in the manner
provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.

ARTICLE THIRTEEN

Defeasance and Covenant Defeasance

Section 1301. Company's Option to Effect Defeasance or Covenant
Defeasance.

The Company may elect, at its option at any time, to have Section 1302
or Section 1303 applied to any Securities or any series of Securities, as
the case may be, designated pursuant to Section 301 as being defeasible
pursuant to such Section 1302 or 1303, in accordance with any applicable
requirements provided pursuant to Section 301 and upon compliance with the
conditions set forth below in this Article. Any such election shall be
evidenced by a Board Resolution or in another manner specified as
contemplated by Section 301 for such Securities.

Section 1302. Defeasance and Discharge.

Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities or any series of Securities, as the case
may be, the Company shall be deemed to have been discharged from its
obligations with respect to such Securities as provided in this Section on
and after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Defeasance"). For this purpose, such Defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Securities and to have satisfied all its
other obligations under such Securities and this Indenture insofar as such
Securities are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), subject to the
following which shall survive until otherwise terminated or discharged
hereunder: (1) the rights of Holders of such Securities to receive, solely
from the trust fund described in Section 1304 and as more fully set forth
in such Section, payments in respect of the principal of and any premium
and interest on such Securities when payments are due, (2) the Company's
obligations with respect to such Securities under Sections 304, 305, 306,
1002 and 1003, (3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (4) this Article. Subject to compliance with this
Article, the Company may exercise its option (if any) to have this Section
applied to any Securities notwithstanding the prior exercise of its option
(if any) to have Section 1303 applied to such Securities.

Section 1303. Covenant Defeasance.

Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities or any series of Securities, as the case
may be, (1) the Company shall be released from its obligations under
Section 801(3), Sections 1005 through 1006, inclusive, and any covenants
provided pursuant to Section 301(19), 901(2) or 901(7) for the benefit of
the Holders of such Securities and (2) the occurrence of any event
specified in Sections 501(4) (with respect to any of Section 801(3),
Sections 1005 through 1006, inclusive, and any such covenants provided
pursuant to Section 301(19), 901(2) or 901(7)), and 501(7) shall be deemed
not to be or result in an Event of Default in each case with respect to
such Securities as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called
"Covenant Defeasance"). For this purpose, such Covenant Defeasance means
that, with respect to such Securities, the Company may omit to comply with
and shall have no liability in respect of any term, condition or limitation
set forth in any such specified Section (to the extent so specified in the
case of Section 501(4)) or Article Fourteen, whether directly or indirectly
by reason of any reference elsewhere herein to any such Section or Article
or by reason of any reference in any such Section or Article to any other
provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.

Section 1304. Conditions to Defeasance or Covenant Defeasance.

The following shall be the conditions to the application of Section
1302 or Section 1303 to any Securities or any series of Securities, as the
case may be:

(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of such
Securities, (A) money in an amount, or (B) U.S. Government Obligations
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (C) a
combination thereof, in each case sufficient, in the opinion of a firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied
by the Trustee (or any such other qualifying trustee) to pay and discharge,
the principal of and any premium and interest on such Securities on the
respective Stated Maturities, in accordance with the terms of this
Indenture and such Securities. As used herein, "U.S. Government Obligation"
means (x) any security which is (i) a direct obligation of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged or (ii) an obligation of a Person
controlled or supervised by and acting as an agency or instrumentality of
the United States of America the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case (i) or (ii), is not callable or redeemable
at the option of the issuer thereof, and (y) any depositary receipt issued
by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any U.S. Government Obligation which is specified
in Clause (x) above and held by such bank for the account of the holder of
such depositary receipt, or with respect to any specific payment of
principal of or interest on any U.S. Government Obligation which is so
specified and held, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable
to the holder of such depositary receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific
payment of principal or interest evidenced by such depositary receipt.

(2) In the event of an election to have Section 1302 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (A)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this instrument, there
has been a change in the applicable Federal income tax law, in either case
(A) or (B) to the effect that, and based thereon such opinion shall confirm
that, the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit, Defeasance and
discharge to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit, Defeasance and
discharge were not to occur.

(3) In the event of an election to have Section 1303 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit and Covenant Defeasance
were not to occur.

(4) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that neither such Securities nor any other
Securities of the same series, if then listed on any securities exchange,
will be delisted as a result of such deposit.

(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any other
Securities shall have occurred and be continuing at the time of such
deposit or, with regard to any such event specified in Sections 501(5) and
(6), at any time on or prior to the 90th day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied
until after such 90th day).

(6) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act (assuming all Securities are in default within the meaning of
such Act).

(7) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.

(8) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act unless such trust shall be
registered under such Act or exempt from registration thereunder.

(9) At the time of such deposit, (A) no default in the payment of any
principal of or premium or interest on any Senior Debt shall have occurred
and be continuing, (B) no event of default with respect to any Senior Debt
shall have resulted in such Senior Debt becoming, and continuing to be, due
and payable prior to the date on which it would otherwise have become due
and payable (unless payment of such Senior Debt has been made or duly
provided for), and no other event of default with respect to any Senior
Debt shall have occurred and be continuing permitting (after notice or
lapse of time or both) the holders of such Senior Debt (or a trustee on
behalf of such holders) to declare such Senior Debt due and payable prior
to the date on which it would otherwise have become due and payable.

(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.

Section 1305. Deposited Money and U.S. Government Obligations to
Be Held in Trust; Miscellaneous Provisions.

Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee or other qualifying trustee (solely for purposes
of this Section and Section 1306, the Trustee and any such other trustee
are referred to collectively as the "Trustee") pursuant to Section 1304 in
respect of any Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become
due thereon in respect of principal and any premium and interest, but money
so held in trust need not be segregated from other funds except to the
extent required by law.

Money and U.S. Government Obligations so held in trust shall not be
subject to the provisions of Article Fourteen.

The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1304 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of Outstanding
Securities.

Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request
any money or U.S. Government Obligations held by it as provided in Section
1304 with respect to any Securities which, in the opinion of a firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would
then be required to be deposited to effect the Defeasance or Covenant
Defeasance, as the case may be, with respect to such Securities.

Section 1306. Reinstatement.

If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the obligations
under this Indenture and such Securities from which the Company has been
discharged or released pursuant to Section 1302 or 1303 shall be revived
and reinstated as though no deposit had occurred pursuant to this Article
with respect to such Securities, until such time as the Trustee or Paying
Agent is permitted to apply all money held in trust pursuant to Section
1305 with respect to such Securities in accordance with this Article;
provided, however, that if the Company makes any payment of principal of or
any premium or interest on any such Security following such reinstatement
of its obligations, the Company shall be subrogated to the rights (if any)
of the Holders of such Securities to receive such payment from the money so
held in trust.

ARTICLE FOURTEEN

Junior Subordinated Securities

Section 1401. Certain Securities Subordinate to Senior Debt.

As provided pursuant to Section 301 or in a supplemental indenture,
the Company may issue one or more series of Securities subject to the
provisions of this Article Fourteen, and each Holder of a Security of a
series so issued ("Junior Subordinated Securities"), whether upon original
issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions.

The payment of the principal of, premium, if any, and interest on all
Junior Subordinated Securities issued with respect to which this Article
Fourteen applies shall, to the extent and in the manner hereinafter set
forth, be subordinate and subject in right of payment to the prior payment
in full of all Senior Debt, whether outstanding at the date of this
Indenture or thereafter incurred.

No provision of this Article Fourteen shall prevent the occurrence of
any default or Event of Default hereunder.

Section 1402. Payment Over of Proceeds Upon Default.

