<PAGE>
As filed with the Securities and Exchange Commission on December 7, 1999
Subject to Amendment
Registration Nos. 333-
333-
333-
333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
Duke Capital Corporation Delaware 56-0282142
Duke Capital Financing Trust IV Delaware 62-6349496
Duke Capital Financing Trust V Delaware 62-6349495
Duke Capital Financing Trust VI Delaware 52-7011988
(Exact name of each (State or other jurisdiction of (I.R.S. Employer
registrant as incorporation or organization) Identification
specified in its Nos.)
charter)
526 South Church Street
Charlotte, North Carolina 28202
704-594-6200
(Address, including zip code, and telephone number,
including area code, of each registrant's principal executive offices)
--------------
RICHARD J. OSBORNE JOHN SPUCHES
Vice President and Chief Financial Officer Dewey Ballantine LLP
526 South Church Street 1301 Avenue of the Americas
Charlotte, North Carolina 28202 New York, New York 10019
Telephone No. 704-382-5159 Telephone No. 212-259-7700
(Names, addresses, including zip codes, and telephone numbers, including area
codes, of agents for service of each registrant)
--------------
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
--------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================
Proposed Maximum
Amount Offering Price Proposed Maximum
Title of Each Class of to be Per Aggregate Offering Amount of
Securities to be Registered Registered(1) Unit(1)(2)(3) Price(1)(2)(3)(4) Registration Fee(1)(4)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Duke Capital Financing Trust IV Trust
Preferred Securities................
- ----------------------------------------------------------------------------------------------------------------
Duke Capital Financing Trust V Trust
Preferred Securities................
- ----------------------------------------------------------------------------------------------------------------
Duke Capital Financing Trust VI Trust
Preferred Securities................
- ----------------------------------------------------------------------------------------------------------------
Duke Capital Corporation Senior
Notes...............................
- ----------------------------------------------------------------------------------------------------------------
Duke Capital Corporation Junior
Subordinated Notes .................
- ----------------------------------------------------------------------------------------------------------------
Duke Capital Corporation Guarantees
with respect to Trust Preferred
Securities of Duke Capital Financing
Trust IV, Duke Capital Financing
Trust V and Duke Capital Financing
Trust VI (5)(6).....................
- ----------------------------------------------------------------------------------------------------------------
Total................................ $2,000,000,000 100% $2,000,000,000 $396,000
================================================================================================================
</TABLE>
(1) Registered hereunder are a currently indeterminate number of Trust
Preferred Securities of Duke Capital Financing Trust IV, Duke Capital
Financing Trust V and Duke Capital Financing Trust VI and a currently
indeterminate principal amount of Senior Notes and Junior Subordinated
Notes of Duke Capital Corporation with an aggregate initial offering price
not to exceed $2,000,000,000. Junior Subordinated Notes also may be issued
to Duke Capital Financing Trust IV, Duke Capital Financing Trust V or Duke
Capital Financing Trust VI and later distributed upon dissolution and
distribution of the assets thereof, which would include such Junior
Subordinated Notes for which no separate consideration will be received.
Pursuant to Rule 457(o) under the Securities Act of 1933, which permits
the registration fee to be calculated on the basis of the maximum offering
price of all the securities listed, the table does not specify by each
class information as to the amount to be registered, proposed maximum
offering price per unit or proposed maximum aggregate offering price.
(2) Estimated solely for the purpose of determining the registration fee.
(3) Exclusive of accrued interest and distributions, if any.
(4) As permitted by Rule 429 under the Securities Act of 1933, the prospectus
included herein is a combined prospectus which also relates to
Registration Statements Nos. 333-71297 and 333-85995, previously filed by
Duke Capital Corporation, Duke Capital Financing Trust IV, Duke Capital
Financing Trust V and Duke Capital Financing Trust VI on Form S-3, as to
which Trust Preferred Securities, Senior Notes, Junior Subordinated Notes
and Guarantees having an aggregate offering price of $500,000,000 (for
which a registration fee of $143,500 was paid) remain unsold. This
Registration Statement constitutes Post-Effective Amendment No. 2 to
Registration Statement No. 333-71297 and Post-Effective Amendment No. 1
to Registration Statement No. 333-85995 which shall become effective
concurrently with this Registration Statement in accordance with Section
8(c) of the Securities Act of 1933.
(5) No separate consideration will be received for the Duke Capital
Corporation Guarantees. Pursuant to Rule 457(n) under the Securities Act
of 1933, no separate fee is payable in respect of the Duke Capital
Corporation Guarantees.
(6) Includes the obligations of Duke Capital Corporation under the respective
Trust Agreements, the Subordinated Indenture, the related series of Junior
Subordinated Notes, the respective Guarantees and the respective
Agreements as to Expenses and Liabilities, which include Duke Capital
Corporation's covenant to pay any indebtedness, expenses or liabilities of
the Trusts (other than obligations pursuant to the terms of the Trust
Preferred Securities or other similar interests), all as described in this
registration statement.
--------------
The registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the registrants
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
This Registration Statement includes a prospectus and two forms of prospectus
supplement. The first is a form of prospectus supplement that may be used in
connection with issuances from time to time of Trust Preferred Securities. The
second is a form of prospectus supplement that may be used in connection with
issuances from time to time of Senior Notes.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this Prospectus is not complete and may be changed. We may +
+not sell the Preferred Securities until the registration statement filed with +
+the Securities and Exchange Commission is effective. This Prospectus is not +
+an offer to sell the Preferred Securities and it is not soliciting an offer +
+to buy the Preferred Securities in any state where the offer or sale of the +
+Preferred Securities is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS SUPPLEMENT
(To Prospectus dated , )
Subject to Completion dated December 7, 1999
[ ] Preferred Securities
Duke Capital Financing Trust [ ]
% Trust Preferred Securities
(Liquidation amount $ per Preferred Security)
Guaranteed, to the extent described herein, by
Duke Capital Corporation
a subsidiary of Duke Energy Corporation
-----------
A brief description of the % Trust Preferred Securities can be found
under "Summary of Offering" in this Prospectus Supplement.
You should carefully read "Risk Factors" beginning on page S-9 to learn about
specific risks associated with the Preferred Securities, as well as the other
information in this Prospectus Supplement and the accompanying Prospectus,
before you make your investment decision.
Duke Capital intends to list the Preferred Securities on the New York Stock
Exchange under the symbol " ". Duke Capital expects trading in the Preferred
Securities to begin on the New York Stock Exchange within 30 days after the
original issue date.
-----------
<TABLE>
<CAPTION>
Per Preferred Security Total
----------------------- -------
<S> <C> <C>
Initial Public Offering Price...................
Underwriting Discounts and Commissions.......... (1) (1)
Proceeds, before expenses, to the Trust.........
</TABLE>
- -----
(1)Underwriting commissions of $ per Preferred Security (or $ in the
aggregate) will be paid by Duke Capital.
-----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this Prospectus Supplement or the accompanying
Prospectus. Any representation to the contrary is a criminal offense.
The underwriters expect to deliver the Preferred Securities on or about ,
.
-----------
[Names of Underwriters]
-----------
Prospectus Supplement dated , .
<PAGE>
You should rely only on the information contained or incorporated by
reference in this Prospectus Supplement and the accompanying Prospectus. None
of Duke Capital, the Trust or the Underwriters has authorized any other person
to provide you with different information. If anyone provides you with
different or inconsistent information, you should not rely on it. If this
Prospectus Supplement is inconsistent with the accompanying Prospectus, you
should rely on this Prospectus Supplement. None of Duke Capital, the Trust or
the Underwriters is making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information in this Prospectus Supplement and the accompanying Prospectus
is accurate only as of the respective dates on the front of those documents or
earlier dates specified therein. Duke Capital's business, financial condition,
results of operations and prospects may have changed since those dates.
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
Page
----
<S> <C>
Forward-Looking Statements................................................ S-3
Summary of Offering....................................................... S-4
Risk Factors.............................................................. S-9
Duke Capital Financing Trust [ ].......................................... S-13
Description of the Preferred Securities................................... S-14
Description of the Series Junior Subordinated Notes..................... S-27
Relationship Among the Preferred Securities, the Series Junior
Subordinated Notes and the Guarantee..................................... S-31
Material Federal Income Tax Considerations................................ S-33
Underwriting.............................................................. S-35
Validity of the Securities................................................ S-36
Prospectus
About This Prospectus..................................................... 2
Where You Can Find More Information....................................... 2
Duke Capital Corporation.................................................. 4
Use of Proceeds........................................................... 6
The Trusts................................................................ 6
Description of the Senior Notes........................................... 7
Description of the Junior Subordinated Notes.............................. 17
Description of the Preferred Securities................................... 26
Description of the Guarantees............................................. 27
Accounting Treatment...................................................... 30
Plan of Distribution...................................................... 30
Experts................................................................... 31
Validity of the Securities................................................ 31
</TABLE>
S-2
<PAGE>
FORWARD-LOOKING STATEMENTS
This Prospectus Supplement and the accompanying Prospectus contain or
incorporate by reference statements that do not directly or exclusively relate
to historical facts. Such statements are "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. You can
typically identify forward-looking statements because they include or are
preceded by forward-looking words, such as "may," "will," "could," "project,"
"believe," "anticipate," "expect," "estimate," "continue," "potential," "plan,"
"forecast" and the like. Those statements represent Duke Capital's intentions,
plans, expectations, assumptions and beliefs about future events and are
subject to risks, uncertainties and other factors. Many of those factors are
outside Duke Capital's control and could cause actual results to differ
materially from the results expressed or implied by those forward-looking
statements. Some of the factors that could cause such differences are:
. state, federal and foreign legislative and regulatory initiatives that
affect cost and investment recovery, have an impact on rate structures
and affect the speed at and degree to which competition enters the
natural gas industry;
. industrial, commercial and residential growth in the service
territories of Duke Capital's subsidiaries;
. the weather and other natural phenomena;
. the timing and extent of changes in commodity prices, interest rates
and foreign currency exchange rates;
. changes in environmental and other laws and regulations to which Duke
Capital and its subsidiaries are subject or other external factors
over which Duke Capital has no control;
. the results of financing efforts, including Duke Capital's ability to
obtain financing on favorable terms, which can be affected by various
factors, including its credit ratings and general economic conditions;
. growth in opportunities for Duke Capital's subsidiaries;
. achievement of Year 2000 readiness by Duke Capital, its subsidiaries
and the customers and suppliers of those subsidiaries; and
. the effect of accounting policies issued periodically by accounting
standard-setting bodies.
In light of these risks, uncertainties and assumptions, the forward-
looking events referred to in this Prospectus Supplement and the accompanying
Prospectus might not occur. Neither Duke Capital nor the Underwriters undertake
any obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
S-3
<PAGE>
SUMMARY OF OFFERING
This summary highlights information appearing elsewhere in this Prospectus
Supplement and in the accompanying Prospectus. This summary does not contain
all the information you should consider before investing in the Preferred
Securities. You should pay special attention to the Risk Factors section of
this Prospectus Supplement to determine whether an investment in the Preferred
Securities is appropriate for you.
Duke Capital Corporation............ Duke Capital Corporation, a wholly owned
subsidiary of Duke Energy Corporation,
is the parent company of a number of
affiliates of Duke Energy. The
subsidiaries of Duke Capital are
primarily engaged in the interstate
transportation and storage of natural
gas, in the gathering, processing,
marketing and intrastate transportation
and storage of natural gas, natural gas
liquids and crude oil, in natural gas
and electric power marketing, in the
acquisition, development and operation
of independent power production
facilities worldwide, in risk management
services and in engineering consulting,
construction and other related energy
services.
The principal executive offices of Duke
Capital are located at 526 South Church
Street, Charlotte, NC 28202 (telephone
(704) 594-6200).
The Trust........................... Duke Capital Financing Trust [ ] is a
statutory business trust created solely
for the purposes of (1) issuing the
Preferred Securities to the public, (2)
issuing the Common Securities to Duke
Capital and (3) using the proceeds from
the issuance of the Preferred Securities
and the Common Securities to purchase
Duke Capital's Series Junior
Subordinated Notes due , .
Preferred Securities Offered........ % Trust Preferred Securities.
Distributions; Distribution Dates... Holders of the Preferred Securities are
entitled to receive cumulative cash
distributions at a yearly rate of % of
the liquidation amount of those
Preferred Securities. Distributions will
accrue
S-4
<PAGE>
from the original issue date.
Distributions will be payable quarterly,
except during extension periods, on
March 31, June 30, September 30 and
December 31 of each year, commencing on
, .
The distribution dates will correspond
to the interest payment dates on the
Series Junior Subordinated Notes and
the rate at which distributions will be
paid on the Preferred Securities will
correspond to the interest rate on the
Series Junior Subordinated Notes. If
Duke Capital does not pay principal or
interest on the Series Junior
Subordinated Notes, no amounts will be
paid on the Preferred Securities.
Record Dates........................ The close of business on the 15th
calendar day before the relevant
distribution date.
Series Junior Subordinated
Notes............................... Duke Capital will issue $ of
Series Junior Subordinated Notes under
its Subordinated Indenture. The Trust
will use the proceeds from the sale of
the Preferred Securities to purchase
$ of Series Junior
Subordinated Notes, and the Trust will
use the proceeds from the sale of the
Common Securities to purchase $
of Series Junior Subordinated Notes.
The Series Junior Subordinated Notes
will be unsecured subordinated
obligations of Duke Capital.
Deferral of Distributions;
Extension Periods................... Duke Capital has the right to defer
payments of interest on the Series
Junior Subordinated Notes by extending
the interest payment period on the
Series Junior Subordinated Notes, at
any time and as often as it wishes, for
up to consecutive quarters (each, an
"extension period") but not beyond the
maturity date of the Series Junior
Subordinated Notes. If Duke Capital
defers payments of interest on the
Series Junior Subordinated Notes,
distributions on the Preferred
Securities will also be deferred.
Deferred interest will bear interest at
a yearly rate of %, compounded
quarterly, to the date of payment, to
the extent legally permitted.
S-5
<PAGE>
Payments of deferred interest, and any
interest on deferred interest, on the
Series Junior Subordinated Notes will
be passed through to the holders of the
Preferred Securities.
The only restrictions on Duke Capital's
ability to defer payments of interest
are that during an extension period Duke
Capital may not, with certain
exceptions, (1) pay dividends on, or
redeem or otherwise purchase, any of its
capital stock or (2) pay principal or
interest on, or redeem or otherwise
purchase, any of its debt securities
ranking equal in priority with or
subordinate to the Series Junior
Subordinated Notes.
During an extension period, holders of
Preferred Securities will recognize
interest income for United States
federal income tax purposes before the
receipt of the cash payments of those
deferred distributions even if the
holder is a cash basis taxpayer.
Redemption; Special Event
Redemption.......................... The Trust will redeem the Preferred
Securities when Duke Capital repays the
Series Junior Subordinated Notes at
maturity or upon earlier redemption.
Duke Capital will have the right to
redeem the Series Junior Subordinated
Notes at any time, in whole or in part,
on or after , . Duke Capital
also will have the right to redeem the
Series Junior Subordinated Notes at
any time, in whole but not in part,
during the 90 days after the occurrence
of a Special Event (see below).
Redemption Price.................... If the Preferred Securities are redeemed
or the Trust is terminated without
distribution of the Series Junior
Subordinated Notes, each holder of a
Preferred Security will be entitled to
receive a liquidation amount of $ per
Preferred Security plus accrued and
unpaid distributions (including any
interest on those distributions) to the
date of payment.
S-6
<PAGE>
Special Event....................... A "Special Event" means a Tax Event or an
Investment Company Act Event.
A "Tax Event" means that because of
changes in certain tax laws or
regulations, or in how they are
interpreted or applied, there is more
than an insubstantial risk that (1) the
Trust would be subject to United States
federal income tax with respect to
income accrued or received on the Series
Junior Subordinated Notes, (2)
interest payable on the Series Junior
Subordinated Notes would not be
deductible by Duke Capital for United
States federal income tax purposes or
(3) the Trust would be subject to more
than a de minimis amount of other taxes,
duties or other governmental charges.
An "Investment Company Act Event" means
that because of changes in certain laws
or regulations, or in how they are
interpreted or applied, there is more
than an insubstantial risk that the
Trust is or will be considered an
"investment company" under the
Investment Company Act of 1940.
Termination of Trust................ Duke Capital will have the right to
terminate the Trust at any time and
cause the Property Trustee to distribute
$ of the Series Junior
Subordinated Notes pro rata to the
holders of the Preferred Securities in
exchange for their Preferred Securities.
This right is optional and wholly in
Duke Capital's discretion.
Ranking of Series Junior
Subordinated Notes.................. The Series Junior Subordinated Notes
will be subordinate and junior in right
of payment to all indebtedness for
borrowed money and other obligations of
Duke Capital included in the definition
of Senior Indebtedness. See "Description
of the Junior Subordinated Notes--
Subordination" in the accompanying
Prospectus for a description of Senior
Indebtedness.
S-7
<PAGE>
Guarantee........................... Duke Capital will fully and
unconditionally guarantee the payment of
distributions and other payments by the
Trust on the Preferred Securities, but
only to the extent that the Trust has
funds legally and immediately available
to make those distributions and
payments.
Ranking of Guarantee................ Duke Capital's obligations under the
Guarantee will be subordinate and junior
in right of payment to all of Duke
Capital's other liabilities, other than
similar guarantees. The Guarantee will
rank equal in priority with Duke
Capital's most senior preferred stock
and with similar guarantees.
Book-Entry Issuance................. The Preferred Securities will be
represented by a global certificate or
certificates deposited with and
registered in the name of The Depository
Trust Company, New York, New York or its
nominee. This means that investors will
not receive certificates for their
Preferred Securities.
Listing ............................ Duke Capital intends to list the
Preferred Securities on the New York
Stock Exchange under the symbol " "
and expects that trading in the
Preferred Securities on the New York
Stock Exchange will begin within 30 days
after the original issue date.
The Trustees........................ The Chase Manhattan Bank will act as
Property Trustee of the Trust. Two of
Duke Capital's officers will act as the
Administrative Trustees of the Trust.
Chase Manhattan Bank Delaware will be
the Delaware Trustee of the Trust. The
Chase Manhattan Bank also serves as the
Indenture Trustee--the trustee under
Duke Capital's Subordinated Indenture
under which the Series Junior
Subordinated Notes will be issued--and
will act as the Guarantee Trustee--the
trustee under the Guarantee. The Chase
Manhattan Bank is also the Trustee under
Duke Capital's Senior Indenture. The
Property Trustee, Delaware Trustee and
Administrative Trustees together are
sometimes referred to as the "Securities
Trustees" in this Prospectus Supplement.
S-8
<PAGE>
RISK FACTORS
An investment in the Preferred Securities involves a number of risks.
Some of the risks relate to the terms of the Preferred Securities and the
Series Junior Subordinated Notes. Other risks relate to Duke Capital or the
Trust. You should carefully read and consider the following risk factors, as
well as the other information contained in this Prospectus Supplement and the
accompanying Prospectus, before you buy any Preferred Securities.
Payments on the Preferred Securities Depend upon Payments on the Series
Junior Subordinated Notes by Duke Capital
The only source of funds for payments on the Preferred Securities will be
the payments that Duke Capital makes on the Series Junior Subordinated Notes.
If Duke Capital fails to make timely payments on the Series Junior
Subordinated Notes, the Trust will not have sufficient funds for distributions
or other payments on the Preferred Securities.
Rights under the Guarantee Are Limited
If the Trust does not have sufficient funds legally and immediately
available to pay distributions or other payments on the Preferred Securities,
the holders of the Preferred Securities will not be able to rely upon the
Guarantee for payment of those distributions or other payments.
The Guarantee Ranks Subordinate to Many of Duke Capital's Other Obligations
Duke Capital's obligations under the Guarantee will rank:
. subordinate and junior in right of payment to all of Duke Capital's
other liabilities, other than obligations or liabilities that rank
equal in priority or subordinate by their terms;
. equal in priority with the most senior preferred stock that may be
issued by Duke Capital and similar guarantees; and
. senior to Duke Capital's common stock.
The Series Junior Subordinated Notes Rank Subordinate to Many of Duke
Capital's Other Obligations
Duke Capital's obligations under the Series Junior Subordinated Notes
will rank subordinate and junior in right of payment to all of Duke Capital's
Senior Indebtedness. As of , , Duke Capital's Senior Indebtedness
totaled approximately $ . For a description of Duke Capital's Senior
Indebtedness, see "Description of the Junior Subordinated Notes--Subordination"
in the accompanying Prospectus.
The Preferred Securities, the Series Junior Subordinated Notes and the
Guarantee do not limit Duke Capital's ability to incur additional Senior
Indebtedness or other indebtedness.
The Series Junior Subordinated Notes Are Subject to Structural Subordination
Duke Capital conducts its business through subsidiaries. Accordingly,
Duke Capital's ability to meet its obligations under the Series Junior
Subordinated Notes is dependent on the earnings and cash flows of those
subsidiaries and the ability of those subsidiaries to pay dividends or to
S-9
<PAGE>
advance or repay funds to Duke Capital. In addition, the rights that Duke
Capital and its creditors would have to participate in the assets of any such
subsidiary upon the subsidiary's liquidation or recapitalization will be
subject to the prior claims of the subsidiary's creditors. Certain subsidiaries
of Duke Capital have incurred substantial amounts of debt in the expansion of
their businesses and Duke Capital anticipates that certain of its subsidiaries
will do so in the future.
Duke Capital Has the Option to Defer Interest Payments on the Series Junior
Subordinated Notes Which Would Cause a Deferral of Distributions on the
Preferred Securities--During an Extension Period Interest and Distributions
Would Accrue but They Would Not be Paid to Holders of the Series Junior
Subordinated Notes or the Preferred Securities
Duke Capital will have the right, at any time and from time to time, to
defer interest payments on the Series Junior Subordinated Notes for up to
consecutive quarters, but not beyond the maturity date of the Series Junior
Subordinated Notes. Any such deferral period is called an "extension period" in
this Prospectus Supplement. During an extension period distributions on the
Preferred Securities will also be deferred.
Duke Capital will pay interest on any deferred interest on the Series
Junior Subordinated Notes at a yearly rate of %, compounded quarterly, to the
date of payment, to the extent legally permitted. Payments of deferred
interest, together with any interest on those payments, will be passed through
to the holders of the Preferred Securities.
If Duke Capital defers interest payments, each holder of Preferred
Securities, or of Series Junior Subordinated Notes, will recognize income as
original issue discount for federal income tax purposes before the holder is
paid deferred distributions. This will be so even if the holder is a cash basis
taxpayer. A holder of Preferred Securities, or of Series Junior Subordinated
Notes, will not receive cash related to that income if the holder disposes of
the Preferred Securities, or the Series Junior Subordinated Notes, before the
record date for the payment of such amounts. Investors should consult their own
tax advisors with respect to these and other tax consequences of an investment
in the Preferred Securities.
Duke Capital Has the Option to Redeem the Series Junior Subordinated Notes if
a Special Event Occurs
Duke Capital will have the option to redeem the Series Junior
Subordinated Notes in whole at any time during the 90 days after the occurrence
of a Special Event. If Duke Capital redeems the Series Junior Subordinated
Notes after the occurrence of a Special Event, the Trust will redeem the
Preferred Securities.
Duke Capital Has the Option to Terminate the Trust and Distribute the Series
Junior Subordinated Notes
Duke Capital will have the right to terminate the Trust at any time and
cause the Series Junior Subordinated Notes to be distributed to the holders
of the Preferred Securities in liquidation of the Trust.
S-10
<PAGE>
There can be no assurance as to the market price for the Series Junior
Subordinated Notes if a termination and liquidation of the Trust occurs and
Series Junior Subordinated Notes are distributed in exchange for Preferred
Securities. The Series Junior Subordinated Notes that the investor would
receive may trade at less than the price that the investor paid to purchase the
Preferred Securities and/or less than the market price of the Preferred
Securities before the exchange.
Holders of Preferred Securities Will Have Limited Voting Rights
Holders of Preferred Securities will have limited voting rights. See
"Description of the Preferred Securities--Voting Rights" for additional
information.
In general, holders of Preferred Securities will not be entitled to vote
to appoint, remove or replace any of the Securities Trustees. Duke Capital, as
the holder of the Common Securities, generally has that right. However, the
holders of the Preferred Securities will have the right to appoint a substitute
Property Trustee or Delaware Trustee if an event of default with respect to the
Series Junior Subordinated Notes occurs and is continuing.
Trading Characteristics of Preferred Securities; No Previous Public Market for
the Preferred Securities
Duke Capital expects to list the Preferred Securities on the New York
Stock Exchange. The Preferred Securities are expected to trade at a price that
takes into account the value, if any, of accrued but unpaid distributions.
Accordingly, purchasers will not pay and sellers will not receive accrued and
unpaid interest with respect to Preferred Securities that is not included in
the trading price of the Preferred Securities.
If a holder disposes of Preferred Securities prior to the occurrence of
an extension period, any portion of the amount received that is attributable to
accrued interest will be treated as interest income for tax purposes and will
not be treated as part of the amount realized for purposes of determining gain
or loss on the disposition of the Preferred Securities. If an extension period
occurs, interest on the Series Junior Subordinated Notes will be included in
the income of holders of Preferred Securities as it accrues rather than when it
is paid. If an extension period occurs, a holder that disposes of its Preferred
Securities between record dates for payments of distributions will be required
to include in income as original issue discount accrued but unpaid interest on
the Series Junior Subordinated Notes through the date of disposition and to
add that amount to the holder's adjusted tax basis in the related Series
Junior Subordinated Notes that are regarded as having been disposed of by that
holder. A holder generally will recognize a capital loss to the extent the
selling price is less than the holder's adjusted tax basis. Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for federal income tax purposes.
No public market for the Preferred Securities existed before this
offering. There can be no assurance that an active public market for the
Preferred Securities will develop. If an active trading market for the
Preferred Securities does develop, there can be no assurance that it will be
sustained after this offering.
S-11
<PAGE>
An Investment in the Trust Involves Risks Parallel to Those of an Investment in
Duke Capital
An investment in the Trust, like an investment in Duke Capital, will
involve risks associated with Duke Capital's operating conditions and will be
affected by the competitive factors, economic conditions, industry conditions
and equity market conditions to which Duke Capital is subject.
Consequences of a Highly Leveraged Transaction
The Subordinated Indenture does not contain provisions that will protect
holders of the Series Junior Subordinated Notes if Duke Capital engages in a
highly leveraged transaction. The Trust Agreement does not contain provisions
that will protect holders of Preferred Securities under those circumstances.
S-12
<PAGE>
DUKE CAPITAL FINANCING TRUST [ ]
Duke Capital created the Trust as a statutory business trust under
Delaware law. The Trust's business is defined in a trust agreement executed by
Duke Capital, as depositor, and the Delaware Trustee. That trust agreement will
be amended when the Preferred Securities are issued. The amended trust
agreement will be in substantially the form filed as an exhibit to the
Registration Statement of which this Prospectus Supplement and the accompanying
Prospectus are a part. The amended trust agreement is called the "Trust
Agreement" in this Prospectus Supplement.
The Trust exists for the purposes of (1) issuing the Preferred Securities
to the public, (2) issuing the Common Securities to Duke Capital and (3) using
the proceeds from the issuance of the Preferred Securities and the Common
Securities to purchase the Series Junior Subordinated Notes. The Trust may
engage in only those other activities as are necessary, appropriate, convenient
or incidental to those purposes. The Preferred Securities and the Common
Securities together are sometimes called the "Trust Securities" in this
Prospectus Supplement.
The Trust has a term of approximately years from its creation, but may
terminate earlier as provided in the Trust Agreement.
The Securities Trustees--the Administrative Trustees, the Property
Trustee and the Delaware Trustee--will conduct the Trust's business and
affairs. Duke Capital, as the holder of the Common Securities, will appoint the
Securities Trustees. Two of Duke Capital's officers initially will serve as
Administrative Trustees. The Chase Manhattan Bank will serve as Property
Trustee. Chase Manhattan Bank Delaware will serve as Delaware Trustee. Duke
Capital, as the holder of all the Common Securities, will have the right to
appoint, remove or replace any of the Securities Trustees, subject to the right
of the holders of a majority of the Preferred Securities to appoint a
substitute Property Trustee and Delaware Trustee if an event of default with
respect to the Series Junior Subordinated Notes occurs.
The Property Trustee will hold legal title to the Series Junior
Subordinated Notes for the benefit of the Trust and the holders of the Trust
Securities. The Property Trustee will have the power, with certain exceptions,
to exercise all rights, powers and privileges under the Subordinated Indenture
as the holder of the Series Junior Subordinated Notes.
The Series Junior Subordinated Notes will constitute substantially all
the assets of the Trust. Other assets that may constitute "Trust Property"
include any cash on deposit in, or owing to, the payment account established
under the Trust Agreement. Trust Property will also include any other property
or assets that the Property Trustee holds under the Trust Agreement. The Trust
may from time to time receive cash from Duke Capital under the Agreement as to
Expenses and Liabilities between Duke Capital and the Trust.
The Trust's office address in the State of Delaware is c/o Chase
Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801. The
principal place of business of the Trust will be c/o Duke Capital Corporation,
526 South Church Street, Charlotte, North Carolina 28202 (telephone (704) 594-
6200).
S-13
<PAGE>
DESCRIPTION OF THE PREFERRED SECURITIES
The following description of the Preferred Securities is only a summary
and is not intended to be comprehensive. For additional information you should
refer to the Trust Agreement. The form of the Trust Agreement is an exhibit to
the Registration Statement of which this Prospectus Supplement and the
accompanying Prospectus are a part.
General
The Trust Agreement authorizes the Administrative Trustees to issue the
Preferred Securities and the Common Securities on behalf of the Trust. The
Preferred Securities represent preferred undivided beneficial interests in the
assets of the Trust. The Common Securities represent common undivided
beneficial interests in the assets of the Trust. The Trust Agreement does not
permit the Trust to issue any other securities or to incur any indebtedness for
borrowed money.
The Preferred Securities will have an aggregate liquidation amount equal
to approximately 97% of the total capital of the Trust. The Common Securities
will have an aggregate liquidation amount equal to approximately 3% of the
total capital of the Trust.
Duke Capital will own all the Common Securities.
In general, the Preferred Securities will rank equal in priority with the
Common Securities, and the Trust will make payments on the Preferred Securities
on a pro rata basis with the Common Securities. The rights of the holders of
the Preferred Securities to receive distributions and liquidation, redemption
and other payments will be senior to the rights of the holder of the Common
Securities if an event of default occurs under the Subordinated Indenture with
respect to the Series Junior Subordinated Notes.
Duke Capital has guaranteed, on a subordinated basis, certain payments
with respect to the Preferred Securities. Those payments are payments of
distributions and payments if the Preferred Securities are redeemed or the
Trust is liquidated, in each case to the extent set forth in the Guarantee. The
Guarantee does not cover those payments when the Trust does not have sufficient
funds legally and immediately available to make the payments. In that event,
the holders of a majority of the Preferred Securities may direct the Property
Trustee to enforce its rights under the Series Junior Subordinated Notes. In
addition, a holder of Preferred Securities may institute a legal proceeding
directly against Duke Capital, without first instituting a legal proceeding
against the Property Trustee or any other person or entity, to enforce payment
to that holder of principal or interest on Series Junior Subordinated Notes
having a principal amount equal to the liquidation amount of that holder's
Preferred Securities on or after the due dates specified or provided for in the
Series Junior Subordinated Notes. These mechanisms and obligations, together
with Duke Capital's obligations under the Agreement as to Expenses and
Liabilities, provide a full and unconditional guarantee by Duke Capital of the
payments due on the Preferred Securities, subject to certain subordination
provisions.
Distributions
Distributions on the Preferred Securities will be fixed at a yearly rate
of % and will accrue from the original issue date of the Preferred Securities.
S-14
<PAGE>
Distributions on the Preferred Securities will be payable quarterly in
arrears on the following distribution dates: March 31, June 30, September 30
and December 31 of each year, commencing on , , except if an
extension period occurs. Distributions payable on a date that is not a Business
Day will be paid on the next day that is a Business Day (without any interest
or other payment due to the delay), except that if that Business Day falls in
the next calendar year, the payment will be made on the immediately preceding
Business Day. In each such case, payment will be made with the same effect as
if made on the date the payment was originally payable. "Business Day" means
any day other than a Saturday or Sunday, a day on which banks in New York City
are authorized or obligated by law or executive order to remain closed or a day
on which the principal corporate trust office of the Property Trustee or the
Indenture Trustee is closed for business.
Distributions on the Preferred Securities will be payable to holders of
record at the close of business on the 15th calendar day before the relevant
distribution date. Each payment of a distribution will be made as described
under the caption "--Book-Entry Issuance--The Depository Trust Company" in this
Prospectus Supplement while the Preferred Securities are in book-entry only
form. Distributions will be computed on the basis of a 360-day year of twelve
30-day months.
Duke Capital has the right to defer interest payments on the Series
Junior Subordinated Notes by extending the interest payment period from time to
time on the Series Junior Subordinated Notes. If Duke Capital exercises that
right, distributions on the Preferred Securities will be deferred during the
extension period. Deferred interest installments on the Series Junior
Subordinated Notes will bear interest at a yearly rate of %, compounded
quarterly, to the payment date, to the extent legally permitted. Duke Capital
will have the right to make partial payments of interest on any interest
payment date during an extension period. If distributions are deferred, the
deferred distributions and accrued interest on those distributions will be
paid, if funds are legally available for those payments, to holders of record
of the Preferred Securities on the record date immediately after the extension
period ends.
The Trust will pay distributions on the Preferred Securities on the
distribution dates to the extent that it has funds legally and immediately
available. Those funds will be limited to payments that Duke Capital makes
under the Series Junior Subordinated Notes.
Redemption
The Trust will redeem the Preferred Securities when Duke Capital repays
the Series Junior Subordinated Notes at maturity or upon redemption. The
Series Junior Subordinated Notes will mature on , . Duke Capital
may redeem the Series Junior Subordinated Notes, in whole or in part, at its
option at any time on or after , . Duke Capital may also redeem the
Series Junior Subordinated Notes, in whole but not in part, at any time
during the 90 days after the occurrence of a Special Event. In each case the
redemption price will be equal to 100% of the principal amount of the Series
Junior Subordinated Notes to be redeemed plus accrued but unpaid interest
(including any Additional Interest as defined below) to the redemption date.
Duke Capital may redeem the Series Junior Subordinated Notes in whole but not
in part if a partial redemption of the Series Junior Subordinated Notes would
cause the Preferred Securities to be delisted.
S-15
<PAGE>
Any Preferred Securities that are to be redeemed will be redeemed upon at
least 30 but not more than 60 days' notice at a redemption price for each
Preferred Security equal to the liquidation amount of $ plus any accrued and
unpaid distributions on the Preferred Security to the date of payment. Any
Preferred Securities that are to be redeemed will be redeemed with the proceeds
from the redemption of an equivalent amount of Series Junior Subordinated
Notes. The redemption price of the Preferred Securities will be deemed payable
on each redemption date only to the extent that the Trust has funds legally and
immediately available for payment of that redemption price.
If fewer than all the outstanding Preferred Securities are to be redeemed
and the Preferred Securities are in book-entry form, DTC will reduce the amount
of the interest of each of its participants in the Preferred Securities in
accordance with its procedures. If the Preferred Securities are no longer in
book-entry form, the Property Trustee will redeem the Preferred Securities to
be redeemed in any manner that it deems fair and appropriate.
Special Event Redemption or Distribution
Duke Capital may at its option redeem all the Series Junior
Subordinated Notes at any time during the 90 days after the occurrence of a
Special Event. In that event, the Preferred Securities will also be redeemed.
A Special Event is either a Tax Event or an Investment Company Act Event.
A "Tax Event" means that the Administrative Trustees and Duke Capital have
received an opinion of counsel experienced in such matters to the effect that,
as a result of:
. any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations under those laws) of the
United States or any political subdivision or taxing authority of or
in the United States; or
. any amendment to, or change in, an interpretation or application of
such laws or regulations,
there is more than an insubstantial risk that:
. the Trust would be subject to United States federal income tax with
respect to income accrued or received on the Series Junior
Subordinated Notes;
. interest payable on the Series Junior Subordinated Notes would not
be deductible by Duke Capital for United States federal income tax
purposes; or
. the Trust would be subject to more than a de minimis amount of other
taxes, duties or other governmental charges,
which amendment or change becomes effective on or after the original issue date
of the Preferred Securities.
An "Investment Company Act Event" means that the Administrative Trustees
and Duke Capital have received an opinion of counsel experienced in such
matters to the effect that, as a result of the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority on or after the original issue date of the Preferred Securities,
there is more than an insubstantial risk that
S-16
<PAGE>
the Trust is or will be considered an "investment company" under the Investment
Company Act of 1940, which change becomes effective on or after the original
issue date of the Preferred Securities.
Distribution of Series Junior Subordinated Notes upon Termination of Trust
Duke Capital will have the right to terminate the Trust at any time and,
after the Trust satisfies its liabilities to creditors, cause the Series
Junior Subordinated Notes to be distributed to the holders of the Preferred
Securities in liquidation of the Trust. That right is optional and wholly
within Duke Capital's discretion.
Circumstances under which Duke Capital may decide to exercise its right
to terminate the Trust could include:
. the occurrence of an Investment Company Act Event or a Tax Event;
. adverse tax consequences to Duke Capital or the Trust that the
definition of a Tax Event does not cover because those consequences do
not result from an amendment or change described in that definition;
and
. changes in the accounting applicable to the Preferred Securities. See
"Accounting Treatment" in the accompanying Prospectus.
If Series Junior Subordinated Notes are distributed to the holders of
the Preferred Securities, Duke Capital will use its best efforts to have the
Series Junior Subordinated Notes listed on the New York Stock Exchange or
other exchange on which the Preferred Securities are then listed.
After the date for any distribution of Series Junior Subordinated Notes
upon termination of the Trust:
. the Preferred Securities and the Guarantee will no longer be
considered outstanding;
. the securities depositary or its nominee, as the record holder of the
Preferred Securities, will receive a registered global certificate or
certificates representing the Series Junior Subordinated Notes
delivered upon the distribution; and
. any certificates representing Preferred Securities not held by the
securities depositary or its nominee will be deemed to represent
Series Junior Subordinated Notes. Those Series Junior Subordinated
Notes will have:
. an aggregate principal amount equal to the aggregate liquidation
amount of those Preferred Securities;
. an interest rate identical to the rate at which cumulative cash
distributions are payable on those Preferred Securities; and
. accrued and unpaid interest equal to the accrued and unpaid
distributions on those Preferred Securities,
until the certificates are presented to Duke Capital or its agent for transfer
or reissuance.
S-17
<PAGE>
There can be no assurance as to the market prices for either the
Preferred Securities or the Series Junior Subordinated Notes that may be
distributed in exchange for the Preferred Securities if a termination and
liquidation of the Trust occurs. Accordingly, the Preferred Securities that an
investor may purchase, or the Series Junior Subordinated Notes that the
investor may receive if the Trust is terminated or liquidated, may trade at a
price less than the price paid by the investor to purchase the Preferred
Securities and/or less than the market price of the Preferred Securities before
the exchange.
Redemption Procedures
If the Trust has the funds required for the redemption and the Preferred
Securities are in book-entry form, then the Property Trustee will irrevocably
deposit sufficient funds with the securities depositary on the redemption date
to pay the redemption price. If the Trust has the funds required for the
redemption and the Preferred Securities are not in book-entry form, the
Property Trustee will irrevocably deposit sufficient funds with the paying
agent to pay the redemption price and will instruct the paying agent to pay the
redemption price to the holders of the Preferred Securities upon surrender of
their Preferred Securities certificates. Immediately before the close of
business on the deposit date, distributions will cease to accrue and all rights
of holders of Preferred Securities called for redemption will cease, except the
right of those holders to receive the redemption price, without interest on it.
If the redemption date is not a Business Day, the redemption price
payable on that date will be paid on the next day that is a Business Day
(without any interest or other payment due to the delay), except that if that
Business Day falls in the next calendar year, the payment will be made on the
immediately preceding Business Day.
If fewer than all the Trust Securities are to be redeemed, the
liquidation amount of the Trust Securities to be redeemed will be allocated 97%
to the Preferred Securities and 3% to the Common Securities.
If the Trust does not pay the redemption price and Duke Capital does not
pay the redemption price under the Guarantee, distributions on the Preferred
Securities to be redeemed will continue to accrue at the applicable rate from
the redemption date originally established for those Preferred Securities to
the date the redemption price is actually paid.
Book-Entry Issuance--The Depository Trust Company
The Preferred Securities will be book-entry securities. Upon issuance,
all book-entry securities will be represented by one or more fully registered
global certificates. Each global certificate will be deposited with, or on
behalf of, The Depository Trust Company ("DTC"), a securities depositary, and
will be registered in the name of DTC or a nominee of DTC. DTC or its nominee
will thus be the only registered holder of those Preferred Securities and will
be considered the sole owner of the Preferred Securities for purposes of the
Trust Agreement.
Purchasers of Preferred Securities may only hold interests in the global
securities through DTC if they are participants in the DTC system. Purchasers
may also hold interests through a securities intermediary--banks, brokerage
houses and other institutions that maintain securities accounts for
S-18
<PAGE>
customers--that has an account with DTC. DTC will maintain accounts showing the
Preferred Security holdings of its participants, and those participants will in
turn maintain accounts showing the Preferred Security holdings of their
customers. Some of those customers may themselves be securities intermediaries
holding Preferred Securities for their customers. Thus, each beneficial owner
of a book-entry Preferred Security will hold that Preferred Security indirectly
through a hierarchy of intermediaries, with DTC at the "top" and the beneficial
owner's own securities intermediary at the "bottom."
The Preferred Securities of each beneficial owner of a book-entry
security will be evidenced solely by entries on the books of the beneficial
owner's securities intermediary. The actual purchaser of the Preferred
Securities will generally not be entitled to have the Preferred Securities
represented by the global securities registered in its name and will not be
considered the owner under the Trust Agreement. In most cases, a beneficial
owner will also not be able to obtain a paper certificate evidencing the
holder's ownership of Preferred Securities. The book-entry system for holding
Preferred Securities eliminates the need for physical movement of certificates
and is the system through which most publicly traded common stock is held in
the United States. However, the laws of some jurisdictions require some
purchasers of securities to take physical delivery of their securities in
definitive form. These laws may impair the ability to transfer book-entry
securities.
A beneficial owner of book-entry Preferred Securities represented by a
global security will receive definitive (paper) Preferred Securities only if:
. DTC is unwilling or unable to continue as depositary for such global
security and Duke Capital is unable to find a qualified replacement
for DTC within 90 days; or
. Duke Capital in its sole discretion decides to terminate the book-
entry system with respect to the Preferred Securities.
Definitive Preferred Securities in registered form will have the same
terms as and be in an equal aggregate principal amount to the equivalent book-
entry Preferred Securities, and will be in denominations of $ or integral
multiples of $ . Definitive Preferred Securities will be registered in the
name or names of the person or persons that DTC specifies in a written
instruction to the registrar of the Preferred Securities. DTC may base its
written instruction upon directions it receives from its participants.
In this Prospectus Supplement, for book-entry Preferred Securities,
references to actions taken by holders of Preferred Securities will mean
actions taken by DTC upon instructions from its participants, and references to
payments and notices of redemption to holders of Preferred Securities will mean
payments and notices of redemption to DTC or its nominee as the registered
holder of the Preferred Securities for distribution to participants in
accordance with DTC's procedures.
DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered under section 17A of the Securities Exchange Act
of 1934. The rules applicable to DTC and its participants are on file with the
Securities and Exchange Commission.
S-19
<PAGE>
DTC has advised Duke Capital that DTC's management is aware that some
computer applications, systems and the like for processing data that are
dependent upon calendar dates, including dates before, on, and after January 1,
2000, may encounter "Year 2000 problems." DTC has informed its participants and
other members of the financial community that it has developed and is
implementing a program so that its systems, as they relate to the timely
payment of distributions (including principal and interest payments) to
security holders, book-entry deliveries and settlement of trades within DTC,
continue to function appropriately. This program includes a technical
assessment and a remediation plan, each of which is complete. Additionally,
DTC's plan includes a testing phase, which is expected to be completed within
appropriate time frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including but not limited to issuers and their agents, as
well as DTC's participants, third-party vendors from whom DTC licenses software
and hardware, and third-party vendors on whom DTC relies for information or the
provision of services, including telecommunication and electrical utility
service providers, among others. DTC has informed its participants and other
members of the financial community that it is contacting (and will continue to
contact) third-party vendors from whom DTC acquires services to: (1) impress
upon them the importance of such services being Year 2000 compliant, and (2)
determine the extent of their efforts for Year 2000 remediation (and, as
appropriate, testing) of their services. In addition, DTC is in the process of
developing such contingency plans as it deems appropriate.
According to DTC, the information in the preceding two paragraphs with
respect to DTC has been provided to members of the financial community for
informational purposes only and is not intended to serve as a representation,
warranty or contract modification of any kind.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that Duke Capital and the Trust believe
to be reliable, but neither Duke Capital nor the Trust takes any responsibility
for its accuracy. Duke Capital and the Trust have no responsibility for the
performance by DTC or its participants of their respective obligations,
including obligations that they have under the rules and procedures that govern
their operations.
Liquidation Distribution upon Dissolution
The Trust will terminate on , , or earlier if:
. one of certain bankruptcy, insolvency or reorganization events occurs
with respect to Duke Capital, Duke Capital is dissolved or liquidated,
or the Trust is dissolved by judicial decree;
. Duke Capital directs the Property Trustee to terminate the Trust and
to distribute the Series Junior Subordinated Notes to the holders of
the Trust Securities in liquidation of the Trust; or
. Duke Capital repays all the Series Junior Subordinated Notes at
maturity or upon redemption and the Trust Securities are paid in full
as a result.
If an early termination occurs as described in the first and second
instances listed above, the Trust will be liquidated and the Property Trustee
will distribute an equivalent amount of Series
S-20
<PAGE>
Junior Subordinated Notes to each holder of Trust Securities after the Trust
satisfies its liabilities to creditors. If the Administrative Trustees
determine that the distribution of Series Junior Subordinated Notes is not
practical in the case of the first instance listed above, those holders instead
will receive an amount equal to the liquidation amount of $ per Trust
Security plus accrued and unpaid distributions to the date of payment out of
the assets of the Trust that are available for distribution, after satisfaction
of the Trust's liabilities to creditors. That amount is called the "liquidation
distribution" in this Prospectus Supplement.
If the Trust does not have sufficient assets available to pay the total
liquidation distribution of the Trust Securities, then, except as described in
the next sentence, the Trust will make the payment to the holders of the
Preferred Securities and the holder of the Common Securities on a pro rata
basis. If an event of default under the Subordinated Indenture has occurred and
is continuing with respect to the Series Junior Subordinated Notes, however,
the Preferred Securities will have a preference over the Common Securities with
respect to the payment.
Events of Default
The following are events of default under the Trust Agreement:
. the occurrence of an event of default under the Subordinated Indenture
with respect to the Series Junior Subordinated Notes;
. the Trust's failure to pay any distribution, when due, that continues
for 30 days;
. the Trust's failure to pay the redemption price of any Preferred
Security or Common Security when due;
. failure to perform, or breach of, any covenant or warranty of the
Securities Trustees in the Trust Agreement that continues for 60 days
after the holders of at least 25% of the outstanding Preferred
Securities give written notice of the failure or breach, requiring it
to be remedied; or
. the occurrence of certain bankruptcy or insolvency events with respect
to the Trust.
In the case of the fourth event of default listed above, the holders of
at least the same percentage of Preferred Securities as had given the default
notice may extend the grace period. The grace period will be automatically
extended if the Securities Trustees have initiated and are diligently pursuing
corrective action.
The Property Trustee will notify the holders of Trust Securities, the
Administrative Trustees and Duke Capital of any default known to it within 90
days after the default occurs, unless the default has been cured or waived. For
this purpose, the term "default" means any event which is an event of default
or which would become an event of default after notice has been given or a
grace period has expired or both, as the case may be.
