8-K

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): December 12, 2001

CINERGY CORP.
(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State or Other Jurisdiction of Incorporation)

1-11377 (Commission File Number)	31-1385023 (IRS Employer Identification No.)
139 East Fourth Street Cincinnati, Ohio (Address of Principal Executive Offices)	45202 (Zip Code)
(513) 421-9500 (Registrant's Telephone Number, Including Area Code)
Not Applicable (Former Name or Former Address, if Changed Since Last Report)

Item 5.  Other Events.

    On November 28, 2001, Cinergy Corp. (the "Company") and CC Funding Trust I (the "Trust") filed, pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Act"), a registration statement on Form S-3 (File No. 333-74086 and 74086-01), which was declared effective on December 6, 2001 (the "Registration Statement"). On December 12, 2001, the Company and the Trust entered into a Purchase Agreement with the several underwriters named therein, relating to the offering and sale by the Company of up to 6,325,000 FELINE PRIDES (including the over-allotment option) under the Registration Statement. On December 13, 2001, the Company and the Trust filed a Preliminary Prospectus Supplement, dated December 12, 2001, which included the Prospectus dated December 6, 2001, relating to the offering of up to 6,325,000 of the Company's FELINE PRIDES. On December 14, 2001, the Company and the Trust filed the final Prospectus Supplement dated December 12, 2001. The FELINE PRIDES initially will consist of units referred to as Income PRIDES. Each Income PRIDE will include (i) a purchase contract under which the purchaser will agree to purchase from the Company and the Company will agree to sell shares of common stock of the Company on February 16, 2005 and (ii) a senior note due 2007 of the Company. In this connection, the Company is filing certain exhibits as part of this Form 8-K. See "Item 7. Exhibits."

Item 7.  Exhibits.

Exhibit Number	Description
1.1	Purchase Agreement, dated December 12, 2001, between the Company, the Trust and the several underwriters named therein.
4.1	Second Supplemental Indenture, dated December 18, 2001, between the Company and Fifth Third Bank, as Trustee.
4.2	Form of Notes (included in Exhibit 4.1).
4.3	Purchase Contract Agreement, dated December 18, 2001, between the Company and The Bank of New York, as Purchase Contract Agent.
4.4	Form of Income PRIDE Certificate (included as Exhibit A to Exhibit 4.3).
4.5	Pledge Agreement, dated December 18, 2001, among the Company, JPMorgan Chase Bank, as Collateral Agent, Custodial Agent and Securities Intermediary and The Bank of New York, as Purchase Contract Agent.
4.6	Remarketing Agreement, dated December 18, 2001, among the Company, the Trust, The Bank of New York, as Purchase Contract Agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Remarketing Agent and Reset Agent.
8.1	Tax Opinion of Davis Polk & Wardwell.
25.1	Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of Fifth Third Bank, as Trustee under the Second Supplemental Indenture on Form T-1.

1

SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CINERGY CORP.
Dated: December 19, 2001	By:	/s/ WENDY L. AUMILLER
		Name: Wendy L. Aumiller Title: Acting Treasurer

EXHIBIT INDEX

Exhibit Number	Description
1.1	Purchase Agreement, dated December 12, 2001, between the Company, the Trust and the several underwriters named therein.
4.1	Second Supplemental Indenture, dated December 18, 2001, between the Company and Fifth Third Bank, as Trustee.
4.2	Form of Notes (included in Exhibit 4.1).
4.3	Purchase Contract Agreement, dated December 18, 2001, between the Company and The Bank of New York, as Purchase Contract Agent.
4.4	Form of Income PRIDE Certificate (included as Exhibit A to Exhibit 4.3).
4.5	Pledge Agreement, dated December 18, 2001, among the Company, JPMorgan Chase Bank, as Collateral Agent, Custodial Agent and Securities Intermediary and The Bank of New York, as Purchase Contract Agent.
4.6	Remarketing Agreement, dated December 18, 2001, among the Company, the Trust, The Bank of New York, as Purchase Contract Agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Remarketing Agent and Reset Agent.
8.1	Tax Opinion of Davis Polk & Wardwell.
25.1	Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of Fifth Third Bank, as Trustee under the Second Supplemental Indenture on Form T-1.

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SIGNATURES
EXHIBIT INDEX

EX-1.1

                                                                     EXHIBIT 1.1


                                                                  EXECUTION COPY

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







                                  CINERGY CORP.


                            (a Delaware corporation)


                               CC FUNDING TRUST I


                           (a Delaware business trust)




                            5,500,000 FELINE PRIDES-SM-
               (Initially Consisting of 5,500,000 Income PRIDES-SM-)






                               PURCHASE AGREEMENT






                            Dated: December 12, 2001

- -SM- Trademark of Merrill Lynch & Co., Inc.


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



                                  Cinergy Corp.
                            (A Delaware Corporation)

                               CC Funding Trust I
                           (A Delaware Business Trust)

                           5,500,000 FELINE PRIDES-SM-
              (Initially consisting of 5,500,000 Income PRIDES)-SM-

                               PURCHASE AGREEMENT


   New York, New York
   December 12, 2001

MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
            Incorporated
Banc of America Securities LLC
Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Lehman Brothers Inc.
AS THE SEVERAL UNDERWRITERS NAMED HEREIN,
c/o Merrill Lynch & Co.
         Merrill Lynch, Pierce, Fenner & Smith
                     Incorporated
         4 World Financial Center
         North Tower
         New York, New York 10080


Ladies and Gentlemen:

                  Cinergy Corp., a Delaware corporation (the "Company"), and CC
Funding Trust I (the "Trust" and together with the Company, the "Offerors"), a
Delaware statutory business trust formed under the Business Trust Act (the
"Delaware Act") of the state of Delaware (Chapter 38, Title 12 of the Delaware
Code, 12 Del. (Sections 3801 et seq.)), confirm their agreement with Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch"), Banc of America Securities LLC, Goldman, Sachs & Co., J.P. Morgan
Securities Inc. and Lehman Brothers Inc. as underwriters (collectively, the
"Underwriters"), with respect to the issue and sale by the Offerors and the
purchase by the Underwriters of 5,500,000 FELINE PRIDES (the "Initial
Securities"). Each FELINE PRIDES initially will consist of a unit (referred to
as "Income PRIDES") with a stated amount of $50 (the "Stated Amount") comprised
of (a) a stock purchase contract (the "Purchase Contract") under which (i) the
holder will agree to purchase from the Company on February 16, 2005 (the
"Purchase Contract Settlement Date"), a number of

     "FELINE PRIDES," "Income PRIDES" and "Growth PRIDES" are service marks
of Merrill Lynch & Co., Inc.



shares of common stock, $0.01 par value, of the Company (the "Common Stock")
equal to the Settlement Rate (as defined in the Purchase Contract Agreement
referred to below) and (ii) the Company will pay to the holder contract
adjustment payments of 2.60% of the Stated Amount, and (b) a 6.90% Preferred
Trust Security of the Trust (the "Preferred Trust Security"), having a stated
liquidation amount of $50. The Company and the Trust also propose to grant to
the Underwriters an option to purchase up to 825,000 additional FELINE PRIDES
(the "Option Securities" and together with the Initial Securities, the
"Securities"), as described below in Section 2, to cover over-allotments.

                  Capitalized terms used herein without definition shall be used
as defined in the Prospectus (as defined below).

                  In accordance with the terms of the Purchase Contract
Agreement, to be dated as of December 18, 2001 (the "Purchase Contract
Agreement"), between the Company and The Bank of New York, as purchase contract
agent (the "Purchase Contract Agent"), the Preferred Trust Securities
constituting a part of the Securities will be pledged by the Purchase Contract
Agent, on behalf of the holders of the Income PRIDES, to JPMorgan Chase Bank, as
collateral agent (the "Collateral Agent"), pursuant to the Pledge Agreement, to
be dated as of December 18, 2001 (the "Pledge Agreement"), among the Company,
the Purchase Contract Agent and the Collateral Agent, to secure the holders'
obligations to purchase Common Stock under the Purchase Contracts. The shares of
Common Stock issuable pursuant to the Purchase Contracts are hereinafter called
the "Shares." The rights and obligations of a holder of Securities in respect of
Preferred Trust Securities, subject to the pledge thereof, and Purchase
Contracts will be evidenced by Security Certificates (the "Security
Certificates") to be issued pursuant to the Purchase Contract Agreement.

                  The Company will guarantee the Preferred Trust Securities with
respect to distributions and payments upon liquidation, redemption and otherwise
(the "Preferred Trust Securities Guarantee") pursuant to the Preferred Trust
Securities Guarantee Agreement, to be dated as of December 18, 2001 (the
"Preferred Trust Securities Guarantee Agreement"), executed and delivered by the
Company and The Bank of New York, as trustee (the "Guarantee Trustee"), for the
benefit of the holders from time to time of the Preferred Trust Securities. All
of the proceeds from the sale of the Preferred Trust Securities will be
aggregated with the proceeds from the sale by the Trust to the Company of its
common trust securities (the "Common Trust Securities" and together with the
Preferred Trust Securities, the "Trust Securities") and used by the Trust to
purchase the Senior Deferrable Notes due 2007 (the "Senior Notes") of the
Company.

                  The Preferred Trust Securities and the Common Trust Securities
will be issued pursuant to the amended and restated declaration of trust of the
Trust, to be dated as of December 18, 2001 (the "Declaration"), among the
Company, as sponsor, R. Foster Duncan, Jerome A. Vennemann and Wendy L. Aumiller
(the "Administrative Trustees"), The Bank of New York, as property trustee (the
"Property Trustee"), and The Bank of New York (Delaware) (the "Delaware Trustee"
and together with the Property Trustee and the Administrative Trustees, the
"Trustees"), and the holders from time to time of undivided beneficial interests
in the assets of the Trust. The Senior Notes will be issued pursuant to the
Indenture, dated as of September 12, 2001, between the Company and Fifth Third
Bank, as trustee (the "Trustee"), pursuant to a Second


                                       2


Supplemental Indenture (the "Supplemental Indenture"; such Indenture as so
amended and supplemented is herein referred to as the "Indenture").

                  Pursuant to a Remarketing Agreement (the "Remarketing
Agreement") to be dated as of December 18, 2001, between the Company, the Trust,
the Purchase Contract Agent and Merrill Lynch, certain Preferred Trust
Securities and, if applicable, certain Senior Notes, may be remarketed, subject
to certain terms and conditions set forth in the Remarketing Agreement.

                  As used in this Agreement, the term "Operative Documents"
means this Agreement, the Purchase Contract Agreement (including the Purchase
Contracts), the Pledge Agreement, the Preferred Trust Securities Guarantee
Agreement, the Remarketing Agreement, the Senior Notes, the Indenture and the
Declaration.

                  The Company and the Trust have filed with the Securities and
Exchange Commission (hereinafter called the "Commission") a registration
statement on Form S-3 (File No. 333-74086 and 333-74086-1) covering the
registration of securities of the Company and the Trust, including the
Securities, with a maximum aggregate offering price of $800,000,000, under the
Securities Act of 1933, as amended (the "1933 Act"). Such registration statement
was declared effective by the Commission on December 6, 2001 and each of the
Declaration, the Indenture and the Preferred Trust Securities Guarantee
Agreement have been duly qualified under the Trust Indenture Act of 1939, as
amended (the "1939 Act"). Such registration statement in the form in which it
became effective is referred to herein as the "Registration Statement." "Basic
Prospectus" means the prospectus included in the Registration Statement. The
Basic Prospectus as supplemented by the prospectus supplement dated December 12,
2001 (the "Prospectus Supplement") relating to the Securities in the form first
used to confirm sales of the Securities is hereafter referred to as the
"Prospectus."

                  All references in this Agreement to financial statements and
schedules and other information that is "contained," "included" or "stated" in
the Registration Statement or the Prospectus (or other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information that is incorporated by reference in the
Registration Statement or Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Registration Statement or
Prospectus shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), that is
incorporated by reference in the Registration Statement or Prospectus, as the
case may be.

                  The Offerors are advised by you that the Underwriters propose
to make a public offering of the Securities as soon after the execution of this
Agreement as in your judgment is advisable. The Company is further advised by
you that the offering price per Security to the public will be $50 (the "public
offering price"). Any Underwriter may allow, and dealers may reallow, a
concession not in excess of $0.90 per security, to certain other dealers. As
compensation to the Underwriters for their commitments hereunder, and in view of
the fact that the Trust will purchase the Senior Notes, the Company hereby
agrees to pay at the Closing Time to the Underwriters for the accounts of the
several Underwriters, a commission in the amount of $1.50 per Security (the
"Underwriting Commission").


                                       3


                  SECTION 1. REPRESENTATIONS AND WARRANTIES BY THE OFFERORS. The
Offerors represent and warrant to each Underwriter as of the date hereof and
agree with each Underwriter as follows:

                           (a) The Registration Statement has become effective
         under the 1933 Act and no stop order suspending the effectiveness of
         the Registration Statement has been issued under the 1933 Act and no
         proceeding for that purpose has been instituted or is pending or, to
         the knowledge of the Company and the Trust, is contemplated by the
         Commission, and any request by the Commission for additional
         information has been complied with. In addition, each of the
         Declaration, the Preferred Trust Securities Guarantee Agreement and the
         Indenture has been duly qualified under the 1939 Act.

                           (b) At the time the Registration Statement became
         effective, it complied in all material respects with the requirements
         of the 1933 Act and the rules and regulations thereunder (the "1933 Act
         Regulations") and did not contain any untrue statements of a material
         fact or omit to state a material fact required to be stated therein or
         necessary to make the statements therein not misleading. At the date of
         the Prospectus, at the Closing Time and at each Date of Delivery, if
         any, neither the Prospectus nor any amendments or supplements thereto
         included or will include an untrue statement of a material fact or
         omitted or will 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. Any preliminary prospectus
         delivered to the Underwriters for use in connection with the offering
         of the Securities and the Prospectus will, at the time of delivery to
         the Underwriters, be identical in all material respects to the
         electronically transmitted copies thereof filed with the Commission
         pursuant to EDGAR, except to the extent permitted by Regulation S-T,
         except that the representations and warranties in this paragraph shall
         not apply to statements in or omissions from the Registration Statement
         or Prospectus, or any preliminary prospectus, made in reliance upon and
         in conformity with information furnished to the Offerors in writing by
         any Underwriter expressly for use therein.

                           (c) The documents incorporated or deemed to be
         incorporated by reference in the Registration Statement and the
         Prospectus, at the time they were or hereafter are filed with the
         Commission, complied and will comply in all material respects with the
         requirements of the 1934 Act and the rules and regulations of the
         Commission thereunder (the "1934 Act Regulations").

                           (d) The financial statements of the Company included
         in the Registration Statement and the Prospectus, together with the
         related schedules and notes, present fairly in all material respects
         the financial position of the Company and its consolidated subsidiaries
         as at the dates indicated and the results of operations, common stock
         equity and cash flows of the Company and its consolidated subsidiaries
         for the periods specified in accordance with generally accepted
         accounting principles ("GAAP") applied on a consistent basis throughout
         the periods involved.


                                       4


                           (e) Since the respective dates as of which
         information is given in the Registration Statement and the Prospectus,
         except as otherwise stated therein, there has been no material adverse
         change or any development involving a prospective material adverse
         change in the financial condition, earnings or business affairs of the
         Company and its subsidiaries considered as one enterprise (a "Material
         Adverse Change"); and since the respective dates as of which
         information is given in the Registration Statement and the Prospectus,
         there has not been any material change in the capital stock (other than
         upon exercise of outstanding stock options or upon conversion of
         convertible securities outstanding on the date of the most recent
         balance sheet included in the Prospectus or pursuant to the Company's
         employee or director compensation and benefit plans or the Company's
         direct stock purchase and dividend reinvestment plan) or long-term debt
         of the Company and its subsidiaries.

                           (f) The Company has been duly incorporated and is
         validly existing and in good standing under the laws of the State of
         Delaware, with full power and authority to own, lease and operate its
         property and conduct its businesses as described in the Prospectus. The
         Company is duly qualified to do business and is in good standing in
         each jurisdiction in which the character of the business conducted by
         it or the location of the properties owned or leased by it make such
         qualification necessary. The Company has full power to execute and
         deliver and perform its obligations under this Agreement and each of
         the Operative Documents to which it is a party.

                           (g) Each of The Cincinnati Gas & Electric Company and
         PSI Energy, Inc., each a wholly-owned subsidiary of the Company, and
         any other significant subsidiary of the Company (as such term is
         defined in Rule 1-02 of Regulation S-X) (the "Significant
         Subsidiaries") is a corporation duly incorporated and existing in good
         standing under the laws of its jurisdiction of incorporation and,
         except as may be limited by state and federal environmental laws and
         regulations, has full power and authority to conduct the businesses in
         which it is engaged and to own and operate the properties in use in
         such businesses.

                           (h) The Trust has been duly created and is validly
         existing in good standing as a business trust under the Delaware Act
         with the power and authority to own property and to conduct its
         business as described in the Registration Statement and Prospectus, to
         issue the Preferred Trust Securities and the Common Trust Securities
         and to enter into and perform its obligations under this Agreement and
         each of the Operative Documents to which it is a party. The Trust is
         not a party to or otherwise bound by any agreement other than those
         described in the Prospectus. The Trust is classified for United States
         federal income tax purposes as a grantor trust and not as an
         association taxable as a corporation.

                           (i) Neither the Company nor any of its Significant
         Subsidiaries is in violation of its charter or by-laws or in default in
         the performance or observance of any obligation, agreement, covenant or
         condition contained in any contract, indenture, mortgage, deed of
         trust, loan or credit agreement, note, lease or other agreement or
         instrument to which the Company or any of its Significant Subsidiaries
         is a party or by which it or any of them may be bound, or to which any
         of the property or assets of the


                                       5


         Company or any Significant Subsidiary is subject (collectively,
         "Agreements and Instruments") except for such defaults that would not
         constitute a Material Adverse Change. The execution, delivery and
         performance of this Agreement will not conflict with or constitute a
         breach of, or a default under, any material contract or instrument to
         which the Company is a party or by which the Company is bound except
         such as would not constitute a Material Adverse Change; nor will such
         action result in a violation of the provisions of the Company's
         Certificate of Incorporation or bylaws, as amended, or any applicable
         law, rule, regulation, judgment, order or administrative or court
         decree; and the Company has the corporate power and authority to
         purchase, own and hold the Common Trust Securities. The Pledge
         Agreement and the Purchase Contract Agreement will constitute valid and
         legally binding agreements of the Company enforceable in accordance
         with their terms except as (i) the enforceability thereof may be
         limited by bankruptcy, insolvency or other similar laws affecting
         creditors' rights generally and rights of acceleration and (ii) the
         availability of equitable remedies may be limited by equitable
         principles of general applicability.

                           (j) The Preferred Trust Securities and Common Trust
         Securities have been duly authorized for issuance by the Trust pursuant
         to the Declaration and, when issued and delivered against payment
         therefor as provided in the Common Trust Securities Purchase Agreement
         between the Company and the Trust and herein, will be validly issued
         and (subject to the terms of the Declaration) fully paid and
         non-assessable undivided beneficial interests in the assets of the
         Trust and will conform to all statements relating thereto contained in
         the Prospectus. The issuance of the Preferred Trust Securities will not
         be subject to preemptive or other similar rights. The Preferred Trust
         Securities will be in the form contemplated by, and each registered
         holder thereof will be entitled to the benefits of, the Declaration. At
         the Closing Time, all of the issued and outstanding Common Trust
         Securities will be directly owned by the Company free and clear of any
         security interest, mortgage, pledge, lien, encumbrance, claim or
         equity.

                           (k) The Declaration has been duly authorized and when
         duly executed and delivered by the Administrative Trustees and the
         Company, and assuming due authorization, execution and delivery by the
         Property Trustee and the Delaware Trustee, will be a valid and binding
         obligation of the Company and the Administrative Trustees, enforceable
         in accordance with its terms except as (i) the enforceability thereof
         may be limited by bankruptcy, insolvency or other similar laws
         affecting creditors' rights generally and rights of acceleration and
         (ii) the availability of equitable remedies may be limited by equitable
         principles of general applicability.

                           (l) The FELINE PRIDES (which include the Income
         PRIDES) have been duly authorized and when executed and delivered by
         the Company will constitute the valid and binding obligations of the
         Company, enforceable in accordance with their terms except as (i) the
         enforceability thereof may be limited by bankruptcy, insolvency or
         other similar laws affecting creditors' rights generally and rights of
         acceleration and (ii) the availability of equitable remedies may be
         limited by equitable principles of general applicability, and will
         conform in all material respects to the description thereof in the
         Prospectus. The Income PRIDES and the Shares have been duly registered
         under the 1934 Act and have been authorized for listing on the New York
         Stock Exchange, subject


                                       6


         to official notice of issuance; and the issuance of the Income PRIDES
         will not be subject to preemptive or other similar rights.

                           (m) The Shares to be issued and sold by the Company
         pursuant to the Purchase Contract Agreement has been duly authorized
         for issuance by the Company and, when issued and delivered in
         accordance with the provisions of the Purchase Contract Agreement, will
         be validly issued and fully paid and non-assessable; and the issuance
         of the Shares is not and will not be subject to preemptive or other
         similar rights.

                           (n) The Preferred Trust Securities Guarantee
         Agreement has been duly authorized by the Company and, when validly
         executed and delivered by the Company assuming due authorization,
         execution and delivery of the Preferred Trust Securities Guarantee
         Agreement by the Guarantee Trustee, the Preferred Trust Securities
         Guarantee Agreement will constitute a valid and binding agreement of
         the Company, enforceable against the Company in accordance with its
         terms, except as (i) the enforceability thereof may be limited by
         bankruptcy, insolvency or other similar laws affecting creditors'
         rights generally and rights of acceleration and (ii) the availability
         of equitable remedies may be limited by equitable principles of general
         applicability.

                           (o) The Indenture has been duly authorized and, upon
         execution and delivery of the Second Supplemental Indenture to be dated
         December 18, 2001 relating to the Securities by the Trustee and the
         Company, will constitute a valid and binding agreement of the Company,
         enforceable against the Company in accordance with its terms, except as
         (i) the enforceability thereof may be limited by bankruptcy, insolvency
         or other similar laws affecting creditors' rights generally and rights
         of acceleration and (ii) the availability of equitable remedies may be
         limited by equitable principles of general applicability.

                           (p) The Senior Notes have been duly authorized and,
         at the Closing Time, will have been validly executed and delivered by
         the Company to the Trust. When the Senior Notes have been issued,
         executed and authenticated in accordance with the provisions of the
         Indenture and delivered to the Trust against payment for the stated
         consideration therefor, they will constitute valid and binding
         obligations of the Company, enforceable against the Company in
         accordance with their terms, except as (i) the enforceability thereof
         may be limited by bankruptcy, insolvency or other similar laws
         affecting creditors' rights generally and rights of acceleration and
         (ii) the availability of equitable remedies may be limited by equitable
         principles of general applicability. At the Closing Time, the Senior
         Notes will conform as to legal matters to the description thereof
         contained in the Prospectus.

                           (q) Neither the Trust nor the Company is and, after
         giving effect to the offering and sale of the Securities and the
         application of the proceeds thereof as described in the Prospectus,
         neither the Trust nor the Company will be required to register as an
         "investment company," as such term is defined in the Investment Company
         Act of 1940, as amended;


                                       7


                           (r) An appropriate order (the "Order") of the
         Commission under the Public Utility Holding Company Act of 1935, as
         amended (together with the rules and regulations thereunder, "PUHCA"),
         necessary to permit the issuance and delivery of the Securities has
         been entered, and the Order is in full force and effect and has not
         been modified or repealed in any respect. Except for permits and
         authorizations required under the securities or blue sky laws and
         except for the Order and such other permits and authorizations as have
         been obtained, no consent, approval, authorization or order of any
         court, governmental agency or body or financial institution is required
         in connection with the consummation of the performance of the Offerors'
         obligations under this Agreement, the Securities and the other
         Operative Documents.

                           (s) There is no litigation or proceeding pending, or
         to the knowledge of the Company or the Trust threatened, which
         challenges the validity of the Order, the Securities or the Operative
         Documents or which seeks to enjoin the performance by the Company or
         the Trust of its obligations hereunder, and, except as described in the
         Prospectus, there is no litigation or governmental proceeding to which
         the Company or the Trust is a party or to which any of their respective
         property is subject or which is pending or, to the knowledge of the
         Company or the Trust contemplated, against the Company or the Trust
         that could constitute a Material Adverse Change.

                           (t) To the knowledge of the Company or the Trust,
         except as disclosed in the Prospectus, neither the Company nor the
         Trust is in violation of any law, ordinance, governmental rule or
         regulation or court decree to which it may be subject, which violation
         could constitute a Material Adverse Change.

                           (u) The shares of issued and outstanding capital
         stock of the Company have been duly authorized and validly issued and
         are fully paid and non-assessable; none of the outstanding shares of
         capital stock of the Company was issued in violation of the preemptive
         or other similar rights of any security holder of the Company.

                           (v) Except as described in the Registration Statement
         and Prospectus and except as would not, singly or in the aggregate,
         constitute a Material Adverse Change, (A) neither the Company nor any
         of its subsidiaries is in violation of any federal, state, local or
         foreign statute, law, rule, regulation, ordinance, code, policy or rule
         of common law or any judicial or administrative interpretation thereof,
         including any judicial or administrative order, consent, decree or
         judgment, relating to pollution or protection of human health, the
         environment (including, without limitation, ambient air, surface water,
         groundwater, land surface or subsurface strata) or wildlife, including,
         without limitation, laws and regulations relating to the release or
         threatened release of chemicals, pollutants, contaminants, wastes,
         toxic substances, hazardous substances, petroleum or petroleum products
         (collectively, "Hazardous Materials") or to the manufacture,
         processing, distribution, use, treatment, storage, disposal, transport
         or handling of Hazardous Materials (collectively, "Environmental
         Laws"), (B) the Company and its subsidiaries have all permits,
         authorizations and approvals required under any applicable
         Environmental Laws and are each in compliance with their requirements,
         (C) there are no pending or threatened administrative, regulatory or
         judicial actions, suits, demands, demand letters, claims, liens,
         notices of noncompliance or violation,


                                       8


         investigation or proceedings relating to any Environmental Law against
         the Company or any of its subsidiaries and (D) there are no events or
         circumstances that might reasonably be expected to form the basis of an
         order for clean-up or remediation, or an action, suit or proceeding by
         any private party or governmental body or agency, against or affecting
         the Company or any of its subsidiaries relating to Hazardous Materials
         or any Environmental Laws.

                  SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.

                           (a) INITIAL SECURITIES. On the basis of the
         representations and warranties herein contained and subject to the
         terms and conditions set forth herein, the Offerors hereby agree to
         sell to each of the undersigned Underwriters, severally and not
         jointly, and each Underwriter, severally and not jointly, agrees to
         purchase at the public offering price the number of Initial Securities
         set forth opposite the name of such Underwriter in Schedule A, plus any
         additional number of Initial Securities which such Underwriter may
         become obligated to purchase pursuant to the provisions of Section 10
         hereof, subject in each case to such adjustments among the Underwriters
         as Merrill Lynch in its sole discretion shall make to eliminate any
         sales or purchases of fractional securities.

                           (b) OPTION SECURITIES. In addition, on the basis of
         the representations and warranties herein contained and subject to the
         terms and conditions herein set forth, the Offerors hereby grant an
         option to the Underwriters, severally and not jointly, to purchase up
         to an additional 825,000 Income PRIDES at the public offering price.
         The option hereby granted will expire 30 days after the date hereof and
         may be exercised in whole or in part from time to time only for the
         purpose of covering over-allotments that may be made in connection with
         the offering and distribution of the Initial Securities upon notice by
         the Underwriters to the Offerors setting forth the number of Option
         Securities as to which the several Underwriters are then exercising the
         option and the time and date of payment and delivery for such Option
         Securities. Any such time and date of delivery (a "Date of Delivery")
         shall be determined by the Underwriters and the Offerors but shall not
         be later than seven full business days after the exercise of said
         option, nor in any event prior to the Closing Time, as hereinafter
         defined. If the option is exercised as to all or any portion of the
         Option Securities, each of the Underwriters, acting severally and not
         jointly, will purchase that proportion of the total number of Option
         Securities then being purchased which the number of Initial Securities
         set forth opposite the name of such Underwriter in Schedule A bears to
         the total number of Initial Securities, subject in each case to such
         adjustments among the Underwriters as Merrill Lynch in its sole
         discretion shall make to eliminate any sales or purchases of fractional
         securities.

                           (c) PLEDGE. The Preferred Trust Securities will be
         pledged with the Collateral Agent to secure the obligations of the
         holders to purchase Common Stock under the Purchase Contracts. Such
         pledge shall be effected by the transfer to the Collateral Agent of the
         Preferred Trust Securities at the Closing Time and appropriate Date of
         Delivery, if any, in accordance with the Pledge Agreement.


                                       9


                           (d) PAYMENT AND DELIVERY. Payment for the Initial
         Securities to be sold by the Offerors shall be made to the Trust
         against delivery to Merrill Lynch for the respective accounts of the
         several Underwriters of the certificates for the Initial Securities, or
         delivery to a securities intermediary designated by Merrill Lynch of
         such certificates and crediting to the securities account of Merrill
         Lynch at such securities intermediary for the account of the several
         Underwriters of security entitlements in respect of the Initial
         Securities, against, in either case, crediting to the securities
         account of the Collateral Agent of security entitlements in respect of
         the Preferred Trust Securities constituting a part of the Initial
         Securities as set forth in the Pledge Agreement, and payment to Merrill
         Lynch of the Underwriting Commission with respect to the Initial
         Securities by wire transfer in immediately available funds to an
         account specified by Merrill Lynch to the Company, shall be made at the
         offices of Shearman & Sterling, 599 Lexington Avenue, New York, NY
         10022, or at such other place as shall be agreed upon by the
         Underwriters and the Offerors, at 9:00 A.M. (Eastern time) on the third
         (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any
         given day) business day after the date hereof (unless postponed in
         accordance with the provisions of Section 8), or such other time not
         later than ten business days after such date as shall be agreed upon by
         the Underwriters and the Offerors (such time and date of payment and
         delivery being herein called the "Closing Time").

                  In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the purchase price for
and delivery of such Option Securities and the Underwriting Commission shall be
made at the above-mentioned offices, or at such other place as shall be agreed
upon by the Underwriters and the Offerors, on each Date of Delivery as specified
in the notice from the Underwriters to the Offerors.

                  Payment for the Securities shall be made to the Trust by wire
transfer of immediately available funds to a bank account designated by the
Trust in writing not less than two full business days prior to the date of
payment. It is understood that each Underwriter has authorized Merrill Lynch,
for its account, to accept delivery of, receipt for and make payment of the
purchase price for the Initial Securities and the Option Securities, if any,
which it has agreed to purchase. Merrill Lynch, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by an Underwriter whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such Underwriter from its obligations
hereunder.

                           (e) DENOMINATIONS; REGISTRATION. Certificates for the
         Initial Securities and the Option Securities, if any, shall be in such
         denominations and registered in such names as the Underwriters may
         request in writing at least one full business day before the Closing
         Time or the relevant Date of Delivery, as the case may be. The
         certificates for the Initial Securities and the Option Securities, if
         any, will be made available for examination and packaging by the
         Underwriters in The City of New York not later than 10:00 A.M. (Eastern
         time) on the business day prior to the Closing Time or the relevant
         Date of Delivery, as the case may be.


                                       10


                           (f) APPOINTMENT OF QUALIFIED INDEPENDENT UNDERWRITER.
         Lehman Brothers Inc. hereby agrees to render services as a "qualified
         independent underwriter" within the meaning of Rule 2720 of the Conduct
         Rule of the National Association of Securities Dealers, Inc. with
         respect to the offering and sale of the Securities. Lehman Brothers,
         Inc. solely in its capacity as qualified independent underwriter and
         not otherwise, is referred to herein as the "Independent Underwriter."

                  SECTION 3. AGREEMENTS. The Offerors agree with the several
Underwriters as follows:

                           (a) The Offerors have furnished or will deliver to
         Merrill Lynch and counsel for the Underwriters, without charge, signed
         copies of the Registration Statement as originally filed and of each
         amendment thereto (including exhibits thereto). The Offerors will
         furnish, so long as delivery of a prospectus by an Underwriter or
         dealer may be required by the 1933 Act, as many copies of each
         preliminary prospectus and the Prospectus and any supplement thereto as
         the Underwriters may reasonably request.

                           (b) Prior to the termination of the offering of the
         Securities, the Offerors will not file any amendment to the
         Registration Statement or any amendment or supplement to the Prospectus
         unless the Offerors have furnished you a copy for your review prior to
         filing and will not file any such proposed amendment or supplement to
         which you reasonably object. Subject to the foregoing sentence, if
         filing of the Prospectus is required under Rule 424(b), the Offerors
         will cause the Prospectus, properly completed, and any supplement
         thereto to be filed with the Commission pursuant to the applicable
         paragraph of Rule 424(b) within the time period prescribed and will
         provide evidence satisfactory to the Underwriters of such timely
         filing. The Offerors will promptly advise the Underwriters (1) when the
         Registration Statement shall have become effective, (2) when the
         Prospectus, and any supplement thereto, shall have been filed with the
         Commission pursuant to Rule 424(b), (3) when, prior to termination of
         the offering of the Securities, any amendment to the Registration
         Statement shall have been filed or become effective, (4) of any request
         by the Commission or its staff for any amendment of the Registration
         Statement or for any supplement to the Prospectus or for any additional
         information, (5) of the issuance by the Commission of any stop order
         suspending the effectiveness of the Registration Statement or the
         institution or threat of any proceeding for that purpose and (6) of the
         receipt by the Company of any notification with respect to the
         suspension of the qualification of the Securities for sale in any
         jurisdiction or the institution or threat of any proceeding for such
         purpose. The Offerors will use their reasonable best efforts to prevent
         the issuance of any such stop order or the suspension of any such
         qualification and, if issued, to use their reasonable best efforts to
         obtain as soon as possible the withdrawal thereof.

                           (c) If, at any time when a prospectus relating to the
         Securities is required to be delivered under the 1933 Act, any event
         occurs as a result of which the Prospectus as then supplemented would
         include any untrue statement of a material fact or omit to state any
         material fact necessary to make the statements therein in the light of
         the circumstances under which they were made not misleading, or if it
         shall be necessary to amend the Registration Statement or supplement
         the Prospectus to comply with the 1933


                                       11


         Act or 1933 Act Regulations, the Company promptly will (1) notify the
         Underwriters of any such event, (2) prepare and file with the
         Commission, subject to the first sentence of paragraph (b) of this
         Section 3, an amendment or supplement that will correct such
         misstatement or omission or effect such compliance, and (3) supply any
         supplemented Prospectus to the Underwriters in such quantities as they
         may reasonably request.

                           (d) The Offerors will make generally available to
         their security holders and to the Underwriters an earnings statement or
         statements of the Company and its subsidiaries which will satisfy the
         provisions of Section 11(a) of the 1933 Act and Rule 158 under the 1933
         Act as soon as practicable.

                           (e) The Offerors will endeavor to qualify the
         Securities under the securities or blue sky laws of such states as the
         Underwriters may reasonably designate.

                           (f) During the period of ninety (90) days from the
         date of this Agreement, the Company will not, without the prior written
         consent of Merrill Lynch (A) directly or indirectly, offer, pledge,
         sell, contract to sell, sell any option or contract to purchase,
         purchase any option or contract to sell, grant any option, right or
         warrant to purchase or otherwise transfer or dispose of any FELINE
         PRIDES, purchase contracts, Common Stock or any similar securities or
         any security convertible into or exercisable or exchangeable for or
         repayable with FELINE PRIDES, purchase contracts, Common Stock or
         similar securities; or (B) directly or indirectly, enter into any swap
         or any other agreement or any transaction that transfers, in whole or
         in part, the economic equivalent of ownership of FELINE PRIDES,
         purchase contracts, Common Stock or similar securities or any security
         convertible into or exercisable or exchangeable for or repayable with
         FELINE PRIDES, purchase contracts, Common Stock or similar securities
         whether any such swap or transaction is to be settled by delivery of
         FELINE PRIDES, purchase contracts, Common Stock or similar securities
         or other securities. The foregoing sentence shall not apply (i) in
         connection with the offering and sale of any Securities to the
         Underwriters pursuant to this Agreement; (ii) to any purchases,
         issuances or grants of options, rights or warrants under the Company's
         employee or director compensation and benefits plans, or used for
         similar employee compensation or benefit purposes; or (iii) to any
         purchases and issuances under the Company's direct stock purchase and
         dividend reinvestment plan.

                           (g) The Company agrees to pay all expenses incident
         to the performance of the obligations of the Offerors under this
         Agreement, including the costs and expenses relating to (i) the
         preparation, printing or reproduction and filing with the Commission of
         the Registration Statement (including financial statements and exhibits
         thereto), each preliminary prospectus, the Prospectus and each
         amendment or supplement to any of them; (ii) the printing (or
         reproduction) and delivery (including postage, air freight charges and
         charges for counting and packaging) of such copies of the Registration
         Statement, each preliminary prospectus, the Prospectus, and all
         amendments or supplements to any of them, as may, in each case, be
         reasonably requested for use in connection with the offering and sale
         of the Securities; (iii) the preparation, printing, authentication,
         issuance and delivery of certificates for the Securities, including any
         stamp or transfer taxes in connection with the original issuance and
         sale of the Securities;


                                       12


         (iv) the printing (or reproduction) and delivery of this Agreement, any
         blue sky memorandum and all other agreements or documents printed (or
         reproduced) and delivered in connection with the offering of the
         Securities; (v) the registration of the Securities under the 1934 Act
         and the listing of the Securities on the New York Stock Exchange; (vi)
         any registration or qualification of the Securities for offer and sale
         under the securities or blue sky laws of the several states (including
         filing fees and the reasonable fees and expenses of counsel for the
         Underwriters relating to such registration and qualification); (vii)
         any filings required to be made with the National Association of
         Securities Dealers, Inc. (including filing fees and the reasonable fees
         and expenses of counsel for the Underwriters relating to such filings);
         (viii) the transportation and other expenses incurred by Company
         representatives in connection with presentations to prospective
         purchasers of the Securities (but not including the transportation and
         other expenses of the Underwriters); (ix) the fees and expenses of the
         Company's accountants and the fees and expenses of counsel (including
         local and special counsel) for the Company; (x) the cost and charges of
         the Trustee, the Purchase Contract Agent, the Collateral Agent and any
         other fiduciary agents and (xi) any fees payable to rating agencies in
         connection with the rating of the Securities. It is understood,
         however, that except as provided in this paragraph, Section 7 and
         Section 8 hereof, the Underwriters shall pay all of their own costs and
         expenses, including the fees and expenses of their counsel, any
         transfer taxes and any advertising expenses incurred in connection with
         any offers they may make.

                           (h) The Company will use its reasonable best efforts
         to effect the listing of the Income PRIDES and the Shares on the New
         York Stock Exchange.

                           (i) The Company has reserved and will keep available
         at all times, free of preemptive or other similar rights and liens and
         adverse claims, sufficient shares of Common Stock to satisfy its
         obligations to issue Shares upon settlement of the Purchase Contracts.

                  SECTION 4. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS.
The obligations of the Underwriters to purchase the Initial Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Offerors contained herein as of the date hereof and as of the Closing Time, to
the accuracy of the statements of officers of the Company or any trustees of the
Trust made in any certificates pursuant to the provisions hereof, to the
performance by the Offerors of their obligations hereunder and to the following
additional conditions:

                           (a) Subsequent to the execution and delivery of this
         Agreement and prior to the Closing Time:

                                    (i) There shall not have been any decrease
                           in the rating of any of the Company's debt securities
                           by any "nationally recognized statistical rating
                           organization" (as defined for purposes of Rule 436(g)
                           under the 1933 Act) or any notice given of any
                           intended or potential decrease in any such rating or
                           of a possible change in any such rating that does not
                           indicate the direction of the possible change; and


                                       13


                                    (ii) There shall not have been a Material
                           Adverse Change.

                           (b) The Registration Statement has become effective
         and at Closing Time no stop order suspending the effectiveness of the
         Registration Statement shall have been issued under the 1933 Act or
         proceedings therefor initiated or threatened by the Commission, and any
         request on the part of the Commission for additional information shall
         have been complied with to the reasonable satisfaction of counsel to
         the Underwriters.

                           (c) At Closing Time, the Underwriters shall have
         received an opinion of Davis Polk & Wardwell, counsel for the Company,
         dated as of the Closing Time, to the effect that:

                                    (i) This Agreement has been duly authorized,
                           executed and delivered by the Company;

                                    (ii) Each of the Purchase Contract Agreement
                           and the Pledge Agreement has been duly authorized,
                           executed and delivered by the Company and assuming
                           such agreements have been duly authorized, executed
                           and delivered by the other parties thereto, each such
                           agreement constitutes a valid and binding obligation
                           of the Company enforceable against the Company in
                           accordance with their terms, except as (a) as such
                           enforcement may be limited by bankruptcy, insolvency,
                           reorganization, moratorium or similar laws affecting
                           creditors' rights and remedies generally and (b) as
                           such enforcement may be limited by general principles
                           of equity, regardless of whether enforcement is
                           sought in a proceeding at law or in equity; PROVIDED,
                           HOWEVER, that upon the occurrence of a termination
                           event under the Purchase Contract, Section 365(e) of
                           the Bankruptcy Code (11 U.S.C. Sections 101-1330, as
                           amended) and, based on a review of the applicable
                           case law (of which there is very little that
                           supports--or refutes--these conclusions), Section 541
                           of the Bankruptcy Code, should not substantively
                           limit the provisions of Sections 3.15 and 5.06 of the
                           Form of Purchase Contract Agreement filed as an
                           exhibit to the Registration Statement or Section 5.4
                           of the Form of Pledge Agreement filed as an exhibit
                           to the Registration Statement that require
                           termination of the Purchase Contracts and release of
                           the Collateral Agent's security interest in (1) the
                           Preferred Trust Securities, (2) the Treasury
                           securities, (3) the applicable ownership interest of
                           the Treasury portfolio or (4) the Senior Notes, as
                           applicable, and, PROVIDED, FURTHER, HOWEVER, that (i)
                           the foregoing opinion is subject to the equitable
                           powers of the Bankruptcy Court and the Bankruptcy
                           Court's power under Section 105(a) of the Bankruptcy
                           Code and (ii) procedural delays could affect the
                           timing of the exercise of such rights and remedies;

                                    (iii) The Preferred Trust Securities
                           Guarantee Agreement has been duly authorized,
                           executed and delivered by the Company and assuming
                           that it has been duly authorized, executed and
                           delivered by the


                                       14


                           other parties thereto, it is a valid and binding
                           agreement of the Company, enforceable in accordance
                           with its terms except (a) as such enforcement may be
                           limited by bankruptcy, insolvency, reorganization,
                           moratorium or similar laws affecting creditors'
                           rights and remedies generally and (b) as such
                           enforcement may be limited by general principles of
                           equity, regardless of whether enforcement is sought
                           in a proceeding at law or in equity;

                                    (iv) The Remarketing Agreement has been duly
                           authorized, executed and delivered by the Company and
                           assuming that it has been duly authorized, executed
                           and delivered by the other parties thereto, it is a
                           valid and binding agreement of the Company except (a)
                           as such enforcement may be limited by bankruptcy,
                           insolvency, reorganization, moratorium or similar
                           laws affecting creditors' rights and remedies
                           generally and (b) as such enforcement may be limited
                           by general principles of equity, regardless of
                           whether enforcement is sought in a proceeding at law
                           or in equity and except as rights to indemnity and
                           contribution thereunder may be limited by applicable
                           law;

                                    (v) The Indenture has been duly authorized,
                           executed and delivered by the Company and assuming
                           due authorization, execution and delivery thereof by
                           the Trustee, constitutes a valid and binding
                           agreement of the Company enforceable against the
                           Company in accordance with its terms except (a) as
                           such enforcement may be limited by bankruptcy,
                           insolvency, reorganization, moratorium or similar
                           laws affecting creditors' rights and remedies
                           generally and (b) as such enforcement may be limited
                           by general principles of equity, regardless of
                           whether enforcement is sought in a proceeding at law
                           or in equity;

                                    (vi) The Declaration has been duly
                           authorized by the Company, duly executed by the
                           proper officers of the Company and delivered by the
                           Company and assuming due authorization, execution and
                           delivery thereof by the other parties thereto, is a
                           valid and binding agreement of the Company
                           enforceable in accordance with its terms except (a)
                           as such enforcement may be limited by bankruptcy,
                           insolvency, reorganization, moratorium or similar
                           laws affecting creditors' rights and remedies
                           generally and (b) as such enforcement may be limited
                           by general principles of equity, regardless of
                           whether enforcement is sought in a proceeding at law
                           or in equity;

                                    (vii) The Securities to be purchased by the
                           Underwriters have been duly authorized by the Company
                           and when duly executed and authenticated in
                           accordance with the terms of the Purchase Contract
                           Agreement and delivered to and paid for by the
                           Underwriters in accordance with the terms of this
                           Agreement will be entitled to the benefits of the
                           Purchase Contract Agreement and will constitute valid
                           and binding obligations of the Company, enforceable
                           against the Company in


                                       15


                           accordance with their terms, PROVIDED, HOWEVER, that
                           upon the occurrence of a termination event under the
                           Purchase Contract, Section 365(e) of the Bankruptcy
                           Code (11 U.S.C. Sections 101-1330, as amended) and,
                           based on a review of the applicable case law (of
                           which there is very little that supports-or
                           refutes-these conclusions), Section 541 of the
                           Bankruptcy Code, should not substantively limit the
                           provisions of Sections 3.15 and 5.06 of the Form of
                           Purchase Contract Agreement filed as an exhibit to
                           the Registration Statement or Section 5.4 of the Form
                           of Pledge Agreement filed as an exhibit to the
                           Registration Statement that require termination of
                           the Purchase Contracts and release of the Collateral
                           Agent's security interest in (1) the Preferred Trust
                           Securities, (2) the Treasury securities, (3) the
                           applicable ownership interest of the Treasury
                           portfolio or (4) the Senior Notes, as applicable,
                           and, PROVIDED, FURTHER, HOWEVER, that (i) the
                           foregoing opinion is subject to the equitable powers
                           of the Bankruptcy Court and the Bankruptcy Court's
                           power under Section 105(a) of the Bankruptcy Code and
                           (ii) procedural delays could affect the timing of the
                           exercise of such rights and remedies;

                                    (viii) The Senior Notes have been duly
                           authorized by the Company and, when issued and
                           authenticated in accordance with the terms of the
                           Indenture and delivered to the Trust against payment
                           therefore in accordance with the terms of the Senior
                           Deferrable Note Purchase Agreement dated the date
                           hereof between the Trust and the Company, will be
                           entitled to the benefits of the Indenture and
                           constitute valid and binding obligations of the
                           Company, enforceable against the Company in
                           accordance with their terms except (a) as such
                           enforcement may be limited by bankruptcy, insolvency,
                           reorganization, moratorium or similar laws affecting
                           creditors' rights and remedies generally and (b) as
                           such enforcement may be limited by general principles
                           of equity, regardless of whether enforcement is
                           sought in a proceeding at law or in equity;

                                    (ix) The Shares to be issued and sold by the
                           Company pursuant to the settlement of the Purchase
                           Contracts has been duly authorized and reserved for
                           issuance by the Company and, when issued by the
                           Company in accordance with the provisions of the
                           Purchase Contract Agreement and the Purchase
                           Contracts, will be validly issued, fully paid and
                           non-assessable; and the holders of outstanding shares
                           of capital stock of the Company are not entitled to
                           preemptive or other rights to subscribe for the
                           Securities pursuant to the Company's Certificate of
                           Incorporation or the General Corporation Law of the
                           State of Delaware;

                                    (x) The Declaration, the Indenture and the
                           Preferred Trust Securities Guarantee Agreement have
                           been qualified under the 1939 Act;

                                    (xi) We have reviewed the discussion set
                           forth under the caption "United States Federal Income
                           Tax Consequences" in the


                                       16


                           Prospectus Supplement and are of the opinion that to
                           the extent the discussion relates to conclusions of
                           law, the discussion is accurate in all material
                           respects;

                                    (xii) Neither the Trust nor the Company is
                           and, after giving effect to the offering and sale of
                           the Securities and the application of the proceeds
                           thereof as described in the Prospectus, neither the
                           Trust nor the Company will be, required to register
                           as an "investment company," as such term is defined
                           in the Investment Company Act of 1940, as amended;

                                    (xiii) No consent, approval, authorization,
                           filing with or order of any court or governmental
                           agency or body is required to be made or obtained by
                           the Trust or the Company pursuant to the General
                           Corporation Law of the State of Delaware or the laws,
                           rules or regulations of the State of New York or of
                           the United States of America in connection with the
                           performance of their obligations hereunder or under
                           the other Operative Documents, except such as have
                           been made obtained under the 1933 Act, the 1934 Act,
                           the 1939 Act or otherwise and such as may be required
                           under PUHCA or under the blue sky laws of any
                           jurisdiction in connection with the purchase and
                           distribution of the Securities by the Underwriters
                           (about which such counsel need express no opinion)
                           and such other approvals (specified in such opinion)
                           as have been obtained.

         Furthermore, following the opinion paragraphs, such counsel shall state
the following:

         "We have considered the statements relating to legal matters or
documents included in the Prospectus Supplement under the captions "Description
of the FELINE PRIDES," "Description of the Purchase Contracts," "Certain
Provisions of the Purchase Contract Agreement and the Pledge Agreement,"
"Description of the Preferred Trust Securities," "Description of the Guarantee,"
"Description of the Senior Deferrable Notes," and in the Basic Prospectus under
the caption "Description of the Trust Preferred Securities," "Description of the
Debt Securities" and "Description of Capital Stock." In our opinion, such
statements fairly summarize in all material respects such matters or documents."

         "We have not ourselves checked the accuracy, completeness or fairness
of, or otherwise verified, the information furnished with respect to other
matters in the Registration Statement or the Prospectus. We have generally
reviewed and discussed with your representatives, and with certain officers and
employees of, and counsel and independent public accountants for, the Company,
the information furnished, whether or not subject to our check and verification.
On the basis of such consideration, review and discussion, but without
independent check or verification except as stated above, nothing has come to
our attention that causes us to believe that (i) the Registration Statement or
the Prospectus (except for the financial statements and financial schedules and
other financial and statistical data included or incorporated by reference
therein or omitted therefrom and the Statements of Eligibility on Form T-1 of
the Trustees, as to which we express no belief) do not comply as to form in all
material respects with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder, (ii) the Registration
Statement or the prospectus included therein (except for the


                                       17


financial statements and financial schedules and other financial and statistical
data included or incorporated by reference therein or omitted therefrom and the
Statements of Eligibility on Form T-1 of the Trustees, as to which we express no
belief) at the time the Registration Statement became effective contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or (iii) the Prospectus (except for the financial statements and financial
schedules and other financial and statistical data included or incorporated by
reference therein or omitted therefrom and the Statements of Eligibility on Form
T-1 of the Trustees, as to which we express no belief) as of its date or as of
the date hereof contained or contains an untrue statement of a material fact or
omitted or omits 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 rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware or the State of New York or the Federal
laws of the United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel reasonably satisfactory to counsel
for the Underwriters and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Trust and the Company and
public officials. In addition, such counsel does not express an opinion as to
the implications of this Agreement or any other transaction document under any
federal, state or local laws or regulations related to electric utilities or
power generation, transmission or distribution. References to the Prospectus in
this paragraph (c) unless otherwise indicated include any supplements thereto at
the Closing Time.

                           (d) At Closing Time, the Underwriters shall have
         received an opinion of Bradley C. Arnett, Esq., Senior Counsel of the
         Company, dated as of Closing Time, to the effect that:

                                    (i) The Company is a corporation duly
                           incorporated, validly existing and in good standing
                           under the laws of the State of Delaware and 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) Each of The Cincinnati Gas & Electric
                           Company and PSI Energy, Inc., each a wholly-owned
                           subsidiary of the Company, and any other significant
                           subsidiary of the Company (as such term is defined in
                           Rule 1-02 of Regulation S-X) is a corporation duly
                           incorporated and existing in good standing under the
                           laws of its jurisdiction of incorporation and, except
                           as may be limited by state and federal environmental
                           laws and regulations, 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;

                                    (iii) The Company and its subsidiaries
                           listed in (ii) above are each duly qualified to
                           transact business and are in good standing in the
                           jurisdictions in which the conduct of their
                           respective businesses or the


                                       18


                           ownership or leasing of their respective properties
                           requires such qualification;

                                    (iv) An appropriate order of the Commission
                           under PUHCA is in effect on the Closing Time 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 is not called upon to
                           express an opinion) is required for the issuance and
                           sale of the Securities;

                                    (v) Such counsel does not know of any
                           contract required to be filed as an exhibit to the
                           Registration Statement, or incorporated therein by
                           reference, which has not been so filed or
                           incorporated by reference;

                                    (vi) To the knowledge of such counsel, no
                           holders of securities of the Company have rights to
                           require the registration of such securities under the
                           Registration Statement that have not been waived with
                           respect to the offering of the Securities.

                           (e) At Closing Time, the Underwriters shall have
         received an opinion of Richards, Layton & Finger, Counsel for the
         Trust, dated as of Closing Time, in form and substance satisfactory to
         counsel for the Underwriters to the effect that:

                                    (i) The Trust has been duly created and is
                           validly existing and in good standing as a business
                           trust under the Delaware Act, and all filing required
                           under the laws of the State of Delaware with respect
                           to the creation and valid existence of the Trust as a
                           business trust have been made.

                                    (ii) Under the Delaware Act and the
                           Declaration, the Trust has the trust power and
                           authority to own property and conduct its business,
                           all as described in the Prospectus.

                                    (iii) Under the Delaware Act and the
                           Declaration, the Trust has the trust power and
                           authority to (a) execute and deliver, and to perform
                           its obligations under, this Agreement and (b) issue
                           and perform its obligations under the Preferred Trust
                           Securities.

                                    (iv) Under the Delaware Act and the
                           Declaration, the execution and delivery by the Trust
                           of this Agreement, and the performance by the Trust
                           of its obligations hereunder, have been duly
                           authorized by all necessary trust action on the part
                           of the Trust.

                                    (v) The Preferred Trust Securities have been
                           duly authorized by the Declaration and, when issued,
                           executed, authenticated and delivered in accordance
                           with the terms of the Declaration against payment
                           therefor as set forth in this Agreement, will be duly
                           and validly issued and, subject to the limitations
                           set forth in this paragraph (vi) below, fully paid


                                       19


                           and non-assessable undivided beneficial interests in
                           the assets of the Trust, entitled to the benefits of
                           the Declaration, subject to the terms of the
                           Declaration. Each Preferred Trust Security holder, in
                           such capacity, will be entitled to the same
                           limitation of personal liability as that extended to
                           stockholders of private corporations for profit
                           organized under the General Corporation Law of the
                           State of Delaware, provided, however, that such
                           counsel need express no opinion with respect to the
                           liability of any Preferred Trust Security holder who
                           is, was, or may become, a named trustee of the Trust.
                           Such counsel may note, however, that the Preferred
                           Trust Security holders may be obligated, pursuant to
                           the Declaration, to (a) provide indemnity and/or
                           security in connection with, and pay taxes or
                           governmental charges arising from transfers or
                           exchanges of Preferred Trust Securities Certificates
                           and the issuance of Preferred Trust Securities
                           Certificates and (b) provide security and indemnity
                           in connection with requests of or directions to the
                           Property Trustee to exercise its rights and remedies
                           under the Declaration.

                                    (vi) Under the Delaware Act and the
                           Declaration, the issuance of the Preferred Trust
                           Securities is not subject to preemptive or other
                           similar rights.

                                    (vii) The issuance and sale by the Trust of
                           the Preferred Trust Securities, the purchase by the
                           Trust of the Senior Notes, the execution, delivery
                           and performance by the Trust of this Agreement, the
                           consummation by the Trust of the transactions
                           contemplated by this Agreement and the compliance by
                           the Trust with its obligations hereunder do not
                           violate (a) any of the provisions of the Certificate
                           or the Declaration or (b) any applicable Delaware law
                           or Delaware administrative regulation.

                                    (viii) No filing or registration with, or
                           authorization, approval, consent, license, order,
                           qualification or order of any Delaware court or
                           Delaware governmental authority or Delaware agency is
                           required to be obtained by the Trust solely in
                           connection with the issuance and sale of the
                           Preferred Trust Securities, the purchase by the Trust
                           of the Senior Notes, the execution, delivery and
                           performance by the Trust of this Agreement, the
                           consummation by the Trust of the transactions
                           contemplated in this Agreement or the compliance by
                           the Trust with its obligations hereunder.

                                    (ix) The Preferred Trust Security holders
                           (other than those Preferred Trust Security holders
                           who reside or are domiciled in the State of Delaware)
                           will have no liability for income taxes imposed by
                           the State of Delaware solely as a result of their
                           participation in the Trust, and the Trust will not be
                           liable for any income tax imposed by the State of
                           Delaware.


                                       20


                           (f) At Closing Time, the Underwriters shall have
         received the opinion, dated as of Closing Time, of Emmet, Marvin &
         Martin LLP, counsel to The Bank of New York, as Property Trustee,
         Guarantee Trustee and Purchase Contract Agent, in form and substance
         satisfactory to counsel for the Underwriters, to the effect that:

                                    (i) The Bank of New York is a New York
                           banking corporation duly organized, validly existing
                           and in good standing under the laws of the New York
                           with all necessary corporate power and authority to
                           execute and deliver, and to carry out and perform its
                           obligations under the terms of, the Declaration, the
                           Preferred Securities Guarantee, the Purchase Contract
                           Agreement, the Pledge Agreement and the Remarketing
                           Agreement;

                                    (ii) The execution, delivery and performance
                           by The Bank of New York in its capacity as Property
                           Trustee, of the Declaration, and the execution,
                           delivery and performance by The Bank of New York in
                           its capacity as Guarantee Trustee, of the Preferred
                           Trust Securities Guarantee Agreement have been duly
                           authorized by all necessary corporate action on the
                           part of The Bank of New York. The Declaration and the
                           Preferred Trust Securities Guarantee Agreement have
                           been duly executed and delivered by The Bank of New
                           York, in its capacity as Property Trustee, in the
                           case of the Declaration, and by The Bank of New York,
                           in its capacity as Guarantee Trustee, in the case of
                           the Preferred Securities Guarantee, and the
                           Declaration and the Preferred Trust Securities
                           Guarantee Agreement constitute the legal, valid and
                           binding obligations of The Bank of New York,
                           enforceable against The Bank of New York 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 and (B) rights of
                           acceleration and the availability of equitable
                           remedies may be limited by equitable principles of
                           general applicability;

                                    (iii) The execution, delivery and
                           performance by the Purchase Contract Agent of the
                           Purchase Contract Agreement, the Pledge Agreement and
                           the Remarketing Agreement, and the authentication and
                           delivery of the Securities have been duly authorized
                           by all necessary action on the part of the Purchase
                           Contract Agent. The Purchase Contract Agreement, the
                           Pledge Agreement and the Indenture have been duly
                           executed and delivered by the Purchase Contract
                           Agent, and constitute the legal, valid and binding
                           obligations of the Purchase Contract Agent,
                           enforceable against the Purchase Contract Agent in
                           accordance with their respective terms, except as (A)
                           the enforceability thereof may be limited by
                           bankruptcy, insolvency or similar laws affecting the
                           enforcement of creditors' rights generally and (B)
                           rights of acceleration and the availability of
                           equitable remedies may be limited by equitable
                           principles of general applicability;


                                       21


                                    (iv) The execution, delivery and performance
                           by The Bank of New York, in its capacity as Property
                           Trustee, of the Declaration, the execution, delivery
                           and performance by The Bank of New York, in its
                           capacity as Guarantee Trustee, of the Preferred
                           Securities Guarantee, and the execution, delivery and
                           performance by The Bank of New York, in its capacity
                           as Purchase Contract Agent of the Purchase Contract
                           Agreement, the Pledge Agreement and the Remarketing
                           Agreement, do not conflict with, or constitute a
                           breach of, The Bank of New York's charter or bylaws;
                           and

                                    (v) No consent, approval or authorization
                           of, or registration with or notice to, any federal
                           banking authority is required for the execution,
                           delivery or performance by The Bank of New York, in
                           its capacity as Property Trustee, of the Declaration,
                           or by The Bank of New York, in its capacity as
                           Guarantee Trustee, of the Preferred Trust Securities
                           Guarantee Agreement by The Bank of New York, in its
                           capacity as Purchase Contract Agent, of the Purchase
                           Contract Agreement, the Pledge Agreement and the
                           Remarketing Agreement.

                           (g) At Closing Time, the Underwriters shall have
         received the opinion, dated as of Closing Time, of Richards, Layton &
         Finger, counsel to The Bank of New York (Delaware) as Delaware Trustee,
         to the effect that:

                                    (i) The Bank of New York (Delaware) is a
                           Delaware corporation, duly organized, validly
                           existing and in good standing, with full corporate
                           power and authority to execute and deliver, and to
                           carry out and perform its obligations under the terms
                           of, the Declaration;

                                    (ii) The execution, delivery and performance
                           by The Bank of New York (Delaware) in its capacity as
                           Delaware Trustee, of the Declaration have been duly
                           authorized by all necessary corporate action on the
                           part of The Bank of New York (Delaware). The
                           Declaration has been duly executed and delivered by
                           The Bank of New York (Delaware), in its capacity as
                           Delaware Trustee, and the Declaration constitutes a
                           legal, valid and binding obligation of The Bank of
                           New York (Delaware), enforceable against The Bank of
                           New York (Delaware) in accordance with its terms,
                           except as (A) the enforceability thereof may be
                           limited by bankruptcy, insolvency or similar laws
                           affecting the enforcement of creditors' rights
                           generally and (B) rights of acceleration and the
                           availability of equitable remedies may be limited by
                           equitable principles of general applicability;

                                    (iii) The execution, delivery and
                           performance by The Bank of New York (Delaware), in
                           its capacity as Delaware Trustee, of the Declaration
                           do not conflict with, or constitute a breach of, The
                           Bank of New York's (Delaware) charter or bylaws; and


                                       22


                                    (iv) No consent, approval or authorization
                           of, or registration with or notice to, any federal
                           banking authority is required for the execution,
                           delivery or performance by The Bank of New York
                           (Delaware), in its capacity as Delaware Trustee, of
                           the Declaration.