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

In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any holder when such payment is prohibited by
the preceding paragraph of this Section 1402, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Debt or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such
Senior Debt may have been issued, as their respective interests may appear,
but only to the extent that the holders of the Senior Debt (or their
representative or representatives or a trustee) notify the Trustee within
90 days of such payment of the amounts then due and owing on the Senior
Debt and only the amounts specified in such notice to the Trustee shall be
paid to the holders of Senior Debt.

Section 1403. Payment Over of Proceeds Upon Dissolution, Etc.

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

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

For purposes of this Article Fourteen, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company
as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article Fourteen with respect to the Junior Subordinated Securities to the
payment of all Senior Debt which may at the time be outstanding; provided
that (i) the Senior Debt is assumed by the new corporation, if any,
resulting from any such reorganization or readjustment, and (ii) the rights
of the holders of the Senior Debt are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation
of the Company with, or the merger of the Company into, another corporation
or the liquidation or dissolution of the Company following the conveyance
or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided for
in Article Eight hereof shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the proposes of this Section 1403 if such
other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Eight
hereof. Nothing in Section 1402 or in this Section 1403 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 607.

Section 1404. Subrogation to Rights of Holders of Senior Debt.

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

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

Upon any payment or distribution of assets of the Company referred to
in this Article Fourteen, the Trustee, subject to the provision of Article
Six, and the Holders of the Junior Subordinated Securities shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other person making such payment or distribution, delivered to the
Trustee or to the Holders of the Junior Subordinated Securities, for the
purposes of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount hereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this
Article Fourteen.

Section 1405. Trustee to Effectuate Subordination.

Each Holder of a Junior Subordinated Security by his acceptance thereof
authorizes and directs the Trustee in his behalf to take such action as may
be necessary or appropriate to effectuate the subordination provided in
this Article Fourteen and appoints the Trustee his attorney-in-fact for any
and all such purposes.

Section 1406. Notice to Trustee.

The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company which would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Junior Subordinated Securities pursuant to the provisions of this Article
Fourteen. Notwithstanding the provisions of this Article Fourteen or any
other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of
any payment of monies to or by the Trustee in respect of the Junior
Subordinated Securities pursuant to the provisions of this Article
Fourteen, unless and until a Responsible Officer of the Trustee shall have
received written notice thereof at the Principal Office of the Trustee from
the Company or a holder or holders of Senior Debt or from any trustee
therefor; and before the receipt of any such written notice, the Trustee,
subject to the provisions of Article Six, shall be entitled in all respects
to assume that no such facts exist; provided, however, that if the Trustee
shall not have received the notice provided for in this Section 1406 at
least two Business Days prior to the date upon which by the terms hereof
any money may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium, if any) or
interest on any Junior Subordinated Security), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such money and to apply the same to the
purposes for which they were received, and shall not be affected by any
notice to the contrary which may be received by it within two Business Days
prior to such date.

The Trustee, subject to the provisions of Article Six, shall be
entitled to rely on the delivery to it of a written notice by a person
representing himself to be a holder of Senior Debt (or a trustee on behalf
of such holder) to establish that such notice has been given by a holder of
Senior Debt or a trustee on behalf of any such holder or holders. In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any person as a holder of Senior Debt
to participate in any payment or distribution pursuant to this Article
Fourteen, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held
by such Person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights
of such person under this Article Fourteen, and if such evidence is not
furnished the Trustee may defer any payment to such person pending judicial
determination as to the right of such person to receive such payment.

Section 1407. Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee's Rights.

The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article Fourteen in respect of any Senior Debt at
any time held by it, to the same extent as any other holder of Senior Debt,
and nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder.

Nothing in this Article Fourteen shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 607.

Section 1408. No Waiver of Subordination Provisions.

No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by
any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof which any such holder
may have or otherwise be charged with.

Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without
the consent of or notice to the Trustee or the holders of the Junior
Subordinated Securities, without incurring responsibility to the holders of
the Junior Subordinated Securities and without impairing or releasing the
subordination provided in this Article or the obligations hereunder of the
holders of the Junior Subordinated Securities to the holders of Senior
Debt, do any one or more of the following: (i) change the manner, place or
terms of payment or extend the time of payment of, or renew or alter,
Senior Debt, or otherwise amend or supplement in any manner Senior Debt or
any instrument evidencing the same or any agreement under which Senior Debt
is outstanding; (ii) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Debt; (iii)
release any person liable in any manner for the collection of Senior Debt;
and (iv) exercise or refrain from exercising any rights against the Company
and any other person.

________________________________

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 Indenture to
be duly executed as of the day and year first above written.

CINERGY CORP.

By __________________________

THE FIFTH THIRD BANK

as Trustee

By __________________________

Exhibit A-3

==========================================================

CINERGY CORP.

AND

THE FIFTH THIRD BANK,
Trustee

________________

_____ Supplemental Indenture

Dated as of __________, _______

Indenture

Dated as of _______, 1997
________________

______% Debentures Due _____

==========================================================

<PAGE>
_________ SUPPLEMENTAL INDENTURE, dated as of ________, ______, between
Cinergy Corp., a corporation duly organized and existing under the laws of
the State of Delaware (herein called the "Company"), having its principal
office at 139 East Fourth Street, Cincinnati, Ohio 45202, and The Fifth Third
Bank, an Ohio banking corporation, as Trustee (herein called the "Trustee")
under the Indenture dated as of _______, 1997 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 in the Indenture provided.

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
_____% Debentures Due _____ (herein called the "Debentures"), in this ______
Supplemental Indenture.

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

Now, Therefore, This ______ 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 "____% Debentures Due _____", limited in aggregate principal
amount to $_____________ (except as provided in Section 301(2) of the
Indenture). The Debentures shall mature and the principal shall be due and
payable together with all accrued and unpaid interest thereon on _________,
____ and shall be issued in the form of a registered Global Security without
coupons, registered in the name of Cede & Co.

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 ________ and __________ in each year (each an "Interest
Payment Date"), commencing on ___________, _____, at the rate per annum
specified in the designation of the Debentures from ________, _____, 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 ________ or _______________ (whether or not a Business Day), as the
case may be, next 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.

Section 104. Subject to agreements with or the rules of The Depository
Trust Company 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, at the
Company's option, as provided for in Sections 1302 and 1303 of the Indenture.

Section 108. The Debentures will not be redeemable at the option of
the Company prior to maturity and will not be subject to any sinking fund.

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:

(FORM OF FACE OF DEBENTURE)

No. $

CUSIP No.

CINERGY CORP.

_____% DEBENTURE DUE _____

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.

CINERGY CORP., a corporation duly organized and existing under the laws
of the State of Delaware (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 _______________________________________ Dollars
($_______________) on ___________, ______, and to pay interest thereon from
________, ______ or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually on _________ and
____________ in each year, commencing ____________, _____, at the rate of
______% 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 _______ or ______________ (whether or not a
Business Day), as the case may be, next 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 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.

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.

CINERGY CORP.

By..............................

CERTIFICATE OF AUTHENTICATION

Dated:

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

THE 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 _________, _______ (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The 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 $__________.

The Securities will not be redeemable at the option of the Company prior to
maturity and will not be subject to any sinking fund.

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 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 any premium 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 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 $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

Original Issue of Debentures

Section 301. Debentures in the aggregate principal amount of
$________________, may, upon execution of this ________ 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 Debentures upon a Company Order without any
further action by the Company.

ARTICLE FOUR

Paying Agent and Security Registrar

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

ARTICLE FIVE

Sundry Provisions

Section 501. Except as otherwise expressly provided in this _______
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 _______
Supplemental Indenture, is in all respects ratified and confirmed, and this
______ Supplemental Indenture shall be deemed part of the Indenture in the
manner and to the extent herein and therein provided.