If an event of default under the Subordinated Indenture with respect to
the Series Junior Subordinated Notes occurs and is continuing:
. the holders of Preferred Securities will rely on the Property Trustee,
as the holder of the Series Junior Subordinated Notes, to enforce
its rights against Duke Capital; and
. the holders of a majority of the Preferred Securities will have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the Property
S-21
<PAGE>
Trustee or the exercise of any power of the Property Trustee under the
Trust Agreement, including the right to direct the Property Trustee to
exercise the remedies available to it as the holder of the Series
Junior Subordinated Notes.
If the Property Trustee fails to enforce its rights under the Series
Junior Subordinated Notes, a holder of Preferred Securities may, to the extent
permitted by law and the Trust Agreement, institute a legal proceeding against
Duke Capital to enforce the Property Trustee's rights under the Trust
Agreement. The holder would not need to first institute a legal proceeding
against the Property Trustee, the Trust or any other person or entity. A holder
of Preferred Securities may also institute a legal proceeding directly against
Duke Capital to enforce payment to that holder of principal or interest on
Series Junior Subordinated Notes that are equal in principal amount to the
liquidation amount of the holder's Preferred Securities on or after the due
dates of the Series Junior Subordinated Notes. The holder would not need to
first institute a legal proceeding against the Property Trustee or any other
person or entity.
Duke Capital, as the holder of the Common Securities, may remove the
Securities Trustees at any time unless an event of default under the
Subordinated Indenture has occurred and is continuing with respect to the
Series Junior Subordinated Notes. If such an event of default has occurred
and is continuing, the holders of a majority of the Preferred Securities may
remove the Property Trustee and the Delaware Trustee. Removal of the Property
Trustee or the Delaware Trustee will become effective when the successor
trustee accepts its appointment.
If an event of default under the Subordinated Indenture with respect to
the Series Junior Subordinated Notes has occurred and is continuing, the
holders of Preferred Securities will have a preference over the holders of
Common Securities if the Trust is dissolved.
The Property Trustee will notify the holders of the Preferred Securities
of any notice of default that it receives from the Indenture Trustee with
respect to the Series Junior Subordinated Notes.
Voting Rights
So long as the Property Trustee holds any Series Junior Subordinated
Notes, the Securities Trustees will not:
. direct the time, method and place of conducting any proceeding for any
remedy available to the Indenture Trustee, or exercising any power of
the Indenture Trustee with respect to the Series Junior Subordinated
Notes;
. consent to waive any past default under the Subordinated Indenture;
. exercise any right to rescind or annul a declaration that the
principal of all the Series Junior Subordinated Notes will be due
and payable; or
. consent to any amendment, modification or termination of the
Subordinated Indenture or the Series Junior Subordinated Notes, if
that consent is required, or to any other action, as the holder of the
Series Junior Subordinated Notes, under the Subordinated Indenture,
without obtaining the prior approval of the holders of at least 66 2/3% of the
outstanding Preferred Securities. When the Subordinated Indenture requires the
consent of each holder of Series Junior
S-22
<PAGE>
Subordinated Notes affected, the Securities Trustees will not give that consent
without the prior consent of each holder of outstanding Preferred Securities.
The Securities Trustees may not revoke any action that the holders of the
Preferred Securities have authorized or approved.
If any proposed amendment to the Trust Agreement provides for any of the
following or the Securities Trustees propose to effect:
. any action that would adversely affect the powers, preferences or
special rights of the Preferred Securities; or
. the dissolution, winding-up or termination of the Trust, other than
pursuant to the Trust Agreement,
then the holders of outstanding Preferred Securities will have the right to
vote as a class on that amendment or proposal. The amendment or proposal will
be effective only if at least 66 2/3% of the outstanding Preferred Securities
approve it. Holders of Preferred Securities may provide their approval at a
meeting convened for that purpose or by written consent.
Any Preferred Securities that Duke Capital, the Administrative Trustees,
or any affiliate of Duke Capital or an Administrative Trustee owns, whether of
record or beneficially, will be treated as not outstanding for purposes of a
vote or consent.
The holders of the Preferred Securities will have no other voting rights
except those described under the caption "--Amendment of the Trust Agreement"
in this Prospectus Supplement and those described under the captions
"Amendments and Assignment" and "Events of Default" in "Description of the
Guarantees" in the accompanying Prospectus and any other voting rights
otherwise required by law or by the Trust Agreement.
Co-Property Trustees and Separate Property Trustees
Duke Capital, as the holder of the Common Securities, and the Property
Trustee will have the power to appoint one or more co-property trustees or
separate property trustees for all or part of the Trust Property for the
purpose of meeting certain legal requirements, including the legal requirements
of any jurisdiction in which part of the Trust Property is located. The
Property Trustee will have the power to make the appointment alone if Duke
Capital, as depositor, does not join in the appointment within 15 days after it
receives a request to do so, or in case an event of default under the
Subordinated Indenture with respect to the Series Junior Subordinated Notes
has occurred and is continuing.
Amendment of the Trust Agreement
Duke Capital and the Securities Trustees may amend the Trust Agreement
without the consent of the holders of the Trust Securities:
. to cure any ambiguity or to make any corrections or additions that are
not inconsistent with the other provisions of the Trust Agreement that
do not adversely affect the interests of any holder of Trust
Securities in any material respect; or
S-23
<PAGE>
. to modify, eliminate or add to any provisions of the Trust Agreement
to the extent necessary to ensure that the Trust will not be
classified as other than a grantor trust for United States federal
income tax purposes.
The Trust or the Securities Trustees may make other amendments to the Trust
Agreement if:
. the holders of at least 66 2/3% of the outstanding Trust Securities
approve the amendment; and
. the Securities Trustees receive an opinion of counsel to the effect
that the amendment will not affect the Trust's status as a grantor
trust or the Trust's exemption from the Investment Company Act of
1940.
The consent of each affected holder of Trust Securities will be required
to amend the Trust Agreement to:
. change the amount or timing of any distribution or any payment upon
redemption, or otherwise adversely affect the amount of any
distribution or any payment upon redemption required to be made on the
Trust Securities as of a specified date;
. restrict the right of a holder of Trust Securities to sue to enforce
any of those payments on or after that date;
. change the purpose of the Trust;
. authorize the issuance of any additional beneficial interests in the
Trust; or
. change the consent required to amend the Trust Agreement.
Mergers, Consolidations, Replacements, Transfers
The Trust may not consolidate, amalgamate, merge with or into or be
replaced by any corporation or other entity, or convey, transfer or lease
substantially all of its properties and assets to any corporation or other
entity, except as described below. At Duke Capital's request but without the
consent of the holders of the Trust Securities, the Trust may consolidate,
amalgamate, merge with or into, or be replaced by a trust organized under the
laws of any state, if:
. the successor entity either:
. expressly assumes all the Trust's obligations with respect to the
Trust Securities; or
. substitutes other securities having substantially the same terms
as the Trust Securities for the Preferred Securities and the
Common Securities so long as those other securities--called
"Successor Securities" in this Prospectus Supplement--rank equal
in priority with the Trust Securities with respect to
distributions and payments upon liquidation, redemption and
otherwise;
. Duke Capital expressly appoints a trustee of the successor entity,
possessing the same powers and duties as the Property Trustee as the
holder of the Series Junior Subordinated Notes;
. the Preferred Securities or any Successor Securities are listed on any
national securities exchange or other organization on which the
Preferred Securities are then listed, or any Successor Securities will
be so listed upon notification of issuance;
S-24
<PAGE>
. the consolidation, amalgamation, merger or replacement does not cause
the Preferred Securities, including any Successor Securities, to be
downgraded by any nationally recognized statistical rating
organization;
. the consolidation, amalgamation, merger or replacement does not
adversely affect the rights, preferences and privileges of the holders
of the Trust Securities, including any Successor Securities, in any
material respect;
. the successor entity has a purpose substantially identical to that of
the Trust;
. prior to the consolidation, amalgamation, merger or replacement, Duke
Capital and the Property Trustee have received an opinion of counsel
to the effect that:
. the transaction does not adversely affect the rights, preferences
and privileges of the holders of the Trust Securities, including
any Successor Securities, in any material respect; and
. following the transaction, neither the Trust nor the successor
entity will be required to register as an "investment company"
under the Investment Company Act of 1940; and
. Duke Capital owns all the common securities of the successor entity
and guarantees the obligations of the successor relating to the
Successor Securities at least to the extent provided by the Guarantee.
However, the Trust may not enter into any of the mergers, consolidations or
other transactions mentioned above if that transaction would cause the Trust or
its successor entity to be classified as other than a grantor trust for United
States federal income tax purposes except with the consent of the holders of
all the Trust Securities.
Payments; Paying Agent
So long as DTC is the securities depositary for the Preferred Securities,
payments on the Preferred Securities will be made to DTC or its nominee and DTC
will credit the relevant accounts at DTC on the applicable distribution dates.
If DTC or its nominee no longer holds the Preferred Securities, the paying
agent will make payments on the Preferred Securities by check mailed to the
address of the holder entitled to the payment as that address appears in the
security register for the Preferred Securities.
The paying agent will initially be the Property Trustee. The paying agent
will be permitted to resign as paying agent if it gives 30 days' written notice
to the Administrative Trustees and Duke Capital. The Administrative Trustees
will appoint a successor paying agent in the event of any such resignation.
Transfers; Exchanges; Registrar and Transfer Agent
There will be no service charge for registration of transfers or
exchanges of any Preferred Securities. However, payment of any tax or other
governmental charge may be required in connection with a transfer or exchange.
The registrar and transfer agent for the Preferred Securities will not be
required to register any transfer or exchange of Preferred Securities that have
been called for redemption.
S-25
<PAGE>
Duke Capital and the Trust anticipate that the Property Trustee or one of
its affiliates will act as registrar and transfer agent for the Preferred
Securities.
Information Concerning the Property Trustee
Before an event of default occurs under the Trust Agreement, the Property
Trustee will perform only those duties that are expressly specified in the
Trust Agreement. After any default, the Property Trustee will exercise the same
degree of care as a prudent person would exercise in the conduct of his or her
own affairs. Subject to these provisions, the Property Trustee is under no
obligation to exercise any of the powers vested in it by the Trust Agreement at
the request of any holder of Preferred Securities, unless that holder offers
the Property Trustee reasonable indemnity against the costs, expenses and
liabilities that the Property Trustee might incur as a result.
The Chase Manhattan Bank is the Property Trustee. The Chase Manhattan
Bank is also the Indenture Trustee and the Guarantee Trustee and serves as
Trustee under Duke Capital's Senior Indenture. Duke Capital and certain of its
affiliates maintain deposit accounts and banking relationships with The Chase
Manhattan Bank. The Chase Manhattan Bank also serves as trustee under other
indentures pursuant to which securities of Duke Capital and certain of its
affiliates are outstanding.
Miscellaneous
The Trust Agreement directs the Administrative Trustees to operate the
Trust so that the Trust will not be:
. deemed to be an "investment company" that is required to be registered
under the Investment Company Act of 1940; or
. taxed as other than a grantor trust for United States federal income
tax purposes.
The Trust Agreement also directs the Administrative Trustees to operate the
Trust so that the Series Junior Subordinated Notes will be treated as
indebtedness of Duke Capital for United States federal income tax purposes. The
Trust Agreement authorizes the Administrative Trustees and Duke Capital to take
any action not inconsistent with applicable law, the Trust's certificate of
trust or the Trust Agreement, that they determine to be necessary or desirable
for those purposes. No such action may, however, materially and adversely
affect the interests of the holders of the Preferred Securities.
Duke Capital and its affiliates may purchase outstanding Preferred
Securities by tender, in the open market or by private agreement, to the extent
legally permitted.
S-26
<PAGE>
DESCRIPTION OF THE SERIES JUNIOR SUBORDINATED NOTES
The following description of the Series Junior Subordinated Notes is
only a summary and is not intended to be comprehensive. The description should
be read together with the description of the general terms and provisions of
the Junior Subordinated Notes provided under the caption "Description of the
Junior Subordinated Notes" in the accompanying Prospectus.
General
Duke Capital will issue the Series Junior Subordinated Notes as a
series of Subordinated Notes under the Subordinated Indenture. The Series
Junior Subordinated Notes will be limited in principal amount to $ , which
is the liquidation amount of the Trust Securities.
The Series Junior Subordinated Notes will mature and become due and
payable, together with any accrued and unpaid interest, including any
Additional Interest (as defined below), on , .
The Series Junior Subordinated Notes will rank equal in priority with
any other series of Junior Subordinated Notes issued under the Subordinated
Indenture.
The Series Junior Subordinated Notes will not be subject to any
sinking fund provision.
Optional Redemption
Duke Capital will have the right to redeem the Series Junior
Subordinated Notes:
. from time to time, in whole or in part, on or after , ; or
. at any time, in whole but not in part, during the 90 days after the
occurrence of a Special Event.
Duke Capital may redeem the Series Junior Subordinated Notes upon not less
than 30 nor more than 60 days' notice at a redemption price equal to the
principal amount to be redeemed plus any accrued and unpaid interest,
including any Additional Interest, to the redemption date.
If a partial redemption of the Series Junior Subordinated Notes would
cause the Preferred Securities to be delisted, Duke Capital will be required
to redeem all of the Series Junior Subordinated Notes.
Interest
The Series Junior Subordinated Notes will bear interest at a yearly
rate of % from the original issue date. Interest on the Series Junior
Subordinated Notes will be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing on , ,
unless the applicable interest period is extended. Interest will be payable to
the person or persons in whose name the Series Junior Subordinated Notes are
registered at the close of business on the 15th calendar day before the
relevant interest payment date, except that interest payable on the maturity
date or on a redemption date will be paid to the person to whom principal is
payable. Interest will be computed on the basis of a 360-day year of twelve
30-day months.
S-27
<PAGE>
If any date on which interest is payable on the Series Junior
Subordinated Notes is not a Business Day, the interest payable on that date
will be paid on the next day that is a Business Day (without any interest or
other payment due to the delay), except that if that Business Day falls in the
next calendar year, interest will be paid on the immediately preceding Business
Day.
Option to Extend Interest Payment Period
Duke Capital will have the right, at any time and from time to time, to
defer interest payments on the Series Junior Subordinated Notes by extending
the interest payment period for up to consecutive quarters, but not beyond
the maturity date. When the extension period has ended, Duke Capital will pay
all accrued and unpaid interest, including any Additional Interest, on the next
interest payment date. Before any extension period ends, Duke Capital may
further defer interest payments by extending the interest payment period.
However, an extension period, together with any previous and further
extensions, may not exceed consecutive quarters. During an extension period,
Duke Capital will have the right to make partial payments of interest on any
interest payment date. After an extension period terminates and all amounts due
are paid, Duke Capital may select a new extension period, subject to the
previously mentioned requirements.
Duke Capital has no present intention of exercising its right to defer
payments by extending the interest payment period on the Series Junior
Subordinated Notes.
Duke Capital will notify the holder or holders of the Series Junior
Subordinated Notes and the Indenture Trustee of its selection or extension of
an extension period at least one Business Day before the earlier of:
. the record date for the interest payment date on which the extension
period is to begin or the record date for the interest payment date on
which the extension period that is being extended would otherwise
terminate; or
. the date that Duke Capital or the Trust is required to give notice to
the New York Stock Exchange or other self-regulatory organization of
the record date or the date those distributions are payable.
Additional Interest
"Additional Interest" means:
. those additional amounts as may be required so that the net amounts
that a holder of Series Junior Subordinated Notes (if the holder is
the Trust) receives and retains after paying taxes, duties,
assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States or any other taxing
authority will not be less than the amounts the holder would have
received had no such taxes, duties, assessments or other governmental
charges been imposed; and
. interest on interest due but not paid on an interest payment date for
the Series Junior Subordinated Notes, accruing at a yearly rate of
% from the applicable interest payment date to the date of payment,
compounded quarterly, on each interest payment date, to the extent
legally permitted.
S-28
<PAGE>
Certain Covenants
Duke Capital will covenant, for the benefit of the holders of Series
Junior Subordinated Notes and the holders of the Preferred Securities, that:
. if it has given notice of its election to extend an interest payment
period for the Series Junior Subordinated Notes and the extension is
continuing; or
. if an event of default under the Subordinated Indenture with respect
to the Series Junior Subordinated Notes has occurred and is
continuing,
then it will not:
. declare or pay any dividend or make any distributions with respect to
any of its capital stock, or redeem, purchase, acquire or make a
liquidation payment with respect to any of its capital stock, or
. make any payment of interest, principal or premium on any debt
securities, including guarantees other than the Guarantee, issued by
it which rank equal in priority with or junior to the Series Junior
Subordinated Notes, or repay, repurchase or redeem any such debt
securities.
However, those covenants will not restrict:
. any action described in the preceding sentence that results from a
reclassification of Duke Capital's capital stock or the exchange or
conversion of one class or series of Duke Capital's capital stock for
another class or series; or
. dividends or distributions in Duke Capital's capital stock.
Duke Capital will also covenant that, for so long as the Trust Securities
are outstanding, it will:
. continue to own all the Common Securities directly or indirectly; and
. use its reasonable efforts to cause the Trust:
. to remain a statutory business trust, except in connection with
the distribution of Series Junior Subordinated Notes in
liquidation of the Trust, the redemption of all the Trust
Securities, or certain mergers, consolidations or amalgamations;
and
. to otherwise continue to be classified as a grantor trust for
United States federal income tax purposes.
Any successor of Duke Capital may, however, succeed to Duke Capital's ownership
of the Common Securities without Duke Capital's violating this covenant if the
successor is permitted under the Subordinated Indenture.
Book-Entry Issuance
Duke Capital expects that the Series Junior Subordinated Notes will be
issued in the form of one or more global certificates registered in the name of
the securities depositary or its nominee if the Series Junior Subordinated
Notes are distributed to holders of Trust Securities in connection with
S-29
<PAGE>
the voluntary or involuntary dissolution, winding-up or liquidation of the
Trust. The procedures applicable to the transfer and payment of the Series
Junior Subordinated Notes are expected to be substantially similar to those
applicable to the transfer and payment of the Preferred Securities.
Denominations
The Series Junior Subordinated Notes will be issuable in denominations
of $ and integral multiples of $ .
Defeasance
The Series Junior Subordinated Notes will be subject to Defeasance but
not to Covenant Defeasance as described in the Subordinated Indenture. See
"Description of the Junior Subordinated Notes--Defeasance and Covenant
Defeasance" in the accompanying Prospectus.
Miscellaneous
Duke Capital will have the right to assign any of its rights or
obligations under the Subordinated Indenture with respect to the Series Junior
Subordinated Notes to one of its direct or indirect wholly owned subsidiaries.
Duke Capital will remain primarily liable for the performance of those
obligations in the event of an assignment.
S-30
<PAGE>
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE SERIES JUNIOR SUBORDINATED NOTES AND THE GUARANTEE
As long as Duke Capital makes interest and other payments on the Series
Junior Subordinated Notes when due, those payments will be sufficient to cover
distributions and payments due on the Preferred Securities and the Common
Securities. This is the case primarily because:
. the total principal amount of the Series Junior Subordinated Notes
will be equal to the total liquidation amount of the Trust Securities;
. the interest rate and interest and other payment dates on the Series
Junior Subordinated Notes will correspond to the distribution rate and
distribution and other payment dates for the Preferred Securities;
. the Agreement as to Expenses and Liabilities between Duke Capital and
the Trust provides that Duke Capital will pay all costs and expenses
of the Trust; and
. the Trust Agreement provides that the Securities Trustees will not
permit the Trust to engage in any activity that is inconsistent with
the purposes of the Trust.
If Duke Capital does not make the required payments on the Series Junior
Subordinated Notes, it is expected that the Trust will not have sufficient
funds to make the related distributions on the Preferred Securities. Duke
Capital will guarantee payments of distributions and other payments due on the
Preferred Securities but only to the extent that the Trust has funds legally
and immediately available for the payment of those distributions and other
payments.
If an event of default under the Subordinated Indenture with respect to
the Series Junior Subordinated Notes occurs and is continuing, then:
. the holders of Preferred Securities will rely on the Property Trustee,
as the holder of the Series Junior Subordinated Notes, to enforce
its rights against Duke Capital; and
. the holders of a majority of the Preferred Securities will have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee or to
direct the exercise of any power of the Property Trustee under the
Trust Agreement, including the right to direct the Property Trustee to
exercise the remedies available to it as a holder of the Series
Junior Subordinated Notes.
If the Property Trustee fails to enforce its rights under the Series
Junior Subordinated Notes, a holder of Preferred Securities may, to the extent
legally permitted, institute a legal proceeding against Duke Capital to enforce
its rights under the Trust Agreement without first instituting a legal
proceeding against the Property Trustee, the Trust or any other person or
entity. Moreover, a holder of Preferred Securities may institute a legal
proceeding directly against Duke Capital to enforce payment to that holder of
principal or interest on Series Junior Subordinated Notes having a principal
amount equal to the liquidation amount of the Preferred Securities of that
holder on or after the due dates specified in the Series Junior Subordinated
Notes. The Trust Agreement also provides a mechanism whereby the holders of
Preferred Securities may appoint a substitute Property Trustee if an event of
default under the Subordinated Indenture with respect to the Series Junior
Subordinated Notes occurs and is continuing.
S-31
<PAGE>
The Guarantee provides a mechanism whereby the holders of the Preferred
Securities may direct the Guarantee Trustee to enforce its rights under the
Guarantee if Duke Capital fails to make payments under the Guarantee. In
addition, any holder of Preferred Securities may institute a legal proceeding
directly against Duke Capital to enforce the Guarantee Trustee's rights under
the Guarantee without first instituting a legal proceeding against the
Guarantee Trustee or any other person or entity.
The Guarantee, the Subordinated Indenture, the Series Junior
Subordinated Notes, the Trust Agreement and the Agreement as to Expenses and
Liabilities provide a full and unconditional guarantee, subject to certain
subordination provisions, by Duke Capital of the payments due on the Preferred
Securities.
The holders of Preferred Securities will be entitled to receive the
liquidation distribution with respect to those Preferred Securities in cash,
out of assets legally available for distribution to those holders, upon any
voluntary or involuntary dissolution, winding-up or termination of the Trust
unless the Series Junior Subordinated Notes are distributed in connection with
those events. Upon any voluntary or involuntary liquidation or bankruptcy of
Duke Capital, the Property Trustee, as holder of the Series Junior
Subordinated Notes, would be a subordinated creditor of Duke Capital,
subordinated in right of payment to all Senior Indebtedness, but entitled to
receive payment in full of principal and interest before any of Duke Capital's
shareholders receive payments or distributions. Because Duke Capital is
guarantor under the Guarantee and has agreed to pay all costs, expenses and
liabilities of the Trust under the Agreement as to Expenses and Liabilities,
other than the Trust's obligations to holders of the Preferred Securities, the
positions of a holder of Preferred Securities and a holder of Series Junior
Subordinated Notes relative to other creditors and Duke Capital's shareholder
would be substantially the same in the event of the liquidation or bankruptcy
of Duke Capital.
A default or event of default under any Senior Indebtedness is not a
default or an event of default under the Subordinated Indenture. However, if a
default occurs with respect to Senior Indebtedness or if Senior Indebtedness is
accelerated, the subordination provisions of the Series Junior Subordinated
Notes provide that no payments may be made in respect of the Series Junior
Subordinated Notes:
. until that Senior Indebtedness has been paid in full, in the case of
any payment by, or distribution of assets of, Duke Capital to
creditors upon a dissolution, winding-up, liquidation or
reorganization of Duke Capital; or
. until all amounts due on that Senior Indebtedness have been paid, in
the case of a payment default beyond any grace period under that
Senior Indebtedness or the acceleration of that Senior Indebtedness
because of a default with respect to that Senior Indebtedness.
S-32
<PAGE>
MATERIAL FEDERAL INCOME TAX CONSIDERATIONS
Following is the opinion of Dewey Ballantine LLP, counsel to Duke Capital
and the Trust, as to the material United States federal income tax consequences
of the purchase, ownership and disposition of Preferred Securities by holders
that acquire Preferred Securities on their original issue at the initial
offering price and that hold the Preferred Securities as capital assets. The
opinion does not address all tax consequences that may be important to a holder
in light of the holder's peculiar circumstances or to holders subject to
special rules, such as financial institutions, foreign persons, real estate
investment trusts, regulated investment companies, insurance companies, tax-
exempt organizations, dealers in securities or currencies, traders in
securities that elect to mark to market, individual retirement and other tax-
deferred accounts, and persons engaging in straddles or hedges relating to
Preferred Securities. This discussion is based on legal authorities that are
subject to change at any time in a manner that could adversely affect holders.
Prospective investors in Preferred Securities should consult their own tax
advisors with regard to the application of the tax considerations discussed
below to their own situations as well as the application of any state, local or
other tax laws.
The Trust will be disregarded for federal income tax purposes and each
holder of Preferred Securities will be treated as the owner of a proportionate
amount of the Series Junior Subordinated Notes held by the Trust.
Accordingly, a holder will include in income the holder's share of the income
from the Series Junior Subordinated Notes. Duke Capital believes that the
likelihood of the occurrence of an extension period is remote and accordingly
that under applicable income tax regulations the Series Junior Subordinated
Notes should not be treated as issued with original issue discount. These
regulations have not been addressed in any rulings or other interpretations by
the Internal Revenue Service and it is possible that the Internal Revenue
Service could take a contrary position. If, however, Duke Capital exercises its
option to defer payments of interest, the Series Junior Subordinated Notes
would at that time be treated as issued with original issue discount and all
the stated interest payments on the Series Junior Subordinated Notes would
thereafter be treated as original issue discount. As a result, holders would be
required to accrue original issue discount income on an economic accrual basis,
even if the holder uses the cash method of accounting for tax purposes and even
though holders will not receive any payments during the extension period.
Because income on the Preferred Securities will constitute interest or original
issue discount, corporate holders will not be entitled to a dividends-received
deduction with respect to any income from the Preferred Securities.
Upon a sale, retirement or other taxable disposition of Preferred
Securities, a holder will recognize gain or loss equal to the difference
between the amount realized on the sale, retirement or other disposition and
the holder's adjusted tax basis in the Preferred Securities. If the holder
disposes of Preferred Securities prior to the occurrence of an extension
period, any portion of the amount received that is attributable to accrued
interest will be treated as interest income to the holder and will not be
treated as part of the amount realized for purposes of determining gain or loss
on the disposition of the Preferred Securities. Any recognized gain or loss
will be capital gain or loss and will be long-term capital gain or loss if the
holding period for the Preferred Securities is more than one year at the time
of sale, retirement or other disposition.
The Series Junior Subordinated Notes will be subject to Defeasance.
See "Description of the Junior Subordinated Notes--Defeasance and Covenant
Defeasance" in the accompanying
S-33
<PAGE>
Prospectus. Under current United States federal income tax laws, a Defeasance
would be treated as an exchange of the relevant Series Junior Subordinated
Notes in which holders of those Series Junior Subordinated Notes might
recognize gain or loss. In addition, the amount, timing and character of
amounts that holders would thereafter be required to include in income might be
different from that which would be includible in the absence of that
Defeasance.
Income on Preferred Securities will be reported to holders on Form 1099,
which form should be mailed to holders of Preferred Securities by January 31
following each calendar year. A holder will generally be required to furnish a
social security number or other taxpayer identification number in order to
avoid "backup withholding" tax on distributions on the Preferred Securities and
payment of the proceeds from the disposition of Preferred Securities. Any
amount so withheld will be allowed as a refund or a credit against the holder's
United States federal income tax liability, provided the required information
is furnished to the Internal Revenue Service.
The United States federal income tax discussion set forth above may not
be applicable to a holder, depending upon the holder's particular situation,
and therefore each holder should consult a tax advisor with respect to the tax
consequences of the ownership and disposition of Preferred Securities,
including the tax consequences under state, local, foreign and other tax laws
and the possible effects of changes in federal or other tax law.
S-34
<PAGE>
UNDERWRITING
Subject to the terms and conditions of an Underwriting Agreement, the
Trust has agreed to sell to each of the Underwriters named below, and each of
those Underwriters has severally agreed to purchase, the number of Preferred
Securities specified opposite its name. In the Underwriting Agreement, the
Underwriters have agreed, subject to certain conditions, to purchase all of the
Preferred Securities if any of the Preferred Securities are purchased. ,
and are acting as Representatives for the Underwriters in the
offering.
<TABLE>
<CAPTION>
Number of
Underwriter Preferred Securities
----------- --------------------
<S> <C>
----
Total....................................................
====
</TABLE>
Since the proceeds of the sale of the Preferred Securities will be used
to purchase Series Junior Subordinated Notes, the Underwriting Agreement
provides that Duke Capital will pay as compensation to the Underwriters $
per Preferred Security for the accounts of the several Underwriters, or $ in
the aggregate.
The Underwriters have advised Duke Capital and the Trust that they
propose to offer the Preferred Securities:
. in part directly to the public at the initial public offering price
that is stated on the cover page of this Prospectus Supplement; and
. in part to certain securities dealers at that price less a concession
not in excess of $ per Preferred Security.
The Underwriters may allow, and those dealers may reallow, a concession not in
excess of $ per Preferred Security to certain other dealers. The
Representatives may vary the initial public offering price and other selling
terms from time to time after the Preferred Securities are released for sale to
the public.
The Preferred Securities are expected to be approved for listing on the
New York Stock Exchange, subject to official notice of issuance. Trading of the
Preferred Securities on the New York Stock Exchange is expected to begin within
a 30-day period after the initial delivery of the Preferred Securities. The
Representatives have advised Duke Capital and the Trust that they intend to
make a market in the Preferred Securities before trading on the New York Stock
Exchange begins. The Representatives will have no obligation to make a market
in the Preferred Securities, however, and may cease market-making activities,
if commenced, at any time.
S-35
<PAGE>
There has been no public market for the Preferred Securities before this
offering. In order to meet one of the requirements for listing the Preferred
Securities on the New York Stock Exchange, the Underwriters will undertake to
sell lots of 100 or more Preferred Securities to a minimum of 400 beneficial
holders.
The Underwriters may purchase and sell the Preferred Securities in the
open market in connection with the offering. Those transactions may include
over-allotment and stabilizing transactions and purchases to cover syndicate
short positions created in connection with the offering. Stabilizing
transactions consist of certain bids or purchases for the purpose of preventing
or retarding a decline in the market price of the Preferred Securities.
Syndicate short positions involve the sale by the Underwriters of a greater
number of Preferred Securities than they are required to purchase from the
Trust in the offering. The Underwriters also may impose a penalty bid, by which
selling concessions allowed to syndicate members or other broker-dealers with
respect to the Preferred Securities sold for their account in the offering may
be reclaimed by the syndicate if those Preferred Securities are repurchased by
the syndicate in stabilizing or covering transactions. These activities may
stabilize, maintain or otherwise affect the market price of the Preferred
Securities, which may be higher than the price that might otherwise prevail in
the open market. These activities, if commenced, may be discontinued at any
time. These transactions may be effected on the New York Stock Exchange, in the
over-the-counter market or otherwise.
The Corporation and the Trust have agreed, during the period of days
from the date of the Underwriting Agreement, not to sell, offer to sell, grant
any option for the sale of, or otherwise dispose of any Preferred Securities,
any security convertible into or exchangeable for Preferred Securities or the
Series Junior Subordinated Notes or any debt securities substantially similar
to the Series Junior Subordinated Notes or equity securities substantially
similar to the Preferred Securities (except for the Series Junior
Subordinated Notes and the Preferred Securities issued pursuant to the
Underwriting Agreement), without prior written consent of the Representatives.
Duke Capital estimates that its expenses in connection with this
offering, excluding underwriting discounts and commissions, will be
approximately $ .
Duke Capital and the Trust have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act of
1933.
Certain of the Underwriters and their affiliates engage in transactions
with, and, from time to time, have performed services for Duke Capital or its
affiliates in the ordinary course of business and may do so in the future.
VALIDITY OF THE SECURITIES
Richards, Layton & Finger, P.A., special Delaware counsel to Duke Capital
and the Trust, will issue an opinion about the validity of the Preferred
Securities under Delaware law on behalf of Duke Capital and the Trust. Dewey
Ballantine LLP will issue an opinion about the validity of the Series Junior
Subordinated Notes, the Guarantee and certain related matters as well as
certain matters relating to United States federal income tax considerations on
behalf of Duke Capital and the Trust. will issue an opinion about the
validity of the Series Junior Subordinated Notes and the Guarantee for the
Underwriters.
S-36
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this Prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This Prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS SUPPLEMENT
(To Prospectus dated , )
Subject to Completion dated December 7, 1999
$[ ]
Duke Capital Corporation
a subsidiary of Duke Energy Corporation
Series % Senior Notes due
------------
Duke Capital will pay interest on the Series Senior Notes on and
of each year. The first interest payment will be made on , .
The Series Senior Notes will mature on , and are redeemable at the
option of Duke Capital at any time at a redemption price determined by using
the formula set forth under the caption "Description of the Series Senior
Notes--Optional Redemption" in this Prospectus Supplement.
The Series Senior Notes are unsecured and rank equally with all other
unsecured and unsubordinated indebtedness of Duke Capital. Duke Capital will
issue the Series Senior Notes in denominations of $ and integral multiples
of $ .
<TABLE>
<CAPTION>
Per Series
Senior Note Total
------------ -----
<S> <C> <C>
Initial Public Offering Price(1).............................
Underwriting Discounts and Commissions.......................
Proceeds, before expenses, to Duke Capital...................
</TABLE>
- ------
(1) Purchasers will also be required to pay accrued interest from , , if
settlement occurs after that date.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this Prospectus Supplement or the accompanying
Prospectus. Any representation to the contrary is a criminal offense.
The underwriters expect to deliver the Series Senior Notes on or about
, .
------------
[Names of Underwriters]
------------
Prospectus Supplement dated , .
<PAGE>
You should rely only on the information contained or incorporated by
reference in this Prospectus Supplement and the accompanying Prospectus. We
have not, and the Underwriters have not, authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. If this Prospectus
Supplement is inconsistent with the accompanying Prospectus, you should rely on
this Prospectus Supplement. We are not, and the Underwriters are not, making an
offer to sell these securities in any jurisdiction where the offer or sale is
not permitted. You should assume that the information in this Prospectus
Supplement and the accompanying Prospectus is accurate only as of the
respective dates on the front of those documents or earlier dates specified
therein. Our business, financial condition, results of operations and prospects
may have changed since those dates.
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
Page
----
<S> <C>
Forward-Looking Statements................................................. S-3
Description of the Series Senior Notes................................... S-4
Underwriting............................................................... S-10
Validity of the Securities................................................. S-11
Prospectus
About This Prospectus...................................................... 2
Where You Can Find More Information........................................ 2
Duke Capital Corporation................................................... 4
Use of Proceeds............................................................ 6
The Trusts................................................................. 6
Description of the Senior Notes............................................ 7
Description of the Junior Subordinated Notes............................... 17
Description of the Preferred Securities.................................... 26
Description of the Guarantees.............................................. 27
Accounting Treatment....................................................... 30
Plan of Distribution....................................................... 30
Experts.................................................................... 31
Validity of the Securities................................................. 31
</TABLE>
S-2
<PAGE>
FORWARD-LOOKING STATEMENTS
This Prospectus Supplement and the accompanying Prospectus contain or
incorporate by reference statements that do not directly or exclusively relate
to historical facts. Such statements are "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. You can
typically identify forward-looking statements because they include or are
preceded by forward-looking words, such as "may," "will," "could," "project,"
"believe," "anticipate," "expect," "estimate," "continue," "potential,"
"plan," "forecast" and the like. Those statements represent Duke Capital's
intentions, plans, expectations, assumptions and beliefs about future events
and are subject to risks, uncertainties and other factors. Many of those
factors are outside Duke Capital's control and could cause actual results to
differ materially from the results expressed or implied by those forward-
looking statements. Some of the factors that could cause such differences are:
. state, federal and foreign legislative and regulatory initiatives that
affect cost and investment recovery, have an impact on rate structures
and affect the speed at and degree to which competition enters the
natural gas industry;
. industrial, commercial and residential growth in the service
territories of Duke Capital's subsidiaries;
. the weather and other natural phenomena;
. the timing and extent of changes in commodity prices, interest rates
and foreign currency exchange rates;
. changes in environmental and other laws and regulations to which Duke
Capital and its subsidiaries are subject or other external factors
over which Duke Capital has no control;
. the results of financing efforts, including Duke Capital's ability to
obtain financing on favorable terms, which can be affected by various
factors, including its credit ratings and general economic conditions;
. growth in opportunities for Duke Capital's subsidiaries;
. achievement of Year 2000 readiness by Duke Capital, its subsidiaries
and the customers and suppliers of those subsidiaries; and
. the effect of accounting policies issued periodically by accounting
standard-setting bodies.
In light of these risks, uncertainties and assumptions, the forward-
looking events referred to in this Prospectus Supplement and the accompanying
Prospectus might not occur. Neither Duke Capital nor the Underwriters undertake
any obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
S-3
<PAGE>
DESCRIPTION OF THE SERIES SENIOR NOTES
The following description of the Series Senior Notes is only a summary
and is not intended to be comprehensive. The description should be read
together with the description of the general terms and provisions of Senior
Notes provided under the caption "Description of the Senior Notes" in the
accompanying Prospectus.
General
The Series Senior Notes will be limited in principal amount to $
and will be issued as a series of Senior Notes under Duke Capital's Senior
Indenture.
The entire principal amount of the Series Senior Notes will mature and
become due and payable, together with any accrued and unpaid interest, on
, .
The Series Senior Notes will not be subject to any sinking fund
provision.
Interest
Each Series Senior Note will bear interest at the rate of % per year
from the date of original issuance. Duke Capital will pay interest semiannually
on and of each year, beginning , , to the person in
whose name that Series Senior Note is registered at the close of business on
the fifteenth calendar day before the relevant interest payment date, except
that Duke Capital will pay interest payable at the maturity date of the Series
Senior Notes or on a redemption date to the person or persons to whom
principal is payable. The amount of interest payable will be computed on the
basis of a 360-day year of twelve 30-day months. In the event that any date on
which interest is payable is not a Business Day, Duke Capital will pay that
interest on the next Business Day without any interest or other payment due to
the delay.
Optional Redemption
Duke Capital will have the right to redeem the Series Senior Notes, in
whole or in part at any time, at a redemption price equal to the greater of (1)
100% of the principal amount of the Series Senior Notes to be redeemed and
(2) the sum of the present values of the remaining scheduled payments of
principal and interest on such Series Senior Notes (exclusive of interest
accrued to the
S-4
<PAGE>
redemption date) discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate plus basis points, plus, in either case, accrued and unpaid interest on
the principal amount being redeemed to such redemption date.
"Treasury Rate" means, with respect to any redemption date, (1) the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15(519)" or any successor publication which is published weekly
by the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to
constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after the maturity date of the Series Senior
Notes, yields for the two published maturities most closely corresponding to
the Comparable Treasury Issue shall be determined, and the Treasury Rate shall
be interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (2) if such release (or any successor
release) is not published during the week preceding the calculation date or
does not contain such yields, the rate per year equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue, calculated using
a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such redemption
date. The Treasury Rate will be calculated on the third Business Day preceding
the redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable
to the remaining term of the Series Senior Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Series Senior Notes.
"Independent Investment Banker" means and any successor firm or,
if such firm is unwilling or unable to select the Comparable Treasury Issue, an
independent investment banking institution of national standing appointed by
the Senior Indenture Trustee after consultation with Duke Capital.
"Comparable Treasury Price" means with respect to any redemption date for
the Series Senior Notes (1) the average of Reference Treasury Dealer
Quotations for such redemption date, after excluding the highest and lowest
such Reference Treasury Dealer Quotations, or (2) if the Senior Indenture
Trustee obtains fewer than such Reference Treasury Dealer Quotations, the
average of all such quotations.
"Reference Treasury Dealer" means each of , ,
, and and their respective successors; provided,
however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"),
Duke Capital will substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined
by the Senior Indenture Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Senior Indenture Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third Business Day preceding
such redemption date.
S-5
<PAGE>
Redemption Procedures
Duke Capital will provide not less than 30 nor more than 60 days' notice
mailed to each registered holder of the Series Senior Notes to be redeemed.
If the redemption notice is given and funds deposited as required, then
interest will cease to accrue on and after the redemption date on the Series
Senior Notes or portions of Series Senior Notes called for redemption. In the
event that any redemption date is not a Business Day, Duke Capital will pay the
redemption price on the next Business Day without any interest or other payment
due to the delay.
Ranking
The Series Senior Notes will be direct, unsecured and unsubordinated
obligations of Duke Capital. The Series Senior Notes will rank equal in
priority with all other unsecured and unsubordinated indebtedness of Duke
Capital and senior in right of payment to all existing and future subordinated
debt of Duke Capital. At , , Duke Capital had outstanding
approximately $ of unsecured and unsubordinated indebtedness. The
Senior Indenture contains no restrictions on the amount of additional
indebtedness that Duke Capital may issue under it.
Denominations
The Series Senior Notes will be issuable in denominations of $ and
integral multiples of $ .
Defeasance and Covenant Defeasance
The Series Senior Notes will be subject to Defeasance and Covenant
Defeasance as described in the Senior Indenture. See "Description of the Senior
Notes--Defeasance and Covenant Defeasance" in the accompanying Prospectus.
Book-Entry Only Issuance--The Depository Trust Company
The Depository Trust Company ("DTC") will act as the initial securities
depositary for the Series Senior Notes. The Series Senior Notes will be
initially issued as fully registered securities registered in the name of Cede
& Co., DTC's nominee. One or more fully registered global certificates will be
issued, representing the total principal amount of the Series Senior Notes,
and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. DTC holds securities that its participants
("participants") deposit with DTC. DTC also facilitates the settlement among
participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations ("direct participants"). DTC is
S-6
<PAGE>
owned by a number of its direct participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc., and the National Association
of Securities Dealers, Inc. Access to the DTC system is also available to
others such as securities brokers and dealers, banks and trust companies that
clear through or maintain a custodial relationship with a direct participant,
either directly or indirectly ("indirect participants"). The rules applicable
to DTC and its participants are on file with the Securities and Exchange
Commission.
Purchases of Series Senior Notes within the DTC system must be made by
or through direct participants, which will receive a credit for the Series
Senior Notes on DTC's records. The ownership interest of each actual purchaser
of Series Senior Notes ("beneficial owner") is in turn to be recorded on the
direct and indirect participants' records. Beneficial owners will not receive
written confirmation from DTC of their purchases, but beneficial owners are
expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the direct
or indirect participants through which the beneficial owners entered into the
transaction. Transfers of ownership interests in the Series Senior Notes are
to be accomplished by entries made on the books of participants acting on
behalf of beneficial owners. Beneficial owners will not receive certificates
representing their ownership interests in Series Senior Notes, except in the
event that use of the book-entry system for the Series Senior Notes is
discontinued.
To facilitate subsequent transfers, all Series Senior Notes deposited
by participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co. The deposit of Series Senior Notes with DTC and their
registration in the name of Cede & Co. effect no change in beneficial
ownership. DTC has no knowledge of the actual beneficial owners of the Series
Senior Notes. DTC's records reflect only the identity of the direct
participants to whose accounts such Series Senior Notes are credited, which
may or may not be the beneficial owners. The participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices will be sent to DTC. If less than all of the Series
Senior Notes are being redeemed, DTC will reduce the amount of interest of each
direct participant in the Series Senior Notes in accordance with its
procedures.
Neither DTC nor Cede & Co. will consent or vote with respect to Series
Senior Notes. Under its usual procedures, DTC would mail an Omnibus Proxy to
Duke Capital as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those direct participants
to whose accounts the Series Senior Notes are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Payments on the Series Senior Notes will be made to Cede & Co., as
nominee of DTC. DTC's practice is to credit direct participants' accounts, upon
DTC's receipt of funds and corresponding detailed information, on the relevant
payment date in accordance with their respective holdings shown on DTC's
records. Payments by participants to beneficial owners will be governed
S-7
<PAGE>
by standing instructions and customary practices, as is the case with
securities held for the account of customers in bearer form or registered in
"street name," and will be the responsibility of such participant and not of
DTC or Duke Capital, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment to Cede & Co. is the responsibility of
Duke Capital or the paying agent, disbursement of such payments to direct
participants is the responsibility of Cede & Co. and disbursement of such
payments to the beneficial owners is the responsibility of direct and indirect
participants.
Except as provided herein, a beneficial owner of an interest in a global
Series Senior Note will not be entitled to receive physical delivery of
Series Senior Notes. Accordingly, each beneficial owner must rely on the
procedures of DTC to exercise any rights under the Series Senior Notes. The
laws of some jurisdictions require that certain purchasers of securities take
physical delivery of securities in definitive form. Such laws may impair the
ability to transfer beneficial interests in a global Series Senior Note.
DTC may discontinue providing its services as securities depositary with
respect to the Series Senior Notes at any time by giving reasonable notice to
Duke Capital. Under such circumstances, in the event that a successor
securities depositary is not obtained within 90 days, Series Senior Note
certificates will be printed and delivered to the holders of record.
Additionally, Duke Capital may decide to discontinue use of the system of book-
entry transfers through DTC (or a successor securities depositary) with respect
to the Series Senior Notes. In that event, certificates for the Series
Senior Notes will be printed and delivered to the holders of record.
DTC has advised Duke Capital that DTC's management is aware that some
computer applications, systems and the like for processing data that are
dependent upon calendar dates, including dates before, on, and after January 1,
2000, may encounter "Year 2000 problems." DTC has informed direct participants
and other members of the financial community that it has developed and is
implementing a program so that its systems, as they relate to the timely
payment of distributions (including principal and interest payments) to
security holders, book-entry deliveries and settlement of trades within DTC,
continue to function appropriately. This program includes a technical
assessment and a remediation plan, each of which is complete. Additionally,
DTC's plan includes a testing phase, which is expected to be completed within
appropriate time frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including but not limited to issuers and their agents, as
well as DTC's direct participants, third-party vendors from whom DTC licenses
software and hardware, and third-party vendors on whom DTC relies for
information or the provision of services, including telecommunication and
electrical utility service providers, among others. DTC has informed its
participants and other members of the financial community that it is contacting
(and will continue to contact) third-party vendors from whom DTC acquires
services to: (1) impress upon them the importance of such services being Year
2000 compliant, and (2) determine the extent of their efforts for Year 2000
remediation (and, as appropriate, testing) of their services. In addition, DTC
is in the process of developing such contingency plans as it deems appropriate.
According to DTC, the information in the preceding two paragraphs with
respect to DTC has been provided to members of the financial community for
informational purposes only and is not intended to serve as a representation,
warranty, or contract modification of any kind.
S-8
<PAGE>
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that Duke Capital believes to be
reliable, but neither Duke Capital nor any Underwriter takes any responsibility
for its accuracy. Duke Capital has no responsibility for the performance by DTC
or its participants of their respective obligations, including obligations that
they have under the rules and procedures that govern their operations.
S-9
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, Duke
Capital has agreed to sell to each of the Underwriters named below (for whom
, , , , , and
are acting as Representatives) and each of the Underwriters has
severally agreed to purchase from Duke Capital the respective principal amount
of Series Senior Notes set forth opposite its name below:
<TABLE>
<CAPTION>
Principal Amount
of Series
Underwriter Senior Notes
----------- ----------------
<S> <C>
-----
Total.................................................... $
=====
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject to
certain conditions, to purchase all of the Series Senior Notes if any of the
Series Senior Notes are purchased.
The Underwriters propose initially to offer the Series Senior Notes to
the public at the initial public offering price set forth on the cover page of
this Prospectus Supplement, and to certain dealers at that price less a
concession not in excess of $ per Series Senior Note. The Underwriters may
allow, and those dealers may reallow, a discount not in excess of $ per
Series Senior Note to certain other dealers. The initial public offering
price, selling concession and discount may be changed after the initial public
offering.
The Underwriters may purchase and sell the Series Senior Notes in the
open market in connection with the offering. Those transactions may include
over-allotment and stabilizing transactions and purchases to cover syndicate
short positions created in connection with the offering. Stabilizing
transactions consist of certain bids or purchases for the purpose of preventing
or retarding a decline in the market price of the Series Senior Notes.