                           (h) An opinion of Shearman & Sterling, counsel for
         the Underwriters, dated as of the Closing Time, containing such opinion
         or opinions, dated the Closing Time, with respect to the issuance and
         sale of the Securities, the Registration Statement, the Prospectus
         (together with any supplement thereto), the Operative Documents and
         other related matters as the Underwriters may reasonably require, and
         the Company shall have furnished to such counsel such documents as they
         request for the purpose of enabling them to pass upon such matters.

                           (i) The Underwriters shall have received a
         certificate of the Company, signed by an executive officer of the
         Company, dated as of Closing Time, to the effect that:

                                    (i) The representations and warranties in
                           Section 1 hereof are true and correct on and as of
                           the Closing Time with the same effect as if made on
                           the Closing Time and the Company and the Trust, as
                           applicable, have complied with all agreements and
                           satisfied all the conditions on its part to be
                           performed or satisfied at or prior to the Closing
                           Time;

                                    (ii) No stop order suspending the
                           effectiveness of the Registration Statement has been
                           issued and no proceedings for that purpose have been
                           instituted or, to the Company's knowledge,
                           threatened; and

                                    (iii) Since the date of the most recent
                           financial statements included or incorporated by
                           reference in the Prospectus, there has not been a
                           Material Adverse Change.

                           (j) The Underwriters shall have received from Arthur
         Andersen LLP a letter dated the Closing Time, in form and substance
         reasonably satisfactory to the Underwriters, 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 the Registration Statement
         and the Prospectus.

                           (k) At the date of this Agreement, the Income PRIDES
         and the Shares shall have been approved for listing, subject to
         official notice of issuance and evidence of satisfactory distribution,
         on the New York Stock Exchange, and satisfactory evidence of such
         actions shall have been provided to the Underwriters.

                           (l) In the event that the Underwriters exercise their
         option provided in Section 2(b) hereof to purchase all or any portion
         of the Option Securities, the representations and warranties of the
         Offerors contained herein and the statements in any certificate
         furnished by the Company or the Trust hereunder shall be true and
         correct as


                                       23


         of each Date of Delivery and, at the relevant Date of Delivery, the
         Underwriters shall have received:

                                    (i) A certificate, dated such Date of
                           Delivery, signed by an executive officer of the
                           Company confirming that the certificate delivered at
                           Closing Time pursuant to Section 4(i) hereof remains
                           true and correct as of such Date of Delivery.

                                    (ii) The opinion of Davis Polk & Wardwell,
                           counsel for the Company, in form and substance
                           satisfactory to counsel for the Underwriters, dated
                           such Date of Delivery, relating to the Option
                           Securities to be purchased on such Date of Delivery
                           and otherwise to the same effect as the opinion
                           required by Section 4(c) hereof.

                                    (iii) The opinion of Bradley C. Arnett,
                           Esq., Senior Counsel of the Company, in form and
                           substance satisfactory to counsel for the
                           Underwriters, dated such Date of Delivery, relating
                           to the Option Securities to be purchased on such Date
                           of Delivery and otherwise to the same effect as the
                           opinion required by Section 4(d) hereof.

                                    (iv) The opinion of Richards, Layton &
                           Finger, counsel for the Trust, in form and substance
                           satisfactory to counsel for the Underwriters, dated
                           such Date of Delivery, relating to the Option
                           Securities to be purchased on such Date of Delivery
                           and otherwise to the same effect as the opinion
                           required by Section 4(e) hereof.

                                    (v) The opinion of Emmet, Marvin & Martin
                           LLP, counsel for The Bank of New York, as Property
                           Trustee, Guarantee Trustee and Purchase Contract
                           Agent, in form and substance satisfactory to counsel
                           for the Underwriters, dated such Date of Delivery and
                           otherwise to the same effect as the opinion required
                           by Section 4(f).

                                    (vi) The opinion of Richards, Layton and
                           Finger, counsel for The Bank of New York (Delaware)
                           as Delaware Trustee, in form and substance
                           satisfactory to counsel for the Underwriters, dated
                           such Date of Delivery and otherwise to the same
                           effect as the opinion required by Section 4(g).

                                    (vii) The opinion of Shearman & Sterling,
                           counsel for the Underwriters, dated such Date of
                           Delivery, relating to the Option Securities to be
                           purchased on such Date of Delivery and otherwise to
                           the same effect as the opinion required by Section
                           4(h) hereof.

                                    (viii) A letter from Arthur Andersen LLP, in
                           form and substance satisfactory to the Underwriters
                           and dated such Date of Delivery, substantially in the
                           same form and substance as the letter furnished to
                           the Underwriters pursuant to Section 4(j) hereof,
                           except that the "specified


                                       24


                           date" in the letter furnished pursuant to this
                           paragraph shall be a date not more than five days
                           prior to such Date of Delivery.

                           (m) If any of the conditions specified in this
         Section 4 shall not have been fulfilled in all material respects when
         and as provided in this Agreement, this Agreement and all obligations
         of the Underwriters hereunder may be canceled at, or at any time prior
         to, the Closing Time by the Underwriters. Notice of such cancellation
         shall be given to the Company in writing or by telephone or facsimile
         confirmed in writing.

                  SECTION 5. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this
Agreement shall be terminated by the Underwriters, or any of them, because of
any failure or refusal on the part of the Offerors to comply with the terms or
to fulfill any of the conditions of this Agreement, the Offerors will reimburse
the Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally through Merrill Lynch, for all out-of-pocket
expenses (including the fees and disbursements of their counsel) reasonably
incurred by such Underwriters in connection with this Agreement or the offering
contemplated hereunder.

                  SECTION 6. INDEMNIFICATION AND CONTRIBUTION.

                           (a) The Offerors, jointly and severally, agree to
         indemnify and hold harmless each Underwriter and each person, if any,
         who controls any Underwriter within the meaning of either Section 15 of
         the 1933 Act or Section 20 of the 1934 Act from and against (i) any and
         all losses, claims, damages, liabilities and expenses whatsoever
         arising out of any untrue statement or alleged untrue statement of a
         material fact contained in the Registration Statement or the Prospectus
         (as amended or supplemented if the Offerors shall have furnished any
         amendments or supplements thereto) or any preliminary prospectus, 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, (ii) any and all losses, claims, damages,
         liabilities and expenses whatsoever, as incurred, to the extent of the
         aggregate amount paid in settlement of any litigation, or any
         investigation or proceeding by any governmental agency or body,
         commenced or threatened, or of any claim whatsoever based upon any such
         untrue statement or omission, or any such alleged untrue statement or
         omission, provided that any such settlement is effected with the
         written consent of the Offerors, and (iii) any and all expenses
         whatsoever, as incurred (including the fees and disbursements of
         counsel chosen by Merrill Lynch), reasonably incurred in investigating,
         preparing and defending against any litigation, or any investigation or
         proceeding by any governmental agency or body, commenced or threatened,
         or any claim whatsoever based upon any such untrue statement or
         omission, or any such alleged untrue statement or omission, to the
         extent that any such expense is not paid under the preceding clauses
         (i) or (ii); provided, however, that this indemnity shall not apply to
         any such losses, claims, damages liabilities or expenses arising out of
         any such untrue statement or omission or alleged untrue statement or
         omission that is based upon information furnished to the Offerors in
         writing by any Underwriter through Merrill Lynch expressly for use
         therein; provided further, however, that this indemnity with
         respect to any preliminary prospectus shall not inure to


                                       25


         the benefit of any Underwriter from whom the person asserting any such
         losses, claims, damages or liabilities, expenses or judgments purchased
         Securities, or any person controlling such Underwriter, if a copy of
         the Prospectus (as then amended or supplemented if the Company shall
         have furnished any amendments or supplements thereto) was not sent or
         given by or on behalf of such Underwriter to such person, at or prior
         to the written confirmation of the sale of the Securities to such
         person, and if the Prospectus (as so amended or supplemented) would
         have cured the defect giving rise to such losses, claims, damages,
         liabilities, expenses or judgments.

                           (b) In addition to and without limitation of the
         Company's obligation to indemnify Lehman Brothers Inc. as an
         Underwriter, the Company also agrees to indemnify and hold harmless the
         Independent Underwriter and each person, if any, who controls the
         Independent Underwriter within the meaning of Section 15 of the 1933
         Act or Section 20 of the 1934 Act, from and against any and all loss,
         liability, claim, damage and expense whatsoever, as incurred, incurred
         as a result of the Independent Underwriter's participation as a
         "qualified independent underwriter" within the meaning of Rule 2720 of
         the Conduct Rules of the National Association of Securities Dealers,
         Inc. in connection with the offering of the Securities, except if
         and to the extent that it has been judicially determined that such
         losses, claims, damages and expense resulted directly from the
         Independent Underwriter's willful misconduct.

                           (c) Each Underwriter agrees, severally and not
         jointly, to indemnify and hold harmless the Company, its directors and
         its officers who sign the Registration Statement, the Trust, each of
         the Trustees who signed the Registration Statement and each person, if
         any, who controls the Company or the Trust within the meaning of either
         Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same
         extent as the foregoing indemnity from the Company and the Trust to
         such Underwriter, but only with reference to information relating to
         such Underwriter furnished to the Offerors in writing by such
         Underwriter through Merrill Lynch expressly for use in the Registration
         Statement, any preliminary prospectus, the Prospectus or any amendments
         or supplements thereto.

                           (d) Each indemnified party shall give notice as
         promptly as reasonably practicable to each indemnifying party of any
         action commenced against it in respect of which indemnity may be sought
         hereunder, but failure to so notify an indemnifying party shall not
         relieve such indemnifying party from any liability hereunder to the
         extent it is not materially prejudiced as a result thereof and in any
         event shall not relieve it from any liability which it may have
         otherwise than on account of this indemnity agreement. In the case of
         parties indemnified pursuant to paragraph (a) above, counsel to the
         indemnified parties shall be selected by Merrill Lynch, and, in the
         case of parties indemnified pursuant to paragraph (b) above, counsel to
         the indemnified parties shall be selected by the Offerors. An
         indemnifying party may participate at its own expense in the defense of
         any such action; provided, however, that counsel to the indemnifying
         party shall not (except with the consent of the indemnified party) also
         be counsel to the indemnified party. In no event shall the indemnifying
         parties be liable for fees and expenses of more than one counsel (in
         addition to any local counsel) separate from their own counsel for all
         indemnified parties in connection with any one action or separate but
         similar or related actions in the same jurisdiction arising out of the
         same general allegations or


                                       26


         circumstances. No indemnifying party shall, without the prior written
         consent of the indemnified parties, settle or compromise or consent to
         the entry of any judgment with respect to any litigation, or any
         investigation or proceeding by any governmental agency or body,
         commenced or threatened, or any claim whatsoever in respect of which
         indemnification or contribution could be sought under this Section 6
         hereof (whether or not the indemnified parties are actual or potential
         parties thereto), unless such settlement, compromise or consent (i)
         includes an unconditional release of each indemnified party from all
         liability arising out of such litigation, investigation, proceeding or
         claim and (ii) does not include a statement as to or an admission of
         fault, culpability or a failure to act by or on behalf of any
         indemnified party.

                           (e) To the extent the indemnification provided for in
         paragraph (a) or (b) of this Section 6 is unavailable to an indemnified
         party or insufficient in respect of any losses, claims, damages or
         liabilities referred to therein, then each indemnifying party under
         such paragraph, 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 Offerors on the one hand and the
         Underwriters on the other hand 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 Offerors on the one hand and of the Underwriters
         on the other hand in connection with the statements or omissions that
         resulted in such losses, claims, damages or liabilities, as well as any
         other relevant equitable considerations. The relative benefits received
         by the Offerors on the one hand and the Underwriters on the other hand
         in connection with the offering of the Securities shall be deemed to be
         in the same respective proportions as the net proceeds from the
         offering of such Securities (before deducting expenses) received by the
         Offerors and the total underwriting commissions received by the
         Underwriters, in each case as set forth in the table on the cover of
         the Prospectus, bear to the aggregate public offering price of the
         Securities. The relative fault of the Offerors on the one hand and the
         Underwriters on the other hand 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 Offerors or by the
         Underwriters and the parties' relative intent, knowledge, access to
         information and opportunity to correct or prevent such statement or
         omission. The Underwriters' respective obligations to contribute
         pursuant to this Section 6 are several in proportion to the respective
         stated amount of the Securities they have purchased hereunder, and not
         joint. The Company and the Underwriters agree that Lehman Brothers Inc.
         will not receive any additional benefits hereunder for serving as the
         Independent Underwriter in connection with the offering and sale of the
         Securities.

                           (f) The Offerors and the Underwriters agree that it
         would not be just or equitable if contribution pursuant to this Section
         6 were determined by pro rata allocation (even if the Underwriters were
         treated as one entity for such purpose) or by any other method of
         allocation that does not take account of the equitable considerations
         referred to in paragraph (d) of this Section 6. The amount paid or
         payable by an


                                       27


         indemnified party as a result of the losses, claims, damages and
         liabilities referred to in the immediately preceding paragraph 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 6, no Underwriter shall
         be required to contribute any amount in excess of the amount by which
         the total price at which the Securities underwritten by it and
         distributed to the public were offered to the public exceeds the amount
         of any damages that such Underwriter 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 1933 Act) shall be entitled
         to contribution from any person who was not guilty of such fraudulent
         misrepresentation. The remedies provided for in this Section 6 are not
         exclusive and shall not limit any rights or remedies which may
         otherwise be available to any indemnified party at law or in equity.

                           (g) The indemnity and contribution provisions
         contained in this Section 6 and the representations, warranties and
         other statements of the Offerors contained 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 Underwriter or any person controlling any Underwriter,
         the Company, its officers or directors, the Trust, its Trustees or any
         person controlling the Company or the Trust and (iii) acceptance of any
         payment for any of the Securities.

                  SECTION 7. DEFAULT BY AN UNDERWRITER. If any one or more of
the Underwriters shall fail or refuse to purchase the Securities which it or
they have agreed to purchase hereunder, and the Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Securities, the other Underwriters shall
be obligated severally in the proportions which the Securities set forth
opposite their names in Section 2(a) hereof bears to the Securities so set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as you may specify, to purchase the Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase; provided
that in no event shall the Securities which any Underwriter has agreed to
purchase pursuant to Section 2(a) hereof be increased pursuant to this Section 7
by an amount in excess of one-ninth of such Securities without the written
consent of such Underwriter. If any Underwriter or Underwriters shall fail or
refuse to purchase Securities and the total number of Securities with respect to
which such default occurs is more than one-tenth of the total number of
Securities and arrangements satisfactory to you and the Offerors for the
purchase of such Securities are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or of the Offerors. In any such case which does not
result in such a termination, either you or the Offerors shall have the right to
postpone the Closing Time, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.


                                       28


                  SECTION 8. TERMINATION. The Underwriters may terminate this
Agreement, by notice to the Offerors, at any time at or prior to Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Prospectus, any
material adverse change, or any development involving a prospective material
adverse change, in the financial condition or in the earnings or business
affairs of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States, any outbreak of hostilities or escalation thereof or other calamity or
crisis or any change or development involving a prospective change in national
or international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Underwriters,
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American stock Exchange or
the New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or a material
disruption has occurred in commercial banking or settlement or clearance
services in the United States or (iv) if a banking moratorium has been declared
by either Federal or New York authorities.

                  SECTION 9. NOTICES. All communications hereunder will be in
writing and effective only on receipt, and, if sent to Merrill Lynch, will be
mailed, delivered or telefaxed to Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Attention: Parker Weil, Managing Director (fax no.: (212)
449-8636) and confirmed to Merrill Lynch, Pierce, Fenner & Smith Incorporated,
at 4 World Financial Center, North Tower, New York, New York, 10080 or, if sent
to the Company or the Trust, will be mailed, delivered or telefaxed to Wendy
Aumiller, (fax no.: (513) 287-2749) and confirmed to it at Cinergy Corp., 139
East Fourth Street, Cincinnati, OH 45202, Attention: Acting Treasurer.

                  SECTION 10. APPLICABLE LAW. This Agreement will be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.

                  SECTION 11. COUNTERPARTS. This Agreement may be signed in one
or more counterparts, each of which shall constitute an original and all of
which together shall constitute one and the same agreement.


                                       29


                  If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the Trust and the several Underwriters.


                                                   Very truly yours,

                                                   CINERGY CORP.

                                                   By:  _______________________
                                                   Name:
                                                   Title:

                                                   CC FUNDING TRUST I
                                                   By Cinergy Corp., as sponsor

                                                   By:  _______________________
                                                   Name:
                                                   Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.

MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
            Incorporated
BANC OF AMERICA SECURITIES LLC
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
LEHMAN BROTHERS INC.


By: Merrill Lynch, Pierce, Fenner & Smith
                Incorporated


By:  _________________________________
           Authorized Signatory


For themselves and the other
several Underwriters named above.



                                   SCHEDULE A



                                                                   Number of
                  Name of Underwriter                         Initial Securities
                  -------------------                         ------------------

                                                           
Merrill Lynch, Pierce, Fenner & Smith
                     Incorporated......................            3,850,000
Banc of America Securities LLC.........................             495,000
Goldman, Sachs & Co. ..................................             385,000
J.P. Morgan Securities Inc. ...........................             385,000
Lehman Brothers Inc. ..................................             385,000

Total                                                              5,500,000



                                       A-1

EX-4.1

===============================================================================
                                                                    EXHIBIT 4.1
                                                                 EXECUTION COPY



                                  CINERGY CORP.



                                       AND



                                FIFTH THIRD BANK,

                                     TRUSTEE






                                ----------------



                          SECOND SUPPLEMENTAL INDENTURE



                          DATED AS OF DECEMBER 18, 2001

                                       TO

                                    INDENTURE

                         DATED AS OF SEPTEMBER 12, 2001

                                ----------------



                        SENIOR DEFERRABLE NOTES DUE 2007


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




         SECOND SUPPLEMENTAL INDENTURE, dated as of December 18, 2001 (this
"Second Supplemental Indenture"), between CINERGY CORP., a Delaware corporation
(the "Company") having its principal office at 139 East Fourth Street,
Cincinnati, Ohio 45202, and FIFTH THIRD BANK, an Ohio banking corporation, as
Trustee (the "Trustee") under the Indenture dated as of September 12, 2001
between the Company and the Trustee (the "Indenture").

                             Recitals of the Company

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

         Pursuant to the terms of the Indenture, the Company desires to provide
for the establishment of a series of Securities, to be known as its "Senior
Deferrable Notes due 2007" (herein called the "Senior Deferrable Notes"), in
this Second Supplemental Indenture.

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

         CC Funding Trust I, a Delaware statutory business trust (the "Trust"),
has offered to the public up to $316,250,000 in aggregate liquidation amount of
its preferred securities (the "Preferred Securities") which, together with
purchase contracts issued by the Company which obligate the holder to purchase a
specified number of shares of common stock, par value $0.01 per share, of the
Company, are being offered to the public in the form of units (the "FELINE
PRIDES") and, in connection therewith, the Company has agreed to purchase up to
$9,782,000 in aggregate liquidation amount of the Trust's common securities (the
"Common Securities" and together with the Preferred Securities, the "Trust
Securities"), each representing an undivided beneficial interest in the assets
of the Trust, and the Trust proposes to invest the proceeds from such offerings
in up to $326,032,000 in aggregate principal amount of the Senior Deferrable
Notes

         Now, Therefore, This Second Supplemental Indenture Witnesseth:

         For and in consideration of the premises and the purchase of the Senior
Deferrable Notes by the Trust, it is mutually agreed, for the equal and
proportionate benefit of the Trust and any other future holders of the Senior
Deferrable Notes (the "Holders"), as follows:



                                   ARTICLE ONE
                                   DEFINITIONS

              Section 101. DEFINITION OF TERMS. UNLESS THE CONTEXT OTHERWISE
REQUIRES:

                     (a) any term defined anywhere in this Second Supplemental
Indenture has the same meaning throughout;



                     (b) any term not defined herein that is defined in the
Indenture has the same meaning when used in this Second Supplemental Indenture;

                     (c) any term not defined herein or in the Indenture that is
defined in Amended and Restated Declaration of Trust, dated December 18, 2001
(the "Declaration") of the Trust, has the same meaning when used in this Second
Supplemental Indenture;

                     (d) the term "Business Day," as used in the Indenture and
this Second Supplemental Indenture with respect to the Senior Deferrable Notes,
shall mean any day other than a Saturday or Sunday or a day on which banking
institutions in the City of New York, New York, or Cincinnati, Ohio, are
authorized or required by law or executive order to remain closed, or a day on
which the Trustee or the Property Trustee is closed for business.

                                  ARTICLE TWO
                TERMS AND ISSUANCE OF THE SENIOR DEFERRABLE NOTES

                     Section 201. ISSUE OF SENIOR DEFERRABLE NOTES. A series of
Securities which shall be designated the "Senior Deferrable Notes due 2007"
shall be executed, authenticated and delivered in accordance with the provisions
of, and shall in all respects be subject to, the terms, conditions and covenants
of the Indenture and this Second Supplemental Indenture (including the forms of
Senior Deferrable Note set forth as Exhibits A and B hereto). The Senior
Deferrable Notes will constitute unsecured and unsubordinated indebtedness of
the Company and will rank equally with all other existing or future unsecured
and unsubordinated indebtedness of the Company. The aggregate principal amount
of Senior Deferrable Notes of the series created hereby which may be
authenticated and delivered under the Indenture shall not, except as permitted
by the provisions of the Indenture, exceed $326,032,000. The Senior Deferrable
Notes shall be initially issued in certificated form to the Trust (the "Initial
Senior Deferrable Notes") and shall be substantially in the Form of Exhibit B
hereto. The terms of such Senior Deferrable Notes are herein incorporated by
reference and made part of this Second Supplemental Indenture.

              Section 202. MATURITY. Unless a Tax Event Redemption occurs or the
Senior Deferrable Notes are repurchased by the Company at the Holders' option
following a Failed Remarketing as described in Section 205(b), the entire
principal amount of the Senior Deferrable Notes will mature and become due and
payable, together with any accrued and unpaid interest thereon, on February 16,
2007 (the "Maturity Date").

              Section 203. GLOBAL SENIOR DEFERRABLE NOTES. In the event of an
involuntary or voluntary liquidation and dissolution of the Trust (other than in
connection with a Tax Event Redemption):

                     (a)    If the Preferred Securities are held in book-entry
form, the Initial Senior Deferrable Notes may be presented to the Trustee by the
Property Trustee, along with written certification by the Property Trustee that
the Preferred Securities are held in book-entry form, in exchange for a Global
Security in the form of Exhibit A in an aggregate principal


                                       2


amount equal to all Outstanding Senior Deferrable Notes (a "Global Senior
Deferrable Note"). The securities depositary for the Global Senior Deferrable
Note will be The Depository Trust Company (the "Depositary"). The Global Senior
Deferrable Note will be registered in the name of the Depositary or its nominee,
and delivered by the Trustee to the Depositary or a custodian appointed by the
Depositary for crediting to the accounts of its participants pursuant to the
instructions of the Property Trustee. The Company upon any such presentation
shall execute a Global Senior Deferrable Note in such aggregate principal amount
and deliver the same to the Trustee for authentication and delivery in
accordance with the Indenture and this Second Supplemental Indenture. Payments
on the Senior Deferrable Notes issued as a Global Senior Deferrable Note will be
made to the Depositary or its nominee.

                     (b)    If any Preferred Securities are held in non
book-entry certificated form ("Non-Book-Entry Preferred Securities"), the
Initial Senior Deferrable Notes may be presented to the Trustee by the Property
Trustee, along with written identification by the Property Trustee of the
certificates representing such Non-Book Entry Preferred Securities and of the
liquidation amount thereof, and such Non Book-Entry Preferred Securities will be
deemed to represent beneficial interests in Senior Deferrable Notes presented to
the Trustee by the Property Trustee having an aggregate principal amount equal
to the aggregate liquidation amount of the Non-Book-Entry Preferred Securities
until the certificates representing such Non-Book-Entry Preferred Securities are
presented to the Securities Registrar for transfer or reissuance, at which time
such certificates will be canceled and a Senior Deferrable Note registered in
the name of the holder of the Non-Book Entry Preferred Security or the
transferee of the holder of such Non-Book Entry Preferred Security, as the case
may be, with an aggregate principal amount equal to the aggregate liquidation
amount of the Non-Book Entry Preferred Security canceled will be executed by the
Company and delivered to the Trustee for authentication and delivery in
accordance with the Indenture and this Second Supplemental Indenture. On issue
of such Senior Deferrable Notes, Senior Deferrable Notes with an equivalent
aggregate principal amount that were presented by the Property Trustee to the
Trustee will be deemed to have been canceled.

              Section 204. INTEREST.

                     (a)    Each Senior Deferrable Note will bear interest at
the rate of 6.9% per annum from December 18, 2001 to but excluding February 16,
2005, and at the Reset Rate (which shall not be lower than 6.9% per annum nor
higher than the maximum rate permitted by applicable law) thereafter, payable
quarterly in arrears on February 16, May 16, August 16 and November 16 of each
year, commencing February 16, 2002 (the "Interest Payment Dates") to the Holder
in whose name such Senior Deferrable Note is registered at the close of business
on the Business Day preceding such Interest Payment Date.

                     (b)    The record dates for the payment of interest on the
Senior Deferrable Notes on any Interest Payment Date, shall be (i) as long as
the Senior Deferrable Notes are represented by a Global Senior Deferrable Note
or the Initial Senior Deferrable Notes, the Business Day preceding each Interest
Payment Date or (ii) if the Senior Deferrable Notes are


                                       3


issued pursuant to Section 203(b) above, the fifteenth Business Day prior to
each Interest Payment Date.

                     (c)    The interest rate on the Senior Deferrable Notes
outstanding on and after the Remarketing Date will be reset to the Reset Rate,
and interest will accrue on the Senior Deferrable Notes at the Reset Rate from
and including February 16, 2005 (the "Reset Date"). The Company will cause the
Reset Agent to provide the Reset Rate to the Trustee on or prior to the Reset
Date.

                     (d)    The amount of interest payable on the Senior
Deferrable Notes for any period will be computed (i) for any full quarterly
period on the basis of a 360-day year of twelve 30-day months and (ii) for any
period shorter than a full quarterly period, on the basis of a 30-day month and,
for any period less than a month, on the basis of the actual number of days
elapsed per 30-day month. In the event that any date on which interest is
payable on the Senior Deferrable Notes is not a Business Day, then payment of
the interest payable on such date will be made on the next day that is a
Business Day (and without interest or other payment in respect of any such
delay), except that, if such Business Day is in the next calendar year, then
such payment will be made on the preceding Business Day.

              Section 205. REDEMPTION.

                     (a)    If a Tax Event occurs and is continuing, the Company
may, at its option and upon not less than 30 nor more than 60 days' notice to
the Holders of the Senior Deferrable Notes, redeem the Senior Deferrable Notes
in whole (but not in part) within 90 days following the occurrence of such Tax
Event, at a price equal to, for each Senior Deferrable Note, the Redemption
Amount, plus any accrued and unpaid interest including compound interest if any
to the Tax Event Redemption Date (as defined below). If the Company elects to
exercise such an option to redeem the Senior Deferrable Notes upon a Tax Event,
(i) the Company shall certify in writing to the Trustee the occurrence of a Tax
Event and the applicable Redemption Amount; (ii) the aggregate Redemption
Amount, plus any accrued and unpaid interest including compound interest if any
to the Tax Event Redemption Date (as defined below), shall be paid prior to
12:00 noon, New York City time, on the date of redemption (the "Tax Event
Redemption Date") by check or wire transfer in immediately available funds at
such place and to such account as may be designated by each such Holder,
PROVIDED that the Company shall have deposited with the Trustee an amount
sufficient to pay the aggregate Redemption Amount, plus any accrued and unpaid
interest including compound interest if any to the Tax Event Redemption Date, by
9:00 a.m. on the Tax Event Redemption Date; (iii) the Company shall appoint a
Quotation Agent in connection with a Tax Event Redemption; and (iv) such
redemption shall otherwise be in accordance with the provisions of Article 11 of
the Indenture.

                     (b)    If a Failed Remarketing has occurred, each Holder of
Senior Deferrable Notes will have the right to deliver the Senior Deferrable
Notes to the Company for redemption at a price per Senior Deferrable Note equal
to $50 plus any accrued and unpaid interest (the "Put Price"). If any Holder of
Senior Deferrable Notes elects to exercise such right to have the Company redeem
the Senior Deferrable Notes, (i) the Holder shall give written notice


                                       4


of such election not less than three Business Days prior to April 1, 2005; (ii)
the aggregate Put Price shall be paid prior to 12:00 noon, New York City time,
on April 1, 2005 (the "Repurchase Date") by check or wire transfer in
immediately available funds at such place and to such account as may be
designated by each such Holder, PROVIDED that the Company shall have deposited
with the Trustee an amount sufficient to pay the aggregate Put Price by 9:00
a.m. on the Repurchase Date; and (iii) such redemption shall otherwise be in
accordance with Article 11 of the Indenture.

                     (c)    Unless the Company defaults in its obligation to pay
the Redemption Amount, plus any accrued and unpaid interest including compound
interest or the Put Price, on and after the Tax Event Redemption Date or the
Repurchase Date, as the case may be, interest shall cease to accrue on the
Senior Deferrable Notes so redeemed.

                     (d)    Except as provided in Section 205(a) or (b), the
Company will have no right to redeem the Senior Deferrable Notes.

                     (e)    The Senior Deferrable Notes will not be subject to a
sinking fund provision.

                     (f)    The Company will have no right to satisfy and
discharge any of its obligations on the Senior Deferrable Notes by making, or
causing to be made, any deposit of money or Government Obligations provided for
by Section 401 of the Indenture.

              Section 206. EVENTS OF DEFAULT. So long as the Senior Deferrable
Notes are held by the Property Trustee, it shall be an Event of Default with
respect to the Senior Deferrable Notes if the Trust shall have voluntarily or
involuntarily dissolved, wound up its business or otherwise terminated its
existence except in connection with (i) the distribution of the Senior
Deferrable Notes held by the Property Trustee to the holders of the Preferred
Securities and Common Securities in liquidation of their interests in the Trust;
(ii) the redemption of all of the outstanding Preferred Securities and Common
Securities or (iii) a consolidation, conversion, amalgamation, merger or other
transaction involving the Trust that is permitted under Section 3.15 or Article
8 of the Declaration.

              Section 207. PAYING AGENT; SECURITIES REGISTRAR. If the Senior
Deferrable Notes are issued in certificated form pursuant to Section 203(b)
above, the Paying Agent and the Securities Registrar for the Senior Deferrable
Notes shall be the Property Trustee.

              Section 208. EXTENSION OF INTEREST PAYMENT PERIOD. The Company
shall have the right at any time and from time to time, so long as no Event of
Default with respect to the Senior Deferrable Notes has occurred and is
continuing, to defer payments of interest by extending the interest payment
period of such Senior Deferrable Notes for a period not extending beyond the
Maturity Date (an "Extension Period"), during which Extension Period no interest
shall be due and payable. To the extent permitted by applicable law, interest,
the payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 208, will accrue at the rate of 9.5% per
annum to but excluding February 16, 2005, and at the Reset


                                       5


Rate (which shall not be lower than 6.9% per annum nor higher than the maximum
rate permitted by applicable law) thereafter, compounded quarterly for each
quarter of such Extension Period ("Compounded Interest"). At the end of such
Extension Period, the Company shall pay all interest accrued and unpaid on the
Senior Deferrable Notes and Compounded Interest (together, "Deferred Interest")
that shall be payable to the Holders of the Senior Deferrable Notes in whose
names the Senior Deferrable Notes are registered in the Security Register on the
first Regular Record Date after the end of the Extension Period. Prior to the
expiration of any Extension Period, the Company may further extend such period,
provided that such period together with all such previous and further extensions
thereof shall not extend beyond the Maturity Date. Upon termination of any
Extension Period and the payment of all Deferred Interest then due, the Company
may commence a new Extension Period, PROVIDED that such Extension Period,
together with all extensions thereof, may not extend beyond the Maturity Date.
No interest shall be due and payable during an Extension Period except at the
end thereof, but the Company, at its option, may prepay on any Interest Payment
Date all or any portion of the interest accrued during the then elapsed portion
of an Extension Period.

              Section 209. NOTICE OF EXTENSION. The Company shall give written
notice to the Trustee (and the Trustee shall give notice thereof to Holders of
Senior Deferrable Notes) of its election of any Extension Period (or any further
extension thereof) at least five Business Days before the earlier of (i) the
date on which interest on the Senior Deferrable Notes would have been payable
except for the election to begin or extend the Extension Period (whether or not
an Interest Payment Date), (ii) the record date therefor, or (iii) the date the
Trustee is required to give notice to any securities exchange or to Holders of
Senior Deferrable Notes of such date on which interest on Senior Deferrable
Notes would have been payable or of the record date therefor.

              Section 210. PLACE OF PAYMENT. The Place of Payment will be
initially the principal corporate trust office of the Trustee which, at the date
hereof, is located at 38 Fountain Square Plaza Cincinnati, Ohio 45263.

                                 ARTICLE THREE
                                    EXPENSES

              Section 301. PAYMENT OF EXPENSES. In connection with the offering,
sale and issuance of the Senior Deferrable Notes to the Trust in connection with
the sale of the Preferred Securities and Common Securities by the Trust, the
Company will pay for all costs and expenses relating to the offering, sale and
issuance of the Senior Deferrable Notes, including compensation of the Trustee
under the Indenture in accordance with the provisions of Section 607 of the
Indenture.


                                       6


                                  ARTICLE FOUR
                                    COVENANTS

              Section 401. COVENANTS DURING AN EXTENSION PERIOD OR IN THE EVENT
OF AN EVENT OF DEFAULT. During an Extension Period or if an Event of Default
with respect to the Senior Deferrable Notes occurs and is continuing, then the
Company shall not:

                     (a)    declare or pay any dividends or distributions on its
capital stock,

                     (b)    redeem, purchase, acquire, or make a liquidation
payment with respect to, any of its capital stock,

                     (c)    make any distribution on any trust preferred
security that ranks PARI PASSU with the Preferred Securities or pay interest on
senior deferrable debt with similar deferral provisions to the Senior Deferrable
Notes; or

                     (d)    make any payment of principal, interest or premium,
if any, on or repay, repurchase or redeem any debt securities issued by the
Company that rank subordinate in right of payment to, the Senior Deferrable
Notes or make any guarantee payments with respect to any guarantee by the
Company of the debt of any subsidiary of the Company if such guarantee ranks
subordinate in right of payment to, the Senior Deferrable Notes.

Notwithstanding the foregoing, the Company may (i) purchase or acquire capital
stock of the Company in connection with the satisfaction by the Company of its
obligations under any employee or director compensation or benefit plans, under
its direct stock purchase and dividend reinvestment plan or pursuant to any
contract or security outstanding on the first day of any such Extension Period
or Event of Default, as the case may be, requiring the Company to purchase
capital stock of the Company, (ii) reclassify the Company's capital stock or
exchange or convert one class or series of the Company's capital stock for
another class or series of the Company's capital stock, (iii) purchase
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (iv) declare or pay dividends or distributions in
capital stock of the Company, (v) redeem or repurchase any rights pursuant to a
rights agreement or (vi) make payments under the Guarantee.

              Section 402. ADDITIONAL COVENANTS RELATING TO THE TRUST. As long
as the Preferred Securities remain outstanding, the Company will:

                     (a)    maintain, directly or indirectly, 100% ownership of
the Common Securities;

                     (b)    cause the Trust to remain a statutory business trust
and not to voluntarily dissolve, wind up, liquidate or be terminated, except as
permitted by the Declaration;


                                       7


                     (c)    use its commercially reasonable efforts to ensure
that the Trust will not be an "investment company" required to be registered
under the Investment Company Act of 1940;

                     (d)    not take any action that would be reasonably likely
to cause the Trust to be classified as an association or a publicly traded
partnership taxable as a corporation for United States federal income tax
purposes; and

                     (e)    pay all of the debts and obligations of the Trust
(other than with respect to the securities issued by the Trust) and all costs
and expenses of the Trust (including, but not limited to, all costs and expenses
relating to the organization of the Trust, the fees and expenses of the Property
Trustee, the Delaware Trustee and the Administrative Trustee and all costs and
expenses relating to the operation of the Trust) and any and all taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed on the Trust by the United States, or any other taxing authority,
so that the net amounts received and retained by the Trust after paying such
expenses will be equal to the amounts the Trust would have received had no
debts, obligations, costs, expenses, taxes, duties, assessments or governmental
charges been incurred by or imposed on the Trust.

                                  ARTICLE FIVE
                    ORIGINAL ISSUE OF SENIOR DEFERRABLE NOTES

              Section 501. ORIGINAL ISSUE OF SENIOR DEFERRABLE NOTES. Senior
Deferrable Notes in an aggregate principal amount of up to $326,032,000 may,
upon execution of this Second Supplemental Indenture, be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Senior Deferrable Notes upon receipt of Company
Order for authentication and delivery, without any further action by the
Company.

                                  ARTICLE SIX
                    RIGHTS OF HOLDERS OF PREFERRED SECURITIES

              Section 601. PREFERRED SECURITY HOLDERS' RIGHTS. Notwithstanding
Section 507 of the Indenture, if the Property Trustee fails to enforce its
rights under the Senior Deferrable Notes after a holder of Preferred Securities
has made a written request, the holder of Preferred Securities may, to the
fullest extent permitted by law, institute a legal proceeding directly against
the Company to enforce the Property Trustee's rights under the Indenture without
first instituting any legal proceeding against the Property Trustee or any other
Person.

              Section 602. DIRECT ACTION. Notwithstanding any other provision of
the Indenture, for as long as any Preferred Securities remain outstanding, to
the fullest extent permitted by law, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest or principal on the Senior Deferrable Notes on the date such interest
or principal is otherwise payable (or in the case of redemption, the Tax Event
Redemption Date or Repurchase Date), then a holder of Preferred Securities may


                                       8



institute a proceeding directly against the Company (a "Direct Action") to
enforce payment to such holder of the principal or interest on Senior Deferrable
Notes having an aggregate principal amount equal to the aggregate liquidation
amount of the Preferred Securities of such holder.

              Section 603. PAYMENTS PURSUANT TO DIRECT ACTIONS. The Company will
have the right to set off against its obligations to the Trust, as Holder of the
Senior Deferrable Notes, any payment made to a holder of Preferred Securities in
connection with a Direct Action.

              Section 604. MODIFICATIONS. So long as any Preferred Securities
remain outstanding, (i) no amendment to this Indenture shall be made that
adversely affects the holders of the Preferred Securities in any material
respect, and no termination of this Indenture shall occur, and no waiver of any
Event of Default or compliance with any covenant under this Indenture shall be
effective, without the prior consent of the holders of at least a Majority in
Liquidation Amount (as defined in the Declaration) of the Preferred Securities
then outstanding unless and until the principal of the Senior Deferrable Notes
and all accrued and unpaid interest thereon have been paid in full, and (ii) no
amendment shall be made to this Article Six of this Second Supplemental
Indenture that would impair the rights of the holders of the Preferred
Securities without the prior consent of the holders of each Preferred Security
then outstanding unless and until the principal of the Senior Deferrable Notes
and all accrued and unpaid interest thereon have been paid in full.

                                  ARTICLE SEVEN
                                   REMARKETING

              Section 701. EFFECTIVENESS OF THIS ARTICLE. Upon a distribution of
the Senior Deferrable Notes upon the liquidation and dissolution of the Trust
which occurs prior to the Remarketing of the Preferred Securities pursuant to
the Declaration, the Senior Deferrable Notes shall be Remarketed in accordance
with the Remarketing procedures of the Declaration where all references in the
Remarketing procedures to (i) the Preferred Securities shall be read as
references to the Senior Deferrable Notes and (ii) the Property Trustee shall be
read as references to the Indenture Trustee, unless the context requires
otherwise. Until such a distribution, or if such distribution occurs after the
Remarketing of the Preferred Securities pursuant to the Declaration, this
Article Seven will have no effect.

                                 ARTICLE EIGHT
                            ACCELERATION OF MATURITY

              Section 801. AUTOMATIC ACCELERATION. If an Event of Default with
respect to the Senior Deferrable Notes specified in clause (5) or (6) of Section
501 of the Indenture occurs and is continuing, the principal of the Senior
Deferrable Notes shall become due and payable immediately, without any
declaration, notice or other act on the part of the Trustee or any holder
thereof.


                                       9


                                  ARTICLE NINE
                                  MISCELLANEOUS

              Section 901. EXECUTION OF SUPPLEMENTAL INDENTURE. This Second
Supplemental Indenture is executed and shall be construed as an indenture
supplemental to the Indenture, and, as provided in the Indenture, this Second
Supplemental Indenture forms a part thereof.

              Section 902. CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with another provision hereof or of the
Indenture which is required to be included in this Second Supplemental Indenture
by any of the provisions of the Trust Indenture Act, such required provision
shall control.

              Section 903. CONSTRUCTION. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof. Unless
otherwise indicated herein, a reference to a Section or Article is to a Section
or Article of this Second Supplemental Indenture.

              Section 904. SUCCESSORS AND ASSIGNS. All covenants and agreements
in this Second Supplemental Indenture by the Company shall bind its successors
and assigns, whether so expressed or not.

              Section 905. SEPARABILITY CLAUSE. In case any provision in this
Second Supplemental Indenture or in the Senior Deferrable Notes 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 906. BENEFITS OF SECOND SUPPLEMENTAL INDENTURE. Nothing in
this Second Supplemental Indenture or in the Senior Deferrable Notes, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the holders, any benefit or any legal or equitable
right, remedy or claim under this Second Supplemental Indenture.

              Section 907. GOVERNING LAW. This Second Supplemental Indenture and
each Senior Deferrable Note shall be deemed to be a contract made under the laws
of the State of New York, and for all purposes shall be governed by and
construed in accordance with the laws of said State.

              Section 908. RECITALS. The recitals contained in this Second
Supplemental Indenture shall be taken as statements of the Company, and the
Trustee assumes no responsibility for their correctness.


                                       10



                  IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed as of the day and year first above
written.

                                  CINERGY CORP.




                                  By:
                                     -------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------




                                  FIFTH THIRD BANK, as Trustee




                                  By:
                                     -------------------------------------------
                                     Name:
                                          -------------------------------------
                                     Title:
                                           ------------------------------------



                                                                      EXHIBIT A


                    [FORM OF FACE OF SENIOR DEFERRABLE NOTE]



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 OF A DEPOSITARY. THIS GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES HEREINAFTER DESCRIBED AND MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY NOMINEE OF THE DEPOSITARY TO A SUCCESSOR OF THE
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR.



REGISTERED                                                           REGISTERED



                                  CINERGY CORP.


                         SENIOR DEFERRABLE NOTE DUE 2007




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 corporation under the Indenture hereinafter referred to
herein), for value received, hereby promises to pay Cede & Co., or registered
assigns, the principal sum of $________________ (____________________ Dollars)
on February 16, 2007, and to pay interest on said principal sum from December
18, 2001, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, quarterly in arrears on February 16, May 16,
August 16 and November 16 of each year (an "Interest Payment Date") commencing
February 16, 2002, at the


                                      A-1


rate of 6.9% per annum to but excluding February 16, 2005, and at the Reset Rate
(which shall not be lower than 6.9% per annum nor higher than the maximum rate
permitted by applicable law) thereafter, until the principal hereof shall have
become due and payable, and to pay interest on any overdue principal and
premium, if any, and (without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at 9.5% per annum to but excluding February 16, 2005, and at the Reset
Rate (which shall not be lower than 6.9% per annum nor higher than the maximum
rate permitted by applicable law) thereafter, compounded quarterly. Any deferred
interest shall accrue interest at the rate set forth in the Second Supplemental
Indenture, dated as of December 18, 2001 (the "Second Supplemental Indenture"),
between the Company and Fifth Third Bank, as Trustee. The amount of interest
payable for any period will be computed (1) for any full quarterly period on the
basis of a 360-day year of twelve 30-day months and (2) for any period shorter
than a full quarterly period, on the basis of a 30-day month and, for any period
less than a month, on the basis of the actual number of days elapsed per 30-day
month. In the event that any date on which interest is payable is not a Business
Day, then payment of the interest payable on such date will be made on the next
day that is a Business Day (and without any interest or other payment in respect
of such delay), except that, if such Business Day is in the next calendar year,
then such payment will be made on the preceding Business Day. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture referred to herein, be
paid to the Holder in whose name this Security (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of business
on the Regular Record Date for such interest installment, which, shall be the
close of business on the Business Day preceding such Interest Payment Date. Any
such interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date, and may
be paid to the Holder in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date to
be fixed by the Trustee referred to on the reverse side hereof for the payment
of such defaulted interest, notice whereof shall be given to the Holders of this
Security not less than 10 days prior to such Special Record Date, or may be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which this Security 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 Trustee maintained
for that purpose in such coin or currency of the United States of America that
at the time of payment is legal tender for payment of public and private debts.
The Company may pay principal and interest by check payable in such money mailed
to the Holder's registered address or by wire transfer to a dollar account
designated by the Holder.

                  Interest on this Security is deferrable, at the election of
the Company, in accordance with the terms of the Second Supplemental Indenture.


                                      A-2


                  This Security is, to the extent provided in the Indenture,
unsecured and will rank in right of payment equally with all other unsecured and
unsubordinated obligations of the Company.

                  Additional provisions of this Security are set forth on the
reverse side hereof, and such provisions shall for all purposes have the same
effect as though fully set forth at this place.

                  Unless the certificate of authentication hereon has been
executed by or on behalf of 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.



                                      A-3


                  IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.

                                             CINERGY CORP.




Dated:___________________                    By:
                                                --------------------------------
                                             Name:
                                                  ------------------------------
                                             Title:
                                                   -----------------------------






                     (FORM OF CERTIFICATE OF AUTHENTICATION)

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Dated:_____________________                  FIFTH THIRD BANK, as Trustee



                                             By:
                                                -------------------------------
                                                 Authorized Officer



                                      A-4




                   (FORM OF REVERSE OF SENIOR DEFERRABLE NOTE)

                                  CINERGY CORP.

                         SENIOR DEFERRABLE NOTE DUE 2007



                  This Senior Deferrable Note is one of a duly authorized series
of securities of the Company (herein called the "Securities") issued and to be
issued in one or more series under the Indenture, dated as of September 12, 2001
pursuant to a Second Supplemental Indenture dated as of December 18, 2001
(herein called the "Indenture"), between the Company and Fifth Third Bank, as
Trustee (herein called the "Trustee," which term includes any successor trustee
under the Indenture), to which Indenture reference is hereby made 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 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 $283,506,000.

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

                  This Security is not subject to any sinking fund, nor may this
Security be redeemed at the option of the Company prior to the Maturity Date
except upon the occurrence of a Tax Event or following a Failed Remarketing as
described below.

                  The indebtedness of this Security will not be subject to
defeasance pursuant to 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.

                  If a Tax Event occurs and is continuing, the Company may, at
its option and upon not less than 30 nor more than 60 days' notice to the
Holders of the Securities, redeem the Securities in whole (but not in part)
within 90 days following the occurrence of such Tax Event at the Redemption
Amount, plus any accrued and unpaid interest including compound interest if any
to the Tax Event Redemption Date. The Redemption Amount, plus any accrued and
unpaid interest including compound interest if any to the Tax Event Redemption
Date, shall be paid prior to 12:00 noon, New York City time, on the Tax Event
Redemption Date, by check or wire transfer in immediately available funds at
such place and to such account as may be designated by each such Holder.


                                      A-5


                  If a Failed Remarketing has occurred, each Holder of
Securities will have the right to deliver the Securities to the Company for
redemption at a price per Security equal to the Put Price. The Holder shall give
written notice of such election not less than three Business Days prior to April
1, 2005 and the aggregate Put Price shall be paid prior to 12:00 noon, New York
City time, on April 1, 2005 by check or wire transfer in immediately available
funds at such place and to such account as may be designated by each such
Holder.

                  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 not less than a majority in
aggregate principal amount of the Outstanding Securities at the time of each
series to be affected (voting as a class). The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount of
the Outstanding Securities of each series at the time, 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.

                  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
premium, if any, and interest, if any, on this Security at the times, place and
rate, and in the coin or currency, herein prescribed.

                  This Security shall be exchangeable for Securities registered
in the names of Persons other than the Depositary with respect to such series or
its nominee only as provided in this paragraph. This Security shall be so
exchangeable if (x) the Depositary is at any time unwilling or unable to
continue as Depositary for such series or no longer eligible or in good standing
under the Securities Exchange Act of 1934, as amended, or other applicable
statute or regulation, or (y) the Company executes and delivers to the Trustee
an Order providing that this Security shall be so exchangeable. Securities so
issued in exchange for this Security shall be of the same series, having the
same interest rate, if any, and maturity and having the same terms as this
Security, in authorized denominations and in the aggregate having the same
principal amount as this Security and registered in such names as the Depositary
for such Global Security shall direct.

                  As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of a Security of the series of which
this Security is a part is registrable in the Security Register, upon surrender
of this Security for registration of transfer at the office or agency of the
Company to be maintained by the Trustee for that purpose in the City of
Cincinnati, Ohio, duly endorsed by, or accompanied by a written instrument of
transfer in the form attached hereto and by such other documents satisfactory to
the Company and the Security Registrar duly executed


                                      A-6


by, the Holder hereof or his attorney duly authorized in writing, and thereupon
one or more new Securities of this series, of authorized denominations and for
the same aggregate principal amount, will be issued to the designated transferee
or transferees. The Security Registrar initially appointed under the Indenture
for the Securities is Fifth Third Bank.

                  The Securities of the series of which this Security is a part
are issuable only in registered form without coupons in denominations of $50 and
in integral multiples 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 Holder 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.

                  No recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or in this Security, or because of the
creation of any indebtedness represented thereby, shall be had 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, under any rule of
law, statute or constitutional provision or by the enforcement of any assessment
or penalty or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance hereof and as a
condition of and as part of the consideration for the issue hereof.

                  This Security shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.


                                      A-7



                                  ABBREVIATIONS

The following abbreviations, when used in the inscription of the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

   TEN COM                 - as tenants in common
   TEN ENT                 - as tenants by the entireties
   JT TEN                  - as joint tenants with right of survivorship and not
                            as tenants in common
   UNIF GIFT MIN ACT -     _________________ Custodian _______________
                               (Cust)                  (Minor) Under
                       Uniform Gifts to Minors Act

             ----------------------------

Additional abbreviations may also be used though not in the above list.

- -----------------------------

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto

PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------------------------------

- --------------------------------------------------------------

- ------------------------------------------------------------------------

           (Please Print or Typewrite Name and Address of Assignee)

the within instrument of CINERGY CORP. and does hereby irrevocably constitute
and appoint _________________________________________________ Attorney to
transfer said instrument on the books of the within-named corporation, with full
power of substitution in the premises.

Dated: __________________                            ___________________________
                                                     Signature

NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration by enlargement or any change whatever.



                                      A-8



                                                                       EXHIBIT B


                    [FORM OF FACE OF SENIOR DEFERRABLE NOTE]


REGISTERED                                                           REGISTERED



                                  CINERGY CORP.


                         SENIOR DEFERRABLE NOTE DUE 2007



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 corporation under the Indenture hereinafter referred to
herein), for value received, hereby promises to pay _____________________, or
registered assigns, the principal sum of $________________ (____________________
Dollars) on February 16, 2007, and to pay interest on said principal sum from
December 18, 2001, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, quarterly in arrears on February
16, May 16, August 16, and November 16 of each year (an "Interest Payment Date")
commencing February 16, 2002, at the rate of 6.9% per annum to but excluding
February 16, 2005, and at the Reset Rate (which shall not be lower than 6.9% per
annum nor higher than the maximum rate permitted by applicable law) thereafter,
until the principal hereof shall have become due and payable, and to pay
interest on any overdue principal and premium, if any, and (without duplication
and to the extent that payment of such interest is enforceable under applicable
law) on any overdue installment of interest at 9.5% per annum to but excluding
February, 16, 2005, and at the Reset Rate (which shall not be lower than 6.9%
per annum nor higher than the maximum rate permitted by applicable law)
thereafter, compounded quarterly. Any deferred interest shall accrue interest at
the rate set forth in the Second Supplemental Indenture, dated as of December
18, 2001 (the "Second Supplemental Indenture"), between the Company and Fifth
Third Bank, as Trustee. The amount of interest payable for any period will be
computed (1) for any full quarterly period on the basis of a 360-day year of
twelve 30-day months and (2) for any period shorter than a full quarterly
period, on the basis of a 30-day month and, for any period less than a month, on
the basis of the actual number of days elapsed per 30-day month. In the event
that any date on which interest is payable is not a Business Day, then payment
of the interest


                                      B-1


payable on such date will be made on the next day that is a Business Day (and
without any interest or other payment in respect of such delay), except that, if
such Business Day is in the next calendar year, then such payment will be made
on the preceding Business Day. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture referred to herein, be paid to the Holder in whose
name this Security (or one or more Predecessor Securities, as defined in said
Indenture) is registered at the close of business on the Regular Record Date for
such interest installment, which, shall be the close of business on the Business
Day preceding such Interest Payment Date. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date, and may be paid to the Holder in whose name
this Security (or one or more Predecessor Securities) is registered at the close
of business on a Special Record Date to be fixed by the Trustee referred to on
the reverse side hereof for the payment of such defaulted interest, notice
whereof shall be given to the Holders of this Security not less than 10 days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which this Security 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 Trustee maintained
for that purpose in such coin or currency of the United States of America that
at the time of payment is legal tender for payment of public and private debts.
The Company may pay principal and interest by check payable in such money mailed
to the Holder's registered address or by wire transfer to a dollar account
designated by the Holder.

                  Interest on this Security is deferrable, at the election of
the Company, in accordance with the terms of the Second Supplemental Indenture.

                  This Security is, to the extent provided in the Indenture,
unsecured and will rank in right of payment equally with all other unsecured and
unsubordinated obligations of the Company.

                  Additional provisions of this Security are set forth on the
reverse side hereof, and such provisions shall for all purposes have the same
effect as though fully set forth at this place.

                  Unless the certificate of authentication hereon has been
executed by or on behalf of 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.


                                      B-2


                  IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.

                                      CINERGY CORP.




                                      By:
                                         --------------------------------------
                                      Name:
                                           ------------------------------------
                                      Title:
                                            -----------------------------------








                     (FORM OF CERTIFICATE OF AUTHENTICATION)

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Dated:___________________                      FIFTH THIRD BANK, as Trustee



                                               By:
                                                  ------------------------------
                                                   Authorized Officer


                                      B-3


                   (FORM OF REVERSE OF SENIOR DEFERRABLE NOTE)

                                  CINERGY CORP.

                         SENIOR DEFERRABLE NOTE DUE 2007





                  This Senior Deferrable Note is one of a duly authorized series
of securities of the Company (herein called the "Securities") issued and to be
issued in one or more series under the Indenture, dated as of September 12, 2001
pursuant to a Second Supplemental Indenture dated as of December 18, 2001
(herein called the "Indenture"), between the Company and Fifth Third Bank, as
Trustee (herein called the "Trustee," which term includes any successor trustee
under the Indenture), to which Indenture reference is hereby made 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 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 $326,032,000.

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

                  This Security is not subject to any sinking fund, nor may this
Security be redeemed at the option of the Company prior to the Maturity Date
except upon the occurrence of a Tax Event or following a Failed Remarketing as
described below.

                  The indebtedness of this Security will not be subject to
defeasance pursuant to 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.

                  If a Tax Event occurs and is continuing, the Company may, at
its option and upon not less than 30 nor more than 60 days' notice to the
Holders of the Securities, redeem the Securities in whole (but not in part)
within 90 days following the occurrence of such Tax Event at the Redemption
Amount, plus any accrued and unpaid interest including compound interest if any
to the Tax Event Redemption Date. The Redemption Amount, plus any accrued and
unpaid interest including compound interest if any to the Tax Event Redemption
Date, shall be paid prior to 12:00 noon, New York City time, on the Tax Event
Redemption Date, by check or wire transfer in immediately available funds at
such place and to such account as may be designated by each such Holder.


                                      B-4


                  If a Failed Remarketing has occurred, each Holder of
Securities will have the right to deliver the Securities to the Company for
redemption at a price per Security equal to the Put Price. The Holder shall give
written notice of such election not less than three Business Days prior to April
1, 2005 and the aggregate Put Price shall be paid prior to 12:00 noon, New York
City time, on April 1, 2005 by check or wire transfer in immediately available
funds at such place and to such account as may be designated by each such
Holder.

                  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 not less than a majority in
aggregate principal amount of the Outstanding Securities at the time of each
series to be affected (voting as a class). The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount of
the Outstanding Securities of each series at the time, 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.

                  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
premium, if any, and interest, if any, 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 a Security of the series of which
this Security is a part is registrable in the Security Register, upon surrender
of this Security for registration of transfer at the office or agency of the
Company to be maintained by the Trustee for that purpose in the City of
Cincinnati, Ohio, duly endorsed by, or accompanied by a written instrument of
transfer in the form attached hereto and by such other documents 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, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. The Security Registrar initially appointed under the Indenture for
the Securities is Fifth Third Bank.

                  The Securities of the series of which this Security is a part
are issuable only in registered form without coupons in denominations of $50 and
in integral multiples 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.


                                      B-5


                  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 Holder 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.

                  No recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or in this Security, or because of the
creation of any indebtedness represented thereby, shall be had 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, under any rule of
law, statute or constitutional provision or by the enforcement of any assessment
or penalty or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance hereof and as a
condition of and as part of the consideration for the issue hereof.

                  This Security shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.


                                      B-6



                                  ABBREVIATIONS

The following abbreviations, when used in the inscription of the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

    TEN COM                - as tenants in common
    TEN ENT                - as tenants by the entireties
    JT TEN                 - as joint tenants with right of survivorship and not
                             as tenants in common
    UNIF GIFT MIN ACT -    _________________ Custodian _______________
                               (Cust)                   (Minor) Under
                           Uniform Gifts to Minors Act

  Additional abbreviations may also be used though not in the above list.

                          -----------------------------

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto

PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------------------------------

- --------------------------------------------------------------

- ------------------------------------------------------------------------

           (Please Print or Typewrite Name and Address of Assignee)

the within instrument of CINERGY CORP. and does hereby irrevocably constitute
and appoint __________________________________________________ Attorney to
transfer said instrument on the books of the within-named corporation, with full
power of substitution in the premises.

Dated: __________________                            ___________________________
                                                     Signature

NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration by enlargement or any change whatever.



                                      B-7

EX-4.3

                                                                     EXHIBIT 4.3

                                                                  EXECUTION COPY





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


                                  CINERGY CORP.