__________________

In Witness Whereof, the parties hereto have caused this ______
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the day and year first
above written.

CINERGY CORP.

By_____________________________________
William L. Sheafer
Treasurer

THE FIFTH THIRD BANK, as Trustee

By____________________________________

Exhibit B-1

CINERGY CORP.
(A Delaware corporation)

PURCHASE AGREEMENT

Dated as of ______________, _______

[Purchaser Name and Address]

Ladies and Gentlemen:

Cinergy Corp. ("Cinergy" or the "Company") confirms its agreement with
____________ (hereinafter, "you" or the "Initial Purchaser) with respect to
the issuance and sale by the Company, on the terms set forth herein, of
$____________ aggregate principal amount of debentures due ______________,
______ (the "Securities") of the Company.

The Securities will be offered and sold to the Initial Purchaser
without registration under the Securities Act of 1933, as amended (the
"Act"), in reliance upon an exemption from the registration requirements of
the Act. In connection with the sale of the Securities, the Company has
prepared a preliminary offering circular dated ______________, _____ (the "
Preliminary Offering Circular") and a final offering circular dated
__________, ______ (the " Offering Circular"), each setting forth certain
information concerning the Company and the Securities. The Company hereby
confirms that it has authorized the use of the Preliminary Offering
Circular and the Offering Circular in connection with the offer and sale of
the Securities. Unless stated to the contrary, all references herein to
the Offering Circular are to the Offering Circular as of the date hereof
and are not meant to include any amendment or supplement thereto subsequent
to the date hereof.

The Company understands that the Initial Purchaser proposes to make
offerings ("Exempt Resales") of the Securities only on the terms and in the
manner set forth in the Offering Circular and Section 3 hereof, as soon as
the Initial Purchaser deems advisable after this Agreement has been
executed and delivered, only to (i) persons in the United States whom the
Initial Purchaser reasonably believes to be "qualified institutional
buyers" ("QIBs") as defined in Rule 144A under the Act, as such rule may be
amended from time to time ("Rule 144A"), in transactions under Rule 144A
and (ii) non-U.S. persons to whom offers and sales of the Securities may be
made in reliance upon Regulation S under the Act ("Regulation S"), in
transactions meeting the requirements of Regulation S.

When used herein in reference to the Company, the term "Operative
Documents" shall refer to this Agreement, the Securities, the Indenture
dated as of February 1, 1997 as supplemented by the _______ supplement to
the indenture dated as of ___________, _____ (as supplemented, the
"Indenture") between the Company and The Fifth Third Bank, as Trustee (the
"Indenture Trustee"),

1. The Company represents and warrants to, and agrees with the
Initial Purchaser that:

(a) The Preliminary Offering Circular and the Offering
Circular have been prepared in connection with the offering of the
Securities. Any reference to the Preliminary Offering Circular or the
Offering Circular shall be deemed to refer to and include all information
incorporated by reference therein and any Additional Issuer Information (as
defined in Section 5A) furnished by the Company prior to the completion of
the distribution of the Securities. The Preliminary Offering Circular and
the Offering Circular and any amendments or supplements thereto did not and
will not, as of their respective dates, contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation and
warranty shall not apply to the Initial Purchaser with regard to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Initial Purchaser;

(b) the consolidated historical financial statements,
together with related schedules and notes, included or incorporated by
reference in the Offering Circular (and any amendment or supplement
thereto), present fairly the consolidated financial position of the Company
and its subsidiaries at the respective dates indicated and the results of
their operations and their cash flows for the respective periods indicated
in accordance with generally accepted accounting principles consistently
applied throughout such periods;

(c) the Company is a company duly incorporated and validly
existing under the laws of the State of Delaware, and the Company has full
power and authority to conduct its business in each jurisdiction where it
carries on business;

(d) the issue of the Securities and the performance of the
obligations assumed thereunder by the Company and the performance of the
obligations assumed by the Company under the Operative Documents have been
duly authorized by the Company and, upon due execution, issue,
authentication and delivery, the same will constitute legal, valid and
binding obligations of the Company enforceable in accordance with their
respective terms, subject as to enforcement to the laws of bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors rights and to general equity principles and
except that rights to indemnity and contribution under this Agreement may
be limited;

(e) when the Securities are issued and delivered pursuant to
this Agreement, the Securities will not be of the same class (within the
meaning of Rule 144A) as securities which are listed on a national
securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system;

(f) neither the Company, nor any affiliate of the Company,
nor any person acting on its or their behalf (other than the Initial
Purchaser, as to which the Company makes no representation) has offered or
sold the Securities by means of any general solicitation or general
advertising within the meaning of Rule 502(c) under the Act or, with
respect to Securities sold outside the United States to Non-U.S. persons
(as defined in Rule 902 under the Act), by means of any directed selling
efforts within the meaning of Rule 902 under the Securities Act and the
Company, any affiliate of the Company and any person acting on its or their
behalf has complied with and will implement the "offering restriction"
within the meaning of such Rule 902.

2. On the basis of the representations, warranties and covenants
contained in this Agreement, and subject to the terms and conditions herein
set forth, the Company agrees to (i) issue and sell to the Initial
Purchaser, and the Initial Purchaser agrees to purchase from the Company,
at a purchase price of ________% plus accrued interest, if any, $__________
principal amount of the Securities, and (ii) pay to the Initial Purchaser a
placement fee of _____% of the aggregate principal amount of the Securities
for placing the Securities (the "Placement Fee"). The payments to be made
at the Time of Delivery are as set forth in Exhibit A hereof.

3. The Initial Purchaser hereby represents and warrants to, and
agrees with the Company that the Initial Purchaser (i) is a QIB; (ii) has
not and will not solicit offers for, or offer or sell, the Securities by
means of any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Act, or in any manner involving a public
offering within the meaning of Section 4(2) of the Act and (iii) will
solicit offers for the Securities only from, and will offer, sell or
deliver the Securities, as part of their initial offering, only to (i)
persons in the United States whom the Initial Purchaser reasonably believes
to be QIBs or, if any such person is buying for one or more institutional
accounts for which such person is acting as fiduciary or agent, only when
such person has represented to the Initial Purchaser that each such account
is a QIB, to whom notice has been given that such sale or delivery is being
made in reliance on Rule 144A, and, in each case, in transactions under
Rule 144A and (ii) to non-U.S. persons to whom offers and sales of the
Securities may be made in reliance upon Regulation S, in transactions
meeting the requirements of Regulation S.

(a) In connection with sales outside the United States, the
Initial Purchaser represents and warrants to and agrees that it will not
offer, sell or deliver Securities to, or for the account or benefit of,
U.S. persons (i) as part of such Initial Purchaser's distribution at any
time or (ii) otherwise until 40 days after the later of the commencement of
the offering and the Time of Delivery, and it will send to each dealer to
whom it sells Securities during such period a confirmation or other notice
setting forth the restrictions on offers and sales of the Securities within
the United States or to, or for the account or benefit of, U.S. persons.

(b) The Initial Purchaser represents and agrees that it (or
any affiliate) (i) has not offered or sold and, prior to the expiry of the
period six months from the Time of Delivery, will not offer or sell any
Securities to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulation 1995 (the
"Regulations"), (ii) has complied and will comply with all applicable
provisions of the Financial Services Act of 1986 with respect to anything
done by it in relation to the Securities in, from or otherwise involving
the United Kingdom and (iii) has only issued or passed on and will only
issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Securities to a person who is of a kind
described in Article 11(3) of the Financial Services Act of 1986
(Investment Advertisements) (Exemptions) Order 1996 or is a person to whom
such document may otherwise lawfully be issued or passed on.