Syndicate short positions involve the sale by the Underwriters of a greater
number of Series Senior Notes than they are required to purchase from Duke
Capital in the offering. The Underwriters also may impose a penalty bid, by
which selling concessions allowed to syndicate members or other broker dealers
with respect to the securities sold in the offering for their account may be
reclaimed by the syndicate if those Series Senior Notes are repurchased by
the syndicate in stabilizing or covering transactions. These activities may
stabilize, maintain or otherwise affect the market price of the Series Senior
Notes, which may be higher than the price that might otherwise prevail in the
open market. These activities, if commenced, may be discontinued at any time.
S-10
<PAGE>
Duke Capital has agreed, during the period of days from the date of
the Underwriting Agreement, not to sell, offer to sell, grant any option for
the sale of, or otherwise dispose of any Series Senior Notes, any security
convertible into or exchangeable for the Series Senior Notes or any debt
securities substantially similar to the Series Senior Notes (except for the
Series Senior Notes issued pursuant to the Underwriting Agreement), without
the prior written consent of the Representatives.
Duke Capital estimates that its expenses in connection with this
offering, excluding underwriting discounts and commissions, will be
approximately $ .
Duke Capital has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
Certain of the Underwriters and their affiliates engage in transactions
with, and, from time to time, have performed services for Duke Capital or its
affiliates in the ordinary course of business and may do so in the future.
VALIDITY OF THE SECURITIES
Dewey Ballantine LLP will issue an opinion about the validity of the
Series Senior Notes and certain related matters on behalf of Duke Capital.
will issue an opinion about the validity of the Series Senior Notes
for the Underwriters.
S-11
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$[ ]
Duke Capital Corporation
a subsidiary of Duke Energy Corporation
Series % Senior Notes
due
---------------------
PROSPECTUS SUPPLEMENT
---------------------
[Names of Underwriters]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this Prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This Prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale of these securities is not +
+permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion dated December 7, 1999
PROSPECTUS
$2,000,000,000
Duke Capital Corporation
a subsidiary of Duke Energy Corporation
Senior Notes
Junior Subordinated Notes
-----------
Duke Capital Financing Trust IV
Duke Capital Financing Trust V
Duke Capital Financing Trust VI
Trust Preferred Securities
Guaranteed, to the extent described herein, by
Duke Capital Corporation
a subsidiary of Duke Energy Corporation
-----------
This Prospectus contains summaries of the general terms of these
securities. You will find the specific terms of these securities, and the
manner in which they are being offered, in supplements to this Prospectus. You
should read this Prospectus and the applicable Prospectus Supplement carefully
before you invest.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this Prospectus. Any representation to the contrary is
a criminal offense.
The date of this Prospectus is , .
<PAGE>
ABOUT THIS PROSPECTUS
This Prospectus is part of a Registration Statement that Duke Capital,
Duke Capital Financing Trust IV, Duke Capital Financing Trust V and Duke
Capital Financing Trust VI filed with the SEC utilizing a "shelf" registration
process. Under the shelf registration process, Duke Capital may issue Senior
Notes and Junior Subordinated Notes and Duke Capital Financing Trust IV, Duke
Capital Financing Trust V and Duke Capital Financing Trust VI may issue trust
preferred securities in one or more offerings up to a total dollar amount of
$2,000,000,000. The trust preferred securities that Duke Capital Financing
Trust IV, Duke Capital Financing Trust V and Duke Capital Financing Trust VI
may issue are called "Preferred Securities" in this Prospectus.
This Prospectus provides general descriptions of the Senior Notes, Junior
Subordinated Notes and Preferred Securities. Each time Senior Notes, Junior
Subordinated Notes or Preferred Securities are sold, a Prospectus Supplement
will provide specific information about the terms of that offering. The
Prospectus Supplement may also add, update or change information contained in
this Prospectus. The Registration Statement filed with the SEC includes
exhibits that provide more details about the matters discussed in this
Prospectus. You should read this Prospectus, the related exhibits filed with
the SEC and any Prospectus Supplement, together with the additional information
described under the next caption, "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
Duke Capital files annual, quarterly and special reports and other
information with the SEC. You may read and copy any document Duke Capital files
at the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC's toll-free telephone number at 1-800-
SEC-0330 for further information about the operation of the public reference
rooms. Duke Capital's SEC filings are available on the SEC's Web site at
http://www.sec.gov.
The SEC allows Duke Capital to "incorporate by reference" the information
Duke Capital files with it, which means that Duke Capital can disclose
important information to you by referring you to those documents. The
information incorporated by reference is an important part of this Prospectus
and should be read with the same care. Information that Duke Capital files
later with the SEC will automatically update and supersede that information.
The following documents are incorporated in and made a part of this
Prospectus by reference:
Duke Capital's annual report on Form 10-K for the year ended December 31,
1998;
Duke Capital's quarterly reports on Form 10-Q for the quarters ended
March 31, 1999, June 30, 1999 and September 30, 1999; and
Duke Capital's current reports on Form 8-K filed on January 26, 1999,
February 24, 1999, June 1, 1999 and August 6, 1999.
Any documents that Duke Capital files with the SEC in the future under
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 will
also be incorporated by reference into this Prospectus until all of the
securities being registered are sold.
2
<PAGE>
You may obtain a copy of the filings incorporated by reference in this
Prospectus at no cost by writing or calling Duke Capital at the following
address or at one of the following telephone numbers:
Investor Relations Department
Duke Capital Corporation
P.O. Box 1005
Charlotte, North Carolina 28201
(704) 382-3853 or (800) 488-3853 (toll-free)
3
<PAGE>
DUKE CAPITAL CORPORATION
Duke Capital, a wholly owned subsidiary of Duke Energy Corporation, is a
holding company that, through subsidiaries, primarily operates in six business
segments:
. Natural Gas Transmission
. Field Services
. Trading and Marketing
. Global Asset Development
. Other Energy Services
. Real Estate Operations
Natural Gas Transmission, through its Northeast Pipelines, provides
interstate transportation and storage of natural gas for customers primarily in
the Mid-Atlantic and New England states.
Field Services gathers, processes, transports and markets natural gas and
produces and markets natural gas liquids. Field Services operates gathering
systems in western Canada and ten contiguous states in the United States that
serve major gas-producing regions in the Rocky Mountains, Permian Basin, Mid-
Continent and onshore and offshore Gulf Coast areas.
Trading and Marketing primarily markets natural gas, electricity and
other energy-related products across North America. Duke Energy owns a 60%
interest in Trading and Marketing's energy trading operations, with Mobil
Corporation owning a 40% minority interest. This segment also includes limited
hydrocarbon exploration and production activities that are wholly owned by Duke
Capital.
Global Asset Development develops, owns and operates energy-related
facilities worldwide. Global Asset Development conducts its operations
primarily through Duke Energy North America, LLC and Duke Energy International,
LLC.
Other Energy Services provides engineering, consulting, construction and
integrated energy solutions worldwide, primarily through Duke Engineering &
Services, Inc., Duke/Fluor Daniel and DukeSolutions, Inc.
Real Estate Operations develops commercial and residential real estate
projects and manages forest holdings in the southeastern United States. Real
Estate Operations conducts its business through Crescent Resources, Inc.
The foregoing information about Duke Capital and its business segments is
only a general summary and is not intended to be comprehensive. For additional
information about Duke Capital and its business segments you should refer to
the information described under the caption "Where You Can Find More
Information."
Duke Capital's principal executive offices are located at 526 South
Church Street, Charlotte, North Carolina 28202, telephone (704) 594-6200.
4
<PAGE>
Recent Financial Data
The following shows only selected consolidated financial information. You
should refer to the financial statements included in the documents incorporated
by reference in this Prospectus for additional information. See "Where You Can
Find More Information."
<TABLE>
<CAPTION>
Nine Months
Ended September 30, Year Ended December 31,
----------------------- -----------------------
1999 1998 1998 1997(1) 1996(1)
---------- --------- ------- ------- -------
(unaudited)
(millions)
<S> <C> <C> <C> <C> <C>
Income Statement Data
Operating Revenues............ $ 11,851 $ 9,868 $13,059 $11,915 $7,816
Operating Expenses............ 11,107 9,139 12,023 11,079 6,947
---------- --------- ------- ------- ------
Operating Income........... 744 729 1,036 836 869
Other Income, Net............. 51 72 101 37 20
---------- --------- ------- ------- ------
Earnings Before Interest and
Taxes........................ 795 801 1,137 873 889
Interest Expense.............. 199 180 237 214 232
Income Before Extraordinary
Items........................ 340 371 519 380 399
Net Income.................... 1,000(2) 363 511 380 382
</TABLE>
- --------
(1) Data reflects accounting for the combination of Duke Capital with
PanEnergy Corp on June 30, 1997 similar to a pooling of interests. As a
result, the data gives effect to the combination as if it had occurred as
of January 1, 1996.
(2) Reflects a one-time after-tax extraordinary gain of approximately $660
million attributable to the sale of certain pipeline operations on March
29, 1999.
<TABLE>
<CAPTION>
As of As of December 31,
September 30, --------------------------
1999 1998 1997(1) 1996(1)
------------- ---------- ------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Balance Sheet Data (millions)
Property, Plant and Equipment,
Net............................ $10,446 $ 7,154 $ 6,065 $5,801
Total Assets.................... 19,166 13,856 11,097 9,752
Short-Term Debt................. 95 29 138 359
Long-Term Debt, including cur-
rent portion................... 5,228 3,142 2,942 2,203
Trust Preferred Securities...... 823 580 -- --
Stockholder's Equity............ 5,079 4,073 3,366 3,060
</TABLE>
- --------
(1) Data reflects accounting for the combination of Duke Capital with
PanEnergy Corp on June 30, 1997 similar to a pooling of interests. As a
result, the data gives effect to the combination as if it had occurred as
of December 31, 1996.
Financial Ratios
(unaudited)
<TABLE>
<CAPTION>
Nine Months
Ended September 30, Year Ended December 31,
------------------- ------------------------------------
1999 1998 1998 1997(1) 1996(1) 1995(1) 1994(1)
--------- -------- ---- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges.......... 3.3 4.0 4.2 3.7 3.6 3.2 2.7
</TABLE>
For purposes of this ratio (a) earnings consist of income from continuing
operations before income taxes and fixed charges, and (b) fixed charges consist
of all interest deductions and the interest component of rentals.
- --------
(1) Data reflects accounting for the combination of Duke Capital with
PanEnergy Corp on June 30, 1997 similar to a pooling of interests. As a
result, the data gives effect to the combination as if it had occurred as
of January 1, 1994.
5
<PAGE>
USE OF PROCEEDS
Each Trust will invest the proceeds it receives from the sale of the
Preferred Securities in Junior Subordinated Notes. Unless the applicable
Prospectus Supplement states otherwise, Duke Capital will use the net proceeds
that it receives from such investment and any proceeds that it receives from
sales of its Senior Notes or other sales of the Junior Subordinated Notes for
general corporate purposes, including capital expenditures, working capital,
debt repayments and advances to affiliates.
If Duke Capital does not use the proceeds of the Senior Notes or the
Junior Subordinated Notes, or the net proceeds of the Preferred Securities,
immediately, it may temporarily invest them in short-term interest-bearing
obligations or deposit them with banks.
THE TRUSTS
Duke Capital formed each Trust as a statutory business trust under
Delaware law. Each Trust's business is defined in a trust agreement executed by
Duke Capital, as depositor, and Chase Manhattan Bank Delaware. Each trust
agreement will be amended when Preferred Securities are issued under it and
will be in substantially the form filed as an exhibit to the Registration
Statement. Each amended trust agreement is called a "Trust Agreement" in this
Prospectus.
The Preferred Securities and the Common Securities of each Trust
represent undivided beneficial interests in the assets of that Trust. The
Preferred Securities and the Common Securities together are sometimes called
the "Trust Securities" in this Prospectus.
The trustees of each Trust will conduct that Trust's business and
affairs. Duke Capital, as the holder of the Common Securities of each Trust,
will appoint the trustees of that Trust. The trustees of each Trust will
consist of:
. two officers of Duke Capital as Administrative Trustees;
. The Chase Manhattan Bank as Property Trustee; and
. Chase Manhattan Bank Delaware as Delaware Trustee.
The Prospectus Supplement relating to the Preferred Securities of a Trust
will provide further information concerning that Trust.
No separate financial statements of any Trust are included in this
Prospectus. Duke Capital considers that such statements would not be material
to holders of the Preferred Securities because no Trust has any independent
operations and the sole purpose of each Trust is investing the proceeds of the
sale of its Trust Securities in Junior Subordinated Notes. Duke Capital does
not expect that any of the Trusts will be filing annual, quarterly or special
reports with the SEC.
The principal place of business of each Trust will be c/o Duke Capital
Corporation, 526 South Church Street, Charlotte, North Carolina 28202,
telephone (704) 594-6200.
6
<PAGE>
DESCRIPTION OF THE SENIOR NOTES
Duke Capital will issue the Senior Notes in one or more series under its
Senior Indenture dated as of April 1, 1998 between Duke Capital and The Chase
Manhattan Bank, as Trustee, as supplemented from time to time. The Senior
Indenture is called the "Senior Indenture" in this Prospectus. The Trustee
under the Senior Indenture is called the "Senior Indenture Trustee" in this
Prospectus. The Senior Indenture is an exhibit to the Registration Statement.
Duke Capital conducts its business through subsidiaries. Accordingly, its
ability to meet its obligations under the Senior Notes is dependent on the
earnings and cash flows of those subsidiaries and the ability of those
subsidiaries to pay dividends or to advance or repay funds to Duke Capital. In
addition, the rights that Duke Capital and its creditors would have to
participate in the assets of any such subsidiary upon the subsidiary's
liquidation or recapitalization will be subject to the prior claims of the
subsidiary's creditors. Certain subsidiaries of Duke Capital have incurred
substantial amounts of debt in the expansion of their businesses and Duke
Capital anticipates that certain of its subsidiaries will do so in the future.
The following description of the Senior Notes is only a summary and is
not intended to be comprehensive. For additional information you should refer
to the Senior Indenture.
General
The Senior Indenture does not limit the amount of Senior Notes that Duke
Capital may issue under it. Duke Capital may issue Senior Notes from time to
time under the Senior Indenture in one or more series by entering into
supplemental indentures or by its Board of Directors or a duly authorized
committee authorizing the issuance. The form of supplemental indenture to the
Senior Indenture is an exhibit to the Registration Statement.
The Senior Notes of a series need not be issued at the same time, bear
interest at the same rate or mature on the same date.
The Senior Indenture does not protect the holders of Senior Notes if Duke
Capital engages in a highly leveraged transaction.
Provisions Applicable to Particular Series
The Prospectus Supplement for a particular series of Senior Notes will
specify the terms of that series, including, if applicable:
. the title of the series;
. any limit on the principal amount of the Senior Notes of the series;
. the date or dates on which principal is payable or the method for
determining the date or dates, and any right that Duke Capital has to
change the date on which principal is payable;
. the interest rate or rates, if any, or the method for determining the
rate or rates, and the date or dates from which interest will accrue;
. any interest payment dates and the regular record date for the
interest payable on each interest payment date, if any;
7
<PAGE>
. whether Duke Capital may extend the interest payment periods and, if
so, the terms of the extension;
. the place or places where payments will be made, if other than the
principal corporate trust office of the Senior Indenture Trustee;
. any obligation that Duke Capital has to redeem the Senior Notes
through a sinking fund or to purchase the Senior Notes through a
purchase fund or at the option of the holder;
. whether Duke Capital has the option to redeem the Senior Notes and, if
so, the terms of its redemption option;
. whether the provisions described under the caption "Defeasance and
Covenant Defeasance" will not apply to the Senior Notes;
. the currency in which payments will be made if other than U.S.
dollars, and the manner of determining the equivalent of those amounts
in U.S. dollars;
. if payments may be made, at Duke Capital's election or at the holder's
election, in a currency other than that in which the Senior Notes are
stated to be payable, then the currency in which those payments may be
made, the terms and conditions of the election and the manner of
determining those amounts;
. the portion of the principal payable upon acceleration of maturity, if
other than the entire principal;
. whether the Senior Notes will be issuable as global securities and, if
so, the securities depositary;
. any changes in the events of default or covenants with respect to the
Senior Notes;
. any index or formula used for determining principal, premium or
interest;
. if the principal payable on the maturity date will not be determinable
on one or more dates prior to the maturity date, the amount which will
be deemed to be such principal amount or the manner of determining it;
and
. any other terms.
Unless Duke Capital states otherwise in the applicable Prospectus
Supplement, Duke Capital will issue the Senior Notes only in fully registered
form, without coupons, and there will be no service charge for any registration
of transfer or exchange of the Senior Notes. Duke Capital may, however, require
payment to cover any tax or other governmental charge payable in connection
with any transfer or exchange. Transfers and exchanges of the Senior Notes may
be made at The Chase Manhattan Bank, 55 Water Street, New York, New York 10041.
The Senior Notes will be issuable in denominations of $1,000 and any
integral multiples of $1,000, unless Duke Capital states otherwise in the
applicable Prospectus Supplement.
Duke Capital may offer and sell the Senior Notes, including original
issue discount Senior Notes, at a substantial discount below their principal
amount. The applicable Prospectus Supplement will describe special United
States federal income tax and any other considerations applicable to those
securities. In addition, the applicable Prospectus Supplement may describe
certain special United States federal income tax or other considerations, if
any, applicable to any Senior Notes which are denominated in a currency other
than U.S. dollars.
8
<PAGE>
Global Securities
Duke Capital may issue some or all of the Senior Notes as book-entry
securities. Any such book-entry securities will be represented by one or more
fully registered global certificates. Duke Capital will register each global
security with, or on behalf of, a securities depositary identified in the
applicable Prospectus Supplement. Each global certificate will be deposited
with the securities depositary or its nominee or a custodian for the securities
depositary.
As long as the securities depositary or its nominee is the registered
holder of a global security representing Senior Notes, that person will be
considered the sole owner and holder of the global security and the Senior
Notes it represents for all purposes. Except in limited circumstances, owners
of beneficial interests in a global security:
. may not have the global security or any Senior Notes it represents
registered in their names;
. may not receive or be entitled to receive physical delivery of
certificated Senior Notes in exchange for the global security; and
. will not be considered the owners or holders of the global security or
any Senior Notes it represents for any purposes under the Senior Notes
or the Senior Indenture.
Duke Capital will make all payments of principal and any premium and
interest on a global security to the securities depositary or its nominee as
the holder of the global security. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of securities in
definitive form. These laws may impair the ability to transfer beneficial
interests in a global security.
Ownership of beneficial interests in a global security will be limited to
institutions having accounts with the securities depositary or its nominee,
which are called "participants" in this discussion, and to persons that hold
beneficial interests through participants. When a global security representing
Senior Notes is issued, the securities depositary will credit on its book
entry, registration and transfer system the principal amounts of Senior Notes
the global security represents to the accounts of its participants. Ownership
of beneficial interests in a global security will be shown only on, and the
transfer of those ownership interests will be effected only through, records
maintained by:
. the securities depositary, with respect to participants' interests;
and
. any participant, with respect to interests the participant holds on
behalf of other persons.
Payments participants make to owners of beneficial interests held through
those participants will be the responsibility of those participants. The
securities depositary may from time to time adopt various policies and
procedures governing payments, transfers, exchanges and other matters relating
to beneficial interests in a global security. None of the following will have
any responsibility or liability for any aspect of the securities depositary's
or any participant's records relating to beneficial interests in a global
security representing Senior Notes, for payments made on account of those
beneficial interests or for maintaining, supervising or reviewing any records
relating to those beneficial interests:
. Duke Capital;
. the Senior Indenture Trustee; or
. an agent of either of the above.
9
<PAGE>
Redemption
Any provisions relating to the redemption of Senior Notes will be set
forth in the applicable Prospectus Supplement. Unless Duke Capital states
otherwise in the applicable Prospectus Supplement, Duke Capital may redeem
Senior Notes only upon notice mailed at least 30 but not more than 60 days
before the date fixed for redemption. Unless Duke Capital states otherwise in
the applicable Prospectus Supplement, that notice may state that the redemption
will be conditional upon the Senior Indenture Trustee, or the applicable Paying
Agent, receiving sufficient funds to pay the principal, premium and interest on
those Senior Notes on the date fixed for redemption and that if the Senior
Indenture Trustee or the applicable Paying Agent does not receive those funds,
the redemption notice will not apply, and Duke Capital will not be required to
redeem those Senior Notes.
Duke Capital will not be required to:
. issue, register the transfer of, or exchange any Senior Notes of a
series during the period beginning 15 days before the date the notice
is mailed identifying the Senior Notes of that series that have been
selected for redemption; or
. register the transfer of, or exchange any Senior Note of that series
selected for redemption except the unredeemed portion of a Senior Note
being partially redeemed.
Consolidation, Merger, Conveyance or Transfer
The Senior Indenture provides that Duke Capital may consolidate or merge
with or into, or convey or transfer all or substantially all of its properties
and assets to, another corporation or other entity. Any successor must,
however, assume Duke Capital's obligations under the Senior Indenture and the
Senior Notes issued under it, and Duke Capital must deliver an officers'
certificate and an opinion of counsel to the Senior Indenture Trustee that
affirm compliance with all conditions in the Senior Indenture relating to the
transaction. When those conditions are satisfied, the successor will succeed to
and be substituted for Duke Capital under the Senior Indenture, and Duke
Capital will be relieved of its obligations under the Senior Indenture and the
Senior Notes issued under it.
Modification; Waiver
Duke Capital may amend or modify the Senior Indenture with the consent of
the holders of a majority of the outstanding Senior Notes of all series of
Senior Notes issued under it that are affected by the amendment or
modification, voting as one class. The consent of the holder of each
outstanding Senior Note affected is, however, required to:
. change the maturity date of the principal, or any installment of
principal or interest on that Senior Note;
. reduce the principal amount, the interest rate or any premium payable
upon redemption on that Senior Note;
. reduce the amount of principal due and payable upon acceleration of
maturity;
. change the currency of payment of principal, premium or interest on
that Senior Note;
. impair the right to institute suit to enforce any such payment on or
after the maturity date or redemption date;
10
<PAGE>
. reduce the percentage in principal amount of Senior Notes of any
series required to amend or modify the Senior Indenture, to waive
compliance with certain restrictive provisions of the Senior Indenture
or to waive certain defaults; or
. with certain exceptions, modify the provisions of the Senior Indenture
governing amendments of the Senior Indenture or governing waiver of
covenants or past defaults.
In addition, Duke Capital may supplement the Senior Indenture to create new
series of Senior Notes and for certain other purposes, without the consent of
any holders of Senior Notes issued under the Senior Indenture.
The holders of a majority of the outstanding Senior Notes of any series
may waive, for that series, Duke Capital's compliance with certain restrictive
provisions of the Senior Indenture under which those Senior Notes were issued.
The holders of a majority of the outstanding Senior Notes of all series under
the Senior Indenture with respect to which a default has occurred and is
continuing, all holders of those series voting as one class, may waive that
default for all those series, except a default in the payment of principal or
any premium or interest on any Senior Note or a default with respect to a
covenant or provision which cannot be amended or modified without the consent
of the holder of each outstanding Senior Note of the series affected.
If certain payments on a series of Senior Notes are insured by a
financial guaranty insurance policy or other policy, terms other than those
that are described in the preceding paragraph may apply to that series.
Events of Default
The following are events of default under the Senior Indenture with
respect to any series of Senior Notes, unless Duke Capital states otherwise in
the applicable Prospectus Supplement:
. failure to pay principal of or any premium on any Senior Note of that
series when due;
. failure to pay any interest on any Senior Note of that series, when
due, that continues for 60 days; for this purpose, the date on which
interest is due is the date on which Duke Capital is required to make
payment following any deferral of interest payments by it under the
terms of Senior Notes that permit such deferrals;
. failure to make any sinking fund payment when required for any Senior
Note of that series that continues for 60 days;
. failure to perform any covenant in the Senior Indenture (other than a
covenant expressly included solely for the benefit of other series)
that continues for 90 days after the Senior Indenture Trustee or the
holders of at least 33% of the outstanding Senior Notes of that series
give Duke Capital written notice of the default; and
. certain bankruptcy, insolvency or reorganization events with respect
to Duke Capital.
In the case of the fourth event of default listed above, the Senior Indenture
Trustee may extend the grace period. In addition, if holders of a particular
series have given a notice of default, then holders of at least the same
percentage of Senior Notes of that series, together with the Senior Indenture
Trustee, may also extend the grace period. The grace period will be
automatically extended if Duke Capital has initiated and is diligently pursuing
corrective action.
11
<PAGE>
Additional events of default may be established for a particular series
and, if established, will be described in the applicable Prospectus Supplement.
If an event of default with respect to Senior Notes of a series occurs
and is continuing, then the Senior Indenture Trustee or the holders of at least
33% of the outstanding Senior Notes of that series may declare the principal
amount of all Senior Notes of that series to be immediately due and payable.
However, that event of default will be considered waived at any time after the
declaration but before a judgment for payment of the money due has been
obtained if:
. Duke Capital has paid or deposited with the Senior Indenture Trustee
all overdue interest, the principal and any premium due otherwise than
by the declaration and any interest on such amounts, and any interest
on overdue interest, to the extent legally permitted, in each case
with respect to that series, and all amounts due to the Senior
Indenture Trustee under the Senior Indenture; and
. all events of default with respect to that series, other than the
nonpayment of the principal which became due solely by virtue of the
declaration, have been cured or waived.
The Senior Indenture Trustee is under no obligation to exercise any of
its rights or powers at the request or direction of any holders of Senior Notes
unless those holders have offered the Senior Indenture Trustee security or
indemnity against the costs, expenses and liabilities which it might incur as a
result. The holders of a majority of the outstanding Senior Notes of any series
have, with certain exceptions, the right to direct the time, method and place
of conducting any proceedings for any remedy available to the Senior Indenture
Trustee or the exercise of any power of the Senior Indenture Trustee with
respect to those Senior Notes. The Senior Indenture Trustee may withhold notice
of any default, except a default in the payment of principal or interest, from
the holders of any series if the Senior Indenture Trustee in good faith
considers it in the interest of the holders to do so.
The holder of any Senior Note will have an absolute and unconditional
right to receive payment of the principal, any premium and, within certain
limitations, any interest on that Senior Note on its maturity date or
redemption date and to enforce those payments.
If certain payments on a series of Senior Notes are insured by a
financial guaranty insurance policy or other policy, terms other than those
that are described in the preceding three paragraphs may apply to that series.
Duke Capital is required to furnish each year to the Senior Indenture
Trustee an officers' certificate to the effect that it is not in default under
the Senior Indenture or, if there has been a default, specifying the default
and its status.
Payments; Paying Agent
The paying agent will pay the principal of any Senior Notes only if those
Senior Notes are surrendered to it. Unless Duke Capital states otherwise in the
applicable Prospectus Supplement, the paying agent will pay interest on Senior
Notes, subject to such surrender, where applicable, at its office or, at Duke
Capital's option:
. by wire transfer to an account at a banking institution in the United
States that is designated in writing to the Senior Indenture Trustee
at least 16 days prior to the date of payment by the person entitled
to that interest; or
12
<PAGE>
. by check mailed to the address of the person entitled to that interest
as that address appears in the security register for those Senior
Notes.
Unless Duke Capital states otherwise in the applicable Prospectus
Supplement, the Senior Indenture Trustee will act as paying agent for the
Senior Notes, and the principal corporate trust office of the Senior Indenture
Trustee will be the office through which the paying agent acts. Duke Capital
may, however, change or add paying agents or approve a change in the office
through which a paying agent acts.
Any money that Duke Capital has paid to a paying agent for principal or
interest on any Senior Notes which remains unclaimed at the end of two years
after that principal or interest has become due will be repaid to Duke Capital
at its request. After repayment to Duke Capital, holders should look only to
Duke Capital for those payments.
Negative Pledge
While any of the Senior Notes remain outstanding, Duke Capital will not,
and will not permit any Principal Subsidiary (as defined below) to, create, or
permit to be created or to exist, any mortgage, lien, pledge, security interest
or other encumbrance upon any Principal Property (as defined below) of Duke
Capital or of a Principal Subsidiary or upon any shares of stock of any
Principal Subsidiary, whether such Principal Property is, or shares of stock
are, owned on or acquired after the date of the Senior Indenture, to secure any
indebtedness for borrowed money of Duke Capital, unless the Senior Notes then
outstanding are equally and ratably secured for so long as any such
indebtedness is so secured.
The foregoing restriction does not apply with respect to, among other
things:
. purchase money mortgages, or other purchase money liens, pledges,
security interests or encumbrances upon property that Duke Capital or
any Principal Subsidiary acquired after the date of the Senior
Indenture;
. mortgages, liens, pledges, security interests or other encumbrances
existing on any property or shares of stock at the time Duke Capital
or any Principal Subsidiary acquired it or them, including those which
exist on any property or shares of stock of an entity with which Duke
Capital or any Principal Subsidiary is consolidated or merged or which
transfers or leases all or substantially all of its properties to Duke
Capital or any Principal Subsidiary;
. mortgages, liens, pledges, security interests or other encumbrances
upon any property of Duke Capital or any Principal Subsidiary or
shares of stock of any Principal Subsidiary that existed on the date
of the initial issuance of Senior Notes or upon the property or shares
of stock of any corporation existing at the time that corporation
became a Principal Subsidiary;
. pledges or deposits to secure performance in connection with bids,
tenders, contracts (other than contracts for the payment of money) or
leases to which Duke Capital or any Principal Subsidiary is a party;
. liens created by or resulting from any litigation or proceeding which
at the time is being contested in good faith by appropriate
proceedings;
13
<PAGE>
. liens incurred in connection with the issuance of bankers' acceptances
and lines of credit, bankers' liens or rights of offset and any
security given in the ordinary course of business to banks or others
to secure any indebtedness payable on demand or maturing within 12
months of the date that such indebtedness is originally incurred;
. liens incurred in connection with repurchase, swap or other similar
agreements (including commodity price, currency exchange and interest
rate protection agreements);
. liens securing industrial revenue or pollution control bonds;
. liens, pledges, security interests or other encumbrances on any
property arising in connection with any defeasance, covenant
defeasance or in-substance defeasance of indebtedness of Duke Capital
or any Principal Subsidiary;
. liens created in connection with, and created to secure, a non-
recourse obligation;
. mortgages, liens, pledges, security interests or other encumbrances in
favor of the United States of America, any state, any foreign country
or any department, agency or instrumentality or political subdivision
of any such jurisdiction, to secure partial, progress, advance or
other payments pursuant to any contract or statute or to secure any
indebtedness incurred for the purpose of financing all or any part of
the purchase price or the cost of constructing or improving the
property subject to such mortgages;
. indebtedness which Duke Capital or any Principal Subsidiary may issue
in connection with the consolidation or merger of Duke Capital or any
Principal Subsidiary with or into any other entity, which may be an
affiliate of Duke Capital or any Principal Subsidiary, in exchange or
in substitution for secured indebtedness of that entity ("Third Party
Debt") which by its terms (1) is secured by a mortgage on all or a
portion of the property of that entity, (2) prevents that entity from
incurring secured indebtedness, unless the Third Party Debt is secured
equally and ratably with such secured indebtedness or (3) prevents
that entity from incurring secured indebtedness;
. indebtedness of any entity which Duke Capital or any Principal
Subsidiary is required to assume in connection with a consolidation or
merger of that entity, with respect to which any property of Duke
Capital or any Principal Subsidiary is subjected to a mortgage, lien,
pledge, security interest or other encumbrance;
. mortgages, liens, security interests or other encumbrances on property
held or used by Duke Capital or any Principal Subsidiary in connection
with the exploration for, or development, gathering, production,
storage or marketing of, natural gas, oil or other minerals (including
liquefied gas and synthetic gas);
. mortgages, liens, pledges, security interests and other encumbrances
in favor of Duke Capital, one or more Principal Subsidiaries, one or
more wholly owned Subsidiaries (as defined below) of Duke Capital or
any of the foregoing in combination;
. mortgages, liens, pledges, security interests or other encumbrances
upon any property acquired, constructed, developed or improved by Duke
Capital or any Principal Subsidiary after the date of the Senior
Indenture which are created before, at the time of, or within 18
months after such acquisition--or in the case of property constructed,
developed or improved, after the completion of the construction,
development or improvement and commencement of full commercial
operation of that property, whichever
14
<PAGE>
is later--to secure or provide for the payment of any part of its
purchase price or cost; provided that, in the case of such
construction, development or improvement, the mortgages, liens,
pledges, security interests or other encumbrances shall not apply to
any property that Duke Capital or any Principal Subsidiary owns other
than real property that is unimproved up to that time; and
. the replacement, extension or renewal of any mortgage, lien, pledge,
security interest or other encumbrance described above; or the
replacement, extension or renewal (not exceeding the principal amount
of indebtedness so secured together with any premium, interest, fee or
expense payable in connection with any such replacement, extension or
renewal) of the indebtedness so secured; provided that such
replacement, extension or renewal is limited to all or a part of the
same property that secured the mortgage, lien, pledge, security
interest or other encumbrance replaced, extended or renewed, plus
improvements on it or additions or accessions to it.
In addition, Duke Capital or any Principal Subsidiary may create or assume any
other mortgage, lien, pledge, security interest or other encumbrance not
excepted in the Senior Indenture without Duke Capital equally and ratably
securing the Senior Notes, if immediately after that creation or assumption,
the principal amount of indebtedness for borrowed money of Duke Capital that
all such other mortgages, liens, pledges, security interests and other
encumbrances secure does not exceed an amount equal to 10% of Duke Capital's
common stockholder's equity as shown on its consolidated balance sheet for the
accounting period occurring immediately before the creation or assumption of
that mortgage, lien, pledge, security interest or other encumbrance.
For purposes of the preceding paragraphs, the following terms have these
meanings: "Principal Property" means any natural gas pipeline, natural gas
gathering system, natural gas storage facility, natural gas processing plant or
other plant or facility located in the United States that in the opinion of the
Board of Directors or management of Duke Capital is of material importance to
the business conducted by Duke Capital and its consolidated subsidiaries taken
as a whole; "Principal Subsidiary" means any Subsidiary of Duke Capital that
owns a Principal Property; and "Subsidiary" means, as to any entity, a
corporation of which more than 50% of the outstanding shares of stock having
ordinary voting power (other than stock having such power only by reason of
contingency) is at the time owned, directly or indirectly, through one or more
intermediaries, or both, by such entity.
Defeasance and Covenant Defeasance
The Senior Indenture provides that Duke Capital may be:
. discharged from its obligations, with certain exceptions, with respect
to any series of Senior Notes, as described in the Senior Indenture,
such a discharge being called a "Defeasance" in this Prospectus; and
. released from its obligations under certain restrictive covenants
especially established with respect to any series of Senior Notes,
including the obligations described above under the caption "Negative
Pledge," as described in the Senior Indenture, such a release being
called a "Covenant Defeasance" in this Prospectus.
Duke Capital must satisfy certain conditions to effect a Defeasance or Covenant
Defeasance. Those conditions include the irrevocable deposit with the Senior
Indenture Trustee, in trust, of money or
15
<PAGE>
government obligations which through their scheduled payments of principal and
interest would provide sufficient money to pay the principal and any premium
and interest on those Senior Notes on the maturity dates of those payments or
upon redemption.
Following a Defeasance, payment of the Senior Notes defeased may not be
accelerated because of an event of default under the Senior Indenture.
Following a Covenant Defeasance, the payment of Senior Notes may not be
accelerated by reference to the covenants from which Duke Capital has been
released. A Defeasance may occur after a Covenant Defeasance.
Under current United States federal income tax laws, a Defeasance would
be treated as an exchange of the relevant Senior Notes in which holders of
those Senior Notes might recognize gain or loss. In addition, the amount,
timing and character of amounts that holders would thereafter be required to
include in income might be different from that which would be includible in the
absence of that Defeasance. Duke Capital urges investors to consult their own
tax advisors as to the specific consequences of a Defeasance, including the
applicability and effect of tax laws other than United States federal income
tax laws.
Under current United States federal income tax law, unless accompanied by
other changes in the terms of the Senior Notes, a Covenant Defeasance should
not be treated as a taxable exchange.
Concerning the Senior Indenture Trustee
The Chase Manhattan Bank is the Senior Indenture Trustee and the Trustee
under the Subordinated Indenture. Duke Capital and certain of its affiliates
maintain deposit accounts and banking relationships with The Chase Manhattan
Bank. The Chase Manhattan Bank also serves as trustee under other indentures
pursuant to which securities of Duke Capital and of certain of its affiliates
are outstanding.
The Senior Indenture Trustee will perform only those duties that are
specifically set forth in the Senior Indenture unless an event of default under
the Senior Indenture occurs and is continuing. In case an event of default
occurs and is continuing, the Senior Indenture Trustee will exercise the same
degree of care as a prudent individual would exercise in the conduct of his or
her own affairs. Subject to those provisions, the Senior Indenture Trustee is
under no obligation to exercise any of its powers under the Senior Indenture at
the request of any holder of Senior Notes unless that holder offers reasonable
indemnity to the Senior Indenture Trustee against the costs, expenses and
liabilities which it might incur as a result.
16
<PAGE>
DESCRIPTION OF THE JUNIOR SUBORDINATED NOTES
Duke Capital will issue the Junior Subordinated Notes in one or more
series under its Subordinated Indenture dated as of April 1, 1998 between Duke
Capital and The Chase Manhattan Bank, as Trustee, as supplemented from time to
time. The Subordinated Indenture is called the "Subordinated Indenture" in this
Prospectus. The Trustee under the Subordinated Indenture is called the
"Subordinated Indenture Trustee" in this Prospectus. The Subordinated Indenture
is an exhibit to the Registration Statement.
The Junior Subordinated Notes are unsecured obligations of Duke Capital
and are junior in right of payment to "Senior Indebtedness" of Duke Capital.
You may find a description of the subordination provisions of the Junior
Subordinated Notes, including a description of Senior Indebtedness of Duke
Capital, under the caption "Subordination."
Duke Capital conducts its business through subsidiaries. Accordingly, its
ability to meet its obligations under the Junior Subordinated Notes is
dependent on the earnings and cash flows of those subsidiaries and the ability
of those subsidiaries to pay dividends or to advance or repay funds to Duke
Capital. In addition, the rights that Duke Capital and its creditors would have
to participate in the assets of any such subsidiary upon the subsidiary's
liquidation or recapitalization will be subject to the prior claims of the
subsidiary's creditors. Certain subsidiaries of Duke Capital have incurred
substantial amounts of debt in the expansion of their businesses and Duke
Capital anticipates that certain of its subsidiaries will do so in the future.
The following description of the Junior Subordinated Notes is only a
summary and is not intended to be comprehensive. For additional information you
should refer to the Subordinated Indenture.
General
The Subordinated Indenture does not limit the amount of Subordinated
Notes, including Junior Subordinated Notes, that Duke Capital may issue under
it. Duke Capital may issue Subordinated Notes, including Junior Subordinated
Notes, from time to time under the Subordinated Indenture in one or more series
by entering into supplemental indentures or by its Board of Directors or a duly
authorized committee authorizing the issuance. Two forms of supplemental
indenture to the Subordinated Indenture (one with respect to Junior
Subordinated Notes initially issued to a Trust and the other with respect to
Junior Subordinated Notes initially issued to the public) are exhibits to the
Registration Statement.
The Junior Subordinated Notes of a series need not be issued at the same
time, bear interest at the same rate or mature on the same date.
The Subordinated Indenture does not protect the holders of Junior
Subordinated Notes if Duke Capital engages in a highly leveraged transaction.
Provisions Applicable to Particular Series
The Prospectus Supplement for a particular series of Junior Subordinated
Notes will specify the terms of that series, including, if applicable:
. the title of the series;
. any limit on the principal amount of the Junior Subordinated Notes of
the series;
17
<PAGE>
. the date or dates on which principal is payable or the method for
determining the date or dates, and any right that Duke Capital has to
change the date on which principal is payable;
. the interest rate or rates, if any, or the method for determining the
rate or rates, and the date or dates from which interest will accrue;
. any interest payment dates and the regular record date for the
interest payable on each interest payment date, if any;
. whether Duke Capital may extend the interest payment periods and, if
so, the terms of the extension;
. the place or places where payments will be made, if other than the
principal corporate trust office of the Subordinated Indenture
Trustee;
. any obligation that Duke Capital has to redeem the Junior Subordinated
Notes through a sinking fund or to purchase the Junior Subordinated
Notes through a purchase fund or at the option of the holder;
. whether Duke Capital has the option to redeem the Junior Subordinated
Notes and, if so, the terms of its redemption option;
. whether the provisions described under the caption "Defeasance and
Covenant Defeasance" will not apply to the Junior Subordinated Notes;
. the currency in which payments will be made if other than U.S.
dollars, and the manner of determining the equivalent of those amounts
in U.S. dollars;
. if payments may be made, at Duke Capital's election or at the holder's
election, in a currency other than that in which the Junior
Subordinated Notes are stated to be payable, then the currency in
which those payments may be made, the terms and conditions of the
election and the manner of determining those amounts;
. the portion of the principal payable upon acceleration of maturity, if
other than the entire principal;
. whether the Junior Subordinated Notes will be issuable as global
securities and, if so, the securities depositary;
. any changes in the events of default or covenants with respect to the
Junior Subordinated Notes;
. any index or formula used for determining principal, premium or
interest;
. if the principal payable on the maturity date will not be determinable
on one or more dates prior to the maturity date, the amount which will
be deemed to be such principal amount or the manner of determining it;
. the subordination of the Junior Subordinated Notes to any other of
Duke Capital's indebtedness, including other series of Subordinated
Notes; and
. any other terms.
The interest rate and interest and other payment dates of each series of
Junior Subordinated Notes issued to a Trust will correspond to the rate at
which distributions will be paid and the distribution and other payment dates
of the Preferred Securities of that Trust.
18
<PAGE>
Unless Duke Capital states otherwise in the applicable Prospectus
Supplement, Duke Capital will issue the Junior Subordinated Notes only in fully
registered form without coupons, and there will be no service charge for any
registration of transfer or exchange of the Junior Subordinated Notes. Duke
Capital may, however, require payment to cover any tax or other governmental
charge payable in connection with any transfer or exchange. Transfers and
exchanges of the Junior Subordinated Notes may be made at The Chase Manhattan
Bank, 55 Water Street, New York, New York 10041.
The Junior Subordinated Notes will be issuable in denominations of $1,000
and any integral multiples of $1,000, unless Duke Capital states otherwise in
the applicable Prospectus Supplement.
Global Securities
Duke Capital may issue some or all of the Junior Subordinated Notes as
book-entry securities. Any such book-entry securities will be represented by
one or more fully registered global certificates. Duke Capital will register
each global security with, or on behalf of, a securities depositary identified
in the applicable Prospectus Supplement. Each global certificate will be
deposited with the securities depositary or its nominee or a custodian for the
securities depositary.
As long as the securities depositary or its nominee is the registered
holder of a global security representing Junior Subordinated Notes, that person
will be considered the sole owner and holder of the global security and the
Junior Subordinated Notes it represents for all purposes. Except in limited
circumstances, owners of beneficial interests in a global security:
. may not have the global security or any Junior Subordinated Notes it
represents registered in their names;
. may not receive or be entitled to receive physical delivery of
certificated Junior Subordinated Notes in exchange for the global
security; and
. will not be considered the owners or holders of the global security or
any Junior Subordinated Notes it represents for any purposes under the
Junior Subordinated Notes or the Subordinated Indenture.
Duke Capital will make all payments of principal and any premium and
interest on a global security to the securities depositary or its nominee as
the holder of the global security. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of securities in
definitive form. These laws may impair the ability to transfer beneficial
interests in a global security.
Ownership of beneficial interests in a global security will be limited to
institutions having accounts with the securities depositary or its nominee,
which are called "participants" in this discussion, and to persons that hold
beneficial interests through participants. When a global security representing
Junior Subordinated Notes is issued, the securities depositary will credit on
its book-entry, registration and transfer system the principal amounts of
Junior Subordinated Notes the global security represents to the accounts of its
participants. Ownership of beneficial interests in a global security will be
shown only on, and the transfer of those ownership interests will be effected
only through, records maintained by:
. the securities depositary, with respect to participants' interests;
and
. any participant, with respect to interests the participant holds on
behalf of other persons.
19
<PAGE>
Payments participants make to owners of beneficial interests held through
those participants will be the responsibility of those participants. The
securities depositary may from time to time adopt various policies and
procedures governing payments, transfers, exchanges and other matters relating
to beneficial interests in a global security. None of the following will have
any responsibility or liability for any aspect of the securities depositary's
or any participant's records relating to beneficial interests in a global
security representing Junior Subordinated Notes, for payments made on account
of those beneficial interests or for maintaining, supervising or reviewing any
records relating to those beneficial interests:
. Duke Capital;
. the Subordinated Indenture Trustee;
. the Trust (if the Junior Subordinated Notes are issued to a Trust); or
. any agent of any of the above.
Redemption
Any provisions relating to the redemption of Junior Subordinated Notes
will be set forth in the applicable Prospectus Supplement. Unless Duke Capital
states otherwise in the applicable Prospectus Supplement, Duke Capital may
redeem Junior Subordinated Notes only upon notice mailed at least 30 but not
more than 60 days before the date fixed for redemption.
Duke Capital will not be required to:
. issue, register the transfer of, or exchange any Junior Subordinated
Notes of a series during the period beginning 15 days before the date
the notice is mailed identifying the Junior Subordinated Notes of that
series that have been selected for redemption; or
. register the transfer of, or exchange any Junior Subordinated Note of
that series selected for redemption except the unredeemed portion of a
Junior Subordinated Note being partially redeemed.
Consolidation, Merger, Conveyance or Transfer
The Subordinated Indenture provides that Duke Capital may consolidate or
merge with or into, or convey or transfer all or substantially all of its
properties and assets to, another corporation or other entity. Any successor
must, however, assume Duke Capital's obligations under the Subordinated
Indenture and the Subordinated Notes, including the Junior Subordinated Notes,
issued under it, and Duke Capital must deliver an officers' certificate and an
opinion of counsel to the Subordinated Indenture Trustee that affirm compliance
with all conditions in the Subordinated Indenture relating to the transaction.
When those conditions are satisfied, the successor will succeed to and be
substituted for Duke Capital under the Subordinated Indenture, and Duke Capital
will be relieved of its obligations under the Subordinated Indenture and the
Subordinated Notes issued under it.
Modification; Waiver
Duke Capital may amend or modify the Subordinated Indenture with the
consent of the holders of a majority of the outstanding Subordinated Notes of
all series issued under it that are affected by the
20
<PAGE>
amendment or modification, voting as one class. The consent of the holder of
each outstanding Subordinated Note affected is, however, required to:
. change the maturity date of the principal, or any installment of
principal or interest on that Subordinated Note;
. reduce the principal amount, the interest rate or any premium payable
upon redemption on that Subordinated Note;
. reduce the amount of principal due and payable upon acceleration of
maturity;
. change the currency of payment of principal, premium or interest on
that Subordinated Note;
. impair the right to institute suit to enforce any such payment on or
after the maturity date or redemption date;
. reduce the percentage in principal amount of Subordinated Notes of any
series required to amend or modify the Subordinated Indenture, to
waive compliance with certain restrictive provisions of the
Subordinated Indenture or to waive certain defaults; or
. with certain exceptions, modify the provisions of the Subordinated
Indenture governing amendments of the Subordinated Indenture or
governing waiver of covenants or past defaults.
In addition, Duke Capital may supplement the Subordinated Indenture to create
new series of Junior Subordinated Notes and for certain other purposes, without
the consent of any holders of Subordinated Notes, including Junior Subordinated
Notes.
The holders of a majority of the outstanding Junior Subordinated Notes of
any series may waive, for that series, Duke Capital's compliance with certain
restrictive provisions of the Subordinated Indenture under which those Junior
Subordinated Notes were issued. The holders of a majority of the outstanding
Subordinated Notes of all series under the Subordinated Indenture with respect
to which a default has occurred and is continuing, all holders of those series
voting as one class, may waive that default for all those series, except a
default in the payment of principal or any premium or interest on any
Subordinated Note or a default with respect to a covenant or provision which
cannot be amended or modified without the consent of the holder of each
outstanding Subordinated Note of the series affected.