                                       and



                              THE BANK OF NEW YORK,

                           as Purchase Contract Agent



                           PURCHASE CONTRACT AGREEMENT



                          Dated as of December 18, 2001




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




                                TABLE OF CONTENTS



                                                                                              PAGETABLE OF CONTENTS

                                                                                                               PAGE

                                                                                                            
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATIONS................................................1
         SECTION 1.01 Definitions.................................................................................1
         SECTION 1.02 Compliance Certificates and Opinions.......................................................10
         SECTION 1.03 Form of Documents Delivered to Purchase Contract Agent.....................................11
         SECTION 1.04 Acts of Holders; Record Dates..............................................................12
         SECTION 1.05 Notices....................................................................................13
         SECTION 1.06 Notice to Holders; Waiver..................................................................14
         SECTION 1.07 Effect of Headings and Table of Contents...................................................14
         SECTION 1.08 Successors and Assigns.....................................................................15
         SECTION 1.09 Separability Clause........................................................................15
         SECTION 1.10 Benefits of Agreement......................................................................15
         SECTION 1.11 Governing Law..............................................................................15
         SECTION 1.12 Legal Holidays.............................................................................15
         SECTION 1.13 Counterparts...............................................................................15
         SECTION 1.14 Inspection of Agreement....................................................................16
         SECTION 1.15 Appointment of Financial Institution as Agent for the Company..............................16
ARTICLE 2 CERTIFICATE FORMS......................................................................................16
         SECTION 2.01 Forms of Certificates Generally............................................................16
         SECTION 2.02 Form of Purchase Contract Agent's Certificate of Authentication............................17
ARTICLE 3 THE SECURITIES.........................................................................................17
         SECTION 3.01 Amount; Form and Denominations.............................................................17
         SECTION 3.02 Rights and Obligations Evidenced by the Certificates.......................................17
         SECTION 3.03 Execution, Authentication, Delivery and Dating.............................................18
         SECTION 3.04 Temporary Certificates.....................................................................19
         SECTION 3.05 Registration; Registration of Transfer and Exchange........................................19
         SECTION 3.06 Book-Entry Interests.......................................................................21
         SECTION 3.07 Notices to Holders.........................................................................21
         SECTION 3.08 Appointment of Successor Depositary........................................................22
         SECTION 3.09 Definitive Certificates....................................................................22
         SECTION 3.10 Mutilated, Destroyed, Lost and Stolen Certificates.........................................22
         SECTION 3.11 Persons Deemed Owners......................................................................23
         SECTION 3.12 Cancellation...............................................................................24
         SECTION 3.13 Creation of Growth PRIDES by Substitution of Treasury Securities...........................24
         SECTION 3.14 Reestablishment of Income PRIDES...........................................................26
         SECTION 3.15 Transfer of Collateral upon Occurrence of Termination Event................................27
         SECTION 3.16 No Consent to Assumption...................................................................28
ARTICLE 4 THE PREFERRED SECURITIES, NOTES AND APPLICABLE OWNERSHIP  INTEREST OF THE TREASURY PORTFOLIO...........28
         SECTION 4.01 Interest Payments; Rights to Interest Payments Preserved...................................28
         SECTION 4.02 Notice and Voting..........................................................................29


                                       i


                                                                                                              
         SECTION 4.03 Distribution of Notes; Tax Event Redemption................................................30
ARTICLE 5 THE PURCHASE CONTRACTS.................................................................................31
         SECTION 5.01 Purchase of Shares of Common Stock.........................................................31
         SECTION 5.02 Payment of Purchase Price..................................................................33
         SECTION 5.03 Issuance of Shares of Common Stock.........................................................38
         SECTION 5.04 Adjustment of Settlement Rate..............................................................39
         SECTION 5.05 Notice of Adjustments and Certain Other Events.............................................46
         SECTION 5.06 Termination Event; Notice..................................................................46
         SECTION 5.07 Early Settlement...........................................................................47
         SECTION 5.08 Intentionally Omitted......................................................................49
         SECTION 5.09 No Fractional Shares.......................................................................49
         SECTION 5.10 Charges and Taxes..........................................................................49
         SECTION 5.11 Purchase Contract Payments.................................................................49
         SECTION 5.12 Deferral of Purchase Contract Payments.....................................................51
ARTICLE 6 REMEDIES...............................................................................................52
         SECTION 6.01 Unconditional Right of Holders to Receive Purchase Contract Payments and to Purchase
                       Shares of Common Stock....................................................................52
         SECTION 6.02 Restoration of Rights and Remedies.........................................................53
         SECTION 6.03 Rights and Remedies Cumulative.............................................................53
         SECTION 6.04 Delay or Omission Not Waiver...............................................................53
         SECTION 6.05 Undertaking for Costs......................................................................53
         SECTION 6.06 Waiver of Stay or Extension Laws...........................................................53
ARTICLE 7 THE PURCHASE CONTRACT AGENT............................................................................54
         SECTION 7.01 Certain Duties and Responsibilities........................................................54
         SECTION 7.02 Notice of Default..........................................................................55
         SECTION 7.03 Certain Rights of Purchase Contract Agent..................................................55
         SECTION 7.04 Not Responsible for Recitals or Issuance of Securities.....................................56
         SECTION 7.05 May Hold Securities........................................................................57
         SECTION 7.06 Money Held in Custody......................................................................57
         SECTION 7.07 Compensation and Reimbursement.............................................................57
         SECTION 7.08 Corporate Purchase Contract Agent Required;   Eligibility..................................57
         SECTION 7.09 Resignation and Removal; Appointment of Successor..........................................58
         SECTION 7.10 Acceptance of Appointment by Successor.....................................................59
         SECTION 7.11 Merger, Conversion, Consolidation or Succession to Business................................60
         SECTION 7.12 Preservation of Information; Communications to Holders.....................................60
         SECTION 7.13 No Obligations of Purchase Contract Agent..................................................60
         SECTION 7.14 Tax Compliance.............................................................................61
ARTICLE 8 SUPPLEMENTAL AGREEMENTS................................................................................61
         SECTION 8.01 Supplemental Agreements Without Consent of Holders.........................................61
         SECTION 8.02 Supplemental Agreements with Consent of Holders............................................62
         SECTION 8.03 Execution of Supplemental Agreements.......................................................63
         SECTION 8.04 Effect of Supplemental Agreements..........................................................63
         SECTION 8.05 Reference to Supplemental Agreements.......................................................63
ARTICLE 9 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE...................................................64
         SECTION 9.01 Covenant Not to Consolidate, Merge, Convey, Transfer or Lease Property Except under
                       Certain Conditions........................................................................64

                                       ii


                                                                                                              
         SECTION 9.02 Rights and Duties of Successor Corporation.................................................64
         SECTION 9.03 Officer's Certificate and Opinion of Counsel Given to Purchase Contract Agent..............65
ARTICLE 10 COVENANTS.............................................................................................65
         SECTION 10.01 Performance under Purchase Contracts......................................................65
         SECTION 10.02 Maintenance of Office or Agency...........................................................65
         SECTION 10.03 Company to Reserve Common Stock...........................................................66
         SECTION 10.04 Covenants as to Common Stock..............................................................66
         SECTION 10.05 Statements of Officers of the Company as to Default.......................................66
         SECTION 10.06 ERISA.....................................................................................66



                                      iii




         PURCHASE CONTRACT AGREEMENT, dated as of December 18, 2001, between
CINERGY CORP., a Delaware corporation (the "COMPANY"), and The Bank of New York,
a New York banking corporation, acting as purchase contract agent for the
Holders of Securities (as defined herein) from time to time (the "PURCHASE
CONTRACT AGENT").

                                    RECITALS

         The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.

         All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Purchase Contract Agent, as provided in this
Agreement, the valid obligations of the Company, and to constitute these
presents a valid agreement of the Company, in accordance with its terms, have
been done. For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:

                                   ARTICLE 1
            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATIONS

         SECTION 1.01 DEFINITIONS.

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

                  (a)      the terms defined in this Article have the meanings
         assigned to them in this Article and include the plural as well as the
         singular, and nouns and pronouns of the masculine gender include the
         feminine and neuter genders;

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

                  (c)      the words "herein," "hereof" and "hereunder" and
         other words of similar import refer to this Agreement as a whole and
         not to any particular Article, Section, Exhibit or other subdivision;

                  (d)      the following terms have the meanings given to them
         in the Declaration (as defined below): (i) Applicable Ownership
         Interest; (ii) Applicable Principal Amount; (iii) Guarantee; (iv)
         Liquidation Distribution; (v) Primary Treasury Dealer; (vi) Pro Rata,
         (vii) Quotation Agent; (viii) Redemption Amount; (xi) Redemption Price;
         (x) Remarketing, (xi) Reset Rate, (xii) Tax Event Redemption, (xiii)
         Tax Event Redemption Date; (xiv) Two-Year Benchmark Treasury Rate; and
         (xv) Treasury Portfolio; and



                  (e)      the following terms have the meanings given to them
         in this Section 1.01(e):

         "ACT" has the meaning, with respect to any Holder, set forth in Section
1.04.

         "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.

         "AGREEMENT" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.

         "APPLICABLE MARKET VALUE" has the meaning set forth in Section 5.01.

         "APPLICANTS" has the meaning set forth in Section 7.12(b).

         "BANKRUPTCY CODE" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.

         "BENEFICIAL OWNER" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected on
the books of the Depositary or on the books of a Person maintaining an account
with such Depositary (directly as a Depositary Participant or as an indirect
participant, in each case in accordance with the rules of such Depositary).

         "BOARD OF DIRECTORS" means the board of directors of the Company or a
duly authorized committee of that board.

         "BOARD RESOLUTION" means one or more resolutions of the Board of
Directors, a copy of which has been 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 Purchase Contract Agent.

         "BOOK-ENTRY INTEREST" means a beneficial interest in a Global
Certificate, registered in the name of a Depositary or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Depositary as described in Section 3.06.

         "BUSINESS DAY" means any day other than a Saturday or Sunday or a day
on which banking institutions in New York City, New York, or Chicago, Illinois
are authorized or required by law or executive order to remain closed or a day
on which the Indenture Trustee or the Property Trustee is closed for business;
provided that for purposes of the second paragraph of Section 1.12 only, the
term "Business Day" shall also be deemed to exclude any day on which trading on
the New York Stock Exchange, Inc. is closed or suspended.


                                       2


         "CASH SETTLEMENT" has the meaning set forth in Section 5.02(a)(i).

         "CERTIFICATE" means an Income PRIDES Certificate or a Growth PRIDES
Certificate.

         "CLEARING AGENCY" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a nominee of
that organization, shall be registered a Global Certificate and which shall
undertake to effect book-entry transfers and pledges of the Securities.

         "CLOSING PRICE" has the meaning set forth in Section 5.01.

         "CODE" means the Internal Revenue Code of 1986, as amended.

         "COLLATERAL" has the meaning set forth in Section 1.01(f) of the Pledge
Agreement.

         "COLLATERAL ACCOUNT" has the meaning set forth in Section 1.01(f) of
the Pledge Agreement.

         "COLLATERAL AGENT" means JPMorgan Chase Bank, as Collateral Agent under
the Pledge Agreement until a successor Collateral Agent shall have become such
pursuant to the applicable provisions of the Pledge Agreement, and thereafter
"Collateral Agent" shall mean the Person who is then the Collateral Agent
thereunder.

         "COLLATERAL SUBSTITUTION" has the meaning set forth in Section 3.13.

         "COMMON STOCK" means the Cinergy Corp., common stock, par value $0.01.

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

         "CONSTITUENT PERSON" has the meaning set forth in Section 5.04(b).

         "CORPORATE TRUST OFFICE" means the principal corporate trust office of
the Purchase Contract Agent at which, at any particular time, its corporate
trust business shall be administered, which office at the date hereof is located
at 5 Penn Plaza; 13th Floor; New York, NY 10001, Attention: Corporate Trust
Department.

         "COUPON RATE" means the percentage rate per annum at which each Note
will bear interest initially and, on and after February 16, 2005, at the Reset
Rate.

         "CURRENT MARKET PRICE" has the meaning set forth in Section 5.04(a)(8).

         "CUSTODIAL AGENt" means JPMorgan Chase Bank, as Custodial Agent under
the Pledge Agreement.

         "DECLARATION" means the Amended and Restated Declaration of Trust of CC
Funding Trust I, dated as of December 18, 2001, among the Company as sponsor,
the trustees named


                                       3


therein and the holders from time to time of individual beneficial interests in
the assets of the Trust.

         "DEPOSITARY" means a clearing agency registered under the Exchange Act
that is designated to act as Depositary for the Securities as contemplated by
Sections 3.06, 3.07, 3.08 and 3.09.

         "DEPOSITARY PARTICIPANT" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Depositary effects
book entry transfers and pledges of securities deposited with the Depositary.

         "DTC" means The Depository Trust Company.

         "EARLY SETTLEMENT" has the meaning set forth in Section 5.07(a).

         "EARLY SETTLEMENT AMOUNT" has the meaning set forth in Section 5.07(a).

         "EARLY SETTLEMENT DATE" means early settlement of the Purchase Contract
pursuant to Section 5.04(b)(2) or Section 5.07.

         "EARLY SETTLEMENT RATE" has the meaning set forth in Section 5.07(c).

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.

         "EXPIRATION DATE" has the meaning set forth in Section 1.04(e).

         "EXPIRATION TIME" has the meaning set forth in Section 5.04(a)(6).

         "FAILED REMARKETING" has the meaning set forth in Section 5.02(b).

         "GLOBAL CERTIFICATE" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Clearing Agency or a nominee
thereof.

         "GROWTH PRIDES" means, following the substitution of Treasury
Securities for Preferred Securities or Notes as collateral to secure a Holder's
obligations under the Purchase Contract, the collective rights and obligations
of a Holder of a Growth PRIDES Certificate or in respect of such Treasury
Securities, subject to the Pledge thereof, and the related Purchase Contract.

         "GROWTH PRIDES CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Growth PRIDES specified
on such certificate.

         "HOLDER" means, with respect to a Security, the Person in whose name
the Security evidenced by a Certificate is registered in the Security Register;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
number of Securities have voted on any matter,


                                       4


then for the purpose of such determination only (and not for any other purpose
hereunder), if the Security remains in the form of one or more Global
Certificates and if the Depositary which is the registered holder of such Global
Certificate has sent an omnibus proxy assigning voting rights to the Depositary
Participants to whose accounts the Securities are credited on the record date,
the term "HOLDER" shall mean such Depositary Participant acting at the direction
of the Beneficial Owners.

         "INCOME PRIDES"means the collective rights and obligations of a Holder
of an Income PRIDES Certificate or in respect of a Preferred Security, the Notes
or an appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, subject in each case to the Pledge thereof, and the related
Purchase Contract.

         "INCOME PRIDES CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Income PRIDES specified
on such certificate.

         "INDENTURE" means the Indenture, dated as of September 12, 2001,
between the Company and the Indenture Trustee (including any provisions of the
TIA that are deemed incorporated therein), pursuant to which the Notes will be
issued.

         "INDENTURE TRUSTEE" means Fifth Third Bank, an Ohio banking
corporation, as trustee under the Indenture, or any successor thereto.

         "ISSUER ORDER" or "ISSUER REQUEST" means a written order or request
signed in the name of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, any of its Vice Presidents, its Treasurer, or
any of its Assistant Treasurers, and delivered to the Purchase Contract Agent.

         "NON-ELECTING SHARE" has the meaning set forth in Section 5.04(b).

         "NOTES" means the series of Senior Deferrable Notes due 2007 issued by
the Company under the Indenture and held by the Property Trustee.

         "NYSE" has the meaning set forth in Section 5.01.

         "OFFICER'S CERTIFICATE" means a certificate signed by the Chairman of
the Board, its Chief Executive Officer, its President, any of its Vice
Presidents, its Treasurer, or any of its Assistant Treasurers, and delivered to
the Purchase Contract Agent. Any Officer's Certificate delivered with respect to
compliance with a condition or covenant provided for in this Agreement shall
include:

                  (i)      a statement that each officer signing the Officer's
         Certificate has read the covenant or condition and the definitions
         relating thereto;

                  (ii)     a brief statement of the nature and scope of the
         examination or investigation undertaken by each officer in rendering
         the Officer's Certificate;

                  (iii)    a statement that, in the opinion of each such
         officer, each such officer has made such examination or investigation
         as is necessary to enable such officer to express


                                       5


         an informed opinion as to whether or not such covenant or condition has
         been complied with; and

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

         "OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel to the Company (and who may be an employee of the Company), and who
shall be reasonably acceptable to the Purchase Contract Agent. An opinion of
counsel may rely on certificates as to matters of fact.

         "OUTSTANDING SECURITIES" means, with respect to any Security and as of
the date of determination, all Securities evidenced by Certificates theretofore
authenticated, executed and delivered under this Agreement, except:

                  (i)      If a Termination Event has occurred, (i) Growth
         PRIDES and (ii) Income PRIDES for which the underlying Notes have been
         theretofore deposited with the Purchase Contract Agent in trust for the
         Holders of such Income PRIDES;

                  (ii)     Securities evidenced by Certificates theretofore
         cancelled by the Purchase Contract Agent or delivered to the Purchase
         Contract Agent for cancellation or deemed cancelled pursuant to the
         provisions of this Agreement; and

                  (iii)    Securities evidenced by Certificates in exchange for
         or in lieu of which other Certificates have been authenticated,
         executed on behalf of the Holder and delivered pursuant to this
         Agreement, other than any such Certificate in respect of which there
         shall have been presented to the Purchase Contract Agent proof
         satisfactory to it that such Certificate is held by a protected
         purchaser in whose hands the Securities evidenced by such Certificate
         are valid obligations of the Company;

PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
number of the Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the Company
or any Affiliate of the Company shall be disregarded and deemed not to be
Outstanding Securities, except that, in determining whether the Purchase
Contract Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities that a
Responsible Officer of the Purchase Contract Agent actually knows to be so owned
shall be so disregarded. Securities so owned that have been pledged in good
faith may be regarded as Outstanding Securities if the pledgee establishes to
the satisfaction of the Purchase Contract Agent the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
Affiliate of the Company.

         "PAYMENT DATE" means each February 16, May 16, August 16 and November
16, commencing February 16, 2002.

         "PERMITTED INVESTMENTS" has the meaning set forth in Section 1.01(f) of
the Pledge Agreement.


                                       6


         "PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof or any other entity of whatever nature.

         "PLAN" means an employee benefit plan that is subject to ERISA, a plan
or individual retirement account that is subject to Section 4975 of the Code or
any entity whose assets are considered assets of any such plan.

         "PLEDGE" means the pledge under the Pledge Agreement of the Preferred
Securities, the Notes, the Treasury Securities or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, in each case constituting a part of the Securities.

         "PLEDGE AGREEMENT" means the Pledge Agreement, dated as of December 18,
2001, among the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, on its own behalf and
as attorney-in-fact for the Holders from time to time of the Securities.

         "PLEDGED NOTES" has the meaning set forth in Section 1.01(f) of the
Pledge Agreement.

         "PLEDGED PREFERRED SECURITIES" has the meaning set forth in Section
1.01(f) of the Pledge Agreement.

         "PREDECESSOR CERTIFICATE" means a Predecessor Income PRIDES Certificate
or a Predecessor Growth PRIDES Certificate.

         "PREDECESSOR INCOME PRIDES CERTIFICATE" of any particular Income PRIDES
Certificate means every previous Income PRIDES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Income PRIDES evidenced thereby; and, for the purposes of this definition, any
Income PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Income PRIDES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Income PRIDES
Certificate.

         "PREDECESSOR GROWTH PRIDES CERTIFICATE" of any particular Growth PRIDES
Certificate means every previous Growth PRIDES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Growth PRIDES evidenced thereby; and, for the purposes of this definition, any
Growth PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Growth PRIDES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Growth PRIDES
Certificate.

         "PREFERRED SECURITIES" means the Preferred Securities of the Trust,
each having a stated liquidation amount of $50, representing preferred undivided
beneficial interests in the assets of the Trust.


                                       7


         "PROCEEDS" has the meaning set forth in Section 1.01(f) of the Pledge
Agreement.

         "PROPERTY TRUSTEE" means The Bank of New York, as initial property
trustee under the Declaration, or any successors thereto that is a financial
institution unaffiliated with the Company.

         "PROSPECTUS" means the prospectus relating to the delivery of shares of
Common Stock in connection with an Early Settlement under Section 5.07 or an
early settlement of Purchase Contracts under Section 5.04(b)(2), in the form in
which first filed, or transmitted for filing, with the Commission after the
effective date of the Registration Statement pursuant to Rule 424(b) under the
Securities Act, including the documents incorporated by reference therein as of
the date of such Prospectus.

         "PURCHASE CONTRACT" means, with respect to any Security, the contract
forming a part of such Security and obligating the Company to (i) sell, and the
Holder of such Security to purchase, shares of Common Stock and (ii) pay the
Holder thereof Purchase Contract Payments, in each case on the terms and subject
to the conditions set forth in Article Five hereof.

         "PURCHASE CONTRACT AGENT" means the Person named as the "PURCHASE
CONTRACT AGENT" in the first paragraph of this Agreement until a successor
Purchase Contract Agent shall have become such pursuant to the applicable
provisions of this Agreement, and thereafter "PURCHASE CONTRACT AGENT" shall
mean such Person.

         "PURCHASE CONTRACT PAYMENTS" means the payments payable by the Company
on the Payment Dates in respect of each Purchase Contract, at a rate per year of
2.6% of the Stated Amount per Purchase Contract.

         "PURCHASE CONTRACT SETTLEMENT DATE" means February 16, 2005.

         "PURCHASE CONTRACT SETTLEMENT FUND" has the meaning set forth in
Section 5.03.

         "PURCHASE PRICE" has the meaning set forth in Section 5.01.

         "PURCHASED SHARES" has the meaning set forth in Section 5.04(a)(6).

         "RECORD DATE" for any distribution and Purchase Contract Payment
payable on any Payment Date means, as to any Global Certificate, the Business
Day next preceding such Payment Date, and as to any other Certificate, the date
selected by the Company, which shall be more than one Business Day but less than
sixty Business Days prior to such Payment Date.

         "REFERENCE DEALER" means a dealer engaged in trading of convertible
securities.

         "REFERENCE PRICE" has the meaning set forth in Section 5.01.

         "REGISTRATION STATEMENT" means a registration statement under the
Securities Act prepared by the Company covering, inter alia, the delivery by the
Company of the shares of Common Stock in connection with an Early Settlement
under Section 5.07 or an early settlement of Purchase Contracts under Section
5.04(b)(2), including all exhibits thereto and the documents


                                       8


incorporated by reference in the prospectus contained in such registration
statement, and any post-effective amendments thereto.

         "REMARKETING" means the remarketing of the Preferred Securities by the
Remarketing Agent pursuant to the Remarketing Agreement.

         "REMARKETING AGENT" has the meaning set forth in Section 5.02(b).

         "REMARKETING AGREEMENT" means the Remarketing Agreement, dated as of
December 18, 2001, between the Company and the Remarketing Agent.

         "REORGANIZATION EVENT" has the meaning set forth in Section 5.04(b).

         "RESPONSIBLE OFFICER" means, with respect to the Purchase Contract
Agent, any officer of the Purchase Contract Agent assigned by the Purchase
Contract Agent to administer this Purchase Contract Agreement.

         "SECOND SUPPLEMENTAL INDENTURE" means the Second Supplemental
Indenture, dated as of December 18, 2001, between the Company and the Indenture
Trustee (including any provisions of the TIA that are deemed incorporated
therein), pursuant to which the Securities will be issued.

         "SECURITIES ACT" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.

         "SECURITIES INTERMEDIARY" means JPMorgan Chase Bank, as Securities
Intermediary under the Pledge Agreement until a successor Securities
Intermediary shall have become such pursuant to the applicable provisions of the
Pledge Agreement, and thereafter "Securities Intermediary" shall mean such
successor.

         "SECURITY" means Income PRIDES or Growth PRIDES, as the case may be.

         "SECURITY REGISTER" and "SECURITIES REGISTRAR" have the respective
meanings set forth in Section 3.05.

         "SENIOR INDEBTEDNESS" means all indebtedness of the Company outstanding
at any time except for such Indebtedness as to which, by its terms, is
subordinated to or ranks equally with the payment of the Purchase Contract
Payments on the Outstanding Securities or any other indebtedness ranking pari
passu with the payment of the Purchase Contract Payments on the Outstanding
Securities.

         "SETTLEMENT RATE" has the meaning set forth in Section 5.01.

         "STATED AMOUNT" means $50.

         "TERMINATION DATE" means the date, if any, on which a Termination Event
occurs.

         "TERMINATION EVENT" means the occurrence of any of the following
events:


                                       9


                  (i)      at any time on or prior to the Purchase Contract
         Settlement Date, a judgment, decree or court order shall have been
         entered granting relief under the Bankruptcy Code, adjudicating the
         Company to be insolvent, or approving as properly filed a petition
         seeking reorganization or liquidation of the Company or any other
         similar applicable Federal or State law, and, unless such judgment,
         decree or order shall have been entered within 60 days prior to the
         Purchase Contract Settlement Date, such decree or order shall have
         continued undischarged and unstayed for a period of 60 days;

                  (ii)     a judgment, decree or court order for the appointment
         of a receiver or liquidator or trustee or assignee in bankruptcy or
         insolvency of the Company or of its property, or for the termination or
         liquidation of its affairs, shall have been entered, and, unless such
         judgment, decree or order shall have been entered within 60 days prior
         to the Purchase Contract Settlement Date, such judgment, decree or
         order shall have continued undischarged and unstayed for a period of 60
         days; or

                  (iii)    at any time on or prior to the Purchase Contract
         Settlement Date, the Company shall file a petition for relief under the
         Bankruptcy Code, or shall consent to the filing of a bankruptcy
         proceeding against it, or shall file a petition or answer or consent
         seeking reorganization or liquidation under the Bankruptcy Code or any
         other similar applicable Federal or State law, or shall consent to the
         filing of any such petition, or shall consent to the appointment of a
         receiver or liquidator or trustee or assignee in bankruptcy or
         insolvency of it or of its property, or shall make an assignment for
         the benefit of creditors, or shall admit in writing its inability to
         pay its debts generally as they become due.

         "THRESHOLD APPRECIATION PRICE" has the meaning set forth in Section
5.01.

         "TIA" means the Trust Indenture Act of 1939, as amended from time to
time, or any successor legislation.

         "TRADING DAY" has the meaning set forth in Section 5.01.

         "TREASURY SECURITIES" means zero-coupon U.S. Treasury Securities (CUSIP
No. 912820BM8 which mature on February 15, 2005.

         "TRUST" means CC Funding Trust I, a statutory business formed under the
laws of the State of Delaware, or any successor thereto by merger or
consolidation.

         "UNDERWRITING AGREEMENT" means the Purchase Agreement, dated as of
December 12, 2001, between the Company, the Trust and the Underwriters
identified in Schedule A thereto.

         "VICE PRESIDENT" 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 1.02 COMPLIANCE CERTIFICATES AND OPINIONS.

         Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Purchase Contract Agent to take any
action in accordance with


                                       10


any provision of this Agreement, the Company shall furnish to the Purchase
Contract Agent an Officer's Certificate stating that all conditions precedent,
if any, provided for in this Agreement relating to the proposed action have been
complied with and, if requested by the Purchase Contract Agent, an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion need be
furnished.

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

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

                  (ii)     a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

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

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

         SECTION 1.03 FORM OF DOCUMENTS DELIVERED TO PURCHASE CONTRACT AGENT.

         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 Agreement, they may, but need not, be consolidated and
form one instrument.


                                       11


         SECTION 1.04 ACTS OF HOLDERS; RECORD DATES.

         (a)      Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given 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 an 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 Purchase Contract Agent 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 Agreement and (subject to Section 7.01) conclusive in favor of
the Purchase Contract Agent and the Company, if made in the manner provided in
this Section.

         (b)      The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Purchase Contract
Agent deems sufficient.

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

         (d)      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 Certificate
evidencing such 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 Purchase Contract Agent or the Company in reliance
thereon, whether or not notation of such action is made upon such Certificate.

         (e)      The Company may set any date as a record date for the purpose
of determining the Holders of Outstanding Securities entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Agreement to be given, made or taken
by Holders of Securities. If any record date is set pursuant to this paragraph,
the Holders of the Outstanding Income PRIDES and the Outstanding Growth PRIDES,
as the case may be, on such record date, and no other Holders, shall be entitled
to take the relevant action with respect to the Income PRIDES or the Growth
PRIDES, as the case may be, whether or not such Holders remain Holders after
such record date; PROVIDED that no such action shall be effective hereunder
unless taken prior to or on the applicable Expiration Date by Holders of the
requisite number of Outstanding Securities on such record date. Nothing
contained 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 cancelled and be of no
effect), and nothing contained in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite number of Outstanding
Securities 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 Purchase Contract Agent in writing and to
each Holder of Securities in the manner set forth in Section 1.06.


                                       12


         With respect to any record date set pursuant to this Section, the
Company may designate any date 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 Purchase Contract Agent in writing, and to each Holder of
Securities in the manner set forth in Section 1.06, prior to or on the existing
Expiration Date. If an Expiration Date is not designated with respect to any
record date set pursuant to this Section, the Company 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.

         SECTION 1.05 NOTICES.

         Any notice or communication is duly given if in writing and delivered
in Person or mailed by first-class mail (registered or certified, return receipt
requested), telecopier (with receipt confirmed) or overnight air courier
guaranteeing next day delivery, to the others' address; provided that notice
shall be deemed given to the Purchase Contract Agent only upon receipt thereof:

         If to the Purchase Contract Agent:

                        The Bank of New York
                        5 Penn Plaza
                        13th Floor
                        New York, NY 10001
                        Telecopier No.:  212-896-7172
                        Attention:  Paul Schmalzel

         If to the Company:

                        Cinergy Corp.
                        139 East Fourth Street
                        Cincinnati, OH 45202
                        Telecopier No.:  513-287-2749
                        Attention:  Treasurer

         with a copy to:

                        Cinergy Corp.
                        139 East Fourth Street
                        Cincinnati, OH 45202
                        Telecopier No.:  513-287-3810
                        Attention:  General Counsel


                                       13


         If to the Collateral Agent:

                        JPMorgan Chase Bank
                        450 W. 33rd Street
                        15th Floor
                        New York, NY 10001
                        Telecopier No.:  212-946-8160
                        Attention:  Richard Lorenzen

         If to the Property Trustee:

                        The Bank of New York
                        5 Penn Plaza
                        13th Floor
                        New York, NY 10001
                        Telecopier No.:  212-896-7172
                        Attention:  Paul Schmalzel

         If to the Indenture Trustee:

                        Fifth Third Bank
                        38 Fountain Square Plaza
                        MD 10AT60
                        Cincinnati, OH 45263
                        Telecopier No.:  513-744-6785
                        Attention:  Christine M. Schaub

         SECTION 1.06 NOTICE TO HOLDERS; WAIVER.

         Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, 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. Where this Agreement 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
Purchase Contract Agent, 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 Purchase
Contract Agent shall constitute a sufficient notification for every purpose
hereunder.

         SECTION 1.07 EFFECT OF HEADINGS AND TABLE OF CONTENTS.


                                       14


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

         SECTION 1.08 SUCCESSORS AND ASSIGNS.

         All covenants and agreements in this Agreement by the Company and the
Purchase Contract Agent shall bind their respective successors and assigns,
whether so expressed or not.

         SECTION 1.09 SEPARABILITY CLAUSE.

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

         SECTION 1.10 BENEFITS OF AGREEMENT.

         Nothing contained in this Agreement or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this Agreement.
The Holders from time to time shall be beneficiaries of this Agreement and shall
be bound by all of the terms and conditions hereof and of the Securities
evidenced by their Certificates by their acceptance of delivery of such
Certificates.

         SECTION 1.11 GOVERNING LAW.

         This Agreement and the Securities shall be governed by, and construed
in accordance with, the laws of the State of New York.

         SECTION 1.12 LEGAL HOLIDAYS.

         In any case where any Payment Date shall not be a Business Day
(notwithstanding any other provision of this Agreement or the Securities),
Purchase Contract Payments or other distributions shall not be paid on such
date, but Purchase Contract Payments or such other distributions shall be paid
on the next succeeding Business Day with the same force and effect as if made on
such Payment Date, PROVIDED that no interest shall accrue or be payable by the
Company or to any Holder for the period from and after any such Payment Date,
except that, if such next succeeding Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day with the same force and effect as if made on such Payment Date.

         In any case where any Purchase Contract Settlement Date or Early
Settlement Date shall not be a Business Day (notwithstanding any other provision
of this Agreement or the Securities) Purchase Contracts shall not be performed
and Early Settlement shall not be effected on such date, but Purchase Contracts
shall be performed or Early Settlement effected, as applicable, on the next
succeeding Business Day with the same force and effect as if made on such
Purchase Contract Settlement Date or Early Settlement Date, as applicable.

         SECTION 1.13 COUNTERPARTS.


                                       15


         This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.

         SECTION 1.14 INSPECTION OF AGREEMENT.

         A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder or Beneficial Owner.

         SECTION 1.15 APPOINTMENT OF FINANCIAL INSTITUTION AS AGENT FOR THE
COMPANY.

         The Company may appoint a financial institution (which may be the
Collateral Agent) to act as its agent in performing its obligations and in
accepting and enforcing performance of the obligations of the Purchase Contract
Agent and the Holders, under this Agreement and the Purchase Contracts, by
giving notice of such appointment in the manner provided in Section 1.05 hereof.
Any such appointment shall not relieve the Company in any way from its
obligations hereunder.

                                   ARTICLE 2

                                CERTIFICATE FORMS

         SECTION 2.01 FORMS OF CERTIFICATES GENERALLY.

         The Certificates (including the form of Purchase Contract forming part
of each Security evidenced thereby) shall be in substantially the form set forth
in Exhibit A hereto (in the case of Certificates evidencing Income PRIDES) or
Exhibit B hereto (in the case of Certificates evidencing Growth PRIDES), with
such letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange on which the Securities are
listed or any depositary therefor, or as may, consistently herewith, be
determined by the officers of the Company executing such Certificates, as
evidenced by their execution of the Certificates.

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

         Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:

                  "THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
                  OF THE PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND
                  IS REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE
                  DEPOSITORY TRUST COMPANY, A


                                       16


                  NEW YORK CORPORATION (THE "DEPOSITARY"), THE DEPOSITARY OR
                  ANOTHER NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS
                  EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A
                  PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
                  LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
                  AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A
                  TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A
                  NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
                  THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE
                  REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
                  REPRESENTATIVE OF THE DEPOSITARY FOR REGISTRATION OF TRANSFER,
                  EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REQUESTED
                  IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY
                  AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY
                  PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
                  AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
                  DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
                  VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
                  REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."

         SECTION 2.02 FORM OF PURCHASE CONTRACT AGENT'S CERTIFICATE OF
AUTHENTICATION.

         The form of the Purchase Contract Agent's certificate of authentication
of the Securities shall be in substantially the form set forth on the form of
the applicable Certificates.

                                   ARTICLE 3

                                 THE SECURITIES

         SECTION 3.01 AMOUNT; FORM AND DENOMINATIONS.

         The aggregate number of Securities evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to 5,500,000 (6,325,000 if the over-allotment option granted in the
Underwriting Agreement is exercised in full), except for Certificates
authenticated, executed and delivered upon registration of transfer of, in
exchange for, or in lieu of, other Certificates pursuant to Sections 3.04, 3.05,
3.10, 3.13, 3.14, 5.07 or 8.05.

         The Certificates shall be issuable only in registered form and only in
denominations of a single Income PRIDES or Growth PRIDES and any integral
multiple thereof.


                                       17


         SECTION 3.02 RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES.

         Each Income PRIDES Certificate shall evidence the number of Income
PRIDES specified therein, with each such Income PRIDES representing (1) the
ownership by the Holder thereof of a beneficial interest in a Preferred
Security, a Note or the Applicable Ownership Interest of the Treasury Portfolio,
as the case may be, subject to the Pledge of such Preferred Security, such Note
or the Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, by such
Holder pursuant to the Pledge Agreement, and (2) the rights and obligations of
the Holder thereof and the Company under one Purchase Contract. The Purchase
Contract Agent, as attorney-in-fact for, and on behalf of, the Holder of each
Income PRIDES shall pledge, pursuant to the Pledge Agreement, the Preferred
Security, the Note or the Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, as the case may
be, forming a part of such Income PRIDES, to the Collateral Agent and grant to
the Collateral Agent a security interest in the right, title and interest of
such Holder in such Preferred Security, such Note or the Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, for the benefit of the Company, to
secure the obligation of the Holder under each Purchase Contract to purchase
shares of Common Stock.

         Upon the formation of a Growth PRIDES pursuant to Section 3.13, each
Growth PRIDES Certificate shall evidence the number of Growth PRIDES specified
therein, with each such Growth PRIDES representing (1) the ownership by the
Holder thereof of a 1/20 undivided beneficial interest in a Treasury Security
with a principal amount equal to $1,000, subject to the Pledge of such Treasury
Security by such Holder pursuant to the Pledge Agreement, and (2) the rights and
obligations of the Holder thereof and the Company under one Purchase Contract.

         Prior to the purchase of shares of Common Stock under each Purchase
Contract, such Purchase Contracts shall not entitle the Holder of a Security to
any of the rights of a holder of shares of Common Stock, including, without
limitation, the right to vote or receive any dividends or other payments or to
consent or to receive notice as a shareholder in respect of the meetings of
shareholders or for the election of directors of the Company or for any other
matter, or any other rights whatsoever as a shareholder of the Company.

         SECTION 3.03 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.

         Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Purchase Contract Agent for authentication, execution on behalf of the Holders
and delivery, together with its Issuer Order for authentication of such
Certificates, and the Purchase Contract Agent in accordance with such Issuer
Order shall authenticate, execute on behalf of the Holders and deliver such
Certificates.

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


                                       18


         Certificates 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 Certificates or did not
hold such offices at the date of such Certificates.

         No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized signatory of the Purchase Contract Agent, as such
Holder's attorney-in-fact. Such signature by an authorized signatory of the
Purchase Contract Agent shall be conclusive evidence that the Holder of such
Certificate has entered into the Purchase Contracts evidenced by such
Certificate.

         Each Certificate shall be dated the date of its authentication.

         No Certificate shall be entitled to any benefit under this Agreement or
be valid or obligatory for any purpose unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Purchase Contract Agent by manual
signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.

         SECTION 3.04 TEMPORARY CERTIFICATES.

         Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu
of such definitive Certificates, temporary Certificates which are in
substantially the form set forth in Exhibit A or Exhibit B hereto, as the case
may be, with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange on which the
Income PRIDES or Growth PRIDES, as the case may be, are listed, or as may,
consistently herewith, be determined by the officers of the Company executing
such Certificates, as evidenced by their execution of the Certificates.

         If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Company shall execute and deliver to the Purchase Contract
Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of
the Holder, and deliver in exchange therefor, one or more definitive
Certificates of like tenor and denominations and evidencing a like number of
Securities as the temporary Certificate or Certificates so surrendered. Until so
exchanged, the temporary Certificates shall in all respects evidence the same
benefits and the same obligations with respect to the Securities, evidenced
thereby as definitive Certificates.

         SECTION 3.05 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.


                                       19


         The Purchase Contract Agent shall keep at the Corporate Trust Office a
register (the "SECURITY REGISTER") in which, subject to such reasonable
regulations as it may prescribe, the Purchase Contract Agent shall provide for
the registration of Certificates and of transfers of Certificates (the Purchase
Contract Agent, in such capacity, the "SECURITY REGISTRAR"). The Security
Registrar shall record separately the registration and transfer of the
Certificates evidencing Income PRIDES and Growth PRIDES.

         Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate, execute on
behalf of the designated transferee or transferees, and deliver, in the name of
the designated transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like number of Income
PRIDES or Growth PRIDES, as the case may be.

         At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Income PRIDES or Growth PRIDES, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the Holder, and deliver the Certificates
which the Holder making the exchange is entitled to receive.

         All Certificates issued upon any registration of transfer or exchange
of a Certificate shall evidence the ownership of the same number of Income
PRIDES or Growth PRIDES, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under this Agreement as the Income
PRIDES or Growth PRIDES, as the case may be, evidenced by the Certificate
surrendered upon such registration of transfer or exchange.

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

         No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Purchase Contract Agent may
require payment from the Holder 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 Certificates, other than any exchanges pursuant to
Sections 3.06 and 8.05 not involving any transfer.

         Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder
and deliver any Certificate in exchange for any other Certificate presented or
surrendered for registration of transfer or for exchange on or after the
Business Day immediately preceding the earliest of any Early Settlement Date for
such Certificate, the Purchase Contract Settlement Date or the Termination Date.
In lieu of delivery of a new Certificate, upon satisfaction of the applicable
conditions specified above in this


                                       20


Section and receipt of appropriate registration or transfer instructions from
such Holder, the Purchase Contract Agent shall:

                  (i)      if the Purchase Contract Settlement Date or an Early
         Settlement Date with respect to such other Certificate has occurred,
         deliver the shares of Common Stock issuable in respect of the Purchase
         Contracts forming a part of the Securities evidenced by such other
         Certificate; or

                  (ii)     if a Cash Settlement or an Early Settlement Date with
         respect to such other Certificate shall have occurred, or if a
         Termination Event shall have occurred prior to the Purchase Contract
         Settlement Date, transfer the Preferred Securities, the Notes, the
         Treasury Securities, or the appropriate Applicable Ownership Interest
         of the Treasury Portfolio, as the case may be, evidenced thereby, in
         each case subject to the applicable conditions and in accordance with
         the applicable provisions of Section 3.15 and Article Five hereof.

         SECTION 3.06 BOOK-ENTRY INTERESTS.

         The Certificates, on original issuance, will be issued in the form of
one or more fully registered Global Certificates, to be delivered to the
Depositary or its custodian by, or on behalf of, the Company. The Company hereby
designates DTC as the initial Depositary. Such Global Certificates shall
initially be registered on the books and records of the Company in the name of
Cede & Co., the nominee of the Depositary, and no Beneficial Owner will receive
a definitive Certificate representing such Beneficial Owner's interest in such
Global Certificate, except as provided in Section 3.09. The Purchase Contract
Agent shall enter into an agreement with the Depositary if so requested by the
Company. Unless and until definitive, fully registered Certificates have been
issued to Beneficial Owners pursuant to Section 3.09:

                  (i)      the provisions of this Section 3.06 shall be in full
         force and effect;

                  (ii)     the Company shall be entitled to deal with the
         Depositary for all purposes of this Agreement (including making
         Purchase Contract Payments and receiving approvals, votes or consents
         hereunder) as the Holder of the Securities and the sole holder of the
         Global Certificates and shall have no obligation to the Beneficial
         Owners;

                  (iii)    to the extent that the provisions of this Section
         conflict with any other provisions of this Agreement, the provisions of
         this Section 3.06 shall control; and

                  (iv)     the rights of the Beneficial Owners shall be
         exercised only through the Depositary and shall be limited to those
         established by law and agreements between such Beneficial Owners and
         the Depositary or the Depositary Participants.

         SECTION 3.07 NOTICES TO HOLDERS.

         Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any
Securities registered in the name of the


                                       21


Depositary or the nominee of the Depositary, the Company or the
Company's agent shall, except as set forth herein, have no obligations to the
Beneficial Owners.

         SECTION 3.08 APPOINTMENT OF SUCCESSOR DEPOSITARY.

         If the Depositary elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Depositary with respect to the Securities.

         SECTION 3.09 DEFINITIVE CERTIFICATES.

         If:

                  (i)      the Depositary elects to discontinue its services as
         securities depositary with respect to the Securities and a successor
         Depositary is not appointed pursuant to Section 3.08 within 90 days
         after such discontinuance; or

                  (ii)     the Company elects, after consultation with the
         Purchase Contract Agent, to terminate the book-entry system for the
         Securities,

then (x) definitive Certificates shall be prepared by the Company with respect
to such Securities and delivered to the Purchase Contract Agent and (y) upon
surrender of the Global Certificates representing the Securities by the
Depositary, accompanied by registration instructions, the Company shall cause
definitive Certificates to be delivered to Beneficial Owners in accordance with
the instructions of the Depositary. The Company shall not be liable for any
delay in delivery of such instructions and may conclusively rely on and shall be
protected in relying on, such instructions. Each definitive Certificate so
delivered shall evidence Securities of the same kind and tenor as the Global
Certificate so surrendered in respect thereof.

         SECTION 3.10 MUTILATED, DESTROYED, LOST AND STOLEN CERTIFICATES.

         If any mutilated Certificate is surrendered to the Purchase Contract
Agent, the Company shall execute and deliver to the Purchase Contract Agent, and
the Purchase Contract Agent shall authenticate, execute on behalf of the Holder,
and deliver in exchange therefor, a new Certificate, evidencing the same number
of Income PRIDES or Growth PRIDES, as the case may be, and bearing a Certificate
number not contemporaneously outstanding.

         If there shall be delivered to the Company and the Purchase Contract
Agent (i) evidence to their satisfaction of the destruction, loss or theft of
any Certificate, and (ii) such security or indemnity as may be required by them
to hold each of them and any agent of any of them harmless, then, in the absence
of notice to the Company or the Purchase Contract Agent that such Certificate
has been acquired by a protected purchaser, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the Holder, and deliver to the Holder, in
lieu of any such destroyed, lost or stolen Certificate, a new Certificate,
evidencing the same number of Income PRIDES or Growth PRIDES, as the case may
be, and bearing a Certificate number not contemporaneously outstanding.


                                       22


         Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder,
and deliver to the Holder, a Certificate on or after the Business Day
immediately preceding the earliest of any Early Settlement Date for such lost or
mutilated Certificate, the Purchase Contract Settlement Date or the Termination
Date. In lieu of delivery of a new Certificate, upon satisfaction of the
applicable conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Purchase Contract
Agent shall:

                  (i)      if the Purchase Contract Settlement Date or an Early
         Settlement Date with respect to such lost or mutilated Certificate has
         occurred, deliver the shares of Common Stock issuable in respect of the
         Purchase Contracts forming a part of the Securities evidenced by such
         Certificate; or

                  (ii)     if a Cash Settlement or an Early Settlement Date with
         respect to such lost or mutilated Certificate shall have occurred or if
         a Termination Event shall have occurred prior to the Purchase Contract
         Settlement Date, transfer the Preferred Securities, the Notes, the
         Treasury Securities or the appropriate Applicable Ownership Interest
         (as specified in clause (A) of the definition of such term) of the
         Treasury Portfolio, as the case may be, evidenced thereby, in each case
         subject to the applicable conditions and in accordance with the
         applicable provisions of Section 3.15 and Article Five hereof.

         Upon the issuance of any new Certificate under this Section, the
Company and the Purchase Contract Agent may require the payment by the Holder 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 Purchase Contract Agent) connected therewith.

         Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered 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 Certificates.

         SECTI1ON 3.11 PERSONS DEEMED OWNERS.

         Prior to due presentment of a Certificate for registration of transfer,
the Company and the Purchase Contract Agent, and any agent of the Company or the
Purchase Contract Agent, may treat the Person in whose name such Certificate is
registered as the owner of the Security evidenced thereby, for the purpose of
receiving distributions on the Preferred Securities, the Treasury Securities,
the Notes, or on the maturing quarterly interest strips of the Treasury
Portfolio, as applicable, receiving Purchase Contract Payments, performance of
the Purchase Contracts and for all other purposes whatsoever, whether or not any
distributions on the


                                       23


Preferred Securities, the Treasury Securities, the Notes, or Treasury Portfolio,
as applicable, or Purchase Contract Payments payable on the Purchase Contracts,
each constituting a part of the Security evidenced thereby shall be overdue and
notwithstanding any notice to the contrary, and neither the Company nor the
Purchase Contract Agent, nor any agent of the Company or the Purchase Contract
Agent, shall be affected by notice to the contrary.

         Notwithstanding the foregoing, with respect to any Global Certificate,
nothing contained herein shall prevent the Company, the Purchase Contract Agent
or any agent of the Company or the Purchase Contract Agent, from giving effect
to any written certification, proxy or other authorization furnished by the
Depositary (or its nominee), as a Holder, with respect to such Global
Certificate or impair, as between such Depositary and the related Beneficial
Owner, the operation of customary practices governing the exercise of rights of
the Depositary (or its nominee) as Holder of such Global Certificate.

         SECTION 3.12 CANCELLATION.

         All Certificates surrendered for delivery of shares of Common Stock on
or after the Purchase Contract Settlement Date, upon the transfer of Preferred
Securities, Notes, the appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of that term) of the Treasury Portfolio or
Treasury Securities, as the case may be, after the occurrence of a Termination
Event or pursuant to an Early Settlement, or upon the registration of transfer
or exchange of a Security, or a Collateral Substitution or the reestablishment
of Income PRIDES shall, if surrendered to any Person other than the Purchase
Contract Agent, be delivered to the Purchase Contract Agent and, if not already
cancelled, shall be promptly cancelled by it. The Company may at any time
deliver to the Purchase Contract Agent for cancellation any Certificates
previously authenticated, executed and delivered hereunder which the Company may
have acquired in any manner whatsoever, and all Certificates so delivered shall,
upon Issuer Order, be promptly cancelled by the Purchase Contract Agent. No
Certificates shall be authenticated, executed on behalf of the Holder and
delivered in lieu of or in exchange for any Certificates cancelled as provided
in this Section, except as expressly permitted by this Agreement. All cancelled
Certificates held by the Purchase Contract Agent shall be disposed of in
accordance with its customary practices.

         If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Purchase
Contract Agent cancelled or for cancellation.

         SECTION 3.13 CREATION OF GROWTH PRIDES BY SUBSTITUTION OF TREASURY
SECURITIES.

         Subject to the conditions set forth in this Agreement, a Holder may
separate the Preferred Securities, the Notes or Applicable Ownership Interests
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable, from the related Purchase Contracts in respect of such
Holder's Income PRIDES by substituting for such Preferred Securities, Notes or
Applicable Ownership Interests (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, as applicable, Treasury Securities in an
aggregate principal amount equal to the aggregate liquidation amount of such
Preferred Securities or the aggregate principal amount of such Notes, as
applicable (a "COLLATERAL SUBSTITUTION"), at any


                                       24


time from and after the date of this Agreement and prior to or on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date. To
effect such substitution, the Holder must:

                  (1)      deposit with the Securities Intermediary Treasury
                           Securities having an aggregate principal amount equal
                           to the aggregate liquidation amount of the Preferred
                           Securities or the aggregate principal amount of the
                           Notes comprising part of such Income PRIDES, as the
                           case may be; and

                  (2)      transfer the related Income PRIDES to the Purchase
                           Contract Agent accompanied by a notice to the
                           Purchase Contract Agent, substantially in the form of
                           Exhibit C hereto, (i) stating that the Holder has
                           transferred the relevant amount of Treasury
                           Securities to the Securities Intermediary and (ii)
                           requesting that the Purchase Contract Agent instruct
                           the Collateral Agent to release the Preferred
                           Securities or the Notes, as the case may be,
                           underlying such Income PRIDES, whereupon the Purchase
                           Contract Agent shall promptly provide an instruction
                           to such effect to the Collateral Agent, substantially
                           in the form of Exhibit A to the Pledge Agreement.

         Upon receipt of the Treasury Securities described in clause (1) above
and the instruction described in clause (2) above, in accordance with the terms
of the Pledge Agreement, the Collateral Agent will cause the Securities
Intermediary to effect the release of such Preferred Securities or the Notes, as
the case may be, from the Pledge, free and clear of the Company's security
interest therein, and the transfer of such Preferred Securities or the Notes, as
the case may be, to the Purchase Contract Agent on behalf of the Holder. Upon
receipt thereof, the Purchase Contract Agent shall promptly:

                  (i)      cancel the related Income PRIDES;

                  (ii)     transfer the Preferred Securities or the Notes, as
         the case may be, to the Holder; and

                  (iii)    authenticate, execute on behalf of such Holder and
         deliver a Growth PRIDES Certificate executed by the Company in
         accordance with Section 3.03 evidencing the same number of Purchase
         Contracts as were evidenced by the cancelled Income PRIDES.

         Holders who elect to separate the Preferred Securities or the Notes, as
the case may be, from the related Purchase Contracts and to substitute Treasury
Securities for such Preferred Securities or the Notes, as the case may be, shall
be responsible for any fees or expenses payable to the Collateral Agent for its
services as Collateral Agent in respect of the substitution, and the Company
shall not be responsible for any such fees or expenses.

         Holders may make Collateral Substitutions only in integral multiples of
20 Income PRIDES.

         If a Tax Event Redemption has occurred, Holders may convert their
Income PRIDES into Growth PRIDES by substituting Applicable Ownership Interests
(as specified in clause (A) of


                                       25


the definition of such term) of the Treasury Portfolio for Treasury Securities
at any time on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date, but only in integral multiples of 80,000
Income PRIDES.

         In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Income PRIDES or fails
to deliver Income PRIDES Certificates to the Purchase Contract Agent after
depositing Treasury Securities with the Collateral Agent, any distributions on
the Preferred Securities or the Notes constituting a part of such Income PRIDES,
as the case may be, shall be held in the name of the Purchase Contract Agent or
its nominee in trust for the benefit of such Holder, until such Income PRIDES
are so transferred or the Income PRIDES Certificate is so delivered, as the case
may be, or, such Holder provides evidence satisfactory to the Company and the
Purchase Contract Agent that such Income PRIDES Certificate has been destroyed,
lost or stolen, together with any indemnity that may be required by the Purchase
Contract Agent and the Company.

         Except as described in this Section 3.13 or in connection with a Cash
Settlement, for so long as the Purchase Contract underlying an Income PRIDES
remains in effect, such Income PRIDES shall not be separable into its
constituent parts, and the rights and obligations of the Holder in respect of
the Preferred Securities or the Notes, as the case may be, and the Purchase
Contract comprising such Income PRIDES may be acquired, and may be transferred
and exchanged, only as an Income PRIDES.

         SECTION 3.14 REESTABLISHMENT OF INCOME PRIDES.

         Subject to the conditions set forth in this Agreement, a Holder of
Growth PRIDES may reestablish Income PRIDES at any time (i) prior to or on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
by:

                  (1)      depositing with the Securities Intermediary Preferred
                           Securities or Notes, as the case may be, having an
                           aggregate liquidation amount (in the case of
                           Preferred Securities) or aggregate principal amount
                           (in the case of Notes), as the case may be, equal to
                           the aggregate principal amount at maturity of the
                           Treasury Securities comprising part of the Growth
                           PRIDES; and

                  (2)      transferring the related Growth PRIDES to the
                           Purchase Contract Agent accompanied by a notice to
                           the Purchase Contract Agent, substantially in the
                           form of Exhibit C hereto, (i) stating that the Holder
                           has transferred the relevant amount of Preferred
                           Securities or Notes, as the case may be, to the
                           Securities Intermediary and (ii) requesting that the
                           Purchase Contract Agent instruct the Collateral Agent
                           to release the Treasury Securities underlying such
                           Growth PRIDES, whereupon the Purchase Contract Agent
                           shall promptly provide an instruction to such effect
                           to the Collateral Agent, substantially in the form of
                           Exhibit C to the Pledge Agreement.

Upon receipt of the Preferred Securities or the Notes, as the case may be,
described in clause (1) above and the instruction described in clause (2) above,
in accordance with the terms of the Pledge Agreement, the Collateral Agent will
cause the Securities Intermediary to effect the


                                       26


release of the Treasury Securities having a corresponding aggregate principal
amount at maturity from the Pledge, free and clear of the Company's security
interest therein, and the transfer to the Purchase Contract Agent on behalf of
the Holder. Upon receipt thereof, the Purchase Contract Agent shall promptly:

                  (i)      cancel the related Growth PRIDES;

                  (ii)     transfer the Treasury Securities to the Holder; and

                  (iii)    authenticate, execute on behalf of such Holder and
         deliver an Income PRIDES Certificate executed by the Company in
         accordance with Section 3.03 evidencing the same number of Purchase
         Contracts as were evidenced by the cancelled Growth PRIDES.

         Holders who elect to reestablish Income PRIDES shall be responsible for
any fees or expenses payable to the Collateral Agent for its services as
Collateral Agent in respect of the reestablishment, and the Company shall not be
responsible for any such fees or expenses.

         Holders of Growth PRIDES may only reestablish Income PRIDES in integral
multiples of 20 Growth PRIDES.

         If a Tax Event Redemption has occurred, Holders may convert their
Growth PRIDES into Income PRIDES by making Collateral Substitutions at any time
on or prior to the second Business Day immediately preceding the Purchase
Contract Settlement Date, but only in integral multiples of 80,000 Growth
Prides.

         Except as provided in this Section 3.14 or in connection with a Cash
Settlement, for so long as the Purchase Contract underlying a Growth PRIDES
remains in effect, such Growth PRIDES shall not be separable into its
constituent parts and the rights and obligations of the Holder of such Growth
PRIDES in respect of the 1/20 of a Treasury Security and the Purchase Contract
comprising such Growth PRIDES may be acquired, and may be transferred and
exchanged, only as a Growth PRIDES.

         SECTION 3.15 TRANSFER OF COLLATERAL UPON OCCURRENCE OF TERMINATION
EVENT.

         Upon the occurrence of a Termination Event and the transfer to the
Purchase Contract Agent of the Preferred Securities, Notes, the appropriate
Applicable Ownership Interest of the Treasury Portfolio or the Treasury
Securities, as the case may be, underlying the Income PRIDES and the Growth
PRIDES, as the case may be, pursuant to the terms of the Pledge Agreement, the
Purchase Contract Agent shall request transfer instructions with respect to such
Preferred Securities, Notes, the appropriate Applicable Ownership Interest of
the Treasury Portfolio or Treasury Securities, as the case may be, from each
Holder by written request, substantially in the form of Exhibit D hereto, mailed
to such Holder at its address as it appears in the Security Register.

         Upon book-entry transfer of the Income PRIDES or the Growth PRIDES or
delivery of an Income PRIDES Certificate or Growth PRIDES Certificate to the
Purchase Contract Agent with such transfer instructions, the Purchase Contract
Agent shall transfer the Preferred


                                       27


Securities, Notes, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or Treasury Securities, as the case may be, underlying such Income
PRIDES or Growth PRIDES, as the case may be, to such Holder by book-entry
transfer, or other appropriate procedures, in accordance with such instructions.
In the event a Holder of Income PRIDES or Growth PRIDES fails to effect such
transfer or delivery, the Preferred Securities, Notes, the appropriate
Applicable Ownership Interest of the Treasury Portfolio or Treasury Securities,
as the case may be, underlying such Income PRIDES or Growth PRIDES, as the case
may be, and any distributions thereon, shall be held in the name of the Purchase
Contract Agent or its nominee in trust for the benefit of such Holder, until the
earlier to occur of:

                  (i)      the transfer of such Income PRIDES or Growth PRIDES
         or surrender of the Income PRIDES Certificate or Growth PRIDES
         Certificate or receipt by the Company and the Purchase Contract Agent
         from such Holder of satisfactory evidence that such Income PRIDES
         Certificate or Growth PRIDES Certificate has been destroyed, lost or
         stolen, together with any indemnity that may be required by the
         Purchase Contract Agent and the Company; and

                  (ii)     the expiration of the time period specified in the
         abandoned property laws of the relevant State in which the Purchase
         Contract Agent holds such property.

         SECTION 3.16 NO CONSENT TO ASSUMPTION.

         Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company or its
trustee, receiver, liquidator or a person or entity performing similar functions
in the event that the Company becomes the debtor under the Bankruptcy Code or
subject to other similar state or Federal law providing for reorganization or
liquidation.

                                   ARTICLE 4

            THE PREFERRED SECURITIES, NOTES AND APPLICABLE OWNERSHIP
                       INTEREST OF THE TREASURY PORTFOLIO

         SECTION 4.01 INTEREST PAYMENTS; RIGHTS TO INTEREST PAYMENTS PRESERVED.

         Any distribution on any Preferred Security, any Note or on the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, which is paid on any Payment Date shall, subject to receipt thereof by
the Purchase Contract Agent from the Collateral Agent as provided by the terms
of the Pledge Agreement, be paid to the Person in whose name the Income PRIDES
Certificate (or one or more Predecessor Income PRIDES Certificates) of which
such Preferred Security, such Note or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, is registered at the
close of business on the Record Date for such Payment Date. Any such
distribution shall be subject to deferral at the option of the Company in
accordance with the Indenture and the Declaration.


                                       28


         Each Income PRIDES Certificate evidencing Preferred Securities, Notes
or the appropriate Applicable Ownership Interest of the Treasury Portfolio
delivered under this Agreement upon registration of transfer of or in exchange
for or in lieu of any other Income PRIDES Certificate shall carry the right to
distributions accrued and unpaid, and to accrue distributions interest, which
were carried by the Preferred Securities, Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio underlying such other Income PRIDES
Certificate.

         In the case of any Income PRIDES with respect to which Cash Settlement
of the underlying Purchase Contract is properly effected pursuant to Section
5.02 hereof, or with respect to which Early Settlement of the underlying
Purchase Contract is properly effected pursuant to Section 5.07 hereof, or with
respect to which a Collateral Substitution is effected, in each case on a date
that is after any Record Date and prior to or on the next succeeding Payment
Date, distributions on the Preferred Securities, Notes or on the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
underlying such Income PRIDES otherwise payable on such Payment Date shall be
payable on such Payment Date notwithstanding such Cash Settlement or Early
Settlement or Collateral Substitution, and such distributions shall, subject to
receipt thereof by the Purchase Contract Agent, be payable to the Person in
whose name the Income PRIDES Certificate (or one or more Predecessor Income
PRIDES Certificates) was registered at the close of business on the Record Date.
Except as otherwise expressly provided in the immediately preceding sentence, in
the case of any Income PRIDES with respect to which Cash Settlement or Early
Settlement of the underlying Purchase Contract is properly effected, or with
respect to which a Collateral Substitution has been effected, distributions on
the related Preferred Securities, Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, that would otherwise be
payable after the Purchase Contract Settlement Date, Early Settlement Date or
the date of the Collateral Substitution, as the case may be, shall not be
payable hereunder to the Holder of such Income PRIDES; PROVIDED, HOWEVER, that
to the extent that such Holder continues to hold separated Preferred Securities
or Notes that formerly comprised a part of such Holder's Income PRIDES, such
Holder shall be entitled to receive distributions on such separated Preferred
Securities or Notes.

         SECTION 4.02 NOTICE AND VOTING.

         Under the terms of the Pledge Agreement, the Purchase Contract Agent
will be entitled to exercise the voting and any other consensual rights
pertaining to the Pledged Preferred Securities or Pledged Notes, but only to the
extent instructed in writing by the Holders as described below. Upon receipt of
notice of any meeting at which holders of Preferred Securities or Notes are
entitled to vote or upon any solicitation of consents, waivers or proxies of
holders of Preferred Securities or Notes, the Purchase Contract Agent shall, as
soon as practicable thereafter, mail, first class, postage pre-paid, to the
Holders of Income PRIDES a notice:

                  (i)      containing such information as is contained in the
         notice or solicitation;

                  (ii)     stating that each Holder on the record date set by
         the Purchase Contract Agent therefor (which, to the extent possible,
         shall be the same date as the record date for determining the holders
         of Preferred Securities or Notes, as the case may be, entitled to


                                       29


         vote) shall be entitled to instruct the Purchase Contract Agent as
         to the exercise of the voting rights pertaining to such Preferred
         Securities or Notes underlying their Income PRIDES; and

                  (iii)    stating the manner in which such instructions may be
         given.

Upon the written request of the Holders of Income PRIDES on such record date
received by the Purchase Contract Agent at least six days prior to such meeting,
the Purchase Contract Agent shall endeavor insofar as practicable to vote or
cause to be voted, in accordance with the instructions set forth in such
requests, the maximum number of Preferred Securities or Notes, as the case may
be, as to which any particular voting instructions are received. In the absence
of specific instructions from the Holder of an Income PRIDES, the Purchase
Contract Agent shall abstain from voting the Preferred Securities or Notes
underlying such Income PRIDES. The Company hereby agrees, if applicable, to
solicit Holders of Income PRIDES to timely instruct the Purchase Contract Agent
in order to enable the Purchase Contract Agent to vote such Preferred Securities
or Notes and the Trust shall covenant to this effect in the Declaration.

         SECTION 4.03 DISTRIBUTION OF NOTES; TAX EVENT REDEMPTION.

         (a)      Upon the dissolution and liquidation of the Trust in
accordance with the Declaration, an aggregate principal amount at maturity of
Notes constituting the assets of the Trust and underlying the Preferred
Securities equal to the aggregate liquidation amount of the Pledged Preferred
Securities shall be delivered to the Securities Intermediary in exchange for the
Pledged Preferred Securities. Thereafter, the Notes will be substituted for the
Pledged Preferred Securities as the Collateral, and will be held by the
Securities Intermediary in the Collateral Account in accordance with the terms
of the Pledge Agreement to secure the obligations of each Holder of an Income
PRIDES to purchase the Common Stock of the Company under the Purchase Contracts
constituting a part of such Income PRIDES.