4. (a) The Securities to be purchased by the Initial Purchaser
hereunder will he represented by one or more global certificates in book-entry
form which will be deposited by or on behalf of the Company with The
Depository Trust Company ("DTC") or its designated custodian. The Company
will deliver the Securities to the Initial Purchaser against payment by or
on behalf of such Initial Purchaser of the purchase price therefor by
electronic transfer to the order of the Company in Federal (same day) funds
("Wire Transfer"), by causing DTC to credit the Securities to the account
of the Initial Purchaser at DTC. The Company will cause the certificates
representing the Securities to be made available to the Initial Purchaser
for checking at least twenty-four hours prior to the Time of Delivery at
the office of DTC or its designated custodian (the "Designated Office").
The time and date of such delivery and payment shall be _______., New York
City time, on __________, _____ or such other time and date as the Initial
Purchaser and the Company may agree upon in writing. Such time and date are
herein called the "Time of Delivery".

(b) Simultaneously with the purchase by the Initial Purchaser
of the Securities, the Company will pay to the Initial Purchaser by Wire
Transfer the Placement Fee.

(c) The documents to be delivered at the Time of Delivery by
or on behalf of the parties hereto pursuant to Section 7 hereof, including
the Securities and the cross-receipts for the Securities and any additional
documents requested by the Initial Purchaser pursuant to Section 7(a)
hereof, will be delivered at such time and date at the offices of
_____________________________ (the "Closing Location"). The Debentures
will be delivered at the Designated Office at the Time of Delivery.

5. The Company agrees with the Initial Purchaser

(a) To prepare the Offering Circular and, before amending or
supplementing the Offering Circular, to furnish the Initial Purchaser a
copy of such proposed amendment or supplement;

(b) to cooperate with the Initial Purchaser and counsel to the
Initial Purchaser to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the Exempt
Resales, provided that in connection therewith the Company shall not be
required to register or qualify as a foreign corporation, or to take any
action that would subject it to taxation or service of process in any
jurisdiction;

(c) prior to ____________, New York City time, on the New York
Business Day (as defined below) next succeeding the date of this Agreement
and until _________, ______, to furnish the Initial Purchaser, in New York
City, with a copy of the Offering Circular in New York City and each
amendment or supplement thereto, and additional copies thereof in such
quantities as you may from time to time reasonably request, and if, at any
time prior to the consummation of any Exempt Resale, any event shall have
occurred as a result of which the Offering Circular as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Offering Circular are delivered, not misleading, or, if for any other
reason it shall be necessary or desirable, as deemed by the Company in its
sole discretion, during such same period to amend or supplement the
Offering Circular, to notify you and upon your request to prepare and
furnish without charge to the Initial Purchaser and to any dealer in
securities as many copies as you may from time to time reasonably request
of the amended Offering Circular or supplement to the Offering Circular
which will correct such statement or omission. For the purposes of this
Section 5, "New York Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York City are generally authorized or obligated by law
or executive order to close;

(d) except as permitted by law, during the period of three
years after the Time of Delivery, the Company will not, and will not permit
any of its "affiliates" (as defined in Rule 144 under the Act) to, resell
any of the Securities which constitute "restricted securities" under Rule
144 that have been reacquired by any of them; and

(e) the Company will take reasonable precautions designed to
insure that any offer or sale, direct or indirect, in the United States or
to any U.S. person (as defined in Rule 902 under the Act) of any Securities
or any substantially similar Security issued by the Company within six
months subsequent to the date on which the distribution of the Securities
has been completed (as notified to the Company by the Initial Purchaser),
is made under restrictions and other circumstances reasonably designed not
to affect the status of the offer and sale of the Securities in the United
States contemplated by this Agreement as transactions exempt from the
registration provisions of the Act.

5A. The Company agrees with the Initial Purchaser that at any
time when the Company is not subject to Section 13 or 15(d) of the Exchange
Act, upon the request of any holder of Securities ("Securityholder"), the
Company shall promptly furnish to such Securityholder or to a prospective
purchaser of a Security designated by such Securityholder, as the case may
be, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act ("Additional Issuer Information") in order to
permit compliance by such Securityholder with Rule 144A in connection with
the resale of such Security by such Securityholder.

6. The Company covenants and agrees with the Initial Purchaser
that the Company will pay or cause to be paid all expenses incident to the
performance of the Company's obligations under this Agreement, including
the following: (i) the reasonable fees, disbursements and expenses of the
Company's counsel and accountants in connection with the issue of the
Securities and all other expenses in connection with the preparation,
printing and filing of the Offering Circular and any amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Initial Purchaser and dealers; (ii) the cost of printing or producing the
Operative Documents, closing documents (including any compilations thereof)
and any other documents in connection with the offering, purchase, sale and
delivery of the Securities, except as otherwise provided below; (iii) all
expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the reasonable fees and disbursements of counsel for the
Initial Purchaser in connection with such qualification, except as
otherwise provided below; (iv) any fees charged by securities rating
services for rating the Securities; (v) the cost of printing the
Securities; (vi) the fees and expenses of the Indenture Trustee and any
agent of the Indenture Trustee and the reasonable fees and disbursements of
counsel for the Indenture Trustee in connection with the Operative
Documents; and (vii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Initial Purchase will pay all of their own costs and expenses, including
the fees of their counsel, transfer taxes on resale of any of the
Securities by them, costs associated with the Blue Sky and legal investment
surveys and any advertising expenses connected with any offers they may
make.

7. The obligations of the Initial Purchaser hereunder shall be
subject, in its discretion, to the condition that all representations and
warranties and other statements of the Company herein are, at and as of the
Time of Delivery, true and correct, the condition that the Company shall
have performed all of their respective obligations hereunder theretofore to
be performed, and the following additional conditions:

(a) You shall have received from your counsel,
_____________________ such opinion or opinions, dated the Time of Delivery,
with respect to the issuance and sale of the Securities and other related
matters as you may reasonably require, and the Company shall have furnished
to such counsel such documents as they reasonably request for the purpose
of enabling them to pass upon such matters.

(b) An appropriate order or orders of the Securities and
Exchange Commission (hereinafter called the "Commission") under the Public
Utility Holding Company Act of 1935 (the "Holding Company Act") necessary
to permit the issue and sale of the Securities as contemplated hereby and
containing no material provision or condition which is unacceptable to the
Company or the Initial Purchaser shall be in effect and no proceedings to
suspend the effectiveness of such order or orders shall be pending or
threatened.

(c) There shall have been no material adverse change (not in
the ordinary course of business) in the condition of the Company and its
subsidiaries, taken as a whole, subsequent to the execution and delivery of
this Agreement and prior to the Closing Date, from that set forth in or
contemplated by the Offering Circular; and you shall have received on the
Closing Date a certificate, dated the Closing Date and signed by an
executive officer of the Company, to the foregoing effect.

(d) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, there shall not have occurred any
downgrading of, nor shall any notice have been given of any review with a
negative implication with respect to, the rating accorded any of the
Company's securities by any of Standard & Poor's, a division of the McGraw-Hill
Companies, Inc., Moody's Investors Service, Inc., or Duff & Phelps,
Inc. (or any of their successors).

(e) You shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in (b) of this Section. The officer
making such certificate may rely upon the best or his knowledge as to
proceedings pending or threatened.