Duke Capital may not amend the Subordinated Indenture to change the
subordination of any outstanding Junior Subordinated Notes without the consent
of each holder of Senior Indebtedness that the amendment would adversely
affect.
Events of Default
The following are events of default under the Subordinated Indenture with
respect to any series of Junior Subordinated Notes, unless Duke Capital states
otherwise in the applicable Prospectus Supplement:
. failure to pay principal of or any premium on any Junior Subordinated
Note of that series when due;
21
<PAGE>
. failure to pay any interest on any Junior Subordinated Note of that
series, when due, that continues for 60 days; for this purpose, the
date on which interest is due is the date on which Duke Capital is
required to make payment following any deferral of interest payments
by it under the terms of Junior Subordinated Notes that permit such
deferrals;
. failure to make any sinking fund payment when required for any Junior
Subordinated Note of that series that continues for 60 days;
. failure to perform any covenant in the Subordinated Indenture (other
than a covenant expressly included solely for the benefit of other
series) that continues for 90 days after the Subordinated Indenture
Trustee or the holders of at least 33% of the outstanding Junior
Subordinated Notes of that series give Duke Capital written notice of
the default; and
. certain bankruptcy, insolvency or reorganization events with respect
to Duke Capital.
In the case of the fourth event of default listed above, the Subordinated
Indenture Trustee may extend the grace period. In addition, if holders of a
particular series have given a notice of default, then holders of at least the
same percentage of Junior Subordinated Notes of that series, together with the
Subordinated Indenture Trustee, may also extend the grace period. The grace
period will be automatically extended if Duke Capital has initiated and is
diligently pursuing corrective action.
Additional events of default may be established for a particular series
and, if established, will be described in the applicable Prospectus Supplement.
If an event of default with respect to Junior Subordinated Notes of a
series occurs and is continuing, then the Subordinated Indenture Trustee or the
holders of at least 33% of the outstanding Junior Subordinated Notes of that
series may declare the principal amount of all Junior Subordinated Notes of
that series to be immediately due and payable. However, that event of default
will be considered waived at any time after the declaration but before a
judgment for payment of the money due has been obtained if:
. Duke Capital has paid or deposited with the Subordinated Indenture
Trustee all overdue interest, the principal and any premium due
otherwise than by the declaration and any interest on such amounts,
and any interest on overdue interest, to the extent legally permitted,
in each case with respect to that series, and all amounts due to the
Subordinated Indenture Trustee under the Subordinated Indenture; and
. all events of default with respect to that series, other than the
nonpayment of the principal which became due solely by virtue of the
declaration, have been cured or waived.
A holder of Preferred Securities may institute a legal proceeding
directly against Duke Capital, without first instituting a legal proceeding
against the Property Trustee of the Trust under which those Preferred
Securities were issued or any other person or entity, for enforcement of
payment to that holder of principal or interest on an equivalent amount of
Junior Subordinated Notes of the related series on or after the due dates
specified in those Junior Subordinated Notes.
The Subordinated Indenture Trustee is under no obligation to exercise any
of its rights or powers at the request or direction of any holders of Junior
Subordinated Notes unless those holders have offered the Subordinated Indenture
Trustee security or indemnity against the costs, expenses
22
<PAGE>
and liabilities which it might incur as a result. The holders of a majority of
the outstanding Junior Subordinated Notes of any series have, with certain
exceptions, the right to direct the time, method and place of conducting any
proceedings for any remedy available to the Subordinated Indenture Trustee or
the exercise of any power of the Subordinated Indenture Trustee with respect
to those Junior Subordinated Notes. The Subordinated Indenture Trustee may
withhold notice of any default, except a default in the payment of principal
or interest, from the holders of any series if the Subordinated Indenture
Trustee in good faith considers it in the interest of the holders to do so.
The holder of any Junior Subordinated Note will have an absolute and
unconditional right to receive payment of the principal, any premium and,
within certain limitations, any interest on that Junior Subordinated Note on
its maturity date or redemption date and to enforce those payments.
Duke Capital is required to furnish each year to the Subordinated
Indenture Trustee an officers' certificate to the effect that it is not in
default under the Subordinated Indenture or, if there has been a default,
specifying the default and its status.
Payments; Paying Agent
The paying agent will pay the principal of any Junior Subordinated Notes
only if those Junior Subordinated Notes are surrendered to it. Unless Duke
Capital states otherwise in the applicable Prospectus Supplement, the paying
agent will pay interest on Junior Subordinated Notes, subject to such
surrender, where applicable, at its office or, at Duke Capital's option:
. by wire transfer to an account at a banking institution in the United
States that is designated in writing to the Subordinated Indenture
Trustee at least 16 days prior to the date of payment by the person
entitled to that interest; or
. by check mailed to the address of the person entitled to that interest
as that address appears in the security register for those Junior
Subordinated Notes.
Unless Duke Capital states otherwise in the applicable Prospectus
Supplement, the Subordinated Indenture Trustee will act as paying agent for
the Junior Subordinated Notes, and the principal corporate trust office of the
Subordinated Indenture Trustee will be the office through which the paying
agent acts. Duke Capital may, however, change or add paying agents or approve
a change in the office through which a paying agent acts.
Any money that Duke Capital has paid to a paying agent for principal or
interest on any Junior Subordinated Notes which remains unclaimed at the end
of two years after that principal or interest has become due will be repaid to
Duke Capital at its request. After repayment to Duke Capital, holders should
look only to Duke Capital for those payments.
Defeasance and Covenant Defeasance
The Subordinated Indenture provides that Duke Capital may be:
. discharged from its obligations, with certain exceptions, with respect
to any series of Junior Subordinated Notes, as described in the
Subordinated Indenture, such a discharge being called a "Defeasance"
in this Prospectus; and
. released from its obligations under certain restrictive covenants
especially established with respect to a series of Junior Subordinated
Notes, as described in the Subordinated Indenture, such a release
being called a "Covenant Defeasance" in this Prospectus.
23
<PAGE>
Duke Capital must satisfy certain conditions to effect a Defeasance or
Covenant Defeasance. Those conditions include the irrevocable deposit with the
Subordinated Indenture Trustee, in trust, of money or government obligations
which through their scheduled payments of principal and interest would provide
sufficient money to pay the principal and any premium and interest on those
Junior Subordinated Notes on the maturity dates of those payments or upon
redemption. Following a Defeasance, payment of the Junior Subordinated Notes
defeased may not be accelerated because of an event of default under the
Subordinated Indenture.
Under current United States federal income tax laws, a Defeasance would
be treated as an exchange of the relevant Junior Subordinated Notes in which
holders of those Junior Subordinated Notes might recognize gain or loss. In
addition, the amount, timing and character of amounts that holders would
thereafter be required to include in income might be different from that which
would be includible in the absence of that Defeasance. Duke Capital urges
investors to consult their own tax advisors as to the specific consequences of
a Defeasance, including the applicability and effect of tax laws other than
United States federal income tax laws.
Junior Subordinated Notes issued to a Trust will not be subject to
Covenant Defeasance.
Subordination
Each series of Junior Subordinated Notes will be subordinate and junior
in right of payment, to the extent set forth in the Subordinated Indenture, to
all Senior Indebtedness as defined below. If:
. Duke Capital makes a payment or distribution of any of its assets to
creditors upon its dissolution, winding-up, liquidation or
reorganization, whether in bankruptcy, insolvency or otherwise;
. a default beyond any grace period has occurred and is continuing with
respect to the payment of principal, interest or any other monetary
amounts due and payable on any Senior Indebtedness; or
. the maturity of any Senior Indebtedness has been accelerated because
of a default on that Senior Indebtedness,
then the holders of Senior Indebtedness generally will have the right to
receive payment, in the case of the first instance, of all amounts due or to
become due upon that Senior Indebtedness, and, in the case of the second and
third instances, of all amounts due on that Senior Indebtedness, or Duke
Capital will make provision for those payments, before the holders of any
Junior Subordinated Notes have the right to receive any payments of principal
or interest on their Junior Subordinated Notes.
"Senior Indebtedness" means, with respect to any series of Junior
Subordinated Notes, the principal, premium, interest and any other payment in
respect of any of the following:
. all of Duke Capital's indebtedness that is evidenced by notes,
debentures, bonds or other securities Duke Capital sells for money or
other obligations for money borrowed;
. all indebtedness of others of the kinds described in the preceding
category which Duke Capital has assumed or guaranteed or which Duke
Capital has in effect guaranteed through an agreement to purchase,
contingent or otherwise; and
24
<PAGE>
. all renewals, extensions or refundings of indebtedness of the kinds
described in either of the preceding two categories.
Any such indebtedness, renewal, extension or refunding, however, will not
be Senior Indebtedness if the instrument creating or evidencing it or the
assumption or guarantee of it provides that it is not superior in right of
payment to or is equal in right of payment with those Junior Subordinated
Notes. Senior Indebtedness will be entitled to the benefits of the
subordination provisions in the Subordinated Indenture irrespective of the
amendment, modification or waiver of any term of the Senior Indebtedness.
Future series of Subordinated Notes which are not Junior Subordinated
Notes may rank senior to outstanding series of Junior Subordinated Notes and
would constitute Senior Indebtedness with respect to those series.
The Subordinated Indenture does not limit the amount of Senior
Indebtedness that Duke Capital may issue. As of September 30, 1999, Duke
Capital's Senior Indebtedness totaled approximately $3,800,000,000.
Concerning the Subordinated Indenture Trustee
The Chase Manhattan Bank is the Subordinated Indenture Trustee and the
Trustee under the Senior Indenture Trustee. Duke Capital and certain of its
affiliates maintain deposit accounts and banking relationships with The Chase
Manhattan Bank. The Chase Manhattan Bank also serves as trustee under other
indentures pursuant to which securities of Duke Capital and of certain of its
affiliates are outstanding.
The Subordinated Indenture Trustee will perform only those duties that
are specifically set forth in the Subordinated Indenture unless an event of
default under the Subordinated Indenture occurs and is continuing. In case an
event of default occurs and is continuing, the Subordinated Indenture Trustee
will exercise the same degree of care as a prudent individual would exercise in
the conduct of his or her own affairs. Subject to those provisions, the
Subordinated Indenture Trustee is under no obligation to exercise any of its
powers under the Subordinated Indenture at the request of any holder of Junior
Subordinated Notes unless that holder offers reasonable indemnity to the
Subordinated Indenture Trustee against the costs, expenses and liabilities
which it might incur as a result.
25
<PAGE>
DESCRIPTION OF THE PREFERRED SECURITIES
Each Trust may issue only one series of Preferred Securities. The Trust
Agreement of each Trust will authorize the Administrative Trustees to issue the
Preferred Securities of that Trust on behalf of that Trust. For additional
information you should refer to the applicable Trust Agreement. The form of
Trust Agreement is an exhibit to the Registration Statement.
You should refer to the applicable Prospectus Supplement for the terms of
any series of Preferred Securities, including:
. the title of the series;
. the number of Preferred Securities of the series;
. the yearly distribution rate, or the method of determining that rate,
and the date or dates on which distributions will be payable;
. the date or dates, or method of determining the date or dates, from
which distributions will be cumulative;
. the amount that will be paid out of the assets of the Trust to the
holders of the Preferred Securities upon the voluntary or involuntary
dissolution, winding-up or termination of the Trust;
. any obligation that the Trust has to purchase or redeem the Preferred
Securities, and the price at which, the period within which, and the
terms and conditions upon which the Trust will purchase or redeem
them;
. any voting rights of the Preferred Securities that are in addition to
those legally required, including any right that the holders of the
Preferred Securities have to approve certain actions under or
amendments to the Trust Agreement;
. any right that the Trust has to defer distributions on the Preferred
Securities in the event the interest payment period on the related
Junior Subordinated Notes is extended; and
. any other rights, preferences, privileges, limitations or restrictions
upon the Preferred Securities of the series.
Duke Capital will guarantee each series of Preferred Securities to the
extent described below under the caption "Description of the Guarantees."
The applicable Prospectus Supplement will describe any material United
States federal income tax considerations that apply to the Preferred
Securities.
26
<PAGE>
DESCRIPTION OF THE GUARANTEES
Duke Capital will execute the Guarantees from time to time for the
benefit of the holders of the Preferred Securities of the respective Trusts.
The Chase Manhattan Bank will act as Guarantee Trustee under each Guarantee.
The Guarantee Trustee will hold each Guarantee for the benefit of the holders
of the Preferred Securities to which it relates.
The following description of the Guarantees is only a summary and is not
intended to be comprehensive. The form of Guarantee is an exhibit to the
Registration Statement.
General
Duke Capital will irrevocably and unconditionally agree under each
Guarantee to pay the Guarantee Payments that are defined below, to the extent
specified in that Guarantee, to the holders of the Preferred Securities to
which the Guarantee relates, to the extent that the Guarantee Payments are not
paid by or on behalf of the related Trust. Duke Capital is required to pay the
Guarantee Payments to the extent specified in the relevant Guarantee regardless
of any defense, right of set-off or counterclaim that Duke Capital may have or
may assert against any person.
The following payments and distributions on the Preferred Securities of a
Trust are Guarantee Payments:
. any accrued and unpaid distributions required to be paid on the
Preferred Securities of the Trust, but only to the extent that the
Trust has funds legally and immediately available for those
distributions;
. the redemption price for any Preferred Securities that the Trust calls
for redemption, including all accrued and unpaid distributions to the
redemption date, but only to the extent that the Trust has funds
legally and immediately available for the payment; and
. upon a dissolution, winding-up or termination of the Trust, other than
in connection with the distribution of Junior Subordinated Notes to
the holders of Trust Securities of the Trust or the redemption of all
the Preferred Securities of the Trust, the lesser of:
. the sum of the liquidation amount and all accrued and unpaid
distributions on the Preferred Securities of the Trust to the
payment date, to the extent that the Trust has funds legally and
immediately available for the payment; and
. the amount of assets of the Trust remaining available for
distribution to holders of the Preferred Securities of the Trust
in liquidation of the Trust.
Duke Capital may satisfy its obligation to make a Guarantee Payment by
making that payment directly to the holders of the related Preferred Securities
or by causing the Trust to make the payment to those holders.
Each Guarantee will be a full and unconditional guarantee, subject to
certain subordination provisions, of the Guarantee Payments with respect to the
related Preferred Securities from the time of issuance of those Preferred
Securities, except that the Guarantee will only apply to the payment of
distributions and other payments on the Preferred Securities when the Trust has
sufficient funds legally and immediately available to make those distributions
or other payments.
27
<PAGE>
If Duke Capital does not make the required payments on the Junior
Subordinated Notes that the Property Trustee holds under a Trust, that Trust
will not make the related payments on its Preferred Securities.
Subordination
Duke Capital's obligations under each Guarantee will be unsecured
obligations of Duke Capital. Those obligations will rank:
. subordinate and junior in right of payment to all of Duke Capital's
other liabilities, other than obligations or liabilities that rank
equal in priority or subordinate by their terms;
. equal in priority with the most senior preferred stock that Duke
Capital may issue and similar guarantees; and
. senior to Duke Capital's common stock.
Duke Capital has no preferred stock outstanding that will rank equal in
priority with the Guarantees. Duke Capital has common stock outstanding that
will rank junior to the Guarantees.
Each Guarantee will be a guarantee of payment and not of collection. This
means that the guaranteed party may institute a legal proceeding directly
against Duke Capital, as guarantor, to enforce its rights under the Guarantee
without first instituting a legal proceeding against any other person or
entity.
The terms of the Preferred Securities will provide that each holder of
the Preferred Securities, by accepting those Preferred Securities, agrees to
the subordination provisions and other terms of the related Guarantee.
Amendments and Assignment
Duke Capital may amend each Guarantee without the consent of any holder
of the Preferred Securities to which that Guarantee relates if the amendment
does not materially and adversely affect the rights of those holders. Duke
Capital may otherwise amend each Guarantee with the approval of the holders of
at least 66 2/3% of the outstanding Preferred Securities to which that
Guarantee relates.
Termination
Each Guarantee will terminate and be of no further effect when:
. the redemption price of the Preferred Securities to which the
Guarantee relates is fully paid;
. Duke Capital distributes the related Junior Subordinated Notes to the
holders of those Preferred Securities; or
. the amounts payable upon liquidation of the related Trust are fully
paid.
Each Guarantee will remain in effect or will be reinstated if at any time
any holder of the related Preferred Securities must restore payment of any sums
paid to that holder with respect to those Preferred Securities or under that
Guarantee.
28
<PAGE>
Events of Default
An event of default will occur under any Guarantee if Duke Capital fails
to perform any of its payment obligations under that Guarantee. The holders of
a majority of the Preferred Securities of any series may waive any such event
of default and its consequences on behalf of all of the holders of the
Preferred Securities of that series. The Guarantee Trustee is obligated to
enforce the Guarantee for the benefit of the holders of the Preferred
Securities of a series if an event of default occurs under the related
Guarantee.
The holders of a majority of the Preferred Securities to which a
Guarantee relates have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee
with respect to that Guarantee or to direct the exercise of any trust or power
that the Guarantee Trustee holds under that Guarantee. Any holder of the
related Preferred Securities may institute a legal proceeding directly against
Duke Capital to enforce that holder's rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee or any other
person or entity.
Concerning the Guarantee Trustee
The Chase Manhattan Bank is the Guarantee Trustee. It is also the
Property Trustee, the Subordinated Indenture Trustee and the Senior Indenture
Trustee. Duke Capital and certain of its affiliates maintain deposit accounts
and banking relationships with The Chase Manhattan Bank. The Chase Manhattan
Bank also serves as trustee under other indentures pursuant to which securities
of Duke Capital and certain of its affiliates are outstanding.
The Guarantee Trustee will perform only those duties that are
specifically set forth in each Guarantee unless an event of default under the
Guarantee occurs and is continuing. In case an event of default occurs and is
continuing, the Guarantee Trustee will exercise the same degree of care as a
prudent individual would exercise in the conduct of his or her own affairs.
Subject to those provisions, the Guarantee Trustee is under no obligation to
exercise any of its powers under any Guarantee at the request of any holder of
the related Preferred Securities unless that holder offers reasonable indemnity
to the Guarantee Trustee against the costs, expenses and liabilities which it
might incur as a result.
Agreements as to Expenses and Liabilities
Duke Capital will enter into an Agreement as to Expenses and Liabilities
under each Trust Agreement. Each Agreement as to Expenses and Liabilities will
provide that Duke Capital will, with certain exceptions, irrevocably and
unconditionally guarantee the full payment of any indebtedness, expenses or
liabilities of the related Trust to each person or entity to whom that Trust
becomes indebted or liable. The exceptions are the obligations of the Trust to
pay to the holders of the related Preferred Securities or other similar
interests in that Trust the amounts due to the holders under the terms of those
Preferred Securities or those similar interests.
29
<PAGE>
ACCOUNTING TREATMENT
Each Trust will be treated as a subsidiary of Duke Capital for financial
reporting purposes. Accordingly, Duke Capital's consolidated financial
statements will include the accounts of each Trust. The Preferred Securities,
along with other trust preferred securities that Duke Capital guarantees on an
equivalent basis, will be presented as a separate line item in Duke Capital's
consolidated balance sheets, entitled "Guaranteed Preferred Beneficial
Interests in Subordinated Notes of Duke Capital Corporation." Duke Capital will
record distributions that each Trust pays on the Preferred Securities as an
expense in its consolidated statement of income.
PLAN OF DISTRIBUTION
The Senior Notes, the Junior Subordinated Notes and the Preferred
Securities may be sold in any of three ways:
. through underwriters or dealers;
. directly to a limited number of institutional purchasers or to a
single purchaser; or
. through agents.
The applicable Prospectus Supplement will describe the terms under which
the Senior Notes, the Junior Subordinated Notes or the Preferred Securities are
offered, including:
. the names of any underwriters, dealers or agents;
. the purchase price and the net proceeds from the sale;
. any underwriting discounts and other items constituting underwriters'
compensation;
. any initial public offering price; and
. any discounts or concessions allowed, re-allowed or paid to dealers.
Any underwriters or dealers may from time to time change any initial
public offering price and any discounts or concessions allowed, re-allowed or
paid to dealers.
If underwriters participate in the sale of the Senior Notes, the Junior
Subordinated Notes or the Preferred Securities, those underwriters will acquire
the Senior Notes, Junior Subordinated Notes or Preferred Securities for their
own account and may resell them in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices
determined at the time of the sale.
Unless Duke Capital states otherwise in the applicable Prospectus
Supplement, the obligations of any underwriter to purchase the Senior Notes,
the Junior Subordinated Notes or the Preferred Securities will be subject to
conditions, and the underwriter will be obligated to purchase all the Senior
Notes, Junior Subordinated Notes or Preferred Securities offered, except that
in some cases involving a default by an underwriter, less than all of the
Senior Notes, Junior Subordinated Notes or Preferred Securities offered may be
purchased. If the Senior Notes, the Junior Subordinated Notes or the Preferred
Securities are sold through an agent, the applicable Prospectus Supplement will
state the name and any commission that may be paid to the agent. Unless Duke
Capital states otherwise in the Prospectus Supplement, that agent will be
acting on a best-efforts basis for the period of its appointment.
30
<PAGE>
Agents and underwriters may be entitled to indemnification against
certain civil liabilities, including liabilities under the Securities Act of
1933, under agreements entered into with the applicable Trust and Duke Capital.
Underwriters and their affiliates may engage in transactions with, and,
from time to time, perform services for, the Trusts and Duke Capital or their
affiliates in the ordinary course of their business.
The Senior Notes, the Junior Subordinated Notes and the Preferred
Securities may or may not be listed on a national securities exchange.
EXPERTS
Duke Capital's consolidated financial statements as of December 31, 1998
and 1997 and for each of the three years in the period ended December 31, 1998,
except PanEnergy and subsidiaries as of and for the period ended December 31,
1996, included in Duke Capital's annual report on Form 10-K for the year ended
December 31, 1998, which are incorporated by reference in this Prospectus, have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report which is incorporated by reference in this Prospectus. The financial
statements of PanEnergy Corp and subsidiaries (consolidated with Duke Capital's
financial statements) as of and for the year ended December 31, 1996 have been
audited by KPMG LLP, independent certified public accountants, as stated in
their report incorporated by reference in this Prospectus. Those financial
statements are incorporated in this Prospectus in reliance upon the respective
reports of such firms given upon their authority as experts in accounting and
auditing.
VALIDITY OF THE SECURITIES
Richards, Layton & Finger, P.A., special Delaware counsel to Duke Capital
and the Trusts, will issue opinions about the validity of the Preferred
Securities under Delaware law on behalf of Duke Capital and the Trusts. Dewey
Ballantine LLP will issue opinions about the validity of the Senior Notes, the
Junior Subordinated Notes and the Guarantees and certain related matters on
behalf of Duke Capital. Counsel named in the applicable Prospectus Supplement
will issue opinions about the validity of the Senior Notes, the Junior
Subordinated Notes and the Guarantees on behalf of any underwriters, dealers or
agents.
31
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[ ]
Preferred Securities
Duke Capital
Financing Trust [ ]
% Trust Preferred Securities
(Liquidation amount $ per Preferred Security)
Guaranteed, to the extent
described herein, by
Duke Capital
Corporation
a subsidiary of
Duke Energy Corporation
----------------
PROSPECTUS SUPPLEMENT
----------------
[Names of Underwriters]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution:
The estimated expenses of issuance and distribution, other than underwriting
discounts and commissions, to be borne by Duke Capital Corporation are as
follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Filing Fee................ $ 396,000*
Trustee Fees and Expenses.................................... 50,000
Listing Fees of New York Stock Exchange...................... 200,000
Printing Costs............................................... 165,000
Legal Fees and Expenses...................................... 185,000
Accounting Fees.............................................. 25,000
Blue Sky Fees and Expenses................................... 23,000
Rating Agency Fees........................................... 300,000
Miscellaneous................................................ 6,000
----------
Total...................................................... $1,350,000
==========
</TABLE>
--------
* Actual
Item 15. Indemnification of Directors and Officers.
Section 2 of Article X of the Restated Certificate of Incorporation of Duke
Capital Corporation provides as follows:
"(a) Right to Indemnification. Each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a 'proceeding'), by reason of the fact that such person, or a
person of whom such person is the legal representative, is or was a director or
officer of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or
agent or in any other capacity while serving as a director, officer, employee
or agent, shall be indemnified and held harmless by the Corporation to the
fullest extent authorized by the DGCL, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights
than said law permitted the Corporation to provide prior to such amendment),
against all expense, liability and loss (including attorneys' fees, judgments,
fines, amounts paid or to be paid in settlement, and excise taxes or penalties
arising under the Employee Retirement Income Security Act of 1974, as in effect
from time to time) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit of
such person's heirs, executors and administrators; provided, however, that,
except as provided in paragraph (b) hereof, the Corporation shall indemnify any
such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part thereof) was
authorized by the Board. The right to indemnification conferred in this Section
shall be a contract right and shall include the right to have the Corporation
pay the expenses incurred in
II-1
<PAGE>
defending any such proceeding in advance of its final disposition; any advance
payments to be paid by the Corporation within 20 calendar days after the
receipt by the Corporation of a statement or statements from the claimant
requesting such advance or advances from time to time; provided, however, that,
if and to the extent the DGCL requires, the payment of such expenses incurred
by a director or officer in such person's capacity as a director or officer
(and not in any other capacity in which service was or is rendered by such
person while a director or officer, including, without limitation, service to
an employee benefit plan) in advance of the final disposition of a proceeding,
shall be made only upon delivery to the Corporation of an undertaking, by or on
behalf of such director or officer, to repay all amounts so advanced if it
shall ultimately be determined that such director or officer is not entitled to
be indemnified under this Section or otherwise. The Corporation may, to the
extent authorized from time to time by the Board of Directors, grant rights to
indemnification, and rights to have the Corporation pay the expenses incurred
in defending any proceeding in advance of its final disposition, to any
employee or agent of the Corporation to the fullest extent of the provisions of
this Article with respect to the indemnification and advancement of expenses of
directors and officers of the Corporation.
"(b) Right of Claimant to Bring Suit. If a claim under paragraph (a) of this
Section is not paid in full by the Corporation within 30 calendar days after a
written claim has been received by the Corporation, the claimant may at any
time thereafter bring suit against the Corporation to recover the unpaid amount
of the claim and, if successful in whole or in part, the claimant shall be
entitled to be paid also the expense of prosecuting such claim. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the Corporation) that the claimant has not met the standard of
conduct which makes it permissible under the DGCL for the Corporation to
indemnify the claimant for the amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because the claimant has met the applicable standard of conduct set forth in
the DGCL, nor an actual determination by the Corporation (including its Board
of Directors, independent legal counsel, or its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.
"(c) Non-Exclusivity of Rights. The right of indemnification and the payment of
expenses incurred in defending a proceeding in advance of its final disposition
conferred in this Section shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, By-Law, agreement, vote of stockholders or
disinterested directors or otherwise. No repeal or modification of this Article
shall in any way diminish or adversely affect the rights of any director,
officer, employee or agent of the Corporation hereunder in respect of any
occurrence or matter arising prior to any such repeal or modification.
"(d) Insurance. The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the
II-2
<PAGE>
Corporation would have the power to indemnify such person against such expense,
liability or loss under the DGCL."
Section 145 of the Delaware General Corporation Law gives corporations the
power to indemnify officers and directors under certain circumstances.
Item 16. Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number
-------
<C> <S>
1.1 -- Form of Underwriting Agreement relating to Senior Notes.
1.2 -- Form of Underwriting Agreement relating to Junior Subordinated
Notes.
1.3 -- Form of Underwriting Agreement relating to Trust Preferred
Securities.
4.1* -- Senior Indenture between Duke Capital Corporation and The Chase
Manhattan Bank, as Trustee, dated as of April 1, 1998 (filed with
Form S-3, File No. 333-71297, effective February 10, 1999, as
Exhibit 4.1).
4.2 -- Form of Supplemental Indenture to Senior Indenture to be used in
connection with the issuance of Senior Notes.
4.3* -- Subordinated Indenture between Duke Capital Corporation and The
Chase Manhattan Bank, as Trustee, dated as of April 1, 1998 (filed
with Form S-3, File No. 333-71297, effective February 10, 1999, as
Exhibit 4.3).
4.4-A -- Form of Supplemental Indenture to Subordinated Indenture to be used
in connection with the issuance of Junior Subordinated Notes.
4.4-B -- Form of Supplemental Indenture to Subordinated Indenture to be used
in connection with the issuance of Junior Subordinated Notes
relating to Trust Preferred Securities.
4.5-A* -- Certificate of Trust of Duke Capital Financing Trust IV (filed with
Form S-3, File No. 333-71297, effective February 10, 1999, as
Exhibit 4.5-B).
4.5-B* -- Certificate of Trust of Duke Capital Financing Trust V (filed with
Form S-3, File No. 333-71297, effective February 10, 1999, as
Exhibit 4.5-C).
4.5-C* -- Certificate of Trust of Duke Capital Financing Trust VI (filed with
Form S-3, File No. 333-85995, effective September 3, 1999, as
Exhibit 4.5-C).
4.6-A* -- Trust Agreement of Duke Capital Financing Trust IV (filed with Form
S-3, File No. 333-71297, effective February 10, 1999, as Exhibit
4.6-B).
4.6-B* -- Trust Agreement of Duke Capital Financing Trust V (filed with Form
S-3, File No. 333-71297, effective February 10, 1999, as Exhibit
4.6-C).
4.6-C* -- Trust Agreement of Duke Capital Financing Trust VI (filed with Form
S-3, File No. 333-85995, effective September 3, 1999, as Exhibit
4.6-C).
4.7 -- Form of Amended and Restated Trust Agreement (Agreements for Duke
Capital Financing Trust IV, Duke Capital Financing Trust V and Duke
Capital Financing Trust VI will be substantially identical except
for names and dates).
4.8 -- Form of Trust Preferred Security for Duke Capital Financing Trust
IV, Duke Capital Financing Trust V and Duke Capital Financing Trust
VI (included in Exhibit 4.7 above).
4.9 -- Form of Senior Note (included in Exhibit 4.2 above).
4.10 -- Form of Junior Subordinated Note (included in Exhibits 4.4-A and
4.4-B above).
4.11 -- Form of Guarantee Agreement (Agreements for Duke Capital Financing
Trust IV, Duke Capital Financing Trust V and Duke Capital Financing
Trust VI will be substantially identical except for names and
dates).
4.12 -- Form of Agreement as to Expenses and Liabilities (included in
Exhibit 4.7 above).
5.1 -- Opinion of Dewey Ballantine LLP.
5.2-A -- Opinion of Richards, Layton & Finger, P.A. relating to Duke Capital
Financing Trust IV.
5.2-B -- Opinion of Richards, Layton & Finger, P.A. relating to Duke Capital
Financing Trust V.
5.2-C -- Opinion of Richards, Layton & Finger, P.A. relating to Duke Capital
Financing Trust VI.
8 -- Tax Opinion of Dewey Ballantine LLP.
12 -- Computation of ratio of earnings to fixed charges.
23.1 -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of KPMG LLP.
23.3 -- Consent of Dewey Ballantine LLP (included in Exhibit 5.1 above).
23.4 -- Consent of Dewey Ballantine LLP (included in Exhibit 8 above).
23.5 -- Consent of Richards, Layton & Finger, P.A. (included in Exhibits
5.2-A, 5.2-B and 5.2-C above).
24.1 -- Power of Attorney of certain officers and directors of Duke Capital
Corporation.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number
-------
<C> <S>
24.2 -- Resolution of Duke Capital Corporation re: Power of Attorney.
25.1 -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Senior Indenture Trustee.
25.2 -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Subordinated Indenture
Trustee.
25.3-A -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Property Trustee under
Duke Capital Financing Trust IV.
25.3-B -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Property Trustee under
Duke Capital Financing Trust V.
25.3-C -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Property Trustee under
Duke Capital Financing Trust VI.
25.4-A -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Guarantee Trustee with
respect to Duke Capital Financing Trust IV.
25.4-B -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Guarantee Trustee with
respect to Duke Capital Financing Trust V.
25.4-C -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Guarantee Trustee with
respect to Duke Capital Financing Trust VI.
</TABLE>
- ----------------
* previously filed
Item 17. Undertakings.
(a) Undertaking related to Rule 415 offering:
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a post-
effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933 (the "Act");
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, S-8 or F-3 and the information required
to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the registrants pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
II-4
<PAGE>
(2) That, for the purpose of determining any liability under the Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(b) Undertaking related to filings incorporating subsequent Securities Exchange
Act of 1934 documents by reference:
The undersigned registrants hereby undertake that, for purposes of determining
any liability under the Act, each filing of Duke Capital Corporation's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange
Act of 1934 that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Undertaking related to acceleration of effectiveness:
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of each undersigned
registrant pursuant to the indemnification provisions described in Item 15
above or in contractual arrangements pursuant thereto, or otherwise, each
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by each
undersigned registrant of expenses incurred or paid by a director, officer or
controlling person of each registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, each registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(d) The undersigned registrants hereby undertake that:
(1) For purposes of determining any liability under the Act, the information
omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the registrants pursuant to Rule 424(b)(1) or 497(h) under the Act
shall be deemed to be part of this registration statement as of the time it was
declared effective:
(2) For the purpose of determining any liability under the Act, each post-
effective amendment that contains a form of prospectus shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
Duke Capital Corporation, certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this registration statement or amendment thereto to be signed on its
behalf by the undersigned, thereunto duly authorized, in Charlotte, North
Carolina, on the 7th day of December, 1999.
DUKE CAPITAL CORPORATION
By: R. B. Priory
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this registration
statement or amendment thereto has been signed by the following directors and
officers of Duke Capital Corporation in the capacities and on the date
indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Richard B. Priory President and Chief December 7, 1999
Executive Officer (Principal
Executive Officer)
Richard J. Osborne Vice President and December 7, 1999
Chief Financial Officer
(Principal Financial
Officer)
Sandra P. Meyer Controller (Principal December 7, 1999
Accounting Officer)
Fred J. Fowler
Robert S. Lilien
Richard J. Osborne All of the Directors December 7, 1999
Harvey J. Padewer
Richard B. Priory
</TABLE>
Robert T. Lucas III, by signing his name hereto, does hereby sign this document
on behalf of Duke Capital Corporation and on behalf of each of the above-named
persons pursuant to a power of attorney duly executed by Duke Capital
Corporation and such persons, filed with the Securities and Exchange Commission
as an exhibit hereto.
/s/ Robert T. Lucas III
-------------------------------------
Robert T. Lucas III
Attorney-in-fact
II-6
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, Duke Capital
Financing Trust IV certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
registration statement or amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in Charlotte, North Carolina, on the
7th day of December, 1999.
DUKE CAPITAL FINANCING TRUST IV
By: Duke Capital Corporation,
Depositor
/s/ Robert T. Lucas III
By: _________________________________
Robert T. Lucas III
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, Duke Capital
Financing Trust V certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
registration statement or amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in Charlotte, North Carolina, on the
7th day of December, 1999.
DUKE CAPITAL FINANCING TRUST V
By: Duke Capital Corporation,
Depositor
/s/ Robert T. Lucas III
By: _________________________________
Robert T. Lucas III
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, Duke Capital
Financing Trust VI certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
registration statement or amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in Charlotte, North Carolina, on the
7th day of December, 1999.
DUKE CAPITAL FINANCING TRUST VI
By: Duke Capital Corporation,
Depositor
/s/ Robert T. Lucas III
By: _________________________________
Robert T. Lucas III
Assistant Secretary
II-7
<PAGE>
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number
-------
<C> <S>
1.1 -- Form of Underwriting Agreement relating to Senior Notes.
1.2 -- Form of Underwriting Agreement relating to Junior Subordinated
Notes.
1.3 -- Form of Underwriting Agreement relating to Trust Preferred
Securities.
4.1* -- Senior Indenture between Duke Capital Corporation and The Chase
Manhattan Bank, as Trustee, dated as of April 1, 1998 (filed with
Form S-3, File No. 333-71297, effective February 10, 1999, as
Exhibit 4.1).
4.2 -- Form of Supplemental Indenture to Senior Indenture to be used in
connection with the issuance of Senior Notes.
4.3* -- Subordinated Indenture between Duke Capital Corporation and The
Chase Manhattan Bank, as Trustee, dated as of April 1, 1998 (filed
with Form S-3, File No. 333-71297, effective February 10, 1999, as
Exhibit 4.3).
4.4-A -- Form of Supplemental Indenture to Subordinated Indenture to be used
in connection with the issuance of Junior Subordinated Notes.
4.4-B -- Form of Supplemental Indenture to Subordinated Indenture to be used
in connection with the issuance of Junior Subordinated Notes
relating to Trust Preferred Securities.
4.5-A* -- Certificate of Trust of Duke Capital Financing Trust IV (filed with
Form S-3, File No. 333-71297, effective February 10, 1999, as
Exhibit 4.5-B).
4.5-B* -- Certificate of Trust of Duke Capital Financing Trust V (filed with
Form S-3, File No. 333-71297, effective February 10, 1999, as
Exhibit 4.5-C).
4.5-C* -- Certificate of Trust of Duke Capital Financing Trust VI (filed with
Form S-3, File No. 333-85995, effective September 3, 1999, as
Exhibit 4.5-C).
4.6-A* -- Trust Agreement of Duke Capital Financing Trust IV (filed with Form
S-3, File No. 333-71297, effective February 10, 1999, as Exhibit
4.6-B).
4.6-B* -- Trust Agreement of Duke Capital Financing Trust V (filed with Form
S-3, File No. 333-71297, effective February 10, 1999, as Exhibit
4.6-C).
4.6-C* -- Trust Agreement of Duke Capital Financing Trust VI (filed with Form
S-3, File No. 333-85995, effective September 3, 1999, as Exhibit
4.6-C).
4.7 -- Form of Amended and Restated Trust Agreement (Agreements for Duke
Capital Financing Trust IV, Duke Capital Financing Trust V and Duke
Capital Financing Trust VI will be substantially identical except
for names and dates).
4.8 -- Form of Trust Preferred Security for Duke Capital Financing Trust
IV, Duke Capital Financing Trust V and Duke Capital Financing Trust
VI (included in Exhibit 4.7 above).
4.9 -- Form of Senior Note (included in Exhibit 4.2 above).
4.10 -- Form of Junior Subordinated Note (included in Exhibits 4.4-A and
4.4-B above).
4.11 -- Form of Guarantee Agreement (Agreements for Duke Capital Financing
Trust IV, Duke Capital Financing Trust V and Duke Capital Financing
Trust VI will be substantially identical except for names and
dates).
4.12 -- Form of Agreement as to Expenses and Liabilities (included in
Exhibit 4.7 above).
5.1 -- Opinion of Dewey Ballantine LLP.
5.2-A -- Opinion of Richards, Layton & Finger, P.A. relating to Duke Capital
Financing Trust IV.
5.2-B -- Opinion of Richards, Layton & Finger, P.A. relating to Duke Capital
Financing Trust V.
5.2-C -- Opinion of Richards, Layton & Finger, P.A. relating to Duke Capital
Financing Trust VI.
8 -- Tax Opinion of Dewey Ballantine LLP.
12 -- Computation of ratio of earnings to fixed charges.
23.1 -- Consent of Deloitte & Touche LLP.
23.2 -- Consent of KPMG LLP.
23.3 -- Consent of Dewey Ballantine LLP (included in Exhibit 5.1 above).
23.4 -- Consent of Dewey Ballantine LLP (included in Exhibit 8 above).
23.5 -- Consent of Richards, Layton & Finger, P.A. (included in Exhibits
5.2-A, 5.2-B and 5.2-C above).
24.1 -- Power of Attorney of certain officers and directors of Duke Capital
Corporation.
24.2 -- Resolution of Duke Capital Corporation re: Power of Attorney.
25.1 -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Senior Indenture Trustee.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number
-------
<C> <S>
25.2 -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Subordinated Indenture
Trustee.
25.3-A -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Property Trustee under
Duke Capital Financing Trust IV.
25.3-B -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Property Trustee under
Duke Capital Financing Trust V.
25.3-C -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Property Trustee under
Duke Capital Financing Trust VI.
25.4-A -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Guarantee Trustee with
respect to Duke Capital Financing Trust IV.
25.4-B -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Guarantee Trustee with
respect to Duke Capital Financing Trust V.
25.4-C -- Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Guarantee Trustee with
respect to Duke Capital Financing Trust VI.
</TABLE>
- ----------------
* previously filed
<PAGE>
EXHIBIT 1.1
DUKE CAPITAL CORPORATION
$
Series % Senior Notes due
UNDERWRITING AGREEMENT
Gentlemen:
1. Introductory. DUKE CAPITAL CORPORATION, a Delaware corporation
("Corporation"), proposes to issue and sell $ aggregate principal amount
of Series % Senior Notes due ("Notes"), to be issued pursuant to the
provisions of a Senior Indenture, dated as of April 1, 1998, between the
Corporation and The Chase Manhattan Bank, as amended and supplemented to the
date hereof and as to be supplemented by a supplemental indenture, dated as of
, , relating to the Notes (the "Indenture"), and hereby agrees with
the several Underwriters hereinafter named ("Underwriters") as follows:
2. Representations and Warranties of the Corporation. The Corporation
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. ), including a prospectus, relating to the
Notes has been filed with the Securities and Exchange Commission ("Commission")
under the Securities Act of 1933, as amended (the "1933 Act"). Such
registration statement and any post-effective amendment thereto, each in the
form heretofore delivered to you, have been declared effective by the
Commission in such form, and no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission (any preliminary prospectus
included in such registration statement or filed with the Commission pursuant
to Rule 424(a) of the rules and regulations of the Commission under the 1933
Act being hereinafter called a "Preliminary Prospectus"; the various parts of
such registration statement, including all exhibits thereto and including the
documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration statement
became effective, each as amended at the time such part of the registration
statement became
<PAGE>
effective, being hereinafter called the "Registration Statement"; and the final
prospectus relating to the Notes, in the form first filed pursuant to Rule
424(b) under the 1933 Act, being hereinafter called the "Prospectus"; and any
reference herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein,
as of the date of such Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment or supplement to any Preliminary Prospectus
or Prospectus shall be deemed to refer to and include any documents filed after
the date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as the
case may be; and any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the Corporation
filed pursuant to Section 13(a) or 15(d) of the 1934 Act after the effective
date of the Registration Statement that is incorporated by reference in the
Registration Statement).
(b) The Registration Statement conforms and the Prospectus will conform in all
material respects to the requirements of the 1933 Act and the rules and
regulations thereunder ("1933 Act Regulations"), and the Registration Statement
does not and the Prospectus will not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, except that the
foregoing does not apply to statements or omissions in any such document based
upon written information furnished to the Corporation by any Underwriter
specifically for use therein.
(c) The documents incorporated by reference in the Prospectus, at the time they
were filed with the Commission, conformed in all material respects to the
requirements of the 1934 Act and the rules and regulations of the Commission
thereunder (the "1934 Act Regulations"), and, when read together with the other
information in the Prospectus, do not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and any documents
deemed to be incorporated by reference in the Prospectus will, when they are
filed with the Commission, comply in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations, and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they are made, not misleading.
(d) The compliance by the Corporation with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Corporation
or any of its Principal Subsidiaries (as defined below) is a party or by which
any of them or their respective property is bound or to which any of their
property or assets is subject, nor will such action result in any violation of
the provisions of the Restated Certificate of Incorporation or By-Laws of the
Corporation or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Corporation or its
Principal Subsidiaries or any of their respective property; and no consent,
approval, authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the consummation by
the Corporation of the transactions contemplated by this Agreement, except for
the registration under the 1933 Act of the Notes and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Notes by the Underwriters.
2
<PAGE>
(e) Each of PanEnergy Corp, Texas Eastern Transmission Corporation and
Algonquin Gas Transmission Company, each a Delaware corporation (and herein
called a "Principal Subsidiary"), is a direct or indirect wholly-owned
subsidiary of the Corporation.
3. Purchase, Sale and Delivery of Notes. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Corporation agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to
purchase from the Corporation at a purchase price of % of the principal amount
of the Notes, plus accrued interest from , , the respective principal
amount of Notes set forth opposite the names of the Underwriters in Schedule A
hereto plus the respective principal amount of additional Notes which each such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 8 hereof.
Payment of the purchase price for the Notes to be purchased by the Underwriters
shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue of the
Americas, New York, N.Y., or at such other place as shall be mutually agreed
upon by you and the Corporation, at 10:00 A.M., New York City time, on ,
(unless postponed in accordance with the provisions of Section 8) or such
other time not later than three full business days after such date as shall be
agreed upon by you and the Corporation (the "Closing Date"). Payment shall be
made to the Corporation by wire transfer in immediately available funds,
payable to the order of the Corporation against delivery of the Notes, in fully
registered form, to you or upon your order. The Notes shall be delivered in the
form of one or more global certificates in aggregate denomination equal to the
aggregate principal amount of the Notes upon original issuance and registered
in the name of Cede & Co., as nominee for The Depository Trust Company ("DTC").
4. Offering by the Underwriters. It is understood that the several Underwriters
propose to offer the Notes for sale to the public as set forth in the
Prospectus.
5. Covenants of the Corporation. The Corporation covenants and agrees with the
several Underwriters that:
(a) The Corporation will advise you promptly of any amendment or
supplementation of the Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of the
Registration Statement, and will use its best efforts to prevent the issuance
of any such stop order and to obtain as soon as possible its lifting, if
issued.
(b) If at any time when a prospectus relating to the Notes is required to be
delivered under the 1933 Act any event occurs as a result of which the
Prospectus as then amended or supplemented would include an 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 is necessary at any time to amend the Prospectus
to comply with the 1933 Act, the Corporation promptly will prepare and file
with the Commission an amendment, supplement or an appropriate document
pursuant to Section 13 or 14 of the 1934 Act which will correct such statement
or omission or which will effect such compliance.
(c) The Corporation, during the period when a prospectus relating to the Notes
is required to be delivered under the 1933 Act, will file promptly all
documents required to be filed with the Commission pursuant to Section 13 or 14
of the 1934 Act.
3
<PAGE>
(d) The Corporation will make generally available to its security holders, in
each case as soon as practicable but not later than 60 days after the close of
the period covered thereby, earning statements (in form complying with the
provisions of Section 11(a) of the 1933 Act, which need not be certified by
independent certified public accountants unless required by the 1933 Act)
covering (i) a twelve-month period beginning not later than the first day of
the Corporation's fiscal quarter next following the effective date of the
Registration Statement and (ii) a twelve-month period beginning not later than
the first day of the Corporation's fiscal quarter next following the date of
this Agreement.
(e) The Corporation will furnish to you, without charge, copies of the
Registration Statement ( of which will be signed and will include all
exhibits other than those incorporated by reference), the Prospectus, and all
amendments and supplements to such documents, in each case as soon as available
and in such quantities as you reasonably request.
(f) The Corporation will arrange or cooperate in arrangements for the
qualification of the Notes for sale under the laws of such jurisdictions as you
designate and will continue such qualifications in effect so long as required
for the distribution; provided, however, that the Corporation shall not be
required to qualify as a foreign corporation or to file any general consents to
service of process under the laws of any state where it is not now so subject.
(g) The Corporation will not, during the period of days from the date
hereof, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of any Notes, any security convertible into or exchangeable for the
Notes or any debt security substantially similar to the Notes (except for the
Notes issued pursuant to this Agreement), without your prior written consent.
(h) The Corporation will pay all expenses incident to the performance of its
obligations under this Agreement including (i) the printing and filing of the
Registration Statement and the printing of this Agreement and the Blue Sky
Survey, (ii) the issuance and delivery of the Notes as specified herein, (iii)
the fees and disbursements of counsel for the Underwriters in connection with
the qualification of the Notes under the securities laws of any jurisdiction in
accordance with the provisions of Section 5(f) and in connection with the
preparation of the Blue Sky Survey, such fees not to exceed $7,500, (iv) the
printing and delivery to the Underwriters, in quantities as hereinabove
referred to, of copies of the Registration Statement and Prospectus and any
amendments thereto, and of the Prospectus and any amendments or supplements
thereto, (v) any fees charged by independent rating agencies for rating the
Notes, (vi) any fees and expenses in connection with any listing of the Notes
on the New York Stock Exchange, (vii) any filing fee required by the National
Association of Securities Dealers, Inc., and (viii) the costs of any depository
arrangements for the Notes with DTC or any successor depository.
6. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Notes will be subject to the
accuracy of the representations and warranties on the part of the Corporation
herein, to the accuracy of the statements of officers of the Corporation made
pursuant to the provisions hereof, to the performance by the Corporation of its
obligations hereunder and to the following additional conditions precedent:
(a) Prior to the Closing Date, no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or, to the knowledge of the Corporation or
you, shall be threatened by the Commission.
4
<PAGE>
(b) Prior to the Closing Date, the rating assigned by Moody's Investors
Service, Inc. or Standard & Poor's Ratings Group to (i) any preferred
securities or any debt securities of the Corporation or (ii) any trust
preferred securities of Duke Capital Financing Trust I, Duke Capital Financing
Trust II or Duke Capital Financing Trust III as of the date of this Agreement
shall not have been lowered.
(c) Since the respective most recent dates as of which information is given in
the Prospectus and up to the Closing Date, there shall not have been any
material adverse change in the condition of the Corporation, financial or
otherwise, except as reflected in or contemplated by the Prospectus, and, since
such dates and up to the Closing Date, there shall not have been any material
transaction entered into by the Corporation other than transactions
contemplated by the Prospectus and transactions in the ordinary course of
business.
(d) You shall have received an opinion or opinions of Dewey Ballantine LLP,
counsel to the Corporation, dated the Closing Date, to the effect that:
(i) The Corporation has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus.
(ii) Each of the Principal Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with power and authority (corporate and other)
to own its properties and conduct its business as described in the Prospectus.
(iii) The Indenture has been duly authorized, executed and delivered by the
Corporation and duly qualified under the Trust Indenture Act of 1939 and,
assuming the due authorization, execution and delivery thereof by The Chase
Manhattan Bank, as Trustee, constitutes a valid and legally binding instrument
of the Corporation, enforceable against the Corporation in accordance with its
terms, subject to the qualifications that the enforceability of the
Corporation's obligations under the Indenture may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(iv) The Notes have been duly authorized and executed by the Corporation and,
when authenticated by The Chase Manhattan Bank, as Trustee, in the manner
provided in the Indenture and delivered against payment therefor, will
constitute valid and legally binding obligations of the Corporation,
enforceable against the Corporation in accordance with their terms, subject to
the qualifications that the enforceability of the Corporation's obligations
under the Notes may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law), and are
entitled to the benefits afforded by the Indenture in accordance with the terms
of the Indenture and the Notes.
(v) The Registration Statement has become effective under the 1933 Act, and, to
the best of the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or threatened under the
1933 Act.
(vi) This Agreement has been duly authorized, executed and delivered by the
Corporation.
5
<PAGE>
(vii) The performance by the Corporation of this Agreement and the Indenture
will not contravene any of the provisions of the Restated Certificate of
Incorporation or By-Laws of the Corporation.
(viii) The Corporation is not a holding company under the Public Utility
Holding Company Act of 1935, as amended.
(ix) No consent, approval, authorization, order, registration or qualification
of or with any court or governmental agency or body is required for the issue
and sale of the Notes or the consummation by the Corporation of the
transactions contemplated by this Agreement or the Indenture, except such as
have been obtained under the 1933 Act and the Trust Indenture Act and such
consents, approvals, authorizations, orders, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Notes by the Underwriters.
(x) The Registration Statement as of the date of effectiveness under the 1933
Act and the Prospectus as of the date it was filed with, or transmitted for
filing to, the Commission complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations; and nothing has come
to their attention that would lead them to believe that the Registration
Statement as of the date of effectiveness under the 1933 Act (or if an
amendment to such Registration Statement or an annual report on Form 10-K has
been filed by the Corporation with the Commission subsequent to the
effectiveness of the Registration Statement, then at the time of the most
recent such filing) 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 that the Prospectus as of the date it was
filed with, or transmitted for filing to, the Commission and at the Closing
Date 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. Such opinion may state that such counsel do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus except as otherwise
expressly provided in such opinion and do not express any opinion or belief as
to the financial statements or other financial data contained in the
Registration Statement and the Prospectus or as to the statement of the
eligibility and qualification of the Trustee.
(xi) The statements made in the Prospectus under the captions "Description of
the Senior Notes" and "Description of the Series Senior Notes," insofar as
they purport to summarize provisions of documents specifically referred to
therein, fairly present the information called for with respect thereto by
Form S-3.
In rendering the foregoing opinion or opinions, Dewey Ballantine LLP may state
that such opinion or opinions are limited to the federal laws of the United
States, the laws of the State of New York and the General Corporation Law of
the State of Delaware, and that they are expressing no opinion as to the effect
of the laws of any other jurisdiction. In addition, such counsel may state that
they have relied as to certain factual matters on information obtained from
public officials, officers of the Corporation and other sources believed by
them to be responsible and that the signatures on all documents examined by
them are genuine, assumptions which such counsel have not independently
verified.
(e) You shall have received an opinion, dated the Closing Date, of Ellen T.
Ruff, Esq., General Counsel of the Corporation, to the effect that:
6
<PAGE>
(i) Each of the Corporation and the Principal Subsidiaries is duly qualified to
do business in each jurisdiction in which the ownership or leasing of its
property or the conduct of its business requires such qualification, except
where the failure to so qualify, considering all such cases in the aggregate,
does not have a material adverse effect on the business, properties, financial
position or results of operations of the Corporation and its subsidiaries taken
as a whole.
(ii) The descriptions in the Registration Statement and the Prospectus of legal
or governmental proceedings are accurate and fairly present the information
required to be shown, and such counsel does not know of any litigation or any
legal or governmental proceeding instituted or threatened against the
Corporation or any of its subsidiaries or any of their respective properties
that would be required to be disclosed in the Prospectus and is not so
disclosed.
Such counsel shall also state that nothing has come to her attention that has
caused her to believe that the Registration Statement as of the date of
effectiveness under the 1933 Act and the Prospectus as of the date it was filed
with, or transmitted for filing to, the Commission, contained any 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
that the Prospectus as of the date it was filed with, or transmitted for filing
to, the Commission and at the Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Such counsel may also
state that, except as otherwise expressly provided in such opinion, she does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus and does
not express any opinion or belief as to the financial statements or other
financial data contained in the Registration Statement and the Prospectus.
In rendering the foregoing opinion, such counsel may rely, to the extent
recited therein, upon opinions of local counsel. Such counsel may also state
that she has relied as to certain factual matters on information obtained from
public officials, officers of the Corporation and other sources believed by her
to be responsible.
(f) You shall have received the opinion or opinions of , counsel for
the Underwriters, dated the Closing Date, with respect to the incorporation of
the Corporation, the validity of the Notes, the Registration Statement and the
Prospectus, as amended or supplemented, and such other related matters as you
may require, and the Corporation shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(g) On or after the date hereof, there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally or of the securities of Duke Energy Corporation, the Corporation,
Duke Capital Financing Trust I, Duke Capital Financing Trust II or Duke Capital
Financing Trust III on the New York Stock Exchange; or (ii) a general
moratorium on commercial banking activities in New York declared by either
federal or New York State authorities; or (iii) the outbreak or material
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war if the effect of any such event
specified in this clause (g) in your judgment makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Notes
being delivered at the Closing Date on the terms and in the manner
7
<PAGE>
contemplated in the Prospectus. In such event there shall be no liability on
the part of any party to any other party except as otherwise provided in
Section 7 hereof and except for the expenses to be borne by the Corporation as
provided in Section 5(h) hereof.
(h) You shall have received a certificate of the Chairman of the Board and
President or any Vice President and a principal financial or accounting officer
of the Corporation, dated the Closing Date, in which such officers, to the best
of their knowledge after reasonable investigation, shall state that the
representations and warranties of the Corporation in this Agreement are true
and correct, that the Corporation has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior
to the Closing Date, that the conditions specified in Section 6(b) and Section
6(c) have been satisfied, and that no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are threatened by the Commission.
(i) On the date of this Agreement, you shall have received letters dated the
date hereof, in form and substance satisfactory to you, from the Corporation's
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in or incorporated by reference into the Prospectus.
(j) At the Closing Date you shall have received from the Corporation's
independent public accountants letters, dated the Closing Date, to the effect
that such accountants reaffirm the statements made in the letters furnished
pursuant to paragraph (i) of this Section 6, except that the specified date
referred to shall be a date not more than three business days prior to the
Closing Date.
The Corporation will furnish you with such conformed copies of such opinions,
certificates, letters and documents as you reasonably request.
7. Indemnification. (a) The Corporation agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever
arising out of any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment thereto), or the
omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or arising
out of any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the prospectus constituting a part of
the Registration Statement in the form in which it became effective or the
Prospectus (or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, unless such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with written information
furnished to the Corporation by any Underwriter through you expressly for use
in the Registration Statement (or any amendment thereto) or such Preliminary
Prospectus, such prospectus, or the Prospectus (or any amendment or supplement
thereto);
(ii) against any and all loss, liability, claim, damage and expense whatsoever
to the extent of the aggregate amount paid in settlement of any litigation,
commenced or threatened, or of any claim
8
<PAGE>
whatsoever based upon any such untrue statement or omission or any such alleged
untrue statement or omission, if such settlement is effected with the written
consent of the Corporation; and
(iii) against any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, 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 (i) or (ii) above.
In no case shall the Corporation be liable under this indemnity agreement with
respect to any claim made against any Underwriter or any such controlling
person unless the Corporation shall be notified in writing of the nature of the
claim within a reasonable time after the assertion thereof, but failure so to
notify the Corporation shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. The Corporation
shall be entitled to participate at its own expense in the defense, or, if it
so elects, within a reasonable time after receipt of such notice, to assume the
defense of any suit brought to enforce any such claim, but if it so elects to
assume the defense, such defense shall be conducted by counsel chosen by it and
approved by the Underwriter or Underwriters or controlling person or persons,
or defendant or defendants in any suit so brought, which approval shall not be
unreasonably withheld. In any such suit, any Underwriter or any such
controlling person shall have the right to employ its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Underwriter or
such controlling person unless (i) the Corporation and such Underwriter shall
have mutually agreed to the employment of such counsel, or (ii) the named
parties to any such action (including any impleaded parties) include both such
Underwriter or such controlling person and the Corporation and such Underwriter
or such controlling person shall have been advised by such counsel that a
conflict of interest between the Corporation and such Underwriter or such
controlling person may arise and for this reason it is not desirable for the
same counsel to represent both the indemnifying party and also the indemnified
party (it being understood, however, that the Corporation shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys for all such Underwriters and all such
controlling persons, which firm shall be designated in writing by you). The
Corporation agrees to notify you within a reasonable time of the assertion of
any claim against it, any of its officers or directors or any person who
controls the Corporation within the meaning of Section 15 of the 1933 Act, in
connection with the sale of the Notes.
(b) Each Underwriter agrees, severally and not jointly, that it will indemnify
and hold harmless the Corporation, its directors and each of the officers of
the Corporation who signed the Registration Statement and each person, if any,
who controls the Corporation within the meaning of Section 15 of the 1933 Act
to the same extent as the indemnity contained in subsection (a) of this
Section, but only with respect to statements or omissions made in the
Registration Statement (or any amendment thereto) or any Preliminary
Prospectus, such prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Corporation by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), such Preliminary Prospectus,
such prospectus or the Prospectus (or any amendment or supplement thereto). In
case any action shall be brought against the Corporation or
9
<PAGE>
any person so indemnified based on the Registration Statement (or any amendment
thereto) or such Preliminary Prospectus, such prospectus or the Prospectus (or
any amendment or supplement thereto) and in respect of which indemnity may be
sought against any Underwriter, such Underwriter shall have the rights and
duties given to the Corporation, and the Corporation and each person so
indemnified shall have the rights and duties given to the Underwriters, by the
provisions of subsection (a) of this Section.
8. Default by One or More of the Underwriters. (a) If any Underwriter shall
default in its obligation to purchase the Notes which it has agreed to purchase
hereunder on the Closing Date, you may in your discretion arrange for you or
another party or other parties to purchase such Notes on the terms contained
herein. If within thirty-six hours after such default by any Underwriter you do
not arrange for the purchase of such Notes, then the Corporation shall be
entitled to a further period of thirty-six hours within which to procure
another party or other parties satisfactory to you to purchase such Notes on
such terms. In the event that, within the respective prescribed periods, you
notify the Corporation that you have so arranged for the purchase of such
Notes, or the Corporation notifies you that it has so arranged for the purchase
of such Notes, you or the Corporation shall have the right to postpone such
Closing Date for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Corporation
agrees to file promptly any amendments to the Registration Statement or the
Prospectus which may be required. The term "Underwriter" as used in this
Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Notes.
(b) If, after giving effect to any arrangements for the purchase of the Notes
of a defaulting Underwriter or Underwriters by you or the Corporation as
provided in subsection (a) above, the aggregate amount of such Notes which
remains unpurchased does not exceed one-eleventh of the aggregate amount of all
the Notes to be purchased at such Closing Date, then the Corporation shall have
the right to require each non-defaulting Underwriter to purchase the amount of
Notes which such Underwriter agreed to purchase hereunder at such Closing Date
and, in addition, to require each non-defaulting Underwriter to purchase its
pro rata share (based on the amount of Notes which such Underwriter agreed to
purchase hereunder) of the Notes of such defaulting Underwriter or Underwriters
for which such arrangements have not been made; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the Notes
of a defaulting Underwriter or Underwriters by you or the Corporation as
provided in subsection (a) above, the aggregate amount of such Notes which
remains unpurchased exceeds one-eleventh of the aggregate amount of all the
Notes to be purchased at such Closing Date, or if the Corporation shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Notes of a defaulting Underwriter or Underwriters,
then this Agreement shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Corporation, except for the expenses to
be borne by the Corporation as provided in Section 5(h) hereof and the
indemnity agreement in Section 7 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10
<PAGE>
9. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of
the Corporation or its officers and of the several Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect,
regardless of any termination of this Agreement, or any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter or
the Corporation, or any of its officers or directors or any controlling person,
and will survive delivery of and payment for the Notes.
10. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters, will be mailed, delivered or telecopied and confirmed to you
in care of at , attention of or, if
sent to the Corporation, will be mailed, delivered or telecopied and confirmed
to it at 526 South Church Street, Charlotte, N.C. 28202, telephone number
(704) 382-5159, attention of Richard J. Osborne, Vice President and Chief
Financial Officer; provided, however, that any notice to an Underwriter
pursuant to Section 7 hereof shall be delivered or sent by mail or telecopy to
such Underwriter at its address or telecopy number set forth in its
Underwriters' Questionnaire or telex constituting such Questionnaire, which
address or telecopy number will be supplied to the Corporation by you. Any such
communications shall take effect upon receipt thereof.
11. Business Day. As used herein, the term "business day" shall mean any day
when the Commission's office in Washington, D.C. is open for business.
12. Successors. This Agreement shall inure to the benefit of and be binding
upon the Underwriters and the Corporation and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the parties
hereto and their respective successors and the controlling persons and the
officers and directors referred to in Section 7, and their respective
successors, heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective successors and said controlling persons, officers
and directors and their respective successors, heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Notes from any Underwriter shall be deemed to be a successor or assign by
reason merely of such purchase.
13. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York.
11
<PAGE>
If the foregoing is in accordance with your understanding, kindly sign and
return to us two counterparts hereof, and upon your acceptance, this letter and
such acceptance will become a binding agreement between the Corporation, on the
one hand, and each of the Underwriters, on the other hand, in accordance with
its terms.
Very truly yours,
Duke Capital Corporation
By:_______________________
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
By: ______________________
12
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Principal
Amount of
Notes to
be
Underwriter Purchased
----------- ---------
<S> <C>
$
--------
Total............................................................. $
========
</TABLE>
13
<PAGE>
EXHIBIT 1.2
DUKE CAPITAL CORPORATION
$
SERIES % JUNIOR SUBORDINATED NOTES DUE
UNDERWRITING AGREEMENT
Gentlemen:
1. Introductory. DUKE CAPITAL CORPORATION, a Delaware corporation
("Corporation"), proposes to issue and sell $ aggregate principal
amount of Series % Junior Subordinated Notes due ("Notes"), to be issued
pursuant to the provisions of a Senior Indenture, dated as of April 1, 1998,
between the Corporation and The Chase Manhattan Bank, as amended and
supplemented to the date hereof and as to be supplemented by a supplemental
indenture, dated as of , , relating to the Notes (the "Indenture"), and
hereby agrees with the several Underwriters hereinafter named ("Underwriters")
as follows:
2. Representations and Warranties of the Corporation. The Corporation
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. ), including a prospectus,
relating to the Notes has been filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended
(the "1933 Act"). Such registration statement and any post-effective
amendment thereto, each in the form heretofore delivered to you, have been
declared effective by the Commission in such form, and no stop order
suspending the effectiveness of such registration statement has been issued
and no proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) of the rules
and regulations of the Commission under the 1933 Act being hereinafter
called a "Preliminary Prospectus"; the various parts of such registration
statement, including all exhibits thereto and including the documents
incorporated by reference in the prospectus contained in the registration
statement at the time such part of the registration statement became
effective, each as amended at the time such part of the registration
statement became effective, being hereinafter called the "Registration
Statement"; and the final prospectus relating to the Notes, in the form
first filed pursuant to Rule 424(b) under the 1933 Act, being hereinafter
called the "Prospectus"; and any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
<PAGE>
include the documents incorporated by reference therein, as of the date of
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary Prospectus or
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as amended (the "1934
Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual
report of the Corporation filed pursuant to Section 13(a) or 15(d) of the
1934 Act after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement).
(b) The Registration Statement conforms and the Prospectus will conform in
all material respects to the requirements of the 1933 Act and the rules and
regulations thereunder ("1933 Act Regulations"), and the Registration
Statement does not and the Prospectus will not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, except
that the foregoing does not apply to statements or omissions in any such
document based upon written information furnished to the Corporation by any
Underwriter specifically for use therein.
(c) The documents incorporated by reference in the Prospectus, at the time
they were filed with the Commission, conformed in all material respects to
the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
with the other information in the Prospectus, do not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and any documents deemed to be incorporated by reference in the
Prospectus will, when they are filed with the Commission, comply in all
material respects with the requirements of the 1934 Act and the 1934 Act
Regulations, and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they are made, not misleading.
(d) The compliance by the Corporation with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Corporation or any of its Principal Subsidiaries (as defined below) is a
party or by which any of them or their respective property is bound or to
which any of their property or assets is subject, nor will such action
result in any violation of the provisions of the Restated Certificate of
Incorporation or By-Laws of the Corporation or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Corporation or its Principal Subsidiaries or any of
their respective property; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the consummation by the Corporation of the
transactions contemplated by this Agreement, except for the registration
under the 1933 Act of the Notes and such consents, approvals,
authorizations, registrations or qualifications as may be required under
2
<PAGE>
state securities or Blue Sky laws in connection with the purchase and
distribution of the Notes by the Underwriters.
(e) Each of PanEnergy Corp, Texas Eastern Transmission Corporation and
Algonquin Gas Transmission Company, each a Delaware corporation (and herein
called a "Principal Subsidiary"), is a direct or indirect wholly-owned
subsidiary of the Corporation.
3. Purchase, Sale and Delivery of Notes. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Corporation agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to
purchase from the Corporation, at a purchase price of % of the principal
amount of the Notes, plus accrued interest from , , the respective
principal amount of Notes set forth opposite the names of the Underwriters in
Schedule A hereto plus the respective principal amount of additional Notes
which each such Underwriter may become obligated to purchase pursuant to the
provisions of Section 8 hereof.
Payment of the purchase price for the Notes to be purchased by the Underwriters
shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue of the
Americas, New York, N.Y., or at such other place as shall be mutually agreed
upon by you and the Corporation, at 10:00 A.M., New York City time, on ,
(unless postponed in accordance with the provisions of Section 8) or such other
time not later than three full business days after such date as shall be agreed
upon by you and the Corporation (the "Closing Date"). Payment shall be made to
the Corporation by wire transfer in immediately available funds, payable to the
order of the Corporation against delivery of the Notes, in fully registered
form, to you or upon your order. The Notes shall be delivered in the form of
one or more global certificates in aggregate denomination equal to the
aggregate principal amount of the Notes upon original issuance and registered
in the name of Cede & Co., as nominee for The Depository Trust Company ("DTC").
4. Offering by the Underwriters. It is understood that the several Underwriters
propose to offer the Notes for sale to the public as set forth in the
Prospectus.
5. Covenants of the Corporation. The Corporation covenants and agrees with the
several Underwriters that:
(a) The Corporation will advise you promptly of any amendment or
supplementation of the Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of
the Registration Statement, and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(b) If at any time when a prospectus relating to the Notes is required to
be delivered under the 1933 Act any event occurs as a result of which the
Prospectus as then amended or supplemented would include an 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 is necessary at any time to
amend the Prospectus to comply with the 1933 Act, the Corporation promptly
will prepare and file with the Commission an amendment, supplement or an
appropriate document pursuant to Section 13 or 14 of the 1934 Act which
will correct such statement or omission or which will effect such
compliance.
3
<PAGE>
(c) The Corporation, during the period when a prospectus relating to the
Notes is required to be delivered under the 1933 Act, will file promptly
all documents required to be filed with the Commission pursuant to Section
13 or 14 of the 1934 Act.
(d) The Corporation will make generally available to its security holders,
in each case as soon as practicable but not later than 60 days after the
close of the period covered thereby, earnings statements (in form complying
with the provisions of Section 11(a) of the 1933 Act, which need not be
certified by independent certified public accountants unless required by
the 1933 Act) covering (i) a twelve-month period beginning not later than
the first day of the Corporation's fiscal quarter next following the
effective date of the Registration Statement and (ii) a twelve-month period
beginning not later than the first day of the Corporation's fiscal quarter
next following the date of this Agreement.
(e) The Corporation will furnish to you, without charge, copies of the
Registration Statement ( of which will be signed and will include all
exhibits other than those incorporated by reference), the Prospectus, and
all amendments and supplements to such documents, in each case as soon as
available and in such quantities as you reasonably request.
(f) The Corporation will arrange or cooperate in arrangements for the
qualification of the Notes for sale under the laws of such jurisdictions as
you designate and will continue such qualifications in effect so long as
required for the distribution; provided, however, that the Corporation
shall not be required to qualify as a foreign corporation or to file any
general consents to service of process under the laws of any state where it
is not now so subject.
(g) The Corporation will not, during the period of days from the date
hereof, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of any Notes, any security convertible into or exchangeable for the
Notes or any debt security substantially similar to the Notes (except for
the Notes issued pursuant to this Agreement), without your prior written
consent.
(h) The Corporation will pay all expenses incident to the performance of
its obligations under this Agreement including (i) the printing and filing
of the Registration Statement and the printing of this Agreement and the
Blue Sky Survey, (ii) the issuance and delivery of the Notes as specified
herein, (iii) the fees and disbursements of counsel for the Underwriters in
connection with the qualification of the Notes under the securities laws of
any jurisdiction in accordance with the provisions of Section 5(f) and in
connection with the preparation of the Blue Sky Survey, such fees not to
exceed $7,500, (iv) the printing and delivery to the Underwriters, in
quantities as hereinabove referred to, of copies of the Registration
Statement and Prospectus and any amendments thereto, and of the Prospectus
and any amendments or supplements thereto, (v) any fees charged by
independent rating agencies for rating the Notes, (vi) any fees and
expenses in connection with any listing of the Notes on the New York Stock
Exchange, (vii) any filing fee required by the National Association of
Securities Dealers, Inc., and (viii) the costs of any depository
arrangements for the Notes with DTC or any successor depository.
6. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Notes will be subject to the
accuracy of the representations and
4
<PAGE>
warranties on the part of the Corporation herein, to the accuracy of the
statements of officers of the Corporation made pursuant to the provisions
hereof, to the performance by the Corporation of its obligations hereunder and
to the following additional conditions precedent:
(a) Prior to the Closing Date, no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of the
Corporation or you, shall be threatened by the Commission.
(b) Prior to the Closing Date, the rating assigned by Moody's Investors
Service, Inc. or Standard & Poor's Ratings Group to (i) any preferred
securities or any debt securities of the Corporation or (ii) any trust
preferred securities of Duke Capital Financing Trust I, Duke Capital
Financing Trust II or Duke Capital Financing Trust III as of the date of
this Agreement shall not have been lowered.
(c) Since the respective most recent dates as of which information is given
in the Prospectus and up to the Closing Date, there shall not have been any
material adverse change in the condition of the Corporation, financial or
otherwise, except as reflected in or contemplated by the Prospectus, and,
since such dates and up to the Closing Date, there shall not have been any
material transaction entered into by the Corporation other than
transactions contemplated by the Prospectus and transactions in the
ordinary course of business.
(d) You shall have received an opinion or opinions of Dewey Ballantine LLP,
counsel to the Corporation, dated the Closing Date, to the effect that:
(i) The Corporation has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus.
(ii) Each of the Principal Subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus.
(iii) The Indenture has been duly authorized, executed and delivered by
the Corporation and duly qualified under the Trust Indenture Act of
1939 and, assuming the due authorization, execution and delivery
thereof by The Chase Manhattan Bank, as Trustee, constitutes a valid
and legally binding instrument of the Corporation, enforceable against
the Corporation in accordance with its terms, subject to the
qualifications that the enforceability of the Corporation's obligations
under the Indenture may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(iv) The Notes have been duly authorized and executed by the
Corporation and, when authenticated by The Chase Manhattan Bank, as
Trustee, in the manner provided in the Indenture and delivered against
payment therefor, will constitute valid and legally binding obligations
of the Corporation, enforceable against the Corporation in accordance
with their terms, subject to the qualifications that the enforceability
of the Corporation's obligations under the Notes may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and by
general
5
<PAGE>
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and are entitled to
the benefits afforded by the Indenture in accordance with the terms of
the Indenture and the Notes.
(v) The Registration Statement has become effective under the 1933 Act,
and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or threatened under the 1933 Act.
(vi) This Agreement has been duly authorized, executed and delivered by
the Corporation.
(vii) The performance by the Corporation of this Agreement and the
Indenture will not contravene any of the provisions of the Restated
Certificate of Incorporation or By-Laws of the Corporation.
(viii) The Corporation is not a holding company under the Public
Utility Holding Company Act of 1935, as amended.
(ix) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the issue and sale of the Notes or the consummation by the
Corporation of the transactions contemplated by this Agreement or the
Indenture, except such as have been obtained under the 1933 Act and the
Trust Indenture Act and such consents, approvals, authorizations,
orders, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Notes by the Underwriters.
(x) The Registration Statement as of the date of effectiveness under
the 1933 Act and the Prospectus as of the date it was filed with, or
transmitted for filing to, the Commission complied as to form in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations; and nothing has come to their attention that would
lead them to believe that the Registration Statement as of the date of
effectiveness under the 1933 Act (or if an amendment to such
Registration Statement or an annual report on Form 10-K has been filed
by the Corporation with the Commission subsequent to the effectiveness
of the Registration Statement, then at the time of the most recent such
filing) 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 that the Prospectus as of
the date it was filed with, or transmitted for filing to, the
Commission and at the Closing Date 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. Such
opinion may state that such counsel do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statement and Prospectus except as otherwise
expressly provided in such opinion and do not express any opinion or
belief as to the financial statements or other financial data contained
in the Registration Statement and the Prospectus or as to the statement
of the eligibility and qualification of the Trustee.
(xi) The statements made in the Prospectus under the captions
"Description of the Junior Subordinated Notes" and "Description of the
Series Junior Subordinated Notes," insofar as they purport to
summarize provisions of documents specifically referred to therein,
fairly present the information called for with respect thereto by Form
S-3.
6
<PAGE>
In rendering the foregoing opinion or opinions, Dewey Ballantine LLP may
state that such opinion or opinions are limited to the federal laws of the
United States, the laws of the State of New York and the General
Corporation Law of the State of Delaware, and that they are expressing no
opinion as to the effect of the laws of any other jurisdiction. In
addition, such counsel may state that they have relied as to certain
factual matters on information obtained from public officials, officers of
the Corporation and other sources believed by them to be responsible and
that the signatures on all documents examined by them are genuine,
assumptions which such counsel have not independently verified.
(e) You shall have received an opinion, dated the Closing Date, of Ellen T.
Ruff, Esq., General Counsel of the Corporation, to the effect that:
(i) Each of the Corporation and the Principal Subsidiaries is duly
qualified to do business in each jurisdiction in which the ownership or
leasing of its property or the conduct of its business requires such
qualification, except where the failure to so qualify, considering all
such cases in the aggregate, does not have a material adverse effect on
the business, properties, financial position or results of operations
of the Corporation and its subsidiaries taken as a whole.
(ii) The descriptions in the Registration Statement and the Prospectus
of legal or governmental proceedings are accurate and fairly present
the information required to be shown, and such counsel does not know of
any litigation or any legal or governmental proceeding instituted or
threatened against the Corporation or any of its subsidiaries or any of
their respective properties that would be required to be disclosed in
the Prospectus and is not so disclosed.
Such counsel shall also state that nothing has come to her attention that
has caused her to believe that the Registration Statement as of the date of
effectiveness under the 1933 Act and the Prospectus as of the date it was
filed with, or transmitted for filing to, the Commission, contained any
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 that the Prospectus as of the date it was filed with, or
transmitted for filing to, the Commission and at the Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Such counsel may also state that, except as otherwise expressly
provided in such opinion, she does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus and does not express any opinion
or belief as to the financial statements or other financial data contained
in the Registration Statement and the Prospectus.
In rendering the foregoing opinion, such counsel may rely, to the extent
recited therein, upon opinions of local counsel. Such counsel may also
state that she has relied as to certain factual matters on information
obtained from public officials, officers of the Corporation and other
sources believed by her to be responsible.
(f) You shall have received the opinion or opinions of , counsel
for the Underwriters, dated the Closing Date, with respect to the
incorporation of the Corporation,
7
<PAGE>
the validity of the Notes, the Registration Statement and the Prospectus,
as amended or supplemented, and such other related matters as you may
require, and the Corporation shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.
(g) On or after the date hereof, there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally or of the securities of Duke Energy Corporation, the Corporation,
Duke Capital Financing Trust I, Duke Capital Financing Trust II or Duke
Capital Financing Trust III on the New York Stock Exchange; or (ii) a
general moratorium on commercial banking activities in New York declared by
either federal or New York State authorities; or (iii) the outbreak or
material escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war if the
effect of any such event specified in this clause (g) in your judgment
makes it impracticable or inadvisable to proceed with the public offering
or the delivery of the Notes being delivered at the Closing Date on the
terms and in the manner contemplated in the Prospectus. In such event there
shall be no liability on the part of any party to any other party except as
otherwise provided in Section 7 hereof and except for the expenses to be
borne by the Corporation as provided in Section 5(h) hereof.
(h) You shall have received a certificate of the Chairman of the Board and
President or any Vice President and a principal financial or accounting
officer of the Corporation, dated the Closing Date, in which such officers,
to the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Corporation in this
Agreement are true and correct, that the Corporation has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Date, that the conditions specified in
Section 6(b) and Section 6(c) have been satisfied, and that no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are threatened
by the Commission.
(i) On the date of this Agreement, you shall have received letters dated
the date hereof, in form and substance satisfactory to you, from the
Corporation's independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in or incorporated by reference
into the Prospectus.
(j) At the Closing Date you shall have received from the Corporation's
independent public accountants letters, dated the Closing Date, to the
effect that such accountants reaffirm the statements made in the letters
furnished pursuant to paragraph (i) of this Section 6, except that the
specified date referred to shall be a date not more than three business
days prior to the Closing Date.
The Corporation will furnish you with such conformed copies of such opinions,
certificates, letters and documents as you reasonably request.
7. Indemnification. (a) The Corporation agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act, as follows:
8
<PAGE>
(i) against any and all loss, liability, claim, damage and expense
whatsoever arising out of any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or any
amendment thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the prospectus constituting a part of the Registration
Statement in the form in which it became effective or the Prospectus (or
any amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, unless such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with written
information furnished to the Corporation by any Underwriter through you
expressly for use in the Registration Statement (or any amendment thereto)
or such Preliminary Prospectus, such prospectus, or the Prospectus (or any
amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission or any such alleged untrue statement
or omission, if such settlement is effected with the written consent of the
Corporation; and
(iii) against any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, 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 (i) or (ii) above.
In no case shall the Corporation be liable under this indemnity agreement with
respect to any claim made against any Underwriter or any such controlling
person unless the Corporation shall be notified in writing of the nature of the
claim within a reasonable time after the assertion thereof, but failure so to
notify the Corporation shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. The Corporation
shall be entitled to participate at its own expense in the defense, or, if it
so elects, within a reasonable time after receipt of such notice, to assume the
defense of any suit brought to enforce any such claim, but if it so elects to
assume the defense, such defense shall be conducted by counsel chosen by it and
approved by the Underwriter or Underwriters or controlling person or persons,
or defendant or defendants in any suit so brought, which approval shall not be
unreasonably withheld. In any such suit, any Underwriter or any such
controlling person shall have the right to employ its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Underwriter or
such controlling person unless (i) the Corporation and such Underwriter shall
have mutually agreed to the employment of such counsel, or (ii) the named
parties to any such action (including any impleaded parties) include both such
Underwriter or such controlling person and the Corporation and such Underwriter
or such controlling person shall have been advised by such counsel that a
conflict of interest between the Corporation and such Underwriter or such
controlling person may arise and for this reason it is not desirable for the
same counsel to represent both the indemnifying party and also the indemnified
party (it being understood, however, that the Corporation shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same
9
<PAGE>
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys for all such Underwriters
and all such controlling persons, which firm shall be designated in writing by
you). The Corporation agrees to notify you within a reasonable time of the
assertion of any claim against it, any of its officers or directors or any
person who controls the Corporation within the meaning of Section 15 of the
1933 Act, in connection with the sale of the Notes.
(b) Each Underwriter agrees, severally and not jointly, that it will indemnify
and hold harmless the Corporation, its directors and each of the officers of
the Corporation who signed the Registration Statement and each person, if any,
who controls the Corporation within the meaning of Section 15 of the 1933 Act
to the same extent as the indemnity contained in subsection (a) of this
Section, but only with respect to statements or omissions made in the
Registration Statement (or any amendment thereto) or any Preliminary
Prospectus, such prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Corporation by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), such Preliminary Prospectus,
such prospectus or the Prospectus (or any amendment or supplement thereto). In
case any action shall be brought against the Corporation or any person so
indemnified based on the Registration Statement (or any amendment thereto) or
such Preliminary Prospectus, such prospectus or the Prospectus (or any
amendment or supplement thereto) and in respect of which indemnity may be
sought against any Underwriter, such Underwriter shall have the rights and
duties given to the Corporation, and the Corporation and each person so
indemnified shall have the rights and duties given to the Underwriters, by the
provisions of subsection (a) of this Section.
8. Default by One or More of the Underwriters. (a) If any Underwriter shall
default in its obligation to purchase the Notes which it has agreed to purchase
hereunder on the Closing Date, you may in your discretion arrange for you or
another party or other parties to purchase such Notes on the terms contained
herein. If within thirty-six hours after such default by any Underwriter you do
not arrange for the purchase of such Notes, then the Corporation shall be
entitled to a further period of thirty-six hours within which to procure
another party or other parties satisfactory to you to purchase such Notes on
such terms. In the event that, within the respective prescribed periods, you
notify the Corporation that you have so arranged for the purchase of such
Notes, or the Corporation notifies you that it has so arranged for the purchase
of such Notes, you or the Corporation shall have the right to postpone such
Closing Date for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Corporation
agrees to file promptly any amendments to the Registration Statement or the
Prospectus which may be required. The term "Underwriter" as used in this
Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Notes.
(b) If, after giving effect to any arrangements for the purchase of the Notes
of a defaulting Underwriter or Underwriters by you or the Corporation as
provided in subsection (a) above, the aggregate amount of such Notes which
remains unpurchased does not exceed one-eleventh of the aggregate amount of all
the Notes to be purchased at such Closing Date, then the Corporation shall have
the right to require each non-defaulting Underwriter to purchase the amount of
Notes which
10
<PAGE>
such Underwriter agreed to purchase hereunder at such Closing Date and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the amount of Notes which such Underwriter agreed to purchase
hereunder) of the Notes of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the Notes
of a defaulting Underwriter or Underwriters by you or the Corporation as
provided in subsection (a) above, the aggregate amount of such Notes which
remains unpurchased exceeds one-eleventh of the aggregate amount of all the
Notes to be purchased at such Closing Date, or if the Corporation shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Notes of a defaulting Underwriter or Underwriters,
then this Agreement shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Corporation, except for the expenses to
be borne by the Corporation as provided in Section 5(h) hereof and the
indemnity agreement in Section 7 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
9. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of
the Corporation or its officers and of the several Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect,
regardless of any termination of this Agreement, or any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter or
the Corporation, or any of its officers or directors or any controlling person,
and will survive delivery of and payment for the Notes.
10. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters, will be mailed, delivered or telecopied and confirmed to you
in care of at , attention of or,
if sent to the Corporation, will be mailed, delivered or telecopied and
confirmed to it at 526 South Church Street, Charlotte, N.C. 28202, telephone
number (704) 382-5159, attention of Richard J. Osborne, Vice President and
Chief Financial Officer; provided, however, that any notice to an Underwriter
pursuant to Section 7 hereof shall be delivered or sent by mail or telecopy to
such Underwriter at its address or telecopy number set forth in its
Underwriters' Questionnaire or telex constituting such Questionnaire, which
address or telecopy number will be supplied to the Corporation by you. Any such
communications shall take effect upon receipt thereof.
11. Business Day. As used herein, the term "business day" shall mean any day
when the Commission's office in Washington, D.C. is open for business.
12. Successors. This Agreement shall inure to the benefit of and be binding
upon the Underwriters and the Corporation and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the parties
hereto and their respective successors and the controlling persons and the
officers and directors referred to in Section 7, and their respective
successors, heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained; this Agreement and all conditions and provisions hereof being
intended to be and
11
<PAGE>
being for the sole and exclusive benefit of the parties hereto and their
respective successors and said controlling persons, officers and directors and
their respective successors, heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Notes from any
Underwriter shall be deemed to be a successor or assign by reason merely of
such purchase.
13. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York.
If the foregoing is in accordance with your understanding, kindly sign and
return to us two counterparts hereof, and upon your acceptance, this letter and
such acceptance will become a binding agreement between the Corporation, on the
one hand, and each of the Underwriters, on the other hand, in accordance with
its terms.
Very truly yours,
Duke Capital Corporation
By:_______________________
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
By:__________________________
12
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Principal
Amount of
Notes to be
Underwriter Purchased
----------- -----------
<S> <C>
$
-----------
Total........................................................... $
===========
</TABLE>
13
<PAGE>
EXHIBIT 1.3
Preferred Securities
DUKE CAPITAL FINANCING TRUST [ ]
% Trust Preferred Securities
(Liquidation Amount $ Per Preferred Security)
UNDERWRITING AGREEMENT
,
As representatives of the several Underwriters
named in Schedule A hereto
c/o
Gentlemen:
1. Introductory. Duke Capital Financing Trust [ ], a Delaware statutory
business trust (the "Trust"), and Duke Capital Corporation, a Delaware
corporation (the "Corporation"), propose that the Trust issue and sell to the
Underwriters named in Schedule A hereto (the "Underwriters") % Trust
Preferred Securities (liquidation amount $ per preferred security),
representing preferred undivided beneficial interests in the assets of the
Trust (the "Preferred Securities"), guaranteed by the Corporation as to the
payment of distributions and payments upon liquidation or redemption, to the
extent set forth in the Guarantee Agreement (the "Guarantee Agreement") between
the Corporation and The Chase Manhattan Bank, as trustee thereunder (the
"Guarantee Trustee"), to be dated as of the Closing Date (as defined in Section
3 hereof) (the "Guarantee"), and the Trust and the Corporation hereby agree
with you as hereinafter set forth in this Agreement.
The entire proceeds from the sale of the Preferred Securities will be combined
with the entire proceeds from the sale by the Trust to the Corporation of its
common securities, representing common undivided beneficial interests in the
assets of the Trust (the "Common Securities"), and will be used by the Trust to
purchase the Series % Junior Subordinated Notes due , (the
"Notes") to be issued by the Corporation. The Preferred Securities and the
Common Securities will be issued pursuant to the Amended and Restated Trust
Agreement, dated as of , (the "Trust Agreement"), among the
Corporation, as Depositor, and the trustees named therein, including The Chase
Manhattan Bank, as property trustee (the "Property
<PAGE>
Trustee"), and Chase Manhattan Bank Delaware, as Delaware trustee (the
"Delaware Trustee"). The Notes will be issued pursuant to a Subordinated
Indenture, dated as of April 1, 1998 (the "Original Indenture"), between the
Corporation and The Chase Manhattan Bank, as Trustee (the "Indenture Trustee"),
as amended and supplemented to the date hereof, and as to be supplemented by a
supplemental indenture, dated as of , (the "Supplemental Indenture"
and, together with the Original Indenture as theretofore amended and
supplemented, the "Indenture").
2. Representations and Warranties of the Trust and the Corporation. The Trust
and the Corporation, jointly and severally, represent and warrant to, and agree
with, the several Underwriters that:
(a) A registration statement (Nos. and ), including a
prospectus, relating to the Preferred Securities, the Guarantee and the
Notes has been filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "1933
Act"). Such registration statement and any post-effective amendment
thereto, each in the form heretofore delivered to you, and, excluding
exhibits thereto but including all documents incorporated by reference in
the prospectus contained therein, to you for each of the other
Underwriters, have been declared effective by the Commission in such form,
and no stop order suspending the effectiveness of such registration
statement has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary prospectus
included in such registration statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission
under the 1933 Act being hereinafter called a "Preliminary Prospectus"; the
various parts of such registration statement, including all exhibits
thereto and including the documents incorporated by reference in the
prospectus contained in the registration statement at the time such part of
the registration statement became effective, each as amended at the time
such part of the registration statement became effective, being hereinafter
called the "Registration Statement"; and the final prospectus relating to
the Preferred Securities, the Guarantee and the Notes, in the form first
filed pursuant to Rule 424(b) under the 1933 Act, being hereinafter called
the "Prospectus"; and any reference herein to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or Prospectus shall
be deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
Corporation filed pursuant to Section 13(a) or 15(d) of the 1934 Act after
the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement).
(b) The Registration Statement conforms and the Prospectus will conform in
all material respects to the requirements of the 1933 Act and the rules and
regulations thereunder ("1933 Act Regulations"), and the Registration
Statement does not and the Prospectus will not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, except
that the foregoing
2
<PAGE>
does not apply to statements or omissions in any such document based upon
written information furnished to the Trust or the Corporation by any
Underwriter specifically for use therein.
(c) The documents incorporated by reference in the Prospectus, at the time
they were filed with the Commission, conformed in all material respects to
the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
with the other information in the Prospectus, do not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and any documents deemed to be incorporated by reference in the
Prospectus will, when they are filed with the Commission, comply in all
material respects with the requirements of the 1934 Act and the 1934 Act
Regulations, and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they are made, not misleading.
(d) The compliance by the Corporation and the Trust with all of the
provisions of this Agreement and the consummation of the transactions
herein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Corporation or any of its Principal
Subsidiaries (as defined below) is a party or by which any of them or their
respective property is bound or to which any of their property or assets is
subject, nor will such action result in any violation of the provisions of
the Restated Certificate of Incorporation or By-Laws of the Corporation,
the Trust Agreement or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over (i) the
Corporation or its Principal Subsidiaries or any of their respective
property or (ii) the Trust; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the consummation by the Corporation or the
Trust of the transactions contemplated by this Agreement, except for the
registration under the 1933 Act of the Preferred Securities, the Guarantee
and the Notes and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Preferred
Securities by the Underwriters.
(e) Each of PanEnergy Corp, Texas Eastern Transmission Corporation and
Algonquin Gas Transmission Company, each a Delaware corporation (and herein
called a "Principal Subsidiary"), is a direct or indirect wholly-owned
subsidiary of the Corporation.
3. Purchase, Sale and Delivery of Preferred Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Trust agrees to sell to each of the
Underwriters and each of the Underwriters agrees, severally and not jointly, to
purchase from the Trust at a purchase price of $ per Preferred Security, the
number of Preferred Securities set forth opposite the name of such Underwriter
in Schedule A hereto, plus the respective principal amount of additional
Preferred Securities which each such Underwriter may become obligated to
purchase pursuant to the provisions of Section 8 hereof.
As compensation to the Underwriters for their commitments hereunder, and in
view of the fact that the proceeds of the sale of the Preferred Securities will
be used by the Trust to purchase the Notes of
3
<PAGE>
the Corporation, the Corporation hereby agrees to pay at the Closing Date (as
defined below) to , for the accounts of the several Underwriters,
a commission equal to $ per Preferred Security.
The Preferred Securities to be purchased by the Underwriters hereunder will be
represented by a global certificate or certificates in book-entry form which
will be deposited by or on behalf of the Trust with The Depository Trust
Company ("DTC") or its designated custodian and registered in the name of Cede
& Co., as nominee of DTC. The Trust will deliver the Preferred Securities to
, for the respective accounts of the Underwriters, against
payment by or on behalf of such Underwriters of the purchase price therefor by
wire transfer of immediately available funds to the Trust, by causing DTC to
credit the Preferred Securities to the account of , at DTC. The
time and date of such delivery and payment (the "Closing Date") shall be 10:00
a.m., New York City time, on , (unless postponed in accordance with
the provisions of Section 8), or at such other time and date as you, the Trust
and the Corporation may agree upon in writing at the office of Dewey Ballantine
LLP, 1301 Avenue of the Americas, New York, New York 10019, or at such other
place as you, the Trust and the Corporation may determine. It is understood
that each Underwriter has authorized , for its account, to accept
delivery of, receipt for, and make payment of the purchase price, for the
Preferred Securities which it has agreed to purchase.
At the Closing Date, the Corporation will pay, or cause to be paid, the
compensation payable to the Underwriters under this Section 3 by wire transfer
of immediately available funds to , as representative of and on
behalf of the Underwriters.
4. Offering by the Underwriters. It is understood that the several Underwriters
propose to offer the Preferred Securities for sale to the public as set forth
in the Prospectus.
5. Covenants of the Trust and the Corporation. The Trust and the Corporation,
jointly and severally, covenant and agree with the several Underwriters that:
(a) The Trust and the Corporation will advise you promptly of any amendment
or supplementation of the Registration Statement or the Prospectus and of
the institution by the Commission of any stop order proceedings in respect
of the Registration Statement, and will use their best efforts to prevent
the issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(b) If at any time when a prospectus relating to the Preferred Securities,
the Guarantee or the Notes is required to be delivered under the 1933 Act
any event occurs as a result of which the Prospectus as then amended or
supplemented would include an 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 is necessary at any time to amend the Prospectus to comply with the
1933 Act, the Trust and the Corporation promptly will prepare and file with
the Commission an amendment, supplement or an appropriate document pursuant
to Section 13 or 14 of the 1934 Act which will correct such statement or
omission or which will effect such compliance.
4
<PAGE>
(c) The Trust and the Corporation, during the period when a prospectus
relating to the Preferred Securities, the Guarantee or the Notes is
required to be delivered under the 1933 Act, will file promptly all
documents required to be filed with the Commission pursuant to Section 13
or 14 of the 1934 Act.
(d) The Corporation will make generally available to its security holders,
in each case as soon as practicable but not later than 60 days after the
close of the period covered thereby, earnings statements (in form complying
with the provisions of Section 11(a) of the 1933 Act, which need not be
certified by independent certified public accountants unless required by
the 1933 Act) covering (i) a twelve-month period beginning not later than
the first day of the Corporation's fiscal quarter next following the
effective date of the Registration Statement and (ii) a twelve-month period
beginning not later than the first day of the Corporation's fiscal quarter
next following the date of this Agreement.
(e) The Trust and the Corporation will furnish to you, without charge,
copies of the Registration Statement ( of which will be signed and will
include all exhibits other than those incorporated by reference), the
Prospectus, and all amendments and supplements to such documents, in each
case as soon as available and in such quantities as you reasonably request.