         (b)      Notwithstanding the foregoing, in the event of a dissolution
and liquidation of the Trust, if a Liquidation Distribution is to be distributed
in lieu of the Notes as provided for in the Declaration, an amount equal to the
Liquidation Distribution shall be deposited in the Collateral Account in
exchange for the Pledged Preferred Securities. Thereafter, pursuant to the terms
of the Pledge Agreement, the Collateral Agent shall cause the Securities
Intermediary to apply an amount of such Liquidation Distribution equal to the
Redemption Amount to purchase on behalf of the Holders of Income PRIDES the
Treasury Portfolio and promptly remit the remaining portion of such Liquidation
Distribution to the Purchase Contract Agent for payment to the Holders of such
Income PRIDES. The Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio will be substituted as
Collateral for the Pledged Preferred Securities and will be held by the
Collateral Agent in accordance with the terms of the Pledge Agreement to secure
the obligation of each Holder of an Income PRIDES to purchase the Common Stock
of the Company under the Purchase Contract constituting a part of such Income
PRIDES.

         (c)      Following the dissolution and liquidation of the Trust, the
Holders and the Collateral Agent shall have such security interests, rights and
obligations with respect to the Notes or the Applicable Ownership Interest (as
specified in clause (A) of the definition of such


                                       30


term) of the Treasury Portfolio, as the case may be, as the Holders and the
Collateral Agent had in respect of the Preferred Securities subject to the
Pledge thereof as provided in the Pledge Agreement. The Company may cause to be
made in any Income PRIDES Certificates thereafter to be issued such change in
phraseology and form (but not in substance) as may be appropriate to reflect the
dissolution and liquidation of the Trust and the substitution of Notes or the
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, as the case may be, for Preferred
Securities as Collateral.

         (d)      Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, an amount equal to the Redemption Amount,
plus any accumulated and unpaid distributions or accrued and unpaid interest, as
the case may be, payable on the Tax Event Redemption Date with respect to the
Applicable Principal Amount shall be deposited in the Collateral Account in
exchange for the Pledged Preferred Securities or the Pledged Notes, as the case
may be. Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent shall cause the Securities Intermediary to apply an amount of
such funds equal to the Redemption Amount to purchase on behalf of the Holders
of Income PRIDES the Treasury Portfolio and promptly remit the remaining portion
of such funds to the Purchase Contract Agent for payment to the Holders of such
Income PRIDES. The Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio will be substituted as
Collateral for the Pledged Preferred Securities or the Pledged Notes, as the
case may be, and will be held by the Collateral Agent in accordance with the
terms of the Pledge Agreement to secure the obligation of each Holder of an
Income PRIDES to purchase the Common Stock of the Company under the Purchase
Contract constituting a part of such Income PRIDES.

         (e)      Following the occurrence of a Tax Event Redemption prior to
the Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interest rights and obligations with
respect to the Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio as the Holders of Income
PRIDES and the Collateral Agent had in respect of the Preferred Securities or
Notes, as the case may be, subject to the Pledge thereof as provided in the
Pledge Agreement, and any reference herein to the Preferred Securities or the
Notes shall be deemed to be reference to such Treasury Portfolio. The Company
may cause to be made in any Income PRIDES Certificates thereafter to be issued
such change in phraseology and form (but not in substance) as may be appropriate
to reflect the liquidation of the Trust and the substitution of the Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio for Preferred Securities or Notes as Collateral.

                                   ARTICLE 5

                             THE PURCHASE CONTRACTS

         SECTION 5.01 PURCHASE OF SHARES OF COMMON STOCK.


                                       31


         (a)      Each Purchase Contract shall obligate the Holder of the
related Security to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "PURCHASE PRICE"), a
number of shares of Common Stock (subject to Section 5.09) equal to the
Settlement Rate unless an Early Settlement has occurred in accordance with
Section 5.07 hereof or, prior to or on the Purchase Contract Settlement Date,
there shall have occurred a Termination Event with respect to such Purchase
Contract. The "SETTLEMENT RATE" is equal to:

                  (i)      if the Applicable Market Value (as defined below) is
         greater than or equal to $34.3970 (the "THRESHOLD APPRECIATION PRICE"),
         1.4536 shares of Common Stock per Purchase Contract;

                  (ii)     if the Applicable Market Value is less than the
         Threshold Appreciation Price but greater than $29.15 (the "REFERENCE
         PRICE"), the number of shares of Common Stock per Purchase Contract
         having a value equal to the Stated Amount divided by the Applicable
         Market Value; and

                  (iii)    if the Applicable Market Value is less than or equal
         to the Reference Price, 1.7153 shares of Common Stock per Purchase
         Contract,

in each case subject to adjustment as provided in Section 5.04 (and in each case
rounded upward or downward to the nearest 1/10,000th of a share).

         The "APPLICABLE MARKET VALUE" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date.

         The "CLOSING PRICE" per share of Common Stock on any date of
determination means:

                  (i)      the closing sale price as of the 4:15 p.m. close of
         the principal trading session (or, if no closing price is reported, the
         last reported sale price) per share on the New York Stock Exchange,
         Inc. (the "NYSE") on such date;

                  (ii)     if the Common Stock is not listed for trading on the
         NYSE on any such date, the closing sale price per share as reported in
         the composite transactions for the principal United States securities
         exchange on which the Common Stock is so listed;

                  (iii)    if the Common Stock is not so listed on a United
         States national or regional securities exchange, the closing sale price
         per share as reported by The Nasdaq Stock Market;

                  (iv)     if the Common Stock is not so reported, the last
         quoted bid price for the Common Stock in the over-the-counter market as
         reported by the National Quotation Bureau or similar organization; or

                  (v)      if such bid price is not available, the market value
         of the Common Stock on such date as determined by a nationally
         recognized independent investment banking firm retained for this
         purpose by the Company.


                                       32


         A "TRADING DAY" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.

         (b)      Each Holder of an Income PRIDES or a Growth PRIDES, by its
acceptance thereof:

                  (i)      irrevocably authorizes the Purchase Contract Agent to
         enter into and perform the related Purchase Contract on its behalf as
         its attorney-in-fact (including the execution of Certificates on behalf
         of such Holder);

                  (ii)     agrees to be bound by the terms and provisions
         thereof;

                  (iii)    covenants and agrees to perform its obligations under
         such Purchase Contract;

                  (iv)     consents to the provisions hereof;

                  (v)      irrevocably authorizes the Purchase Contract Agent to
         enter into and perform this Agreement and the Pledge Agreement on its
         behalf as its attorney-in-fact; and

                  (vi)     consents to, and agrees to be bound by, the Pledge of
         such Holder's right, title and interest in and to the Collateral
         Account, including the Preferred Securities, Notes, the Applicable
         Ownership Interest (as specified in clause (A) of the definition of
         such term) of the Treasury Portfolio or the Treasury Securities
         pursuant to the Pledge Agreement,

PROVIDED that upon a Termination Event, the rights of the Holder of such
Security under the Purchase Contract may be enforced without regard to any other
rights or obligations.

         (c)      Each Holder of an Income PRIDES or a Growth PRIDES, by its
acceptance thereof, further covenants and agrees, that to the extent and in the
manner provided in Section 5.02 and the Pledge Agreement, but subject to the
terms thereof, payments in respect of the Preferred Securities or the Notes or
the proceeds from the Treasury Securities or the Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio at maturity on the Purchase Contract Settlement Date, as the case may
be, shall be paid by the Collateral Agent to the Company in satisfaction of such
Holder's obligations under such Purchase Contract and such Holder shall acquire
no right, title or interest in such payments.

         (d)      Upon registration of transfer of a Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee) by the terms of this Agreement, the Purchase Contracts underlying
such Certificate, the Declaration and the Pledge Agreement and the transferor
shall be released from the obligations under this Agreement, the Purchase
Contracts underlying the Certificate so transferred and the Pledge Agreement.
The


                                       33


Company covenants and agrees, and each Holder of a Certificate, by its
acceptance thereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.

         SECTION 5.02 PAYMENT OF PURCHASE PRICE.

         (a)      (i) Unless a Tax Event Redemption has occurred or a Holder of
an Income PRIDES effects an Early Settlement of the underlying Purchase Contract
in the manner described in Section 5.07, each Holder who intends to pay in cash
to satisfy such Holder's obligations under the Purchase Contract on the Purchase
Contract Settlement Date shall notify the Purchase Contract Agent by use of a
notice in substantially the form of Exhibit E hereto of his intention to pay in
cash ("CASH SETTLEMENT") the Purchase Price for the shares of Common Stock to be
purchased pursuant to the related Purchase Contract. Such notice shall be given
prior to 5:00 p.m. (New York City time) on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date. Prior to 11:00 a.m. (New York
City time) on the next succeeding Business Day, the Purchase Contract Agent
shall notify the Collateral Agent and the Property Trustee or the Indenture
Trustee, as the case may be, of the receipt of such notices from Holders
intending to make a Cash Settlement.

                  (ii)     A Holder of an Income PRIDES who has so notified the
         Purchase Contract Agent of his intention to effect a Cash Settlement in
         accordance with paragraph 5.02(a)(i) above shall pay the Purchase Price
         to the Securities Intermediary for deposit in the Collateral Account
         prior to 11:00 a.m. (New York City time) on the fourth Business Day
         immediately preceding the Purchase Contract Settlement Date, in lawful
         money of the United States by certified or cashiers' check or wire
         transfer, in each case in immediately available funds payable to or
         upon the order of the Securities Intermediary. Any cash received by the
         Collateral Agent shall be invested promptly by the Securities
         Intermediary in Permitted Investments and paid to the Company on the
         Purchase Contract Settlement Date in settlement of the Purchase
         Contracts in accordance with the terms of this Agreement and the Pledge
         Agreement. Any funds received by the Securities Intermediary in respect
         of the investment earnings from such Permitted Investments in excess of
         the Purchase Price for the shares of Common Stock to be purchased by
         such Holder shall be distributed to the Purchase Contract Agent when
         received for payment to the Holder.

                  (iii)    If a Holder of an Income PRIDES fails to notify the
         Purchase Contract Agent of his intention to make a Cash Settlement in
         accordance with paragraph 5.02(a)(i) above, or does notify the Purchase
         Contract Agent as provided in paragraph 5.02(a)(i) above of his
         intention to pay the Purchase Price in cash, but fails to make such
         payment as required by paragraph 5.02(a)(ii) above, such Holder shall
         be deemed to have consented to the disposition of the Pledged Preferred
         Securities or the Pledged Notes pursuant to the Remarketing as
         described in paragraph 5.02(b) below.

                  (iv)     Promptly after 11:00 a.m. (New York City time) on the
         fourth Business Day preceding the Purchase Contract Settlement Date,
         the Purchase Contract Agent, based on notices received by the Purchase
         Contract Agent pursuant to Section 5.02(a) hereof and notice from the
         Securities Intermediary regarding cash received by it prior to such
         time, shall notify the Collateral Agent and the Property Trustee or the
         Indenture


                                       34


         Trustee, as applicable of the aggregate number of Preferred Securities
         or Notes to be tendered for purchase in the Remarketing in a notice
         substantially in the form of Exhibit F hereto.

         (b)      In order to dispose of the Preferred Securities or Notes of
Income PRIDES Holders electing to have their Preferred Securities or Notes
remarketed or of Income PRIDES Holders who have not notified the Purchase
Contract Agent of their intention to effect a Cash Settlement as provided in
paragraph 5.02(a)(i) above, or who have so notified the Purchase Contract Agent
but failed to make such payment as required by paragraph 5.02(a)(ii) above, the
Company expects to engage Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
Remarketing Agent (the "REMARKETING AGENT"), pursuant to the Remarketing
Agreement (and subject to removal as provided in the Remarketing Agreement) to
sell such Preferred Securities or Notes. In order to facilitate the Remarketing,
the Purchase Contract Agent, based on the notices specified in Section
5.02(a)(iv), shall notify the Remarketing Agent, promptly after 11:00 a.m. (New
York City time) on the fourth Business Day immediately preceding the Purchase
Contract Settlement Date, of the aggregate number of Preferred Securities or
Notes that are part of Income PRIDES to be remarketed. Concurrently, the
Collateral Agent, pursuant to the terms of the Pledge Agreement, shall cause
such Preferred Securities or Notes to be presented to the Remarketing Agent for
Remarketing.

         Upon receipt of such notice from the Purchase Contract Agent and such
Preferred Securities or Notes, the Remarketing Agent shall, on the third
Business Day immediately preceding the Purchase Contract Settlement Date, use
reasonable efforts to remarket such Preferred Securities or Notes on such date
at a price equal to 100.5% of the Stated Amount ($50) per Preferred Security or
Note, as provided in the Remarketing Agreement plus deferred and unpaid
distributions or deferred and unpaid interest, if any, thereon. The proceeds
from the Remarketing shall be invested by the Collateral Agent in Permitted
Investments, in accordance with the Pledge Agreement, and then applied to
satisfy in full such Income PRIDES Holders' obligations to pay the Purchase
Price for the shares of Common Stock under the related Purchase Contracts on the
Purchase Contract Settlement Date. In addition, an amount not to exceed $.125,
plus .25% of deferred and unpaid distributions or deferred and unpaid interest,
as the case may be, if any, of the proceeds from each Preferred Security or Note
shall automatically be remitted to the Remarketing Agent for services rendered
in connection with the Remarketing (the "REMARKETING FEE").

         If, despite using its reasonable efforts, the Remarketing Agent cannot
remarket the related Preferred Securities or Notes of such Holders of Income
PRIDES at a price not less than 100.0% of the Stated Amount ($50), plus deferred
and unpaid distributions or deferred and unpaid interest, if any, or if a
condition precedent set forth in the Remarketing Agreement is not fulfilled,
then the Remarketing shall be deemed to have failed (a "FAILED REMARKETING"), an
event of default shall be deemed to have occurred under this Agreement and the
Pledge Agreement and in accordance with the terms of the Pledge Agreement, the
Collateral Agent, for the benefit of the Company, shall exercise its rights as a
secured party with respect to such Preferred Securities or Notes, including
those actions specified in paragraph 5.02(c) below; PROVIDED, that if upon a
Failed Remarketing the Collateral Agent exercises such rights for the benefit of
the Company with respect to such Preferred


                                       35


Securities or Notes, any deferred and unpaid distributions or deferred and
unpaid interest, as the case may be, if any, on such Preferred Securities or
Notes and any deferred and unpaid Purchase Contract Payments shall become
payable by the Company to the Purchase Contract Agent for payment to the
Beneficial Owner of the Income PRIDES to which such Preferred Securities or
Notes relate. Such payment will be made by the Company on or prior to 11:00 a.m.
New York City time on the Purchase Contract Settlement Date in lawful money of
the United States by certified or cashiers' check or wire transfer in
immediately available funds payable to or upon the order of the Purchase
Contract Agent. The Company shall cause a notice of such Failed Remarketing to
be published on the second Business Day immediately preceding the Purchase
Contract Settlement Date in a daily newspaper in the English language of general
circulation in the City of New York, which is expected to be The Wall Street
Journal, and on Bloomberg News.

         (c)      With respect to any Preferred Securities or Notes which are
subject to a Failed Remarketing, the Collateral Agent for the benefit of the
Company reserves all of its rights as a secured party with respect thereto and,
subject to applicable law and paragraph 5.02(g) below, shall, in full
satisfaction of the Holders' obligations under the Purchase Contracts among
other things, (i) retain the Preferred Securities or Notes, (ii) sell the
Preferred Securities or Notes in one or more public or private sales or (iii)
take, or choose not to take, any other action with respect to the Preferred
Securities or the Notes, which in every case specified in (i), (ii) and (iii)
shall constitute payment in full for the aggregate Purchase Price for the shares
of Common Stock to be purchased under the Purchase Contracts.

         (d)      (i) Unless a Holder of a Growth PRIDES or Income PRIDES (if a
Tax Event Redemption has occurred) effects an Early Settlement of the underlying
Purchase Contract through the early delivery of cash to the Purchase Contract
Agent in the manner described in Section 5.07, each Holder of a Growth PRIDES or
Income PRIDES (if a Tax Event Redemption has occurred) who intends to pay in
cash shall notify the Purchase Contract Agent by use of a notice in
substantially the form of Exhibit E hereto of his intention to pay in cash the
Purchase Price for the shares of Common Stock to be purchased pursuant to the
related Purchase Contract. Such notice shall be given prior to 5:00 p.m. (New
York City time) on the second Business Day immediately preceding the Purchase
Contract Settlement Date. Prior to 11:00 a.m. (New York City time) on the next
succeeding Business Day, the Purchase Contract Agent shall notify the Collateral
Agent of the receipt of such notices from such Holders intending to make a Cash
Settlement. Growth PRIDES holders may make Cash Settlements only in integral
multiples of 20 Growth PRIDES.

                  (ii)     A Holder of a Growth PRIDES or Income PRIDES (if a
         Tax Event Redemption has occurred) who has so notified the Purchase
         Contract Agent of his intention to make a Cash Settlement in accordance
         with paragraph 5.02(d)(i) above shall pay the Purchase Price to the
         Securities Intermediary for deposit in the Collateral Account prior to
         11:00 a.m. (New York City time) on the Business Day immediately
         preceding the Purchase Contract Settlement Date, in lawful money of the
         United States by certified or cashiers' check or wire transfer, in each
         case in immediately available funds payable to or upon the order of the
         Securities Intermediary. Any cash received by the Collateral Agent
         shall be invested promptly by the Securities Intermediary in Permitted
         Investments and paid to the Company on the Purchase Contract Settlement
         Date in settlement of the Purchase Contract in accordance with the
         terms of this Agreement and the Pledge Agreement. Any funds received by
         the Securities


                                       36


         Intermediary in respect of the investment earnings from the investment
         in such Permitted Investments in excess of the Purchase Price for the
         shares of Common Stock to be purchased by such Holder shall be
         distributed to the Purchase Contract Agent when received for payment to
         the Holder.

                  (iii)    If a Holder of a Growth PRIDES or Holder of an Income
         PRIDES (if a Tax Event Redemption has occurred) fails to notify the
         Purchase Contract Agent of his intention to make a Cash Settlement in
         accordance with paragraph 5.02(d)(i) above, or does notify the Purchase
         Contract Agent as provided in paragraph 5.02(d)(i) above of his
         intention to pay the Purchase Price in cash, but fails to make such
         payment as required by paragraph 5.02(d)(ii) above, then upon the
         maturity of the Pledged Treasury Securities or the appropriate
         Applicable Ownership Interest (as specified in clause (A) of the
         definition of such term) of the Treasury Portfolio held by the
         Securities Intermediary on the Business Day immediately preceding the
         Purchase Contract Settlement Date, the principal amount of the Treasury
         Securities or the appropriate Applicable Ownership Interest (as
         specified in clause (A) of the definition of such term) of the Treasury
         Portfolio received by the Securities Intermediary shall be invested
         promptly in Permitted Investments. On the Purchase Contract Settlement
         Date, an amount equal to the Purchase Price shall be remitted to the
         Company as payment thereof without receiving any instructions from the
         Holder. In the event the sum of the proceeds from the related Pledged
         Treasury Securities or the appropriate Applicable Ownership Interest
         (as specified in clause (A) of the definition of such term) of the
         Treasury Portfolio and the investment earnings earned from such
         investments is in excess of the aggregate Purchase Price of the
         Purchase Contracts being settled thereby, the Collateral Agent shall
         cause the Securities Intermediary to distribute such excess to the
         Purchase Contract Agent for the benefit of the Holder of the related
         Growth PRIDES or Income PRIDES when received.

                  (iv)     A holder of a Preferred Security or Note that is no
         longer part of an Income PRIDES may elect to have such Preferred
         Security or Note, as the case may be, remarketed. A holder making such
         an election must notify the Property Trustee or the Indenture Trustee,
         as the case may be, prior to 11:00 a.m. (New York City time) on the
         fifth Business Day immediately preceding the Purchase Contract
         Settlement Date, of the aggregate number of Preferred Securities or
         Notes, as the case may be, that are not part of Income PRIDES to be
         remarketed. Any such notice will be irrevocable and may not be
         conditioned upon the level at which the Reset Rate is established in
         the Remarketing. Concurrently, the Property Trustee or the Indenture
         Trustee, as the case may be, shall cause such Preferred Securities or
         Notes, as the case may be, to be presented to the Remarketing Agent for
         Remarketing.

         (e)      Any distribution to Holders of any payments described above
shall be payable at the office of the Purchase Contract Agent in New York City
maintained for that purpose or, at the option of the Holder, by check mailed to
the address of the Person entitled thereto at such address as it appears on the
Security Register.

         (f)      Upon Cash Settlement of any Purchase Contract:


                                       37


                  (i)      the Collateral Agent will in accordance with the
         terms of the Pledge Agreement cause the Pledged Preferred Securities,
         Pledged Notes, the appropriate Applicable Ownership Interest (as
         specified in clause (A) of the definition of such term) of the Treasury
         Portfolio or the Pledged Treasury Securities, as the case may be,
         underlying the relevant Security to be released from the Pledge, free
         and clear of any security interest of the Company, and transferred to
         the Purchase Contract Agent for delivery to the Holder thereof or its
         designee as soon as practicable; and

                  (ii)     subject to the receipt thereof, the Purchase Contract
         Agent shall, by book-entry transfer or other appropriate procedures, in
         accordance with written instructions provided by the Holder thereof,
         transfer such Preferred Securities, Notes, or the appropriate
         Applicable Ownership Interest (as specified in clause (A) of the
         definition of such term) of the Treasury Portfolio or such Treasury
         Securities, as the case may be (or, if no such instructions are given
         to the Purchase Contract Agent by the Holder, the Purchase Contract
         Agent shall hold such Preferred Securities, Notes, or the appropriate
         Applicable Ownership Interest (as specified in clause (A) of the
         definition of such term) of the Treasury Portfolio or such Treasury
         Securities, as the case may be, and any interest payment thereon, in
         the name of the Purchase Contract Agent or its nominee in trust for the
         benefit of such Holder until the expiration of the time period
         specified in the abandoned property laws of the relevant state where
         such property is held).

         (g)      The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and, except to the extent satisfied by Early Settlement
or Cash Settlement, are payable solely out of the proceeds of any Collateral
pledged to secure the obligations of the Holders and in no event will Holders be
liable for any deficiency between the proceeds of the disposition of Collateral
and the Purchase Price.

         (h)      The Company shall not be obligated to issue any shares of
Common Stock in respect of a Purchase Contract or deliver any certificates
thereof to the Holder of the related Security unless the Company shall have
received payment in full for the aggregate Purchase Price for the Common Stock
to be purchased thereunder in the manner herein set forth.

         SECTION 5.03 ISSUANCE OF SHARES OF COMMON STOCK.

         Unless a Termination Event or an Early Settlement shall have occurred,
subject to Section 5.04(b), on the Purchase Contract Settlement Date upon
receipt of the aggregate Purchase Price payable on all Outstanding Securities,
the Company shall issue and deposit with the Purchase Contract Agent, for the
benefit of the Holders of the Outstanding Securities, one or more certificates
representing newly issued shares of Common Stock registered in the name of the
Purchase Contract Agent (or its nominee) as custodian for the Holders (such
certificates for shares of Common Stock, together with any dividends or
distributions for which a record date and payment date for such dividend or
distribution has occurred after the Purchase Contract Settlement Date, being
hereinafter referred to as the "PURCHASE CONTRACT SETTLEMENT FUND") to which the
Holders are entitled hereunder.

         Subject to the foregoing, upon surrender of a Certificate to the
Purchase Contract Agent on or after the Purchase Contract Settlement Date or
Early Settlement Date, as the case may be,


                                       38


together with settlement instructions thereon duly completed and executed, the
Holder of such Certificate shall be entitled to receive forthwith in exchange
therefor a certificate representing that number of newly issued whole shares of
Common Stock which such Holder is entitled to receive pursuant to the provisions
of this Article Five (after taking into account all Securities then held by such
Holder), together with cash in lieu of fractional shares as provided in Section
5.09 and any dividends or distributions with respect to such shares constituting
part of the Purchase Contract Settlement Fund, but without any interest thereon,
and the Certificate so surrendered shall forthwith be cancelled. Such shares
shall be registered in the name of the Holder or the Holder's designee as
specified in the settlement instructions provided by the Holder to the Purchase
Contract Agent. If any shares of Common Stock issued in respect of a Purchase
Contract are to be registered to a Person other than the Person in whose name
the Certificate evidencing such Purchase Contract is registered, no such
registration shall be made unless the Person requesting such registration has
paid any transfer and other taxes required by reason of such registration in a
name other than that of the registered Holder of the Certificate evidencing such
Purchase Contract or has established to the satisfaction of the Company that
such tax either has been paid or is not payable.

         SECTION 5.04 ADJUSTMENT OF SETTLEMENT RATE.

         (a)      Adjustments for Dividends, Distributions, Stock Splits, Etc.

         (1)      In case the Company shall pay or make a dividend or other
distribution on Common Stock in Common Stock, the Settlement Rate in effect at
the opening of business on the day following the date fixed for the
determination of shareholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate by a fraction
of which:

                  (i)      the numerator shall be the number of shares of Common
         Stock outstanding at the close of business on the date fixed for such
         determination; and

                  (ii)     the denominator shall be the sum of such number of
         shares and the total number of shares constituting such dividend or
         other distribution,

such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purposes of
this paragraph (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company agrees that it shall not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.

         (2)      In case the Company shall, after the date hereof, issue
rights, warrants or options to all holders of its Common Stock (not being
available on an equivalent basis to Holders of the Securities upon settlement of
the Purchase Contracts underlying such Securities) entitling them, for a period
expiring within 45 days after the record date for the determination of
shareholders entitled to receive such rights, warrants or options, to subscribe
for or purchase shares of Common Stock at a price per share less than the
Current Market Price per share of Common


                                       39


Stock on the date of announcement of such issuance, the Settlement Rate in
effect at the opening of business on the day following the date of such
announcement shall be increased by dividing such Settlement Rate by a fraction
of which:

                  (i)      the numerator shall be the number of shares of Common
         Stock outstanding at the close of business on the date fixed for such
         determination plus the number of shares of Common Stock which the
         aggregate of the offering price of the total number of shares of Common
         Stock so offered for subscription or purchase would purchase at such
         Current Market Price; and

                  (ii)     the denominator shall be the number of shares of
         Common Stock outstanding at the close of business on the date fixed for
         such determination plus the number of shares of Common Stock so offered
         for subscription or purchase,

such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. To the extent that such
rights, warrants or options expire prior to the Purchase Contract Settlement
Date and shares of Common Stock are delivered with respect to less than all of
such rights or warrants prior to such expiration, the Settlement Rate shall be
readjusted to the Settlement Rate which would then be in effect had such
adjustments for the issuance of such rights, warrants or options been made upon
the basis of delivery of only the number of shares of Common Stock actually
delivered pursuant to such rights, warrants or options. The Company agrees that
it shall, following the expiration of such rights, warrants or options, notify
the Purchase Contract Agent of the number of shares of Common Stock actually
delivered pursuant to such rights, warrants or options. For the purposes of this
paragraph (2), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company agrees that it shall not issue
any such rights, warrants or options in respect of shares of Common Stock held
in the treasury of the Company.

         (3)      In case outstanding shares of Common Stock shall be subdivided
or split into a greater number of shares of Common Stock, the Settlement Rate in
effect at the opening of business on the day following the day upon which such
subdivision or split becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Settlement Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision, split or
combination becomes effective.

         (4)      In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness or
assets (including securities, but excluding any rights, warrants or options
referred to in paragraph (2) of this Section 5.04(a), any dividend or
distribution paid exclusively in cash and any dividend or distribution referred
to in paragraph (1) of this Section 5.04(a)), the Settlement Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the close of


                                       40


business on the date fixed for the determination of shareholders entitled to
receive such distribution by a fraction of which:

                  (i)      the numerator shall be the Current Market Price per
         share of Common Stock on the date fixed for such determination less the
         then fair market value (as reasonably determined by the Board of
         Directors, whose determination shall be conclusive and the basis for
         which shall be described in a Board Resolution) of the portion of the
         assets or evidences of indebtedness so distributed applicable to one
         share of Common Stock; and

                  (ii)     the denominator shall be such Current Market Price
         per share of Common Stock,

such adjustment to become effective immediately prior to the opening of business
on the day following the date fixed for the determination of shareholders
entitled to receive such distribution. In any case in which this paragraph (4)
is applicable, paragraph (2) of this Section 5.04(a) shall not be applicable. In
the event that such dividend or distribution is not so paid or made, the
Settlement Rate shall again be adjusted to be the Settlement Rate which would
then be in effect if such dividend or distribution had not been declared.

         (5)      In case the Company shall, (I) by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash that is
distributed in a Reorganization Event to which Section 5.6(b) applies or as part
of a distribution referred to in paragraph (4) of this Section) in an aggregate
amount that, combined together with (II) the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in cash within
the 12 months preceding the date of payment of such distribution and in respect
of which no adjustment pursuant to this paragraph (5) or paragraph (6) of this
Section has been made and (III) the aggregate of any cash plus the fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) of consideration payable in
respect of any tender or exchange offer by the Company or any of its
subsidiaries for all or any portion of the Common Stock concluded within the 12
months preceding the date of payment of the distribution described in clause (I)
above and in respect of which no adjustment pursuant to this paragraph (5) or
paragraph (6) of this Section has been made, exceeds 15% of the product of the
Current Market Price per share of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive such
distribution multiplied by the number of shares of Common Stock outstanding on
such date, then, in each such case, the Settlement Rate shall be increased so
that the same shall equal the rate determined by dividing the Settlement Rate in
effect immediately prior to the close of business on such record date by a
fraction of which:

                  (i)      the numerator shall be the Current Market Price of
         Common Stock on the record date less the amount of cash so distributed
         (and not excluded as provided above) applicable to one share of Common
         Stock; and

                  (ii)     the denominator shall be the Current Market Price of
         Common Stock,


                                       41


such increase to be effective immediately prior to the opening of business on
the day following the record date; PROVIDED, HOWEVER, that in the event the
portion of cash so distributed applicable to one share of Common Stock is equal
to or greater than the Current Market Price per share of Common Stock on the
record date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each holder of a Security shall have the right to receive upon
settlement of the Securities the amount of cash such Holder would have received
had such Holder settled each Security on the record date. In the event that such
dividend or distribution is not so paid or made, the Settlement Rate shall again
be adjusted to be the Settlement Rate which would then be in effect if such
dividend or distribution had not been declared.

         (6)      In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of Common Stock shall expire
and such tender or exchange offer (as amended upon the expiration thereof) shall
require the payment to shareholders (based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of Purchased Shares as
herein defined) of (I) an aggregate consideration having a fair market value (as
reasonably determined by the Board of Directors, whose determination shall be
conclusive and the basis for which shall be described in a Board Resolution)
that combined together with the aggregate of the cash plus the fair market value
(as reasonably determined by the Board of Directors, whose determination shall
be conclusive and the basis for which shall be described in a Board Resolution),
as of the expiration of such tender or exchange offer, of consideration payable
in respect of any other tender or exchange offer, by the Company or any
subsidiary of the Company for all or any portion of Common Stock expiring within
the 12 months preceding the expiration of such tender or exchange offer and in
respect of which no adjustment pursuant to this paragraph (6) has been made, and
(II) the aggregate amount of any distributions to all holders of Common Stock
made exclusively in cash within the 12 months preceding the expiration of such
tender or exchange offer and in respect of which no adjustment pursuant to
paragraph (6) has been made, exceeds 15% of the product of the Current Market
Price per share of Common Stock as of the last time (the "EXPIRATION TIME")
tenders could have been made pursuant to such tender or exchange offer (as it
may be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, then, and in each such
case, immediately prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate shall be adjusted so that the same
shall equal the rate determined by dividing the Settlement Rate immediately
prior to the close of business on the date of the Expiration Time by a fraction:

                  (i)      the numerator of which shall be equal to (A) the
         product of (I) the Current Market Price per share of Common Stock on
         the date of the Expiration Time and (II) the number of shares of Common
         Stock outstanding (including any tendered shares) on the Expiration
         Time less (B) the amount of cash plus the fair market value (determined
         as aforesaid) of the aggregate consideration payable to shareholders
         based on the transactions described in clauses (I) and (II) above
         (assuming in the case of clause (I) the acceptance, up to any maximum
         specified in the terms of the tender or exchange offer, of Purchased
         Shares); and

                  (ii)     the denominator of which shall be equal to the
         product of (A) the Current Market Price per share of Common Stock as of
         the Expiration Time and (B) the number of shares of Common Stock
         outstanding (including any tendered shares) as of the


                                       42


         Expiration Time less the number of all shares validly tendered and not
         withdrawn as of the Expiration Time (the shares deemed so accepted, up
         to any such maximum, being referred to as the "PURCHASED SHARES").

         (7)      The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which Section 5.04(b) applies) shall be deemed to
involve:

                  (i)      a distribution of such securities other than Common
         Stock to all holders of Common Stock (and the effective date of such
         reclassification shall be deemed to be "the date fixed for the
         determination of shareholders entitled to receive such distribution"
         and the "date fixed for such determination" within the meaning of
         paragraph (4) of this Section); and

                  (ii)     a subdivision, split or combination, as the case may
         be, of the number of shares of Common Stock outstanding immediately
         prior to such reclassification into the number of shares of Common
         Stock outstanding immediately thereafter (and the effective date of
         such reclassification shall be deemed to be "the day upon which such
         subdivision or split becomes effective" or "the day upon which such
         combination becomes effective", as the case may be, and "the day upon
         which such subdivision, split or combination becomes effective" within
         the meaning of paragraph (3) of this Section).

         (8)      The "CURRENT MARKET PRICE" per share of Common Stock on any
date of determination means the average of the daily Closing Prices for the five
consecutive Trading Days selected by the Company commencing not more than 30
Trading Days before, and ending not later than, the earlier of such date of
determination and the day before the "ex date" with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph, the
term "ex date," when used with respect to any issuance or distribution, shall
mean the first date on which Common Stock trades regular way on such exchange or
in such market without the right to receive such issuance or distribution.

         (9)      All adjustments to the Settlement Rate shall be calculated to
the nearest 1/10,000th of a share of Common Stock (or if there is not a nearest
1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment
in the Settlement Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent thereof; PROVIDED, HOWEVER, that
any adjustments which by reason of this subparagraph are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
any announcement of an issuance of rights, warrants or options or the
declaration of a date fixed for determination of shareholders entitled to
receive a dividend or distribution requiring adjustment pursuant to this Section
5.04(a) shall subsequently be canceled by the Company, or such dividend,
distribution or issuance shall fail to receive requisite approval or fail to
occur, the Settlement Rate shall be readjusted to the Settlement Rate which
would then have been in effect had adjustment for such event not been made. If
an adjustment is made to the Settlement Rate pursuant to paragraph (1), (2),
(3), (4), (5), (6), (7) or (10) of this Section 5.04(a), an adjustment shall
also be made to the Applicable Market Value solely to determine which of clauses
(i), (ii) or (iii) of the definition of Settlement Rate in Section 5.01 will
apply on the Purchase Contract Settlement Date. Such adjustment shall be made by
multiplying the Applicable Market Value by


                                       43


a fraction of which the numerator shall be the Settlement Rate immediately after
such adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of this Section 5.04(a) and the denominator shall be the Settlement Rate
immediately prior to such adjustment; PROVIDED, HOWEVER, that if such adjustment
to the Settlement Rate is required to be made pursuant to the occurrence of any
of the events contemplated by paragraph (1), (2), (3), (4), (5), (6), (7) or
(10) of this Section 5.04(a) during the period taken into consideration for
determining the Applicable Market Value, appropriate and customary adjustments
shall be made to the Settlement Rate.

         (10)     The Company may, but shall not be required to, make such
increases in the Settlement Rate, in addition to those required by this Section,
as it considers to be advisable in order to avoid or diminish any income tax to
any holders of shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or subscribe
for stock or from any event treated as such for income tax purposes or for any
other reason.

         (b)      Adjustment for Consolidation, Merger or Other Reorganization
Event.

         (1)      In the event of:

                  (i)      any consolidation or merger of the Company with or
         into another Person (other than a merger or consolidation in which the
         Company is the continuing corporation and in which the shares of Common
         Stock outstanding immediately prior to the merger or consolidation are
         not exchanged for cash, securities or other property of the Company or
         another corporation);

                  (ii)     any sale, transfer, lease or conveyance to another
         Person of the property of the Company as an entirety or substantially
         as an entirety;

                  (iii)    any statutory share exchange of the Company with
         another Person (other than in connection with a merger or acquisition);
         or

                  (iv)     any liquidation, dissolution or termination of the
         Company other than as a result of or after the occurrence of a
         Termination Event, (any such event, a "REORGANIZATION EVENT"),

the Settlement Rate will be adjusted to provide that each Holder of Securities
will receive on the Purchase Contract Settlement Date with respect to each
Purchase Contract forming a part thereof, the kind and amount of securities,
cash and other property receivable upon such Reorganization Event (without any
interest thereon, and without any right to dividends or distribution thereon
which have a record date that is prior to the Purchase Contract Settlement Date)
by a Holder of the number of shares of Common Stock issuable on account of each
Purchase Contract if the Purchase Contract Settlement Date had occurred
immediately prior to such Reorganization Event, assuming such Holder of Common
Stock is not a Person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be (any such Person, a "CONSTITUENT PERSON"),
or an Affiliate of a Constituent Person to the extent such Reorganization Event
provides for different treatment of Common Stock held by Affiliates of the
Company and non-affiliates and such Holder failed to exercise his rights of
election, if any, as to the kind or


                                       44


amount of securities, cash and other property receivable upon such
Reorganization Event (PROVIDED that if the kind or amount of securities, cash
and other property receivable upon such Reorganization Event is not the same for
each share of Common Stock held immediately prior to such Reorganization Event
by other than a Constituent Person or an Affiliate thereof and in respect of
which such rights of election shall not have been exercised ("NON-ELECTING
SHARE"), then for the purpose of this Section the kind and amount of securities,
cash and other property receivable upon such Reorganization Event by each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares).

         In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires the assets of the
Company or, in the event of a liquidation, dissolution or termination of the
Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Purchase Contract Agent an agreement
supplemental hereto providing that each Holder of an Outstanding Security shall
have the rights provided by this Section 5.04(b). Such supplemental agreement
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental agreement, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 5.04. The above
provisions of this Section 5.04 shall similarly apply to successive
Reorganization Events.

         (2)      In the event of a consolidation or merger of the Company with
or into another Person, any merger of another Person into the Company (other
than a merger that does not result in any reclassification, conversion, exchange
or cancellation of outstanding shares of Common Stock) in which 30% or more of
the total consideration paid to the Company's shareholders consists of cash or
cash equivalents (a "CASH MERGER"), then a Holder of a Security may settle his
Purchase Contract for cash as described in Section 5.02(a)(i) or 5.02(d)(i)
hereof, as applicable, on or after the date of the cash merger, at the
applicable Settlement Rate. Within five Business Days of the completion of a
Cash Merger, the Company shall provide written notice to Holders of Securities
of such completion of a Cash Merger, which shall specify the deadline for
submitting a notice of Early Settlement pursuant to this Section 5.04(b)(2), the
applicable Settlement Rate and the amount (per share of common stock) of cash,
securities and other consideration receivable by the Holder upon settlement. For
the purposes of this Section 5.04(b)(2), the sixteenth Business Day after the
closing of the merger or consolidation shall be deemed to be the Purchase
Contract Settlement Date for the purpose of determining the Applicable Market
Value and the deadline for submitting the notice to settle early and the related
cash payment of the Purchase Price shall be 5:00 p.m. (New York City time) on
the tenth Business Day after the date the notice relating to a Cash Merger is
provided to the Holders by the Company. Growth PRIDES holders may only effect
Early Settlement pursuant to this Section 5.04(b)(2) in integral multiples of 20
Purchase Contracts. Other than the provisions relating to timing of notice and
settlement, which shall be as set forth above, the provisions of Section 5.01(a)
shall apply with respect to an Early Settlement following a Cash Merger pursuant
to this Section 5.04(b)(2). Notwithstanding the foregoing, no Early Settlement
will be permitted pursuant to this Section 5.04(b)(2) unless, at the time such
Early Settlement is effected, there is an effective Registration Statement with
respect to the shares of Common Stock to be issued and delivered in connection
with such early settlement, if such a Registration Statement is required (in the
view of counsel, which need not be in the form of a written opinion, for either
the Company or the Purchase Contract Agent) under the Securities Act. If such a
Registration


                                       45


Statement is so required, the Company covenants and agrees to use its best
efforts to (A) have in effect a Registration Statement covering the shares of
Common Stock to be delivered in respect of the Purchase Contracts being settled
and (B) provide a Prospectus in connection therewith, in each case in a form
that the Purchase Contract Agent may use in connection with such early
settlement.

         (c)      All calculations and determinations pursuant to this Section
5.04 shall be made by the Company or its agent and the Purchase Contract Agent
shall have no responsibility with respect thereto.

         SECTION 5.05 NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS.

         (a)      Whenever the Settlement Rate is adjusted as herein provided,
the Company shall:

                  (i)      forthwith compute the adjusted Settlement Rate in
         accordance with Section 5.04 and prepare and transmit to the Purchase
         Contract Agent an Officer's Certificate setting forth the Settlement
         Rate, the method of calculation thereof in reasonable detail, and the
         facts requiring such adjustment and upon which such adjustment is
         based; and

                  (ii)     within 10 Business Days following the occurrence of
         an event that requires an adjustment to the Settlement Rate pursuant to
         Section 5.04 (or if the Company is not aware of such occurrence, as
         soon as practicable after becoming so aware), provide a written notice
         to the Holders of the Securities of the occurrence of such event and a
         statement in reasonable detail setting forth the method by which the
         adjustment to the Settlement Rate was determined and setting forth the
         adjusted Settlement Rate.

         (b)      The Purchase Contract Agent shall not at any time be under any
duty or responsibility to any Holder of Securities to determine whether any
facts exist which may require any adjustment of the Settlement Rate, or with
respect to the nature or extent or calculation of any such adjustment when made,
or with respect to the method employed in making the same. The Purchase Contract
Agent shall not be accountable with respect to the validity or value (or the
kind or amount) of any shares of Common Stock, or of any securities or property,
which may at the time be issued or delivered with respect to any Purchase
Contract; and the Purchase Contract Agent makes no representation with respect
thereto. The Purchase Contract Agent shall not be responsible for any failure of
the Company to issue, transfer or deliver any shares of Common Stock pursuant to
a Purchase Contract or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article.

         SECTION 5.06 TERMINATION EVENT; NOTICE.

         The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Purchase
Contract Payments (including any deferred or accrued and unpaid Purchase
Contract Payments), if the Company shall have such obligation, and the rights
and obligations of Holders to purchase Common Stock, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Purchase Contract

                                    46



Agent or the Company, if, prior to or on the Purchase Contract Settlement
Date, a Termination Event shall have occurred.

         Upon and after the occurrence of a Termination Event, the Securities
shall thereafter represent the right to receive the Preferred Securities, the
Notes, the Treasury Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, forming part of such
Securities, in accordance with the provisions of Section 5.04 of the Pledge
Agreement. Upon the occurrence of a Termination Event, the Company shall
promptly but in no event later than two Business Days thereafter give written
notice to the Purchase Contract Agent, the Collateral Agent and the Holders,
at their addresses as they appear in the Security Register.

         SECTION 5.07 EARLY SETTLEMENT.

         (a)      Subject to and upon compliance with the provisions of this
Section 5.07, at the option of the Holder thereof, Purchase Contracts underlying
Securities may effect Early Settlement on or prior to 5:00 p.m. (New York City
time) on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date. Holders of Growth PRIDES may only effect Early Settlement of
the related Purchase Contracts in integral multiples of 20 Purchase Contracts.
In order to exercise the right to effect Early Settlement with respect to any
Purchase Contracts, the Holder of the Certificate evidencing Securities shall
deliver to the Purchase Contract Agent at the Corporate Trust Office an
"Election to Settle Early" form (on the reverse side of the Certificate) and any
other documents requested by the Purchase Contract Agent and accompanied by
payment (payable to the Company in immediately available funds) in an amount
(the "EARLY SETTLEMENT AMOUNT") equal to the product of (i) (A) the Stated
Amount times (B) the number of Purchase Contracts with respect to which the
Holder has elected to effect Early Settlement, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date next preceding any Payment Date to the opening of
business on such Payment Date, an amount equal to the Purchase Contract Payments
payable on such Payment Date with respect to such Purchase Contracts.

         Except as provided in the immediately preceding sentence and subject to
Section 5.11(c), no payment shall be made upon Early Settlement of any Purchase
Contract on account of any Purchase Contract Payments accrued on such Purchase
Contract or on account of dividends payable on the Common Stock issued upon such
Early Settlement, the record date for which payment occurs prior to the Early
Settlement Date. If the foregoing requirements are first satisfied with respect
to Purchase Contracts underlying any Securities prior to or at 5:00 p.m. (New
York City time) on a Business Day, such day shall be the "EARLY SETTLEMENT DATE"
with respect to such Securities and if such requirements are first satisfied
after 5:00 p.m. (New York City time) on a Business Day or on a day that is not a
Business Day, the "EARLY SETTLEMENT DATE" with respect to such Securities shall
be the next succeeding Business Day (so long as such next succeeding Business
Day is not later than the fifth Business Day immediately preceding the Purchase
Contract Settlement Date).

         (b)      No Early Settlement will be permitted under this Section 5.07
unless, at the time of delivery of the Election to Settle Early form or the time
the Early Settlement is effected, there is an effective Registration Statement
with respect to the shares of Common Stock to be issued and delivered in
connection with such Early Settlement, if such a Registration Statement is


                                       47


required (in the view of counsel, which need not be in the form of a written
opinion, for either the Company or the Purchase Contract Agent) under the
Securities Act. If such a Registration Statement is so required, the Company
covenants and agrees to use its best efforts to (A) have in effect a
Registration Statement covering the shares of Common Stock to be delivered in
respect of the Purchase Contracts being settled and (B) provide a Prospectus in
connection therewith, in each case in a form that the Purchase Contract Agent
may use in connection with such Early Settlement.

         (c)      Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Company shall issue, and the Holder shall be entitled to
receive 1.4536 shares of Common Stock on account of each Purchase Contract as to
which Early Settlement is effected (the "EARLY SETTLEMENT RATE"). The Early
Settlement Rate shall be adjusted in the same manner and at the same time as the
Settlement Rate is adjusted.

         (d)      Not later than the third Business Day after the applicable
Early Settlement Date, the Company shall cause:

                  (i)      the shares of Common Stock issuable upon Early
         Settlement of Purchase Contracts to be issued and delivered, together
         with payment in lieu of any fraction of a share, as provided in Section
         5.09; and

                  (ii)     the related Preferred Securities, Notes or the
         appropriate Applicable Ownership Interest (as specified in clause (A)
         of the definition of such term) of the Treasury Portfolio, in the case
         of Income PRIDES, or the related Treasury Securities, in the case of
         Growth PRIDES, to be released from the Pledge by the Collateral Agent
         and transferred, in each case, to the Purchase Contract Agent for
         delivery to the Holder thereof or its designee.

         (e)      Upon Early Settlement of any Purchase Contracts, and subject
to receipt of shares of Common Stock from the Company and the Preferred
Securities, Notes, the appropriate Applicable Ownership Interest as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, or
Treasury Securities, as the case may be, from the Securities Intermediary, as
applicable, the Purchase Contract Agent shall, in accordance with the
instructions provided by the Holder thereof on the Election to Settle Early form
(on the reverse of the Certificate evidencing the related Securities):

                  (i)      transfer to the Holder the Preferred Securities,
         Notes, the appropriate Applicable Ownership Interest (as specified in
         clause (A) of the definition of such term) of the Treasury Portfolio or
         Treasury Securities, as the case may be, forming a part of such
         Securities;

                  (ii)     deliver to the Holder a certificate or certificates
         for the full number of shares of Common Stock issuable upon such Early
         Settlement, together with payment in lieu of any fraction of a share,
         as provided in Section 5.09; and

                  (iii)    if so required under the Securities Act, deliver a
         Prospectus for the shares of Common Stock issuable upon such Early
         Settlement as contemplated by Section 5.07(b).


                                       48


         (f)      In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Purchase Contract Agent shall authenticate, countersign and deliver to the
Holder thereof, at the expense of the Company, a Certificate evidencing the
Securities as to which Early Settlement was not effected.

         (g)      A Holder of a Security who effects Early Settlement may elect
to have the Preferred Securities or Notes, as the case may be, no longer a part
of an Income PRIDES remarketed. A Holder making such an election must notify the
Property Trustee or the Indenture Trustee, as the case may be, prior to 11:00
a.m. (New York City time) on the fourth Business Day immediately preceding the
Purchase Contract Settlement Date, of the aggregate number of Preferred
Securities or Notes that are not part of Income PRIDES to be remarketed. Any
such notice will be irrevocable and may not be conditioned upon the level at
which the Reset Rate is established in the Remarketing. Concurrently, the
Property Trustee or the Indenture Trustee, as the case may be, shall cause such
Preferred Securities or Notes, as the case may be, to be presented to the
Remarketing Agent for Remarketing.

         SECTION 5.08 INTENTIONALLY OMITTED.

         SECTION 5.09 NO FRACTIONAL SHARES.

         No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date or upon Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered for
settlement at one time by the same Holder, the number of full shares of Common
Stock which shall be delivered upon settlement shall be computed on the basis of
the aggregate number of Purchase Contracts evidenced by the Certificates so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be deliverable upon settlement of any Purchase Contracts on the
Purchase Contract Settlement Date or upon Early Settlement, the Company, through
the Purchase Contract Agent, shall make a cash payment in respect of such
fractional interest in an amount equal to the value of such fractional shares
times the Applicable Market Value. The Company shall provide the Purchase
Contract Agent from time to time with sufficient funds to permit the Purchase
Contract Agent to make all cash payments required by this Section 5.09 in a
timely manner.

         SECTION 5.10 CHARGES AND TAXES.

         The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts; PROVIDED, HOWEVER, that the Company shall not be
required to pay any such tax or taxes which may be payable in respect of any
exchange of or substitution for a Certificate evidencing a Security or any
issuance of a share of Common Stock in a name other than that of the registered
Holder of a Certificate surrendered in respect of the Securities evidenced
thereby, other than in the name of the Purchase Contract Agent, as custodian for
such Holder, and the Company shall not be required to issue or deliver such
share certificates or Certificates unless or until the Person or Persons
requesting the transfer or issuance thereof shall have paid to the Company the
amount


                                       49


of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.

         SECTION 5.11 PURCHASE CONTRACT PAYMENTS.

         (a)      Subject to Section 5.12, the Company shall pay, on each
Payment Date, the Purchase Contract Payments payable in respect of each Purchase
Contract to the Person in whose name a Certificate is registered at the close of
business on the Record Date next preceding such Payment Date. The Purchase
Contract Payments will be payable at the office of the Purchase Contract Agent
in New York City maintained for that purpose or, at the option of the Holder, by
check mailed to the address of the Person entitled thereto at such Person's
address as it appears on the Security Register. If any date on which Purchase
Contract Payments are to be made is not a Business Day, then payment of the
Purchase Contract Payments payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment will be made on the immediately preceding Business
Day. Purchase Contract Payments payable for any period will be computed (i) for
any full quarterly period on the basis of a 360-day year of twelve 30-day months
and (ii) for any period shorter than a full quarterly period, on the basis of a
30-day month and, for periods of less than a month, on the basis of the actual
number of days elapsed per 30-day month.

         (b)      Upon the occurrence of a Termination Event, the Company's
obligation to pay future Purchase Contract Payments (including any accrued or
deferred Purchase Contract Payments) shall cease.

         (c)      Each Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of (including as a
result of a Collateral Substitution or the reestablishment of Income PRIDES) any
other Certificate shall carry the right to accrued or deferred and unpaid
Purchase Contract Payments and the right to accrue Purchase Contract Payments,
which rights were carried by the Purchase Contracts underlying such other
Certificates.

         (d)      Subject to Section 5.07, in the case of any Security with
respect to which Early Settlement of the underlying Purchase Contract is
effected on an Early Settlement Date that is after any Record Date and prior to
or on the next succeeding Payment Date, Purchase Contract Payments otherwise
payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Early Settlement, and such Purchase Contract Payments shall
be paid to the Person in whose name the Certificate evidencing such Security is
registered at the close of business on such Record Date. Except as otherwise
expressly provided in the immediately preceding sentence, in the case of any
Security with respect to which Early Settlement of the underlying Purchase
Contract is effected on an Early Settlement Date, Purchase Contract Payments
that would otherwise be payable after the Early Settlement Date with respect to
such Purchase Contract shall not be payable.

         (e)      The obligations of the Company with respect to Purchase
Contract Payments will be subordinated and junior in right of payment to the
Company's obligations under any Senior Indebtedness. In the event of:


                                       50


                  (i)      any insolvency or bankruptcy case or proceeding, or
         any receivership, liquidation, reorganization or other similar case or
         proceeding in connection therewith, relative to the Company or to
         creditors of the Company, as such, or to the Company's assets;

                  (ii)     any voluntary or involuntary liquidation, dissolution
         or other winding up of the Company, whether or not involving insolvency
         or bankruptcy; or

                  (iii)    any assignment for the benefit of creditors or any
         other marshalling of the Company's assets and liabilities,

then and in any such event (A) the holders of Senior Indebtedness will be
entitled to receive payment in full of all amounts due or to become due on or in
respect of all Senior Indebtedness, or provision will be made for such payment
in cash, before the Holders of Outstanding Securities are entitled to receive or
retain any payment of Purchase Contract Payments, and (B) in furtherance of the
foregoing, the holders of Senior Indebtedness will be entitled to receive, for
application to the payment thereof, any payment or distribution of any kind or
character, whether in cash, property or securities, including any such payment
or distribution which may be payable or deliverable by reason of the payment of
any other Senior Indebtedness being subordinated to the payment of Purchase
Contract Payments on the Outstanding Securities, which may be payable or
deliverable in respect of the Outstanding Securities in any such case,
proceeding, dissolution, liquidation or other winding up event.

         Subject to the payment in full of all Senior Indebtedness, the rights
of the Holders of the Outstanding Securities with respect to Purchase Contract
Payments will be subrogated to the rights of the holders of Senior Indebtedness
to receive payments or distributions of cash, property or securities of the
Company applicable to such Senior Indebtedness until the Purchase Contract
Payments with respect to the Outstanding Securities have been paid in full.

         The Company shall not make any payment of Purchase Contract Payments
with respect to the Outstanding Securities if any Senior Indebtedness is not
paid when due and such default has not been cured or waived or ceased to exist,
or if the maturity of any Senior Indebtedness has been accelerated because of a
default.


         SECTION 5.12 DEFERRAL OF PURCHASE CONTRACT PAYMENTS.

         (a)      The Company has the right to defer payment of all or part of
the Purchase Contract Payments in respect of each Purchase Contract until no
later than the Purchase Contract Settlement Date, but only if the Company shall
give the Holders and the Purchase Contract Agent written notice of its election
to defer such payment (specifying the amount to be deferred) at least ten
Business Days prior to the earlier of (i) the next succeeding Payment Date or
(ii) the date the Company is required to give notice of the Record Date or
Payment Date with respect to payment of such Purchase Contract Payments to the
NYSE or other applicable self-regulatory organization or to Holders of the
Securities, but in any event not less than one Business Day prior to such Record
Date. If the Company so elects to defer Purchase Contract Payments, the Company
shall pay additional Purchase Contract Payments on such deferred installments of


                                       51


Purchase Contract Payments at a rate equal to 9.5% per annum, compounding
quarterly, until such deferred installments are paid in full. Deferred Purchase
Contract Payments shall be due on the Payment Date except to the extent that
payment is deferred pursuant to this Section. Except as otherwise provided in
Section 5.11(d), in the case of any Security with respect to which Early
Settlement of the underlying Purchase Contract is effected on an Early
Settlement Date, the Holder will have no right to receive any accrued or
deferred Purchase Contract Payments.

         (b)      In the event the Company elects to defer the payment of
Purchase Contract Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, each Holder will receive on the Purchase Contract Settlement
Date the aggregate amount of accrued and unpaid Purchase Contract Payments. The
Company shall pay such amounts on the Purchase Contract Settlement Date in the
manner described in Section 5.02(e).

         (c)      In the event the Company exercises its option to defer the
payment of Purchase Contract Payments, then, until all deferred Purchase
Contract Payments have been paid, the Company shall not (a) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities that rank junior to the Notes in the right of payment issued by
the Company, or (b) make any guarantee payments with respect to any guarantee by
the Company of any securities of any of its subsidiaries if such guarantee ranks
junior to the Notes in the right of payment, (c) declare or pay any dividends or
distributions on any of the Company's capital stock, (d) redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company's
capital stock or (e) make any distribution or payment of interest on any
preferred security which ranks pari passu with the Preferred Securities or on
senior deferrable debt with similar deferrable provisions to the senior
deferrable notes. Notwithstanding the foregoing, the Company may (1) purchase or
acquire its capital stock in connection with the satisfaction by it of its
obligations under any employee or director compensation or benefit plans or
under the Company's direct stock purchase and dividend reinvestment plans, or
pursuant to any contract or security outstanding on the first day of any such
event requiring it to purchase its capital stock; (2) reclassify its capital
stock or exchange or convert one class or series of its capital stock for
another class or series of its capital stock; (3) purchase fractional interests
in shares of its capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged; (4) declare
or pay dividends or distributions in its capital stock; (5) redeem or repurchase
any rights pursuant to a rights agreement; and (6) make payments under the
Guarantee related to the Preferred Securities.

                                    ARTICLE 6

                                    REMEDIES

         SECTION 6.01 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PURCHASE
CONTRACT PAYMENTS AND TO PURCHASE SHARES OF COMMON STOCK.

         Each Holder of a Security shall have the right, which is absolute and
unconditional, (i) subject to the right of the Company to defer such payments in
accordance with Section 5.12, to receive each Purchase Contract Payment with
respect to the Purchase Contract comprising part


                                       52


of such Security on the respective Payment Date for such Security and (ii) to
purchase shares of Common Stock pursuant to such Purchase Contract and, in each
such case, to institute suit for the enforcement of any such right to receive
Purchase Contract Payments and the right to purchase shares of Common Stock, and
such rights shall not be impaired without the consent of such Holder.

         SECTION 6.02 RESTORATION OF RIGHTS AND REMEDIES.

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

         SECTION 6.03 RIGHTS AND REMEDIES CUMULATIVE.

         Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved 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 6.04 DELAY OR OMISSION NOT WAIVER.

         No delay or omission of any Holder to exercise any right or remedy upon
a default shall impair any such right or remedy or constitute a waiver of any
such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.

         SECTION 6.05 UNDERTAKING FOR COSTS.

         All parties to this Agreement agree, and each Holder of a Security, by
its acceptance of such Security shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Agreement, or in any suit against the Purchase Contract Agent
for any action taken, suffered or omitted by it as Purchase Contract Agent, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and costs against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; PROVIDED that the provisions of this
Section shall not apply to any suit instituted by the Purchase Contract Agent,
to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% of the Outstanding Securities, or to any suit instituted
by any Holder for the enforcement of distributions on any Preferred Securities
or interest on any Notes or Purchase Contract Payments on or after the
respective Payment Date therefor in respect of any Security held by such Holder,


                                       53


or for enforcement of the right to purchase shares of Common Stock under the
Purchase Contracts constituting part of any Security held by such Holder.

         SECTION 6.06 WAIVER OF 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 stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; 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 Purchase Contract Agent or the Holders, but will
suffer and permit the execution of every such power as though no such law had
been enacted.

                                   ARTICLE 7

                           THE PURCHASE CONTRACT AGENT

         SECTION 7.01 CERTAIN DUTIES AND RESPONSIBILITIES.

         (a)      The Purchase Contract Agent:

         (1)      undertakes to perform, with respect to the Securities, such
duties and only such duties as are specifically set forth in this Agreement and
the Pledge Agreement, and no implied covenants or obligations shall be read into
this Agreement or the Pledge Agreement against the Purchase Contract Agent; and

         (2)      in the absence of bad faith, willful misconduct or negligence
on its part, may, with respect to the Securities, conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Purchase Contract Agent and
conforming to the requirements of this Agreement or the Pledge Agreement, as
applicable, but in the case of any certificates or opinions which by any
provision hereof are specifically required to be furnished to the Purchase
Contract Agent, the Purchase Contract Agent shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Agreement or the Pledge Agreement, as applicable (but need not confirm or
investigate the accuracy of the mathematical calculations or other facts stated
therein).

         (b)      No provision of this Agreement or the Pledge Agreement shall
be construed to relieve the Purchase Contract Agent from liability for its own
grossly negligent action, its own grossly negligent failure to act, or its own
willful misconduct, except that:

         (1)      this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;


                                       54


         (2)      the Purchase Contract Agent shall not be liable for any error
of judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Purchase Contract Agent was negligent in ascertaining the
pertinent facts;

         (3)      no provision of this Agreement or the Pledge Agreement shall
require the Purchase Contract Agent 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 indemnity satisfactory to
the Purchase Contract Agent is not provided to it; and

         (4)      the Purchase Contract Agent shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority in principal amount of the
Outstanding Securities.

         (c)      Whether or not therein expressly so provided, every provision
of this Agreement and the Pledge Agreement relating to the conduct or affecting
the liability of or affording protection to the Purchase Contract Agent shall be
subject to the provisions of this Section.

         (d)      The Purchase Contract Agent is authorized to execute and
deliver the Pledge Agreement in its capacity as Purchase Contract Agent.

         SECTION 7.02 NOTICE OF DEFAULT.

         Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Purchase Contract Agent has
actual knowledge, the Purchase Contract Agent shall transmit by mail to the
Company and the Holders of Securities, as their names and addresses appear in
the Security Register, notice of such default hereunder, unless such default
shall have been cured or waived.

         SECTION 7.03 CERTAIN RIGHTS OF PURCHASE CONTRACT AGENT.