(f) You shall have received on the Closing Date the
favorable opinion of __________________________, counsel for the Company,
dated the Closing Date, to the effect that:

(i) the Company is a corporation duly incorporated,
validly existing and qualified to transact business under the laws of the
State of Delaware and, except for certain operating permits for which the
Company has made application but which have either been denied or have not
yet been granted in the form requested, and except for certain notices or
violations, the Company has due corporate and governmental authority to
carry on the businesses in which it is engaged and to own and operate the
properties in use in such businesses;

(ii) the Company has full power and authority and is
duly qualified to conduct its business in each jurisdiction where it
carries on business;

(iii) each of the Operative Documents (other than this
Agreement) have been duly authorized, executed and delivered by the Company
and are valid and binding instruments enforceable in accordance with their
terms, except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally, (B) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles
of general applicability and (C) rights to indemnity and contributions
thereunder may be limited under applicable law; and the Indenture has been
duly qualified under the Trust Indenture Act of 1939;

(iv) the Securities, when duly executed by the Company
and paid for by the Initial Purchaser pursuant to this Agreement, will be
valid and binding obligations of the Company in accordance with their
terms, except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally, (B) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles
of general applicability and (C) rights to indemnity and contribution
thereunder may be limited under applicable laws;

(v) the Order of the Commission under the Holding
Company Act authorizing the issuance and sale of the Securities is in
effect on the Closing Date and no further approval, authorization, consent
or order of any other commission or other governmental authority (other
than under state securities or Blue Sky laws, as to which such counsel are
not called upon to express an opinion) is required for the issuance and
sale of the Securities;

(vi) this Agreement has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement of the
Company in accordance with its terms, except as (A) the enforceability
hereof may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally, (B) rights of acceleration
and the availability of equitable remedies may be limited by equitable
principles of general applicability and (C) rights to indemnity and
contribution hereunder may be limited under applicable laws;

(vii) The execution and delivery of the Operative
Documents, the issuance or the Securities in accordance with the Indenture,
and the sale of the Securities in accordance with the Purchase Agreement do
not and will not result in any violation by the Company of any of the terms
or provisions of the Certificate of Incorporation or by-laws of the Company
or of any Indenture, mortgage or other agreement or instrument known to
such counsel, by which the Company is bound.

(viii) such counsel (A) is of the opinion that each
document incorporated by reference in the Offering Circular (except for
operating statistics, financial statements and other financial data therein
as to which such counsel need not express an opinion) complied as to form
in all material respects with the requirements of the Securities Exchange
Act of 1934, together with the applicable rules and regulations of the
Commission thereunder and (B) believes that (except for operating
statistics, financial statements and other financial data therein as to
which such counsel need not express a belief) the Offering Circular at the
date of this Agreement did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading and the Offering Circular (as
amended or supplemented if applicable) on the Closing Date does not contain
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

In regard to clause (vi) above, such counsel may state that
no opinion is expressed with respect to the effect of New York law, in
regard to clause (viii) above, such counsel may state that their Opinion
and belief is based upon their participation in the preparation of the
Offering Circular and any supplements and amendments, thereto and upon
their review and discussion of the contents thereof, but is without
independent check or verification except as specified, and that their
opinion in regard to documents filed under the Securities Exchange Act of
1934, called for in clause (viii)(A) above, is based upon the opinion of
counsel satisfactory to them.

(g) You shall have received on the Closing Date a letter,
dated the Closing Date, in form and substance satisfactory to you, from
Arthur Andersen LLP, independent accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in or incorporated by reference
into the Offering Circular.

8. The Company agrees to indemnify and hold harmless the Initial
Purchaser and each person, if any, who controls the Initial Purchaser
within the meaning of Section 15 of the Securities Act of 1933 or Section
20 of the Securities Exchange Act of 1934, from and against any and all
losses, claims, damages and liabilities (including the fees and expenses of
counsel in connection with any governmental or regulatory investigation or
proceeding) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Offering Circular or any preliminary
Offering Circular, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
furnished to the Company by the Initial Purchaser expressly for use
therein.

In case any action shall be brought against the Initial Purchaser
or any person controlling the Initial Purchaser based upon the Offering
Circular or any amendment or supplemental thereto or any preliminary
Offering Circular and in respect of which indemnity may be sought against
the Company, the Initial Purchaser shall promptly notify the Company in
writing, and the Company, upon the request of the Initial Purchaser, shall
assume the defense thereof on behalf of the Initial Purchaser or
controlling person, including the employment of counsel and payment of all
expenses. In any such action, the Initial Purchaser or any such
controlling person shall have the right to employ its own counsel but the
fees and expenses of such counsel shall be at the expense of the Initial
Purchaser or such controlling person unless (i) the employment of such
counsel has been specifically authorized in writing by the Company or (ii)
the named parties to any such action (including any impleaded parties)
include both the Initial Purchaser or such controlling person and the
Company and the initial Purchaser or such controlling person shall have
been advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available
to the Company (it being understood, however, that the Company shall not,
in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to one
firm of local counsel) for the Initial Purchaser and controlling persons,
which firm shall be designated in writing by you, and that such fees and
expenses shall be reimbursed as they are incurred). The Company shall not
be liable for indemnification (or contribution as provided below) with
respect to the settlement of any such action effected without its written
consent, but if settled with the written consent of the Company or if there
be a final judgment for the plaintiff in any such action. The Company
agrees to indemnify and hold harmless the Initial Purchaser and any such
controlling person from and against any loss or liability by reason of such
settlement or judgment (or to make contribution as provided below).

The Initial Purchaser agrees to indemnify and hold harmless the
Company, its directors, its officers and any person controlling the Company
to the same extent as the foregoing indemnity from the Company to the
Initial Purchaser, but only with reference to information relating to the
Initial Purchaser furnished by the Initial Purchaser expressly for use in
the Offering Circular, or any preliminary Offering Circular. In case any
action shall be brought against the Company, any of its directors or any
such officer or controlling person based on the Offering Circular,
preliminary Offering Circular and in respect of which indemnity may be
sought against the Initial Purchaser shall have the rights and duties given
to the Company, and the Company, its directors or any such officer or
controlling person shall have the rights and duties given to the Initial
Purchaser, by the preceding paragraph of this Section 8.

If the indemnification provided for in the second paragraph of this
Section 8 is unavailable to the Initial Purchaser or other indemnified
party in respect of any losses, claims, damages or liabilities referred to
therein, then the Company, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Initial
Purchaser on the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and of the Initial Purchaser on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and the Initial Purchaser on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Initial Purchaser, in each case
as set forth in the table on the cover page of the Offering Circular. The
relative fault of the Company and of the Initial Purchaser shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Company or by the
Initial Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.

If the indemnification provided for in this Section 8 is sought
solely by the Company under the third paragraph hereof and there is no
claim for indemnification by the Initial Purchaser or any person
controlling the Initial Purchaser arising out of the same misstatement or
omission and if such indemnification is unavailable to the Company in
respect of any losses, claims, damages or liabilities referred to in such
fourth paragraph, then Initial Purchaser, in lieu of indemnifying the
Company, shall contribute to the amount paid or payable by the Company as a
result of such losses, claims, damages or liabilities in such proportion as
is appropriate to reflect the relative fault of the Company on the one hand
and of Initial Purchaser on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative fault of
the Company on the one hand and of the Initial Purchaser on the other shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or by the Initial Purchaser and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

The Company and the Initial Purchaser agree that it would not be
just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Initial Purchaser were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to in the two immediately preceding paragraphs. The amount paid
or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in such paragraphs shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities purchased hereunder by the Initial Purchaser exceeds
the amount of any damages which such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act of 1933) shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation.

The indemnity and contribution agreements contained in this Section
8 and the representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Initial Purchaser or any person controlling any Initial
Purchaser or by or on behalf of the Company, its directors or officers or
any person controlling the Company and (iii) acceptance of and payment for
any of the Securities.