(f) The Trust and the Corporation will arrange or cooperate in arrangements
for the qualification of the Preferred Securities, and to the extent
required or advisable, the Guarantee and the Notes for sale under the laws
of such jurisdictions as you designate and will continue such
qualifications in effect so long as required for the distribution;
provided, however, that neither the Trust nor the Corporation shall be
required to qualify as a foreign corporation or to file any general
consents to service of process under the laws of any state where it is not
now so subject.
(g) The Trust and Corporation will not, during the period of days from
the date hereof, sell, offer to sell, grant any option for the sale of, or
otherwise dispose of any Preferred Securities, any security convertible
into or exchangeable for the Preferred Securities or the Notes or any debt
security substantially similar to the Notes or equity securities
substantially similar to the Preferred Securities (except for the Notes and
the Preferred Securities issued pursuant to this Agreement), without your
prior written consent.
(h) The Corporation will pay all expenses incident to the performance of
the obligations of the Trust and the Corporation under this Agreement
including (i) the printing and filing of the Registration Statement and the
printing of this Agreement and the Blue Sky Survey, (ii) the issuance and
delivery of the Preferred Securities, the Guarantee and the Notes as
specified herein, (iii) the fees and disbursements of counsel for the
Underwriters in connection with the qualification of the Preferred
Securities, the Guarantee and the Notes under the securities laws of any
jurisdiction in accordance with the provisions of Section 5(f) and in
connection with the preparation of the Blue Sky Survey, such fees not to
exceed $7,500, (iv) the printing and delivery to the Underwriters, in
quantities as hereinabove referred to, of copies of the Registration
Statement and Prospectus and any amendments thereto, (v) any fees charged
by independent rating agencies for rating the Preferred Securities, (vi)
all fees and expenses of the Trustees, including the Indenture Trustee,
Property Trustee, Guarantee Trustee and Delaware Trustee and the fees and
disbursements of their counsel, (vii) any fees and expenses in connection
with the listing of the Preferred Securities and, if applicable, the Notes
on the New
5
<PAGE>
York Stock Exchange, (viii) any filing fee required by the National
Association of Securities Dealers, Inc. and (ix) the costs of any
depository arrangements for the Preferred Securities with DTC or any
successor depository.
6. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Preferred Securities will be
subject to the accuracy of the representations and warranties on the part of
the Trust or the Corporation herein, to the accuracy of the statements of
trustees or representatives of the Trust and officers of the Corporation made
pursuant to the provisions hereof, to the performance by the Trust and the
Corporation of their obligations hereunder and to the following additional
conditions precedent:
(a) Prior to the Closing Date, no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of the Trust,
the Corporation or you, shall be threatened by the Commission.
(b) Prior to the Closing Date, the rating assigned by Moody's Investors
Service, Inc. or Standard & Poor's Ratings Group to (i) any preferred
securities or any debt securities of the Corporation or (ii) any trust
preferred securities of Duke Capital Financing Trust I, Duke Capital
Financing Trust II or Duke Capital Financing Trust III as of the date of
this Agreement shall not have been lowered.
(c) Since the respective most recent dates as of which information is given
in the Prospectus and up to the Closing Date, there shall not have been any
material adverse change in the condition of the Trust or the Corporation,
financial or otherwise, except as reflected in or contemplated by the
Prospectus, and, since such dates and up to the Closing Date, there shall
not have been any material transaction entered into by the Corporation
other than transactions contemplated by the Prospectus and transactions in
the ordinary course of business.
(d) You shall have received an opinion or opinions of Dewey Ballantine LLP,
counsel to the Corporation, dated the Closing Date, to the effect that:
(i) The Corporation has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus.
(ii) Each of the Principal Subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus.
(iii) The Trust Agreement has been duly authorized, executed and
delivered by the Corporation and, assuming due authorization, execution
and delivery thereof by The Chase Manhattan Bank, as Trustee,
constitutes a valid and legally binding instrument of the Corporation,
enforceable against the Corporation in accordance with its terms,
subject to the qualifications that the enforceability of the
Corporation's obligations under the Trust Agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, and by
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
6
<PAGE>
(iv) The Guarantee Agreement has been duly authorized, executed and
delivered by the Corporation and constitutes a valid and legally
binding instrument of the Corporation, enforceable against the
Corporation in accordance with its terms, subject to the qualifications
that the enforceability of the Corporation's obligations under the
Guarantee Agreement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(v) The Indenture has been duly authorized, executed and delivered by
the Corporation and, assuming due authorization, execution and delivery
thereof by The Chase Manhattan Bank, as Trustee, constitutes a valid
and legally binding instrument of the Corporation, enforceable against
the Corporation in accordance with its terms, subject to the
qualifications that the enforceability of the Corporation's obligations
under the Indenture may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(vi) The Notes have been duly authorized and executed by the
Corporation and, when authenticated by The Chase Manhattan Bank, as
Trustee, in the manner provided in the Indenture and delivered against
payment therefor, will constitute valid and legally binding obligations
of the Corporation, enforceable against the Corporation in accordance
with their terms, subject to the qualifications that the enforceability
of the Corporation's obligations under the Notes may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law), and are entitled to
the benefits afforded by the Indenture in accordance with the terms of
the Indenture and the Notes.
(vii) The Registration Statement has become effective under the 1933
Act, and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or threatened under the 1933 Act.
(viii) Each of the Indenture, the Guarantee Agreement and the Trust
Agreement has been duly qualified under the Trust Indenture Act of
1939, as amended.
(ix) This Agreement has been duly authorized, executed and delivered by
the Corporation.
(x) The performance by the Corporation of this Agreement, the
Indenture, the Guarantee Agreement and the Trust Agreement will not
contravene any of the provisions of the Restated Certificate of
Incorporation or By-Laws of the Corporation.
(xi) The Corporation is not a holding company under the Public Utility
Holding Company Act of 1935, as amended.
7
<PAGE>
(xii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the issue and sale of the Preferred Securities, the issue
of the Guarantee or the issue and sale of the Notes or the consummation
by the Corporation and the Trust of the transactions contemplated by
this Agreement, the Trust Agreement, the Guarantee or the Indenture,
except such as have been obtained under the 1933 Act and the Trust
Indenture Act and such consents, approvals, authorizations, orders,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Preferred Securities and the Guarantee by the
Underwriters.
(xiii) The Registration Statement as of the date of effectiveness under
the 1933 Act and the Prospectus as of the date it was filed with, or
transmitted for filing to, the Commission complied as to form in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations; and nothing has come to their attention that would
lead them to believe that the Registration Statement as of the date of
effectiveness under the 1933 Act (or if an amendment to such
Registration Statement or an annual report on Form 10-K has been filed
by the Corporation with the Commission subsequent to the effectiveness
of the Registration Statement, then at the time of the most recent such
filing) 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 that the Prospectus as of
the date it was filed with, or transmitted for filing to, the
Commission and at the Closing Date 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. Such
opinion may state that such counsel do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statement and Prospectus except as otherwise
expressly provided in such opinion and do not express any opinion or
belief as to the financial statements or other financial data contained
in the Registration Statement and the Prospectus or as to the statement
of the eligibility and qualification of the Trustee.
(xiv) The statements made in the Prospectus under the captions
"Description of the Preferred Securities," "Description of the
Guarantees," "Description of the Series Junior Subordinated Notes"
and "Description of the Junior Subordinated Notes," insofar as they
purport to summarize provisions of documents specifically referred to
therein, fairly present the information called for with respect thereto
by Form S-3, and the statements as to matters of law and legal
conclusions contained in the Prospectus under the caption "Material
Federal Income Tax Considerations" are correct in all material
respects.
In rendering the foregoing opinion or opinions, Dewey Ballantine LLP may
state that such opinion or opinions are limited to the Federal laws of the
United States, the laws of the State of New York and the General
Corporation Law of the State of Delaware, and that they are expressing no
opinion as to the effect of the laws of any other jurisdiction. In
addition, such counsel may state that they have relied as to certain
factual matters on information obtained from public officials, officers of
the Corporation and other sources believed by them to be responsible and
that the signatures on all documents examined by them are genuine,
assumptions which such counsel have not independently verified.
8
<PAGE>
(e) You shall have received an opinion, dated the Closing Date, of Ellen T.
Ruff, Esq., General Counsel of the Corporation, to the effect that:
(i) Each of the Corporation and the Principal Subsidiaries is duly
qualified to do business in each jurisdiction in which the ownership or
leasing of its property or the conduct of its business requires such
qualification, except where the failure to so qualify, considering all
such cases in the aggregate, does not have a material adverse effect on
the business, properties, financial position or results of operations
of the Corporation and its subsidiaries taken as a whole.
(ii) The descriptions in the Registration Statement and the Prospectus
of legal or governmental proceedings are accurate and fairly present
the information required to be shown, and such counsel does not know of
any litigation or any legal or governmental proceeding instituted or
threatened against the Corporation or any of its subsidiaries or any of
their respective properties that would be required to be disclosed in
the Prospectus and is not so disclosed.
Such counsel shall also state that nothing has come to her attention that
has caused her to believe that the Registration Statement as of the date of
effectiveness under the 1933 Act and the Prospectus as of the date it was
filed with, or transmitted for filing to, the Commission, contained any
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 that the Prospectus as of the date it was filed with, or
transmitted for filing to, the Commission and at the Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Such counsel may also state that, except as otherwise expressly
provided in such opinion, she does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus and does not express any opinion
or belief as to the financial statements or other financial data contained
in the Registration Statement and the Prospectus.
In rendering the foregoing opinion, such counsel may rely, to the extent
recited therein, upon opinions of local counsel. Such counsel may also
state that she has relied as to certain factual matters on information
obtained from public officials, officers of the Corporation and other
sources believed by her to be responsible.
(f) You shall have received the opinion of Richards, Layton & Finger, P.A.,
special Delaware counsel to the Trust, dated the Closing Date, to the
effect that:
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Business Trust Act of the State
of Delaware (the "Delaware Business Trust Act"), and all filings
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 Business Trust Act and the Trust Agreement, the
Trust has the business trust power and authority to own property and
conduct its business, all as described in the Prospectus.
9
<PAGE>
(iii) Under the Delaware Business Trust Act and the Trust Agreement,
the Trust has the business trust power and authority (a) to execute and
deliver this Agreement, (b) to perform its obligations under this
Agreement and (c) to issue and perform its obligations under the
Preferred Securities and the Common Securities.
(iv) Under the Delaware Business Trust Act and the Trust Agreement, the
execution and delivery by the Trust of this Agreement and the
performance by the Trust of its obligations hereunder and under the
Trust Agreement, have been duly authorized by all necessary business
trust action on the part of the Trust.
(v) The Trust Agreement constitutes a valid and binding obligation of
the Corporation and the trustees named therein, enforceable against the
Corporation and the trustees named therein, in accordance with its
terms, subject, as to enforcement, to the effect upon the Trust
Agreement of (a) bankruptcy, insolvency, moratorium, receivership,
liquidation, fraudulent conveyance or transfer, reorganization and
other similar laws relating to or affecting the remedies and rights of
creditors generally, (b) principles of equity, including applicable law
relating to fiduciary duties (regardless of whether considered or
applied in a proceeding in equity or at law) and (c) the effect of
applicable public policy on the enforceability of provisions relating
to indemnification or contribution.
(vi) The Preferred Securities have been duly authorized by the Trust
Agreement and are duly and validly issued and, subject to the
qualifications set forth herein, fully paid and non-assessable
preferred undivided beneficial interests in the assets of the Trust;
the Holders of the Preferred Securities, as beneficial owners of the
Trust (the "Securityholders"), are entitled to the same limitation of
personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of
Delaware; provided, however, that such counsel may note that the
Securityholders may be obligated, pursuant to the Trust Agreement, to
(a) provide indemnity and/or security in connection with and pay a sum
sufficient to cover any taxes or governmental charges arising from
transfers or exchanges of Preferred Securities certificates and the
issuance of replacement Preferred Securities certificates and (b)
provide security and/or indemnity in connection with requests of or
directions to the Property Trustee (as defined in the Trust Agreement)
to exercise its rights and powers under the Trust Agreement; and under
the Delaware Business Trust Act and the Trust Agreement, the issuance
of the Preferred Securities is not subject to preemptive or other
similar rights.
(vii) The Common Securities have been duly authorized by the Trust
Agreement and are duly and validly issued and fully paid undivided
beneficial interests in the assets of the Trust; and under the Delaware
Business Trust Act and the Trust Agreement, the issuance of the Common
Securities is not subject to preemptive or other similar rights.
(viii) The issuance and sale by the Trust of the Preferred Securities
and the Common Securities, the execution, delivery and performance by
the Trust of this Agreement, the performance by the Trust of the Trust
Agreement, the consummation by the Trust of the transactions
contemplated herein and therein and the compliance by the Trust with
its obligations hereunder do not violate (a) any of the provisions of
the Certificate of Trust of the Trust or the Trust Agreement or (b) any
applicable Delaware law or Delaware administrative regulation.
10
<PAGE>
(ix) Assuming that the Trust derives no income from or connected with
sources within the State of Delaware and has no assets, activities
(other than having a Delaware trustee as required by the Delaware
Business Trust Act and the filing of documents with the Secretary of
State of the State of Delaware) or employees in the State of Delaware,
no authorization, approval, consent or order of any Delaware court or
Delaware governmental authority or Delaware agency is required to be
obtained by the Trust solely as a result of the issuance and sale of
the Preferred Securities, the consummation by the Trust of the
transactions contemplated in this Agreement and the Trust Agreement or
the compliance by the Trust of its obligations hereunder and
thereunder.
(x) Assuming that the Trust derives no income from or connected with
sources within the State of Delaware and has no assets, activities
(other than having a Delaware trustee as required by the Delaware
Business Trust Act and the filing of documents with the Secretary of
State of the State of Delaware) or employees in the State of Delaware,
and assuming that the Trust is treated as a grantor trust for federal
income tax purposes, the Securityholders (other than those holders of
the Preferred Securities 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.
In rendering the opinion expressed in this paragraph (f), such counsel need
express no opinion concerning the securities laws of the State of Delaware.
(g) You shall have received the opinion or opinions of , counsel
for the Underwriters, dated the Closing Date, with respect to the
incorporation of the Corporation, the validity of the Notes, the
Registration Statement and the Prospectus, as amended or supplemented, and
such other related matters as you may require, and the Corporation shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(h) On or after the date hereof, there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally or of the securities of Duke Energy Corporation, the Corporation,
or Duke Capital Financing Trust I, Duke Capital Financing Trust II or Duke
Capital Financing Trust III on the New York Stock Exchange; or (ii) a
general moratorium on commercial banking activities in New York declared by
either Federal or New York State authorities; or (iii) the outbreak or
material escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war if the
effect of any such event specified in this clause (h) in your judgment
makes it impracticable or inadvisable to proceed with the public offering
or the delivery of the Preferred Securities being delivered at the Closing
Date on the terms and in the manner contemplated in the Prospectus. In such
event there shall be no liability on the part of any party to any other
party except as otherwise provided in Section 7 hereof and except for the
expenses to be borne by the Corporation as provided in Section 5(h) hereof.
(i) You shall have received a certificate of the Chairman of the Board and
President or any Vice President and a principal financial or accounting
officer of the Corporation and a certificate of a trustee or authorized
representative of the Trust, each dated the Closing Date, in which such
11
<PAGE>
officers or trustee or representative, as the case may be, to the best of
their knowledge after reasonable investigation, shall state that the
representations and warranties of the Corporation and the Trust in this
Agreement are true and correct, that the Corporation and the Trust have
complied with all agreements and satisfied all conditions on their part to
be performed or satisfied at or prior to the Closing Date, that the
conditions specified in Section 6(b) and Section 6(c) have been satisfied,
and that no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are threatened by the Commission.
(j) On the date of this Agreement, you shall have received letters dated
the date hereof, in form and substance satisfactory to you, from the
Corporation's independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in or incorporated by reference
into the Prospectus.
(k) At the Closing Date you shall have received from the Corporation's
independent public accountants letters, dated the Closing Date, to the
effect that such accountants reaffirm the statements made in the letters
furnished pursuant to paragraph (j) of this Section 6, except that the
specified date referred to shall be a date not more than three business
days prior to the Closing Date.
The Corporation will furnish you with such conformed copies of such opinions,
certificates, letters and documents as you reasonably request.
7. Indemnification. (a) The Trust and the Corporation, jointly and severally,
agree to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the 1933 Act,
as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever arising out of any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or any
amendment thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the prospectus constituting a part of the Registration
Statement in the form in which it became effective or the Prospectus (or
any amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, unless such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with written
information furnished to the Trust or the Corporation by any Underwriter
through you expressly for use in the Registration Statement (or any
amendment thereto) or such Preliminary Prospectus, such prospectus, or the
Prospectus (or any amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission or any such alleged untrue statement
or omission, if such settlement is effected with the written consent of the
Trust and the Corporation; and
12
<PAGE>
(iii) against any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, 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 (i) or (ii) above.
In no case shall the Trust or the Corporation be liable under this indemnity
agreement with respect to any claim made against any Underwriter or any such
controlling person unless the Trust and the Corporation shall be notified in
writing of the nature of the claim within a reasonable time after the assertion
thereof, but failure so to notify the Trust or the Corporation shall not
relieve either of them from any liability which either of them may have
otherwise than on account of this indemnity agreement. The Trust and the
Corporation shall be entitled to participate at their own expense in the
defense, or, if they so elect, within a reasonable time after receipt of such
notice, to assume the defense of any suit brought to enforce any such claim,
but if they so elect to assume the defense, such defense shall be conducted by
counsel chosen by them and approved by the Underwriter or Underwriters or
controlling person or persons, or defendant or defendants in any suit so
brought, which approval shall not be unreasonably withheld. In any such suit,
any Underwriter or any such controlling person shall have the right to employ
its own counsel, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or such controlling person unless (i) the Trust and
the Corporation and such Underwriter shall have mutually agreed to the
employment of such counsel, or (ii) the named parties to any such action
(including any impleaded parties) include both such Underwriter or such
controlling person and the Trust or the Corporation and such Underwriter or
such controlling person shall have been advised by such counsel that a conflict
of interest between the Trust or the Corporation and such Underwriter or such
controlling person may arise and for this reason it is not desirable for the
same counsel to represent both the indemnifying party and also the indemnified
party (it being understood, however, that the Trust and the Corporation shall
not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys for all such Underwriters
and all such controlling persons, which firm shall be designated in writing by
you). The Trust and the Corporation agree to notify you within a reasonable
time of the assertion of any claim against them, any of their officers,
directors or trustees or any person who controls the Trust or the Corporation
within the meaning of Section 15 of the 1933 Act, in connection with the sale
of the Preferred Securities.
(b) Each Underwriter agrees, severally and not jointly, that it will indemnify
and hold harmless the Trust and the Corporation, their directors, trustees,
representatives and each of the officers of the Corporation who signed the
Registration Statement and each person, if any, who controls them within the
meaning of Section 15 of the 1933 Act to the same extent as the indemnity
contained in subsection (a) of this Section, but only with respect to
statements or omissions made in the Registration Statement (or any amendment
thereto) or any Preliminary Prospectus, such prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Trust or the Corporation by such
Underwriter through you expressly for use in the Registration Statement (or any
amendment thereto), such Preliminary Prospectus, such prospectus or the
Prospectus (or any amendment or supplement thereto). In case any action shall
be brought against the Trust or the Corporation or any person so indemnified
based on
13
<PAGE>
the Registration Statement (or any amendment thereto) or such Preliminary
Prospectus, such prospectus or the Prospectus (or any amendment or supplement
thereto) and in respect of which indemnity may be sought against any
Underwriter, such Underwriter shall have the rights and duties given to the
Trust and the Corporation, and the Trust and the Corporation and each person so
indemnified shall have the rights and duties given to the Underwriters, by the
provisions of subsection (a) of this Section.
8. Default by One or More of the Underwriters. (a) If any Underwriter shall
default in its obligation to purchase the Preferred Securities which it has
agreed to purchase hereunder on the Closing Date, you may in your discretion
arrange for you or another party or other parties to purchase such Preferred
Securities on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such
Preferred Securities, then the Trust and the Corporation shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Preferred Securities on such
terms. In the event that, within the respective prescribed periods, you notify
the Trust and the Corporation that you have so arranged for the purchase of
such Preferred Securities, or the Trust or the Corporation notifies you that it
has so arranged for the purchase of such Preferred Securities, you, the Trust
or the Corporation shall have the right to postpone such Closing Date for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or
in any other documents or arrangements, and the Trust and the Corporation agree
to file promptly any amendments to the Registration Statement or the Prospectus
which may be required. The term "Underwriter" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Preferred Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Preferred Securities of a defaulting Underwriter or Underwriters by you, the
Trust or the Corporation as provided in subsection (a) above, the aggregate
number of such Preferred Securities which remains unpurchased does not exceed
one-eleventh of the aggregate number of all the Preferred Securities to be
purchased at such Closing Date, then the Trust and the Corporation shall have
the right to require each non-defaulting Underwriter to purchase the number of
Preferred Securities which such Underwriter agreed to purchase hereunder at
such Closing Date and, in addition, to require each non-defaulting Underwriter
to purchase its pro rata share (based on the number of Preferred Securities
which such Underwriter agreed to purchase hereunder) of the Preferred
Securities of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Preferred Securities of a defaulting Underwriter or Underwriters by you, the
Trust or the Corporation as provided in subsection (a) above, the aggregate
number of such Preferred Securities which remains unpurchased exceeds one-
eleventh of the aggregate number of all the Preferred Securities to be
purchased at such Closing Date, or if the Trust or the Corporation shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Preferred Securities of a defaulting Underwriter or
Underwriters, then this Agreement shall thereupon terminate, without liability
on the part of any non-defaulting Underwriter, the Trust or the Corporation,
except for the expenses to be
14
<PAGE>
borne by the Corporation as provided in Section 5(h) hereof and the indemnity
agreement in Section 7 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
9. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of
the Trust and the Corporation or their officers and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any termination of this Agreement, or any investigation,
or statement as to the results thereof, made by or on behalf of the
Underwriters or the Trust and the Corporation, or any of their officers,
directors, trustees, representatives or any controlling person, and will
survive delivery of and payment for the Preferred Securities.
10. Reliance on Your Acts. In all dealings hereunder, you shall act on behalf
of each of the Underwriters, and the parties hereto shall be entitled to act
and rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by you.
11. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters, will be mailed, delivered, or telecopied and confirmed to you
as the representatives in care of at , attention of
, or, if sent to the Trust or the Corporation, will be mailed,
delivered, or telecopied and confirmed to them at 526 South Church Street,
Charlotte, N.C. 28202, telephone number (704) 382-5159, attention of Richard J.
Osborne, Vice President and Chief Financial Officer; provided, however, that
any notice to an Underwriter pursuant to Section 7 hereof shall be delivered or
sent by mail or telecopy to such Underwriter at its address or telecopy number
set forth in its Underwriters' Questionnaire or telex constituting such
Questionnaire, which address or telecopy number will be supplied to the Trust
and the Corporation by you. Any such communications shall take effect upon
receipt thereof.
12. Business Day. As used herein, the term "business day" shall mean any day
when the Commission's office in Washington, D.C. is open for business.
13. Successors. This Agreement shall inure to the benefit of and be binding
upon the Underwriters, the Trust and the Corporation and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons and
the officers, directors, trustees and representatives referred to in Section 7,
and their respective successors, heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained; this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of the
parties hereto and their respective successors and said controlling persons,
officers, directors, trustees and representatives and their respective
successors, heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Preferred Securities from any
Underwriter shall be deemed to be a successor or assign by reason merely of
such purchase.
14. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
15. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York.
15
<PAGE>
If the foregoing is in accordance with your understanding, kindly sign and
return to us two counterparts hereof, and upon your acceptance on behalf of
each of the Underwriters, this letter and such acceptance will become a binding
agreement between the Trust and the Corporation, on the one hand, and each of
the Underwriters, on the other hand, in accordance with its terms. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement
Among Underwriters, the form of which shall be submitted to the Trust and the
Corporation for examination, but without warranty on your part as to the
authority of the signers thereof.
Very truly yours,
Duke Capital Financing Trust [ ]
By: Duke Capital Corporation
as Depositor
By: _________________________________
Duke Capital Corporation
By: _________________________________
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
By:
By: ___________________________
16
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Preferred
Securities to
Underwriter be Purchased
- ----------- -------------
<S> <C>
</TABLE>
<PAGE>
SCHEDULE A--(continued)
<TABLE>
<CAPTION>
Number of
Preferred
Securities to
Underwriter be Purchased
- ----------- -------------
<S> <C>
--------
Total...........................................................
========
</TABLE>
<PAGE>
EXHIBIT 4.2
DUKE CAPITAL CORPORATION
TO
THE CHASE MANHATTAN BANK
Trustee
----------------
Supplemental Indenture
Dated as of ,
----------------
$
Series % Senior Notes
due
----------------
<PAGE>
TABLE OF CONTENTS (1)
ARTICLE 1
Series % Senior Notes Due
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
Section 101. Establishment............................................... 1
Section 102. Definitions................................................. 2
Section 103. Payment of Principal and Interest........................... 2
Section 104. Denominations............................................... 3
Section 105. Global Securities........................................... 3
Section 106. Redemption at the Option of the Corporation................. 3
Section 107. Paying Agent................................................ 5
ARTICLE 2
Miscellaneous Provisions
Section 201. Recitals by Corporation..................................... 5
Section 202. Ratification and Incorporation of Original Indenture........ 5
Section 203. Executed in Counterparts.................................... 5
</TABLE>
Exhibit A Form of Series % Senior Note due
Exhibit B Certificate of Authentication
- --------
(1) This Table of Contents does not constitute part of the Indenture or have
any bearing upon the interpretation of any of its terms and provisions.
i
<PAGE>
THIS SUPPLEMENTAL INDENTURE is made as of the day of , , by and
between DUKE CAPITAL CORPORATION, a Delaware corporation, having its principal
office at 526 South Church Street, Charlotte, North Carolina 28202 (the
"Corporation"), and THE CHASE MANHATTAN BANK, a New York banking corporation,
as Trustee (herein called the "Trustee").
W I T N E S S E T H:
WHEREAS, the Corporation has heretofore entered into a Senior Indenture, dated
as of April 1, 1998 (the "Original Indenture") with The Chase Manhattan Bank,
as Trustee;
WHEREAS, the Original Indenture is incorporated herein by this reference and
the Original Indenture, as amended and supplemented to the date hereof,
including by this Supplemental Indenture, is herein called the "Indenture";
WHEREAS, under the Indenture, a new series of Securities may at any time be
established in accordance with the provisions of the Indenture and the terms of
such series may be described by a supplemental indenture executed by the
Corporation and the Trustee;
WHEREAS, the Corporation proposes to create under the Indenture a new series of
Securities;
WHEREAS, additional Securities of other series hereafter established, except as
may be limited in the Indenture as at the time supplemented and modified, may
be issued from time to time pursuant to the Indenture as at the time
supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution and delivery of
this Supplemental Indenture and to make it a valid and binding obligation of
the Corporation have been done or performed.
NOW, THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
Series % Senior Notes Due
Section 101. Establishment. There is hereby established a new series of
Securities to be issued under the Indenture, to be designated as the
Corporation's Series % Senior Notes due (the "Series Notes").
There are to be authenticated and delivered $ principal amount of
Series Notes, and no further Series Notes shall be authenticated and
delivered except as provided by Section 304, 305, 306, 906 or 1106 of the
Original Indenture. The Series Notes shall be issued in fully registered form
without coupons.
<PAGE>
The Series Notes shall be in substantially the form set out in Exhibit A
hereto, and the form of the Trustee's Certificate of Authentication for the
Series Notes shall be in substantially the form set forth in Exhibit B
hereto.
Each Series Note shall be dated the date of authentication thereof and shall
bear interest from the date of original issuance thereof or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for.
Section 102. Definitions. The following defined terms used herein shall, unless
the context otherwise requires, have the meanings specified below. Capitalized
terms used herein for which no definition is provided herein shall have the
meanings set forth in the Original Indenture.
"Interest Payment Dates" means and .
"Original Issue Date" means , .
"Regular Record Date" means, with respect to each Interest Payment Date, the
close of business on the 15th calendar day prior to such Interest Payment Date.
"Stated Maturity" means , .
Section 103. Payment of Principal and Interest. The unpaid principal amount of
the Series Notes shall bear interest at the rate of % per annum until paid
or duly provided for, such interest to accrue from , or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for. Interest shall be paid semi-annually in arrears on each Interest Payment
Date to the Person or Persons in whose name the Series Notes are registered
on the Regular Record Date for such Interest Payment Date; provided that
interest payable at the Stated Maturity of principal or on a Redemption Date as
provided herein shall be paid to the Person to whom principal is payable. Any
such interest that is not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holders on such Regular Record Date and
may either be paid to the Person or Persons in whose name the Series Notes
are registered at the close of business on a Special Record Date for the
payment of such defaulted interest to be fixed by the Trustee ("Special Record
Date"), notice whereof shall be given to Holders of the Series Notes not less
than ten (10) days prior to such Special Record Date, or be paid at any time in
any other lawful manner not inconsistent with the requirements of any
securities exchange, if any, on which the Series Notes may be listed, and
upon such notice as may be required by any such exchange, all as more fully
provided in the Original Indenture.
Payments of interest on the Series Notes shall include interest accrued to
but excluding the respective Interest Payment Dates. Interest payments for the
Series Notes shall be computed and paid on the basis of a 360-day year of
twelve 30-day months. In the event that any date on which interest is payable
on the Series Notes is not a Business Day, then payment of the interest
payable on such date shall be made on the next succeeding day that is a
Business Day (and without any interest or payment in respect of any such delay)
with the same force and effect as if made on the date the payment was
originally payable. "Business Day" means a day other than (i) a Saturday or a
Sunday, (ii) a day on which banking institutions in New York, New York are
authorized or obligated
2
<PAGE>
by law or executive order to remain closed or (iii) a day on which the
Corporate Trust Office is closed for business.
Payment of principal of, premium, if any, and interest on the Series Notes
shall be made in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
Payments of principal of, premium, if any, and interest on Series Notes
represented by a Global Security shall be made by wire transfer of immediately
available funds to the Holder of such Global Security, provided that, in the
case of payments of principal and premium, if any, such Global Security is
first surrendered to the Paying Agent. If any of the Series Notes are no
longer represented by a Global Security, (i) payments of principal, premium, if
any, and interest due at the Stated Maturity or earlier redemption of such
Series Notes shall be made at the office of the Paying Agent upon surrender
of such Series Notes to the Paying Agent and (ii) payments of interest shall
be made, at the option of the Corporation, subject to such surrender where
applicable, (A) by check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register or (B) by wire transfer
at such place and to such account at a banking institution in the United States
as may be designated in writing to the Trustee at least sixteen (16) days prior
to the date for payment by the Person entitled thereto.
Section 104. Denominations. The Series Notes shall be issued in denominations
of $ or any integral multiple thereof.
Section 105. Global Securities. The Series Notes shall initially be issued in
the form of one or more Global Securities registered in the name of the
Depositary (which initially shall be The Depository Trust Company) or its
nominee. Except under the limited circumstances described below, Series Notes
represented by such Global Security or Global Securities shall not be
exchangeable for, and shall not otherwise be issuable as, Series Notes in
definitive form. The Global Securities described above may not be transferred
except 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 to a
successor Depositary or its nominee.
A Global Security shall be exchangeable for Series Notes registered in the
names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Corporation that it is unwilling or unable to continue
as a Depositary for such Global Security and no successor Depositary shall have
been appointed by the Corporation within 90 days of receipt by the Corporation
of such notification, or if at any time the Depositary ceases to be a clearing
agency registered under the Exchange Act at a time when the Depositary is
required to be so registered to act as such Depositary and no successor
Depositary shall have been appointed by the Corporation within 90 days after it
becomes aware of such cessation, or (ii) the Corporation in its sole discretion
determines that such Global Security shall be so exchangeable. Any Global
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Series Notes registered in such names as the Depositary
shall direct.
Section 106. Redemption at the Option of the Corporation. The Series Notes
shall be redeemable, in whole or from time to time in part, at the option of
the Corporation on any date (a "Redemption Date"), at a Redemption Price equal
to the greater of (i) 100% of the principal amount of the Series Notes to be
redeemed and (ii) the sum of the present values of the remaining
3
<PAGE>
scheduled payments of principal and interest thereon (exclusive of interest
accrued to such Redemption Date) discounted to such Redemption Date on a semi-
annual basis (assuming a 360-day year consisting of twelve 30-day months) at
the Treasury Rate plus basis points, plus, in either case, accrued and unpaid
interest on the principal amount being redeemed to such Redemption Date.
"Treasury Rate" means, with respect to any Redemption Date for the Series
Notes, (i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which
is published weekly by the Board of Governors of the Federal Reserve System and
which establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Comparable Treasury Issue (if no maturity
is within three months before or after the Stated Maturity, yields for the two
published maturities most closely corresponding to the Comparable Treasury
Issue shall be determined, and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the nearest
month) or (ii) if such release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be
calculated on the third Business Day preceding the Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security selected
by the Independent Investment Banker as having a maturity comparable to the
remaining term of the Series Notes to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Series Notes.
"Independent Investment Banker" means and any successor firm or,
if such firm is unwilling or unable to select the Comparable Treasury Issue, an
independent investment banking institution of national standing appointed by
the Trustee after consultation with the Corporation.
"Comparable Treasury Price" means with respect to any Redemption Date for the
Series Notes (i) the average of Reference Treasury Dealer Quotations for
such Redemption Date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than such
Reference Treasury Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer" means each of , ,
, and and their respective successors;
provided, however, that if any of the foregoing shall cease to be a primary
U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Corporation will substitute therefor another Primary Treasury
Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Trustee, of the bid and asked prices for
4
<PAGE>
the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third Business Day preceding
such Redemption Date.
Notwithstanding Section 1104 of the Original Indenture, the notice of
redemption with respect to the foregoing redemption need not set forth the
Redemption Price but only the manner of calculation thereof.
The Corporation shall notify the Trustee of the Redemption Price with respect
to the foregoing redemption promptly after the calculation thereof. The Trustee
shall not be responsible for calculating said Redemption Price.
If less than all of the Series Notes are to be redeemed, the Trustee shall
select the Series Notes or portions of Series Notes to be redeemed by such
method as the Trustee shall deem fair and appropriate. The Trustee may select
for redemption Series Notes and portions of Series Notes in amounts of
whole multiples of $ .
The Series Notes shall not have a sinking fund.
Section 107. Paying Agent. The Trustee shall initially serve as Paying Agent
with respect to the Series Notes, with the Place of Payment initially being
the Corporate Trust Office.
ARTICLE 2
Miscellaneous Provisions
Section 201. Recitals by Corporation. The recitals in this Supplemental
Indenture are made by the Corporation only and not by the Trustee, and all of
the provisions contained in the Original Indenture in respect of the rights,
privileges, immunities, powers and duties of the Trustee shall be applicable in
respect of the Series Notes and this Supplemental Indenture as fully and
with like effect as if set forth herein in full.
Section 202. Ratification and Incorporation of Original Indenture. As
supplemented hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture and this Supplemental Indenture shall
be read, taken and construed as one and the same instrument.
Section 203. Executed in Counterparts. This Supplemental Indenture may be
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts shall together constitute but one and the same
instrument.
5
<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed
in its name and behalf by its duly authorized officers, all as of the day and
year first above written.
Duke Capital Corporation
By: _________________________________
Attest:
_____________________________
The Chase Manhattan Bank, as Trustee
By: _________________________________
Attest:
_____________________________
6
<PAGE>
EXHIBIT A
FORM OF
SERIES % SENIOR NOTE
DUE
No. CUSIP No.
DUKE CAPITAL CORPORATION
SERIES % SENIOR NOTE
DUE
Principal Amount:
Regular Record Date: close of business on the 15th calendar day prior to the
relevant Interest Payment Date
Original Issue Date: ,
Stated Maturity: ,
Interest Payment Dates: and
Interest Rate: % per annum
Authorized Denomination: $ or any integral multiple thereof
Duke Capital Corporation, a Delaware corporation (the "Corporation," which term
includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to ,
or registered assigns, the principal sum of DOLLARS ($ ) on the
Stated Maturity shown above and to pay interest thereon from the Original Issue
Date shown above, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually in arrears on each
Interest Payment Date as specified above, commencing on the Interest Payment
Date next succeeding the Original Issue Date shown above and on the Stated
Maturity at the rate per annum shown above (the "Interest Rate") until the
principal hereof is paid or made available for payment and on any overdue
principal and on any overdue installment of interest. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date (other
than an Interest Payment Date that is the Stated Maturity or a Redemption Date)
will, as provided in the Indenture, be paid to the Person in whose name this
Series % Senior Note due (this "Security") is registered on the
Regular Record Date as specified above next preceding such Interest Payment
Date; provided that any interest payable at Stated Maturity or on a Redemption
Date will be paid to the Person to whom principal is payable. Except as
otherwise provided in the Indenture, any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent
A-1
<PAGE>
with the requirements of any securities exchange, if any, on which the
Securities of this series shall be listed, and upon such notice as may be
required by any such exchange, all as more fully provided in the Indenture.
Payments of interest on this Security will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this
Security shall be computed and paid on the basis of a 360-day year of twelve
30-day months. In the event that any date on which interest is payable on this
Security is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and
without any interest or payment in respect of any such delay) with the same
force and effect as if made on the date the payment was originally payable.
"Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day on
which banking institutions in New York, New York are authorized or obligated by
law or executive order to remain closed or (iii) a day on which the Corporate
Trust Office is closed for business.
Payment of principal of, premium, if any, and interest on the Securities of
this series shall be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. Payments of principal of, premium, if any, and interest on
Securities of this series represented by a Global Security shall be made by
wire transfer of immediately available funds to the Holder of such Global
Security, provided that, in the case of payments of principal and premium, if
any, such Global Security is first surrendered to the Paying Agent. If any of
the Securities of this series are no longer represented by a Global Security,
(i) payments of principal, premium, if any, and interest due at the Stated
Maturity or earlier redemption of such Securities shall be made at the office
of the Paying Agent upon surrender of such Securities to the Paying Agent and
(ii) payments of interest shall be made, at the option of the Corporation,
subject to such surrender where applicable, (A) by check mailed to the address
of the Person entitled thereto as such address shall appear in the Security
Register or (B) by wire transfer at such place and to such account at a banking
institution in the United States as may be designated in writing to the Trustee
at least sixteen (16) days prior to the date for payment by the Person entitled
thereto.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH
ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
A-2
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this instrument to be duly
executed under its corporate seal.
Dated:
Duke Capital Corporation
By: _________________________________
Attest:
_____________________________________
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
The Chase Manhattan Bank,
as Trustee
By: _________________________________
A-3
<PAGE>
(Reverse Side of Security)
This Security is one of a duly authorized issue of Securities of the
Corporation (the "Securities"), issued and issuable in one or more series under
a Senior Indenture, dated as of April 1, 1998, as supplemented (the
"Indenture"), between the Corporation and The Chase Manhattan Bank, as Trustee
(the "Trustee," which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitation of rights, duties and
immunities thereunder of the Corporation, the Trustee and the Holders of the
Securities issued thereunder and of the terms upon which said Securities are,
and are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof as Series % Senior Notes due in the
aggregate principal amount of up to $ . Capitalized terms used herein
for which no definition is provided herein shall have the meanings set forth in
the Indenture.
The Securities of this series will be redeemable, in whole or from time to time
in part, at the option of the Corporation on any date (a "Redemption Date"), at
a Redemption Price equal to the greater of (i) 100% of the principal amount of
the Securities of this series to be redeemed and (ii) the sum of the present
values of the remaining scheduled payments of principal and interest thereon
(exclusive of interest accrued to such Redemption Date) discounted to such
Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus basis points, plus, in either
case, accrued and unpaid interest on the principal amount being redeemed to
such Redemption Date.
"Treasury Rate" means, with respect to any Redemption Date for the Securities
of this series, (i) the yield, under the heading which represents the average
for the immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which
is published weekly by the Board of Governors of the Federal Reserve System and
which establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Comparable Treasury Issue (if no maturity
is within three months before or after the Stated Maturity, yields for the two
published maturities most closely corresponding to the Comparable Treasury
Issue shall be determined, and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the nearest
month) or (ii) if such release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be
calculated on the third Business Day preceding the Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security selected
by the Independent Investment Banker as having a maturity comparable to the
remaining term of the Securities of this series to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Securities of this series.
"Independent Investment Banker" means and any successor firm or,
if such firm is unwilling or unable to select the Comparable Treasury Issue, an
independent
A-4
<PAGE>
investment banking institution of national standing appointed by the Trustee
after consultation with the Corporation.
"Comparable Treasury Price" means with respect to any Redemption Date for the
Securities of this series (i) the average of Reference Treasury Dealer
Quotations for such Redemption Date, after excluding the highest and lowest
such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer
than such Reference Treasury Dealer Quotations, the average of all such
quotations.
"Reference Treasury Dealer" means each of , , ,
and and their respective successors; provided, however,
that if any of the foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the
Corporation will substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
Notice of any redemption by the Corporation will be mailed at least 30 days but
not more than 60 days before any Redemption Date to each Holder of Securities
of this series to be redeemed. If less than all the Securities of this series
are to be redeemed at the option of the Corporation, the Trustee shall select,
in such manner as it shall deem fair and appropriate, the Securities of this
series to be redeemed in whole or in part. The Trustee may select for
redemption Securities of this series and portions of Securities of this series
in amounts of whole multiples of $ .
If an Event of Default with respect to the 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, with the effect and subject to the
conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Corporation and the rights of the Holders of the Securities of all series
affected under the Indenture at any time by the Corporation and the Trustee
with the consent of the Holders of not less than a majority in principal amount
of the Outstanding Securities of all series affected thereby (voting as one
class). The Indenture contains provisions permitting the Holders of not less
than a majority in principal amount of the Outstanding Securities of all series
with respect to which a default under the Indenture shall have occurred and be
continuing (voting as one class), on behalf of the Holders of the Securities of
all such series, to waive, with certain exceptions, such default under the
Indenture and its consequences. The Indenture also permits the Holders of not
less than a majority in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Corporation with certain provisions of the
Indenture affecting such series. Any
A-5
<PAGE>
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 Corporation, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Corporation for such purpose, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Corporation and
the Security Registrar and 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 of like tenor and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
As provided in and subject to the provisions of the Indenture, the Holder of
this Security shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than a majority in principal
amount of the Securities of this series at the time Outstanding shall have made
written request to the Trustee to institute proceedings in respect of such
Event of Default as Trustee and offered the Trustee reasonable indemnity, and
the Trustee shall not have received from the Holders of a majority in principal
amount of Securities of this series at the time Outstanding a direction
inconsistent with such request and shall have failed to institute any such
proceeding for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder
of this Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates expressed
herein.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of the Securities of this series and for covenant defeasance at
any time of certain covenants in the Indenture upon compliance with certain
conditions set forth in the Indenture.
Prior to due presentment of this Security for registration of transfer, the
Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue, and neither the
Corporation, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Securities of this series are issuable only in registered form without
coupons in denominations of $ and any integral multiple thereof. As provided
in the Indenture and subject to the limitations
A-6
<PAGE>
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series of a different
authorized denomination, as requested by the Holder surrendering the same upon
surrender of the Security or Securities to be exchanged at the office or agency
of the Corporation.
This Security shall be governed by, and construed in accordance with, the
internal laws of the State of New York.
A-7
<PAGE>
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:
UNIF GIFT MIN ACT -- Custodian
TEN COM -- as tenants in common ------- --------
(Cust) (Minor)
TEN ENT -- as tenants by the entireties under Uniform Gifts to
Minors Act _____________
(State)
JT TEN -- as joint tenants with rights of
survivorship and not as tenants
in common
Additional abbreviations may also be used though not on the above list.
- -------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
-------
(please insert Social Security or other identifying number of assignee)
- -----
- -------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
- -------------------------------------------------------------------------------
agent to transfer said Security on the books of the Corporation, with full
power of substitution in the premises.
Dated: __________________________
------------------------------------------
------------------------------------------
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 or
enlargement, or any change whatever.
A-8
<PAGE>
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
The Chase Manhattan Bank,
as Trustee
By: _________________________________
Authorized Officer
B-9
<PAGE>
EXHIBIT 4.4-A
DUKE CAPITAL CORPORATION
TO
THE CHASE MANHATTAN BANK
Trustee
----------------
Supplemental Indenture
Dated as of ,
----------------
$
Series % Junior Subordinated Notes
due
----------------
<PAGE>
TABLE OF CONTENTS (1)
ARTICLE 1
Series % Junior Subordinated Notes Due
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
Section 101. Establishment............................................... 1
Section 102. Definitions................................................. 2
Section 103. Payment of Principal and Interest........................... 2
Section 104. Denominations............................................... 3
Section 105. Global Securities........................................... 3
Section 106. Redemption at the Option of the Corporation................. 3
Section 107. Subordination............................................... 5
Section 108. Paying Agent................................................ 5
ARTICLE 2
Miscellaneous Provisions
Section 201. Recitals by Corporation..................................... 5
Section 202. Ratification and Incorporation of Original Indenture........ 5
Section 203. Executed in Counterparts.................................... 5
</TABLE>
Exhibit A Form of Series % Junior Subordinated Note due
Exhibit B Certificate of Authentication
- --------
(1) This Table of Contents does not constitute part of the Indenture or have
any bearing upon the interpretation of any of its terms and provisions.
i
<PAGE>
THIS SUPPLEMENTAL INDENTURE is made as of the day of , , by and
between DUKE CAPITAL CORPORATION, a Delaware corporation, having its principal
office at 526 South Church Street, Charlotte, North Carolina 28202 (the
"Corporation"), and THE CHASE MANHATTAN BANK, a New York banking corporation,
as Trustee (herein called the "Trustee").
W I T N E S S E T H:
WHEREAS, the Corporation has heretofore entered into a Subordinated Indenture,
dated as of April 1, 1998 (the "Original Indenture") with The Chase Manhattan
Bank, as Trustee;
WHEREAS, the Original Indenture is incorporated herein by this reference and
the Original Indenture, as amended and supplemented to the date hereof,
including by this Supplemental Indenture, is herein called the "Indenture";
WHEREAS, under the Indenture, a new series of Securities may at any time be
established in accordance with the provisions of the Indenture and the terms of
such series may be described by a supplemental indenture executed by the
Corporation and the Trustee;
WHEREAS, the Corporation proposes to create under the Indenture a new series of
Securities;
WHEREAS, additional Securities of other series hereafter established, except as
may be limited in the Indenture as at the time supplemented and modified, may
be issued from time to time pursuant to the Indenture as at the time
supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution and delivery of
this Supplemental Indenture and to make it a valid and binding obligation of
the Corporation have been done or performed.
NOW, THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
Series % Junior Subordinated Notes Due
Section 101. Establishment. There is hereby established a new series of
Securities to be issued under the Indenture, to be designated as the
Corporation's Series % Junior Subordinated Notes due (the "Series
Notes").
There are to be authenticated and delivered $ principal amount of
Series Notes, and no further Series Notes shall be authenticated and
delivered except as provided by Section 304, 305, 306, 906 or 1106 of the
Original Indenture. The Series Notes shall be issued in fully registered form
without coupons.
<PAGE>
The Series Notes shall be in substantially the form set out in Exhibit A
hereto, and the form of the Trustee's Certificate of Authentication for the
Series Notes shall be in substantially the form set forth in Exhibit B
hereto.
Each Series Note shall be dated the date of authentication thereof and shall
bear interest from the date of original issuance thereof or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for.
Section 102. Definitions. The following defined terms used herein shall, unless
the context otherwise requires, have the meanings specified below. Capitalized
terms used herein for which no definition is provided herein shall have the
meanings set forth in the Original Indenture.
"Interest Payment Dates" means and .
"Original Issue Date" means , .
"Regular Record Date" means, with respect to each Interest Payment Date, the
close of business on the 15th calendar day prior to such Interest Payment Date.
"Stated Maturity" means , .