         Subject to the provisions of Section 7.01:

         (1)      the Purchase Contract Agent may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, Note, 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 an Officer's Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;

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


                                       55


         (4)      the Purchase Contract Agent may consult with counsel of its
selection appointed with due care by it hereunder 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 Purchase Contract Agent 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 Purchase Contract Agent, in its discretion, and at the expense
of the Company, may make reasonable further inquiry or investigation into such
facts or matters related to the execution, delivery and performance of the
Purchase Contracts as it may see fit, and, if the Purchase Contract Agent shall
determine to make such further inquiry or investigation, it shall be given a
reasonable opportunity to examine the relevant books, records and premises of
the Company, personally or by agent or attorney and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation;

         (6)      the Purchase Contract Agent may execute any of the powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or an Affiliate and the Purchase Contract Agent shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney or an Affiliate appointed with due care by it hereunder;

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

         (8)      the Purchase Contract Agent shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;

         (9)      the Purchase Contract Agent shall not be deemed to have notice
of any default hereunder unless a Responsible Officer of the Purchase Contract
Agent has actual knowledge thereof or unless written notice of any event which
is in fact such a default is received by the Purchase Contract Agent at the
Corporate Trust Office of the Purchase Contract Agent, and such notice
references the Securities and this Agreement;

         (10)     the Purchase Contract Agent may request that the Company
deliver an Officer's Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions pursuant to
this Agreement, which Officer's Certificate may be signed by any person
authorized to sign an Officer's Certificate, including any person specified as
so authorized in any such certificate previously delivered and not superseded;
and

         (11)     the rights, privileges, protections, immunities and benefits
given to the Purchase Contract Agent, including, without limitation, its right
to be indemnified, are extended


                                       56


to, and shall be enforceable by, the Purchase Contract Agent in each of its
capacities hereunder, and to each agent, custodian and other Person employed to
act hereunder.

         SECTION 7.04 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

         The recitals contained herein and in the Certificates shall be taken as
the statements of the Company, and the Purchase Contract Agent assumes no
responsibility for their accuracy. The Purchase Contract Agent makes no
representations as to the validity or sufficiency of either this Agreement or of
the Securities, or of the Pledge Agreement or the Pledge. The Purchase Contract
Agent shall not be accountable for the use or application by the Company of the
proceeds in respect of the Purchase Contracts.

         SECTION 7.05 MAY HOLD SECURITIES.

         Any Security Registrar or any other agent of the Company, or the
Purchase Contract Agent and its Affiliates, in their individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, the Collateral Agent or any other Person with the same rights
it would have if it were not Security Registrar or such other agent, or the
Purchase Contract Agent. The Company may become the owner or pledgee of
Securities.

         SECTION 7.06 MONEY HELD IN CUSTODY.

         Money held by the Purchase Contract Agent in custody hereunder need not
be segregated from the other funds except to the extent required by law or
provided herein. The Purchase Contract Agent shall be under no obligation to
invest or pay interest on any money received by it hereunder except as otherwise
provided hereunder or agreed in writing with the Company.

         SECTION 7.07 COMPENSATION AND REIMBURSEMENT.

         The Company agrees:

         (1)      to pay to the Purchase Contract Agent compensation for all
services rendered by it hereunder and under the Pledge Agreement as the Company
and the Purchase Contract Agent shall from time to time agree in writing;

         (2)      except as otherwise expressly provided for herein, to
reimburse the Purchase Contract Agent upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Purchase Contract
Agent in accordance with any provision of this Agreement and the Pledge
Agreement (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 gross negligence, willful misconduct or
bad faith; and

         (3)      to indemnify the Purchase Contract Agent and any predecessor
Purchase Contract Agent for, and to hold it harmless against, any loss,
liability or expense incurred without gross negligence, willful misconduct or
bad faith on its part, arising out of or in connection with the acceptance or
administration of its duties hereunder, including the costs and expenses of
defending itself against any claim (whether asserted by the Company, a Holder or
any other


                                       57


person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder.

         The provisions of this Section shall survive the resignation and
removal of the Purchase Contract Agent and the termination of this Agreement.

         SECTION 7.08 CORPORATE PURCHASE CONTRACT AGENT REQUIRED; ELIGIBILITY.

         There shall at all times be a Purchase Contract Agent hereunder which
shall 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 exercise corporate trust powers, having (or being a member of
a bank holding company having) a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by Federal or State authority
and having a corporate trust office in the Borough of Manhattan, New York City,
if there be such a corporation in the Borough of Manhattan, New York City,
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation 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 corporation 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 Purchase Contract Agent 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 7.09 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

         (a)      No resignation or removal of the Purchase Contract Agent and
no appointment of a successor Purchase Contract Agent pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Purchase Contract Agent in accordance with the applicable requirements of
Section 7.10.

         (b)      The Purchase Contract Agent may resign at any time by giving
written notice thereof to the Company 60 days prior to the effective date of
such resignation. If the instrument of acceptance by a successor Purchase
Contract Agent required by Section 7.10 shall not have been delivered to the
Purchase Contract Agent within 30 days after the giving of such notice of
resignation, the resigning Purchase Contract Agent may petition, at the expense
of the Company, any court of competent jurisdiction for the appointment of a
successor Purchase Contract Agent.

         (c) The Purchase Contract Agent may be removed at any time by Act of
the Holders of a majority in number of the Outstanding Securities delivered
to the Purchase Contract Agent and the Company. If the instrument of
acceptance by a successor Purchase Contract Agent required by Section 7.10
shall not have been delivered to the Purchase Contract Agent within 30 days
after the giving of such notice of resignation, the resigning Purchase
Contract Agent may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Purchase Contract
Agent.

         (d)      If at any time:


                                       58


         (1)      the Purchase Contract Agent fails to comply with Section
310(b) of the TIA, as if the Purchase Contract Agent were an indenture trustee
under an indenture qualified under the TIA, 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;

         (2)      the Purchase Contract Agent shall cease to be eligible under
Section 7.08 and shall fail to resign after written request therefor by the
Company or by any such Holder; or

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

then, in any such case, (i) the Company by a Board Resolution may remove the
Purchase Contract Agent, or (ii) 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 Purchase Contract Agent and the appointment of a successor Purchase
Contract Agent.

         (e)      If the Purchase Contract Agent shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of
Purchase Contract Agent for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Purchase Contract Agent and shall comply with the
applicable requirements of Section 7.10. If no successor Purchase Contract Agent
shall have been so appointed by the Company and accepted appointment in the
manner required by Section 7.10, any Holder who has been a bona fide Holder of a
Security for at least six months, on behalf of itself and all others similarly
situated, or the Purchase Contract Agent may petition at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Purchase Contract Agent.

         (f)      The Company shall give, or shall cause such successor Purchase
Contract Agent to give, notice of each resignation and each removal of the
Purchase Contract Agent and each appointment of a successor Purchase Contract
Agent by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in the applicable
Register. Each notice shall include the name of the successor Purchase Contract
Agent and the address of its Corporate Trust Office.

         SECTION 7.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

         (a)      In case of the appointment hereunder of a successor Purchase
Contract Agent, every such successor Purchase Contract Agent so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Purchase
Contract Agent an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Purchase Contract Agent shall become
effective and such successor Purchase Contract Agent, without any further act,
deed or conveyance, shall become vested with all the rights, powers, agencies
and duties of the retiring Purchase Contract Agent; but, on the request of the
Company or the successor Purchase


                                       59


Contract Agent, such retiring Purchase Contract Agent shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor
Purchase Contract Agent all the rights, powers and trusts of the retiring
Purchase Contract Agent and shall duly assign, transfer and deliver to such
successor Purchase Contract Agent all property and money held by such retiring
Purchase Contract Agent hereunder.

         (b)      Upon request of any such successor Purchase Contract Agent,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Purchase Contract Agent all such
rights, powers and agencies referred to in paragraph 7.10(a) of this Section.

         (c)      No successor Purchase Contract Agent shall accept its
appointment unless at the time of such acceptance such successor Purchase
Contract Agent shall be qualified and eligible under this Article.

         SECTION 7.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.

         Any corporation into which the Purchase Contract 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 the Purchase Contract
Agent shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Purchase Contract Agent, shall be the
successor of the Purchase Contract Agent hereunder, provided that 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 Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Purchase Contract Agent then in office, any successor by merger, conversion or
consolidation to such Purchase Contract Agent may adopt such authentication and
execution and deliver the Certificates so authenticated and executed with the
same effect as if such successor Purchase Contract Agent had itself
authenticated and executed such Securities.

         SECTION 7.12 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.

         (a)      The Purchase Contract Agent shall preserve, in as current a
form as is reasonably practicable, the names and addresses of Holders received
by the Purchase Contract Agent in its capacity as Security Registrar.

         (b)      If three or more Holders (herein referred to as "APPLICANTS")
apply in writing to the Purchase Contract Agent, and furnish to the Purchase
Contract Agent reasonable proof that each such applicant has owned a Security
for a period of at least six months preceding the date of such application, and
such application states that the applicants desire to communicate with other
Holders with respect to their rights under this Agreement or under the
Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Purchase
Contract Agent shall mail to all the Holders copies of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Purchase Contract Agent of the materials to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of such mailing.

         SECTION 7.13 NO OBLIGATIONS OF PURCHASE CONTRACT AGENT.


                                       60


         Except to the extent otherwise expressly provided in this Agreement,
the Purchase Contract Agent assumes no obligations and shall not be subject to
any liability under this Agreement, the Pledge Agreement or any Purchase
Contract in respect of the obligations of the Holder of any Security thereunder.
The Company agrees, and each Holder of a Certificate, by his or her acceptance
thereof, shall be deemed to have agreed, that the Purchase Contract Agent's
execution of the Certificates on behalf of the Holders shall be solely as agent
and attorney-in-fact for the Holders, and that the Purchase Contract Agent shall
have no obligation to perform such Purchase Contracts on behalf of the Holders,
except to the extent expressly provided in Article Five hereof. Anything
contained in this Agreement to the contrary notwithstanding, in no event shall
the Purchase Contract Agent or its officers, employees or agents be liable under
this Agreement to any third party for indirect, special, punitive, or
consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Purchase
Contract Agent, incurred without any act or deed that is found to be
attributable to gross negligence or willful misconduct on the part of the
Purchase Contract Agent.

         SECTION 7.14 TAX COMPLIANCE.

         (a)      The Company and the Purchase Contract Agent will comply with
all applicable certification, information reporting and withholding (including
"backup" withholding) requirements imposed by applicable tax laws, regulations
or administrative practice with respect to (i) any payments made with respect to
the Securities or (ii) the issuance, delivery, holding, transfer, redemption or
exercise of rights under the Securities. Such compliance shall include, without
limitation, the preparation and timely filing of required returns and the timely
payment of all amounts required to be withheld to the appropriate taxing
authority or its designated agent.

         (b)      The Purchase Contract Agent shall comply in accordance with
the terms hereof with any written direction received from the Company with
respect to the execution or certification of any required documentation and the
application of such requirements to particular payments or Holders or in other
particular circumstances, and may for purposes of this Agreement conclusively
rely on any such direction in accordance with the provisions of Section
7.01(a)(2) hereof.

         (c)      The Purchase Contract Agent shall maintain all appropriate
records documenting compliance with such requirements, and shall make such
records available, on written request, to the Company or its authorized
representative within a reasonable period of time after receipt of such request.

                                   ARTICLE 8

                             SUPPLEMENTAL AGREEMENTS

         SECTION 8.01 SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS.


                                       61


         Without the consent of any Holders, the Company and the Purchase
Contract Agent, at any time and from time to time, may enter into one or more
agreements supplemental hereto, in form satisfactory to the Company and the
Purchase Contract Agent, to:

         (1)      evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein and
in the Certificates;

         (2)      evidence and provide for the acceptance of appointment
hereunder by a successor Purchase Contract Agent;

         (3)      add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the Company;

         (4)      make provision with respect to the rights of Holders pursuant
to the requirements of Section 5.04(b); or

         (5)      cure any ambiguity, correct or supplement any provisions
herein which may be inconsistent with any other provisions herein, or make any
other provisions with respect to such matters or questions arising under this
Agreement, PROVIDED that such action shall not adversely affect the interests of
the Holders.

         SECTION 8.02 SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS.

         With the consent of the Holders of not less than a majority of the
outstanding Securities voting together as one class, by Act of said Holders
delivered to the Company and the Purchase Contract Agent, the Company, when
authorized by a Board Resolution, and the Purchase Contract Agent may enter into
an agreement or agreements supplemental hereto for the purpose of modifying in
any manner the terms of the Purchase Contracts, or the provisions of this
Agreement or the rights of the Holders in respect of the Securities; PROVIDED,
HOWEVER, that, except as contemplated herein, no such supplemental agreement
shall, without the unanimous consent of the Holders of each outstanding Purchase
Contract affected thereby,

         (1)      change any Payment Date;

         (2)      change the amount or the type of Collateral required to be
Pledged to secure a Holder's obligations under the Purchase Contract, impair the
right of the Holder of any Purchase Contract to receive distributions on the
related Collateral (except for the rights of Holders of Income PRIDES to
substitute Treasury Securities for the Pledged Preferred Securities or Pledged
Notes or the rights of Holders of Growth PRIDES to substitute Preferred
Securities or Notes for the Pledged Treasury Securities) or otherwise adversely
affect the Holder's rights in or to such Collateral or adversely alter the
rights in or to such Collateral;

         (3)      impair the right to institute suit for the enforcement of any
Purchase Contract;


                                       62


         (4)      reduce the number of shares of Common Stock to be purchased
pursuant to any Purchase Contract, increase the price to purchase shares of
Common Stock upon settlement of any Purchase Contract or change the Purchase
Contract Settlement Date or the right to Early Settlement or otherwise adversely
affect the Holder's rights under the Purchase Contract;

         (5)      reduce the percentage of the outstanding Purchase Contracts
the consent of whose Holders is required for any such supplemental agreement; or

         (6)      reduce any Purchase Contract Payments or change any place
where, or the coin or currency in which, any Purchase Contract Payment is
payable;

PROVIDED that if any amendment or proposal referred to above would adversely
affect only the Income PRIDES or the Growth PRIDES, then only the affected class
of Holders as of the record date for the Holders entitled to vote thereon will
be entitled to vote on such amendment or proposal, and such amendment or
proposal shall not be effective except with the consent of Holders of not less
than a majority of such class; and PROVIDED, FURTHER, that the unanimous consent
of the Holders of each outstanding Purchase Contract of such class affected
thereby shall be required to approve any amendment or proposal specified in
clauses (1) through (6) above.

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

         SECTION 8.03 EXECUTION OF SUPPLEMENTAL AGREEMENTS.

         In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Purchase Contract Agent shall be
provided, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officer's Certificate and an Opinion of Counsel stating that the
execution of such supplemental agreement is authorized or permitted by this
Agreement and that any and all conditions precedent to the execution and
delivery of such supplemental agreement have been satisfied. The Purchase
Contract Agent may, but shall not be obligated to, enter into any such
supplemental agreement which affects the Purchase Contract Agent's own rights,
duties or immunities under this Agreement or otherwise.

         SECTION 8.04 EFFECT OF SUPPLEMENTAL AGREEMENTS.

         Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder, shall be bound thereby.

         SECTION 8.04 REFERENCE TO SUPPLEMENTAL AGREEMENTS.

         Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by


                                       63


the Purchase Contract Agent, bear a notation in form approved by the Purchase
Contract Agent as to any matter provided for in such supplemental agreement. If
the Company shall so determine, new Certificates so modified as to conform, in
the opinion of the Purchase Contract Agent and the Company, to any such
supplemental agreement may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Purchase
Contract Agent in exchange for outstanding Certificates.

                                   ARTICLE 9

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

         SECTION 9.01 COVENANT NOT TO CONSOLIDATE, MERGE, CONVEY, TRANSFER OR
LEASE PROPERTY EXCEPT UNDER CERTAIN CONDITIONS.

         The Company covenants that it will not consolidate with or merge into
any other corporation or convey, transfer or lease all or substantially all of
its properties and assets to any Person, unless:

                  (i)      either the Company shall be the continuing
         corporation, or the successor (if other than the Company) shall be a
         corporation organized and existing under the laws of the United States
         of America or a State thereof or the District of Columbia and such
         corporation shall expressly assume all the obligations of the Company
         under the Purchase Contracts, the Guarantee, this Agreement, the Pledge
         Agreement, the Indenture (including any supplement thereto) and the
         Remarketing Agreement by one or more supplemental agreements in form
         reasonably satisfactory to the Purchase Contract Agent and the
         Collateral Agent, executed and delivered to the Purchase Contract Agent
         and the Collateral Agent by such corporation; and

                  (ii)     the Company or such successor corporation, as the
         case may be, shall not, immediately after such consolidation, merger,
         conveyance, transfer or lease, be in default in the performance of any
         covenant or condition hereunder, under any of the Securities or under
         the Pledge Agreement.

         SECTION 9.02 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION.

         In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance and upon any such assumption by a
successor corporation in accordance with Section 9.01, 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 Company. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of Cinergy Corp., any or all of the Certificates evidencing Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Purchase Contract Agent; and, upon the order of such
successor corporation, instead of the Company, and subject to all the terms,
conditions and limitations in this Agreement prescribed, the Purchase Contract
Agent shall authenticate and execute on behalf of the Holders and deliver any


                                       64


Certificates which previously shall have been signed and delivered by the
officers of the Company to the Purchase Contract Agent for authentication and
execution, and any Certificate evidencing Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Purchase
Contract Agent for that purpose. All the Certificates issued shall in all
respects have the same legal rank and benefit under this Agreement as the
Certificates theretofore or thereafter issued in accordance with the terms of
this Agreement as though all of such Certificates had been issued at the date of
the execution hereof.

         In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing Securities
thereafter to be issued as may be appropriate.

         SECTION 9.03 OFFICER'S CERTIFICATE AND OPINION OF COUNSEL GIVEN TO
PURCHASE CONTRACT AGENT.

         The Purchase Contract Agent, subject to Sections 7.01 and 7.03, shall
receive an Officer's Certificate and an Opinion of Counsel as conclusive
evidence that any such merger, consolidation, share exchange, sale, assignment,
transfer, lease or conveyance, and any such assumption, complies with the
provisions of this Article and that all conditions precedent to the consummation
of any such merger, consolidation, share exchange, sale, assignment, transfer,
lease or conveyance have been met.

                                   ARTICLE 10

                                   COVENANTS

         SECTION 10.01 PERFORMANCE UNDER PURCHASE CONTRACTS.

         The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.

         SECTION 10.02 MAINTENANCE OF OFFICE OR AGENCY.

         The Company will maintain in the Borough of Manhattan, New York City an
office or agency where Certificates may be presented or surrendered for
acquisition of shares of Common Stock upon settlement of the Purchase Contracts
on the Purchase Contract Settlement Date or Early Settlement and for transfer of
Collateral upon occurrence of a Termination Event, where Certificates may be
surrendered for registration of transfer or exchange, for a Collateral
Substitution or reestablishment of Income PRIDES and where notices and demands
to or upon the Company in respect of the Securities and this Agreement may be
served. The Company will give prompt written notice to the Purchase Contract
Agent of the location, and any change in the location, of such office or agency.
The Company initially designates the Corporate Trust Office of the Purchase
Agent as such office of the Company. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the
Purchase Contract Agent


                                       65


with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office, and the Company hereby
appoints the Purchase Contract Agent 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 Certificates 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 the
Borough of Manhattan, New York City for such purposes. The Company will give
prompt written notice to the Purchase Contract Agent of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates as the place of payment for the Securities the
Corporate Trust Office and appoints the Purchase Contract Agent at its Corporate
Trust Office as paying agent in such city.

         SECTION 10.03 COMPANY TO RESERVE COMMON STOCK.

         The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock the full number of shares of Common
Stock issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding Certificates.

         SECTION 10.04 COVENANTS AS TO COMMON STOCK.

         The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.

         SECTION 10.05 STATEMENTS OF OFFICERS OF THE COMPANY AS TO DEFAULT.

         The Company will deliver to the Purchase Contract Agent, within 120
days after the end of each fiscal year of the Company (which as of the date
hereof is December 31) ending after the date hereof, an Officer's Certificate
(one of the signers of which shall be the principal executive officer, principal
financial officer or principal accounting officer of the Company), stating
whether or not to the knowledge of the signers thereof the Company is in default
in the performance and observance of any of the terms, provisions and conditions
hereof, 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 10.06 ERISA.

         Each Holder from time to time of the Securities that is a Plan hereby
represents that its acquisition of the Income PRIDES and the holding of the same
satisfies the applicable fiduciary requirements of ERISA and that it is entitled
to exemption relief from the prohibited transaction provisions of ERISA and the
Code in accordance with one or more prohibited transaction exemptions or
otherwise will not result in a nonexempt prohibited transaction.

                       [SIGNATURES ON THE FOLLOWING PAGE]


                                       66


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                                    CINERGY CORP.


                                    By:
                                         ------------------------------------
                                         Name:
                                         Title:

                                    THE BANK OF NEW YORK,
                                    as Purchase Contract Agent


                                    By:
                                         ------------------------------------
                                         Name:
                                         Title:



                                       67



                                                                       EXHIBIT A

                        FACE OF INCOME PRIDES CERTIFICATE

         [THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (THE "DEPOSITARY"), THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF
THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

No. ____                                                    CUSIP No.  172474207
Number of Income PRIDES:______________

                                  CINERGY CORP.
                               CC FUNDING TRUST I
                                  INCOME PRIDES

         This Income PRIDES Certificate certifies that ___________________ is
the registered Holder of the number of Income PRIDES set forth above. Each
Income PRIDES consists of (i) either (a) the beneficial ownership by the Holder
of one Preferred Security (the "PREFERRED SECURITY") of CC Funding Trust I, a
Delaware statutory business trust (the "TRUST"), having a stated liquidation
amount of $50, subject to the Pledge of such Preferred Security by such Holder
pursuant to the Pledge Agreement, or (b) upon the occurrence of a Tax Event
Redemption prior to the Purchase Contract Settlement Date, the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one Purchase
Contract with Cinergy Corp., a Delaware corporation (the "COMPANY"). All


                                      A-1


capitalized terms used herein which are defined in the Purchase Contract
Agreement (as defined on the reverse hereof) have the meaning set forth therein.

         Pursuant to the Pledge Agreement, the Preferred Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be,
constituting part of each Income PRIDES evidenced hereby has been pledged to the
Collateral Agent, for the benefit of the Company, to secure the obligations of
the Holder under the Purchase Contract comprising part of such Income PRIDES.

         The Pledge Agreement provides that all payments of the liquidation
amount with respect to any of the Pledged Preferred Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, or cash
distributions on any Pledged Preferred Securities (as defined in the Pledge
Agreement) or the appropriate Applicable Ownership Interest (as specified in
clause (B) of the definition of such term) of the Treasury Portfolio, as the
case may be, constituting part of the Income PRIDES received by the Securities
Intermediary shall be paid by wire transfer in same day funds (i) in the case of
(A) cash distributions with respect to Pledged Preferred Securities or the
appropriate Applicable Ownership Interest (as specified in clause (B) of the
definition of such term) of the Treasury Portfolio, as the case may be, and (B)
any payments of the liquidation amount with respect to any Preferred Securities
or the appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as the case may be, that
have been released from the Pledge pursuant to the Pledge Agreement, to the
Purchase Contract Agent to the account designated by the Purchase Contract
Agent, no later than 2:00 p.m., New York City time, on the Business Day such
payment is received by the Securities Intermediary (PROVIDED that in the event
such payment is received by the Securities Intermediary on a day that is not a
Business Day or after 12:30 p.m., New York City time, on a Business Day, then
such payment shall be made no later than 10:30 a.m., New York City time, on the
next succeeding Business Day) and (ii) in the case of payments of the
liquidation amount with respect to any of the Pledged Preferred Securities or
the appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, to the Company on the
Purchase Contract Settlement Date (as described herein) in accordance with the
terms of the Pledge Agreement, in full satisfaction of the respective
obligations of the Holders of the Income PRIDES of which such Pledged Preferred
Securities or the Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as the case may be, are
a part under the Purchase Contracts forming a part of such Income PRIDES.
Distributions on any Preferred Security or the appropriate Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, forming part of an Income PRIDES
evidenced hereby, which are payable quarterly in arrears on February 16, May 16,
August 16, and November 16 of each year, commencing February 16, 2002 (a
"PAYMENT DATE"), shall, subject to receipt thereof by the Purchase Contract
Agent from the Securities Intermediary, be paid to the Person in whose name this
Income PRIDES Certificate (or a Predecessor Income PRIDES Certificate) is
registered at the close of business on the Record Date for such Payment Date.

         Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on February 16,
2005 (the "PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $50 (the
"STATED AMOUNT"), a number of shares of


                                      A-2


Common Stock, without par value ("COMMON STOCK"), of the Company, equal to the
Settlement Rate, unless on or prior to the Purchase Contract Settlement Date
there shall have occurred a Termination Event or an Early Settlement with
respect to the Income PRIDES of which such Purchase Contract is a part, all as
provided in the Purchase Contract Agreement and more fully described on the
reverse hereof. The purchase price (the "PURCHASE PRICE") for the shares of
Common Stock purchased pursuant to each Purchase Contract evidenced hereby, if
not paid earlier, shall be paid on the Purchase Contract Settlement Date by
application of payment received in respect of the liquidation amount with
respect to any Pledged Preferred Securities pursuant to the Remarketing or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, pledged
to secure the obligations under such Purchase Contract of the Holder of the
Income PRIDES of which such Purchase Contract is a part.

         The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of an Income PRIDES evidenced hereby, an amount
(the "PURCHASE CONTRACT PAYMENTS") equal to 2.6% per year of the Stated Amount.
Such Purchase Contract Payments shall be payable to the Person in whose name
this Income PRIDES Certificate is registered at the close of business on the
Record Date for such Payment Date. The Company may, at its option, defer such
Purchase Contract Payments.

         Distributions on the Preferred Securities and the Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) and the
Purchase Contract Payments will be payable at the office of the Purchase
Contract Agent in New York City or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address appears on
the Security Register.

         Reference is hereby made to the further provisions 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 Purchase Contract Agent by manual signature, this Income PRIDES Certificate
shall not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.


                                      A-3


         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                   CINERGY CORP.


                                   By:
                                        -----------------------------------
                                        Name:
                                        Title:

                                   HOLDER SPECIFIED ABOVE (as to
                                   obligations of such Holder under the
                                   Purchase Contracts)

                                   By: THE BANK OF NEW YORK,
                                     not individually but solely as
                                     Attorney-in-Fact of such Holder

                                   By:
                                        -----------------------------------
                                        Name:
                                        Title:

DATED:  December 18, 2001


                                      A-4



                          CERTIFICATE OF AUTHENTICATION
                           OF PURCHASE CONTRACT AGENT

         This is one of the Income PRIDES Certificates referred to in the within
mentioned Purchase Contract Agreement.

                                       By:   THE BANK OF NEW YORK,
                                             as Purchase Contract Agent

                                       By:
                                             ----------------------------------
                                                     Authorized Signatory
Dated: December 18, 2001


                                      A-5


                 (FORM OF REVERSE OF INCOME PRIDES CERTIFICATE)

         Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of December 18, 2001 (as may be supplemented from
time to time, the "PURCHASE CONTRACT AGREEMENT"), between the Company and The
Bank of New York, as Purchase Contract Agent (including its successors
hereunder, the "PURCHASE CONTRACT AGENT"), to which Purchase Contract Agreement
and supplemental agreements thereto reference is hereby made for a description
of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Purchase Contract Agent, the Company, and the
Holders and of the terms upon which the Income PRIDES Certificates are, and are
to be, executed and delivered.

         Unless an Early Settlement has occurred, each Purchase Contract
evidenced hereby obligates the Holder of this Income PRIDES Certificate to
purchase, and the Company to sell, on the Purchase Contract Settlement Date at a
price equal to the Stated Amount (the "PURCHASE PRICE"), a number of shares of
Common Stock equal to the Settlement Rate, unless, prior to or on the Purchase
Contract Settlement Date, there shall have occurred a Termination Event with
respect to the Purchase Contract which is a part of this Security. The
"SETTLEMENT RATE" is equal to:

                  (1)      if the Applicable Market Value (as defined below) is
         greater than or equal to $34.3970 (the "THRESHOLD APPRECIATION PRICE"),
         1.4536 shares of Common Stock per Purchase Contract;

                  (2)      if the Applicable Market Value is less than the
         Threshold Appreciation Price but greater than $29.15 (the "REFERENCE
         PRICE"), the number of shares of Common Stock per Purchase Contract
         having a value equal to the Stated Amount divided by the Applicable
         Market Value; and

                  (3)      if the Applicable Market Value is less than or equal
         to the Reference Price, 1.7153 shares of Common Stock per Purchase
         Contract,

in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest 1/10,000th
of a share).

         No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.

         Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Income PRIDES to purchase at the Purchase Price, and the Company to
sell, a number of shares of Common Stock equal to the Early Settlement Rate or
Settlement Rate, as applicable.

         The "APPLICABLE MARKET VALUE" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date.

         The "CLOSING PRICE" per share of Common Stock on any date of
determination means:


                                      A-6


                  (1)      the closing sale price as of the close of the
         principal trading session (or, if no closing price is reported, the
         last reported sale price) per share on the New York Stock Exchange,
         Inc. (the "NYSE") on such date;

                  (2)      if Common Stock is not listed for trading on the NYSE
         on any such date, the closing sale price per share as reported in the
         composite transactions for the principal United States securities
         exchange on which Common Stock is so listed;

                  (3)      if Common Stock is not so listed on a United States
         national or regional securities exchange, the closing sale price per
         share as reported by The Nasdaq Stock Market;

                  (4)      if Common Stock is not so reported, the last quoted
         bid price for Common Stock in the over-the-counter market as reported
         by the National Quotation Bureau or similar organization; or

                  (5)      if such bid price is not available, the market value
         of Common Stock on such date as determined by a nationally recognized
         independent investment banking firms retained for this purpose by the
         Company.

         A "TRADING DAY" means a day on which Common Stock (1) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (2) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of Common
Stock.

         In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Income PRIDES Certificate may pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement or an Early Settlement or from the
proceeds of the Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio or a Remarketing of the
related Pledged Preferred Securities. A Holder of Income PRIDES who does not
effect, on or prior to 11:00 a.m. (New York City time) on the fourth Business
Day immediately preceding the Purchase Contract Settlement Date (or in the event
a Tax Event Redemption has occurred, the Business Day prior to the Purchase
Contract Settlement Date), an effective Cash Settlement, or who does not effect
on or prior to 5:00 p.m. (New York City time) on the fifth Business Day prior to
the Purchase Contract Settlement Date an effective Early Settlement, shall pay
the Purchase Price for the shares of Common Stock to be delivered under the
related Purchase Contract from the proceeds of the sale of the related Pledged
Preferred Securities held by the Collateral Agent. Such sale will be made by the
Remarketing Agent pursuant to the terms of the Remarketing Agreement on the
third Business Day prior to the Purchase Contract Settlement Date. If, as
provided in the Purchase Contract Agreement, upon the occurrence of a Failed
Remarketing, the Collateral Agent, for the benefit of the Company, exercises its
rights as a secured creditor with respect to the Pledged Preferred Securities
related to this Income PRIDES certificate, any accrued and unpaid distributions
on such Pledged Preferred Securities will become payable by the Company to the
holder of this Income PRIDES Certificate in the manner provided for in the
Purchase Contract Agreement.


                                      A-7


         The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment of the aggregate purchase price for
the shares of Common Stock to be purchased thereunder in the manner herein set
forth.

         Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall occur. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Purchase Contract Agent and to the Holders, at their
addresses as they appear in the Security Register. Upon and after the occurrence
of a Termination Event, the Collateral Agent shall release the Pledged Preferred
Security or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio forming a
part of each Income PRIDES from the Pledge. An Income PRIDES shall thereafter
represent the right to receive the Preferred Security or the appropriate
Applicable Ownership Interest of the Treasury Portfolio forming a part of such
Income PRIDES in accordance with the terms of the Purchase Contract Agreement
and the Pledge Agreement.

         Under the terms of the Pledge Agreement, the Purchase Contract Agent
will be entitled to exercise the voting and any other consensual rights
pertaining to the Pledged Preferred Securities. Upon receipt of notice of any
meeting at which holders of Preferred Securities are entitled to vote or upon
the solicitation of consents, waivers or proxies of holders of Preferred
Securities, the Purchase Contract Agent shall, as soon as practicable
thereafter, mail to the Income PRIDES Holders a notice:

                  (1)      containing such information as is contained in the
         notice or solicitation;

                  (2)      stating that each Income PRIDES Holder on the record
         date set by the Purchase Contract Agent therefor (which, to the extent
         possible, shall be the same date as the record date for determining the
         holders of Preferred Securities entitled to vote) shall be entitled to
         instruct the Purchase Contract Agent as to the exercise of the voting
         rights pertaining to the Preferred Securities constituting a part of
         such Holder's Income PRIDES; and

                  (3)      stating the manner in which such instructions may be
         given.

Upon the written request of the Income PRIDES Holders on such record date, the
Purchase Contract Agent shall endeavor insofar as practicable to vote or cause
to be voted, in accordance with the instructions set forth in such requests, the
maximum number of Preferred Securities as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of an Income PRIDES, the Purchase Contract Agent shall abstain from
voting the Preferred Security evidenced by such Income PRIDES.

         Upon the dissolution and liquidation of the Trust, an aggregate
principal amount of the Notes constituting the assets of the Trust and
underlying the Preferred Securities equal to the aggregate liquidation amount of
the Pledged Preferred Securities shall be delivered to the Securities
Intermediary in exchange for the Pledged Preferred Securities. Thereafter, the
Notes shall be held by the Securities Intermediary to secure the obligations of
each Holder of Income


                                      A-8


PRIDES to purchase shares of Common Stock under the Purchase Contracts
constituting a part of such Income PRIDES.

         Notwithstanding the foregoing, in the event of a dissolution and
liquidation of the Trust, if a Liquidation Distribution is to be distributed in
lieu of the Notes as provided for in the Declaration, an amount equal to the
Liquidation Distribution shall be deposited in the Collateral Account in
exchange for the Pledged Preferred Securities. Thereafter, pursuant to the terms
of the Pledge Agreement, the Collateral Agent shall cause the Securities
Intermediary to apply an amount equal to the Redemption Amount of such
Liquidation Distribution to purchase on behalf of the Holders of Income PRIDES
the Treasury Portfolio and promptly remit the remaining portion of such
Liquidation Distribution to the Purchase Contract Agent for payment to the
Holders of such Income PRIDES. The Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio will be
substituted as Collateral for the Pledged Preferred Securities and will be held
by the Collateral Agent in accordance with the terms of the Pledge Agreement to
secure the obligation of each Holder of an Income PRIDES to purchase the Common
Stock of the Company under the Purchase Contract constituting a part of such
Income PRIDES.

         Following the dissolution and liquidation of the Trust, the Holders and
the Collateral Agent shall have such security interests, rights and obligations
with respect to the Notes or the Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, as the Holders and the Collateral Agent had in respect of the
Pledged Preferred Securities, any reference herein to the Preferred Securities
shall be deemed to be a reference to the Notes or the Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, and any reference herein to the
liquidation amount of the Preferred Securities shall be deemed to be a reference
to the principal amount of the Notes or the Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be.

         Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, an amount equal to the Redemption Amount plus any
accumulated and unpaid distributions payable on the Tax Event Redemption Date
with respect to the Applicable Principal Amount shall be deposited in the
Collateral Account in exchange for the Pledged Preferred Securities. Thereafter,
pursuant to the terms of the Pledge Agreement, the Collateral Agent shall cause
the Securities Intermediary to apply an amount equal to the Redemption Amount of
such funds to purchase on behalf of the Holders of Income PRIDES, the Treasury
Portfolio and promptly (a) transfer the Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio to the Collateral Account to secure the obligations of each Holder of
Income PRIDES to purchase shares of Common Stock under the Purchase Contracts
constituting a part of such Income PRIDES, (b) transfer the Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of the
Treasury Portfolio to the Purchase Contract Agent for the benefit of the Holders
of such Income PRIDES and (C) remit the remaining portion of such funds to the
Purchase Contract Agent for payment to the Holders of such Income PRIDES.

         Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such


                                      A-9


security interest rights and obligations with respect to the Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio as the Holder of Income PRIDES and the Collateral
Agent had in respect of the Preferred Securities or Notes, as the case may be,
subject to the Pledge thereof as provided in the Pledge Agreement and any
reference herein to the Preferred Securities shall be deemed to be a reference
to such Treasury Portfolio.

         The Income PRIDES Certificates are issuable only in registered form and
only in denominations of a single Income PRIDES and any integral multiple
thereof. The transfer of any Income PRIDES Certificate will be registered and
Income PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Security Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Purchase Contract
Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute a Treasury Security for Preferred Securities, thereby creating Growth
PRIDES, shall be responsible for any fees or expenses payable in connection
therewith. Except as provided in the Purchase Contract Agreement, for so long as
the Purchase Contract underlying an Income PRIDES remains in effect, such Income
PRIDES shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Income PRIDES in respect of the Preferred
Securities and Purchase Contract constituting such Income PRIDES may be
transferred and exchanged only as an Income PRIDES.

         The Holder of Income PRIDES may substitute for the Pledged Preferred
Securities securing such Holder's obligations under the related Purchase
Contracts Treasury Securities in an aggregate principal amount equal to the
aggregate liquidation amount of the Pledged Preferred Securities in accordance
with the terms of the Purchase Contract Agreement and the Pledge Agreement. From
and after such Collateral Substitution, each Security for which such Pledged
Treasury Securities secures the Holder's obligation under the Purchase Contract
shall be referred to as a "Growth PRIDES". A Holder may make such Collateral
Substitution only in integral multiples of 20 Income PRIDES for 20 Growth
PRIDES. If a Tax Event Redemption has occurred, an Income PRIDES Holder may make
such Collateral Substitution only in integral multiples of 80,000 Income PRIDES
for 80,000 Growth PRIDES.

         A Holder of Growth PRIDES may recreate Income PRIDES by delivering to
the Securities Intermediary Preferred Securities with an aggregate liquidation
amount equal to the aggregate principal amount at maturity of the Pledged
Treasury Securities in exchange for the release of such Pledged Treasury
Securities in accordance with the terms of the Purchase Contract Agreement and
the Pledge Agreement. A Holder may recreate Income PRIDES only in integral
multiples of 20 Growth PRIDES for 20 Income PRIDES. If a Tax Event Redemption
has occurred, a Growth PRIDES Holder may recreate Income PRIDES only in integral
multiples of 80,000 Growth PRIDES for 80,000 Income PRIDES.

         The Company shall pay, on each Payment Date, the Purchase Contract
Payments payable in respect of each Purchase Contract to the Person in whose
name the Income PRIDES Certificate evidencing such Purchase Contract is
registered at the close of business on the Record


                                      A-10


Date for such Payment Date. Purchase Contract Payments will be payable at the
office of the Purchase Contract Agent in New York City or, at the option of the
Holder, by check mailed to the address of the Person entitled thereto at such
address as it appears on the Security Register.

         The Company has the right to defer payment of all or part of the
Purchase Contract Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date. If the Company so elects to defer
Purchase Contract Payments, the Company shall pay additional Purchase Contract
Payments on such deferred installments of Purchase Contract Payments at a rate
equal to 9.5% per annum, compounding quarterly, until such deferred installments
are paid. In the event that the Company elects to defer the payment of Purchase
Contract Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, each Holder will receive on the Purchase Contract Settlement
Date the aggregate amount of accrued and unpaid Purchase Contract Payments.

         The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Purchase
Contract Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Security
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Preferred Securities or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, as the case may be, from the Pledge in accordance
with the provisions of the Pledge Agreement.

         Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities may be settled early ("EARLY SETTLEMENT") as provided in
the Purchase Contract Agreement. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by this Income
PRIDES Certificate, the Holder of this Income PRIDES Certificate shall deliver
to the Purchase Contract Agent at the Corporate Trust Office an Election to
Settle Early form set forth below and any other documents requested by the
Purchase Contract Agent duly completed and accompanied by payment in the form of
immediately available funds payable to the order of the Company in an amount
(the "EARLY SETTLEMENT AMOUNT") equal to (i) the product of (A) $50 times (B)
the number of Purchase Contracts with respect to which the Holder has elected to
effect Early Settlement, plus (ii) if such delivery is made with respect to any
Purchase Contracts during the period from the close of business on any Record
Date for any Payment Date to the opening of business on such Payment Date, an
amount equal to the Purchase Contract Payments payable on such Payment Date with
respect to such Purchase Contracts.

         Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Pledged Preferred Securities, Pledged Notes or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, as the case may be, underlying such
Securities shall be released from the Pledge as provided in the Pledge Agreement
and the Holder shall be entitled to receive a number of shares of Common Stock
on


                                      A-11


account of each Purchase Contract forming part of an Income PRIDES as to which
Early Settlement is effected equal to 1.4536 share of Common Stock per Purchase
Contract (the "EARLY SETTLEMENT Rate"). The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted as provided in the Purchase Contract Agreement.

         Upon registration of transfer of this Income PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Income PRIDES Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.

         The Holder of this Income PRIDES Certificate, by its acceptance hereof,
authorizes the Purchase Contract Agent to enter into and perform the related
Purchase Contracts forming part of the Income PRIDES evidenced hereby on its
behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform his obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Purchase Contract Agent to enter into and perform the Purchase Contract
Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Preferred Securities or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, as the case may be, underlying this Income PRIDES
Certificate pursuant to the Pledge Agreement. The Holder further covenants and
agrees that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect to the aggregate liquidation amount of the Pledged Preferred
Securities or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, on the Purchase Contract Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.

         Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.

         The Purchase Contracts shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to conflicts
of laws principles thereof.

         The Company, the Purchase Contract Agent and its Affiliates and any
agent of the Company or the Purchase Contract Agent may treat the Person in
whose name this Income PRIDES Certificate is registered as the owner of the
Income PRIDES evidenced hereby for the purpose of receiving payments of
distributions payable quarterly on the Preferred Securities, receiving payments
of Purchase Contract Payments, performance of the Purchase Contracts and for all
other purposes whatsoever, whether or not any payments in respect thereof be
overdue and


                                      A-12


notwithstanding any notice to the contrary, and neither the Company, the
Purchase Contract Agent nor any such agent shall be affected by notice to the
contrary.

         The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.

         A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Purchase Contract Agent.


                                      A-13



                                  ABBREVIATIONS

         The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM:                      as tenants in common

UNIF GIFT MIN ACT:            _________________ Custodian ________________
                                  (cust)                      (minor)

                              Under Uniform Gifts to Minors Act of  __________

TENANT:                       as tenants by the entireties

JT TEN:                       as joint tenants with right of survivorship and
                              not as tenants in common

Additional abbreviations may also be used though not in the above list.

           FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto

- --------------------------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)

- --------------------------------------------------------------------------------
 (Please Print or Type Name and Address Including Postal Zip Code of Assignee)

the within Income PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney __________________, to transfer
said Income PRIDES Certificates on the books of Cinergy Corp., and CC Funding
Trust I with full power of substitution in the premises.

Dated:                                        Signature
       ---------------------------                     ------------------------

                                              NOTICE: The signature
                                              to this assignment
                                              must correspond with
                                              the name as it appears
                                              upon the face of the
                                              within Income PRIDES
                                              Certificates in every
                                              particular, without
                                              alteration or
                                              enlargement or any
                                              change whatsoever.

         Signature Guarantee:
                               --------------------------------


                                      A-14



                             SETTLEMENT INSTRUCTIONS

         The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Income PRIDES evidenced
by this Income PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.



Dated:                                    -------------------------------------
                                          Signature
                                          Signature Guarantee:
                                                               ----------------
                                          (if assigned to another person)


If shares are to be registered in         REGISTERED HOLDER
the name of and delivered to a
Person other than the Holder,
please (i) print such Person's name       Please print name and address of
and address and (ii) provide a            Registered Holder:
guarantee of your signature:

                                          ------------------------------------
                                          Name
- ------------------------------------
Name

                                          ------------------------------------
                                          Address
- ------------------------------------
Address
                                          ------------------------------------
                                          ------------------------------------
- ------------------------------------      ------------------------------------
- ------------------------------------
- ------------------------------------

Social Security or other
Taxpayer Identification
Number, if any                            ------------------------------------



                                      A-15




                           ELECTION TO SETTLE EARLY

         The undersigned Holder of this Income PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Income PRIDES evidenced by this Income PRIDES
Certificate specified below. The undersigned Holder directs that a certificate
for shares of Common Stock deliverable upon such Early Settlement be registered
in the name of, and delivered, together with a check in payment for any
fractional share and any Income PRIDES Certificate representing any Income
PRIDES evidenced hereby as to which Early Settlement of the related Purchase
Contracts is not effected, to the undersigned at the address indicated below
unless a different name and address have been indicated below. Pledged Preferred
Securities, Pledged Notes or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, deliverable upon such Early
Settlement will be transferred in accordance with the transfer instructions set
forth below. If shares are to be registered in the name of a Person other than
the undersigned, the undersigned will pay any transfer tax payable incident
thereto.

Dated:
        ----------------------------        ----------------------------------
                                            Signature


Signature Guarantee:
                    -----------------------------


                                      A-16



         Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:


If shares of Common Stock or Income      REGISTERED HOLDER
PRIDES Certificates are to be
registered in the name of and
delivered to and Pledged Preferred
Securities, Pledged Notes or the
Applicable Ownership Interest of
the Treasury Portfolio, as the case
may be, are to be transferred to a
Person other than the Holder,
please print such Person's name and
address:

                                         Please print name and address of
                                         Registered Holder:

- ------------------------------------     -----------------------------------
Name                                     Name

- ------------------------------------     -----------------------------------
Address                                  Address

- ------------------------------------     -----------------------------------
- ------------------------------------     -----------------------------------
- ------------------------------------     -----------------------------------

Social Security or other
Taxpayer Identification

Number, if any                           ------------------------------------


                                      A-17



Transfer Instructions for Pledged Preferred Securities or the Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, transferable
upon Early Settlement or a Termination Event:


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                                      A-18



                     [TO BE ATTACHED TO GLOBAL CERTIFICATES]

            SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

The following increases or decreases in this Global Certificate have been made:




================================================================================================================
                                                                 Number of Income
            Amount of increase in    Amount of decrease in      PRIDES evidenced by
              Number of Income         Number of Income       this Global Certificate    Signature of authorized
             PRIDES evidenced by      PRIDES evidenced by         following such         signatory of Trustee or
            the Global Certificate   the Global Certificate    decrease or increase       Securities Custodian
Date
                                                                             
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
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                                      A-19



                                                                       EXHIBIT B

                   FACE OF GROWTH PRIDES PURCHASE CERTIFICATE

         [THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (THE "DEPOSITARY"), THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF
THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

No.                                                        CUSIP No.  172474306
    -----------------------
Number of Growth PRIDES:___________

                                  CINERGY CORP.
                               CC FUNDING TRUST I
                                  GROWTH PRIDES

         This Growth PRIDES Certificate certifies that _________________ is the
registered Holder of the number of Growth PRIDES set forth above. Each Growth
PRIDES consists of (i) a 1/20 undivided beneficial ownership interest of a
Treasury Security having a principal amount at maturity equal to $1,000, subject
to the Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one Purchase
Contract with Cinergy Corp., a Delaware corporation (the "COMPANY"). All
capitalized terms used herein which are defined in the Purchase Contract
Agreement (as defined on the reverse hereof) have the meaning set forth therein.

         Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Growth PRIDES evidenced hereby have been pledged to the Collateral
Agent, for the benefit of


                                      B-1


the Company, to secure the obligations of the Holder under the Purchase Contract
comprising part of such Growth PRIDES. Each Purchase Contract evidenced hereby
obligates the Holder of this Growth PRIDES Certificate to purchase, and the
Company, to sell, on February 16, 2005 (the "PURCHASE CONTRACT SETTLEMENT
DATE"), at a price equal to $50 (the "STATED Amount"), a number of shares of
Common Stock, without par value ("COMMON STOCK"), of the Company, equal to the
Settlement Rate, unless prior to or on the Purchase Contract Settlement Date
there shall have occurred a Termination Event or an Early Settlement with
respect to the Growth PRIDES of which such Purchase Contract is a part, all as
provided in the Purchase Contract Agreement and more fully described on the
reverse hereof. The purchase price (the "PURCHASE PRICE") for the shares of
Common Stock purchased pursuant to each Purchase Contract evidenced hereby, if
not paid earlier, shall be paid on the Purchase Contract Settlement Date by
application of the proceeds from the Treasury Securities at maturity pledged to
secure the obligations of the Holder under such Purchase Contract of the Growth
PRIDES of which such Purchase Contract is a part.

         The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of a Growth PRIDES evidenced hereby, an amount
(the "PURCHASE CONTRACT PAYMENTS") equal to 2.6% per year of the Stated Amount.
Such Purchase Contract Payments shall be payable to the Person in whose name
this Growth PRIDES Certificate is registered at the close of business on the
Record Date for such Payment Date. The Company may, at its option, defer such
Purchase Contract Payments.

         Distributions on the Applicable Ownership Interests (as specified in
clause (B) of the definition of such term) and the Purchase Contract Payments
will be payable at the office of the Purchase Contract Agent in New York City
or, at the option of the Company, by check mailed to the address of the Person
entitled thereto as such address appears on the Security Register.

         Reference is hereby made to the further provisions 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 Purchase Contract Agent by manual signature, this Growth PRIDES Certificate
shall not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.


                                      B-2


         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                   CINERGY CORP.



                                   BY:
                                      -----------------------------------------
                                      Name:
                                      Title:


                                   HOLDER SPECIFIED ABOVE (as to obligations
                                   of such Holder under the Purchase Contracts)

                                   By:  THE BANK OF NEW YORK,
                                        not individually but solely as
                                        Attorney-in-Fact of such Holder



                                   BY:
                                      -----------------------------------------
                                      Name:
                                      Title:
Dated:  December 18, 2001


                                      B-3



                        CERTIFICATE OF AUTHENTICATION OF
                             PURCHASE CONTRACT AGENT

         This is one of the Growth PRIDES referred to in the within-mentioned
Purchase Contract Agreement.

                                        By: THE BANK OF NEW YORK,
                                            as Purchase Contract Agent

                                        By:
                                           ------------------------------------
                                           Authorized Signatory

Dated:  December 18, 2001


                                      B-4



                     (REVERSE OF GROWTH PRIDES CERTIFICATE)

         Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of December 18, 2001 (as may be supplemented from
time to time, the "PURCHASE CONTRACT AGREEMENT") between the Company and The
Bank of New York, as Purchase Contract Agent (including its successors
thereunder, herein called the "PURCHASE CONTRACT AGENT"), to which the Purchase
Contract Agreement and supplemental agreements thereto reference is hereby made
for a description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Purchase Contract Agent, the Company and
the Holders and of the terms upon which the Growth PRIDES Certificates are, and
are to be, executed and delivered.

         Unless an Early Settlement has occurred, each Purchase Contract
evidenced hereby obligates the Holder of this Growth PRIDES Certificate to
purchase, and the Company to sell, on the Purchase Contract Settlement Date at a
price equal to the Stated Amount (the "PURCHASE PRICE") a number of shares of
Common Stock equal to the Settlement Rate, unless prior to the Purchase Contract
Settlement Date, there shall have occurred a Termination Event with respect to
the Security of which such Purchase Contract is a part. The "SETTLEMENT RATE" is
equal to:

                  (1)      if the Applicable Market Value (as defined below) is
         greater than or equal to $34.3970 (the "THRESHOLD APPRECIATION PRICE"),
         1.4536 share of Common Stock per Purchase Contract;

                  (2)      if the Applicable Market Value is less than the
         Threshold Appreciation Price but greater than $29.15 (the "REFERENCE
         PRICE"), the number of shares of Common Stock per Purchase Contract
         having a value equal to the Stated Amount divided by the Applicable
         Market Value; and

                  (3)      if the Applicable Market Value is less than or equal
         to the Reference Price, then 1.7153 shares of Common Stock per Purchase
         Contract,

         in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest 1/10,000th
of a share).

         No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.

         Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Growth PRIDES to purchase at the Purchase Price for cash, and the
Company to sell, a number of shares of Common Stock equal to the Early
Settlement Rate or the Settlement Rate, as applicable.

         The "APPLICABLE MARKET VALUE" means the average of the Closing Prices
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date.

         The "CLOSING PRICE" per share of Common Stock on any date of
determination means the:


                                      B-5


                  (1)      closing sale price as of the close of the principal
         trading session (or, if no closing price is reported, the last reported
         sale price) per share on the New York Stock Exchange, Inc. (the "NYSE")
         on such date;

                  (2)      if the Common Stock is not listed for trading on the
         NYSE on any such date, the closing sale price per share as reported in
         the composite transactions for the principal United States securities
         exchange on which the Common Stock is so listed;

                  (3)      if the Common Stock is not so listed on a United
         States national or regional securities exchange, the closing sale price
         per share as reported by The Nasdaq Stock Market;

                  (4)      if the Common Stock is not so reported, the last
         quoted bid price for the Common Stock in the over-the-counter market as
         reported by the National Quotation Bureau or similar organization; or

                  (5)      if such bid price is not available, the market value
         of the Common Stock on such date as determined by a nationally
         recognized independent investment banking firm retained for this
         purpose by the Company.

         A "TRADING DAY" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.

         In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Growth PRIDES shall pay the Purchase Price for the shares of the
Common Stock purchased pursuant to each Purchase Contract evidenced hereby
either by effecting a Cash Settlement or an Early Settlement of each such
Purchase Contract or by applying a principal amount of the Pledged Treasury
Securities underlying such Holder's Growth PRIDES equal to the Stated Amount of
such Purchase Contract to the purchase of the Common Stock. A Holder of Growth
PRIDES who does not effect, prior to or on 5:00 p.m. (New York City time) on the
second Business Day immediately preceding the Purchase Contract Settlement Date,
an effective Cash Settlement, or who does not effect on or prior to 11:00 a.m.
(New York City time) on the Business Day immediately preceding the Purchase
Contract Settlement Date an effective Early Settlement, shall pay the Purchase
Price for the shares of Common Stock to be issued under the related Purchase
Contract from the proceeds of the Pledged Treasury Securities.

         The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment of the aggregate purchase price for
the shares of Common Stock to be purchased thereunder in the manner herein set
forth.

         Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall occur. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Purchase Contract Agent and to the Holders, at their
addresses as they appear in the Security Register.


                                      B-6


Upon and after the occurrence of a Termination Event, the Collateral Agent shall
release the Pledged Treasury Securities (as defined in the Pledge Agreement)
forming a part of each Growth PRIDES. A Growth PRIDES shall thereafter represent
the right to receive the interest in the Treasury Security forming a part of
such Growth PRIDES, in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.

         The Growth PRIDES Certificates are issuable only in registered form and
only in denominations of a single Growth PRIDES and any integral multiple
thereof. The transfer of any Growth PRIDES Certificate will be registered and
Growth PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Security Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Purchase Contract
Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute Preferred Securities or Notes, for Treasury Securities, thereby
recreating Income PRIDES, shall be responsible for any fees or expenses
associated therewith. Except as provided in the Purchase Contract Agreement, for
so long as the Purchase Contract underlying a Growth PRIDES remains in effect,
such Growth PRIDES shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Growth PRIDES in respect of the
Treasury Security and the Purchase Contract constituting such Growth PRIDES may
be transferred and exchanged only as a Growth PRIDES.

         A Holder of Growth PRIDES may recreate Income PRIDES by delivering to
the Securities Intermediary Preferred Securities with an aggregate liquidation
amount, or Notes with an aggregate principal amount, equal to the aggregate
principal amount at maturity of the Pledged Treasury Securities in exchange for
the release of such Pledged Treasury Securities in accordance with the terms of
the Purchase Contract Agreement and the Pledge Agreement. From and after such
substitution, the Holder's Security shall be referred to as a "INCOME PRIDES".
Any such creation of Income PRIDES may be effected only in multiples of 20
Growth PRIDES for 20 Income PRIDES.

         A Holder of Income PRIDES may recreate Growth PRIDES by delivering to
the Securities Intermediary Treasury Securities in an aggregate principal amount
equal to the aggregate liquidation amount of the Pledged Preferred Securities or
the aggregate principal amount at maturity of the Pledged Notes, as the case may
be, in accordance with the terms of the Purchase Contract Agreement and the
Pledge Agreement. Any such recreation of Growth PRIDES may be effected only in
multiples of 20 Income PRIDES for 20 Growth PRIDES.

         If a Tax Event Redemption has occurred, a Growth PRIDES Holder may
recreate Income PRIDES only in integral multiples of 80,000 Growth PRIDES for
80,000 Income PRIDES and an Income PRIDES Holder may create Growth PRIDES only
in integral multiples of 80,000 Income PRIDES for 80,000 Growth PRIDES.

         The Company shall pay, on each Payment Date, the Purchase Contract
Payments payable in respect of each Purchase Contract to the Person in whose
name the Growth PRIDES Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Purchase Contract Payments will be payable at the office of the


                                      B-7


Purchase Contract Agent in New York City or, at the option of the Holder, by
check mailed to the address of the Person entitled thereto at such address as it
appears on the Security Register.

         The Company has the right to defer payment of all or part of the
Purchase Contract Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date. If the Company so elects to defer
Purchase Contract Payments, the Company shall pay additional Purchase Contract
Payments on such deferred installments of Purchase Contract Payments at a rate
equal to 9.5% per annum, compounding quarterly, until such deferred installments
are paid. In the event that the Company elects to defer the payment of Purchase
Contract Payments on the Purchase Contracts until the Purchase Contract
Settlement Date), each Holder will receive on the Purchase Contract Settlement
Date the aggregate amount of accrued and unpaid Purchase Contract Payments.

         The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Purchase
Contract Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Security
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Treasury Securities from the Pledge in accordance with
the provisions of the Pledge Agreement. A Growth PRIDES shall thereafter
represent the right to receive the interest in the Treasury Security forming a
part of such Growth PRIDES, in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement.

         Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities may be settled early ("EARLY SETTLEMENT") as provided in
the Purchase Contract Agreement. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by this Income
PRIDES Certificate, the Holder of this Growth PRIDES Certificate shall deliver
to the Purchase Contract Agent at the Corporate Trust Office an Election to
Settle Early form set forth below and any other documents requested by the
Purchase Contract Agent duly completed and accompanied by payment in the form of
immediately available funds payable to the order of the Company in an amount
(the "EARLY SETTLEMENT AMOUNT") equal to (i) the product of (A) $50 times (B)
the number of Purchase Contracts with respect to which the Holder has elected to
effect Early Settlement, plus (ii) if such delivery is made with respect to any
Purchase Contracts during the period from the close of business on any Record
Date for any Payment Date to the opening of business on such Payment Date, an
amount equal to the Purchase Contract Payments payable on such Payment Date with
respect to such Purchase Contracts.

         Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Pledged Treasury Securities underlying such Securities shall be
released from the Pledge as provided in the Pledge Agreement and the Holder
shall be entitled to receive a number of shares of Common Stock on account of
each Purchase Contract forming part of a Growth PRIDES as to which Early
Settlement is effected equal to 1.4536 share of Common Stock per Purchase


                                      B-8


Contract (the "EARLY SETTLEMENT RATE"). The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted as provided in the Purchase Contract Agreement.

         Upon registration of transfer of this Growth PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Growth PRIDES Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.

         The Holder of this Growth PRIDES Certificate, by its acceptance hereof,
authorizes the Purchase Contract Agent to enter into and perform the related
Purchase Contracts forming part of the Growth PRIDES evidenced hereby on its
behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform its obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Purchase Contract Agent to enter into and perform the Purchase Contract
Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Treasury Securities underlying this Growth PRIDES
Certificate pursuant to the Pledge Agreement. The Holder further covenants and
agrees, that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect to the aggregate principal amount of the Pledged Treasury Securities
on the Purchase Contract Settlement Date shall be paid by the Collateral Agent
to the Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.

         Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.

         The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to conflicts of laws principles thereof.

         The Company, the Purchase Contract Agent and its Affiliates and any
agent of the Company or the Purchase Contract Agent may treat the Person in
whose name this Growth PRIDES Certificate is registered as the owner of the
Growth PRIDES evidenced hereby for the purpose of receiving payments of interest
on the Treasury Securities, receiving payments of Purchase Contract Payments,
performance of the Purchase Contracts and for all other purposes whatsoever,
whether or not any payments in respect thereof be overdue and notwithstanding
any notice to the contrary, and neither the Company, the Purchase Contract Agent
nor any such agent shall be affected by notice to the contrary.


                                      B-9


         The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.

         A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Purchase Contract Agent.


                                      B-10



                                  ABBREVIATIONS

         The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM:                         as tenants in common

UNIF GIFT MIN ACT:               ______________ Custodian _____________
                                   (cust)                    (minor)
                                 Under Uniform Gifts to Minors Act of___________
                                 _______________________________________________

TENANT:                           as tenants by the entireties

JT TEN:                           as joint tenants with right of survivorship
                                  and not as tenants in common

Additional abbreviations may also be used though not in the above list.


FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto

- -------------------------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)

- -------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)


the within Growth PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and                 appointing attorney to transfer
said Growth PRIDES Certificates on the books of Cinergy Corp.., and CC
Funding Trust I with full power of substitution in the premises.

Dated:
      --------------------------             -----------------------------------
                                             Signature

                                             NOTICE: The signature to this
                                             assignment must correspond with the
                                             name as it appears upon the face of
                                             the within Growth PRIDES
                                             Certificates in every particular,
                                             without alteration or enlargement
                                             or any change whatsoever.

         Signature Guarantee:
                               ---------------------------


                                      B-11



                             SETTLEMENT INSTRUCTIONS

         The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Growth PRIDES evidenced
by this Growth PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.