9. This Agreement shall be subject to termination in your absolute
discretion, by notice given to the Company, if (a) prior to the Closing
Date (i) trading in securities on the New York Stock Exchange or the
American Stock Exchange shall have been suspended or materially limited,
(ii) trading in any securities of the Company shall have been suspended on
any national securities exchange in the United States or in any over-the-counter
market in the United States, (iii) a general moratorium on banking
activities in New York shall have been declared by Federal or New York
State authorities or (iv) there shall have occurred any outbreak or
escalation of hostilities or any change in the financial markets or other
calamity or crisis, any of which is material and adverse and in the case of
any of the events specified in clauses (a)(i) through (iv), such event
either singly or together make it, in your reasonable judgment,
impracticable to market the Securities. Any termination of this Agreement
pursuant to this Section 9 shall be without liability on the part of the
Company to the Initial Purchaser, or the Initial Purchaser to the Company.

If this Agreement shall be terminated by the Initial Purchaser,
because of any failure or refusal on the part of the Company to comply with
the terms or to fulfill any of the conditions of this Agreement or if for
any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Initial Purchaser for all
out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by the Initial Purchaser in connection with
this Agreement or the offering contemplated hereunder.

10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the Initial Purchaser,
as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of the Initial Purchaser or any controlling
person of the Initial Purchaser or the Company or any officer or director
or controlling person of the Company and shall survive delivery of and
payment for the Securities.

11. If the Securities are not delivered by or on behalf of the
Company as provided herein, the Company will reimburse the Initial
Purchaser for all out-of-pocket expenses approved in writing by the Initial
Purchaser, including fees and disbursements of counsel, reasonably incurred
by the Initial Purchaser in making preparations for the purchase, sale and
delivery of the Securities, but the Company shall then be under no further
liability to the Initial Purchaser except as provided in Sections 6 and 9
hereof.

12. All statements, requests, notices and agreements hereunder
shall be in writing, and if to the Initial Purchaser shall be delivered or
sent by mail, telex or facsimile transmission to you at
________________________________; if to the Company shall be delivered or
sent by mail, telex or facsimile transmission to the Company at Cinergy
Corp., 139 East Fourth Street, P.O. Box 960, Cincinnati, Ohio 45201,
Attention: James R. Lance. Any such statements, requests, notices or
agreements shall take effect upon receipt thereon.

13. This Agreement shall be binding upon, and inure solely to
the benefit of, the Initial Purchaser and the Company and, to the extent
provided in Sections 9 and 11 hereof the officers and directors of the
Company and each person who controls the Company or the Initial Purchaser,
and their respective heirs, executors, administrators, successors and
assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Securities from the
Initial Purchaser shall be deemed a successor or assign by reason merely of
such purchase.

14. The Company irrevocably (i) agrees that any legal suit, action
or proceeding against it brought by the Initial Purchaser or by any person
who controls the Initial Purchaser arising out of or based upon this
Agreement or the transactions contemplated hereby may be instituted in any
New York court, (ii) waives, to the fullest extent it may effectively do
so, any objection which it may now or hereafter have to the laying of venue
of any such proceeding and (iii) submits to the nonexclusive jurisdiction
of such courts in any such suit, action or proceeding.

15. Time shall be of the essence of this Agreement.

16. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to choice of
law or conflicts of laws principles.

17. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such respective counterparts shall together
constitute one and the same instrument.

If the foregoing is in accordance with your understanding, please sign and
return to us counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between you and the Company as of the date above written.

Very truly yours,

CINERGY CORP.

By:
Name: William L. Sheafer
Title: Treasurer

Accepted as of the date hereof:

[Purchaser Name]

By:
Name:
Title:

<PAGE>

Exhibit A

Funds Flow Memorandum

I. _______________ as Initial Purchaser of the Securities will wire in
immediately available finds, $_______________ (_______% x $____________)
to __________________________________________:

Amount: $
Payee:
ABA#:
Ref:
Account #:
Attn:

II. Cinergy Corp., as Issuer will wire to ______________________, as
Placement Agent, an amount equal to $__________ (_____% X
$_______________) in connection with the Securities offering:

Amount: $
Payee:
Bank:
ABA#:
Account#:
Attn:

FINANCIAL STATEMENTS

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.

FORM U-1

CINERGY CORP.

CONSOLIDATED

AS OF DECEMBER 31, 1996

(Unaudited)

Pages 1 through 6

CINERGY CORP
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1996

Pro Forma
Actual Adjustments Pro Forma
(in thousands, except per share amounts)
<S> <C> <C> <C>
OPERATING REVENUES
Electric ............................................................... $ 2,768,706 $ -- $ 2,768,706
Gas .................................................................... 474,034 -- 474,034
----------- ----------- -----------
3,242,740 -- 3,242,740

OPERATING EXPENSES
Fuel used in electric production ....................................... 713,250 -- 713,250
Gas purchased .......................................................... 249,116 -- 249,116
Purchased and exchanged power .......................................... 158,838 -- 158,838
Other operation ........................................................ 598,434 -- 598,434
Maintenance ............................................................ 193,908 -- 193,908
Depreciation ........................................................... 282,763 -- 282,763
Amortization of phase-in deferrals ..................................... 13,598 -- 13,598
Post-in-service deferred operating
expenses - net ......................................................... (1,509) -- (1,509)
Income taxes ........................................................... 218,269 -- 218,269
Taxes other than income taxes .......................................... 257,815 -- 257,815
----------- ----------- -----------
2,684,482 -- 2,684,482

OPERATING INCOME ....................................................... 558,258 -- 558,258

OTHER INCOME AND EXPENSES - NET
Allowance for equity funds used during
construction ........................................................... 1,225 -- 1,225
Post-in-service carrying costs ......................................... 1,223 -- 1,223
Phase-in deferred return ............................................... 8,372 -- 8,372
Equity in earnings of
unconsolidated subsidiary .............................................. 25,430 -- 25,430
Income taxes ........................................................... 19,536 2,893 22,429
Other - net ............................................................ (40,464) -- (40,464)
----------- ----------- -----------
15,322 2,893 18,215

INCOME BEFORE INTEREST AND OTHER CHARGES ............................... 573,580 2,893 576,473

INTEREST AND OTHER CHARGES
Interest on long-term debt ............................................. 190,617 32,267 222,884
Other interest ......................................................... 31,169 (24,000) 7,169
Allowance for borrowed funds used
during construction .................................................... (6,183) -- (6,183)
Preferred dividend requirements of
subsidiaries ........................................................... 23,180 -- 23,180
----------- ----------- -----------
238,783 8,267 247,050

NET INCOME ............................................................. $ 334,797 $ (5,374) $ 329,423

COSTS OF REACQUISITION OF PREFERRED
STOCK OF SUBSIDIARY .................................................... (18,391) -- (18,391)
----------- ----------- -----------

NET INCOME APPLICABLE TO COMMON STOCK .................................. $ 316,406 $ (5,374) $ 311,032

AVERAGE COMMON SHARES OUTSTANDING ...................................... 157,678 157,678

EARNINGS PER COMMON SHARE
Net Income ............................................................. $ 2.12 $ (0.03) $ 2.09

Costs of reacquisition of preferred stock of subsidiary ................ (0.12) -- (0.12)
----------- ----------- -----------

Net Income Applicable to Common Stock .................................. $ 2.00 $ (0.03) $ 1.97

DIVIDENDS DECLARED PER COMMON SHARE .................................... $ 1.74
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP
PRO FORMA CONSOLIDATED BALANCE SHEET
AT DECEMBER 31, 1996

ASSETS
Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C> <C>
UTILITY PLANT - ORIGINAL COST
In service
Electric ........................................................ $ 8,809,786 $ -- $8,809,786
Gas ............................................................. 713,829 -- 713,829
Common .......................................................... 185,255 -- 185,255
----------- ----------- ----------