Section 103. Payment of Principal and Interest. The unpaid principal amount of
the Series Notes shall bear interest at the rate of % per annum until paid
or duly provided for, such interest to accrue from , or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for. Interest shall be paid semi-annually in arrears on each Interest Payment
Date to the Person or Persons in whose name the Series Notes are registered
on the Regular Record Date for such Interest Payment Date; provided that
interest payable at the Stated Maturity of principal or on a Redemption Date as
provided herein shall be paid to the Person to whom principal is payable. Any
such interest that is not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holders on such Regular Record Date and
may either be paid to the Person or Persons in whose name the Series Notes
are registered at the close of business on a Special Record Date for the
payment of such defaulted interest to be fixed by the Trustee ("Special Record
Date"), notice whereof shall be given to Holders of the Series Notes not less
than ten (10) days prior to such Special Record Date, or be paid at any time in
any other lawful manner not inconsistent with the requirements of any
securities exchange, if any, on which the Series Notes may be listed, and
upon such notice as may be required by any such exchange, all as more fully
provided in the Original Indenture.
Payments of interest on the Series Notes shall include interest accrued to
but excluding the respective Interest Payment Dates. Interest payments for the
Series Notes shall be computed and paid on the basis of a 360-day year of
twelve 30-day months. In the event that any date on which interest is payable
on the Series Notes is not a Business Day, then payment of the interest
payable on such date shall be made on the next succeeding day that is a
Business Day (and without any interest or payment in respect of any such delay)
with the same force and effect as if made on the date the payment was
originally payable. "Business Day" means a day other than (i) a Saturday or a
Sunday, (ii) a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to remain closed or (iii) a
day on which the Corporate Trust Office is closed for business.
2
<PAGE>
Payment of principal of, premium, if any, and interest on the Series Notes
shall be made in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
Payments of principal of, premium, if any, and interest on Series Notes
represented by a Global Security shall be made by wire transfer of immediately
available funds to the Holder of such Global Security, provided that, in the
case of payments of principal and premium, if any, such Global Security is
first surrendered to the Paying Agent. If any of the Series Notes are no
longer represented by a Global Security, (i) payments of principal, premium, if
any, and interest due at the Stated Maturity or earlier redemption of such
Series Notes shall be made at the office of the Paying Agent upon surrender
of such Series Notes to the Paying Agent and (ii) payments of interest shall
be made, at the option of the Corporation, subject to such surrender where
applicable, (A) by check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register or (B) by wire transfer
at such place and to such account at a banking institution in the United States
as may be designated in writing to the Trustee at least sixteen (16) days prior
to the date for payment by the Person entitled thereto.
Section 104. Denominations. The Series Notes shall be issued in denominations
of $ or any integral multiple thereof.
Section 105. Global Securities. The Series Notes shall initially be issued in
the form of one or more Global Securities registered in the name of the
Depositary (which initially shall be The Depository Trust Company) or its
nominee. Except under the limited circumstances described below, Series Notes
represented by such Global Security or Global Securities shall not be
exchangeable for, and shall not otherwise be issuable as, Series Notes in
definitive form. The Global Securities described above may not be transferred
except 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 to a
successor Depositary or its nominee.
A Global Security shall be exchangeable for Series Notes registered in the
names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Corporation that it is unwilling or unable to continue
as a Depositary for such Global Security and no successor Depositary shall have
been appointed by the Corporation within 90 days of receipt by the Corporation
of such notification, or if at any time the Depositary ceases to be a clearing
agency registered under the Exchange Act at a time when the Depositary is
required to be so registered to act as such Depositary and no successor
Depositary shall have been appointed by the Corporation within 90 days after it
becomes aware of such cessation, or (ii) the Corporation in its sole discretion
determines that such Global Security shall be so exchangeable. Any Global
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Series Notes registered in such names as the Depositary
shall direct.
Section 106. Redemption at the Option of the Corporation. The Series Notes
shall be redeemable, in whole or from time to time in part, at the option of
the Corporation on any date (a "Redemption Date"), at a Redemption Price equal
to the greater of (i) 100% of the principal amount of the Series Notes to be
redeemed and (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon (exclusive of interest accrued to
such Redemption Date) discounted to such Redemption Date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate plus basis points, plus, in either case, accrued and unpaid interest on
the principal amount being redeemed to such Redemption Date.
3
<PAGE>
"Treasury Rate" means, with respect to any Redemption Date for the Series
Notes, (i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which
is published weekly by the Board of Governors of the Federal Reserve System and
which establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Comparable Treasury Issue (if no maturity
is within three months before or after the Stated Maturity, yields for the two
published maturities most closely corresponding to the Comparable Treasury
Issue shall be determined, and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the nearest
month) or (ii) if such release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be
calculated on the third Business Day preceding the Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security selected
by the Independent Investment Banker as having a maturity comparable to the
remaining term of the Series Notes to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Series Notes.
"Independent Investment Banker" means and any successor firm or,
if such firm is unwilling or unable to select the Comparable Treasury Issue, an
independent investment banking institution of national standing appointed by
the Trustee after consultation with the Corporation.
"Comparable Treasury Price" means with respect to any Redemption Date for the
Series Notes (i) the average of Reference Treasury Dealer Quotations for
such Redemption Date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than such
Reference Treasury Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer" means each of , ,
, and and their respective successors;
provided, however, that if any of the foregoing shall cease to be a primary
U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Corporation will substitute therefor another Primary Treasury
Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
4
<PAGE>
Notwithstanding Section 1104 of the Original Indenture, the notice of
redemption with respect to the foregoing redemption need not set forth the
Redemption Price but only the manner of calculation thereof.
The Corporation shall notify the Trustee of the Redemption Price with respect
to the foregoing redemption promptly after the calculation thereof. The Trustee
shall not be responsible for calculating said Redemption Price.
If less than all of the Series Notes are to be redeemed, the Trustee shall
select the Series Notes or portions of Series Notes to be redeemed by such
method as the Trustee shall deem fair and appropriate. The Trustee may select
for redemption Series Notes and portions of Series Notes in amounts of
whole multiples of $ .
The Series Notes shall not have a sinking fund.
Section 107. Subordination. The indebtedness evidenced by the Series Notes
shall be, to the extent and in the manner set forth in the Original Indenture,
subordinate and junior in right of payment to the prior payment in full of all
Senior Indebtedness (as defined in the Original Indenture) with respect to the
Series Notes, and the Series Notes shall rank pari passu in right of
payment with each other series of Securities issued under the Indenture, with
the exception of any series of Securities which by its terms provides
otherwise.
Section 108. Paying Agent. The Trustee shall initially serve as Paying Agent
with respect to the Series Notes, with the Place of Payment initially being
the Corporate Trust Office.
ARTICLE 2
Miscellaneous Provisions
Section 201. Recitals by Corporation. The recitals in this Supplemental
Indenture are made by the Corporation only and not by the Trustee, and all of
the provisions contained in the Original Indenture in respect of the rights,
privileges, immunities, powers and duties of the Trustee shall be applicable in
respect of the Series Notes and this Supplemental Indenture as fully and
with like effect as if set forth herein in full.
Section 202. Ratification and Incorporation of Original Indenture. As
supplemented hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture and this Supplemental Indenture shall
be read, taken and construed as one and the same instrument.
Section 203. Executed in Counterparts. This Supplemental Indenture may be
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts shall together constitute but one and the same
instrument.
5
<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed
in its name and behalf by its duly authorized officers, all as of the day and
year first above written.
Duke Capital Corporation
By: _________________________________
Attest:
_____________________________
The Chase Manhattan Bank,
as Trustee
By: _________________________________
Attest:
_____________________________
6
<PAGE>
EXHIBIT A
FORM OF
SERIES % JUNIOR SUBORDINATED NOTE
DUE
THE INDEBTEDNESS EVIDENCED BY THIS SECURITY IS, TO THE EXTENT PROVIDED IN THE
INDENTURE, SUBORDINATE AND SUBJECT IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN
FULL OF ALL SENIOR INDEBTEDNESS, AND THIS SECURITY IS ISSUED SUBJECT TO THE
PROVISIONS OF THE INDENTURE WITH RESPECT THERETO.
No. CUSIP No.
DUKE CAPITAL CORPORATION
SERIES % JUNIOR SUBORDINATED NOTE
DUE
Principal Amount:
Regular Record Date: 15th calendar day prior to Interest Payment Date
Original Issue Date: ,
Stated Maturity: ,
Interest Payment Dates: and
Interest Rate: % per annum
Authorized Denomination: $ or any integral multiple thereof
Duke Capital Corporation, a Delaware corporation (the "Corporation," which term
includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to ,
or registered assigns, the principal sum of DOLLARS ($ ) on the
Stated Maturity shown above and to pay interest thereon from the Original Issue
Date shown above, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually in arrears on each
Interest Payment Date as specified above, commencing on the Interest Payment
Date next succeeding the Original Issue Date shown above and on the Stated
Maturity at the rate per annum shown above (the "Interest Rate") until the
principal hereof is paid or made available for payment and on any overdue
principal and on any overdue installment of interest. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date (other
than an Interest Payment Date that is the Stated Maturity or a Redemption Date)
will, as provided in the Indenture, be paid to the Person in whose name this
Series % Junior Subordinated Note due , (this "Security") is
registered on the close of business on the Regular Record Date as specified
above next preceding such Interest Payment Date; provided that any interest
payable at Stated Maturity or on a Redemption Date will be paid to the Person
to whom principal is payable. Except as otherwise provided in the Indenture,
any such interest not so punctually paid or duly provided for will forthwith
A-1
<PAGE>
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange, if any, on which the Securities of
this series shall be listed, and upon such notice as may be required by any
such exchange, all as more fully provided in the Indenture.
Payments of interest on this Security will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this
Security shall be computed and paid on the basis of a 360-day year of twelve
30-day months. In the event that any date on which interest is payable on this
Security is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and
without any interest or payment in respect of any such delay) with the same
force and effect as if made on the date the payment was originally payable.
"Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day on
which banking institutions in New York, New York are authorized or obligated by
law or executive order to remain closed or (iii) a day on which the Corporate
Trust Office is closed for business.
Payment of principal of, premium, if any, and interest on the Securities of
this series shall be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. Payments of principal of, premium, if any, and interest on
Securities of this series represented by a Global Security shall be made by
wire transfer of immediately available funds to the Holder of such Global
Security, provided that, in the case of payments of principal and premium, if
any, such Global Security is first surrendered to the Paying Agent. If any of
the Securities of this series are no longer represented by a Global Security,
(i) payments of principal, premium, if any, and interest due at the Stated
Maturity or earlier redemption of such Securities shall be made at the office
of the Paying Agent upon surrender of such Securities to the Paying Agent and
(ii) payments of interest shall be made, at the option of the Corporation,
subject to such surrender where applicable, (A) by check mailed to the address
of the Person entitled thereto as such address shall appear in the Security
Register or (B) by wire transfer at such place and to such account at a banking
institution in the United States as may be designated in writing to the Trustee
at least sixteen (16) days prior to the date for payment by the Person entitled
thereto.
The indebtedness evidenced by this Security is, to the extent and in the manner
set forth in the Indenture, subordinate in right of payment to the prior
payment in full of all Senior Indebtedness (as defined in the Indenture), and
this Security is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to effectuate
the subordination so provided and (c) appoints the Trustee his attorney-in-fact
for any and all such purposes. Each Holder hereof, by his acceptance hereof,
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness whether now
outstanding or hereafter incurred and waives reliance by each such holder upon
said provisions.
A-2
<PAGE>
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH
ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Corporation has caused this instrument to be duly
executed under its corporate seal.
Dated:
Duke Capital Corporation
By: _________________________________
Attest:
_____________________________________
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
The Chase Manhattan Bank,
as Trustee
By: _________________________________
A-3
<PAGE>
(Reverse Side of Security)
This Security is one of a duly authorized issue of Securities of the
Corporation (the "Securities"), issued and issuable in one or more series under
a Subordinated Indenture, dated as of April 1, 1998, as supplemented (the
"Indenture"), between the Corporation and The Chase Manhattan Bank, as Trustee
(the "Trustee," which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitation of rights, duties and
immunities thereunder of the Corporation, the Trustee and the Holders of the
Securities issued thereunder and of the terms upon which said Securities are,
and are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof as Series % Junior Subordinated Notes due
in the aggregate principal amount of up to $ . Capitalized terms used
herein for which no definition is provided herein shall have the meanings set
forth in the Indenture.
The Securities of this series will be redeemable, in whole or from time to time
in part, at the option of the Corporation on any date (a "Redemption Date"), at
a Redemption Price equal to the greater of (i) 100% of the principal amount of
the Securities of this series to be redeemed and (ii) the sum of the present
values of the remaining scheduled payments of principal and interest thereon
(exclusive of interest accrued to such Redemption Date) discounted to such
Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus basis points, plus, in either
case, accrued and unpaid interest on the principal amount being redeemed to
such Redemption Date.
"Treasury Rate" means, with respect to any Redemption Date for the Securities
of this series, (i) the yield, under the heading which represents the average
for the immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which
is published weekly by the Board of Governors of the Federal Reserve System and
which establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Comparable Treasury Issue (if no maturity
is within three months before or after the Stated Maturity, yields for the two
published maturities most closely corresponding to the Comparable Treasury
Issue shall be determined, and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the nearest
month) or (ii) if such release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be
calculated on the third Business Day preceding the Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security selected
by the Independent Investment Banker as having a maturity comparable to the
remaining term of the Securities of this series to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Securities of this series.
A-4
<PAGE>
"Independent Investment Banker" means and any successor firm or,
if such firm is unwilling or unable to select the Comparable Treasury Issue, an
independent investment banking institution of national standing appointed by
the Trustee after consultation with the Corporation.
"Comparable Treasury Price" means with respect to any Redemption Date for the
Securities of this series (i) the average of Reference Treasury Dealer
Quotations for such Redemption Date, after excluding the highest and lowest
such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer
than such Reference Treasury Dealer Quotations, the average of all such
quotations.
"Reference Treasury Dealer" means each of , ,
, and and their respective
successors; provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Corporation will substitute therefor another Primary Treasury
Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
Notice of any redemption by the Corporation will be mailed at least 30 days but
not more than 60 days before any Redemption Date to each Holder of Securities
of this series to be redeemed. If less than all the Securities of this series
are to be redeemed at the option of the Corporation, the Trustee shall select,
in such manner as it shall deem fair and appropriate, the Securities of this
series to be redeemed in whole or in part. The Trustee may select for
redemption Securities of this series and portions of Securities of this series
in amounts of whole multiples of $ .
If an Event of Default with respect to the 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, with the effect and subject to the
conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Corporation and the rights of the Holders of the Securities of all series
affected under the Indenture at any time by the Corporation and the Trustee
with the consent of the Holders of not less than a majority in principal amount
of the Outstanding Securities of all series affected thereby (voting as one
class). The Indenture contains provisions permitting the Holders of not less
than a majority in principal amount of the Outstanding Securities of all series
with respect to which a default under the Indenture shall have occurred and be
continuing (voting as one class), on behalf of the Holders of the Securities of
all such series, to waive, with certain exceptions, such default under the
Indenture and its consequences. The Indenture also permits the Holders of not
less than a majority in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive
A-5
<PAGE>
compliance by the Corporation with certain provisions of the Indenture
affecting such series. 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 Corporation, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Corporation for such purpose, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Corporation and
the Security Registrar and 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 of like tenor and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
As provided in and subject to the provisions of the Indenture, the Holder of
this Security shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than a majority in principal
amount of the Securities of this series at the time Outstanding shall have made
written request to the Trustee to institute proceedings in respect of such
Event of Default as Trustee and offered the Trustee reasonable indemnity, and
the Trustee shall not have received from the Holders of a majority in principal
amount of Securities of this series at the time Outstanding a direction
inconsistent with such request and shall have failed to institute any such
proceeding for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder
of this Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates expressed
herein.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of the Securities of this series and for covenant defeasance at
any time of certain covenants in the Indenture upon compliance with certain
conditions set forth in the Indenture.
Prior to due presentment of this Security for registration of transfer, the
Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue, and neither the
Corporation, the Trustee nor any such agent shall be affected by notice to the
contrary.
A-6
<PAGE>
The Securities of this series are issuable only in registered form without
coupons in denominations of $ and any integral multiple thereof. As provided
in the Indenture and subject to the limitations therein set forth, Securities
of this series are exchangeable for a like aggregate principal amount of
Securities of this series of a different authorized denomination, as requested
by the Holder surrendering the same upon surrender of the Security or
Securities to be exchanged at the office or agency of the Corporation.
This Security shall be governed by, and construed in accordance with, the
internal laws of the State of New York.
A-7
<PAGE>
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:
UNIF GIFT MIN ACT -- Custodian
TEN COM -- as tenants in common ------ --------
(Cust) (Minor)
TEN ENT -- as tenants by the entireties under Uniform Gifts to
Minors Act _____________
(State)
JT TEN -- as joint tenants with rights of
survivorship and not as tenants
in common
Additional abbreviations may also be used though not on the above list.
- -------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
(please insert Social Security or other identifying number of assignee)
- -------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
- -------------------------------------------------------------------------------
agent to transfer said Security on the books of the Corporation, with full
power of substitution in the premises.
Dated: __________________________
------------------------------------------
------------------------------------------
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 or
enlargement, or any change whatever.
A-8
<PAGE>
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
The Chase Manhattan Bank,
as Trustee
By: _________________________________
Authorized Officer
B-1
<PAGE>
EXHIBIT 4.4-B
DUKE CAPITAL CORPORATION
TO
THE CHASE MANHATTAN BANK
Trustee
----------------
Supplemental Indenture
Dated as of ,
----------------
$
Series % Junior Subordinated Notes
due ,
----------------
<PAGE>
TABLE OF CONTENTS (1)
ARTICLE 1
Series % Junior Subordinated Notes
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
Section 101. Establishment............................................. 1
Section 102. Definitions............................................... 2
Section 103. Payment of Principal and Interest......................... 4
Section 104. Deferral of Interest Payments............................. 5
Section 105. Denominations............................................. 6
Section 106. Global Securities......................................... 6
Section 107. Redemption................................................ 7
Section 108. Additional Interest....................................... 7
Section 109. Limitations on Dividend and Certain Other Payments........ 8
Section 110. Covenants Regarding Securities Trust...................... 8
Section 111. No Fiduciary Duty of Trustee to Holders of Trust
Securities............................................... 9
Section 112. Listing of Series Notes................................. 9
Section 113. Covenant Defeasance....................................... 9
Section 114. Set-Off................................................... 9
Section 115. Subordination............................................. 9
Section 116. Paying Agent.............................................. 9
ARTICLE 2
Miscellaneous Provisions
Section 201. Recitals by Corporation................................... 9
Section 202. Ratification and Incorporation of Original Indenture...... 10
Section 203. Executed in Counterparts.................................. 10
Section 204. Assignment................................................ 10
Section 205. Enforcement by Holders of Preferred Securities of Right of
Holders to Receive Principal and Interest................. 10
</TABLE>
- --------
(1) This Table of Contents does not constitute part of the Indenture or have
any bearing upon the interpretation of any of its terms and provisions.
i
<PAGE>
THIS SUPPLEMENTAL INDENTURE is made as of the day of , , by
and between DUKE CAPITAL CORPORATION, a Delaware corporation, having its
principal office at 526 South Church Street, Charlotte, North Carolina 28202
(the "Corporation"), and THE CHASE MANHATTAN BANK, a New York banking
corporation, as Trustee (herein called the "Trustee").
W I T N E S S E T H:
WHEREAS, the Corporation has heretofore entered into a Subordinated Indenture,
dated as of April 1, 1998 (the "Original Indenture") with The Chase Manhattan
Bank, as Trustee;
WHEREAS, the Original Indenture is incorporated herein by this reference and
the Original Indenture, as amended and supplemented to the date hereof,
including by this Supplemental Indenture, is herein called the "Indenture";
WHEREAS, under the Indenture, a new series of Securities may at any time be
established in accordance with the provisions of the Indenture and the terms of
such series may be described by a supplemental indenture executed by the
Corporation and the Trustee;
WHEREAS, the Corporation proposes to create under the Indenture a new series of
Securities;
WHEREAS, additional Securities of other series hereafter established, except as
may be limited in the Indenture as at the time supplemented and modified, may
be issued from time to time pursuant to the Indenture as at the time
supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution and delivery of
this Supplemental Indenture and to make it a valid and binding obligation
of the Corporation have been done or performed.
NOW, THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
Series % Junior Subordinated Notes
Section 101. Establishment. There is hereby established a new series of
Securities to be issued under the Indenture, to be designated as the
Corporation's Series % Junior Subordinated Notes due , (the
"Series Notes").
There are to be authenticated and delivered $ principal amount of
Series Notes, and no further Series Notes shall be authenticated and
delivered except as provided by Sections 304, 305, 306, 906 or 1106 of the
Original Indenture. The Series Notes shall be issued in definitive fully
registered form without coupons.
1
<PAGE>
The Series Notes shall be in substantially the form set out in Exhibit A
hereto. The entire principal amount of the Series Notes shall initially be
evidenced by one certificate issued to the Property Trustee of Duke Capital
Financing Trust [ ].
The form of the Trustee's Certificate of Authentication for the Series Notes
shall be in substantially the form set forth in Exhibit B hereto.
Each Series Note shall be dated the date of authentication thereof and shall
bear interest from the date of original issuance thereof or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for.
Section 102. Definitions. The following defined terms used herein shall, unless
the context otherwise requires, have the meanings specified below. Capitalized
terms used herein for which no definition is provided herein shall have the
meanings set forth in the Original Indenture.
"Additional Interest" means (i) such additional amounts as may be required so
that the net amounts received and retained by the Holder (if the Holder is the
Securities Trust) after paying taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed by the United
States or any other taxing authority will not be less than the amounts the
Holder would have received had not such taxes, duties, assessments, or other
governmental charges been imposed; and (ii) such interest as shall accrue on
interest due and not paid on an Interest Payment Date, accruing at the rate of
% per annum from the applicable Interest Payment Date to the date of payment,
compounded quarterly, on each Interest Payment Date, to the extent permitted by
applicable law.
"Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day on
which banks in New York, New York are authorized or obligated by law or
executive order to remain closed or (iii) a day on which the Corporate Trust
Office or the principal corporate trust office of the Property Trustee is
closed for business.
"Deferred Interest" means such installments of interest as are not paid during
any Extension Period, plus Additional Interest (as defined in clause (ii) of
the definition thereof) thereon.
"Extension Period" means any period during which the Corporation has agreed or
elected to defer payments of interest, which deferral may be for a period of up
to ( ) consecutive quarters.
"Guarantee" means the Guarantee Agreement executed and delivered by the
Corporation and The Chase Manhattan Bank, as guarantee trustee, for the benefit
of the holders of the Preferred Securities, as such Agreement may be amended
from time to time.
"Interest Payment Dates" means March 31, June 30, September 30 and December 31
of each year.
"Investment Company Act Event" means that the Administrative Trustees (as
defined in the Trust Agreement) and the Corporation shall have received an
Opinion of Counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or regulation or a written change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, there is more than an
insubstantial risk that the
2
<PAGE>
Securities Trust is or will be considered an "investment company" that is
required to be registered under the Investment Company Act of 1940, as amended,
which change becomes effective on or after the Original Issue Date.
"Original Issue Date" means , .
"Outstanding," when used with respect to the Series Notes, means, as of the
date of determination, all Series Notes theretofore authenticated and
delivered under the Indenture, except:
(i) Series Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Series Notes for whose payment or redemption the necessary amount of
money or money's worth has been theretofore deposited with the Trustee or
any Paying Agent (other than the Corporation) in trust or set aside and
segregated in trust by the Corporation (if the Corporation shall act as its
own Paying Agent) for the Holders of such Series Notes; provided that if
such Series Notes are to be redeemed, notice of such redemption has been
duly given pursuant to the Indenture or provision therefor satisfactory to
the Trustee has been made;
(iii) Series Notes as to which Defeasance has been effected pursuant to
Section 1302 of the Original Indenture; and
(iv) Series Notes that have been paid or in exchange for or in lieu of
which other Series Notes have been authenticated and delivered pursuant
to the Indenture, other than any such Series Notes in respect of which
there shall have been presented to the Trustee proof satisfactory to it
that such Series Notes are held by a bona fide purchaser in whose hands
such Series Notes are valid obligations of the Corporation;
provided, however, that in determining, during any period in which any Series
Notes are owned by any Person other than the Corporation or any Affiliate
thereof, whether the Holders of the requisite principal amount of Outstanding
Series Notes have given, made or taken any request, demand, authorization,
direction, notice, consent, waiver or other action hereunder as of any date,
Series Notes owned, whether of record or beneficially, by the Corporation or
any Affiliate thereof (with the exception of the Securities Trust) shall be
disregarded and deemed not to be Outstanding. In determining whether the
Trustee shall be protected in relying upon such request, demand, authorization,
direction, notice, consent, waiver or other action, only Series Notes that
the Trustee knows to be so owned by the Corporation or an Affiliate of the
Corporation (with the exception of the Securities Trust) in the above
circumstances shall be so disregarded. Series Notes so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect
to such Series Notes and that the pledgee is not the Corporation or any
Affiliate of the Corporation.
"Preferred Securities" means the % Trust Preferred Securities issued by the
Securities Trust.
"Property Trustee," when used with respect to the Series Notes, means the
Person designated as such in the Trust Agreement.
3
<PAGE>
"Regular Record Date" means, with respect to each Interest Payment Date, the
close of business on the 15th calendar day preceding such Interest Payment
Date.
"Securities Trust" means Duke Capital Financing Trust , a statutory business
trust formed by the Corporation under Delaware law to issue the Trust
Securities, the proceeds of which will be used to purchase Series Notes, or a
successor thereof.
"Special Event" means an Investment Company Act Event or Tax Event.
"Stated Maturity" means , .
"Tax Event" means that the Administrative Trustees and the Corporation shall
have received an Opinion of Counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, or change (including any announced
prospective change) in, laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein or
(b) any amendment to, or change in, an interpretation or application of such
laws or regulations, there is more than an insubstantial risk that (i) the
Securities Trust would be subject to United States federal income tax with
respect to income accrued or received on the Series Notes, (ii) interest
payable on the Series Notes would not be deductible by the Corporation for
United States federal income tax purposes, or (iii) the Securities Trust would
be subject to more than a de minimis amount of other taxes, duties or other
governmental charges, which change or amendment becomes effective on or after
the Original Issue Date.
"Trust Agreement" means the Amended and Restated Trust Agreement that governs
the affairs of the Securities Trust.
"Trust Securities" means the securities issued by the Securities Trust
evidencing the entire beneficial interest therein.
Section 103. Payment of Principal and Interest. The unpaid principal amount of
the Series Notes shall bear interest at the rate of % per annum until paid
or duly provided for, such interest to accrue from , or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for. Interest shall be paid quarterly in arrears on each Interest
Payment Date commencing , to the Person in whose name the
Series Notes are registered on the Regular Record Date for such Interest
Payment Date; provided that interest payable at the Stated Maturity of
principal or on a Redemption Date as provided herein will be paid to the Person
to whom principal is payable. So long as an Extension Period is not occurring,
any such interest that is not so punctually paid or duly provided for will
forthwith cease to be payable to the Holders on such Regular Record Date and
may either be paid to the Person or Persons in whose name the Series Notes
are registered at the close of business on a Special Record Date for the
payment of such defaulted interest to be fixed by the Trustee ("Special Record
Date"), notice whereof shall be given to Holders of the Series Notes not less
than ten (10) days prior to such Special Record Date, or be paid at any time in
any other lawful manner not inconsistent with the requirements of any
securities exchange, if any, on which the Series Notes may be listed, and
upon such notice as may be required by any such exchange, all as more fully
provided in the Original Indenture.
4
<PAGE>
Payments of interest on the Series Notes will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for the
Series Notes shall be computed and paid on the basis of a 360-day year of
twelve 30-day months. In the event that any date on which interest is payable
on the Series Notes is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on the date the payment was
originally payable.
Payment of the principal and interest (including Additional Interest, if any)
on the Series Notes shall be made at the office of the Paying Agent in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts, with any such payment
that is due at the Stated Maturity or at earlier redemption of any Series
Notes being made upon surrender of such Series Notes to the Paying Agent.
Payments of interest (including interest on any Interest Payment Date) will be
made, subject to such surrender where applicable, at the option of the
Corporation, (i) by check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register or (ii) by wire transfer
at such place and to such account at a banking institution in the United States
as may be designated in writing to the Trustee at least sixteen (16) days prior
to the date for payment by the Person entitled thereto.
The Corporation shall pay, as additional interest on the Series Notes, when
due to the United States or any other taxing authority, the amounts set forth
in clause (i) of the definition of Additional Interest.
Section 104. Deferral of Interest Payments. The Corporation has the right at
any time and from time to time to extend (by prior agreement or otherwise) the
interest payment period of the Series Notes for up to ( ) consecutive
quarters (each, an "Extension Period"), during which Extension Period the
Corporation shall have the right to make partial payments of interest on any
Interest Payment Date; provided, however, that no such Extension Period may
extend beyond the Stated Maturity. Notwithstanding the foregoing, the
Corporation has no right to extend its obligation to pay such amounts as are
defined in clause (i) of the definition of Additional Interest. Prior to the
termination of any such Extension Period, the Corporation may further extend
(by prior agreement or otherwise) the interest payment period; provided that
such Extension Period, together with all such previous and further extensions
of that Extension Period, shall not exceed ( ) consecutive quarters. Upon
the termination of any such Extension Period and upon the payment of all
accrued and unpaid interest and any Additional Interest then due, the
Corporation may select a new Extension Period, subject to the above limitations
and requirements.
Upon the termination of any Extension Period, which termination shall be on an
Interest Payment Date, the Corporation shall pay all Deferred Interest on the
next succeeding Interest Payment Date to the Person or Persons in whose name
the Series Notes are registered on the Regular Record Date for such Interest
Payment Date; provided that Deferred Interest payable at Stated Maturity or on
any Redemption Date will be paid to the Person or Persons to whom principal is
payable.
5
<PAGE>
The Corporation shall give the Holder or Holders of the Series Notes and the
Trustee notice, as provided in Sections 105 and 106, respectively, of the
Original Indenture, of the occurrence, its selection or extension of an
Extension Period at least one Business Day prior to the earlier of (i) the
Regular Record Date relating to the Interest Payment Date on which the
Extension Period is to commence or relating to the Interest Payment Date on
which an Extension Period that is being extended would otherwise terminate, or
(ii) the date the Corporation or the Securities Trust is required to give
notice to the New York Stock Exchange or other applicable self-regulatory
organization of the record date or the date such distributions are payable. The
Corporation shall cause the Securities Trust to give notice of the occurrence
or the Corporation's selection of such Extension Period to Holders of the Trust
Securities. The month in which any notice is given pursuant to the immediately
preceding sentence of this Section shall constitute the first month of the
first quarter of the ( ) consecutive quarters which comprise the maximum
Extension Period.
At any time any of the foregoing notices are given to the Trustee, the
Corporation shall give to the Paying Agent for the Series Notes such
information as said Paying Agent shall reasonably require in order to fulfill
its tax reporting obligations with respect to such Series Notes.
Section 105. Denominations. The Series Notes may be issued in denominations
of $ or any integral multiple thereof.
Section 106. Global Securities. If the Series Notes are distributed to
holders of the Trust Securities in liquidation of such holders' interests
therein, the Series Notes will be issued in the form of one or more Global
Securities registered in the name of the Depositary (which shall be The
Depository Trust Company) or its nominee. Except under the limited
circumstances described below, Series Notes represented by such Global
Security or Global Securities will not be exchangeable for, and will not
otherwise be issuable as, Series Notes in definitive form. The Global
Securities described above may not be transferred except 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 to a successor Depositary or its
nominee.
Owners of beneficial interests in such a Global Security will not be considered
the Holders thereof for any purpose under the Indenture, and no Global Security
representing a Series Note shall be exchangeable, except for another Global
Security of like denomination and tenor to be registered in the name of the
Depositary or its nominee or to a successor Depositary or its nominee or except
as described below. The rights of Holders of such Global Security shall be
exercised only through the Depositary.
A Global Security shall be exchangeable for Series Notes registered in the
names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Corporation that it is unwilling or unable to continue
as a Depositary for such Global Security and no successor Depositary shall have
been appointed by the Corporation within 90 days of receipt by the Corporation
of such notification, or if at any time the Depositary ceases to be a clearing
agency registered under the Exchange Act at a time when the Depositary is
required to be so registered to act as such Depositary and no successor
Depositary shall have been appointed by the Corporation within 90 days after it
becomes aware of such cessation, or (ii) the Corporation in its sole discretion
determines that such Global Security shall be so exchangeable. Any Global
Security that is
6
<PAGE>
exchangeable pursuant to the preceding sentence shall be exchangeable for
Series Notes registered in such names as the Depositary shall direct.
Section 107. Redemption. The Series Notes shall be subject to redemption at
the option of the Corporation, in whole or in part, without premium or penalty,
at any time or from time to time on or after , , at a Redemption
Price equal to 100% of the principal amount to be redeemed plus accrued but
unpaid interest (including any Additional Interest) to the Redemption Date;
provided, however, that, if a redemption in part shall result in the delisting
of the Preferred Securities, the Corporation may redeem the Series Notes only
in whole. In addition, upon the occurrence of a Special Event, the Corporation
may, within ninety (90) days following the occurrence thereof and subject to
the terms and conditions of the Indenture, redeem the Series Notes, in whole,
at a price equal to 100% of the principal amount to be redeemed plus any
accrued but unpaid interest (including Additional Interest, if any) to the
Redemption Date.
In the event of redemption of the Series Notes in part only, a new Series
Note or Notes for the unredeemed portion shall be issued in the name or names
of the Holders thereof upon the surrender thereof.
The Series Notes shall not have a sinking fund.
Notice of redemption shall be given as provided in Section 1104 of the Original
Indenture. Notwithstanding the foregoing, no notice of redemption that is given
pursuant to such Section with respect to any Series Notes shall, while any
Preferred Securities are outstanding, contain a condition that provides that
redemption of the Series Notes, or the part thereof, specified therein, shall
be conditional upon receipt by the Trustee or the Paying Agent for such Series
Notes, on or prior to the date fixed for such redemption, of money sufficient
to pay the principal of and any interest on such Series Notes. Any notice
provided to the Trustee under Section 1102 of the Original Indenture shall also
be provided by the Corporation to the Property Trustee; provided that the
Corporation shall provide notice pursuant to such Section 1102 on a date less
than 45 days prior to the Redemption Date only if such shorter notice is
satisfactory to both the Trustee and the Property Trustee.
Any redemption of less than all of the Series Notes shall, with respect to
the principal thereof, be divisible by $ .
Section 108. Additional Interest. Whenever there is mentioned in the Indenture,
in any context, the payment of the principal of, or any premium or interest on,
or in respect of, Securities of any series, such mention shall, with respect to
the Series Notes, be deemed to include mention of the payment of Additional
Interest provided for by the terms of the Series Notes to the extent that, in
such context, Additional Interest is, was or would be payable in respect
thereof pursuant to such terms, and express mention of the payment of
Additional Interest in any provisions of this Supplemental Indenture shall
not be construed as excluding Additional Interest in those provisions of the
Original Indenture or this Supplemental Indenture in which such express
mention is not made.
If, subsequent to the date that a satisfaction and discharge or Defeasance is
effected pursuant to Section 401 or 1302, respectively, of the Original
Indenture, Additional Interest (for purposes of this
7
<PAGE>
paragraph, as defined in clause (i) of the definition thereof) (in excess of
that established as of the date that such discharge or Defeasance is effected)
becomes payable in respect of the Series Notes so discharged or defeased, the
Corporation shall irrevocably deposit or cause to be irrevocably deposited in
accordance with the provisions of Section 401 or 1304 of the Original
Indenture, as the case may be, within ten Business Days prior to the date the
first payment in respect of any portion of such excess Additional Interest
becomes due, such additional moneys or Government Obligations as are necessary
to satisfy the provisions of Section 401 or 1304 of the Original Indenture, as
the case may be, as if a discharge or Defeasance were being effected as of the
date of such subsequent deposit.
Except as otherwise provided in or pursuant to the Indenture, at least 10 days
prior to the first Interest Payment Date upon which Additional Interest (for
purposes of this paragraph, as defined in clause (i) of the definition thereof)
shall be payable, and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the information set forth in the Officers' Certificate hereinafter
mentioned, the Corporation shall furnish the Trustee and any Paying Agent, if
other than the Trustee or the Corporation, with an Officers' Certificate
stating the amount of the Additional Interest payable per minimum authorized
denomination of the Series Notes.
Section 109. Limitations on Dividend and Certain Other Payments. The
Corporation covenants, for the benefit of the Holders of the Series Notes,
that, subject to the next succeeding sentence, (a) the Corporation shall not
declare or pay any dividend on, or make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock, and (b) the Corporation shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees other than the Guarantee) issued by the
Corporation which rank pari passu with or junior to the Series Notes (i) if
at such time the Corporation shall have given notice of its election to extend
an interest payment period for the Series Notes and such extension shall be
continuing or (ii) if at such time an Event of Default with respect to the
Series Notes shall have occurred and be continuing. The preceding sentence,
however, shall not restrict (A) any of the actions described in the preceding
sentence resulting from any reclassification of the Corporation's capital stock
or the exchange or conversion of one class or series of the Corporation's
capital stock for another class or series of the Corporation's capital stock or
(B) dividends or distributions in capital stock of the Corporation.
Section 110. Covenants Regarding Securities Trust. For so long as the Trust
Securities remain outstanding, the Corporation covenants (i) directly or
indirectly to maintain 100% ownership of the Common Securities (as defined in
the Trust Agreement) of the Securities Trust; provided, however, that any
permitted successor of the Corporation under the Indenture may succeed to the
Corporation's ownership of such Common Securities, and (ii) to use its
reasonable efforts to cause the Securities Trust (a) to remain a statutory
business trust, except in connection with the distribution of Series Notes to
the holders of Trust Securities in liquidation of the Securities Trust, the
redemption of all of the Trust Securities, or certain mergers, consolidations
or amalgamations, each as permitted under the Trust Agreement, and (b) to
otherwise continue to be classified as a grantor trust for United States
federal income tax purposes. The Corporation shall deliver to the Trustee, no
later than the Business Day on which the event occurs, written notice of the
liquidation, dissolution
8
<PAGE>
or winding-up of the Securities Trust if such liquidation, dissolution or
winding-up would occur earlier than the Stated Maturity of the Series Notes
owned by such Securities Trust.
Section 111. No Fiduciary Duty of Trustee to Holders of Trust Securities. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Trust
Securities and shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself to be a holder of a Trust Security to
establish that such Person is such a holder.
Section 112. Listing of Series Notes. If the Series Notes are to be issued
as a Global Security in connection with the distribution of the Series Notes
to the holders of the Preferred Securities, the Corporation shall use its best
efforts to list such Series Notes on the New York Stock Exchange or any other
exchange on which such Preferred Securities are then listed. The Corporation
shall notify the Trustee if and when the Series Notes become admitted to
trading on the New York Stock Exchange or any other national securities
exchange.
Section 113. Covenant Defeasance. Section 1303 of the Original Indenture shall
not apply to any of the Series Notes.
Section 114. Set-Off. Notwithstanding anything to the contrary in the Indenture
or in any Series Note, prior to the dissolution of the Securities Trust, the
Corporation shall have the right to set off and apply against any payment it is
otherwise required to make hereunder or thereunder with respect to the
principal of or interest (including any Additional Interest) on the Series
Notes with and to the extent the Corporation has theretofore made, or is
concurrently on the date of such payment making, a payment with respect to the
Preferred Securities under the Guarantee. Contemporaneously with, or as
promptly as practicable after, any such payment under the Guarantee, the
Corporation shall deliver to the Trustee an Officers' Certificate (upon which
the Trustee shall be entitled to rely conclusively without any requirement to
investigate the facts contained therein) to the effect that such payment has
been made and that, as a result of such payment, the corresponding payment
under the Series Notes has been set off in accordance with this Section 114.
Section 115. Subordination. The indebtedness evidenced by the Series Notes
shall be, to the extent and in the manner set forth in the Original Indenture,
subordinate and junior in right of payment to the prior payment in full of all
Senior Indebtedness (as defined in the Original Indenture) with respect to the
Series Notes, and the Series Notes shall rank pari passu in right of
payment with each other series of Securities issued under the Indenture, with
the exception of any series of Securities which by its terms provides
otherwise.
Section 116. Paying Agent. The Trustee shall initially serve as Paying Agent
with respect to the Series Notes, with the Place of Payment initially being
the Corporate Trust Office of the Trustee.
ARTICLE 2
Miscellaneous Provisions
Section 201. Recitals by Corporation. The recitals in this Supplemental
Indenture are made by the Corporation only and not by the Trustee, and all of
the provisions contained in the Original Indenture in respect of the rights,
privileges, immunities, powers and duties of the Trustee shall be applicable in
respect of the Series Notes and of this Supplemental Indenture as fully
and with like effect as if set forth herein in full.
9
<PAGE>
Section 202. Ratification and Incorporation of Original Indenture. As
supplemented hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture and this Supplemental Indenture shall
be read, taken and construed as one and the same instrument.
Section 203. Executed in Counterparts. This Supplemental Indenture may be
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts shall together constitute but one and the same
instrument.
Section 204. Assignment. The Corporation shall have the right at all times to
assign any of its rights or obligations under this Indenture with respect to
the Series Notes to a direct or indirect wholly-owned subsidiary of the
Corporation; provided that, in the event of any such assignment, the
Corporation shall remain primarily liable for the performance of all such
obligations. The Indenture may also be assigned by the Corporation in
connection with a transaction described in Article Eight of the Original
Indenture.
Section 205. Enforcement by Holders of Preferred Securities of Right of Holders
to Receive Principal and Interest. So long as the Series Notes are held by
the Property Trustee on behalf of the Securities Trust, a registered holder of
Preferred Securities may institute a legal proceeding directly against the
Corporation, without first instituting a legal proceeding directly against or
requesting or directing that action be taken by the Property Trustee or any
other Person, for enforcement of payment to such registered holder of principal
of or interest on Series Notes having a principal amount equal to the
aggregate stated liquidation amount of such Preferred Securities of such
registered holder on or after the due dates therefor specified or provided for
in the Series Notes. This Section 205 and Section 109 of this
Supplemental Indenture are for the benefit of the registered holders of
Preferred Securities and, prior to the dissolution of the Securities Trust, may
be enforced by such holders. A holder of a Preferred Security shall not have
the right, as such holder, to enforce any other provision of the Indenture.
IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed
in its name and behalf by its duly authorized officers, all as of the day and
year first above written.
Duke Capital Corporation
By: _________________________________
Attest:
_________________________________
The Chase Manhattan Bank,
as Trustee
By: _________________________________
Attest:
_________________________________
10
<PAGE>
EXHIBIT A
FORM OF
SERIES % JUNIOR SUBORDINATED NOTE
DUE
No. CUSIP No.
THE INDEBTEDNESS EVIDENCED BY THIS SECURITY IS, TO THE EXTENT PROVIDED IN THE
INDENTURE, SUBORDINATE AND SUBJECT IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN
FULL OF ALL SENIOR INDEBTEDNESS, AND THIS SECURITY IS ISSUED SUBJECT TO THE
PROVISIONS OF THE INDENTURE WITH RESPECT THERETO.
DUKE CAPITAL CORPORATION
SERIES % JUNIOR SUBORDINATED NOTE
DUE
<TABLE>
<S> <C>
Principal Amount: $
Regular Record Date: 15th calendar day prior to Interest Payment Date
Original Issue Date: ,
Stated Maturity: ,
Interest Payment Dates: March 31, June 30, September 30, December 31
Interest Rate: % per annum
Authorized Denomination: $ or any integral multiple thereof
Initial Redemption Date: ,
</TABLE>
Duke Capital Corporation, a Delaware corporation (the "Corporation," which
term includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to
, or registered assigns, the principal sum of
DOLLARS ($ ) on the Stated Maturity shown above (or upon earlier
redemption), and to pay interest thereon from the Original Issue Date shown
above, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, quarterly in arrears on each Interest Payment
Date as specified above, commencing on , , and on the Stated
Maturity (or upon earlier redemption) at the rate per annum shown above (the
"Interest Rate") until the principal hereof is paid or made available for
payment and on any overdue principal and on any overdue installment of
interest. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date (other than an Interest Payment Date that is the
Stated Maturity or a Redemption Date) will, as provided in such Indenture, be
paid to the Person in whose name this Series % Junior Subordinated Note due
, (this "Security") is registered at the close of business on
the Regular Record Date as specified above next preceding such Interest
Payment Date; provided that any interest payable at Stated Maturity or on any
Redemption Date will be paid to the Person to whom principal
A-1
<PAGE>
is payable. Except as otherwise provided in the Indenture, any such interest
not so punctually paid or duly provided for will forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to the Person
in whose name this Security is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange, if any, on which the Securities of this series shall be
listed, and upon such notice as may be required by any such exchange, all as
more fully provided in said Indenture.
Payments of interest on this Security will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this
Security shall be computed and paid on the basis of a 360-day year of twelve
30-day months. In the event that any date on which interest is payable on this
Security is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and
without any interest or payment in respect of any such delay), except that, if
such Business Day is in the next succeeding calendar year, payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on the date the payment was originally payable.
"Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day on
which banks in New York, New York are authorized or obligated by law or
executive order to remain closed or (iii) a day on which the Corporate Trust
Office or the principal corporate trust office of the Property Trustee is
closed for business.
The Corporation shall have the right at any time and from time to time during
the term of this Security to extend (by prior agreement or otherwise) the
interest payment period of such Security for up to consecutive quarters
(each, an "Extension Period"), but not beyond the Stated Maturity of this
Security, during which Extension Periods interest shall accrue on unpaid
installments of interest at the Interest Rate, compounded quarterly, to the
date of payment to the extent permitted by applicable law (such unpaid interest
plus such interest thereon being called "Deferred Interest"); provided,
however, that the Corporation shall have the right to make partial payments of
interest on any Interest Payment Date during any Extension Period. Upon the
termination of each Extension Period, which shall be an Interest Payment Date,
the Corporation shall pay all Deferred Interest on the next succeeding Interest
Payment Date to the Person in whose name this Security is registered at the
close of business on the Regular Record Date for such Interest Payment Date;
provided that any Deferred Interest payable at Stated Maturity or on any
Redemption Date will be paid to the Person to whom principal is payable. Prior
to the termination of any such Extension Period, the Corporation may further
extend (by prior agreement or otherwise) the interest payment period; provided
that such Extension Period together with all such previous and further
extensions thereof shall not exceed ( ) consecutive quarters. Upon the
termination of any such Extension Period, and the payment of all accrued and
unpaid interest (including any Additional Interest) then due, the Corporation
may agree to or select a new Extension Period, subject to the above
requirements. The Corporation shall not (i) declare or pay any dividend or
distribution on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of its capital stock, and (ii) make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees other than the Guarantee) issued by the
Corporation that rank pari passu with or junior to this Security if
A-2
<PAGE>
the Corporation shall have given notice of its election to extend an interest
payment period for this Security and such extension shall be continuing or if
at such time an Event of Default with respect to the series of which this
Security is a part shall have occurred and be continuing. The preceding
sentence, however, shall not restrict (A) any of the actions described in the
preceding sentence resulting from any reclassification of the Corporation's
capital stock or the exchange or conversion of one class or series of the
Corporation's capital stock for another class or series of the Corporation's
capital stock or (B) dividends or distributions in capital stock of the
Corporation. The Corporation shall give the Holder of this Security and the
Trustee notice of the occurrence, its selection or extension of an Extension
Period at least one Business Day prior to the earlier of (i) the Regular Record
Date relating to the Interest Payment Date on which the Extension Period is to
commence or relating to the Interest Payment Date on which an Extension Period
that is being extended would otherwise terminate or (ii) the date the
Corporation or the Securities Trust is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization of the record
date or the date such distributions are payable.
The Corporation also shall be obligated to pay when due and without extension
all additional amounts as may be required so that the net amount received and
retained by the Holder of this Security (if the Holder is the Securities Trust)
after paying taxes, duties, assessments or governmental charges of whatever
nature (other than withholding taxes) imposed by the United States or any other
taxing authority will not be less than the amounts such Holder would have
received had no such taxes, duties, assessments, or other governmental charges
been imposed.