Dated:
      ---------------------------         --------------------------------------
                                          Signature
                                          Signature Guarantee:
                                                              ------------------
                                          (if assigned to another person)

If shares are to be registered in
the name of and delivered to a            REGISTERED HOLDER
Person other than the Holder,
please (i) print such Person's name
and address and (ii) provide a
guarantee of your signature:


                                          Please print name and address of
                                          Registered Holder:

- --------------------------------          --------------------------------------
Name                                       Name

- --------------------------------          --------------------------------------
Address                                    Address

- --------------------------------          --------------------------------------
- --------------------------------          --------------------------------------
- --------------------------------          --------------------------------------

Social Security or other
Taxpayer Identification

Number, if any                            --------------------------------------



                                      B-12



                            ELECTION TO SETTLE EARLY

         The undersigned Holder of this Growth PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Growth PRIDES evidenced by this Growth PRIDES
Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Growth PRIDES with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Growth PRIDES Certificate representing any Growth PRIDES evidenced hereby as to
which Early Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. Pledged Treasury Securities deliverable upon such
Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.

Dated:
       -------------------------         --------------------------------------
                                         Signature

Signature Guarantee:
                     --------------------------------


                                      B-13



         Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:


If shares of Common Stock or Growth       REGISTERED HOLDER
PRIDES Certificates are to be
registered in the name of and
delivered to and Pledged Treasury
Securities are to be transferred to
a Person other than the Holder,
please print such Person's name and
address:


                                          Please print name and address of
                                          Registered Holder:

- --------------------------------          --------------------------------------
Name                                       Name

- --------------------------------          --------------------------------------
Address                                    Address

- --------------------------------          --------------------------------------
- --------------------------------          --------------------------------------
- --------------------------------          --------------------------------------

Social Security or other
Taxpayer Identification

Number, if any                            --------------------------------------


                                      B-14



Transfer Instructions for Pledged Treasury Securities Transferable Upon or Early
Settlement or a Termination Event:

- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------


                                      B-15




                     [TO BE ATTACHED TO GLOBAL CERTIFICATES]

            SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

The following increases or decreases in this Global Certificate have been made:



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

                                                                 Number of Growth
          Amount of increase in      Amount of decrease in      PRIDES evidenced by
             Number of Growth           Number of Growth      this Global Certificate     Signature of authorized
            PRIDES evidenced by       PRIDES evidenced by         following such          signatory of Trustee or
           the Global Certificate    the Global Certificate    decrease or increase        Securities Custodian
Date
- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------------------------------




                                      B-16


                                                                       EXHIBIT C

                     INSTRUCTION TO PURCHASE CONTRACT AGENT

The Bank of New York
5 Penn Plaza
13th Floor
New York, NY 10001
Attention: Corporate Trust Department

         Re: [_______ Income PRIDES] [_______ Growth PRIDES] of Cinergy Corp., a
Delaware corporation (the "COMPANY") and CC Funding Trust I.

         The undersigned Holder hereby notifies you that it has delivered to [
], as Securities Intermediary, for credit to the Collateral Account, $______
aggregate [liquidation] [principal] amount of [Preferred Securities] [Notes]
[Treasury Securities] [Applicable Ownership Interests (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio] in exchange for
the [Pledged Preferred Securities] [Pledged Notes] [Pledged Treasury Securities]
held in the Collateral Account, in accordance with the Pledge Agreement, dated
as of ____________, 2001 (the "PLEDGE AGREEMENT"; unless otherwise defined
herein, terms defined in the Pledge Agreement are used herein as defined
therein), between you, the Company, the Collateral Agent and the Securities
Intermediary. The undersigned Holder has paid all applicable fees relating to
such exchange. The undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned Holder the
[Pledged Preferred Securities] [Pledged Notes] [Pledged Treasury Securities]
[Pledged Applicable Ownership Interests] related to such [Income PRIDES] [Growth
PRIDES].

Dated:
        ----------------------------             -------------------------------
                                                 Signature

Signature Guarantee:
                      -------------------------------------



                                      C-1


Please print name and address of Registered Holder:



- -----------------------------           ----------------------------------------
Name                                    Social Security or other Taxpayer
                                        Identification Number, if any
Address

- -----------------------------
- -----------------------------
- -----------------------------
- -----------------------------



                                      C-2



                                                                      EXHIBIT D

                       NOTICE FROM PURCHASE CONTRACT AGENT
                                   TO HOLDERS
         (Transfer of Collateral upon Occurrence of a Termination Event)

[HOLDER]

- -----------------------

- -----------------------
Attention:
Telecopy: __________

             Re:      [__________ Income PRIDES] [______ Growth PRIDES] of
                      Cinergy Corp., a Delaware corporation (the "COMPANY")
                      and CC Funding Trust I

         Please refer to the Purchase Contract Agreement, dated as of December
18, 2001 (the "PURCHASE CONTRACT AGREEMENT"; unless otherwise defined herein,
terms defined in the Purchase Contract Agreement are used herein as defined
therein), between the Company and the undersigned, as Purchase Contract Agent
and as attorney-in-fact for the holders of Income PRIDES and Growth PRIDES from
time to time.

         We hereby notify you that a Termination Event has occurred and that
[the Notes][the Treasury Securities] [Preferred Securities] [Applicable
Ownership Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio] serving as Collateral underlying your ownership
interest in _____ [Income PRIDES] [Growth PRIDES] have been released and are
being held by us for your account pending receipt of transfer instructions with
respect to such [Notes][Treasury Securities] [Preferred Securities] [Applicable
Ownership Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio] (the "RELEASED SECURITIES").

Pursuant to Section 3.15 of the Purchase Contract Agreement, we hereby request
written transfer instructions with respect to the Released Securities. Upon
receipt of your instructions and upon transfer to us of your [Income
PRIDES][Growth PRIDES] effected through book-entry or by delivery to us of your
[Income PRIDES Certificate][Growth PRIDES Certificate], we shall transfer the
Released Securities by book-entry transfer or other appropriate procedures, in
accordance with your instructions. In the event you fail to effect such transfer
or delivery, the Released Securities and any distributions thereon, shall be
held in our name, or a nominee in trust for your benefit, until such time as
such [Income PRIDES][Growth PRIDES] are transferred or your [Income PRIDES
Certificate] [Growth PRIDES Certificate] is surrendered or satisfactory evidence
is provided that such [Income PRIDES Certificate][Growth PRIDES Certificate] has
been destroyed, lost or stolen, together with any indemnification that we or the
Company may require.

Date:                                       By:[                         ]



                                      D-1



                                        Name:
                                             -------------------------------
                                        Title: Authorized Signatory


                                      D-2




                                                                      EXHIBIT E

                            NOTICE TO SETTLE BY CASH

The Bank of New York
5 Penn Plaza
13th Floor
New York, NY 10001
Attention: Corporate Trust Department

                  Re:      [_______ Income PRIDES] [Growth PRIDES] of Cinergy
                           Corp., a Delaware corporation (the "COMPANY") and CC
                           Funding Trust I

         The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.02 of the Purchase Contract Agreement, dated as of December 18,
2001 (the "PURCHASE CONTRACT AGREEMENT"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and you, as Purchase Contract Agent and as Attorney-in-Fact
for the Holders of the Purchase Contracts, that such Holder has elected to pay
to the Securities Intermediary for deposit in the Collateral Account, prior to
or on 11:00 a.m. (New York City time) on the [fourth] Business Day immediately
preceding the Purchase Contract Settlement Date (in lawful money of the United
States by certified or cashiers' check or wire transfer, in immediately
available funds), $______ as the Purchase Price for the shares of Common Stock
issuable to such Holder by the Company under the related Purchase Contracts on
the Purchase Contract Settlement Date. The undersigned Holder hereby instructs
you to notify promptly the Collateral Agent of the undersigned Holders' election
to make such cash settlement with respect to the Purchase Contracts related to
such Holder's [Income PRIDES] [Growth PRIDES].

Dated:
        ---------------------     -----------------------------------------
                                  Signature

                                  Signature Guarantee:
                                                      ---------------------

Please print name and address of Registered Holder:


                                      E-1




                                                                      EXHIBIT F

                       NOTICE FROM PURCHASE CONTRACT AGENT
                    TO COLLATERAL AGENT AND PROPERTY TRUSTEE
              (Settlement of Purchase Contract through Remarketing)

JPMorgan Chase Bank
450 W. 33rd Street
15th Floor
New York, NY 10001
Attention:  Richard Lorenzen
Telecopy:  212-946-8160

The Bank of New York
5 Penn Plaza
13th Floor
New York, NY 10001
Attention:  Paul Schmalzel
Telecopy:  212-896-7172

                  Re:      __________ Income PRIDES of Cinergy Corp.., a
                           Delaware corporation (the "COMPANY") and CC Funding
                           Trust I

         Please refer to the Purchase Contract Agreement, dated as of December
18, 2001 (the "PURCHASE CONTRACT Agreement"; unless otherwise defined herein,
terms defined in the Purchase Contract Agreement are used herein as defined
therein), between the Company and the undersigned, as Purchase Contract Agent
and as attorney-in-fact for the Holders of Income PRIDES from time to time.

         In accordance with Section 5.02 of the Purchase Contract Agreement and,
based on instructions and Cash Settlements received from Holders of Income
PRIDES as of 11:00 a.m. (New York City time), the fourth Business Day preceding
the Purchase Contract Settlement Date, we hereby notify you that ______
[Preferred Securities] [Notes] are to be tendered for purchase in the
Remarketing.

Date:                                 By:  [                          ]

                                      ------------------------------------------
                                      Name:
                                      Title:  Authorized Signatory


                                      F-1

EX-4.5

                                                                     EXHIBIT 4.5


                                                                  EXECUTION COPY



                                  CINERGY CORP.

                                       and

                              JPMORGAN CHASE BANK,
        as Collateral Agent, Custodial Agent and Securities Intermediary

                                       and

                              THE BANK OF NEW YORK,
                           as Purchase Contract Agent


                                PLEDGE AGREEMENT

                          Dated as of December 18, 2001





                                TABLE OF CONTENTS




                                                                                                        Page
                                                                                                        ----

                                                                                                     
ARTICLE 1 DEFINITIONS
         SECTION 1.01.      Definitions...................................................................1

ARTICLE 2 PLEDGE
         SECTION 2.01.      Pledge........................................................................6
         SECTION 2.02.      Control; Financing Statement..................................................6
         SECTION 2.03.      Termination...................................................................6

ARTICLE 3 DISTRIBUTIONS ON PLEDGED COLLATERAL
         SECTION 3.01.      Income Distributions..........................................................7
         SECTION 3.02.      Principal Payments Following Termination Event................................7
         SECTION 3.03.      Principal Payments Prior to or on Purchase Contract Settlement Date...........7
         SECTION 3.04.      Payments to Purchase Contract Agent...........................................8
         SECTION 3.05.      Assets Not Properly Released..................................................8

ARTICLE 4 CONTROL
         SECTION 4.01.      Establishment of Collateral Account...........................................8
         SECTION 4.02.      Treatment as Financial Assets.................................................9
         SECTION 4.03.      Sole Control by Collateral Agent..............................................9
         SECTION 4.04.      Securities Intermediary's Location............................................9
         SECTION 4.05.      No Other Claims...............................................................9
         SECTION 4.06.      Investment and Release........................................................9
         SECTION 4.07.      Statements and Confirmations..................................................9
         SECTION 4.08.      Tax Allocations...............................................................9
         SECTION 4.09.      No Other Agreements..........................................................10
         SECTION 4.10.      Powers Coupled with an Interest..............................................10

ARTICLE 5 INITIAL DEPOSIT; ESTABLISHMENT OF GROWTH PRIDES AND REESTABLISHMENT OF INCOME PRIDES
         SECTION 5.01.      Initial Deposit of Preferred Securities......................................10
         SECTION 5.02.      Establishment of Growth PRIDES...............................................10
         SECTION 5.03.      Reestablishment of Income PRIDES.............................................12
         SECTION 5.04.      Termination Event............................................................14
         SECTION 5.05.      Cash Settlement..............................................................15
         SECTION 5.06.      Early Settlement.............................................................17
         SECTION 5.07.      Application of Proceeds in Settlement of Purchase Contracts..................17
         SECTION 5.08.      Tax Event Redemption.........................................................19

ARTICLE 6 VOTING RIGHTS - PLEDGED PREFERRED SECURITIES AND PLEDGED NOTES
         SECTION 6.01.      Voting Rights................................................................20

ARTICLE 7 RIGHTS AND REMEDIES


                                       i


         SECTION 7.01.      Rights and Remedies of the Collateral Agent..................................20
         SECTION 7.02.      Substitution of Notes or Treasury Portfolio..................................21
         SECTION 7.03.      Tax Event Redemption.........................................................22
         SECTION 7.04.      Substitutions................................................................22

ARTICLE 8 REPRESENTATIONS AND WARRANTIES; COVENANTS
         SECTION 8.01.      Representations and Warranties...............................................22
         SECTION 8.02.      Covenants....................................................................23

ARTICLE 9 THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES INTERMEDIARY
         SECTION 9.01.      Appointment, Powers and Immunities...........................................23
         SECTION 9.02.      Instructions of the Company..................................................24
         SECTION 9.03.      Reliance.....................................................................25
         SECTION 9.04.      Rights in Other Capacities...................................................25
         SECTION 9.05.      Non-Reliance.................................................................25
         SECTION 9.06.      Compensation and Indemnity...................................................25
         SECTION 9.07.      Failure to Act...............................................................26
         SECTION 9.08.      Resignation..................................................................27
         SECTION 9.09.      Right to Appoint Agent or Advisor............................................28
         SECTION 9.10.      Survival.....................................................................28
         SECTION 9.11.      Exculpation..................................................................28

ARTICLE 10 AMENDMENT
         SECTION 10.01.     Amendment Without Consent of Holders.........................................28
         SECTION 10.02.     Amendment with Consent of Holders............................................29
         SECTION 10.03.     Execution of Amendments......................................................30
         SECTION 10.04.     Effect of Amendments.........................................................30
         SECTION 10.05.     Reference of Amendments......................................................30

ARTICLE 11 MISCELLANEOUS
         SECTION 11.01.     No Waiver....................................................................30
         SECTION 11.02.     Governing Law................................................................30
         SECTION 11.03.     Notices......................................................................31
         SECTION 11.04.     Successors and Assigns.......................................................31
         SECTION 11.05.     Counterparts.................................................................31
         SECTION 11.06.     Severability.................................................................31
         SECTION 11.07.     Expenses, Etc................................................................31
         SECTION 11.08.     Security Interest Absolute...................................................32
         SECTION 11.09.     Notice of Tax Event, Tax Event Redemption and Termination Event..............32



Exhibit A -       Instruction from Purchase Contract Agent to Collateral Agent
                      (Establishment of Growth PRIDES)
Exhibit B -       Instruction from Collateral Agent to Securities Intermediary
                      (Establishment of Growth PRIDES)


                                       ii


Exhibit C - Instruction from Purchase Contract Agent to Collateral Agent
                  (Reestablishment of Income PRIDES)
Exhibit D - Instruction from Collateral Agent to Securities Intermediary
                  (Reestablishment of Income PRIDES)
Exhibit E - Notice of Cash Settlement from Securities Intermediary to Purchase
                  Contract Agent (Cash Settlement Amounts)
Exhibit F - Instruction to Custodial Agent Regarding Remarketing
Exhibit G - Instruction to Custodial Agent Regarding Withdrawal From Remarketing


                                       iii


                                PLEDGE AGREEMENT

         PLEDGE AGREEMENT, dated as of December 18, 2001, among Cinergy Corp., a
Delaware corporation (the "COMPANY"), JPMorgan Chase Bank, a New York banking
corporation, not individually but solely as collateral agent (in such capacity,
together with its successors in such capacity, the "COLLATERAL AGENT"), as
custodial agent (in such capacity, together with its successors in such
capacity, the "CUSTODIAL AGENT") and as "securities intermediary" as defined in
Section 8-102(a)(14) of the UCC (as defined herein) (in such capacity, together
with its successors in such capacity, the "SECURITIES INTERMEDIARY"), and The
Bank of New York, a New York banking corporation, not individually but solely as
purchase contract agent and as attorney-in-fact of the Holders (as defined in
the Purchase Contract Agreement) from time to time of the Securities (as defined
in the Purchase Contract Agreement) (in such capacity, together with its
successors in such capacity, the "PURCHASE CONTRACT AGENT") under the Purchase
Contract Agreement (as defined herein).


                                    RECITALS

         The Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "PURCHASE CONTRACT
AGREEMENT"), pursuant to which 6,325,000 Income PRIDES (as defined herein)
will be issued (including the over-allotment option exercised in full by the
underwriters).

         Each Income PRIDES (as defined herein), at issuance, consists of a unit
comprised of (a) a stock purchase contract (a "PURCHASE CONTRACT") under which
the Holder will purchase from the Company on the Purchase Contract Settlement
Date (as defined herein), for an amount equal to $50 (the "STATED AMOUNT"), a
number of shares of Cinergy Corp. common stock, par value $0.01 per share
("COMMON STOCK"), equal to the Settlement Rate (as defined herein), and (b)
beneficial ownership of a preferred trust security due 2007 (a "PREFERRED
SECURITY") issued by CC Funding Trust I, a Delaware statutory business trust
(the "TRUST"), having a liquidation amount equal to the Stated Amount.

         Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders of the Securities have irrevocably authorized
the Purchase Contract Agent, as attorney-in-fact of such Holders, among other
things, to execute and deliver this Agreement on behalf of such Holders and to
grant the pledge provided herein of the Collateral (as defined herein) to secure
the Obligations (as defined herein).

         Accordingly, the Company, the Collateral Agent, the Custodial Agent,
the Securities Intermediary and the Purchase Contract Agent, on its own behalf
and as attorney-in-fact of the Holders from time to time of the Securities,
agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

         Section 1.01. DEFINITIONS. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:



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

         (b) the words "HEREIN," "HEREOF" and "HEREUNDER" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision;

         (c) the following terms which are defined in the UCC shall have the
meanings set forth therein: "CERTIFICATED SECURITY," "CONTROL," "FINANCIAL
ASSET," "ENTITLEMENT ORDER," "SECURITIES ACCOUNT" and "SECURITY ENTITLEMENT";

         (d) the following terms have the meanings assigned to them in the
Purchase Contract Agreement: "ACT," "BANKRUPTCY CODE," "BOARD RESOLUTION,"
"BUSINESS DAY," "CASH MERGER," "CASH SETTLEMENT," "CERTIFICATE," "EARLY
SETTLEMENT," "EARLY SETTLEMENT AMOUNT," "EARLY SETTLEMENT DATE," "FAILED
REMARKETING," "HOLDER," "NOTES," "OFFICERS' CERTIFICATE," "OPINION OF COUNSEL,"
"OUTSTANDING SECURITIES," "PURCHASE CONTRACT," "PURCHASE CONTRACT SETTLEMENT
DATE," "PURCHASE PRICE," "REMARKETING AGENT," "REMARKETING AGREEMENT,"
"SECURITY," "SETTLEMENT RATE," "TERMINATION EVENT," and "UNDERWRITING
AGREEMENT";

         (e) the following terms have the meanings assigned to them in the
Amended and Restated Declaration of Trust of CC Funding Trust I, of even date
herewith (the "DECLARATION"): "APPLICABLE OWNERSHIP INTEREST," "APPLICABLE
PRINCIPAL AMOUNT," "INDENTURE," "INDENTURE TRUSTEE," "LIQUIDATION DISTRIBUTION,"
"PRIMARY TREASURY DEALER," "PROPERTY TRUSTEE," "QUOTATION AGENT," "REMARKETING,"
"REDEMPTION AMOUNT," "REDEMPTION PRICE," "TAX Event," "TAX EVENT REDEMPTION,"
"TAX EVENT REDEMPTION DATE," and "TREASURY PORTFOLIO"; and

         (f) the following terms have the meanings given to them in this Section
1.01(f):

         "AGREEMENT" means this Pledge Agreement, as the same may be amended,
modified or supplemented from time to time.

         "CASH" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.

         "COLLATERAL" means the collective reference to:

                  (i) all investment property and other financial assets from
         time to time credited to the Collateral Account, including, without
         limitation, (A) the Preferred Securities and security entitlements
         relating thereto which are a component of the Income PRIDES from time
         to time, (B) the Applicable Ownership Interests (as specified in Clause
         (A) of the definition of such term) of the Holders with respect to the
         Treasury Portfolio which are a component of the Income PRIDES from time
         to time; (C) the Notes and security entitlements relating thereto which
         are a component of the Income PRIDES from time to time, (D) any
         Treasury Securities and security entitlements relating thereto
         delivered from time to time upon establishment of Growth PRIDES in
         accordance with Section 5.02 hereof and (E) payments made by Holders
         pursuant to Section 5.05 hereof;


                                       2


                  (ii) all Proceeds of any of the foregoing (whether such
         Proceeds arise before or after the commencement of any proceeding under
         any applicable bankruptcy, insolvency or other similar law, by or
         against the pledgor or with respect to the pledgor) (Notwithstanding
         the foregoing, for the avoidance of doubt, the cash payments at a rate
         of 9.5% per year of the Stated Amount of Income PRIDES to Holders of
         Income PRIDES, whether current or deferred, shall not be considered as
         Proceeds of the Pledged Securities and therefore are not part of the
         Collateral); and

                  (iii) all powers and rights now owned or hereafter acquired
         under or with respect to the Collateral Account

         "COLLATERAL ACCOUNT" means the securities account of JPMorgan Chase
Bank, as Collateral Agent, maintained by the Securities Intermediary and
designated "JPMorgan Chase Bank, as Collateral Agent of Cinergy Corp., as
pledgee of The Bank of New York, as the Purchase Contract Agent on behalf of and
as attorney-in-fact for the Holders."

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

         "GROWTH PRIDES" means, following the substitution of Treasury
Securities for Preferred Securities or Notes as collateral to secure a Holder's
obligations under the Purchase Contract, the collective rights and obligations
of a Holder of a Growth PRIDES Certificate in respect of such Treasury
Securities, subject to the Pledge thereof, and the related Purchase Contract.

         "GROWTH PRIDES CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Growth PRIDES specified
on such certificate.

         "INCOME PRIDES" means the collective rights and obligations of a Holder
of an Income PRIDES Certificate in respect of a Preferred Security, the Notes or
an appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, subject in each case to the Pledge thereof, and the related
Purchase Contract; PROVIDED that the appropriate Applicable Ownership Interest
(as specified in clause (B) of the definition of such term) of the Treasury
Portfolio shall not be subject to the Pledge.

         "INCOME PRIDES CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Income PRIDES specified
on such certificate.

         "OBLIGATIONS" means, with respect to each Holder, the collective
reference to all obligations and liabilities of such Holder under such Holder's
Purchase Contract, the Purchase Contract Agreement, and this Agreement or any
other document made, delivered or given in connection herewith or therewith, in
each case whether on account of principal, interest (including, without
limitation, interest accruing before and after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to such Holder, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements
of counsel to the Company or the Collateral Agent or the Securities


                                       3


Intermediary that are required to be paid by the Holder pursuant to the terms of
any of the foregoing agreements).

         "PERMITTED INVESTMENTS" means any one of the following which shall
mature not later than the next succeeding Business Day:

                  (1) any evidence of indebtedness with an original maturity of
         365 days or less issued, or directly and fully guaranteed or insured,
         by the United States of America or any agency or instrumentality
         thereof (provided that the full faith and credit of the United States
         of America is pledged in support of the timely payment thereof or such
         indebtedness constitutes a general obligation of it);

                  (2) deposits, certificates of deposit or acceptances with an
         original maturity of 365 days or less of any institution which is a
         member of the Federal Reserve System having combined capital and
         surplus and undivided profits of not less than $200.0 million at the
         time of deposit (and which may include the Collateral Agent);

                  (3) investments with an original maturity of 365 days or less
         of any Person that is fully and unconditionally guaranteed by a bank
         referred to in clause (2);

                  (4) repurchase agreements and reverse repurchase agreements
         relating to marketable direct obligations issued or unconditionally
         guaranteed by the United States Government or issued by any agency
         thereof and backed as to timely payment by the full faith and credit of
         the United States Government;

                  (5) investments in commercial paper, other than commercial
         paper issued by the Company or its affiliates, of any corporation
         incorporated under the laws of the United States or any State thereof,
         which commercial paper has a rating at the time of purchase at least
         equal to "A-1" by Standard & Poor's Ratings Services ("S&P") or at
         least equal to "P-1" by Moody's Investors Service, Inc. ("MOODY'S");

                  (6) investments in money market funds (including, but not
         limited to, money market funds managed by the Collateral Agent or an
         affiliate of the Collateral Agent) registered under the Investment
         Company Act of 1940, as amended, rated in the highest applicable rating
         category by S&P or Moody's; and

                  (7) a cash escrow product offered by the Collateral Agent,
         which may consist of trust funds, trust accounts or interest-bearing
         demand or time deposits, including certificates of deposit, which are
         held by any commercial bank having a short term deposit rating at the
         time of purchase of at least "A-2" or the equivalent thereof by S&P or
         at least "P-2" or the equivalent thereof by Moody's.

         "PERSON" means any legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof.

         "PLEDGE" means the lien and security interest created by this
Agreement.


                                       4


         "PLEDGED APPLICABLE OWNERSHIP INTERESTS" means the Applicable Ownership
Interests (as specified in clause (A) of the definition thereof) of the Holders
with respect to the Treasury Portfolio from time to time credited to the
Collateral Account and not then released from the Pledge.

         "PLEDGED NOTES" means Notes and security entitlements with respect
thereto from time to time credited to the Collateral Account and not then
released from the Pledge.

         "PLEDGED PREFERRED SECURITIES" means the Preferred Securities and
security entitlements with respect thereto from time to time credited to the
Collateral Account and not then released from the Pledge.

         "PLEDGED SECURITIES" means the Pledged Preferred Securities, the
Pledged Applicable Ownership Interests, the Pledged Notes or the Pledged
Treasury Securities, collectively.

         "PLEDGED TREASURY SECURITIES" means Treasury Securities and security
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.

         "PROCEEDS" has the meaning ascribed thereto in the UCC and includes,
without limitation, all interest, dividends, cash, instruments, securities,
financial assets (as defined in Section 8-102(a)(9) of the UCC) and other
property received, receivable or otherwise distributed upon the sale, exchange,
collection or disposition of any financial assets from time to time held in the
Collateral Account.

         "PURCHASE CONTRACT AGENT" has the meaning specified in the paragraph
preceding the recitals of this Agreement.

         "SEPARATE NOTES" means Notes which are not components of Income PRIDES.

         "SEPARATE PREFERRED SECURITIES" means Preferred Securities which are
not components of Income PRIDES.

         "STATED AMOUNT" has the meaning specified in the recitals of this
Agreement.

         "TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.

         "TRADES REGULATIONS" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, an amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.

         "TRANSFER" means in the case of certificated securities in registered
form, delivery as provided in Section 8-301(a) of the UCC, indorsed to the
transferee or in blank by an effective endorsement; in the case of Treasury
Securities, registration of the transferee as the owner of such Treasury
Securities on TRADES; and in the case of security entitlements, including,
without limitation, security entitlements with respect to Treasury Securities, a
securities


                                       5


intermediary indicating by book entry that such security entitlement has been
credited to the transferee's securities account.

         "TREASURY SECURITIES" means zero-coupon U.S. treasury securities (CUSIP
No. 912820BM8) which mature on February 15, 2005.

         "UCC" means the Uniform Commercial Code as in effect in the State of
New York from time to time.

         "VALUE" means, with respect to any item of Collateral on any date, as
to (1) Cash, the face amount thereof and (2) Treasury Securities or Notes, the
aggregate principal amount thereof at maturity and (3) Applicable Ownership
Interests, the appropriate percentage (as specified in clause (A) of the
definition thereof) of the aggregate principal amount at maturity of the
Treasury Portfolio and (4) the Preferred Securities, the liquidation amount
thereof.

                                    ARTICLE 2
                                     PLEDGE

         Section 2.01. PLEDGE. Each Holder, acting through the Purchase Contract
Agent as such Holder's attorney-in-fact, hereby pledges and grants to the
Collateral Agent, as agent of and for the benefit of the Company, a continuing
first priority security interest in and to, and a lien upon and right of set-off
against, all of such Holder's right, title and interest in and to the Collateral
to secure the prompt and complete payment and performance when due (whether at
stated maturity, by acceleration or otherwise) of the Obligations. The
Collateral Agent shall have all of the rights, remedies and recourses with
respect to the Collateral afforded a secured party by the UCC, in addition to,
and not in limitation of, the other rights, remedies and recourses afforded to
the Collateral Agent by this Agreement.

         Section 2.02. CONTROL; FINANCING STATEMENT.

         (a) The Collateral Agent shall have control of the Collateral Account
pursuant to the provisions of ARTICLE 4 of this Agreement.

         (b) Subsequent to the date of initial issuance of the Securities, the
Purchase Contract Agent shall file or cause to be filed a financing statement
prepared by the Company in the Office of the Secretary of State of the State of
New York and any other jurisdictions which the Company deems necessary, signed
by the Purchase Contract Agent, as attorney-in-fact for the Holders, as Debtors,
and describing the Collateral.

         Section 2.03. TERMINATION. As to each Holder, this Agreement and the
Pledge created hereby shall terminate upon the satisfaction of such Holder's
Obligations. Upon such termination, the Collateral Agent shall Transfer such
Holder's portion of the Collateral to the Purchase Contract Agent for
distribution to such Holder in accordance with his interest, free and clear of
any lien, pledge or security interest created hereby.


                                       6


                                    ARTICLE 3
                       DISTRIBUTIONS ON PLEDGED COLLATERAL

         Section 3.01. INCOME DISTRIBUTIONS. All income distributions
received by the Collateral Agent on account of the Pledged Preferred
Securities, the Pledged Applicable Ownership Interests (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, the
Pledged Notes or Permitted Investments from time to time held in the
Collateral Account shall be distributed to the Purchase Contract Agent at an
account specified by the Purchase Contract Agent for the benefit of the
applicable Holders as provided in the Purchase Contracts or Purchase Contract
Agreement. Notwithstanding anything contained herein to the contrary, for the
avoidance of doubt, the cash payments at a rate of 9.5% per year of the
Stated Amount of Income PRIDES to Holders of Income PRIDES, whether current
or deferred, shall not be subject to the Pledge and therefore are not part of
the Collateral.

         Section 3.02. PRINCIPAL PAYMENTS FOLLOWING TERMINATION EVENT. All
payments received by the Collateral Agent following a Termination Event of (1)
the liquidation amount of Pledged Preferred Securities or securities
entitlements thereto, (2) the Applicable Ownership Interests (as specified in
clause (A) of the definition thereof) of the aggregate principal amount of the
Treasury Portfolio, (3) the aggregate principal amount of the Pledged Notes or
securities entitlements thereto, or (4) the principal amount of the Pledged
Treasury Securities, shall be distributed to the Purchase Contract Agent for the
benefit of the applicable Holders for distribution to such Holders in accordance
with their respective interests.

         Section 3.03. PRINCIPAL PAYMENTS PRIOR TO OR ON PURCHASE CONTRACT
SETTLEMENT DATE.

         (a) Subject to the provisions of Section 5.08 and Section 7.02 , and
except as provided in Section 3.03(b) below, if no Termination Event shall have
occurred, all payments received by the Collateral Agent of (1) the liquidation
amount with respect to the Pledged Preferred Securities or security entitlements
with respect thereto, (2) the Applicable Ownership Interests (as specified in
clause (A) of the definition thereof) of the aggregate principal amount of the
Treasury Portfolio, (3) the aggregate principal amount with respect to the
Pledged Notes or security entitlements with respect thereto or (4) the principal
amount of Pledged Treasury Securities, shall be held and invested in Permitted
Investments until the Purchase Contract Settlement Date and on the Purchase
Contract Settlement Date distributed to the Company as provided in Section 5.07
hereof. Any balance remaining in the Collateral Account shall be distributed to
the Purchase Contract Agent for the benefit of the applicable Holders for
distribution to such Holders in accordance with their respective interests. The
Company shall instruct the Collateral Agent as to the type of Permitted
Investments in which any payments made under this Section shall be invested,
provided, however, that if the Company fails to deliver such instructions by
10:30 a.m. (New York City time), the Collateral Agent shall invest such payments
in the Permitted Investments described in clause (7) of the definition of
Permitted Investments.

         (b) All payments received by the Collateral Agent of (1) the
liquidation amount of Preferred Securities or security entitlements with respect
thereto, (2) the Applicable Ownership Interests (as specified in clause (A) of
the definition thereof) of the aggregate principal amount


                                       7


of the Treasury Portfolio, (3) the aggregate principal amount with respect to
the Notes or security entitlements with respect thereto or (4) the principal
amount of Treasury Securities or security entitlements with respect thereto,
that, in each case, have been released from the Pledge shall be distributed to
the Purchase Contract Agent for the benefit of the applicable Holders for
distribution to such Holders in accordance with their respective interests.

         Section 3.04. PAYMENTS TO PURCHASE CONTRACT AGENT. The Collateral Agent
shall use all commercially reasonable efforts to deliver payments to the
Purchase Contract Agent hereunder to the account designated by the Purchase
Contract Agent for such purpose not later than 12:00 p.m. (New York City time)
on the Business Day such payment is received by the Collateral Agent; provided,
however, that if such payment is received on a day that is not a Business Day or
after 11:00 a.m. (New York City time) on a Business Day, then the Collateral
Agent shall use all commercially reasonable efforts to deliver such payment no
later than 10:30 a.m. (New York City time) on the next succeeding Business Day.

         Section 3.05. ASSETS NOT PROPERLY RELEASED. If the Purchase Contract
Agent or any Holder shall receive any principal payments on account of financial
assets credited to the Collateral Account and not released therefrom in
accordance with this Agreement, the Purchase Contract Agent or such Holder shall
hold the same as trustee of an express trust for the benefit of the Company and,
upon receipt of an Officers' Certificate of the Company so directing, promptly
deliver the same to the Collateral Agent for credit to the Collateral Account or
to the Company for application to the Obligations of the Holders, and the
Purchase Contract Agent and Holders shall acquire no right, title or interest in
any such payments of principal amounts so received.

                                    ARTICLE 4
                                     CONTROL

         Section 4.01. ESTABLISHMENT OF COLLATERAL ACCOUNT. The Securities
Intermediary hereby confirms that:

         (a) the Securities Intermediary has established the Collateral Account;

         (b) the Collateral Account is a securities account;

         (c) subject to the terms of this Agreement, the Securities Intermediary
shall identify in its records the Collateral Agent as the entitlement holder
entitled to exercise the rights that comprise any financial asset credited to
the Collateral Account;

         (d) all property delivered to the Securities Intermediary pursuant to
this Agreement or the Purchase Contract Agreement will be credited promptly to
the Collateral Account;

         (e) all securities or other property underlying any financial assets
credited to the Collateral Account shall be registered in the name of the
Collateral Agent, indorsed to the Collateral Agent or in blank, or credited to
another securities account maintained in the name of the Collateral Agent, and
the Collateral Agent may, at any time or from time to time, in its sole
discretion, cause any or all securities or other property underlying any
financial assets credited to the Collateral Account not registered in its name
to be so registered in its name; in no case will any financial asset credited to
the Collateral Account be registered in the name of the Purchase


                                       8


Contract Agent or any Holder, payable to the order of the Purchase Contract
Agent or any Holder or specially indorsed to the Purchase Contract Agent or any
Holder.

         Section 4.02. TREATMENT AS FINANCIAL ASSETS. Each item of property
(whether investment property, financial asset, security, instrument or cash)
credited to the Collateral Account shall be treated as a financial asset.

         Section 4.03. SOLE CONTROL BY COLLATERAL AGENT. Except as provided in
Section 6.01, at all times prior to the termination of the Pledge, the
Collateral Agent shall have sole control of the Collateral Account, and the
Securities Intermediary shall take instructions and directions with respect to
the Collateral Account solely from the Collateral Agent. If at any time the
Securities Intermediary shall receive an entitlement order issued by the
Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Purchase Contract Agent or any Holder or any other Person. Until termination
of the Pledge, the Securities Intermediary will not comply with any entitlement
orders issued by the Purchase Contract Agent or any Holder.

         Section 4.04. SECURITIES INTERMEDIARY'S LOCATION. The Collateral
Account, and the rights and obligations of the Securities Intermediary, the
Collateral Agent, the Purchase Contract Agent and the Holders with respect
thereto, shall be governed by the laws of the State of New York. Regardless of
any provision in any other agreement, for purposes of the UCC, New York shall be
deemed to be the Securities Intermediary's location.

         Section 4.05. NO OTHER CLAIMS. Except for the claims and interest of
the Collateral Agent and of the Purchase Contract Agent and the Holders in the
Collateral Account, the Securities Intermediary (without making any
investigation) does not know of any claim to, or interest in, the Collateral
Account or in any financial asset credited thereto. If any Person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
warrant of attachment, execution or similar process) against the Collateral
Account or in any financial asset carried therein, the Securities Intermediary
will promptly notify the Collateral Agent and the Purchase Contract Agent.

         Section 4.06. INVESTMENT AND RELEASE. All proceeds of financial assets
from time to time deposited in the Collateral Account shall be invested and
reinvested as provided in this Agreement. At all times prior to termination of
the Pledge, no property shall be released from the Collateral Account except in
accordance with this Agreement or upon written instructions of the Collateral
Agent.

         Section 4.07. STATEMENTS AND CONFIRMATIONS. The Securities Intermediary
will promptly send copies of all statements, confirmations and other
correspondence concerning the Collateral Account and any financial assets
credited thereto simultaneously to each of the Purchase Contract Agent and the
Collateral Agent at their addresses for notices under this Agreement.

         Section 4.08. TAX ALLOCATIONS. The Purchase Contract Agent shall report
all items of income, gain, expense and loss recognized in the Collateral
Account, to the extent such reporting is required by law, to the Internal
Revenue Service and all state and local taxing


                                       9


authorities in the manner required by law. Neither the Securities
Intermediary nor the Collateral Agent shall have any tax reporting duties
hereunder.

         Section 4.09. NO OTHER AGREEMENTS. The Securities Intermediary has not
entered into, and prior to the termination of the Pledge will not enter into,
any agreement with any other Person relating to the Collateral Account or any
financial assets credited thereto, including, without limitation, any agreement
to comply with entitlement orders of any Person other than the Collateral Agent.

         Section 4.10. POWERS COUPLED WITH AN INTEREST. The rights and powers
granted in this ARTICLE 4 to the Collateral Agent have been granted in order to
perfect its security interests in the Collateral Account, are powers coupled
with an interest and will be affected neither by the bankruptcy of the Purchase
Contract Agent or any Holder nor by the lapse of time. The obligations of the
Securities Intermediary under this ARTICLE 4 shall continue in effect until the
termination of the Pledge.

                                    ARTICLE 5
 INITIAL DEPOSIT; ESTABLISHMENT OF GROWTH PRIDES AND REESTABLISHMENT OF INCOME
                                     PRIDES

         Section 5.01. INITIAL DEPOSIT OF PREFERRED SECURITIES. Prior to or
concurrently with the execution and delivery of this Agreement, the Purchase
Contract Agent, on behalf of the initial Holders of the Income PRIDES, shall
Transfer to the Collateral Agent, for credit to the Collateral Account, the
Preferred Securities or security entitlements relating thereto, and the
Securities Intermediary shall indicate by book-entry that a securities
entitlement to such Preferred Securities has been credited to the Collateral
Account.

         Section 5.02. ESTABLISHMENT OF GROWTH PRIDES.

         (a) So long as no Tax Event Redemption shall have occurred, and the
Trust shall not have been dissolved and liquidated, on or at any time prior to
the fifth Business Day immediately preceding the Purchase Contract Settlement
Date, a Holder of Income PRIDES shall have the right to establish or reestablish
Growth PRIDES by substitution of Treasury Securities or security entitlements
with respect thereto for the Pledged Preferred Securities comprising a part of
such Holder's Income PRIDES in integral multiples of 20 Income PRIDES by:

                  (i) Transferring to the Collateral Agent for credit to the
         Collateral Account Treasury Securities or security entitlements with
         respect thereto having a Value equal to the aggregate liquidation
         amount of the Pledged Preferred Securities to be released, accompanied
         by a notice, substantially in the form of Exhibit C to the Purchase
         Contract Agreement, whereupon the Purchase Contract Agent shall deliver
         to the Collateral Agent a notice, substantially in the form of Exhibit
         A hereto, (A) stating that such Holder has Transferred Treasury
         Securities or security entitlements with respect thereto to the
         Collateral Agent for credit to the Collateral Account, (B) stating the
         Value of the Treasury Securities or security entitlements with respect
         thereto Transferred by such


                                       10


         Holder and (C) requesting that the Collateral Agent release from the
         Pledge the Pledged Preferred Securities that are a component of such
         Income PRIDES; and

                  (ii) delivering the related Income PRIDES to the Purchase
         Contract Agent.

         Upon receipt of such notice and confirmation that Treasury Securities
or security entitlements with respect thereto have been credited to the
Collateral Account as described in such notice, the Collateral Agent shall
instruct the Securities Intermediary by a notice, substantially in the form of
Exhibit B hereto, to release such Pledged Preferred Securities from the Pledge
by Transfer to the Purchase Contract Agent for distribution to such Holder, free
and clear of any lien, pledge or security interest created hereby.

         (b) If a Tax Event Redemption has occurred and the Treasury Portfolio
has become a component of the Income PRIDES, on or at any time prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date,
a Holder of Income PRIDES shall have the right to establish or reestablish
Growth PRIDES by substitution of Treasury Securities or security entitlements
with respect thereto for the Applicable Ownership Interests (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio comprising
a part of such Holder's Income PRIDES in integral multiples of 80,000 Income
PRIDES by:

                  (i) Transferring to the Collateral Agent for credit to the
         Collateral Account Treasury Securities or security entitlements with
         respect thereto having a Value equal to the Value of the Applicable
         Ownership Interests (as specified in clause (A) of the definition of
         such term) of the Treasury Portfolio to be released, accompanied by a
         notice, substantially in the form of Exhibit C to the Purchase Contract
         Agreement, whereupon the Purchase Contract Agent shall deliver to the
         Collateral Agent a notice, substantially in the form of Exhibit A
         hereto, (A) stating that such Holder has Transferred Treasury
         Securities or security entitlements with respect thereto to the
         Collateral Agent for credit to the Collateral Account, (B) stating the
         Value of the Treasury Securities or security entitlements with respect
         thereto Transferred by such Holder and (C) requesting that the
         Collateral Agent release from the Pledge the Applicable Ownership
         Interests (as specified in clause (A) of the definition of such term)
         of the Treasury Portfolio that are a component of such Income PRIDES;
         and

                  (ii) delivering the related Income PRIDES to the Purchase
         Contract Agent.

         Upon receipt of such notice and confirmation that Treasury Securities
or security entitlements with respect thereto have been credited to the
Collateral Account as described in such notice, the Collateral Agent shall
instruct the Securities Intermediary by a notice, substantially in the form of
Exhibit B hereto, to release such Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio from the
Pledge by Transfer to the Purchase Contract Agent for distribution to such
Holder, free and clear of any lien, pledge or security interest created hereby.

         (c) If no Tax Event Redemption shall have occurred, but the Trust shall
have been dissolved and liquidated, and the Notes have become a component of the
Income PRIDES, at any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract


                                       11


         Settlement Date, a Holder of Income PRIDES shall have the right to
         substitute Treasury Securities or security entitlements with respect
         thereto for the Pledged Notes comprising a part of such Holder's Income
         PRIDES in integral multiples of 20 Income PRIDES by:

                  (i) Transferring to the Securities Intermediary for credit to
         the Collateral Account Treasury Securities or security entitlements
         with respect thereto having a Value equal to the aggregate principal
         amount at maturity of the Pledged Notes to be released, accompanied by
         a notice, substantially in the form of Exhibit C to the Purchase
         Contract Agreement, whereupon the Purchase Contract Agent shall deliver
         to the Collateral Agent a notice, substantially in the form of Exhibit
         A hereto, (A) stating that such Holder has Transferred Treasury
         Securities or security entitlements with respect thereto to the
         Collateral Agent for credit to the Collateral Account, (B) stating the
         Value of the Treasury Securities or securities entitlements with
         respect thereto Transferred by such Holder and (C) requesting that the
         Collateral Agent release from the Pledge the Pledged Notes that are a
         component of such Income PRIDES; and

                  (ii) delivering the related Income PRIDES to the Purchase
         Contract Agent.

         Upon receipt of such notice and confirmation that Treasury Securities
or security entitlements with respect thereto have been credited to the
Collateral Account as described in such notice, the Collateral Agent shall
instruct the Securities Intermediary by a notice, substantially in the form of
Exhibit B hereto, to release such Pledged Notes from the Pledge by Transfer to
the Purchase Contract Agent for distribution to such Holder free and clear of
any lien, pledge or security interest created hereby.

         Section 5.03. REESTABLISHMENT OF INCOME PRIDES.

         (a) So long as no Tax Event Redemption shall have occurred, and the
Trust shall not have been dissolved and liquidated, on or at any time on or
prior to the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, a Holder of Growth PRIDES shall have the right to reestablish
Income PRIDES by substitution of Preferred Securities or security entitlements
with respect thereto for Pledged Treasury Securities in integral multiples of 20
Growth PRIDES by:

                  (i) Transferring to the Collateral Agent for credit to the
         Collateral Account Preferred Securities or security entitlements with
         respect thereto having a liquidation amount equal to the Value of the
         Pledged Treasury Securities to be released, accompanied by a notice,
         substantially in the form of Exhibit C to the Purchase Contract
         Agreement, whereupon the Purchase Contract Agent shall deliver to the
         Collateral Agent a notice, substantially in the form of Exhibit C
         hereto, stating that such Holder has transferred Preferred Securities
         or security entitlements with respect thereto to the Collateral Agent
         for credit to the Collateral Account and requesting that the Collateral
         Agent release from the Pledge the Pledged Treasury Securities related
         to such Growth PRIDES; and

                  (ii) Delivering the related Growth PRIDES to the Purchase
         Contract Agent.


                                       12


         Upon receipt of such notice and confirmation that Preferred Securities
or security entitlements with respect thereto have been credited to the
Collateral Account as described in such notice, the Collateral Agent shall
instruct the Securities Intermediary by a notice in the form provided in Exhibit
D to release such Pledged Treasury Securities from the Pledge by Transfer to the
Purchase Contract Agent for distribution to such Holder, free and clear of any
lien, pledge or security interest created hereby.

         (b) If a Tax Event Redemption has occurred and the Treasury Portfolio
has become a component of the Income PRIDES, on or at any time prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date,
a Holder of Growth PRIDES shall have the right to reestablish Income PRIDES by
substitution of Treasury Securities or security entitlements with respect
thereto for the Applicable Ownership Interests (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio comprising a part of such
Holder's Growth PRIDES in integral multiples of 80,000 Growth PRIDES by:

                  (i) Transferring to the Collateral Agent for credit to the
         Collateral Account Applicable Ownership Interests (as specified in
         clause (A) of the definition of such term) of the Treasury Portfolio
         having a Value equal to the Treasury Securities or security
         entitlements with respect thereto to be released, accompanied by a
         notice, substantially in the form of Exhibit C to the Purchase Contract
         Agreement, whereupon the Purchase Contract Agent shall deliver to the
         Collateral Agent a notice, substantially in the form of Exhibit A
         hereto, (A) stating that such Holder has Transferred Applicable
         Ownership Interests (as specified in clause (A) of the definition of
         such term) of the Treasury Portfolio to the Collateral Agent for credit
         to the Collateral Account, (B) stating the Value of the Applicable
         Ownership Interests (as specified in clause (A) of the definition of
         such term) of the Treasury Portfolio Transferred by such Holder and (C)
         requesting that the Collateral Agent release from the Pledge the
         Treasury Securities or security entitlements with respect thereto that
         are a component of such Growth PRIDES; and

                  (ii) delivering the related Growth PRIDES to the Purchase
         Contract Agent.

         Upon receipt of such notice and confirmation that the Applicable
Ownership Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio have been credited to the Collateral Account as
described in such notice, the Collateral Agent shall instruct the Securities
Intermediary by a notice, substantially in the form of Exhibit B hereto, to
release the Treasury Securities or security entitlements with respect thereto
from the Pledge by Transfer to the Purchase Contract Agent for distribution to
such Holder, free and clear of any lien, pledge or security interest created
hereby.

         (c) If no Tax Event Redemption shall have occurred, but the Trust shall
have been dissolved and liquidated, and the Notes have become a component of the
Income PRIDES, at any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, a Holder of Growth PRIDES shall
have the right to reestablish Income PRIDES by substitution of Notes or security
entitlements with respect thereto for Pledged Treasury Securities in integral
multiples of 20 Growth PRIDES by:


                                       13


                  (i) Transferring to the Collateral Agent for credit to the
         Collateral Account Notes or security entitlements with respect thereto
         having a principal amount equal to the Value of the Pledged Treasury
         Securities to be released, accompanied by a notice, substantially in
         the form of Exhibit C to the Purchase Contract Agreement, whereupon the
         Purchase Contract Agent shall deliver to the Collateral Agent a notice,
         substantially in the form of Exhibit C hereto, stating that such Holder
         has Transferred the Notes or security entitlements with respect thereto
         to the Collateral Agent for credit to the Collateral Account and
         requesting that the Collateral Agent release from the Pledge the
         Pledged Treasury Securities related to such Growth PRIDES; and

                  (ii) delivering the related Growth PRIDES to the Purchase
         Contract Agent.

         Upon receipt of such notice and confirmation that Notes or security
entitlements with respect thereto have been credited to the Collateral Account
as described in such notice, the Collateral Agent shall instruct the Securities
Intermediary by a notice in the form provided in Exhibit D to release such
Pledged Treasury Securities from Pledge by Transfer to the Purchase Contract
Agent for distribution to such Holder, free and clear of any lien, pledge or
security interest created hereby.

         Section 5.04. TERMINATION EVENT.

         (a) Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that a Termination Event has occurred,
the Collateral Agent shall release all Collateral from the Pledge and shall
promptly Transfer:

                  (i) any Pledged Preferred Securities or security entitlements
         with respect thereto or the Applicable Ownership Interests (as
         specified in clause (A) of the definition of such term) of the Treasury
         Portfolio (if a Tax Event Redemption has occurred and the Treasury
         Portfolio has become a component of the Income PRIDES) or the Pledged
         Notes (if the Trust has been dissolved and liquidated, and the Notes or
         security entitlements with respect thereto have become a component of
         the Income PRIDES);

                  (ii) any Pledged Treasury Securities, and

                  (iii) payments by Holders or the Permitted Investments of such
         payments pursuant to Section 5.05 hereof,

to the Purchase Contract Agent for the benefit of the Holders for distribution
to such Holders in accordance with their respective interests, free and clear of
any lien, pledge or security interest or other interest created hereby;
provided, however, if any Holder shall be entitled to receive less than $1,000
with respect to his interest in the Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio, the
Purchase Contract Agent shall have the right to dispose of such interest for
cash and deliver to such Holder cash in lieu of delivering the Applicable
Ownership Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio.

         (b) If such Termination Event shall result from the Company becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to


                                       14


effectuate the release and Transfer of all Pledged Preferred Securities, the
Applicable Ownership Interests (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, the Pledged Notes, the Pledged Treasury
Securities or payments by Holders or the Permitted Investments of such payments
pursuant to Section 5.05 hereof, as the case may be, as provided by this Section
5.04, the Purchase Contract Agent shall:

                  (i) use its best efforts to obtain an opinion of a nationally
         recognized law firm reasonably acceptable to the Collateral Agent to
         the effect that, as a result of the Company being the debtor in such a
         bankruptcy case, the Collateral Agent will not be prohibited from
         releasing or Transferring the Collateral as provided in this Section
         5.04, and shall deliver such opinion to the Collateral Agent within ten
         days after the occurrence of such Termination Event, and if (A) the
         Purchase Contract Agent shall be unable to obtain such opinion within
         ten days after the occurrence of such Termination Event or (B) the
         Collateral Agent shall continue, after delivery of such opinion, to
         refuse to effectuate the release and Transfer of all Pledged Preferred
         Securities, Applicable Ownership Interests (as specified in clause (A)
         of the definition of such term) of the Treasury Portfolio, all the
         Pledged Notes, the Pledged Treasury Securities, the payments by Holders
         or the Permitted Investments of such payments pursuant to Section 5.05
         hereof or the Proceeds of any of the foregoing, as the case may be, as
         provided in this Section 5.04, then the Purchase Contract Agent shall
         within fifteen days after the occurrence of such Termination Event
         commence an action or proceeding in the court having jurisdiction of
         the Company's case under the Bankruptcy Code seeking an order requiring
         the Collateral Agent to effectuate the release and transfer of all
         Pledged Preferred Securities, Applicable Ownership Interests (as
         specified in clause (A) of the definition of such term) of the Treasury
         Portfolio, all the Pledged Notes, the Pledged Treasury Securities, or
         the payments by Holders or the Permitted Investments of such payments
         pursuant to Section 5.05 hereof, or as the case may be, as provided by
         this Section 5.04; or

                  (ii) commence an action or proceeding like that described in
         clause Section 5.04(b)(i) hereof within ten days after the occurrence
         of such Termination Event.

         Section 5.05. CASH SETTLEMENT.

         (a) Upon receipt by the Collateral Agent of (1) a notice from the
Purchase Contract Agent promptly after the receipt by the Purchase Contract
Agent of a notice from a Holder of Income PRIDES that such Holder has elected,
in accordance with the procedures specified in Section 5.02(a)(i) or (d)(i) of
the Purchase Contract Agreement, respectively, to effect a Cash Settlement and
(2) payment by such Holder by deposit in the Collateral Account prior to 11:00
a.m. (New York City time) on the fourth Business Day immediately preceding the
Purchase Contract Settlement Date, in the case of an Income PRIDES, unless a Tax
Event Redemption has occurred, or on the Business Day prior to the Purchase
Contract Settlement Date in the case of Treasury Stock Purchase or an Income
PRIDES, if a Tax Event Redemption has occurred, of the Purchase Price in lawful
money of the United States by certified or cashier's check or wire transfer of
immediately available funds payable to or upon the order of the Securities
Intermediary, then the Collateral Agent shall:


                                       15


                  (i) instruct the Securities Intermediary promptly to invest
         any such Cash in Permitted Investments;

                  (ii) release from the Pledge the Income PRIDES Holder's or the
         Growth PRIDES Holder's related Pledged Preferred Securities, Applicable
         Ownership Interests (as specified in clause (A) of the definition of
         such term) of the Treasury Portfolio, the Pledged Notes or Pledged
         Treasury Securities, as applicable, as to which such Holder has elected
         to effect a Cash Settlement pursuant to this Section 5.05(a); and

                  (iii) instruct the Securities Intermediary to Transfer all
         such Pledged Preferred Securities, Applicable Ownership Interests (as
         specified in clause (A) of the definition of such term) of the Treasury
         Portfolio, Pledged Notes or the Pledged Treasury Securities, as the
         case may be, to the Purchase Contract Agent for the benefit of such
         Holder, in each case free and clear of the Pledge created hereby, for
         distribution to such Holder.

         The Company shall instruct the Collateral Agent in writing as to the
type of Permitted Investments in which any such Cash shall be invested;
provided, however, that if the Company fails to deliver such written
instructions by 10:30 a.m. (New York City time), the Securities Intermediary
shall invest such Cash in the Permitted Investments described in clause (7) of
the definition of Permitted Investments.

         Upon receipt of the proceeds upon the maturity of the Permitted
Investments on the Purchase Contract Settlement Date, the Collateral Agent shall
(A) instruct the Securities Intermediary to pay the portion of such proceeds and
deliver any certified or cashier's checks received, in an aggregate amount equal
to the Purchase Price, to the Company on the Purchase Contract Settlement Date,
and (B) instruct the Securities Intermediary to release any amounts in excess of
the Purchase Price earned from such Permitted Investments to the Purchase
Contract Agent for distribution to such Holder.

         (b) If a Holder of Income PRIDES (if a Tax Event Redemption shall not
have occurred) notifies the Purchase Contract Agent as provided in paragraph
5.02(a)(i) of the Purchase Contract Agreement of its intention to pay the
Purchase Price in cash, but fails to make such payment as required by paragraph
5.02(a)(ii) of the Purchase Contract Agreement, such Holder shall be deemed to
have consented to the disposition of such Holder's Pledged Preferred Securities
or Pledged Notes in accordance with paragraph 5.02(a)(iii) of the Purchase
Contract Agreement.

         (c) If a Holder of a Growth PRIDES or a Holder of Income PRIDES (if a
Tax Event Redemption shall have occurred) notifies the Purchase Contract Agent
as provided in paragraph 5.02(d)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by paragraph 5.02(d)(ii) of the Purchase Contract Agreement, such
Holder shall be deemed to have elected to pay the Purchase Price in accordance
with paragraph 5.02(d)(iii) of the Purchase Contract Agreement.

         (d) As soon as practicable after 11:00 a.m. (New York City time) on the
fourth Business Day immediately preceding the Purchase Contract Settlement Date,
the Collateral Agent shall deliver to the Purchase Contract Agent a notice,
substantially in the form of Exhibit


                                       16


E hereto, stating (i) the amount of Cash that it has received with respect to
the Cash Settlement of Income PRIDES and (ii) the amount of Cash that it has
received with respect to the Cash Settlement of Growth PRIDES.

         Section 5.06. EARLY SETTLEMENT. Upon receipt by the Collateral Agent of
a notice from the Purchase Contract Agent that a Holder of Securities has
elected to effect Early Settlement of its obligations under the Purchase
Contracts forming a part of such Securities in accordance with the terms of the
Purchase Contracts and Section 5.07 or Section 5.04(b)(2) (in case of an early
settlement upon a Cash Merger) of the Purchase Contract Agreement (which notice
shall set forth the number of such Purchase Contracts as to which such Holder
has elected to effect Early Settlement), and that the Purchase Contract Agent
has received from such Holder, and paid to the Company as confirmed in writing
by the Company, the related Early Settlement Amounts or Purchase Price (if such
Early Settlement is pursuant to Section 5.04(b)(2) of the Purchase Contract
Agreement) pursuant to the terms of the Purchase Contracts and the Purchase
Contract Agreement and that all conditions to such Early Settlement have been
satisfied, then the Collateral Agent shall release from the Pledge, (1) Pledged
Preferred Securities or the appropriate Applicable Ownership Interests (as
specified in clause (A) of the definitions at such term) of the Treasury
Portfolio or Pledged Notes in the case of a Holder of Income PRIDES or (2)
Pledged Treasury Securities, in the case of a Holder of Growth PRIDES, in each
case with a Value equal to the product of (x) the Stated Amount times (y) the
number of Purchase Contracts as to which such Holder has elected to effect Early
Settlement, and shall instruct the Securities Intermediary to Transfer all such
Pledged Preferred Securities or the appropriate Applicable Ownership Interests
(as specified in clause (A) of the definitions at such term) of the Treasury
Portfolio or Pledged Notes or Pledged Treasury Securities, as the case may be,
to the Purchase Contract Agent for the benefit of such Holder, in each case free
and clear of the Pledge created hereby, for distribution to such Holder. A
Growth PRIDES holder may settle early only in integral multiples of 20 Purchase
Contracts.

         Section 5.07. APPLICATION OF PROCEEDS IN SETTLEMENT OF PURCHASE
CONTRACTS.

         (a) If a Holder of Income PRIDES (if a Tax Event Redemption has not
occurred) has not elected to make an effective Cash Settlement by notifying the
Purchase Contract Agent in the manner provided for in Section 5.02(a)(i) in the
Purchase Contract Agreement, or has given such notice but failed to deliver the
required cash prior to 11:00 a.m. (New York City time) on the fourth Business
Day immediately preceding the Purchase Contract Settlement Date, such Holder
shall be deemed to have elected to pay for the shares of Common Stock to be
issued under such Purchase Contracts from the Proceeds of the remarketing of the
related Pledged Preferred Securities or Pledged Notes. Upon written notice of
such event from the Purchase Contract Agent, the Collateral Agent shall instruct
the Securities Intermediary to Transfer the related Pledged Preferred Securities
or Pledged Notes to the Remarketing Agent for remarketing. Upon receiving such
Pledged Preferred Securities or Pledged Notes, the Remarketing Agent, pursuant
to the terms of the Remarketing Agreement, will use reasonable efforts to
remarket such Pledged Preferred Securities or Pledged Notes. The Remarketing
Agent will deposit the Proceeds of such remarketing (less an amount not
exceeding $0.125 per each Preferred Security remarketed plus 0.25% of the
deferred and unpaid distributions or deferred and unpaid interest thereon, as
the case may be, if any, which shall be retained by the Remarketing Agent as a
fee for its services in the Remarketing) in the Collateral Account, and the
Collateral Agent shall invest the Proceeds of


                                       17


the remarketing in Permitted Investments set forth in clause (7) of the
definition of Permitted Investments. On the Purchase Contract Settlement Date,
the Purchase Contract Agent shall give written direction to the Collateral Agent
specifying the instruction the Collateral Agent shall give to the Securities
Intermediary in order to apply a portion of the Proceeds from such remarketing
equal to the aggregate liquidation amount of the Preferred Securities or
aggregate principal amount of such Pledged Notes to satisfy in full such
Holder's obligations to pay the Purchase Price to purchase the shares of Common
Stock under the related Purchase Contracts and the balance of the Proceeds from
the remarketing, if any, that shall be transferred to the Purchase Contract
Agent for the benefit of such Holder for distribution to such Holder.

         If the Remarketing Agent advises the Collateral Agent in writing that
there has been a Failed Remarketing, thus resulting in an event of default under
the Purchase Contract Agreement and hereunder, the Collateral Agent, for the
benefit of the Company, shall, at the written direction of the Company, exercise
its rights as a secured party with respect to the Pledged Preferred Securities
or Pledged Notes and use commercially reasonable efforts to dispose of the
Pledged Preferred Securities or Pledged Notes in accordance with applicable law
and apply the proceeds from such disposition towards such Holder's obligations
to pay the Purchase Price for the shares of Common Stock.