9,708,870 -- 9,708,870
Accumulated depreciation ........................................ 3,591,858 -- 3,591,858
----------- ----------- ----------
6,117,012 -- 6,117,012

Construction work in progress ................................... 172,614 -- 172,614
----------- ----------- ----------
Total utility plant ............................................. 6,289,626 -- 6,289,626

CURRENT ASSETS
Cash and temporary cash investments ............................. 19,327 (8,000) 11,327
Restricted deposits ............................................. 1,721 -- 1,721
Accounts receivable less accumulated
provision for doubtful accounts of $10,618 ...................... 199,361 -- 199,361
Materials, supplies and fuel
- - at average cost
Fuel for use in electric production ............................. 71,730 -- 71,730
Gas stored for current use ...................................... 32,951 -- 32,951
Other materials and supplies .................................... 80,292 -- 80,292
Property taxes applicable to subsequent year .................... 123,580 -- 123,580
Prepayments and other ........................................... 37,049 -- 37,049
----------- ----------- ----------
566,011 (8,000) 558,011

OTHER ASSETS
Regulatory Assets
Amounts due from customers - income taxes ....................... 377,194 -- 377,194
Post-in-service carrying costs and
deferred operating expenses ..................................... 186,396 -- 186,396
Phase-in deferred return and depreciation ....................... 95,163 -- 95,163
Coal contract buyout costs ...................................... 138,171 138,171
Deferred demand-side management costs ........................... 134,742 -- 134,742
Deferred merger costs ........................................... 93,999 -- 93,999
Unamortized costs of reacquiring debt ........................... 70,518 -- 70,518
Other ........................................................... 72,483 -- 72,483
Investment in unconsolidated subsidiary ......................... 592,660 -- 592,660
Other ........................................................... 231,551 7,733 239,284
----------- ----------- ----------
1,992,877 7,733 2,000,610

$ 8,848,514 $ (267) $8,848,247
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP
PRO FORMA CONSOLIDATED BALANCE SHEET
AT DECEMBER 31, 1996

CAPITALIZATION AND LIABILITIES
Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C> <C>
COMMON STOCK EQUITY
Common stock - $.01 par value;
Authorized shares - 600,000,000
Outstanding shares - 157,679,129 Actual ....................... $ 1,577 $ -- $ 1,577
Paid-in capital ............................................... 1,590,735 -- 1,590,735
Retained earnings ............................................. 992,273 (5,374) 986,899
Cumulative foreign currency translation
adjustment .................................................... (131) -- (131)
----------- ----------- -----------
Total common stock equity ..................................... 2,584,454 (5,374) 2,579,080

CUMULATIVE PREFERRED STOCK OF SUBSIDIARIES
Not subject to mandatory redemption ........................... 194,232 -- 194,232
Subject to mandatory redemption ............................... -- -- --

LONG-TERM DEBT ................................................ 2,534,978 400,000 2,934,978
Total capitalization .......................................... 5,313,664 394,626 5,708,290

CURRENT LIABILITIES
Long-term debt due within one year ............................ 140,000 -- 140,000
Notes payable ................................................. 713,617 (400,000) 313,617
Accounts payable .............................................. 305,420 -- 305,420
Litigation settlement ......................................... -- -- --
Accrued taxes ................................................. 323,059 (2,893) 320,166
Accrued interest .............................................. 55,590 8,000 63,590
Other ......................................................... 114,653 -- 114,653
1,652,339 (394,893) 1,257,446

OTHER LIABILITIES
Deferred income taxes ......................................... 1,146,263 -- 1,146,263
Unamortized investment tax credits ............................ 175,935 -- 175,935
Accrued pension and other postretirement
benefit costs ................................................. 263,319 -- 263,319
Other ......................................................... 296,994 -- 296,994
1,882,511 -- 1,882,511

$ 8,848,514 $ (267) $ 8,848,247
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

CINERGY CORP.
PRO FORMA CONSOLIDATED STATEMENT OF CHANGES IN RETAINED EARNINGS
YEAR ENDED DECEMBER 31, 1996

Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C> <C>
BALANCE DECEMBER 31, 1995 .......................................... $ 950,216 $ -- $ 950,216

Net income ......................................................... 334,797 (5,374) 329,423
Dividends on common stock .......................................... (274,358) -- (274,358)
Costs of reacquisition of preferred stock
of subsidiary ...................................................... (18,391) -- (18,391)
Other .............................................................. 9 -- 9
--------- ------- ---------

BALANCE DECEMBER 31, 1996 .......................................... $ 992,273 $(5,374) $ 986,899
</TABLE>
<PAGE>

CINERGY CORP.

Pro Forma Consolidated Journal Entries to Give Effect to the
Issuance of $400 Million of Debentures

Entry No. 1

Cash and temporary cash investments $400,000,000
Long-Term Debt $400,000,000

To record the issuance of $400,000,000 of debentures.

Entry No. 2

Other Assets $8,000,000
Cash and temporary cash investments $8,000,000

To record underwriting commissions.
($400,000,000 principal amount of debentures at an assumed 2%)

Entry No. 3

Interest on Long-Term Debt $32,000,000
Accrued interest $32,000,000

To record interest on $400,000,000 of debentures payable at 8%.

Entry No. 4

Accrued taxes $11,200,000
Income taxes $11,200,000

To record the reduction in income taxes due to increased interest on debentures.
($32,000,000 at an assumed tax rate of 35%).

Entry No. 5

Notes payable $400,000,000
Cash and temporary cash investments $400,000,000

To record the use of proceeds from the sale of debentures
as payment of short-term debt

Entry No. 6

Interest on Long-Term Debt $266,667
Other Assets $266,667

To record amortization of underwriting commissions.
($8,000,000 over an assumed life of 30 years.)

Entry No. 7

Accrued taxes $93,333
Income taxes $93,333

To record the reduction in income taxes due to the amortization of underwriting
commissions.
($266,667 at an assumed tax rate of 35%).

Entry No. 8

Accrued interest $24,000,000
Other interest $24,000,000

To record the reduction in interest expense due to the $400,000,000 reduction in
notes payable. ($400,000,000 at an assumed interest rate of 6%).

Entry No. 9

Income taxes $8,400,000
Accrued taxes $8,400,000

To record additional income taxes due to reduction in interest expense on notes
payable.
($24,000,000 at an assumed tax rate of 35%).

FINANCIAL STATEMENTS

WASHINGTON, D.C.

FORM U-1

CINERGY CORP.

AS OF DECEMBER 31, 1996

(Unaudited)

Pages 1 through 6
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1996

Pro Forma
Actual Adjustments Pro Forma
(in thousands, except per share amounts)
<S> <C> <C> <C>
OTHER INCOME AND EXPENSES - NET
Equity in earnings of subsidiaries ............................... $ 347,556 $ -- $ 347,556
Income taxes ..................................................... 6,857 2,893 9,750
Other - net ...................................................... (1,501) -- (1,501)
352,912 2,893 355,805

INCOME BEFORE INTEREST AND OTHER CHARGES ......................... 352,912 2,893 355,805

INTEREST ......................................................... 18,115 8,267 26,382

NET INCOME ....................................................... $ 334,797 $ (5,374) $ 329,423
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA BALANCE SHEET
AT DECEMBER 31, 1996

ASSETS
Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C> <C>
CURRENT ASSETS
Cash and temporary cash investments ........................... $ 3,605 $ (8,000) $ (4,395)
Notes receivable from affiliated
companies ..................................................... 42 -- 42
Accounts receivable - net ..................................... 104 -- 104
Accounts receivable from affiliated
companies ..................................................... 10,780 -- 10,780
Prepayments and other ......................................... 1,000 -- 1,000