         (b) If a Holder of a Growth PRIDES or a Holder of Income PRIDES (if a
Tax Event Redemption has occurred) has not elected to make an effective Cash
Settlement by notifying the Purchase Contract Agent in the manner provided for
in Section 5.02(d)(i) of the Purchase Contract Agreement, or has given such
notice but failed to make such payment in the manner required by Section
5.02(d)(ii) of the Purchase Contract Agreement, such Holder shall be deemed to
have elected to pay for the shares of Common Stock to be issued under such
Purchase Contracts from the Proceeds of the related Pledged Treasury Securities
or such Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be.
Promptly, after 11:00 a.m. (New York City time) on the Business Day immediately
prior to the Purchase Contract Settlement Date, the Collateral Agent shall
invest the Cash Proceeds of the maturing Pledged Treasury Securities or such
Applicable Ownership Interests (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, as the case may be, in Permitted
Investments set forth in clause (7) of the definition of Permitted Investments,
unless prior to 10:30 a.m. (New York City time), the Company shall otherwise
instruct the Collateral Agent as to the type of Permitted Investments in which
any such Cash Proceeds shall be invested. Without receiving any instruction from
any such Holder, the Collateral Agent shall apply the Proceeds of the related
Pledged Treasury Securities or such Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, to the settlement of such Purchase Contracts on the Purchase
Contract Settlement Date. In the event the sum of the Proceeds from the related
Pledged Treasury Securities or such Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio as the
case may be, and the investment earnings from the investment in Permitted
Investments exceeds the aggregate Purchase Price of the Purchase Contracts being
settled thereby, the Collateral Agent shall instruct the Securities Intermediary
to distribute such excess, when received, to the Purchase Contract Agent for the
benefit of such Holder for distribution to such Holder.


                                       18


         (c) Under the Remarketing Agreement and subject to the terms of the
Supplemental Remarketing Agreement, on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, but no earlier than
the Payment Date immediately preceding the Purchase Contract Settlement Date,
Holders of Separate Preferred Securities or Separate Notes, as the case may be,
may elect to have their Separate Preferred Securities or Separate Notes, as the
case may be, remarketed by delivering their Separate Preferred Securities or
Separate Notes, as the case may be, along with a notice of such election,
substantially in the form of Exhibit F hereto, to the Custodial Agent. The
Custodial Agent shall hold Separate Preferred Securities or Separate Notes, as
the case may be, in an account separate from the Collateral Account in which the
Pledged Securities shall be held. Holders of Separate Preferred Securities or
Separate Notes, as the case may be, electing to have their Separate Preferred
Securities or Separate Notes, as the case may be, remarketed will also have the
right to withdraw that election by written notice to the Custodial Agent,
substantially in the form of Exhibit G hereto, on or prior to the fifth Business
Day immediately preceding the Purchase Contract Settlement Date

         On the fourth Business Day immediately preceding the Purchase Contract
Settlement Date, the Custodial Agent shall notify the Remarketing Agent of the
aggregate Stated Amount of the Separate Preferred Securities or the aggregate
principal amount of the Separate Notes, as the case may be, to be remarketed and
will deliver to the Remarketing Agent for remarketing all Separate Preferred
Securities or Separate Notes, as the case may be, delivered to the Custodial
Agent pursuant to this Section 5.07(c) and not withdrawn pursuant to the terms
hereof prior to such date. After deducting the Remarketing Fee to the extent
permitted under the terms of the Remarketing Agreement, the Remarketing Agent
will remit to the Custodial Agent the remaining portion of the proceeds of
such Remarketing for the benefit of such Holders. In the event of a Failed
Remarketing, the Remarketing Agent will promptly return such Separate Preferred
Securities or Separate Notes, as the case may be, to the Custodial Agent for
redelivery to such Holders.

         Section 5.08. TAX EVENT REDEMPTION If the Collateral Agent receives
written notice that a Tax Event Redemption has occurred prior to the Purchase
Contract Settlement Date, the Collateral Agent shall apply the Redemption Amount
to purchase the Treasury Portfolio and the Collateral Agent shall credit the
Applicable Ownership Interests (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio to the Collateral Account and shall
transfer the Applicable Ownership Interests (as specified in clause (B) of the
definition of such term) of the Treasury Portfolio to the Purchase Contract
Agent for distribution to the Holders of the Income PRIDES. Upon credit to the
Collateral Account of the Applicable Ownership Interests (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio having a Value
equal to the liquidation amount of the Pledged Preferred Securities or the
aggregate principal amount of the Pledged Notes, the Collateral Agent shall
cause the Securities Intermediary to release the Pledged Preferred Securities or
the Pledged Notes, as applicable, from the Collateral Account and to promptly
transfer the Pledged Preferred Securities to the Purchase Contract Agent and the
Pledged Notes to the Company, as applicable.


                                       19


                                    ARTICLE 6
            VOTING RIGHTS - PLEDGED PREFERRED SECURITIES AND PLEDGED
                                      NOTES

         Section 6.01. VOTING RIGHTS. The Purchase Contract Agent may exercise,
or refrain from exercising, any and all voting and other consensual rights
pertaining to the Pledged Preferred Securities or the Pledged Notes or any part
thereof for any purpose not inconsistent with the terms of this Agreement and in
accordance with the terms of the Purchase Contract Agreement; provided, that the
Purchase Contract Agent shall not exercise or shall not refrain from exercising
such right, as the case may be, if, in the judgment of the Purchase Contract
Agent, such action would impair or otherwise have a material adverse effect on
the value of all or any of the Pledged Preferred Securities or the Pledged
Notes; and provided, further, that the Purchase Contract Agent shall give the
Company and the Collateral Agent at least five Business Days' prior written
notice of the manner in which it intends to exercise, or its reasons for
refraining from exercising, any such right. Upon receipt of any notices and
other communications in respect of any Pledged Preferred Securities or the
Pledged Notes, including notice of any meeting at which holders of the Preferred
Securities or the Notes are entitled to vote or solicitation of consents,
waivers or proxies of holders of the Preferred Securities or Notes, the
Collateral Agent shall use reasonable efforts to send promptly to the Purchase
Contract Agent such notice or communication, and as soon as reasonably
practicable after receipt of a written request therefor from the Purchase
Contract Agent, execute and deliver to the Purchase Contract Agent such proxies
and other instruments in respect of such Pledged Preferred Securities or the
Pledged Notes (in form and substance satisfactory to the Collateral Agent) as
are prepared by the Purchase Contract Agent with respect to the Pledged
Preferred Securities or the Pledged Notes.

                                    ARTICLE 7
                               RIGHTS AND REMEDIES

         Section 7.01. RIGHTS AND REMEDIES OF THE COLLATERAL AGENT.

         (a) In addition to the rights and remedies specified in Section 5.07
hereof or otherwise available at law or in equity, after an event of default (as
specified in Section 7.01(b) below) hereunder, the Collateral Agent shall have
all of the rights and remedies with respect to the Collateral of a secured party
under the UCC (whether or not the UCC is in effect in the jurisdiction where the
rights and remedies are asserted) and the TRADES Regulations and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted. Without limiting the generality of the foregoing, such remedies may
include, to the extent permitted by applicable law, (1) retention of the Pledged
Preferred Securities, Pledged Notes, Pledged Treasury Securities or the
appropriate Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio in full satisfaction of the
Holders' obligations under the Purchase Contracts and the Purchase Contract
Agreement or (2) sale of the Pledged Preferred Securities, Pledged Notes,
Pledged Treasury Securities or the appropriate Applicable Ownership Interests
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio in one or more public or private sales.


                                       20


         (b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, or on account of principal payments of any Pledged
Treasury Securities as provided in ARTICLE 3 hereof, in satisfaction of the
Obligations of the Holder of the Income PRIDES (if a Tax Event Redemption has
occurred) of which such appropriate Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio or the
Holder of the Growth PRIDES of which such Pledged Treasury Securities, as
applicable, is a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder and the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities or the appropriate Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable, any and all of the rights and remedies available to a
secured party under the UCC and the TRADES Regulations after default by a
debtor, and as otherwise granted herein or under any other law.

         (c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the liquidation amount of
the Pledged Preferred Securities, (ii) the principal amount of the Pledged
Notes, (iii) the principal amount of the Pledged Treasury Securities and (iv)
the Applicable Ownership Interests (as specified in clause (A) of the definition
of such term) of the principal amount of the Treasury Portfolio, subject, in
each case, to the provisions of ARTICLE 3 hereof, and as otherwise granted
herein.

         (d) The Purchase Contract Agent and each Holder of Securities agrees
that, from time to time, upon the written request of the Collateral Agent or the
Purchase Contract Agent, such Holder shall execute and deliver such further
documents and do such other acts and things as the Collateral Agent may
reasonably request in order to maintain the Pledge, and the perfection and
priority thereof, and to confirm the rights of the Collateral Agent hereunder.
The Purchase Contract Agent shall have no liability to any Holder for executing
any documents or taking any such acts requested by the Collateral Agent
hereunder, except for liability for its own negligent acts, its own negligent
failure to act or its own willful misconduct.

         Section 7.02. SUBSTITUTION OF NOTES OR TREASURY PORTFOLIO. If the Trust
shall have been dissolved and liquidated prior to the Purchase Contract
Settlement Date, the Purchase Contract Agent shall Transfer to the Collateral
Agent Notes having a Value equal to the liquidation amount of the Pledged
Preferred Securities for credit to the Collateral Account. Upon credit to the
Collateral Account of such Notes, the Collateral Agent shall release the Pledged
Preferred Securities from the Collateral Account and shall promptly transfer the
same to the Purchase Contract Agent.

         Notwithstanding the foregoing, in the event of a dissolution and
liquidation of the Trust, if a Liquidation Distribution is to be distributed in
lieu of the Notes as provided for in the Declaration, the Liquidation
Distribution shall be credited to the Collateral Account by the Property
Trustee, on or prior to 12:30 p.m., New York City time, on the date of
distribution of the Liquidation Distribution, by federal funds check or wire
transfer of immediately available funds. The Collateral Agent is hereby
authorized to present the Pledged Preferred Securities for


                                       21


payment as may be required by their terms. Upon receipt of such funds, the
Pledged Preferred Securities shall be released from the Collateral Account. In
the event such funds are credited to the Collateral Account, the Collateral
Agent, at the written direction of the Company, shall instruct the Securities
Intermediary to (a) apply an amount equal to the Redemption Amount of such
Liquidation Distribution to purchase the Treasury Portfolio from the Quotation
Agent for credit to the Collateral Account and (b) promptly remit the remaining
portion of such Liquidation Distribution, if any, to the Purchase Contract Agent
for payment to the Holders of Income PRIDES.

         Section 7.03. TAX EVENT REDEMPTION. Upon the occurrence of a Tax Event
Redemption prior to the Purchase Contract Settlement Date, the Redemption
Amount, plus any accumulated and unpaid distributions, or any accrued and unpaid
interest, as the case may be, payable on the Tax Event Redemption Date with
respect to the Applicable Principal Amount shall be credited to the Collateral
Account by the Property Trustee or, in case there has been a dissolution of the
Trust and the distribution of the related Notes, by the Indenture Trustee, on or
prior to 12:30 p.m., New York City time on such Tax Event Redemption Date, by
federal funds check or wire transfer of immediately available funds. The
Collateral Agent is hereby authorized to present the Pledged Preferred
Securities or the Pledged Notes for payment as may be required by their
respective terms. Upon receipt of such funds, the Pledged Preferred Securities
or Pledged Notes, as the case may be, shall be released from the Collateral
Account. In the event such funds are credited to the Collateral Account, the
Collateral Agent, at the written direction of the Company, shall instruct the
Securities Intermediary to (a) apply an amount equal to the Redemption Amount of
such funds to purchase the Treasury Portfolio from the Quotation Agent for
credit to the Collateral Account and (b) promptly remit the remaining portion of
such funds, if any, to the Purchase Contract Agent for payment to the Holders of
Income PRIDES.

         Section 7.04. SUBSTITUTIONS. Whenever a Holder has the right to
substitute Treasury Securities, Preferred Securities, Notes or security
entitlements for any of them or the appropriate Applicable Ownership Interests
of the Treasury Portfolio, as the case may be, for financial assets held in the
Collateral Account, such substitution shall not constitute a novation of the
security interest created hereby.

                                    ARTICLE 8
                    REPRESENTATIONS AND WARRANTIES; COVENANTS

         Section 8.01. REPRESENTATIONS AND WARRANTIES. Each Holder from time to
time, acting through the Purchase Contract Agent as attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represents
and warrants to the Collateral Agent (with respect to such Holder's interest in
the Collateral), which representations and warranties shall be deemed repeated
on each day a Holder Transfers Collateral that:

         (a) such Holder has the power to grant a security interest in and lien
on the Collateral;

         (b) such Holder is the sole beneficial owner of the Collateral and, in
the case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral


                                       22


Agent for credit to the Collateral Account, free and clear of any security
interest, lien, encumbrance, call, liability to pay money or other restriction
other than the security interest and lien granted under ARTICLE 2 hereof;

         (c) upon the Transfer of the Collateral to the Collateral Agent for
credit to the Collateral Account, the Collateral Agent, for the benefit of the
Company, will have a valid and perfected first priority security interest
therein (assuming that any central clearing operation or any securities
intermediary or other entity not within the control of the Holder involved in
the Transfer of the Collateral, including the Collateral Agent and the
Securities Intermediary, gives the notices and takes the action required of it
hereunder and under applicable law for perfection of that interest and assuming
the establishment and exercise of control pursuant to ARTICLE 4 hereof); and

         (d) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any security interest,
lien or other encumbrance on the Collateral other than the security interest and
lien granted under ARTICLE 2 hereof or violate any provision of any existing law
or regulation applicable to it or of any mortgage, charge, pledge, indenture,
contract or undertaking to which it is a party or which is binding on it or any
of its assets.

         Section 8.02. COVENANTS. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:

         (a) neither the Purchase Contract Agent nor such Holders will create or
purport to create or allow to subsist any mortgage, charge, lien, pledge or any
other security interest whatsoever over the Collateral or any part of it other
than pursuant to this Agreement; and

         (b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the Pledge hereunder,
transferred in connection with the Transfer of the Securities.

                                    ARTICLE 9
    THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES INTERMEDIARY

         It is hereby agreed as follows:

         Section 9.01. APPOINTMENT, POWERS AND IMMUNITIES. The Collateral Agent,
the Custodial Agent or the Securities Intermediary shall act as agent for the
Company hereunder with such powers as are specifically vested in the Collateral
Agent, the Custodial Agent or the Securities Intermediary, as the case may be,
by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. The Collateral Agent, Custodial Agent and
Securities Intermediary shall:

         (a) have no duties or responsibilities except those expressly set forth
in this Agreement and no implied covenants or obligations shall be inferred from
this Agreement


                                       23


against the Collateral Agent, Custodial Agent and Securities Intermediary, nor
shall the Collateral Agent, Custodial Agent and Securities Intermediary be bound
by the provisions of any agreement by any party hereto beyond the specific terms
hereof;

         (b) not be responsible for any recitals contained in this Agreement, or
in any certificate or other document referred to or provided for in, or received
by it under, this Agreement, the Securities or the Purchase Contract Agreement,
or for the value, validity, effectiveness, genuineness, enforceability (other
than as against the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be) or sufficiency of this Agreement, the
Securities or the Purchase Contract Agreement or any other document referred to
or provided for herein or therein or for any failure by the Company or any other
Person (except the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be) to perform any of its obligations hereunder or
thereunder or for the perfection, priority or, except as expressly required
hereby, maintenance of any security interest created hereunder;

         (c) not be required to initiate or conduct any litigation or collection
proceedings hereunder (except pursuant to written directions furnished under
Section 9.02 hereof, subject to Section 9.06 hereof);

         (d) not be responsible for any action taken or omitted to be taken by
it hereunder or under any other document or instrument referred to or provided
for herein or in connection herewith or therewith, except for its own negligence
or willful misconduct; and

         (e) not be required to advise any party as to selling or retaining, or
taking or refraining from taking any action with respect to, any securities or
other property deposited hereunder.

         Subject to the foregoing, during the term of this Agreement, the
Collateral Agent shall take all reasonable action in connection with the
safekeeping and preservation of the Collateral hereunder.

         No provision of this Agreement shall require the Collateral Agent,
Custodial Agent or Securities Intermediary to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder. In no event shall the Collateral Agent or Securities Intermediary be
liable for any amount in excess of the Value of the Collateral. Notwithstanding
the foregoing, each of the Collateral Agent and the Securities Intermediary in
its individual capacity hereby waives any right of setoff, bankers' lien, liens
or perfection rights as securities intermediary or any counterclaim with respect
to any of the Collateral.

         Section 9.02. INSTRUCTIONS OF THE COMPANY. The Company shall have the
right, by one or more written instruments executed and delivered to the
Collateral Agent, to direct the time, method and place of conducting any
proceeding for the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the Collateral Agent,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; provided, however, that (i) such direction shall not conflict
with the provisions of any law or of this Agreement and (ii) the Collateral
Agent shall be adequately indemnified as provided herein. Nothing contained in
this Section 9.02 shall impair the right of the Collateral Agent in its


                                       24


discretion to take any action or omit to take any action which it deems proper
and which is not inconsistent with such direction.

         Section 9.03. RELIANCE. Each of the Securities Intermediary, the
Custodial Agent and the Collateral Agent shall be entitled to rely upon any
certification, order, judgment, opinion, notice or other written communication
(including, without limitation, any thereof by e-mail or similar electronic
means, telecopy, telex or facsimile) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons
(without being required to determine the correctness of any fact stated therein)
and consult with and rely upon advice, opinions and statements of legal counsel
and other experts selected by the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be. As to any matters not expressly
provided for by this Agreement, the Collateral Agent, the Custodial Agent and
the Securities Intermediary shall in all cases be fully protected in acting, or
in refraining from acting, hereunder in accordance with instructions given by
the Company in accordance with this Agreement.

         Section 9.04. RIGHTS IN OTHER CAPACITIES. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, any other Person
interested herein and any Holder of Securities (and any of their respective
subsidiaries or affiliates) as if it were not acting as the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be, and the
Collateral Agent, the Custodial Agent, the Securities Intermediary and their
affiliates may accept fees and other consideration from the Purchase Contract
Agent and any Holder of Securities without having to account for the same to the
Company; provided that each of the Securities Intermediary, the Custodial Agent
and the Collateral Agent covenants and agrees with the Company that it shall not
accept, receive or permit there to be created in favor of itself and shall take
no affirmative action to permit there to be created in favor of any other
Person, any security interest, lien or other encumbrance of any kind in or upon
the Collateral other than the lien created by the Pledge.

         Section 9.05. NON-RELIANCE. None of the Securities Intermediary, the
Custodial Agent or the Collateral Agent shall be required to keep itself
informed as to the performance or observance by the Purchase Contract Agent or
any Holder of Securities of this Agreement, the Purchase Contract Agreement, the
Securities or any other document referred to or provided for herein or therein
or to inspect the properties or books of the Purchase Contract Agent or any
Holder of Securities. None of the Collateral Agent, the Custodial Agent or the
Securities Intermediary shall have any duty or responsibility to provide the
Company with any credit or other information concerning the affairs, financial
condition or business of the Purchase Contract Agent or any Holder of Securities
(or any of their respective affiliates) that may come into the possession of the
Collateral Agent, the Custodial Agent or the Securities Intermediary or any of
their respective affiliates.

         Section 9.06. COMPENSATION AND INDEMNITY. The Company agrees to:

         (a) pay the Collateral Agent, the Custodial Agent and the Securities
Intermediary from time to time such compensation as shall be agreed in writing
between the Company and the


                                       25


Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, for all services rendered by them hereunder;

         (b) indemnify and hold harmless the Collateral Agent, the Custodial
Agent and the Securities Intermediary and each of their respective directors,
officers, agents and employees (collectively, the "INDEMNITEES"), harmless from
and against any and all claims, liabilities, losses, damages, fines, penalties
and expenses (including reasonable fees and expenses of counsel) (collectively,
"LOSSES" and individually, a "LOSS") that may be imposed on, incurred by, or
asserted against, the Indemnitees or any of them for following any instructions
or other directions upon which either the Collateral Agent, the Custodial Agent
or the Securities Intermediary is entitled to rely pursuant to the terms of this
Agreement; and

         (c) in addition to and not in limitation of paragraph (b) immediately
above, indemnify and hold the Indemnitees and each of them harmless from and
against any and all Losses that may be imposed on, incurred by or asserted
against, the Indemnitees or any of them in connection with or arising out of the
Collateral Agent's, the Custodial Agent's or the Securities Intermediary's
acceptance or performance of its powers and duties under this Agreement,
provided the Collateral Agent, the Custodial Agent or the Securities
Intermediary has not acted with negligence or engaged in willful misconduct or
bad faith with respect to the specific Loss against which indemnification is
sought.

         Section 9.07. FAILURE TO ACT. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, then at its sole option, each of the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall be entitled,
after prompt notice to the Company and the Purchase Contract Agent, to refuse to
comply with any and all claims, demands or instructions with respect to such
property or funds so long as such dispute or conflict shall continue, and the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall not
be or become liable in any way to any of the parties hereto for its failure or
refusal to comply with such conflicting claims, demands or instructions. The
Collateral Agent, the Custodial Agent and the Securities Intermediary shall be
entitled to refuse to act until either:

         (a) such conflicting or adverse claims or demands shall have been
finally determined by a court of competent jurisdiction or settled by agreement
between the conflicting parties as evidenced in a writing satisfactory to the
Collateral Agent, the Custodial Agent or the Securities Intermediary; or

         (b) the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall have received security or an indemnity satisfactory to it
sufficient to save it harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which it may incur by reason of its acting.

The Collateral Agent, the Custodial Agent and the Securities Intermediary may in
addition elect to commence an interpleader action or seek other judicial relief
or orders as the Collateral Agent, the Custodial Agent or the Securities
Intermediary may deem necessary. Notwithstanding anything contained herein to
the contrary, none of the Collateral Agent, the Custodial Agent or


                                       26


the Securities Intermediary shall be required to take any action that is in its
opinion contrary to law or to the terms of this Agreement, or which would in its
opinion subject it or any of its officers, employees or directors to liability.

         Section 9.08. RESIGNATION.

         (a) Subject to the appointment and acceptance of a successor Collateral
Agent, Custodial Agent or Securities Intermediary as provided below:

                  (i) the Collateral Agent, the Custodial Agent and the
         Securities Intermediary may resign at any time by giving notice thereof
         to the Company and the Purchase Contract Agent as attorney-in-fact for
         the Holders of Securities;

                  (ii) the Collateral Agent, the Custodial Agent and the
         Securities Intermediary may be removed at any time by the Company; and

                  (iii) if the Collateral Agent, the Custodial Agent or the
         Securities Intermediary fails to perform any of its material
         obligations hereunder in any material respect for a period of not less
         than 20 days after receiving written notice of such failure by the
         Purchase Contract Agent and such failure shall be continuing, the
         Collateral Agent, the Custodial Agent or the Securities Intermediary
         may be removed by the Purchase Contract Agent, acting at the direction
         of the Holders of Securities.

The Purchase Contract Agent shall promptly notify the Company of any removal of
the Collateral Agent , the Custodial Agent or the Securities Intermediary
pursuant to clause (iii) of this Section 9.08(a). Upon any resignation or
removal, the Company shall have the right to appoint a successor Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be. If no
successor Collateral Agent, Custodial Agent or Securities Intermediary shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's, Custodial Agent's and Securities
Intermediary's giving of notice of resignation or the Company or the Purchase
Contract Agent giving notice of such removal, then the retiring Collateral
Agent, Custodial Agent and Securities Intermediary may petition any court of
competent jurisdiction for the appointment of a successor Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be. Each of the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall be a
bank or a national banking association which has an office (or an agency office)
in New York City with a combined capital and surplus of at least $50,000,000 and
shall not be the Purchase Contract Agent or any of its affiliates. Upon the
acceptance of any appointment as Collateral Agent, the Custodial Agent or the
Securities Intermediary hereunder by a successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be, such successor Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, and the retiring Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be, shall take all appropriate
action to transfer any money and property held by it hereunder (including the
Collateral) to such successor. The retiring Collateral Agent, Custodial Agent or
Securities Intermediary shall, upon such succession, be discharged from its
duties and obligations as Collateral Agent, Custodial Agent or


                                       27


Securities Intermediary hereunder. After any retiring Collateral Agent's,
Custodial Agent's or Securities Intermediary's resignation hereunder as
Collateral Agent, Custodial Agent or Securities Intermediary, the provisions of
this ARTICLE 9 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Collateral
Agent, Custodial Agent or Securities Intermediary. Any resignation or removal of
the Collateral Agent hereunder, at a time when the same Person is acting as the
Collateral Agent, the Custodial Agent and the Securities Intermediary, shall be
deemed for all purposes of this Agreement as the simultaneous resignation or
removal of the Custodial Agent and the Securities Intermediary. Any resignation
or removal of the Securities Intermediary hereunder, at a time when the same
Person is acting as the Collateral Agent, the Custodial Agent and the Securities
Intermediary, shall be deemed for all purposes of this Agreement as the
simultaneous resignation or removal of the Custodial Agent and the Collateral
Agent.

         Section 9.09. RIGHT TO APPOINT AGENT OR ADVISOR. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 9.09
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.

         Section 9.10. SURVIVAL. The provisions of this Article 9 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent, the Custodial Agent or the Securities Intermediary.

         Section 9.11. EXCULPATION. Anything contained in this Agreement to the
contrary notwithstanding, in no event shall any of the Collateral Agent, the
Custodial Agent or the Securities Intermediary or their officers, directors,
employees or agents be liable under this Agreement to any third party for
indirect, special, punitive, or consequential loss or damage of any kind
whatsoever, including, but not limited to, lost profits, whether or not the
likelihood of such loss or damage was known to the Collateral Agent, the
Custodial Agent or the Securities Intermediary, or any of them.

                                   ARTICLE 10
                                    AMENDMENT

         Section 10.01. AMENDMENT WITHOUT CONSENT OF HOLDERS. Without the
consent of any Holders, the Company, the Collateral Agent, the Custodial Agent,
the Securities Intermediary and the Purchase Contract Agent, at any time and
from time to time, may amend this Agreement, in form satisfactory to the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, to:

         (a) evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company;

         (b) evidence and provide for the acceptance of appointment hereunder by
a successor Collateral Agent, Custodial Agent, Securities Intermediary or
Purchase Contract Agent;


                                       28


         (c) add to the covenants of the Company for the benefit of the Holders,
or surrender any right or power herein conferred upon the Company, provided such
covenants or such surrender do not adversely affect the validity, perfection or
priority of the Pledge created hereunder; or

         (d) cure any ambiguity (or formal defect), correct or supplement any
provisions herein which may be inconsistent with any other such provisions
herein, or make any other provisions with respect to such matters or questions
arising under this Agreement, provided such action shall not adversely affect
the interests of the Holders.

         Section 10.02. AMENDMENT WITH CONSENT OF HOLDERS. With the consent of
the Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of such Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
duly authorized, the Purchase Contract Agent, the Securities Intermediary, the
Custodial Agent and the Collateral Agent may amend this Agreement for the
purpose of modifying in any manner the provisions of this Agreement or the
rights of the Holders in respect of the Securities; provided, however, that no
such supplemental agreement shall, without the unanimous consent of the Holders
of each Outstanding Security adversely affected thereby:

         (a) change the amount or type of Collateral underlying a Security
(except for the rights of holders of Income PRIDES to substitute the Treasury
Securities for the Pledged Preferred Securities, the Pledged Notes or the
Applicable Ownership Interests (as specified in clause (A) of the definition of
such term) of the principal amount of the Treasury Portfolio, as the case may
be, or the rights of Holders of Growth PRIDES to substitute Preferred
Securities, Notes or the Applicable Ownership Interests (as specified in clause
(A) of the definition of such term) of the principal amount of the Treasury
Portfolio, as applicable, for the Pledged Treasury Securities), impair the right
of the Holder of any Security to receive distributions on the underlying
Collateral or otherwise adversely affect the Holder's rights in or to such
Collateral; or

         (b) otherwise effect any action that would require the consent of the
Holder of each Outstanding Security affected thereby pursuant to the Purchase
Contract Agreement if such action were effected by an agreement supplemental
thereto; or

         (c) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for any such amendment;

provided that if any amendment or proposal referred to above would adversely
affect only the Income PRIDES or only the Growth PRIDES, then only the affected
class of Holders as of the record date for the Holders entitled to vote thereon
will be entitled to vote on such amendment or proposal, and such amendment or
proposal shall not be effective except with the consent of Holders of not less
than a majority of such class; provided further that the unanimous consent of
the Holders of each outstanding Purchase Contract of such class affected thereby
shall be required to approve any amendment or proposal specified in clauses (a)
through (c) above.


                                       29


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

         Section 10.03. EXECUTION OF AMENDMENTS. In executing any amendment
permitted by this Section, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall be entitled to
receive and (subject to Section 7.01 of the Purchase Contract Agreement with
respect to the Purchase Contract Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent, if
any, to the execution and delivery of such amendment have been satisfied.

         Section 10.04. EFFECT OF AMENDMENTS. Upon the execution of any
amendment under this Section, this Agreement shall be modified in accordance
therewith, and such amendment shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered under the
Purchase Contract Agreement shall be bound thereby.

         Section 10.05. REFERENCE OF AMENDMENTS. Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this Section may, and shall if required by the Collateral
Agent or the Purchase Contract Agent, bear a notation in form approved by the
Purchase Contract Agent and the Collateral Agent as to any matter provided for
in such amendment. If the Company shall so determine, new Certificates so
modified as to conform, in the opinion of the Collateral Agent, the Purchase
Contract Agent and the Company, to any such amendment may be prepared and
executed by the Company and authenticated, executed on behalf of the Holders and
delivered by the Purchase Contract Agent in accordance with the Purchase
Contract Agreement in exchange for Certificates representing Outstanding
Securities.

                                   ARTICLE 11
                                  MISCELLANEOUS

         Section 11.01. NO WAIVER. No failure on the part of the Collateral
Agent, the Securities Intermediary or any of their respective agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Collateral Agent, the Securities
Intermediary or any of their respective agents of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.

         Section 11.02. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Company,
the Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Holders from time to time of the Securities, acting through the Purchase
Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to this


                                       30


Agreement or the transactions contemplated hereby. The Company, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Holders from
time to time of the Securities, acting through the Purchase Contract Agent as
their attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.

         Section 11.03. NOTICES. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "ADDRESS FOR NOTICES" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.

         Section 11.04. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, and the Holders from time to time of the
Securities, by their acceptance of the same, shall be deemed to have agreed to
be bound by the provisions hereof and to have ratified the agreements of, and
the grant of the Pledge hereunder by, the Purchase Contract Agent.

         Section 11.05. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.

         Section 11.06. SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.

         Section 11.07. EXPENSES, ETC. The Company agrees to reimburse the
Collateral Agent, the Custodial Agent and the Securities Intermediary for:

         (a) all reasonable costs and expenses of the Collateral Agent and the
Securities Intermediary (including, without limitation, the reasonable fees and
expenses of counsel to the Collateral Agent and the Securities Intermediary), in
connection with (i) the negotiation, preparation, execution and delivery or
performance of this Agreement and (ii) any modification, supplement or waiver of
any of the terms of this Agreement;

         (b) all reasonable costs and expenses of the Collateral Agent and the
Securities Intermediary (including, without limitation, reasonable fees and
expenses of counsel) in connection with (i) any enforcement or proceedings
resulting or incurred in connection with


                                       31


causing any Holder of Securities to satisfy its obligations under the Purchase
Contracts forming a part of the Securities and (ii) the enforcement of this
Section 11.07(b);

         (c) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any other document referred to herein and all
costs, expenses, taxes, assessments and other charges incurred in connection
with any filing, registration, recording or perfection of any security interest
contemplated hereby;

         (d) all reasonable fees and expenses of any agent or advisor appointed
by the Collateral Agent and consented to by the Company under Section 9.09 of
this Agreement; and

         (e) any other out-of-pocket costs and expenses reasonably incurred by
the Collateral Agent and the Securities Intermediary in connection with the
performance of their duties hereunder.

         Section 11.08. SECURITY INTEREST ABSOLUTE. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:

         (a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or instrument
relating thereto;

         (b) any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of the Securities under the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any Purchase Contract or any
other agreement or instrument relating thereto; or

         (c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledger.

         Section 11.09. NOTICE OF TAX EVENT, TAX EVENT REDEMPTION AND
TERMINATION EVENT. Upon the occurrence of a Tax Event, a Tax Event Redemption or
a Termination Event, the Company shall deliver written notice to the Collateral
Agent and the Securities Intermediary. Upon the written request of the
Collateral Agent or the Securities Intermediary, the Company shall inform such
party whether or not a Tax Event, a Tax Event Redemption or a Termination Event
has occurred.

                       [SIGNATURES ON THE FOLLOWING PAGE]


                                       32


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

CINERGY CORP.                       The Bank of New York,
                                    as Purchase Contract Agent and
                                    as attorney-in-fact of the Holders
                                    from time to time of the Securities

By:_____________________________    By:__________________________
      Name:                            Name:
      Title:                           Title:

Address for Notices:                Address for Notices:

Cinergy Corp.                       101 Barclay Street
139 East Fourth Street              Floor 21W
Cincinnati, Ohio  45202             New York, New York  10286
Attention:  Treasurer               Attention:   Corporate Trust Administration
Telecopy:  513-287-2749             Telecopy:   212-896-7298

With a copy to:

Cinergy Corp.
139 East Fourth Street
Cincinnati, Ohio  45202
Attention:  General Counsel
Telecopy:  513-287-3810

JPMorgan Chase Bank,
as Collateral Agent, Custodial Agent
and as Securities Intermediary

By:_____________________________
     Name:
     Title:

Address for Notices:

JPMorgan Chase Bank
450 W. 33rd Street
15th Floor
New York, New York  10001
Attention:  Institutional Trust Services
Telecopy:  212-946-8159


                                       33


                                                                       EXHIBIT A

                                   INSTRUCTION
                          FROM PURCHASE CONTRACT AGENT
                               TO COLLATERAL AGENT
                        (Establishment of Growth PRIDES)


JPMorgan Chase Bank
450 W. 33rd Street
15th Floor
New York, New York  10001
Attention:  Institutional Trust Services
Telecopy:  212-946-8159


         Re:      Income PRIDES of Cinergy Corp.
                  (the "COMPANY") and CC Funding Trust I

                  The securities account of JPMorgan Chase Bank, as Collateral
                  Agent, maintained by the Securities Intermediary and
                  designated "JPMorgan Chase Bank, as Collateral Agent of
                  Cinergy Corp., as pledgee of The Bank of New York, as the
                  Purchase Contract Agent on behalf of and as attorney-in-fact
                  for the Holders" (the "COLLATERAL ACCOUNT")

         Please refer to the Pledge Agreement, dated as of December 18, 2001
(the "PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, Custodial
Agent and Securities Intermediary, and the undersigned, as Purchase Contract
Agent and as attorney-in-fact for the holders of Income PRIDES from time to
time. Capitalized terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.

         We hereby notify you in accordance with Section 5.02 of the Pledge
Agreement that the holder of securities named below (the "HOLDER") has elected
to substitute $__________ Value of Treasury Securities or security entitlements
with respect thereto in exchange for an equal Value of [Pledged Preferred
Securities] [Pledged Notes] [Pledged Applicable Ownership Interests] relating to
_________ Income PRIDES and has delivered to the undersigned a notice stating
that the Holder has Transferred such Treasury Securities or security
entitlements thereto to the Securities Intermediary, for credit to the
Collateral Account.


                                       A-1


         We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities or security entitlements thereto have
been credited to the Collateral Account, to release to the undersigned an equal
Value of [Pledged Preferred Securities] [Pledged Notes] [Pledged Applicable
Ownership Interests] in accordance with Section 5.02 of the Pledge Agreement.

                              The Bank of New York,
Date:______________           as Purchase Contract Agent and as attorney-in-fact
                              of the Holders from time to time of the Securities

                              By:__________________________
                                   Name:
                                   Title:


                                       A-2


Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements with respect thereto for the [Pledged
Preferred Securities] [Pledged Notes] [Pledged Applicable Ownership Interests]:

- -----------------------------        -----------------------------
            Name                     Social Security or other
                                     Taxpayer Identification Number,
                                     if any

- ------------------------------
          Address

- ------------------------------

- ------------------------------


                                       A-3


                                                                       EXHIBIT B

                                   INSTRUCTION
                              FROM COLLATERAL AGENT
                           TO SECURITIES INTERMEDIARY
                        (Establishment of Growth PRIDES)

JPMorgan Chase Bank
450 W. 33rd Street
15th Floor
New York, New York  10001
Attention:  Institutional Trust Services
Telecopy:  212-946-8159

Re:      Income PRIDES of Cinergy Corp. (the
         "COMPANY") and CC Funding Trust I (the "TRUST")

         The securities account of JPMorgan Chase Bank, as Collateral Agent,
         maintained by the Securities Intermediary and designated "JPMorgan
         Chase Bank, as Collateral Agent of Cinergy Corp., as pledgee of The
         Bank of New York, as the Purchase Contract Agent on behalf of and as
         attorney-in-fact for the Holders" (the "COLLATERAL ACCOUNT")

         Please refer to the Pledge Agreement, dated as of December 18, 2001
(the "PLEDGE AGREEMENT"), among the Company, you, as Securities Intermediary,
The Bank of New York, as Purchase Contract Agent and as attorney-in-fact for the
holders of Income PRIDES from time to time, and the undersigned, as Collateral
Agent. Capitalized terms used herein but not defined shall have the meanings set
forth in the Pledge Agreement.

         When you have confirmed that $__________ Value of Treasury Securities
or security entitlements thereto has been credited to the Collateral Account by
or for the benefit of _________, as Holder of Income PRIDES (the "HOLDER"), you
are hereby instructed to release from the Collateral Account an equal Value of
[Preferred Securities or security entitlements with respect thereto] [Notes or
security entitlements with respect thereto] [Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio] relating to _____ Income PRIDES of the Holder by Transfer to the
Purchase Contract Agent.

                                                     JPMorgan Chase Bank,
                                                     as Collateral Agent
Dated:_______________

                                                     By:_______________________
                                                          Name:
                                                          Title:


                                       B-1


Please print name and address of Holder:



- --------------------------------    --------------------------
             Name                   Social Security or other
                                    Taxpayer Identification Number,
                                    if any

- ---------------------------------
           Address

- ---------------------------------

- ---------------------------------


                                       B-2


                                                                       EXHIBIT C

                                   INSTRUCTION
                          FROM PURCHASE CONTRACT AGENT
                               TO COLLATERAL AGENT
                       (Reestablishment of Income PRIDES)


JPMorgan Chase Bank
450 W. 33rd Street
15th Floor
New York, New York  10001
Attention:  Institutional Trust Services
Telecopy:  212-946-8159

         Re:      ____________ Income PRIDES of Cinergy Corp. (the "COMPANY")
                  and CC Funding Trust I (the "TRUST")

         Please refer to the Pledge Agreement dated as of December 18, 2001 (the
"PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, Custodial
Agent and Securities Intermediary, and the undersigned, as Purchase Contract
Agent and as attorney-in-fact for the holders of Income PRIDES from time to
time. Capitalized terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.

         We hereby notify you in accordance with Section 5.03(a) of the Pledge
Agreement that the holder of securities listed below (the "HOLDER") has elected
to substitute [$ Value of [Preferred Securities or security entitlements
thereto] [Notes or security entitlements thereto]] in exchange for $__________
Value of Pledged Treasury Securities and has delivered to the undersigned a
notice stating that the holder has Transferred such [Preferred Securities or
security entitlements with respect thereto] [Notes or security entitlements with
respect thereto] [Applicable Ownership Interests (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio] to the Securities
Intermediary, for credit to the Collateral Account.

         We hereby request that you instruct the Securities Intermediary, upon
confirmation that such [Preferred Securities or security entitlements with
respect thereto] [Notes or security entitlements with respect thereto]
[Applicable Ownership Interests (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio] have been credited to the Collateral
Account, to release to the undersigned $__________ Value of Treasury Securities
or security


                                       C-1


entitlements thereto related to _____ Income PRIDES of such Holder in accordance
with Section 5.03 of the Pledge Agreement.

                                                     The Bank of New York,
                                                     as Purchase Contract Agent

Dated:_______________                                By:_______________________
                                                          Name:
                                                          Title:


                                       C-2




Please print name and address of Holder electing to substitute [Preferred
Securities or security entitlements with respect thereto] [Pledged Notes or
security entitlements with respect thereto] [Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio] for Pledged Treasury Securities:

- ----------------------------              -------------------------
Name                                      Social Security or other
                                          Taxpayer Identification Number, if any

- ---------------------------------
               Address

- ---------------------------------

- ---------------------------------


                                       C-3


                                                                       EXHIBIT D

                                   INSTRUCTION
                              FROM COLLATERAL AGENT
                           TO SECURITIES INTERMEDIARY
                       (Reestablishment of Income PRIDES)

JPMorgan Chase Bank
450 W. 33rd Street
15th Floor
New York, New York  10001
Attention:  Institutional Trust Services
Telecopy:  212-946-8159

         Re:      ___________ Income PRIDES of Cinergy Corp.
                  (the "COMPANY") and CC Funding Trust I (the "TRUST")

                  The securities account of JPMorgan Chase Bank, as Collateral
                  Agent, maintained by the Securities Intermediary and
                  designated "JPMorgan Chase, as Collateral Agent of Cinergy
                  Corp., as pledgee of The Bank of New York, as the Purchase
                  Contract Agent on behalf of and as attorney-in-fact for the
                  Holders" (the "COLLATERAL ACCOUNT")

         Please refer to the Pledge Agreement dated as of December 18, 2001 (the
"PLEDGE AGREEMENT"), among the Company, you, as Securities Intermediary,
Collateral Agent and Custodial Agent, The Bank of New York, as Purchase Contract
Agent and as attorney-in-fact for the holders of Income PRIDES from time to
time, and the undersigned, as Collateral Agent. Capitalized terms used herein
but no defined shall have the meaning set forth in the Pledge Agreement.

         When you have confirmed that $ __________ Value of [Preferred
Securities or security entitlements with respect thereto] [Notes or security
entitlements with respect thereto] [Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio] has
been credited to the Collateral Account by or for the benefit of
________________, as Holder of Income PRIDES (the "HOLDER"), you are hereby
instructed to


                                       D-1


release from the Collateral Account $________________ Value of Treasury
Securities or security entitlements with respect thereto by Transfer to the
Purchase Contract Agent.

                                          JPMorgan Chase Bank,
                                          as Collateral Agent

Dated:_______________                     By:_______________________
                                               Name:
                                               Title:

- -------------------------------           --------------------------
Name                                      Social Security or other
                                          Taxpayer Identification Number, if any

- -------------------------------
              Address

- -------------------------------

- -------------------------------


                                       D-2


                                                                       EXHIBIT E

                    NOTICE OF CASH SETTLEMENT FROM COLLATERAL
                        AGENT TO PURCHASE CONTRACT AGENT
                            (Cash Settlement Amounts)

The Bank of New York
101 Barclay Street
Floor 21W
New York, New York  10286
Attention:   Corporate Trust Administration
Telecopy:   212-896-7298

         Re:      __________  Income PRIDES of Cinergy Corp.
                  (the "COMPANY") and CC Funding Trust I (the "TRUST")

         Please refer to the Pledge Agreement dated as of December 18, 2001
(the "PLEDGE AGREEMENT"), by and among you, the Company, the undersigned,
JPMorgan Chase Bank, as Collateral Agent, Custodial Agent and Securities
Intermediary. Unless otherwise defined herein, terms defined in the Pledge
Agreement are used herein as defined therein.

         In accordance with Section 5.05(d) of the Pledge Agreement, we hereby
notify you that as of 11:00 a.m. (New York City time) on the fourth Business Day
immediately preceding ___________, we have received (i) $ _______________ in
immediately available funds paid in an aggregate amount equal to the Purchase
Price due to the Company on the Purchase Contract Settlement Date with respect
to ________________ Income PRIDES and (ii) $ ___________ in immediately
available funds paid in an aggregate amount equal to the Purchase Price due to
the Company on the Purchase Contract Settlement Date with respect to ______
Growth PRIDES.

                                                     JPMorgan Chase Bank,
                                                     as Collateral Agent

Dated:_______________                                By:_______________________
                                                          Name:
                                                          Title:


                                       E-1


                                                                       EXHIBIT F

              INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING


JPMorgan Chase Bank
450 W. 33rd Street
15th Floor
New York, New York  10001
Attention:  Institutional Trust Services
Telecopy:  212-946-8159


                  Re:  Preferred Securities of CC Funding Trust I (the "TRUST")

         The undersigned hereby notifies you in accordance with Section 5.07(c)
of the Pledge Agreement, dated as of December 18, 2001 (the "PLEDGE AGREEMENT"),
among the Company, you, as Collateral Agent, Custodial Agent and Securities
Intermediary, The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the holders of Income PRIDES from time to time, that the
undersigned elects to deliver [$_____________ aggregate Stated Amount of
Separate Preferred Securities] [$______________ aggregate principal amount of
Separate Notes] for delivery to the Remarketing Agent on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date for remarketing
pursuant to Section 5.07(c) of the Pledge Agreement. The undersigned will, upon
request of the Remarketing Agent, execute and deliver any additional documents
deemed by the Remarketing Agent or by the Company to be necessary or desirable
to complete the sale, assignment and transfer of the [Separate Preferred
Securities] [Separate Notes] tendered hereby. Capitalized terms used herein but
no defined shall have the meaning set forth in the Pledge Agreement.

          The undersigned hereby instructs you, upon receipt of the Proceeds of
such remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions". The undersigned hereby instructs you, in the event of
Failed Remarketing, upon receipt of the [Separate Preferred Securities]
[Separate Notes] tendered herewith from the Remarketing Agent, to be delivered
to the person(s) and the address(es) indicated herein under "B. Delivery
Instructions."

         With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the [Separate Preferred Securities] [Separate Notes] tendered hereby
and that the undersigned is the record owner of any [Preferred Securities]
[Notes] tendered herewith in physical form or a participant in The Depositary
Trust Company ("DTC") and the beneficial owner of any Preferred Securities
tendered herewith by book-entry transfer to your account at DTC and (ii) agrees
to be bound by the terms and conditions of Section 5.07(c) of the Pledge
Agreement.

Date:_____________
                                            ____________________________________
                                            By:_________________________________


                                       F-1


                                            Name:
                                            Title:
                                            Signature Guarantee:________________

- ---------------------------                 ------------------------------------
          Name                              Social Security or other Taxpayer
                                            Identification Number, if any
- ---------------------------
        Address
- ---------------------------

- ---------------------------


                                       F-2


- --------------------------------------------------------------------------------

A.       PAYMENT INSTRUCTIONS

- --------------------------------------------------------------------------------

Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.

- --------------------------------------------------------------------------------

                                     Name(s)


- --------------------------------------------------------------------------------
                                 (Please Print)
                                     Address

                                 (Please Print)

- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------
                                   (Zip Code)


- --------------------------------------------------------------------------------
(Tax Identification or Social Security Number)



- --------------------------------------------------------------------------------
B.       DELIVERY INSTRUCTIONS

- --------------------------------------------------------------------------------
In the event of a Failed Remarketing, [Preferred Securities] [Notes] which are
in physical form should be delivered to the person(s) set forth below and mailed
to the address set forth below.

                                     Name(s)

- --------------------------------------------------------------------------------
                                 (Please Print)
                                     Address

                                 (Please Print)

- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------
                                   (Zip Code)


                                       F-3



- --------------------------------------------------------------------------------
(Tax Identification or Social Security Number)

In the event of a Failed Remarketing, [Preferred Securities] [Notes] which are
in book-entry form should be credited to the account at The Depositary Trust
Company set forth below.

                               ------------------

                               DTC Account Number

         Name of Account Party:_________________________________


                                       F-4


                                                                       EXHIBIT G

                    INSTRUCTION TO CUSTODIAL AGENT REGARDING
                           WITHDRAWAL FROM REMARKETING


JPMorgan Chase Bank
450 W. 33rd Street
15th Floor
New York, New York  10001
Attention:  Institutional Trust Services
Telecopy:  212-946-8159


                  Re:  Preferred Securities of CC Funding Trust I (the "TRUST")

         The undersigned hereby notifies you in accordance with Section 5.07(c)
of the Pledge Agreement, dated as of December 18, 2001 (the "PLEDGE AGREEMENT"),
among the Company, you, as Collateral Agent, Custodial Agent and Securities
Intermediary, The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the holders of Income PRIDES from time to time, that the
undersigned elects to withdraw the [$_____ aggregate Stated Amount of Separate
Preferred Securities] [$_________ aggregate principal amount of Separate Notes]
delivered to the Custodial Agent on _________, 200_ for remarketing pursuant to
Section 5.07(c) of the Pledge Agreement. The undersigned hereby instructs you to
return such [Preferred Securities] [Notes] to the undersigned in accordance with
the undersigned's instructions. With this notice, the Undersigned hereby agrees
to be bound by the terms and conditions of Section 5.07(c) of the Pledge
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.


Date:_____________
                                           ------------------------------------
                                           By:_________________________________
                                           Name:
                                           Title:
                                           Signature Guarantee:_________________

- ---------------------------                ----------------------------------
          Name                             Social Security or other Taxpayer
                                           Identification Number, if any
- ---------------------------
        Address
- ---------------------------

- ---------------------------


                                       G-1

EX-4.6

                                                                     EXHIBIT 4.6

                                                                  EXECUTION COPY


                              REMARKETING AGREEMENT

     REMARKETING AGREEMENT, dated as of December 18, 2001 (the "Remarketing
Agreement") by and between Cinergy Corp., a Delaware corporation ("Cinergy" or
the "Company"), CC Funding Trust I, a Delaware statutory business trust (the
"Trust"), The Bank of New York, a New York banking corporation, not individually
but solely as Purchase Contract Agent and as attorney-in-fact of the holders of
Purchase Contracts (each as defined in the Purchase Contract Agreement (as
defined herein)), and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Remarketing Agent" and "Reset Agent").

                                   WITNESSETH:

     WHEREAS, the Company will issue an aggregate Stated Amount of its FELINE
PRIDES (the "FELINE PRIDES") under the Purchase Contract Agreement, dated as of
December 18, 2001, by and between the Purchase Contract Agent and the Company
(the "Purchase Contract Agreement"); and

     WHEREAS, the Trust will issue concurrently as part of the FELINE PRIDES
preferred trust securities (the "Preferred Trust Securities") representing
undivided beneficial interests in the assets of the Trust in an aggregate stated
liquidation amount equal to the aggregate Stated Amount of the FELINE PRIDES
under the Amended and Restated Declaration of Trust, dated as of December 18,
2001, by and among the Company, the Administrative Trustees, the Delaware
Trustee and the Property Trustee (the "Declaration"); and

     WHEREAS, the FELINE PRIDES will initially consist of units referred to as
"Income PRIDES," each of which will consist of a Preferred Trust Security and a
Purchase Contract; and

     WHEREAS, the sole assets of the Trust, $326,032,000 aggregate principal
amount (including the over-allotment option exercised in full by the
underwriters) of Senior Deferrable Notes due 2007 (the "Notes") of the Company
will be purchased by the Trust from the Company with the proceeds of the sale of
the Preferred Trust Securities and the proceeds of the sale to the Company of
the common securities representing undivided beneficial interests in the assets
of the Trust (the "Common Trust Securities" and, together with the Preferred
Trust Securities, the "Trust Securities"); and

     WHEREAS, the Preferred Trust Securities (or upon a dissolution of the Trust
and the distribution of the Notes as described in the Declaration, such Notes)
will be pledged pursuant to the Pledge Agreement (the "Pledge Agreement"), dated
as of December 18, 2001, by and between the Company, JPMorgan Chase Bank, as
collateral agent (the "Collateral Agent") and the Purchase Contract Agent, to
secure an Income PRIDES holder's obligations under the related Purchase Contract
on the Purchase Contract Settlement Date; and

     WHEREAS, the Preferred Trust Securities or the Notes, as the case may be,
of Preferred Security holders or Note holders electing to have their Preferred
Trust Securities or Notes remarketed, or of Income PRIDES holders who have
elected not to settle the Purchase Contracts


                                       1



related to their Income PRIDES through a Cash Settlement and who have not early
settled their Purchase Contracts, will be remarketed by the Remarketing Agent on
the third Business Day immediately preceding the Purchase Contract Settlement
Date; and

     WHEREAS, the applicable distribution rate on the Preferred Trust Securities
(and, thus, the interest rate on the Notes) that remain outstanding on and after
the Purchase Contract Settlement Date will be reset to the Reset Rate to be
determined by the Reset Agent as the rate that such Preferred Trust Securities
(and, thus the Notes) should bear in order to have an approximate market value
of 100.5% of the aggregate stated liquidation amount (plus deferred and unpaid
distributions, if any) of the Preferred Trust Securities or the aggregate
principal amount (plus deferred and unpaid interest, if any) of the Notes on the
third Business Day immediately preceding the Purchase Contract Settlement Date;
and

     WHEREAS, the Company has requested Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") to act as the Reset Agent
and and Remarketing Agent, and as such to perform the services described herein;
and

     WHEREAS, Merrill Lynch is willing to act as the Reset Agent and Remarketing
Agent and as such to perform such duties on the terms and conditions expressly
set forth herein;

     NOW, THEREFORE, for and in consideration of the covenants herein made, and
subject to the conditions herein set forth, the parties hereto agree as follows:

     SECTION 1. DEFINITIONS.

     Capitalized terms used and not defined in this Agreement shall have the
meanings assigned to them in the Purchase Contract Agreement or, if not therein
stated, the Declaration or the Pledge Agreement.

     SECTION 2. APPOINTMENT AND OBLIGATIONS OF REMARKETING AGENT.

     (a) The Company hereby appoints Merrill Lynch and Merrill Lynch hereby
accepts such appointment, (i) as the Reset Agent to determine in consultation
with the Company, in the manner provided for in the Declaration with respect to
the Trust Securities and the Indenture with respect to the Notes, the Reset
Rate, that in the opinion of the Reset Agent, will, when applied to the Trust
Securities (and, thus, the Notes), enable a Trust Security (and, thus, a Note),
to have a market value of approximately 100.5% of: (1) the aggregate stated
liquidation amount (plus deferred and unpaid distributions, if any) in the case
of such Trust Security or (2) the aggregate principal amount (plus deferred and
unpaid interest, if any) in the case of such Note; PROVIDED, HOWEVER, that the
Reset Rate shall not be less than 6.9% and shall not be higher than the maximum
rate permitted under applicable law, and (ii) as the exclusive Remarketing Agent
to remarket the Preferred Trust Securities, or the Notes, as the case may be, of
such Preferred Trust Security or Note holders electing to have their Preferred
Trust Securities or Notes, as the case may be, remarketed, or of such Income
PRIDES holders who have not early settled the related Purchase Contracts and
have failed to notify the Purchase Contract Agent, on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, of
their intention to settle the related Purchase Contracts through Cash
Settlement, for settlement on the Purchase Contract Settlement Date, pursuant to
the Supplemental Remarketing Agreement with


                                       2



the Company, the Trust and the Purchase Contract Agent, substantially in the
form attached hereto as Exhibit A (with such changes as the Company, the
Purchase Contract Agent and the Remarketing Agent may agree upon, it being
understood that changes may be necessary in the representations, warranties,
covenants and other provisions of the Supplemental Remarketing Agreement due to
changes in law or facts and circumstances).

     (b) Pursuant to the Supplemental Remarketing Agreement, the Remarketing
Agent, either as the sole remarketing agent or as representative of a group of
remarketing agents appointed, pursuant to the Supplemental Remarketing
Agreement, will agree, subject to the terms and conditions set forth therein, to
use its reasonable efforts to (i) remarket the Preferred Trust Securities or the
Notes, as the case may be, to be sold by the holder or holders of Preferred
Trust Securities, Notes or Income PRIDES on the third Business Day immediately
preceding the Purchase Contract Settlement Date based on the Reset Rate (such
remarketing being hereinafter referred to as the "Remarketing"), at a price of
approximately 100.5% of such Preferred Trust Securities' aggregate stated
liquidation amount plus any deferred and unpaid distributions and in the case of
Notes, at a price of approximately 100.5% of such Notes' aggregate principal
amount plus any deferred and unpaid interest. Notwithstanding the preceding
sentence, the Remarketing Agent shall not remarket any Preferred Trust
Securities or Notes, as the case may be, for a price less than 100% of the
aggregate stated liquidation amount or aggregate principal amount of such
Preferred Trust Securities or Notes, respectively, plus deferred and unpaid
distributions or interest, as the case may be. The proceeds of such remarketing
shall be paid to the Collateral Agent in accordance with Section 5.07 of the
Pledge Agreement and Section 5.02 of the Purchase Contract Agreement. Each
holder of Preferred Trust Securities or Notes, as the case may be, shall have
the right to tender for Remarketing by the Remarketing Agent pursuant to the
terms of this Agreement; provided, however, that such right is subject to the
following conditions precedent: (i) the Preferred Trust Securities or Notes, as
the case may be, tendered have not been called for redemption, (ii) the
Remarketing Agent is able to find a purchaser or purchasers for tendered
Preferred Trust Securities or Notes, as the case may be, at a price of not less
than 100% of the aggregate stated liquidation amount or aggregate principal
amount of such Preferred Trust Securities or Notes, respectively, plus any
deferred and unpaid distributions or interest, as the case may be, and (iii)
such purchaser or purchasers deliver the purchase price therefor to the
Remarketing Agent as and when required.

     (c) It is understood and agreed that neither the Remarketing Agent nor the
Reset Agent shall have any obligation whatsoever to purchase any Preferred Trust
Securities or Notes, whether in the Remarketing or otherwise, and shall in no
way be obligated to provide funds to make payment upon tender of Preferred Trust
Securities or Notes, as the case may be, for Remarketing or to otherwise expend
or risk their own funds or incur or be exposed to financial liability in the
performance of their respective duties under this Agreement or the Supplemental
Remarketing Agreement, and, without limitation of the foregoing, the Remarketing
Agent shall not be deemed an underwriter of the remarketed Preferred Trust
Securities or Notes. It also is understood and agreed that the Company in no way
shall be obligated in any case to provide funds to make payment upon tender of
Preferred Trust Securities or Notes for Remarketing.

     SECTION 3. FEES.


                                       3


     In the event of a successful Remarketing, the Remarketing Agent shall
retain a Remarketing Fee in an amount not exceeding 25 basis points (.25%) of
the aggregate stated liquidation amount or aggregate principal amount of the
remarketed securities plus deferred and unpaid distributions or interest, as the
case may be, if any, from any amount received in connection with such
Remarketing in excess of the aggregate stated liquidation amount or aggregate
principal amount of such remarketed Preferred Trust Securities or Notes. The
Reset Agent, who also is and will be the Remarketing Agent, shall not be
entitled to receive any separate Reset Agent Fee.

     SECTION 4. REPLACEMENT AND RESIGNATION OF REMARKETING AGENT.

     (a) The Company may in its absolute discretion replace Merrill Lynch as the
Remarketing Agent and Reset Agent in its capacity hereunder by giving notice
prior to 3:00 p.m., New York City time, on the eleventh Business Day immediately
prior to the Purchase Contract Settlement Date. Any such replacement shall
become effective upon the Company's appointment of a successor to perform the
services that would otherwise be performed hereunder by the Remarketing Agent
and Reset Agent. Upon providing such notice, the Company shall use all
reasonable efforts to appoint such a successor and to enter into a remarketing
agreement with such successor as soon as reasonably practicable.

     (b) Merrill Lynch may resign at any time and be discharged from its duties
and obligations hereunder as the Remarketing Agent and as the Reset Agent by
giving notice prior to 3:00 p.m., New York City time, on the eleventh Business
Day immediately prior to the Purchase Contract Settlement Date. Any such
resignation shall become effective upon the Company's appointment of a successor
to perform the services that would otherwise be performed hereunder by the
Remarketing Agent and Reset Agent. Upon receiving notice from the Remarketing
Agent and Reset Agent that it wishes to resign hereunder, the Company shall
appoint such a successor and enter into a remarketing agreement with it as soon
as reasonably practicable.

     SECTION 5. DEALING IN THE SECURITIES.

     The Remarketing Agent, when acting hereunder or under the Supplemental
Remarketing Agreement or acting in its individual or any other capacity, may, to
the extent permitted by law, buy, sell, hold or deal in any of the Preferred
Trust Securities or Notes, as the case may be. With respect to any Preferred
Trust Securities or Notes, as the case may be, owned by it, the Remarketing
Agent may exercise any vote or join in any action with like effect as if it did
not act in any capacity hereunder. The Remarketing Agent, in its individual
capacity, either as principal or agent, may also engage in or have an interest
in any financial or other transaction with the Company as freely as if it did
not act in any capacity hereunder.

     SECTION 6. REGISTRATION STATEMENT AND PROSPECTUS.

     (a) In connection with the Remarketing, if and to the extent required (in
the opinion of counsel for the Remarketing Agent, the Company or the Trust) by
applicable law, regulations or interpretations in effect at the time of such
Remarketing, the Company or the Trust, as the case may be, shall use its
reasonable efforts to have a registration statement relating to the Preferred
Trust Securities or Notes, as the case may be, effective under the Securities
Act of


                                       4



1933, as amended (the "1933 Act"), by the third Business Day immediately
preceding the Purchase Contract Settlement Date, shall furnish a current
prospectus and/or prospectus supplement to be used in such Remarketing by the
Remarketing Agent or Agents under the Supplemental Remarketing Agreement, and
shall pay all expenses relating thereto.