15,531 (8,000) 7,531
OTHER ASSETS
Investment in subsidiaries .................................... 3,101,501 -- 3,101,501
Other ......................................................... 2,071 7,733 9,804
3,103,572 7,733 3,111,305

$ 3,119,103 $ (267) $ 3,118,836
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA BALANCE SHEET
AT DECEMBER 31, 1996

CAPITALIZATION AND LIABILITIES
Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)
<S> <C> <C> <C>
COMMON STOCK EQUITY
Common stock - $.01 par value;
Authorized shares - 600,000,000
Outstanding shares - 157,679,129 Actual ....................... $ 1,577 -- $ 1,577
Paid-in capital ............................................... 1,590,735 -- 1,590,735
Retained earnings ............................................. 992,273 (5,374) 986,899
Cumulative foreign currency translation
adjustment .................................................... (131) -- (131)
Total common stock equity ..................................... 2,584,454 (5,374) 2,579,080

LONG-TERM DEBT ................................................ -- 400,000 400,000

Total Capitalization .......................................... 2,584,454 394,626 2,979,080

CURRENT LIABILITIES
Notes payable ................................................. 509,000 (400,000) 109,000
Notes payable to affiliated
companies ..................................................... 7 -- 7
Accounts payable .............................................. 2,597 -- 2,597
Accounts payable to affiliated
companies ..................................................... 23,196 -- 23,196
Accrued taxes ................................................. (14,439) (2,893) (17,332)
Accrued interest .............................................. 975 8,000 8,975
521,336 (394,893) 126,443

OTHER LIABILITIES
Deferred income taxes ......................................... 13,287 -- 13,287
Other ......................................................... 26 -- 26
13,313 -- 13,313

$ 3,119,103 $ (267) $ 3,118,836
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CINERGY CORP.
PRO FORMA STATEMENT OF CHANGES IN RETAINED EARNINGS
YEAR ENDED DECEMBER 31, 1996

Pro Forma
Actual Adjustments Pro Forma
(dollars in thousands)

<S> <C> <C> <C>
BALANCE DECEMBER 31, 1995 .......................................... $ 950,216 $ -- $ 950,216

BALANCE DECEMBER 31, 1996 .......................................... $ 992,273 $(5,374) $ 986,899
</TABLE>
<PAGE>
CINERGY CORP.

Pro Forma Journal Entries to Give Effect to the
Issuance of $400 Million of Debentures

Entry No. 1

Cash and temporary cash investments $400,000,000
Long-Term Debt $400,000,000

To record the issuance of $400,000,000 of debentures.

Entry No. 2

Other Assets $8,000,000
Cash and temporary cash investments $8,000,000

To record underwriting commissions.
($400,000,000 principal amount of debentures at an assumed 2%)

Entry No. 3

Interest on Long-Term Debt $32,000,000
Accrued interest $32,000,000

To record interest on $400,000,000 of debentures payable at 8%.

Entry No. 4

Accrued taxes $11,200,000
Income taxes $11,200,000

To record the reduction in income taxes due to increased interest on
debentures.
($32,000,000 at an assumed tax rate of 35%).

Entry No. 5

Notes payable $400,000,000
Cash and temporary cash investments $400,000,000

To record the use of proceeds from the sale of debentures
as payment of short-term debt

Entry No. 6

Interest on Long-Term Debt $266,667
Other Assets $266,667

To record amortization of underwriting commissions.
($8,000,000 over an assumed life of 30 years.)

Entry No. 7

Accrued taxes $93,333
Income taxes $93,333

To record the reduction in income taxes due to the amortization of
underwriting commissions.
($266,667 at an assumed tax rate of 35%).

Entry No. 8

Accrued interest $24,000,000
Other interest $24,000,000

To record the reduction in interest expense due to the $400,000,000
reduction in notes payable.
($400,000,000 at an assumed interest rate of 6%).

Entry No. 9

Income taxes $8,400,000
Accrued taxes $8,400,000

To record additional income taxes due to reduction in interest expense
on notes payable.
($24,000,000 at an assumed tax rate of 35%).

<ARTICLE> OPUR1
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEETS AND STATEMENTS OF INCOME AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000899652
<NAME> CINERGY CORP.
<SUBSIDIARY>
<NUMBER> 0
<NAME> CINERGY CORP. (CONSOLIDATED)
<MULTIPLIER> 1000

<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> JAN-01-1996 JAN-01-1996
<PERIOD-END> DEC-31-1996 DEC-31-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 6289626 6289626
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 566011 558011
<TOTAL-DEFERRED-CHARGES> 1168666 1168666
<OTHER-ASSETS> 824211 831944
<TOTAL-ASSETS> 8848514 8848247
<COMMON> 1577 1577
<CAPITAL-SURPLUS-PAID-IN> 1590735 1590735
<RETAINED-EARNINGS> 992142 986768
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2584454 2579080
0 0
194232 194232
<LONG-TERM-DEBT-NET> 2534978 2934978
<SHORT-TERM-NOTES> 713617 313617
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 140000 140000
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2681233 2686340
<TOT-CAPITALIZATION-AND-LIAB> 8848514 8848247
<GROSS-OPERATING-REVENUE> 3242740 3242740
<INCOME-TAX-EXPENSE> 218269 218269
<OTHER-OPERATING-EXPENSES> 2466213 2466213
<TOTAL-OPERATING-EXPENSES> 2684482 2684482
<OPERATING-INCOME-LOSS> 558258 558258
<OTHER-INCOME-NET> 15322 18215
<INCOME-BEFORE-INTEREST-EXPEN> 573580 576473
<TOTAL-INTEREST-EXPENSE> 215603 223870
<NET-INCOME> 357977 352603
23180 23180
<EARNINGS-AVAILABLE-FOR-COMM> 316406 311032
<COMMON-STOCK-DIVIDENDS> 274358 274358
<TOTAL-INTEREST-ON-BONDS> 190617 222884
<CASH-FLOW-OPERATIONS> 816089 816089
<EPS-PRIMARY> 2.00 1.97
<EPS-DILUTED> 2.00 1.97

<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> JAN-01-1996 JAN-01-1996
<PERIOD-END> DEC-31-1996 DEC-31-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 0 0
<OTHER-PROPERTY-AND-INVEST> 0 0
<TOTAL-CURRENT-ASSETS> 15,531 7,531
<TOTAL-DEFERRED-CHARGES> 0 0
<OTHER-ASSETS> 3,103,572 3,111,305
<TOTAL-ASSETS> 3,119,103 3,118,836
<COMMON> 1,577 1,577
<CAPITAL-SURPLUS-PAID-IN> 1,590,735 1,590,735
<RETAINED-EARNINGS> 992,142 986,768
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,584,454 2,579,080
0 0
0 0
<LONG-TERM-DEBT-NET> 0 400,000
<SHORT-TERM-NOTES> 509,007 109,007
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 0 0
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 25,642 30,749
<TOT-CAPITALIZATION-AND-LIAB> 3,119,103 3,118,836
<GROSS-OPERATING-REVENUE> 0 0
<INCOME-TAX-EXPENSE> (6,857) (9,750)
<OTHER-OPERATING-EXPENSES> (346,055) (346,055)
<TOTAL-OPERATING-EXPENSES> (352,912) (355,805)
<OPERATING-INCOME-LOSS> 352,912 355,805
<OTHER-INCOME-NET> 0 0
<INCOME-BEFORE-INTEREST-EXPEN> 352,912 355,805
<TOTAL-INTEREST-EXPENSE> 18,115 26,382
<NET-INCOME> 334,797 329,423
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 316,406 311,032
<COMMON-STOCK-DIVIDENDS> 0 0
<TOTAL-INTEREST-ON-BONDS> 0 0
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0