     (b) If in the opinion of counsel for the Remarketing Agent, the Company or
the Trust, in connection with the Remarketing it is required by applicable law,
regulations or interpretations in effect at the time of such Remarketing but, it
shall not be possible, in the view of counsel for the Company and the Trust
(which need not be an opinion), under applicable law, regulations or
interpretations then in effect to either register the offer and sale by the
Company or the Trust, as the case may be, of the Preferred Trust Securities or
the Notes, as the case may be, under the 1933 Act or deliver a current
prospectus meeting the requirements of Section (10)(a) of the 1933 Act and the
rules and regulations of the Securities and Exchange Commission thereunder, as
otherwise contemplated by this Section 6, the Company and the Trust, as the case
may be, shall use reasonable efforts to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper and advisable to
permit and effectuate the offer and sale of the Preferred Trust Securities or
the Notes, as the case may be, in connection with the Remarketing without
registration under the 1933 Act pursuant to an exemption therefrom, if, in the
opinion of counsel for the Company, the Trust and the Remarketing Agent such an
exemption is available, including the exemption afforded by Rule 144A under the
rules and regulations promulgated under the 1933 Act by the Securities and
Exchange Commission, and in connection therewith, if requested by the
Remarketing Agent shall (i) furnish a current preliminary remarketing memorandum
to be used by the Remarketing Agent in the Remarketing not later than seven
Business Days prior to the Purchase Contract Settlement Date (or such earlier
date as the Remarketing Agent may reasonably request) and in such quantities as
the Remarketing Agent may reasonably request and (ii) furnish a current final
remarketing memorandum to be used by the Remarketing Agent in the Remarketing
not later than the third Business Day immediately preceding the Purchase
Contract Settlement Date, in such quantities as the Remarketing Agent may
reasonably request, and shall pay all expenses relating thereto.

     (c) In connection with the Remarketing, if and to the extent required (upon
advice of counsel for either the Company, the Trust or the Remarketing Agent) by
applicable law, regulations or interpretations in effect at the time of such
Remarketing, the Company and the Trust, as the case may be, will endeavor to
qualify the Preferred Trust Securities or Notes, as the case may be, under the
securities or blue sky laws of the states where such qualification is required.

     SECTION 7. CONDITIONS TO THE REMARKETING AGENT'S OBLIGATIONS.

     (a) The obligations of the Remarketing Agent or Agents to remarket the
Preferred Trust Securities or the Notes, as the case may be, shall be subject to
the terms and conditions of the Supplemental Remarketing Agreement.

     (b) If at any time during the term of this Agreement, any Indenture Event
of Default or Declaration Event of Default, or event that with the passage of
time or the giving of notice or both would become an Indenture Event of Default
or Declaration Event of Default, has occurred and is continuing under the
Indenture or the Declaration, then the obligations and duties of the


                                       5



Remarketing Agent under this Agreement shall be suspended until such default or
event has been cured. The Company and the Trust, as the case may be, will cause
the Indenture Trustee and the Property Trustee to give the Remarketing Agent
notice of all such defaults and events of which either the Company, the Trust,
the Indenture Trustee, or the Property Trustee is aware.

     SECTION 8. TERMINATION OF REMARKETING AGREEMENT.

     This Agreement shall terminate as to the Remarketing Agent and Reset Agent
on the effective date of its replacement pursuant to Section 4(a) hereof or
pursuant to Section 4(b) hereof.

     In addition, each former Remarketing Agent and Reset Agent shall be
entitled to the rights and benefits under Sections 9 and 10 of this Agreement
notwithstanding the replacement or resignation of such Remarketing Agent and
Reset Agent.

     SECTION 9. REMARKETING AGENT'S PERFORMANCE; DUTY OF CARE.

     The duties and obligations of the Remarketing Agent and Reset Agent shall
be determined solely by the express provisions of this Agreement and, in the
case of the Remarketing Agent, the Supplemental Remarketing Agreement. No
implied covenants or obligations of or against the Remarketing Agent and Reset
Agent shall be read into this Agreement or the Supplemental Remarketing
Agreement. In the absence of bad faith on the part of the Remarketing Agent and
Reset Agent, the Remarketing Agent and Reset Agent may conclusively rely upon
any document furnished to it which purports to conform to the requirements of
this Agreement or the Supplemental Remarketing Agreement, as the case may be, as
to the truth of the statements expressed therein. The Remarketing Agent and
Reset Agent shall be protected in acting upon any document or communication
reasonably believed by it to be signed, presented or made by the proper party or
parties. The Remarketing Agent and Reset Agent shall not have any obligation to
determine whether there is any limitation under applicable law on the Reset Rate
on the Preferred Trust Securities or Notes, as the case may be, or, if there is
any such limitation, the maximum permissible Reset Rate on the Preferred Trust
Securities or Notes, as the case may be, and they shall rely solely upon written
notice from the Company (which the Company agrees to provide prior to the tenth
Business Day before the Purchase Contract Settlement Date) as to whether or not
there is any such limitation and, if so, the maximum permissible Reset Rate. The
Remarketing Agent and Reset Agent shall in no way incur any liability under this
Agreement or the Supplemental Remarketing Agreement to any beneficial owner or
holder of Preferred Trust Securities or Notes, as the case may be, or other
securities, either in its individual capacity or as Remarketing Agent and Reset
Agent, for any action or failure to act in connection with the Remarketing or
otherwise in connection with the transactions contemplated by this Agreement or
the Supplemental Remarketing Agreement.

     SECTION 10. INDEMNIFICATION AND CONTRIBUTION.

     (a) The Company and the Trust, jointly and severally, agree to indemnify
and hold harmless the Remarketing Agent and Reset Agent and its respective
directors, officers, employees, agents, affiliates and each person, if any, who
controls the Remarketing Agent and


                                       6



Reset Agent within the meaning of either Section 15 of the 1933 Act, or Section
20 of the Securities Exchange Act of 1934, as amended (the "1934 Act"), as
follows:

          (i) from and against any and all losses, claims, damages, liabilities
     and expenses whatsoever, joint or several, as incurred, to which the
     Remarketing Agent and Reset Agent may become subject under any applicable
     federal or state law, or otherwise, and related to, arising out of, or
     based on (A) the failure to have an effective Registration Statement (as
     defined in the Supplemental Remarketing Agreement) under the 1933 Act
     relating to Remarketing of the Preferred Trust Securities or Notes, as the
     case may be, if required, or the failure to satisfy the prospectus delivery
     requirements of the 1933 Act but only if the Company or the Trust, as the
     case may be, failed to provide the Remarketing Agent with a Prospectus (as
     defined in the Supplemental Remarketing Agreement) for delivery, or (B) any
     untrue statement or alleged untrue statement of a material fact contained
     in the Registration Statement or Prospectus (as amended or supplemented if
     the Company or Trust shall have furnished any amendments or supplements
     thereto) or the omission or alleged omission therefrom of 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, or (C) any untrue statement or alleged untrue statement of a
     material fact contained in any preliminary remarketing memorandum or any
     final remarketing memorandum, or any amendment or supplement thereto, or
     the omission therefrom of a material fact necessary in order to make the
     statements therein, in light of the circumstances under which they were
     made, not misleading, or (D) any untrue statement or alleged untrue
     statement of a material fact contained in any other documents (including,
     without limitation, any documents incorporated or deemed to be incorporated
     by reference in any such documents) provided by the Company or Trust for
     use in connection with the remarketing of the Preferred Trust Securities or
     Notes, as the case may be, or any of the transactions related thereto, or
     (E) any failed Remarketing, except to the extent that any loss, claim,
     damage, liability or expense resulted from the willful misconduct, gross
     negligence or bad faith of the Remarketing Agent and Reset Agent, or (F)
     the Remarketing of the Preferred Trust Securities or Notes, as the case may
     be, or the determination of the Reset Rate, except to the extent that any
     loss, claim, damage, liability or expense resulted from the willful
     misconduct, gross negligence or bad faith of the Remarketing Agent or the
     Reset Agent, as the case may be;

          (ii) against any and all loss, liability, claim, damage and expense
     whatsoever, as incurred, to the extent of the aggregate amount paid in
     settlement with the consent of the Company or the Trust, as the case may
     be, of any litigation or any investigation or proceeding by any
     governmental agency or body, commenced or threatened, or of any claim
     whatsoever related to, arising out of or based on any matter described in
     (i) above; and

          (iii) against any and all expense whatsoever, as incurred (including
     the fees and disbursements of counsel chosen by the Remarketing Agent and
     Reset Agent) reasonably incurred in investigating, preparing or defending
     against any litigation, or any investigation or proceeding by any
     governmental agency or body, commenced or threatened, or any claim
     whatsoever related to, arising out or based on any matter


                                       7



     described in (i) above to the extent that any such expense is not paid
     under (i) or (ii) above;

provided, however, that neither the Company nor the Trust shall be liable under
clause (i)(B), (i)(C), or (i)(D) to the extent any such loss, claim, damage,
liability or expense arises out of any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and conformity with written
information furnished to the Company by the Remarketing Agent and Reset Agent
expressly for use in the Registration Statement (or any amendment thereto), any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) or any preliminary or final remarketing memorandum (or any amendment or
supplement thereto) or any other documents used in connection with remarketing
of the Preferred Trust Securities or Notes, as the case may be; provided,
further, that with respect to any untrue statement or omission of a material
fact made in any preliminary prospectus, the indemnity agreement contained in
this Section 10(a) shall not inure to the benefit of the Remarketing Agent to
the extent that any such loss, claim, damage or liability of the Remarketing
Agent occurs under the circumstance where it shall be that (w) the Company had
previously furnished copies of the Prospectus or final remarketing memorandum,
as the case may be, to the Remarketing Agent, (x) the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact contained in the preliminary prospectus or preliminary remarketing
memorandum was corrected in the Prospectus or final remarketing memorandum, as
the case may be, and (y) there was not sent or given to such person, at or prior
to the written confirmation of the sale of Securities to such person, a copy of
the Prospectus or final remarketing memorandum, as the case may be, and the
delivery thereof would have constituted a complete defense to such person's
claim in respect of such untrue statement or omission or alleged untrue
statement or omission.

     The Company and the Trust agree that no indemnified party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company or its respective security holders or creditors relating to or arising
out of the engagement of the Remarketing Agent and Reset Agent pursuant to, or
the performance by the Remarketing Agent and Reset Agent of its respective
services contemplated by, this Agreement or the Supplemental Remarketing
Agreement except to the extent that any loss, claim, damage, liability or
expense resulted from the willful misconduct, gross negligence or bad faith of
the Remarketing Agent and the Reset Agent, as the case may be.

     (b) The Remarketing Agent and Reset Agent agree to indemnify and hold
harmless the Company, its directors and its officers who sign the Registration
Statement, the Trust and each person, if any, who controls the Company or the
Trust within the meaning of either Section 15 of the 1933 Act or Section 20 of
the 1934 Act to the same extent as the foregoing indemnity from the Company and
the Trust to such Remarketing Agent and Reset Agent, but only with reference to
information relating to such Remarketing Agent and Reset Agent furnished to the
Company or the Trust in writing by such Remarketing Agent and Reset Agent
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.

     (c) An indemnifying party agrees that, without an indemnified party's prior
written consent, it will not settle, compromise or consent to the entry of any
judgment with respect to


                                       8



any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any action or claim whatsoever in respect of
which indemnification or contribution could be sought under this Section 10
(whether or not any indemnified party is an actual or potential party to such
claim, action or proceeding), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding, action or claim and
(ii) does not include a statement as to, or an admission of, fault, culpability
or a failure to act by or on behalf of an indemnified party.

     (d) To the extent the indemnification provided for in paragraphs (a) or (b)
of this Section 10 is unavailable to an indemnified party or insufficient to
hold harmless an indemnified party in respect of any losses, liabilities,
claims, damages or expenses referred to therein, then each indemnifying party
under such paragraph, 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, liabilities, claims or damages (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and
Trust on the one hand and the Remarketing Agent and Reset Agent on the other
hand from the remarketing of the Preferred Trust Securities or Notes, as the
case may be, contemplated hereby or (ii) if the allocation provided by clause
(i) 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 and the Trust on the one hand and of the
Remarketing Agent and Reset Agent on the other hand in connection with the
statements, omissions or other matters which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Trust on the one hand and the Remarketing Agent and Reset Agent on the other
hand in connection with the remarketing of the Preferred Trust Securities or
Notes, as the case may be, contemplated hereby shall be deemed to be in the same
respective proportions as the aggregate stated amount of the Preferred Trust
Securities or the aggregate principal amount of the Notes, as the case may be,
which are or are to be remarketed bears to the aggregate fees actually received
by the Remarketing Agent and Reset Agent under Section 3 hereof. The relative
fault of the Company and the Trust on the one hand and the Remarketing Agent and
the Reset Agent on the other hand (i) in the case of an untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, shall be determined by reference to, among other things, whether such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Trust on the one hand or by the Remarketing Agent and Reset Agent on the
other hand and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission and (ii) in the
case of any other action or omission shall be determined by reference to, among
other things, whether such action or omission was taken or omitted to be taken
by the Company or the Trust on the one hand, or by the Remarketing Agent and
Reset Agent, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to prevent or correct such action or
omission. The Company, the Trust and the Remarketing Agent and Reset Agent agree
that it would not be just and equitable if contribution pursuant to this Section
10(d) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 10(d). The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to in this
Section 10(d) shall be deemed to include any legal or other expenses incurred by
such


                                       9



indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or any such omission or alleged omission or
any other such action or omission; provided, however, that to the extent
permitted by applicable law, in no event shall the Remarketing Agent and Reset
Agent be required to contribute any amount which, in the aggregate, exceeds the
aggregate fees received by them under Section 3 of this Agreement. No
investigation or failure to investigate by any indemnified party shall impair
the foregoing indemnification and contribution agreement or any rights an
indemnified party may have. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

     (e) Promptly after receipt by an indemnified party of written notice of any
claim or commencement of an action or proceeding with respect to which
indemnification may be sought hereunder, such indemnified party will notify the
indemnifying party in writing of such claim or of the commencement of such
action or proceeding, but failure to so notify the indemnifying party will not
relieve the indemnifying party from any liability which it may have to such
indemnified party under this indemnification and contribution agreement except
to the extent the indemnifying party was materially prejudiced by such failure
to notify, and in any event will not relieve the indemnifying party from any
other liability that it may have to such indemnified party. An indemnifying
party, upon request of an indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and any
others the indemnifying party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party shall have agreed in
writing to pay such fees and expenses, (ii) the indemnifying party shall have
failed to take reasonable steps necessary to defend diligently any claim within
ten calendar days after receiving written notice from the indemnified party that
that indemnified party believes the indemnifying party has failed to take such
steps or (iii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm (in addition to any local counsel) for
all such indemnified parties, and that all such fees and expenses shall be
reimbursed as they are incurred after receipt of adequate documentation thereof.

     (g) Anything herein or in the Supplemental Remarketing Agreement to the
contrary notwithstanding, the provisions of this Section 10, and the rights of
the indemnified parties shall be in addition to, and not in limitation of, any
rights or benefits (including, without limitation, rights to indemnification or
contribution) which such parties may have under any other instrument or
agreement.

         SECTION 11.  GOVERNING LAW.


                                       10


     This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.

     SECTION 12. TERM OF AGREEMENT.

     (a) Unless otherwise terminated in accordance with the provisions hereof
and except as otherwise provided herein, this Agreement shall remain in full
force and effect from the date hereof until the first day on which no Preferred
Trust Securities or Notes, as the case may be, are outstanding, or, if earlier,
the Business Day immediately following the Purchase Contract Settlement Date.
Anything herein to the contrary notwithstanding, the provisions of the last
section of Section 8 hereof and the provisions of Sections 3, 9, 10 and 12(b)
hereof shall survive any termination of this Agreement and remain in full force
and effect.

     (b) All representations and warranties included or incorporated by
reference in this Agreement, or the Supplemental Remarketing Agreement, or
contained in certificates of officers of the Company submitted pursuant hereto
or thereto, shall remain operative and in full force and effect, regardless of
any investigation made by or on behalf of the Remarketing Agent, the Reset Agent
or any of their controlling persons, or by or on behalf of the Company or the
Purchase Contract Agent, and shall survive the remarketing of the Preferred
Trust Securities or Notes, as the case may be.

     SECTION 13. SUCCESSORS AND ASSIGNS.

     The rights and obligations of the Company and the Purchase Contract Agent
(both in its capacity as Purchase Contract Agent and as attorney-in-fact)
hereunder may not be assigned or delegated to any other person without the prior
written consent of the Remarketing Agent and Reset Agent. The rights and
obligations of the Remarketing Agent and Reset Agent hereunder may not be
assigned or delegated to any other person without the prior written consent of
the Company and the Trust, except that the Remarketing Agent shall have the
right to appoint additional Remarketing Agents. This Agreement shall inure to
the benefit of and be binding upon the Company, the Trust, the Purchase Contract
Agent, the Remarketing Agent and Reset Agent and their respective successors and
assigns and the successors, assigns, heirs and legal representatives of the
indemnified parties. The terms "successors" and "assigns" shall not include any
purchaser of Securities merely because of such purchase.

     SECTION 14. HEADINGS.

     Section headings have been inserted in this Agreement and the Supplemental
Remarketing Agreement as a matter of convenience of reference only, and it is
agreed that such section headings are not a part of this Agreement or the
Supplemental Remarketing Agreement and will not be used in the interpretation of
any provision of this Agreement or the Supplemental Remarketing Agreement.

     SECTION 15. SEVERABILITY.

     If any provision of this Agreement or the Supplemental Remarketing
Agreement shall be held or deemed to be or shall, in fact, be invalid,
inoperative or unenforceable as applied in any particular case in any or all
jurisdictions because it conflicts with any provisions of any


                                       11


constitution, statute, rule or public policy or for any other reason, then, to
the extent permitted by law, such circumstances shall not have the effect of
rendering the provision in question invalid, inoperative or unenforceable in any
other case, circumstances or jurisdiction, or of rendering any other provision
or provisions of this Agreement or the Supplemental Remarketing Agreement, as
the case may be, invalid, inoperative or unenforceable to any extent whatsoever.

     SECTION 16. COUNTERPARTS.

     This Agreement and the Supplemental Remarketing Agreement may be executed
in counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.

     SECTION 17. AMENDMENTS.

     This Agreement and the Supplemental Remarketing Agreement may be amended by
any instrument in writing signed by the parties hereto. The Company, the Trustee
and the Purchase Contract Agent agree that they will not enter into, cause or
permit any amendment or modification of the Purchase Contract Agreement, the
Amended and Restated Declaration of Trust, the Indenture, the Pledge Agreement,
the Notes, the FELINE PRIDES or any other instruments or agreements relating to
the Preferred Trust Securities or the FELINE PRIDES which would adversely affect
the rights, duties or obligations of the Remarketing Agent and Reset Agent
without the prior written consent of the Remarketing Agent and Reset Agent, as
the case may be.

     SECTION 18. NOTICES.

     Unless otherwise specified, any notices, requests, consents or other
communications given or made hereunder or pursuant hereto shall be made in
writing or transmitted by any standard form of telecommunication, including
telephone, telegraph or telecopy, and confirmed in writing. All written notices
and confirmations of notices by telecommunication shall be deemed to have been
validly given or made when delivered or mailed, registered or certified mail,
return receipt requested and postage prepaid. All such notices, requests,
consents or other communications shall be addressed as follows: if to the
Company, to Cinergy Corp., 139 East Fourth Street, Cincinnati, Ohio 45202,
Attention: Wendy L. Aumiller, Acting Treasurer, or other persons designated by
the Company from time to time; if to the Remarketing Agent and Reset Agent (if
Merrill Lynch & Co. is the Remarketing Agent and the Reset Agent), to Merrill
Lynch & Co., Attention: Parker Weil, Managing Director at Merrill Lynch World
Headquarters, 4 World Financial Center, North Tower, New York, New York 10080,
with a copy to Shearman & Sterling, 599 Lexington Avenue, New York, NY 10022,
Attention: Robert Evans III; and if to the Purchase Contract Agent, to The Bank
of New York, 5 Penn Plaza, 13th Floor, New York, NY 10001, or to such other
address as any of the above shall specify to the other in writing.

     SECTION 19. INFORMATION.

     The Company and the Trust agree to furnish the Remarketing Agent and
Reset Agent with such information and documents as the Remarketing Agent and
Reset Agent may reasonably request in connection with the transactions
contemplated by this Remarketing Agreement and the Supplemental Remarketing
Agreement, and make reasonably available to the

                                       12



Remarketing Agent and Reset Agent and any attorney retained by the Remarketing
Agent and Reset Agent such information that parties would customarily require in
connection with a due diligence investigation conducted in accordance with
applicable securities laws and cause the Company's officers, directors,
employees and accountants to participate in all such discussions and to supply
all such information reasonably requested by any such person in connection with
such investigation.


                      [Signature page follows on next page]







                                       13



     IN WITNESS WHEREOF, each of the Company, the Purchase Contract Agent and
the Remarketing Agent has caused this Agreement to be executed in its name and
on its behalf by one of its duly authorized officers as of the date first above
written.


                                       CINERGY CORP.


                                       By:
                                            --------------------------------
                                            Name:
                                            Title:


                                       CC FUNDING TRUST I


                                       By:
                                            --------------------------------
                                            Name:
                                            Title:



CONFIRMED AND ACCEPTED:

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
            INCORPORATED

By:
   ----------------------------------
         Authorized Signatory


THE BANK OF NEW YORK,
not individually but solely as Purchase Contract
Agent and as attorney-in-fact for the holders of
the Purchase Contracts


By:
   -----------------------------------
     Name:
     Title:




                                                                    Exhibit A to
                                                           Remarketing Agreement


                   FORM OF SUPPLEMENTAL REMARKETING AGREEMENT

     Supplemental Remarketing Agreement dated __________, ____ among Cinergy
Corp., a Delaware corporation (the "Company"), Merrill Lynch, Pierce, Fenner &
Smith Incorporated (the "Remarketing Agent"), and The Bank of New York, as
Purchase Contract Agent and attorney-in-fact for the Holders of the Purchase
Contracts (as such terms are defined in the Purchase Contract Agreement referred
to in Schedule I hereto).

     NOW, THEREFORE, for and in consideration of the covenants herein made, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

     SECTION 1. DEFINITIONS.

     Capitalized terms used and not defined in this Agreement shall have the
meanings assigned to them in the Remarketing Agreement dated as of December 18,
2001 (the "Remarketing Agreement") among the Company, the Purchase Contract
Agent, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and The Bank of New York or, if not defined in the Remarketing Agreement, the
meanings assigned to them in the Purchase Contract Agreement, the Pledge
Agreement, the Purchase Agreement, the Amended and Restated Declaration of Trust
and the Indenture (each as defined in Schedule I hereto).

     SECTION 2. REGISTRATION STATEMENT AND PROSPECTUS.

     If required by applicable law, the Company and the Trust have filed with
the Securities and Exchange Commission, and there has become effective, a
registration statement on Form S-3 (No. 333-_______), including a prospectus,
relating to the Securities (as set forth in Schedule I hereto). Such
Registration Statement, as amended, at the time it was declared effective, and
including the information deemed to be a part thereof pursuant to Rule 430A
under the Securities Act of 1933, as amended (the "1933 Act"), and the documents
incorporated or deemed to be incorporated by reference therein, are hereinafter
called, collectively, the "Registration Statement"; the prospectus included in
the Registration Statement is hereinafter referred to as the "Basic Prospectus"
and the Basic Prospectus, as amended or supplemented to the date of this
Agreement to relate to the Securities and to the remarketing of the Securities,
is hereinafter referred to as the "Final Prospectus" (including in each case all
documents incorporated by reference). The Company and the Trust, as the case may
be, have provided copies of the Registration Statement, the Basic Prospectus and
the Final Prospectus to the Remarketing Agent, and hereby consents to the use of
the Final Prospectus in connection with the remarketing of the Securities. IN
THE EVENT THAT A REGISTRATION STATEMENT IS NOT POSSIBLE OR NOT REQUIRED OR A
SECTION 10(a) PROSPECTUS UNDER THE 1933 ACT IS NOT AVAILABLE INSERT THE
FOLLOWING: The Company and the Trust, as the case may be, have provided to the
Remarketing Agent, for use in connection with remarketing of the Securities (as
such term is defined on Schedule I hereto), a [preliminary


                                      A-1





remarketing memorandum and] remarketing memorandum and [describe other
materials, if any]. Such remarketing memorandum (including the documents
incorporated or deemed to be incorporated by reference therein, [and] [describe
other materials] are hereinafter called, collectively, the "Final Prospectus,"
[and such preliminary marketing memorandum (including the documents incorporated
or deemed to be incorporated by reference therein) is hereinafter called a
"Basic Prospectus")]. The Company and the Trust, as the case may be, hereby
consent to the use of the Final Prospectus in connection with the remarketing of
the Securities. All references in this Agreement to amendments or supplements to
the Registration Statement or the Final Prospectus shall be deemed to mean and
include the filing of any document under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), which is incorporated or deemed to be incorporated by
reference in the Registration Statement or the Final Prospectus, as the case may
be.

     SECTION 3. PROVISIONS INCORPORATED BY REFERENCE.

     (a) Subject to Section 3(b) herein, the provisions of the Purchase
Agreement (other than Sections 2, 3, 5, 6 and 7 thereof) are incorporated
herein by reference, mutatis mutandis, and the Company and the Trust, as the
case may be, hereby represent and warrant, and agree to comply with the
covenants and obligations, set forth in the provisions of the Purchase Agreement
incorporated by reference herein, as modified by the provisions of Section 3(b)
hereof.

     (b) With respect to the provisions of the Purchase Agreement incorporated
herein, for the purposes hereof, (i) all references therein to the "Underwriter"
or "Underwriters" shall be deemed to refer to the Remarketing Agent and all
references to the "Representative" or the "Representatives" shall be deemed to
refer to Merrill Lynch, Pierce, Fenner & Smith Incorporated, ("Merrill Lynch");
(ii) all references therein to the "Securities" or "Initial Securities" shall be
deemed to refer to the Securities as defined herein; (iii) all references
therein to the "Closing Time" shall be deemed to refer to the Remarketing
Closing Date specified in Schedule I hereto; (iv) all references therein to the
"Registration Statement," the "Basic Prospectus" or the "Prospectus" shall be
deemed to refer to the Registration Statement, the Basic Prospectus and the
Final Prospectus, respectively, as defined herein; (v) all references therein to
this "Agreement," the "Purchase Agreement," "hereof," "herein" and all
references of similar import, shall be deemed to mean and refer to this
Supplemental Remarketing Agreement; (vi) all references therein to "the date
hereof," "the date of this Agreement" and all similar references shall be deemed
to refer to the date of this Supplemental Remarketing Agreement; (vii) all
references therein to any "settlement date" shall be disregarded; and (viii)
other changes, including changes relating to the offer and sale of the
Securities in connection with the Remarketing without registration under the
Securities Act of 1933 in reliance upon an exemption therefrom (including the
exemption afforded by Rule 144A).

     SECTION 4. REMARKETING.

     Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth or incorporated by reference
herein and in the Remarketing Agreement, the Remarketing Agent agrees to use its
reasonable efforts to remarket, in the manner set forth in Section 2(b) of the
Remarketing Agreement, the Securities set forth in


                                      A-2




Schedule I hereto at a purchase price not less than 100% of such aggregate
stated liquidation amount or aggregate principal amount, as the case may be,
plus any deferred and unpaid distributions or interest, as applicable, thereon.
In connection therewith, the registered holder or holders thereof agree, in the
manner specified in Section 5 hereof, to pay the Remarketing Agent a Remarketing
Fee in an amount not exceeding 25 basis points (.25%) of the aggregate stated
liquidation amount or aggregate principal amount of the remarketed securities
plus deferred and unpaid distributions or interest, as the case may be, if any,
from any amount received in connection with such Remarketing in excess of the
aggregate stated liquidation amount or aggregate principal amount of such
remarketed Preferred Trust Securities or Notes, as the case may be. The right of
each holder of Securities to tender Securities for Remarketing shall be limited
to the extent set forth in the last sentence of Section 2(b) of the Remarketing
Agreement (which is incorporated by reference herein). As more fully provided in
Section 2(c) of the Remarketing Agreement (which is incorporated by reference
herein), the Remarketing Agent is not obligated to purchase any Securities in
the Remarketing or otherwise, and neither the Company nor the Remarketing Agent
shall be obligated in any case to provide funds to make payment upon tender of
Securities for Remarketing.

     SECTION 5. DELIVERY AND PAYMENT.

     Delivery of payment for the remarketed Securities by the purchasers thereof
identified by the Remarketing Agent and payment of the Remarketing Fee shall be
made on the Remarketing Closing Date at the location and time specified in
Schedule I hereto (or such later date not later than five Business Days after
such date as the Remarketing Agent shall designate), which date and time may be
postponed by agreement between the Remarketing Agent, the Company, the Trust and
the registered holder or holders thereof. Delivery of the remarketed Securities
and payment of the Remarketing Fee shall be made to the Remarketing Agent
against payment by the respective purchasers of the remarketed Securities of the
consideration therefor as specified herein, which consideration shall be paid to
the Collateral Agent for the account of the persons entitled thereto in
immediately available funds by wire transfer to an account or accounts
designated by the Collateral Agent.

     If the Securities are not represented by a Global Security held by or on
behalf of The Depository Trust Company, certificates for the Securities shall be
registered in such names and denominations as the Remarketing Agent may request
not less than one full Business Day in advance of the Remarketing Closing Date,
and the Company, the Collateral Agent and the registered holder or holders
thereof agree to have such certificates available for inspection, packaging and
checking by the Remarketing Agent in New York, New York not later than 1:00 p.m.
on the Business Day prior to the Remarketing Closing Date.

     SECTION 6. NOTICES.

     Unless otherwise specified, any notices, requests, consents or other
communications given or made hereunder or pursuant hereto shall be made in
writing or transmitted by any standard form of telecommunication, including
telephone or telecopy, and confirmed in writing. All written notices and
confirmations of notices by telecommunication shall be deemed to have been
validly given or made when delivered or mailed, registered or certified mail,
return receipt requested and postage prepaid. All such notices, requests,
consents


                                      A-3




or other communications shall be addressed as follows: if to the Company, to
Cinergy Corp., 139 East Fourth Street, Cincinnati, Ohio 45202, Attention: Wendy
L. Aumiller, Acting Treasurer; if to the Remarketing Agent, to Merrill Lynch &
Co. at Merrill Lynch World Headquarters, 4 World Financial Center, North Tower,
New York, New York 10080, Attention: Parker Weil, Managing Director, with a copy
to Shearman & Sterling, 599 Lexington Avenue, New York, NY 10022, Attention:
Robert Evans III; and if to the Purchase Contract Agent, to The Bank of New
York, 101 Barclay Street, 21W, New York, NY 10286, or to such other address as
any of the above shall specify to the other in writing.

     SECTION 7. CONDITIONS TO OBLIGATIONS OF REMARKETING AGENT.

     Anything herein to the contrary notwithstanding, the parties hereto agree
(and the holders and beneficial owners of the Securities will be deemed to
agree) that the obligations of the Remarketing Agent under this Agreement and
the Remarketing Agreement are subject to the satisfaction of the conditions set
forth in Section 7 of the Remarketing Agreement (which are incorporated herein
by reference), and to the satisfaction, on the Remarketing Closing Date, of the
conditions incorporated by reference herein from Section 4 of the Purchase
Agreement as modified by Section 3(b) hereof (including, without limitation, the
delivery of opinions of counsel, officers' certificates and accountants' comfort
letters in form and substance satisfactory to the Remarketing Agent, the
accuracy as of the Remarketing Closing Date of the representations and
warranties of the Company and Trust included and incorporated by reference
herein and the performance by the Company and Trust of their obligations under
the Remarketing Agreement and this Agreement as and when required hereby and
thereby). In addition, anything herein or in the Remarketing Agreement to the
contrary notwithstanding, the Remarketing Agreement and this Agreement may be
terminated by the Remarketing Agent, by notice to the Company at any time prior
to the time of settlement on the Remarketing Closing Date, if any of the events
or conditions set forth in Section 8 of the Purchase Agreement, as modified by
Section 3(b) hereof, shall have occurred or shall exist.

     SECTION 8. INDEMNITY AND CONTRIBUTION.

     Anything herein to the contrary notwithstanding, the Remarketing Agent
shall be entitled to indemnity and contribution on the terms and conditions set
forth in the Remarketing Agreement.


                      [Signature page follows on next page]


                                      A-4







     If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company
and the Remarketing Agent.

                                       Very truly yours,

                                       CINERGY CORP.


                                       By:
                                           -----------------------------
                                           Name:
                                           Title:




CONFIRMED AND ACCEPTED:

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
            INCORPORATED

By:
   -----------------------------------------
         Authorized Signatory

[Add other Remarketing Agents, if any]


THE BANK OF NEW YORK,
not individually but solely as Purchase Contract
Agent and as attorney-in-fact for the holders of
the Purchase Contracts


By:
   -----------------------------------------
   Name:
   Title:





                                      A-5




                                   SCHEDULE I

     Purchase Contract Agreement, dated as of December 18, 2001 by and between
Cinergy Corp., a Delaware corporation, and The Bank of New York.

     Pledge Agreement dated as of December 18, 2001 by and between Cinergy
Corp., a Delaware corporation, JPMorgan Chase Bank and The Bank of New York.

     Amended and Restated Declaration of Trust dated as of December 18, 2001 of
CC Funding Trust I, a Delaware statutory business trust.

     Indenture dated as of September 12, 2001 by and between Cinergy Corp., a
Delaware corporation, and Fifth Third Bank.

     Second Supplemental Indenture, dated as of December 18, 2001 by and between
Cinergy Corp., a Delaware corporation, and Fifth Third Bank.

     Registration Statement No. 333-_________

     Title of Securities: ___ 1. __% Preferred Trust Securities of CC Funding
                                 Trust I

                          ___ 2. __% Senior Deferrable Notes due February 16,
                                 2007 of Cinergy Corp.

     Stated Amount or Principal Amount of Securities: $

     Purchase Agreement, dated as of December 12, 2001, among Cinergy Corp., a
Delaware corporation, CC Funding Trust I, a Delaware statutory business trust,
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of
America Securities LLC, Goldman, Sachs & Co., J.P. Morgan Securities Inc. and
Lehman Brothers Inc.

     Remarketing Fee:     % ($          )

     Remarketing Closing Date, Time and Location:

EX-8.1

                                                                     EXHIBIT 8.1






                                                     December 18, 2001




Re:      CINERGY CORP. AND FELINE PRIDES


Cinergy Corp.
139 East Fourth Street
Cincinnati, Ohio 45202

Ladies and Gentlemen:

         We have acted as counsel for Cinergy Corp. (the "COMPANY") in
connection with the registration of 6,325,000 FELINE PRIDES (the "FELINE
PRIDES"), consisting of purchase contracts issued by the Company and preferred
trust securities issued by CC Funding Trust I (the "TRUST"). We have reviewed
the discussion set forth under the caption "United States Federal Income Tax
Consequences" in the final prospectus (the "PROSPECTUS") that was filed by the
Company and the Trust with the Securities and Exchange Commission on December
14, 2001 and are of the opinion that to the extent the discussion relates to
conclusions of law, the discussion is accurate in all material respects.
Capitalized terms used herein but not defined have the same meanings as provided
in the Prospectus.

         In rendering this opinion, we have relied upon, among other things,
representations and statements made by the Company in the Prospectus and have
assumed that the offering of FELINE PRIDES will occur as described in the
Prospectus.

         This letter is limited to matters discussed expressly herein and does
not address other U.S. federal income tax issues or other legal issues relevant
to issuance of the FELINE PRIDES. In particular, this opinion does not address
the tax treatment to the Company of issuance of the FELINE PRIDES and should not
be construed otherwise.

                                            Very truly yours,

                                            /s/ Davis Polk & Wardwell

EX-25.1

                                                                    EXHIBIT 25.1

                                    FORM T-1                      File No. ____

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                       Statement of Eligibility Under the
                  Trust Indenture Act of 1939 of a Corporation
                          Designated to Act as Trustee

          CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
                          PURSUANT TO SECTION 305(B)(2)

                                FIFTH THIRD BANK
                                ----------------
               (Exact name of trustee as specified in its charter)

                                      Ohio
                                      ----
     (Jurisdiction of incorporation or organization if not a national bank)

                                   31-0854433
                                   ----------
                      (I.R.S. Employer Identification No.)

                   38 Fountain Square Plaza, Cincinnati, Ohio
                   ------------------------------------------
                    (Address of principal executive offices)

                                      45263
                                      -----
                                   (Zip Code)

                    Paul L. Reynolds, 5th and Walnut Streets
                     Cincinnati, Ohio, 45263 (513) 579-5300
                     --------------------------------------
            (Name, address and telephone number of agent for service)

                       CINERGY CORP. / CC FUNDING TRUST I
                       ----------------------------------
               (Exact name of obligor as specified in its charter)

                                    Delaware
                                    --------
         (State or other jurisdiction of incorporation or organization)

                             31-1385023 / 51-6524633
                             -----------------------
                      (I.R.S. Employer Identification No.)

                    139 East Fourth Street, Cincinnati, Ohio
                    ----------------------------------------
                    (Address of principal executive offices)

                                      45202
                                      -----
                                   (Zip Code)

                             Senior Deferrable Notes
                             -----------------------
                       (Title of the indenture securities)





ITEM 1. GENERAL INFORMATION.

             Furnish the following information as to the trustee -

        (a)  Name and address of each examining or supervising authority
             to which it is subject.

             Ohio Superintendent of Banks
             State Office Tower
             30 E. Broad Street
             Columbus, Ohio 43215

             Federal Reserve Bank of Cleveland
             East Sixth Street and Superior Avenue
             Cleveland, Ohio 44101

             Federal Deposit Insurance Corporation,
             Washington, D.C.

        (b)  Whether it is authorized to exercise corporate trust powers.

             Yes.

ITEM  2. AFFILIATIONS WITH OBLIGOR.

             If the obligor is an affiliate of the trustee, describe each
             such affiliation.

     None.

ITEMS 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14 AND 15 ARE NOT APPLICABLE BY VIRTUE OF
THE ANSWER TO ITEM 13.

ITEM  13. DEFAULTS BY THE OBLIGOR.

     (a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.

None.

     (b) If the Trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been a default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.

None.


                                       2



ITEM 16. LIST OF EXHIBITS.

          List below all exhibits filed as a part of this statement of
     eligibility. (Exhibits identified in parentheses, on file with the
     Commission, are incorporated herein by reference as exhibits hereto.)

     (1)  A copy of the Certificate of Incorporation of the trustee as now in
          effect.

     (2)  A copy of the certificate of authority of the trustee to commence
          business. (Included in Exhibit 1)

     (3)  A copy of the authorization of the trustee to exercise corporate trust
          powers.

     (4)  A copy of the existing code of regulations of the trustee
          incorporating amendments to date.

     (5)  A copy of each indenture referred to in Item 4.

     (6)  The consent of the trustee required by Section 321 (b) of the Trust
          Indenture Act of 1939.

     (7)  A copy of the latest report of condition of the trustee published
          pursuant to law or the requirements of its supervising or examining
          authority.

     (8)  A copy of any order pursuant to which the foreign trustee is
          authorized to act as sole trustee under indentures qualified or to be
          qualified under the Act.

     (9)  Foreign trustees are required to file a consent to service of process
          of Form F-X


                                       3



                                    SIGNATURE

     Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Fifth Third Bank, a corporation organized and existing under the laws
of the State of Ohio, has duly caused this statement of eligibility and
qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Cincinnati and the State of Ohio, on the 19th day
of December, 2001.

                                       FIFTH THIRD BANK

                                       By:  /s/ Christine Schaub
                                            -----------------------------
                                       Its: Vice President








                                       4



                                    EXHIBIT 1

                          CERTIFICATE OF INCORPORATION
                         OF THE TRUSTEE AS NOW IN EFFECT

                        AMENDED ARTICLES OF INCORPORATION

                                       OF

                         FIFTH THIRD BANK, WESTERN OHIO

FIRST:      The name of this Corporation shall be Fifth Third Bank.

SECOND:     The place in Ohio where its principal office is to be located is
            Cincinnati, Hamilton County, Ohio.

THIRD:      This Corporation is formed for the purpose of (a) receiving
            on deposit or in trust, moneys, securities and other valuable
            property, on such terms as may be agreed, and of doing the
            business of a savings bank and of a trust company;  (b) disposing
            of box vaults for safekeeping of valuables by lease or otherwise;
            (c) investing and loaning the funds of the company and those
            received by it on deposit or in trust; (d) doing a commercial
            banking business; (e) doing the business of a special plan bank;
            and (f) doing any other lawful act or activity for which banking
            corporations may be formed under Ohio law; and in furtherance of
            said  purposes, to exercise all of the powers which may be
            lawfully exercised by a corporation formed therefor, and to do all
            things necessary or incident thereto.

FOURTH:     The maximum number of shares which this Corporation is
            authorized to have outstanding shall be Four Hundred
            Fifty-Four Thousand Forty-Two (454,042) shares of common
            stock, with a par value of Ten Dollars ($10.00) per share.

FIFTH:      No holder of any share or shares of any class issued by this
            Corporation shall be entitled as such, as a matter of right, at
            any time, to subscribe for or purchase (i) shares of any class
            issued by this Corporation, now or hereafter authorized,
            (ii) securities of this Corporation convertible into or exchangeable
            for shares of any class issued by this Corporation, now or
            hereafter authorized, or (iii) securities of this Corporation to
            which shall be attached or appertain to any rights or options
            whether by the terms of such securities or in the contracts,
            warrants, or other instruments (whether transferable  or
            non-transferable or separable or inseparable from such securities)
            evidencing such rights or options entitling the holders thereof to
            subscribe for or purchase shares of any class issued by this
            Corporation, now or hereafter authorized; it being the intent and
            is the effect of this Article Fifth to fully eliminate any and all
            pre-emptive rights with respect to the shares of any class issued
            by this Corporation now or hereafter authorized.

SIXTH:      When authorized by the affirmative vote of a majority of the
            Board of Directors, without the action or approval of the
            shareholders of this Corporation, and when


                                       5



            approved in advance by the Ohio Superintendent of Banks, this
            Corporation may redeem, purchase, or contract to purchase, at any
            time and from time to time, shares of any class issued by this
            Corporation for such prices and upon and subject to such terms
            and conditions that the Board of Directors may determine.

SEVENTH:    These Amended Articles of Incorporation supersede and take the
            place of the existing Articles of Incorporation.






                                       6




                                    EXHIBIT 2

                         CERTIFICATE OF AUTHORITY OF THE
                          TRUSTEE TO COMMENCE BUSINESS
                             (INCLUDED IN EXHIBIT 1)






                                       7



                                    EXHIBIT 3

                   A COPY OF THE AUTHORIZATION OF THE TRUSTEE
                       TO EXERCISE CORPORATE TRUST POWERS

                                 [See Attached]












                                       8



                                  STATE OF OHIO

                       DIVISION OF FINANCIAL INSTITUTIONS

This is to certify that Fifth Third Bank, Cincinnati, Ohio, organized under the
laws of the State of Ohio has complied with the laws relating to trust companies
under Section 1111.04 of the Ohio Revised Code and is qualified to exercise
trust powers in Ohio.

Witness my hand at Columbus, Ohio, this 1st day of December, 2001.

                                       /s/ F. David A. Arnold
                                       ----------------------------
                                       DAVID A. ARNOLD
                                       Deputy Superintendent for Banks
                                       Division of Financial Institutions










                                       9



                                    EXHIBIT 4

            A COPY OF THE EXISTING CODE OF REGULATIONS OF THE TRUSTEE
                        INCORPORATING AMENDMENTS TO DATE

                                 [See Attached]




                                       10




                     CODE OF REGULATIONS OF FIFTH THIRD BANK

                                    ARTICLE I
                                  SHAREHOLDERS

     SECTION 1. MEETINGS. The annual meeting of the Shareholders shall be held
at the principal office of the Corporation at such hour, as may be fixed in the
notice of such meeting, and on such date, not earlier than the second Tuesday of
January or later than the third Tuesday of April of each year, as shall be fixed
by the Board of Directors and communicated in writing to the Shareholders not
later than twenty (20) days prior to such meeting.

     SECTION 2. QUORUM. Shareholders, whether in person or by lawful proxies,
representing a majority in amount of the outstanding stock of the Corporation,
shall constitute a quorum at any Shareholders' meeting. If there be less than a
majority in amount of such stock at any meeting, the meeting may be adjourned
from time to time.


                                   ARTICLE II
                               BOARD OF DIRECTORS

     SECTION 1. ELECTION AND NUMBER. The Board of Directors shall be elected by
the Shareholders. The Board of Directors shall be composed of eighteen (18)
persons unless this number is changed by: (1) the Shareholders in accordance
with the applicable laws of Ohio or (2) the vote of a majority of the Directors
in office. The Directors may increase the number to not more than twenty four
(24) persons and may decrease the number to not less than fifteen (15) persons.
Any Director's office created by the Directors by reason of an increase in their
number may be filled by action of a majority of the Directors in office. Within
sixty (60) days of the election or appointment of each Director, the Director
shall take and subscribe to an oath to diligently and honestly perform the
duties of a director and to not knowingly violate, or permit to be violated, any
federal or Ohio banking law.

     SECTION 2. TERM. Directors shall hold office until the expiration of the
term for which they were elected, and shall continue in office until their
respective successors shall have been duly elected and qualified. Any such term
of office shall be no longer than three (3) years.

     SECTION 3. QUALIFICATIONS AND COMPENSATION. No person shall serve as a
Director who does not meet the qualification requirements of the applicable laws
of Ohio. Each Director shall be entitled to receive such compensation for
attendance at meetings of the Board of Directors or Committees thereof as the
Board of Directors may, from time to time, fix.

     SECTION 4. REPLACEMENT OR REMOVAL. Directors may be replaced or removed as
provided by the laws of Ohio, provided that Directors may be removed without
cause only by an affirmative vote of not less than two-thirds (2/3) of the
outstanding shares of the Corporation.


                                       11



     SECTION 5. VACANCIES. Any vacancy occurring in the Board of Directors may
be filled by the Board of Directors until an election to fill such vacancy is
had.

     SECTION 6. QUORUM. A majority of the whole authorized number of Directors,
as the same shall be established from time to time in accordance with Section 1
of this Code of Regulations, shall constitute a quorum for a meeting of the
Directors, except that a majority of the Directors in office constitutes a
quorum for the filling of a vacancy or vacancies of the Board.

     SECTION 7. MEETINGS OF THE BOARD. Regular meetings of the Board of
Directors shall be held on the third Tuesday of each month, or at such other
times as may be determined by the Board of Directors. Except as otherwise
provided by the laws of Ohio, any business may be transacted at any regular
meeting of the Board of Directors. Special meetings shall be held upon the call
of the Chairman of the Board, if one be elected, or by the President, or in
their absence, by a Vice President or any three (3) Directors.

     SECTION 8. NOTICE OF MEETINGS. The Secretary shall give notice of each
meeting of the Board of Directors, whether regular or special, to each member to
the Board.

     SECTION 9. COMMITTEES.

     9.1 EXECUTIVE COMMITTEE. The Board of Directors shall appoint an Executive
Committee consisting of at least three (3) members of the Board of Directors.
Such executive Committee shall serve until their successors are appointed. A
majority of the members of said Committee shall constitute a quorum. The
Executive Committee shall conduct the business of the Corporation and shall have
all the powers of the Board of Directors when said Board is not in session,
except that of declaring a dividend. The Secretary of the Corporation shall keep
a record of the Committee's proceedings, which, signed by the Chairman of the
Committee, shall be presented at the meetings of the Committees and at the
meetings of the Board of Directors.

     9.2 OTHER COMMITTEES. The Board of Directors shall appoint a Trust
Committee of which the Vice President and Trust Officer and at least three (3)
of its members who are not officers of the Corporation shall be members. The
Vice President and Trust Officer shall be Chairman of the Trust Committee. In
addition thereto, the Chairman of the Board, Chief Executive Officer or
President, may appoint such additional Committees, by and with the approval of
the Board of Directors, as may be deemed desirable or necessary.

     Each such Committee, so appointed, shall have such powers and perform such
duties, not inconsistent with the applicable laws of Ohio, as may be delegated
to it by the Board of Directors.

SECTION 10. INDEMNIFICATION. The Corporation shall indemnify each Director and
each Officer of the Corporation, and each person employed by the Corporation who
serves at the written request of the President of the Corporation as a director,
trustee, officer, employee, or agent of another corporation, domestic or
foreign, non-profit or for profit, partnership, joint venture, trust or other
enterprise, to the full extent permitted by the applicable laws of Ohio. The
term




                                       12



`Officer' as used in this Section shall include the Chairman of the Board and
the Vice Chairman of the Board if such offices are filled, the Chief Executive
Officer, the President, each Vice President, each Affiliate Director, the
Treasurer, the Secretary, the Cashier, the Controller, the Auditor, the Counsel
and any other person who is specifically designated as an `Officer' within the
operation of this Section by action of the Board of Directors. The Corporation
may indemnify assistant Officers, employees and others by action of the Board of
Directors to the extent permitted by the applicable laws of Ohio.


                                   ARTICLE III
                                    OFFICERS

     SECTION 1. ELECTION OF OFFICERS. The Board of Directors at the first
meeting after the election of Directors may elect one of its own number Chairman
of the Board and one of its own number Vice Chairman of the Board; and it shall
elect one of its own number President. It may also elect a Chief Executive
Officer, one or more Vice Presidents (one or more of whom may be designated
Executive Vice President and/or Senior Vice President and/or Vice President and
Trust Officer), one or more Affiliate Directors, a Cashier, a Secretary, and a
Treasurer, and it may appoint such other officers as the Board may deem
advisable. The Corporation may also elect a Chief Executive Officer, President,
Chief Financial Officer, Secretary and/or Treasurer for each affiliate of the
Corporation as determined appropriate from time to time by the Board of
Directors, with such officers having the name of such affiliate appended to his
of her title (e.g., President (Northeastern Ohio)). Any two or more offices may
be held by the same person. Officers so elected shall hold office during the
term of the Board by whom they are elected, subject to the power of the Board to
remove them at its discretion. They shall be bonded in such amount and with such
surety or securities as the Board of Directors shall require.

     SECTION 2. POWERS AND DUTIES. The Chairman of the Board of Directors, if
the office be filled, otherwise the Vice Chairman of the Board of Directors, if
the office be filled, otherwise the President shall preside at all meetings of
the Shareholders and the Board of Directors, shall be responsible for the
supervision and control over the business of the Corporation and shall serve at
the pleasure of the Board of Directors. In the absence or disability of any of
the foregoing officers, their respective duties shall be performed by the
Chairman of the Board, the Vice Chairman of the Board, the President, or by a
Vice President specifically designated by the Board of Directors, in the order
named.

     The Secretary, or in his absence or disability, the assistant Secretary,
shall act, ex officio, as Secretary of all meetings of the Shareholders, the
Board of Directors and the Executive Committee. The other officers of the
Corporation shall have such powers and duties as usually and customarily attach
to their offices.


                                   ARTICLE IV
                          AFFILIATE BOARDS OF DIRECTORS

     SECTION 1. AFFILIATE BOARDS OF DIRECTORS. The Board of Directors may elect
such of its members and Officers of the Corporation (whether or not such other
persons are employed by


                                       13



the Corporation) in such numbers as the Board of Directors deems necessary to
form an affiliate board of directors for such affiliates of the Corporation as
determined appropriate from time to time by the Board of Directors. As of
December 29, 2000, such affiliates are anticipated to be known as: Fifth Third
Bank (Central Ohio), Fifth Third Bank (Ohio Valley), Fifth Third Bank
(Northwestern Ohio), Fifth Third Bank (Northeastern Ohio), and Fifth Third Bank
(Western Ohio). Any person designated as an Affiliate Director, who is not
employed by the Corporation, shall be a Non-Employee Officer of the Corporation.
Affiliate Directors so elected shall hold office during the term of the Board by
whom they are appointed, subject to the power of the Board to remove them at its
discretion and/or until such time as their successors have been duly elected and
qualified.

     SECTION 2. POWERS AND DUTIES. The Board of Directors may delegate to each
Affiliate Board of Directors the power and authority to take by majority vote of
the members of such Affiliate Board of Directors any and all such actions that
may be legally delegated by the Board of Directors to any one or more officers
of the Corporation pursuant to the laws of Ohio. Any action taken by any
Affiliate Director pursuant to the direction given or authorization granted to
him or her by such Affiliate Board of Directors shall constitute the valid and
legal act of the Corporation pursuant to the approval and authorization of the
Board of Directors.

     SECTION 3. EXECUTIVE COMMITTEES. Each Affiliate Board of Directors shall
appoint an Executive Committee consisting of at least three (3) members of the
respective Affiliate Board of Directors. Such executive Committee shall serve
until their successors are appointed. The Board of Directors may delegate to
each such Executive Committee of an Affiliate Board of Directors any and all
such actions that may be legally delegated to the respective Affiliate Board of
Directors pursuant to the laws of Ohio. Any action taken by any officer of the
Corporation pursuant to the direction given or authorization granted to him or
her by such an Executive Committee shall constitute the valid and legal act of
the Corporation pursuant to the approval and authorization of the Board of
Directors.


                                    ARTICLE V
                              CERTIFICATES OF STOCK

     SECTION 1. FORM. Certificates for shares of stock shall be signed by the
Chairman of the Board, or by the President, or by one of the Vice Presidents,
and by the Secretary or Treasurer or by the Cashier or an Assistant Cashier,
shall contain such statements as are required by applicable Ohio law, and shall
otherwise be in such form as the Board of Directors may, from time to time,
require.

     SECTION 2. TRANSFERS. Shares shall be transferable on the books of the
Corporation by the holders thereof in person or by duly authorized attorney upon
surrender of the certificates therefor with duly executed assignment endorsed
thereon or attached thereto.

     SECTION 3. CLOSING OF TRANSFER BOOKS. The books for the transfer of the
stock of the Corporation shall be closed for at least five (5) days preceding
the annual meeting of



                                       14



Shareholders, and may be closed by order of the Board of Directors, or Executive
Committee, for a like period before any other meeting of the Shareholders.


                                   ARTICLE VI
                                   AMENDMENTS

     These regulations may be changed, and new regulations adopted by the assent
thereto in writing of at least two-thirds (2/3) of the Shareholders of the
Corporation in number and in amount or by a majority of such Shareholders in
number and in amount; at a meeting held for that purpose, notice of which has
been given by the President, the Secretary, or any two (2) Directors on behalf
of the Corporation, personally or by written notice, to each Shareholder, or in
such other manner as may then be authorized by the applicable laws of Ohio.







                                       15



                                    EXHIBIT 5


                 A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4

                                (NOT APPLICABLE)






                                       16




                                    EXHIBIT 6

             THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321 (B)
                       OF THE TRUST INDENTURE ACT OF 1939

                                 [See Attached]





                                       17




                              EXHIBIT 6 TO FORM T-1

                               CONSENT OF TRUSTEE

     Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939 in connection with the proposed issuance of Debt Securities of Cinergy
Corp., Fifth Third Bank hereby consents that reports of examination by Federal,
State, Territorial or District Authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.


                                       FIFTH THIRD BANK


                                       By:  /s/ Christine Schaub
                                            -----------------------------
                                       Its: Vice President





                                    EXHIBIT 7

             A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE
                  PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS
                    OF ITS SUPERVISING OR EXAMINING AUTHORITY

                                 [See Attached]







CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 2001

All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.

SCHEDULE RC - BALANCE SHEET





                                                                                        Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------------------------
ASSETS
                                                                                                    
1.       Cash and balance due from depository institutions (from Schedule RC-A):            RCFD
                                                                                            ----
         a.  Noninterest-bearing balances and currency and coin (1)                          0081        517,166  1.a
                                                                                                   -------------
         b.  Interest-bearing balances (2)                                                   0071         14,378  1.b
                                                                                                   -------------
2.       Securities:
         a.  Held-to-maturity securities (from Schedule RC-B, column A)                      1754          3,960  2.a
                                                                                                   -------------
         b.  Available-for-sale securities (from Schedule RC-B, column D)                    1773     12,918,434  2.b
                                                                                                   -------------
3.       Federal Funds sold and securities purchased under agreements to resell              1350        343,327  3.
                                                                                                   -------------
4.       Loans and lease financing receivables (from Schedule RC-C):
         a.  LOANS AND LEASES HELD FOR SALE                                                  5369      1,675,036  4.a
                                                                                                   -------------
         b.  LOANS AND LEASES, NET OF UNEARNED INCOME                              B528     20,235,391                4.b
                                                                                          ------------
         c.  LESS: Allowance for loan and lease losses                             3123        295,528                4.c
                                                                                          ------------
         d.  LOANS AND LEASES, NET OF UNEARNED INCOME AND

         ALLOWANCE (ITEM 4.b MINUS 4.c)                                                      B529     19,939,863  4.d
                                                                                                    -------------
5.       Trading assets (from Schedule RC-D)                                                 3545              0  5.
                                                                                                    -------------
6.       Premises and fixed assets (including capitalized leases                             2145        354,542  6.
                                                                                                    -------------
7.       Other real estate owned (from Schedule RC-M)                                        2150         19,629  7.
                                                                                                    -------------
8.       Investments in unconsolidated subsidiaries and associated companies (from           2130            750  8.
         Schedule RC-M)

9.       Customers' liability to this bank on acceptances outstanding                        2155         19,685  9.
                                                                                                    -------------
10.      Intangible assets                                                                                       10.
         a.   Goodwill                                                                       3163        123,851 10.a
                                                                                                      -------------
         b.   Other Intangible Assets (from Schedule RC-M)                                   0426        255,748 10.b
                                                                                                    -------------
11.      Other assets (from Schedule RC-F)                                                   2160      2,090,332 11.
                                                                                                    -------------
12.      Total Assets (sun of items 1 through 11)                                            2170     38,276,701 12.
                                                                                                    -------------


- -------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposits not held for trading.





SCHEDULE RC - CONTINUED



                                                                                              Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------------------------------
LIABILITIES
                                                                                                    
13.      Deposits:
         a.  In domestic offices (sum of totals of columns A and C from Schedule                   RCON
             RC-E, part 1)                                                                         ----

                                                                         RCON                  2200     18,132,220  13.a.
                                                                         ----                          ------------
                                                                                 ------------
1.       Noninterest-bearing (1)                                         6631      2,977,956                        13.a.1.
                                                                                 ------------
2.       Interest-bearing                                                6636     15,154,264                        13.a.2.
                                                                                 ------------
         b.  In foreign offices, Edge and Agreement subsidiaries, and                          RCFN
                                                                                               ----
         IBFs (from Schedule RC-E, part II)

                                                                                                       ------------
                                                                         RCFN                  2200      2,065,826  13.b.
                                                                         ----
                                                                                                       ------------
                                                                                 ------------
1.       Noninterest-bearing                                             6631              0                        13.b1
                                                                                 ------------
2.       Interest-bearing                                                6636      2,065,826   RCFD                 13.b2
                                                                                               ----
                                                                                 ------------
                                                                                                       ------------
14.      Federal Funds purchased and securities sold under agreements to                       2800      6,871,140  14
         repurchase ______________

                                                                                                       ------------
15.      Trading liabilities (from Schedule RC-D)                                              3548              0  15
                                                                                                       ------------
16.      Other borrowed money (includes mortgage indebtedness and
         obligations under capitalized leases) (from Schedule RC-M):                           3190      5,505,852  16
                                                                                                       ------------
17.      Not applicable
                                                                                                       ------------
18.      Bank's liability on acceptances executed and outstanding                              2920         19,685  18
                                                                                                       ------------
19.      Subordinated notes and debentures (2)                                                 3200        591,703  19
                                                                                                       ------------
20.      Other liabilities (from Schedule RC-G)                                                2930      2,097,239  20
                                                                                                       ------------
21.      Total liabilities (sum of items 13 through 20)                                        2948     35,283,665  21
                                                                                                       ------------
22.      Minority interest in consolidated subsidiaries                                        3000             99  22
                                                                                                       ------------
EQUITY CAPITAL


23.      Perpetual preferred stock and related surplus                                         3838              0  23
                                                                                                       ------------
24.      Common Stock                                                                          3230          4,540  24
                                                                                                       ------------
25.      Surplus (exclude all surplus related to preferred stock)                              3839      1,214,938  25
                                                                                                       ------------
26.      a.     Retained earnings                                                              3832      1,624,564  26.a.
                                                                                                       ------------
         b.     ACCUMULATED OTHER COMPREHENSIVE INCOME (3)                                     B530        148,895  26.b.
                                                                                                       ------------
27.      OTHER EQUITY CAPITAL COMPONENTS (4)                                                   A130              0  27
                                                                                                       ------------
28.      Total equity capital (sum of items 23 through 27)                                     3210      2,992,937  28
                                                                                                       ------------
29.      Total liabilities, minority interest and equity capital (sum of                       3300     38.276,701  29
         items 21 and 22) _____________________                                                        ------------

MEMORANDUM
TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION

1.   Indicate in the box at the right the number of the statement below that best
     describes the most comprehensive level of auditing work performed for the bank by         RCFD      NUMBER
     independent external auditors as of any date during 2000                                  ----      ------
                                                                                               6724         N/A     M.1


1=   Independent audit of the bank conducted in accordance with generally
     accepted auditing standards by a certified public accounting firm which
     submits a report on the bank.

2=   Independent audit of the bank's parent holding company conducted in
     accordance with generally accepted auditing standards by a certified public
     accounting firm which submits a report on the consolidated holding company
     (but not on the bank separately)

3=   Attestation on bank management's assertion on the effectiveness of the
     bank's internal control over financial reporting by a certified public
     accounting firm

4=   Directors' examination of the bank conducted in accordance with generally
     accepted auditing standards by certified public accounting firm (may be
     required by state chartering authority)

5=   Director's examination of the bank performed by other external auditors
     (may be required by state chartering authority)

6=   Review of the bank's financial statements by external auditors

7=   Compilation of bank's financial statements by external auditors

8=   Other audit procedures (excluding tax preparation work)

9=   No external audit work

- --------

(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
(3) Includes net unrealized holding gains (losses) on available-for-sale
securities, accumulated net gains (losses) on cash flow hedges, cumulative
foreign currency translation adjustments, and minimum pension liability
adjustments.
(4) Includes treasury stock and unearned Employee Stock Ownership Plan shares.






                                    EXHIBIT 8

A COPY OF ANY ORDER PURSUANT TO WHICH THE FOREIGN TRUSTEE IS AUTHORIZED TO ACT
AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO BE QUALIFIED UNDER THE ACT


                                (NOT APPLICABLE)






                                    EXHIBIT 9

          FOREIGN TRUSTEES ARE REQUIRED TO FILE A CONSENT TO SERVICE OF
                               PROCESS OF FORM F-X

                                (NOT APPLICABLE)