Payment of the principal of and interest (including Additional Interest, if
any) due at the Stated Maturity or earlier redemption of this Security shall be
made upon surrender of this Security, at the Corporate Trust Office of the
Trustee, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.
Payment of interest (including interest on an Interest Payment Date) will be
made, subject to such surrender where applicable, at the option of the
Corporation, (i) by check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register or (ii) by wire transfer
at such place and to such account at a banking institution in the United States
as may be designated in writing to the Trustee at least sixteen (16) days prior
to the date for payment by the Person entitled thereto.
The indebtedness evidenced by this Security is, to the extent and in the manner
set forth in the Indenture, subordinate in right of payment to the prior
payment in full of all Senior Indebtedness (as defined in the Indenture), and
this Security is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to effectuate
the subordination so provided and (c) appoints the Trustee his attorney-in-fact
for any and all such purposes. Each Holder hereof, by his acceptance hereof,
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness whether now
outstanding or hereafter incurred and waives reliance by each such holder upon
said provisions.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH
ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS IF SET FORTH AT THIS PLACE.
A-3
<PAGE>
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Corporation has caused this instrument to be duly
executed under its corporate seal.
Dated:
Duke Capital Corporation
By: _________________________________
Attest:
_________________________________
A-4
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
The Chase Manhattan Bank,
as Trustee
By: _________________________________
Authorized Officer
A-5
<PAGE>
(Reverse Side of Security)
This Security is one of a duly authorized issue of Securities of the
Corporation (the "Securities"), issued and issuable in one or more series under
a Subordinated Indenture, dated as of April 1, 1998, as supplemented (the
"Indenture"), between the Corporation and The Chase Manhattan Bank, as Trustee
(the "Trustee," which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitation of rights, duties and
immunities thereunder of the Corporation, the Trustee and the Holders of the
Securities issued thereunder and of the terms upon which said Securities are,
and are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof as Series % Junior Subordinated Notes due
, (the "Series Notes") in the aggregate principal amount of up
to $ . Capitalized terms used herein for which no definition is
provided herein shall have the meanings set forth in the Indenture.
The Corporation shall have the right, subject to the terms and conditions of
the Indenture, to redeem this Security at any time on or after ,
at the option of the Corporation, without premium or penalty, in whole or in
part, at a Redemption Price equal to 100% of the principal amount to be
redeemed plus accrued but unpaid interest (including any Additional Interest)
to the Redemption Date. Upon the occurrence of a Special Event (as defined
below), the Corporation may, within 90 days following the occurrence thereof
and subject to the terms and conditions of the Indenture, redeem this Security
without premium or penalty, in whole, at a Redemption Price equal to 100% of
the principal amount thereof plus accrued but unpaid interest (including any
Additional Interest) to the Redemption Date. A Special Event may be a Tax Event
or an Investment Company Act Event. "Tax Event" means that the Administrative
Trustees and the Corporation shall have received an Opinion of Counsel
experienced in such matters to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to, or
change in, an interpretation or application of such laws or regulations, there
is more than an insubstantial risk that (i) the Securities Trust would be
subject to United States federal income tax with respect to income accrued or
received on the Series Notes, (ii) interest payable on the Series Notes
would not be deductible by the Corporation for United States federal income tax
purposes, or (iii) the Securities Trust would be subject to more than a de
minimis amount of other taxes, duties or other governmental charges, which
change or amendment becomes effective on or after the Original Issue Date.
"Investment Company Act Event" means that the Administrative Trustees and the
Corporation shall have received an Opinion of Counsel experienced in such
matters to the effect that, as a result of the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that the Securities Trust
is or will be considered an "investment company" that is required to be
registered under the Investment Company Act of 1940, as amended, which change
becomes effective on or after the Original Issue Date.
In the event of redemption of this Security in part only, a new Security or
Securities of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the surrender hereof. The Securities of this
series will not have a sinking fund.
A-6
<PAGE>
If an Event of Default with respect to the 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, with the effect and subject to the
conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Corporation and the rights of the Holders of the Securities of all series
affected under the Indenture at any time by the Corporation and the Trustee
with the consent of the Holders of not less than a majority in principal amount
of the Outstanding Securities of all series affected thereby (voting as one
class). The Indenture contains provisions permitting the Holders of not less
than a majority in principal amount of the Outstanding Securities of all series
with respect to which a default under the Indenture shall have occurred and be
continuing (voting as one class), on behalf of the Holders of the Securities of
all such series, to waive, with certain exceptions, such default under the
Indenture and its consequences. The Indenture also permits the Holders of not
less than a majority in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Corporation with certain provisions of the
Indenture affecting such series. 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 Corporation, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Corporation for such purpose, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Corporation and
the Security Registrar and 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 of like tenor and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
As provided in and subject to the provisions of the Indenture, the Holder of
this Security shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than a majority in principal
amount of the Securities of this series at the time Outstanding shall have made
written request to the Trustee to institute proceedings in respect of such
Event of Default as Trustee and offered the Trustee reasonable indemnity, and
the Trustee shall not have received from the Holders of a majority in principal
amount of Securities of this series at the time Outstanding a direction
inconsistent with such request and shall have failed to
A-7
<PAGE>
institute any such proceeding for 60 days after receipt of such notice, request
and offer of indemnity. The foregoing shall not apply to any suit instituted by
the Holder of this Security for the enforcement of any payment of principal
hereof or any interest hereon on or after the respective due dates expressed
herein.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of the Securities of this series upon compliance with certain
conditions set forth in the Indenture.
Prior to due presentment of this Security for registration of transfer, the
Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue, and neither the
Corporation, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Securities of this series are issuable only in registered form without
coupons in denominations of $ and any integral multiple thereof. As provided
in the Indenture and subject to the limitations therein set forth, Securities
of this series are exchangeable for a like aggregate principal amount of
Securities of this series of a different authorized denomination, as requested
by the Holder surrendering the same upon surrender of the Security or
Securities to be exchanged at the office or agency of the Corporation.
This Security shall be governed by, and construed in accordance with, the
internal laws of the State of New York.
A-8
<PAGE>
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
------ -------
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with under Uniform Gifts to
rights of survivorship and Minors Act _____________
not as tenants in common (State)
Additional abbreviations may also be used though not on the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
(please insert Social Security or other identifying number of assignee)
- --------------------------------------------------------------------------------
Please Print or Typewrite Name and Address, Including Postal Zip Code of
Assignee
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer said Security on the books of the Corporation, with full
power of substitution in the premises.
Dated: ______________________________ -------------------------------------
-------------------------------------
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 or
enlargement, or any change whatever.
A-9
<PAGE>
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
The Chase Manhattan Bank,
as Trustee
By: _________________________________
Authorized Officer
B-1
<PAGE>
EXHIBIT 4.7
DUKE CAPITAL FINANCING TRUST [ ]
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
DUKE CAPITAL CORPORATION, AS DEPOSITOR,
THE CHASE MANHATTAN BANK, AS PROPERTY TRUSTEE
CHASE MANHATTAN BANK DELAWARE, AS DELAWARE TRUSTEE
AND
ROBERT T. LUCAS III AND S.L. LOVE,
AS ADMINISTRATIVE TRUSTEES
DATED AS OF ,
<PAGE>
DUKE CAPITAL FINANCING TRUST [ ]
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Trust Agreement
Act Section Section
--------------- ---------------
<C> <S> <C>
Section 310 (a)(1)........................................... 8.07
(a)(2)........................................... 8.07
(a)(3)........................................... 8.09
(a)(4)........................................... Not Applicable
(b).............................................. 8.08
Section 311 (a).............................................. 8.13
(b).............................................. 8.13
Section 312 (a).............................................. 5.07
(b).............................................. 5.07
(c).............................................. 5.07
Section 313 (a).............................................. 8.14(a)
(a)(4)........................................... 8.14(b)
(b).............................................. 8.14(b)
(c).............................................. 8.14(a)
(d).............................................. 8.14(a), 8.14(b)
Section 314 (a).............................................. 8.15
(b).............................................. Not Applicable
(c)(1)........................................... 8.15, 8.16
(c)(2)........................................... 8.16
(c)(3)........................................... 8.16
(d).............................................. Not Applicable
(e).............................................. 8.16
Section 315 (a).............................................. 8.01
(b).............................................. 8.02, 8.14(b)
(c).............................................. 8.01(a)
(d).............................................. 8.01, 8.03
(e).............................................. Not Applicable
Section 316 (a).............................................. Not Applicable
(a)(l)(A)........................................ 8.19
(a)(1)(B)........................................ 8.19
(a)(2)........................................... Not Applicable
(b).............................................. Not Applicable
(c).............................................. Not Applicable
Section 317 (a)(1)........................................... Not Applicable
(a)(2)........................................... Not Applicable
(b).............................................. 5.09
Section 318 (a).............................................. 10.10
</TABLE>
- --------
Note: This Cross-Reference Table does not constitute part of the Trust
Agreement and shall not affect the interpretation of any of its terms and
provisions.
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Defined Terms
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
Section 1.01 Definitions............................................... 1
ARTICLE II
Establishment of the Trust
Section 2.01 Name...................................................... 9
Section 2.02 Offices of the Trustees; Principal Place of Business...... 9
Section 2.03 Initial Contribution of Trust Property; Organizational
Expenses................................................. 9
Section 2.04 Issuance of the Preferred Securities...................... 9
Section 2.05 Subscription and Purchase of Junior Subordinated Notes;
Issuance of the Common Securities........................ 9
Section 2.06 Declaration of Trust...................................... 10
Section 2.07 Authorization to Enter into Certain Transactions.......... 10
Section 2.08 Assets of Trust........................................... 14
Section 2.09 Title to Trust Property................................... 14
Section 2.10 Mergers and Consolidations of the Trust................... 14
ARTICLE III
Payment Account
Section 3.01 Payment Account........................................... 15
ARTICLE IV
Distributions; Redemption
Section 4.01 Distributions............................................. 16
Section 4.02 Redemption................................................ 17
Section 4.03 Subordination of Common Securities........................ 18
Section 4.04 Payment Procedures........................................ 19
Section 4.05 Tax Returns and Reports................................... 19
ARTICLE V
Trust Securities Certificates
Section 5.01 Initial Ownership......................................... 19
Section 5.02 The Trust Securities Certificates......................... 19
Section 5.03 Authentication of Trust Securities Certificates........... 20
Section 5.04 Registration of Transfer and Exchange of Preferred
Securities Certificates.................................. 20
Section 5.05 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates............................................. 21
Section 5.06 Persons Deemed Securityholders............................ 21
Section 5.07 Access to List of Securityholders' Names and Addresses.... 21
Section 5.08 Maintenance of Office or Agency........................... 22
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
Section 5.09 Appointment of Paying Agent............................... 22
Section 5.10 Ownership of Common Securities by Depositor............... 22
Section 5.11 Book-Entry Preferred Securities Certificates; Common
Securities Certificate................................... 23
Section 5.12 Notices to Clearing Agency................................ 23
Section 5.13 Definitive Preferred Securities Certificates.............. 24
Section 5.14 Rights of Securityholders................................. 24
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 6.01 Limitations on Voting Rights.............................. 24
Section 6.02 Notice of Meetings........................................ 25
Section 6.03 Meetings of Preferred Securityholders..................... 25
Section 6.04 Voting Rights............................................. 26
Section 6.05 Proxies, etc. ............................................ 26
Section 6.06 Securityholder Action by Written Consent.................. 26
Section 6.07 Record Date for Voting and Other Purposes................. 26
Section 6.08 Acts of Securityholders................................... 26
Section 6.09 Inspection of Records..................................... 27
ARTICLE VII
Representations and Warranties of the Property Trustee and Delaware Trustee
Section 7.01 Representations and Warranties of the Property Trustee and
Delaware Trustee......................................... 27
Section 7.02 Representations and Warranties of Depositor............... 28
ARTICLE VIII
The Trustees
Section 8.01 Certain Duties and Responsibilities....................... 29
Section 8.02 Notice of Defaults........................................ 29
Section 8.03 Certain Rights of Property Trustee........................ 29
Section 8.04 Not Responsible for Recitals or Issuance of Securities.... 30
Section 8.05 May Hold Securities....................................... 30
Section 8.06 Compensation; Fees; Indemnity............................. 31
Section 8.07 Trustees Required; Eligibility............................ 31
Section 8.08 Conflicting Interests..................................... 32
Section 8.09 Co-Property Trustees and Separate Trustee................. 32
Section 8.10 Resignation and Removal; Appointment of Successor......... 33
Section 8.11 Acceptance of Appointment by Successor.................... 34
Section 8.12 Merger, Conversion, Consolidation or Succession to
Business................................................. 35
Section 8.13 Preferential Collection of Claims Against Depositor or
Trust.................................................... 35
Section 8.14 Reports by the Property Trustee........................... 35
Section 8.15 Reports to the Property Trustee........................... 36
Section 8.16 Evidence of Compliance with Conditions Precedent.......... 36
Section 8.17 Number of Trustees........................................ 36
Section 8.18 Delegation of Power....................................... 36
Section 8.19 Enforcement of Rights of Property Trustee by
Securityholders.......................................... 37
Section 8.20 Delaware Trustee.......................................... 37
</TABLE>
ii
<PAGE>
ARTICLE IX
Termination and Liquidation
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
Section 9.01 Termination Upon Expiration Date........................... 38
Section 9.02 Early Termination.......................................... 38
Section 9.03 Termination................................................ 38
Section 9.04 Liquidation................................................ 38
Section 9.05 Bankruptcy................................................. 39
ARTICLE X
Miscellaneous Provisions
Section 10.01 Guarantee by the Depositor................................. 40
Section 10.02 Limitation of Rights of Securityholders.................... 40
Section 10.03 Amendment.................................................. 40
Section 10.04 Separability............................................... 41
Section 10.05 Governing Law.............................................. 41
Section 10.06 Notice of Deferral of Distribution......................... 41
Section 10.07 Headings................................................... 42
Section 10.08 Notice and Demand.......................................... 42
Section 10.09 Agreement Not to Petition.................................. 42
Section 10.10 Conflict with Trust Indenture Act.......................... 43
Section 10.11 Successors................................................. 43
EXHIBIT A Certificate of Trust
EXHIBIT B (Reserved)
EXHIBIT C Form of Common Securities Certificate
EXHIBIT D Form of Expense Agreement
EXHIBIT E Form of Preferred Securities Certificate
</TABLE>
iii
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT is made as of , , by and
among (i) Duke Capital Corporation, a Delaware corporation (the "Depositor" or
the "Corporation"), (ii) The Chase Manhattan Bank, a banking corporation duly
organized and existing under the laws of the State of New York, as trustee (the
"Property Trustee" and, in its separate corporate capacity and not in its
capacity as Property Trustee, the "Bank"), (iii) Chase Manhattan Bank Delaware,
a banking corporation duly organized under the laws of the State of Delaware,
as Delaware trustee (the "Delaware Trustee" and, in its separate corporate
capacity and not in its capacity as Delaware Trustee, the "Delaware Bank"),
(iv) Robert T. Lucas III, an individual, and S.L. Love, an individual, as
administrative trustees (each an "Administrative Trustee" and together the
"Administrative Trustees") (the Property Trustee, the Delaware Trustee and the
Administrative Trustees referred to collectively as the "Trustees") and (v) the
several Holders, as hereinafter defined.
WITNESSETH:
WHEREAS, the Depositor and the Delaware Trustee have heretofore duly declared
and established a business trust pursuant to the Delaware Business Trust Act by
entering into that certain Trust Agreement, dated as of , (the
"Original Trust Agreement"), and by the execution and filing by the Delaware
Trustee with the Secretary of State of the State of Delaware of the Certificate
of Trust, dated , (the "Certificate of Trust"); and
WHEREAS, the parties hereto desire to amend and restate the Original Trust
Agreement in its entirety as set forth herein to provide for, among other
things, (i) the addition of the Bank, Robert T. Lucas III and S.L. Love as
trustees of the Trust, (ii) the acquisition by the Trust from the Depositor of
all of the right, title and interest in the Junior Subordinated Notes, (iii)
the issuance of the Common Securities by the Trust to the Depositor, and (iv)
the issuance and sale of the Preferred Securities by the Trust pursuant to the
Underwriting Agreement.
NOW THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, each party, for the benefit of the other parties and
for the benefit of the Securityholders, hereby amends and restates the Original
Trust Agreement in its entirety and agrees as follows:
ARTICLE I
Defined Terms
Section 1.01 Definitions. For all purposes of this Trust 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) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
<PAGE>
(c) unless the context otherwise requires, any reference to an "Article" or
a "Section" refers to an Article or a Section, as the case may be, of this
Trust Agreement; and
(d) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Trust Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, an amount equal to the Additional
Interest (as defined in clause (ii) of the definition of "Additional Interest"
in the Subordinated Indenture) paid by the Depositor on a Like Amount of Junior
Subordinated Notes for such period.
"Administrative Trustee" means each of the individuals identified as an
"Administrative Trustee" in the preamble to this Trust Agreement solely in
their capacities as Administrative Trustees of the Trust formed and continued
hereunder and not in their individual capacities, or such trustee's
successor(s) in interest in such capacity, or any successor "Administrative
Trustee" appointed as herein provided.
"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.
"Bank" has the meaning specified in the preamble to this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(i) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of such Person in an involuntary case
or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging such
Person a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of such Person under any applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of such Person or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 90
consecutive days; or
(ii) the commencement by such Person of a voluntary case or proceeding
under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of such Person in an involuntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
2
<PAGE>
by it of a petition or answer or consent seeking reorganization or relief
under any applicable federal or state law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Corporation or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the authorization of any such action
by the board of directors of such Person;
"Bankruptcy Laws" has the meaning specified in Section 10.09.
"Board Resolution" means a copy of a resolution certified by the Secretary or
an Assistant Secretary of the Depositor to have been duly adopted by the
Depositor's Board of Directors or a duly authorized committee thereof and to be
in full force and effect on the date of such certification, and delivered to
the Trustees.
"Book-Entry Preferred Securities Certificates" means certificates representing
Preferred Securities issued in global, fully registered form to the Clearing
Agency as described in Section 5.11.
"Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day on
which banks in New York, New York are authorized or obligated by law or
executive order to remain closed or (iii) a day on which the Corporate Trust
Office or the Indenture Trustee's principal corporate trust office is closed
for business.
"Certificate Depository Agreement" means the agreement among the Trust, The
Chase Manhattan Bank, as agent, and The Depository Trust Company, as the
initial Clearing Agency, dated , relating to the Preferred
Securities Certificates as the same may be amended and supplemented from time
to time.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act. The Depository Trust Company will
be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time to time
constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Security" means an undivided beneficial ownership interest in the
assets of the Trust having a Liquidation Amount of $ and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing ownership of a
Common Security or Securities, substantially in the form attached as Exhibit C.
3
<PAGE>
"Corporate Trust Office" means the office of the Property Trustee located in
New York, New York at which its corporate trust business shall be principally
administered.
"Corporation" means Duke Capital Corporation, its successors and assigns.
"Definitive Preferred Securities Certificates" means either or both (as the
context requires) of (i) Preferred Securities Certificates issued in
certificated, fully registered form as provided in Section 5.11(a) and (ii)
Preferred Securities Certificates issued in certificated, fully registered form
as provided in Section 5.13.
"Delaware Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to
time.
"Delaware Trustee" means the commercial bank or trust company or any other
person identified as the "Delaware Trustee" and has the meaning specified in
the preamble to this Trust Agreement solely in its capacity as Delaware Trustee
of the Trust formed and continued hereunder and not in its individual capacity,
or its successor in interest in such capacity, or any successor Delaware
Trustee appointed as herein provided.
"Depositor" means Duke Capital Corporation, in its capacity as "Depositor"
under this Trust Agreement, its successors and assigns.
"Distribution Date" has the meaning specified in Section 4.01(a).
"Distributions" means amounts payable in respect of the Trust Securities as
provided in Section 4.01.
"Event of Default" means any one of the following events (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(i) the occurrence of an Indenture Event of Default; or
(ii) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of
30 days; or
(iii) default by the Trust in the payment of any Redemption Price of any
Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, of any covenant or warranty of
the Trustees in this Trust Agreement (other than a covenant or warranty a
default in whose performance or breach is dealt with in clause (ii) or
(iii) above) and continuation of such default or breach for a period of 60
days after there has been given, by registered or certified mail, to the
Trustees by the Holders of at least 25% in Liquidation Amount of the
Outstanding Preferred Securities a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; unless Holders in Liquidation Amount of
Outstanding Preferred Securities not less than the Liquidation Amount of
Outstanding Preferred Securities
4
<PAGE>
the Holders of which gave such notice, shall agree in writing to an
extension of such period prior to its expiration; provided, however, that
the Holders of such Liquidation Amount of Outstanding Preferred Securities
shall be deemed to have agreed to an extension of such period if corrective
action is initiated by the Trustees within such period and is being
diligently pursued; or
(v) the occurrence of a Bankruptcy Event with respect to the Trust.
"Expense Agreement" means the Agreement as to Expenses and Liabilities between
the Corporation and the Trust, substantially in the form attached as Exhibit D,
as amended from time to time.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time, or any successor legislation.
"Guarantee" means the Guarantee Agreement executed and delivered by the
Corporation and The Chase Manhattan Bank, as Guarantee Trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the Holders of the Preferred Securities, as amended from time to
time.
"Indenture Event of Default" means an "Event of Default," as defined in the
Subordinated Indenture with respect to the Junior Subordinated Notes.
"Indenture Redemption Date" means "Redemption Date," as defined in the
Subordinated Indenture.
"Indenture Trustee" means the trustee under the Subordinated Indenture.
"Investment Company Act" means the Investment Company Act of 1940, as amended
from time to time, or any successor legislation.
"Issue Date" means the date of the delivery of the Trust Securities.
"Junior Subordinated Notes" means the $ aggregate principal amount
of the Depositor's Series % Junior Subordinated Notes due ,
issued pursuant to the Subordinated Indenture.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of trust,
adverse ownership interest, hypothecation, assignment, security interest or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever.
"Like Amount" means (i) Trust Securities having a Liquidation Amount equal to
the principal amount of Junior Subordinated Notes to be contemporaneously
redeemed in accordance with the Subordinated Indenture and the proceeds of
which will be used to pay the Redemption Price of such Trust Securities and
(ii) Junior Subordinated Notes having a principal amount equal to the
Liquidation Amount of the Trust Securities of the Holder to whom such Junior
Subordinated Notes are distributed.
"Liquidation Amount" means the stated amount of $ per Trust Security.
5
<PAGE>
"Liquidation Date" means the date on which Junior Subordinated Notes are to be
distributed to Holders of Trust Securities in connection with a liquidation of
the Trust pursuant to Section 9.04.
"Liquidation Distribution" has the meaning specified in Section 9.05.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Depositor, and
delivered to the appropriate Trustee. One of the officers signing an Officers'
Certificate to be delivered by the Depositor pursuant to Section 8.16 shall be
the principal executive, financial or accounting officer of the Depositor. An
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in the
Officers' Certificate are based;
(c) a statement that, in the opinion of each such officer, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"OID" means "original issue discount" as that term is defined in the Internal
Revenue Code of 1986, as amended.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel for
the Trust, the Trustees or the Depositor, but not an employee of the Trust or
the Trustees, and who shall be reasonably acceptable to the Property Trustee.
Any Opinion of Counsel pertaining to federal income tax matters may rely on
published rulings of the Internal Revenue Service.
"Original Trust Agreement" has the meaning specified in the recitals to this
Trust Agreement.
"Outstanding," when used with respect to Preferred Securities, means, as of the
date of determination, all Preferred Securities theretofore authenticated and
delivered under this Trust Agreement, except:
(i) Preferred Securities theretofore cancelled by the Administrative
Trustees or delivered to the Administrative Trustees for cancellation;
(ii) Preferred Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee
or any Paying Agent for the Holders of such Preferred Securities; provided
that if such Preferred Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Trust Agreement or
provision therefor satisfactory to the Property Trustee has been made; and
(iii) Preferred Securities in exchange for or in lieu of which other
Preferred Securities have been authenticated and delivered pursuant to this
Trust Agreement; provided, however, that in
6
<PAGE>
determining whether the Holders of the requisite Liquidation Amount of the
Outstanding Preferred Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Preferred Securities owned,
whether of record or beneficially, by the Depositor, the Holder of the Common
Securities, any Administrative Trustee or any Affiliate of the Depositor or any
Administrative Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Preferred Securities which such Trustee knows to be so
owned shall be so disregarded and (b) the foregoing shall not apply at any time
when all of the outstanding Preferred Securities are owned by the Depositor,
the Holder of the Common Securities, one or more Administrative Trustees and/or
any such Affiliate. Preferred Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Administrative Trustees the pledgee's right so to act with
respect to such Preferred Securities and that the pledgee is not the Depositor
or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry Preferred
Securities Certificate as reflected in the records of the Clearing Agency or,
if a Clearing Agency Participant is not the Owner, then as reflected in the
records of a Person maintaining an account with such Clearing Agency (directly
or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed pursuant to
Section 5.09 and shall initially be the Property Trustee.
"Payment Account" means a segregated non-interest-bearing corporate trust
account maintained by the Property Trustee for the benefit of the
Securityholders in which all amounts paid in respect of the Junior Subordinated
Notes will be held and from which the Property Trustee shall make payments to
the Securityholders in accordance with Section 4.01.
"Person" means an individual, corporation, partnership, joint venture, trust,
limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial ownership interest in the
assets of the Trust having a Liquidation Amount of $ and having rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing ownership of
a Preferred Security or Securities, substantially in the form attached as
Exhibit E.
"Property Trustee" means the commercial bank or trust company identified as the
"Property Trustee" in the preamble to this Trust Agreement solely in its
capacity as Property Trustee of the Trust formed and continued hereunder and
not in its individual capacity, or its successor in interest in such capacity,
or any successor "Property Trustee" as herein provided.
"Redemption Date" means, with respect to any Trust Security to be redeemed, the
date fixed for such redemption by or pursuant to this Trust Agreement; provided
that each Indenture Redemption Date shall be a Redemption Date for a Like
Amount of Trust Securities.
7
<PAGE>
"Redemption Price" means, with respect to any date fixed for redemption of any
Trust Security, the Liquidation Amount of such Trust Security, plus accrued and
unpaid Distributions to such date.
"Relevant Trustee" has the meaning specified in Section 8.10.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"Security Register" and "Security Registrar" are described in Section 5.04.
"Securityholder" or "Holder" means a Person in whose name a Trust Security or
Securities is registered in the Security Register; any such Person is a
beneficial owner within the meaning of the Delaware Business Trust Act.
"Subordinated Indenture" means the Subordinated Indenture, dated as of April 1,
1998, between the Depositor and the Indenture Trustee, as heretofore
supplemented and amended and as supplemented by the Supplemental Indenture.
"Supplemental Indenture" means the Supplemental Indenture, dated as of
, , by and between the Depositor and the Indenture Trustee.
"Trust" means the Delaware business trust continued hereby and identified on
the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the same
may be modified, amended or supplemented in accordance with the applicable
provisions hereof, including all exhibits hereto, including, for all purposes
of this Amended and Restated Trust Agreement and any modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Amended and Restated Trust Agreement and any such
modification, amendment or supplement, respectively.
"Trustees" means the Persons identified as "Trustees" in the preamble to this
Trust Agreement solely in their capacities as Trustees of the Trust formed
hereunder and not in their individual capacities, or any successor in interest
in such capacity, or any successor trustee appointed as herein provided.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the
date as of which this instrument was executed; provided, however, that in the
event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Property" means (i) the Junior Subordinated Notes, (ii) any cash on
deposit in, or owing to, the Payment Account, and (iii) all proceeds and rights
in respect of the foregoing and any other property and assets for the time
being held or deemed to be held by the Property Trustee pursuant to this Trust
Agreement.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
8
<PAGE>
"Trust Security" means any one of the Common Securities or the Preferred
Securities.
"Underwriting Agreement" means the Underwriting Agreement, dated ,
, among the Trust, the Depositor and the underwriters named therein.
ARTICLE II
Establishment of the Trust
Section 2.01 Name. The Trust continued hereby shall be known as "Duke Capital
Financing Trust [ ]," in which name the Trustees may conduct the business of
the Trust, make and execute contracts and other instruments on behalf of the
Trust and sue and be sued. The Administrative Trustees may change the name of
the Trust from time to time following written notice to the Holders.
Section 2.02 Offices of the Trustees; Principal Place of Business. The address
of the Property Trustee is The Chase Manhattan Bank, 450 West 33rd Street, New
York, New York 10001, or at such other address in New York as the Property
Trustee may designate by written notice to the Securityholders and the
Depositor. The principal place of business of the Delaware Trustee is 1201
Market Street, Wilmington, Delaware 19801, or at such other address in Delaware
as the Delaware Trustee may designate by notice to the Depositor. The address
of the Administrative Trustees is c/o Duke Capital Corporation, 526 South
Church Street, Charlotte, North Carolina 28202, Attention: Corporate Secretary.
The principal place of business of the Trust is c/o Duke Capital Corporation,
526 South Church Street, Charlotte, North Carolina 28202. The Depositor may
change the principal place of business of the Trust at any time by giving
notice thereof to the Trustees.
Section 2.03 Initial Contribution of Trust Property; Organizational
Expenses. The Delaware Trustee acknowledges receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of the Trustees,
promptly reimburse the Trustees for any such expenses paid by the Trustees. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
Section 2.04 Issuance of the Preferred Securities. Contemporaneously with the
execution and delivery of this Trust Agreement, the Administrative Trustees, on
behalf of the Trust, shall execute and deliver to the underwriters named in the
Underwriting Agreement Preferred Securities Certificates, registered in the
name of the nominee of the initial Clearing Agency, in an aggregate amount of
Preferred Securities having an aggregate Liquidation Amount of
$ (the "Preferred Securities") against receipt of the aggregate
purchase price of such Preferred Securities of $ , which amount the
Administrative Trustees shall promptly deliver to the Property Trustee.
Section 2.05 Subscription and Purchase of Junior Subordinated Notes; Issuance
of the Common Securities. Contemporaneously with the execution and delivery of
this Trust Agreement, the Administrative Trustees, on behalf of the Trust,
shall execute and deliver to the Depositor Common Securities Certificates,
registered in the name of the Depositor, in an aggregate amount of
9
<PAGE>
Common Securities having an aggregate Liquidation Amount of $ ,
against payment by the Depositor of such amount. Contemporaneously therewith,
the Administrative Trustees, on behalf of the Trust, shall subscribe to and
purchase from the Depositor Junior Subordinated Notes, registered in the name
of the Property Trustee, on behalf of the Trust and the Holders, and having an
aggregate principal amount equal to $ and, in satisfaction of the
purchase price for such Junior Subordinated Notes, the Property Trustee, on
behalf of the Trust, shall deliver to the Depositor the sum of $ .
Section 2.06 Declaration of Trust. The exclusive purposes and functions of the
Trust are (i) to issue and sell the Trust Securities and use the proceeds from
such sale to acquire the Junior Subordinated Notes, and (ii) to engage in only
those other activities necessary, incidental, appropriate or convenient
thereto. The Depositor hereby appoints each of the Bank, the Delaware Bank,
Robert T. Lucas III, and S.L. Love as trustees of the Trust, to have all the
rights, powers and duties to the extent set forth herein. The Property Trustee
hereby declares that it will hold the Trust Property in trust upon and subject
to the conditions set forth herein for the benefit of the Trust and the
Securityholders. The Trustees shall have all rights, powers and duties set
forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of the Property Trustee or the Administrative
Trustees set forth herein. The Delaware Trustee shall be one of the Trustees
for the sole and limited purpose of fulfilling the requirements of (S)3807 of
the Delaware Business Trust Act. The Delaware Trustee, as the trustee under the
Original Trust Agreement, has filed the Certificate of Trust of the Trust with
the office of the Secretary of State of the State of Delaware, a copy of which
is attached hereto as Exhibit A, and such filing is hereby confirmed and
ratified.
Section 2.07 Authorization to Enter into Certain Transactions. The Trustees
shall conduct the affairs of the Trust in accordance with the terms of this
Trust Agreement. Subject to the limitations set forth in paragraph (C) of this
Section, and in accordance with the following paragraphs (A) and (B), the
Trustees shall have the authority to enter into all transactions and agreements
determined by the Trustees to be appropriate in exercising the authority,
express (in the case of the Property Trustee) or implied, otherwise granted to
the Trustees under this Trust Agreement, and to perform all acts in furtherance
thereof, including, without limitation, the following:
(A) As among the Trustees, the Administrative Trustees, acting singly or
jointly, shall have the exclusive power, duty and authority to act on
behalf of the Trust with respect to the following matters:
(i) to acquire the Junior Subordinated Notes with the proceeds of the
sale of the Trust Securities; provided, however, the Administrative
Trustees shall cause legal title to all of the Junior Subordinated
Notes to be vested in, and the Junior Subordinated Notes to be held of
record in the name of, the Property Trustee for the benefit of the
Trust and the Holders of the Trust Securities;
(ii) to give the Depositor and the Property Trustee prompt written
notice of the occurrence of any Special Event (as defined in the
Supplemental Indenture) and to take any ministerial actions in
connection therewith; provided that the Administrative Trustees shall
consult
10
<PAGE>
with the Depositor and the Property Trustee before taking or refraining
to take any ministerial action in relation to a Special Event;
(iii) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including
for the purposes of (S)316(c) of the Trust Indenture Act and with
respect to Distributions, voting rights, redemptions, and exchanges,
and to issue relevant notices to Holders of the Trust Securities as to
such actions and applicable record dates;
(iv) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 2.07(B)(v), the
Property Trustee has the power to bring such Legal Action;
(v) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such
services;
(vi) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(vii) to give the certificate to the Property Trustee required by
(S)314(a)(4) of the Trust Indenture Act, which certificate may be
executed by any Administrative Trustee;
(viii) to take all actions and perform such duties as may be required
of the Administrative Trustees pursuant to the terms of this Trust
Agreement;
(ix) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under
the laws of the State of Delaware and of each other jurisdiction in
which such existence is necessary to protect the limited liability of
the Holders of the Trust Securities or to enable the Trust to effect
the purposes for which the Trust has been created;
(x) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Administrative
Trustees, on behalf of the Trust;
(xi) to issue and sell the Trust Securities;
(xii) to cause the Trust to enter into, and to execute, deliver and
perform on behalf of the Trust, the Expense Agreement and such other
agreements as may be necessary or desirable in connection with the
consummation hereof;
(xiii) to assist in the registration of the Preferred Securities under
the Securities Act and under state securities or blue sky laws, and the
qualification of the Trust Agreement as a trust indenture under the
Trust Indenture Act;
(xiv) to assist in the listing of the Preferred Securities upon such
securities exchange or exchanges as shall be determined by the
Depositor and, if required, the registration of the Preferred
Securities under the Exchange Act, and the preparation and filing of
all periodic and other reports and other documents pursuant to the
foregoing;
11
<PAGE>
(xv) to send notices (other than notices of default) and other
information regarding the Trust Securities and the Junior Subordinated
Notes to the Securityholders in accordance with this Trust Agreement;
(xvi) to appoint a Paying Agent (subject to Section 5.09),
authenticating agent and Security Registrar in accordance with this
Trust Agreement;
(xvii) to register transfers of the Trust Securities in accordance with
this Trust Agreement;
(xviii) to assist in, to the extent provided in this Trust Agreement,
the winding-up of the affairs of and termination of the Trust and the
preparation, execution and filing of the certificate of cancellation
with the Secretary of State of the State of Delaware; and
(xix) to take any action incidental to the foregoing as the
Administrative Trustees may from time to time determine is necessary,
appropriate, convenient or advisable to protect and conserve the Trust
Property for the benefit of the Securityholders (without consideration
of the effect of any such action on any particular Securityholder).
(B) As among the Trustees, the Property Trustee shall have the exclusive
power, duty and authority to act on behalf of the Trust with respect to the
following matters:
(i) engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the redemption of the Trust Securities
to the extent the Junior Subordinated Notes are redeemed or mature;
(ii) upon notice of distribution issued by the Administrative Trustees
in accordance with the terms of this Trust Agreement, engage in such
ministerial activities as shall be necessary or appropriate to effect
promptly the distribution pursuant to the terms of this Trust Agreement
of Junior Subordinated Notes to Holders of Trust Securities;
(iii) subject to the terms hereof, exercise all of the rights, powers
and privileges of a holder of the Junior Subordinated Notes under the
Subordinated Indenture and, if an Event of Default occurs and is
continuing, enforce for the benefit of, and subject to the rights of,
the Holders of the Trust Securities, its rights as holder of the Junior
Subordinated Notes under the Subordinated Indenture;
(iv) take all actions and perform such duties as may be specifically
required of the Property Trustee pursuant to the terms of this Trust
Agreement;
(v) take any Legal Action which arises out of or in connection with an
Event of Default or the Property Trustee's duties and obligations under
this Trust Agreement, the Delaware Business Trust Act or the Trust
Indenture Act;
(vi) the establishment and maintenance of the Payment Account;
(vii) the receipt of and holding of legal title to the Junior
Subordinated Notes as described herein;
(viii) the collection of interest, principal and any other payments
made in respect of the Junior Subordinated Notes in the Payment
Account;
(ix) the distribution of amounts received in the Payment Account and
owed to the Securityholders in respect of the Trust Securities;
12
<PAGE>
(x) the sending of notices of default and other information regarding
the Trust Securities and the Junior Subordinated Notes to the
Securityholders in accordance with this Trust Agreement;
(xi) the distribution of the Trust Property in accordance with the
terms of this Trust Agreement;
(xii) as provided in this Trust Agreement, the winding-up of the
affairs of and termination of the Trust and the preparation, execution
and filing of the certificate of cancellation with the Secretary of
State of Delaware; and
(xiii) the taking of any action incidental to the foregoing as the
Property Trustee may from time to time determine is necessary,
appropriate, convenient or advisable to protect and conserve the Trust
Property for the benefit of the Securityholders (without consideration
of the effect of any such action on any particular Securityholder).
(C) So long as this Trust Agreement remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activity or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not (i) acquire any investments
or engage in any activities not authorized by this Trust Agreement, (ii)
sell, assign, transfer, exchange, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to
Securityholders, except as expressly provided herein, (iii) take any action
that would cause the Trust to fail or cease to qualify as a grantor trust
for United States federal income tax purposes, (iv) incur any indebtedness
for borrowed money, (v) take or consent to any action that would result in
the placement of a Lien on any of the Trust Property, (vi) issue any
securities other than the Trust Securities, or (vii) have any power to, or
agree to any action by the Depositor that would, vary the investment
(within the meaning of Treasury Regulation Section 301.7701-4(c)) of the
Trust or of the Securityholders. The Trustees shall defend all claims and
demands of all Persons at any time claiming any Lien on any of the Trust
Property adverse to the interest of the Trust or the Securityholders in
their capacity as Securityholders.
(D) In connection with the issue and sale of the Preferred Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any
actions taken by the Depositor in furtherance of the following prior to the
date of this Trust Agreement are hereby ratified and confirmed in all
respects):
(i) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 under the Securities Act in relation
to the Preferred Securities, including any amendments thereto;
(ii) to determine the states in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities
and to do any and all such acts, other than actions which must be taken
by or on behalf of the Trust, and advise the Trustees of actions they
must take on behalf of the Trust, and prepare for execution and filing
any documents to be executed and filed by the Trust or on behalf of the
Trust, as the Depositor deems necessary or advisable in order to comply
with the applicable laws of any such states;
(iii) to prepare for filing by the Trust an application to the New York
Stock Exchange or any other national stock exchange or the NASDAQ
National Market for listing upon notice of issuance of any Preferred
Securities;
13
<PAGE>
(iv) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto;
(v) to negotiate the terms of the Underwriting Agreement providing for
the sale of the Preferred Securities and to execute, deliver and
perform the Underwriting Agreement on behalf of the Trust;
(vi) to negotiate the terms of the Certificate Depository Agreement
relating to the Preferred Securities and to execute, deliver and
perform the Certificate Depository Agreement on behalf of the Trust;
and
(vii) any other actions necessary, incidental, appropriate or
convenient to carry out any of the foregoing activities.
(E) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust
and to operate the Trust so that the Trust will not be deemed to be an
"investment company" required to be registered under the Investment Company
Act, or taxed as other than a grantor trust for United States federal
income tax purposes and so that the Junior Subordinated Notes will be
treated as indebtedness of the Depositor for United States federal income
tax purposes. In this connection, the Depositor and the Administrative
Trustees are authorized to take any action, not inconsistent with
applicable law, the Certificate of Trust or this Trust Agreement, that each
of the Depositor and the Administrative Trustees determines in its
discretion to be necessary or desirable for such purposes, as long as such
action does not materially and adversely affect the interests of the
Holders of the Preferred Securities.
Section 2.08 Assets of Trust. The assets of the Trust shall consist of the
Trust Property.
Section 2.09 Title to Trust Property. Legal title to all Trust Property shall
be vested at all times in the Property Trustee (in its capacity as such) and
shall be held and administered by the Property Trustee for the benefit of the
Securityholders and the Trust in accordance with this Trust Agreement. The
right, title and interest of the Property Trustee to the Junior Subordinated
Notes shall vest automatically in each Person who may thereafter be appointed
as Property Trustee in accordance with the terms hereof. Such vesting and
cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered.
Section 2.10 Mergers and Consolidations of the Trust. The Trust may not
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets substantially as an entirety to any
corporation or other entity, except as described below. The Trust may at the
request of the Corporation, with the consent of the Administrative Trustees and
without the consent of the Holders of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any state; provided that (i) such successor entity either (x)
expressly assumes all of the obligations of the Trust with respect to the Trust
Securities or (y) substitutes for the Preferred Securities and the Common
Securities other securities having substantially the same terms as the Trust
Securities (herein referred to as the "Successor Securities") so long as the
Successor Securities rank the same as the Trust Securities rank in priority
with respect to Distributions and payments upon liquidation, redemption and
otherwise, (ii) the Corporation expressly appoints a trustee of such successor
entity possessing the
14
<PAGE>
same powers and duties as the Property Trustee as the holder of legal title to
the Junior Subordinated Notes, (iii) the Preferred Securities or any Successor
Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, (iv) such
merger, consolidation, amalgamation or replacement does not cause the Preferred
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such consolidation,
amalgamation, merger or replacement does not adversely affect the rights,
preferences and privileges of the Holders of the Trust Securities (including
any Successor Securities) in any material respect, (vi) such successor entity
has a purpose substantially identical to that of the Trust, (vii) prior to such
consolidation, amalgamation, merger or replacement, the Corporation and the
Property Trustee have received an Opinion of Counsel experienced in such
matters to the effect that (A) such consolidation, amalgamation, merger or
replacement does not adversely affect the rights, preferences and privileges of
the Holders of the Trust Securities (including any Successor Securities) in any
material respect, and (B) following such consolidation, amalgamation, merger or
replacement, neither the Trust nor such successor entity will be required to
register as an investment company under the Investment Company Act, and (viii)
the Corporation owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding
the foregoing, the Trust shall not, except with the consent of Holders of 100%
in Liquidation Amount of the Trust Securities, consolidate, amalgamate, merge
with or into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger or replacement would cause the Trust or the
successor entity to be classified as other than a grantor trust for United
States federal income tax purposes.
ARTICLE III
Payment Account
Section 3.01 Payment Account.
(a) On or prior to the Issue Date, the Property Trustee shall establish the
Payment Account. The Property Trustee and an agent of the Property Trustee
shall have exclusive control and sole right of withdrawal with respect to the
Payment Account for the purpose of making deposits in and withdrawals from the
Payment Account in accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account shall be
held by the Property Trustee in the Payment Account for the exclusive benefit
of the Securityholders and for distribution as herein provided, including (and
subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly upon
receipt, all payments of principal or interest on, and any other payments or
proceeds with respect to, the Junior Subordinated Notes. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
15
<PAGE>
ARTICLE IV
Distributions; Redemption
Section 4.01 Distributions.
(a) Distributions on the Trust Securities shall be cumulative and accrue from
the Issue Date and, except in the event that the Depositor exercises its right
to extend the interest payment period for the Junior Subordinated Notes
pursuant to Section 104 of the Supplemental Indenture, shall be payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing on , . If any date on which Distributions are
otherwise payable on the Trust Securities is not a Business Day, then the
payment of such Distribution shall be made on the next succeeding day which is
a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding
calendar year, payment of such Distribution shall be made on the immediately
preceding Business Day, in each case, with the same force and effect as if made
on such date (each such date, a "Distribution Date").
(b) Distributions payable on the Trust Securities shall be fixed at a rate of
% per annum of the Liquidation Amount of the Trust Securities. The amount of
Distributions payable for any full quarterly period shall be computed on the
basis of twelve 30-day months and a 360-day year. If the interest payment
period for the Junior Subordinated Notes is extended pursuant to Section 104 of
the Supplemental Indenture (an "Extension Period"), then the rate per annum at
which Distributions on the Trust Securities accumulate shall be increased by an
amount such that the aggregate amount of Distributions that accumulate on all
Trust Securities during any such Extension Period is equal to the aggregate
amount of interest (including interest payable on unpaid interest at the
percentage rate per annum set forth above, compounded quarterly, to the extent
permitted by applicable law) that accrues during any such Extension Period on
the Junior Subordinated Notes. The payment of such deferred interest, together
with interest thereon, will be distributed, if funds are legally available
therefor, to the Holders of the Trust Securities (as they appear on the books
and records of the Trust on the record date (as specified in Section 4.01(d))
next following the termination of such Extension Period) as received at the end
of any Extension Period. The amount of Distributions payable for any period
shall include the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made and shall be deemed
payable on each Distribution Date only to the extent that the Trust has legally
and immediately available funds in the Payment Account for the payment of such
Distributions.
(d) Distributions (including Additional Amounts, if any) on the Trust
Securities on each Distribution Date shall be payable to the Holders thereof as
they appear on the Security Register for the Trust Securities on the relevant
record date, which shall be the close of business on the fifteenth calendar day
prior to the relevant Distribution Date.
Each Trust Security upon registration of transfer of or in exchange for or in
lieu of any other Trust Security shall carry the rights of Distributions
accrued (including Additional Amounts, if any) and unpaid, and to accrue
(including Additional Amounts, if any), which were carried by such other Trust
Security.
16
<PAGE>
Section 4.02 Redemption.
(a) On each Redemption Date with respect to the Junior Subordinated Notes, the
Trust will be required to redeem a Like Amount of Trust Securities at the
Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by first-class
mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to
the Redemption Date to each Holder of Trust Securities to be redeemed, at such
Holder's address appearing in the Security Register. All notices of redemption
shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be redeemed,
the total Liquidation Amount of the Trust Securities to be redeemed; and
(v) that on the Redemption Date the Redemption Price will become due and
payable upon each such Trust Security to be redeemed and the Distributions
thereon will cease to accrue on and after such date.
(c) The Trust Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the proceeds from the contemporaneous redemption of
Junior Subordinated Notes. Redemptions of the Trust Securities shall be made
and the Redemption Price shall be deemed payable on each Redemption Date only
to the extent that the Trust has funds legally and immediately available in the
Payment Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of any
Preferred Securities, then, by 2:00 P.M. New York City time, on the Redemption
Date, subject to Section 4.02(c), the Property Trustee will, so long as the
Preferred Securities are in book-entry only form, irrevocably deposit with the
Clearing Agency for the Preferred Securities funds sufficient to pay the
applicable Redemption Price. If the Preferred Securities are not in book-entry
only form, the Property Trustee, subject to Section 4.02(c), shall irrevocably
deposit with the Paying Agent funds sufficient to pay the applicable Redemption
Price and will give the Paying Agent irrevocable instructions to pay the
Redemption Price to the Holders thereof upon surrender of their Preferred
Securities Certificates. Notwithstanding the foregoing, Distributions payable
on or prior to the Redemption Date for any Trust Securities called for
redemption shall be payable to the Holders of such Trust Securities as they
appear on the Security Register for the Trust Securities on the relevant record
dates for the related Distribution Dates. If notice of redemption shall have
been given and funds deposited as required, then immediately prior to the close
of business on the date of such deposit, all rights of Securityholders holding
Trust Securities so called for redemption will cease, except the right of such
Securityholders to receive the Redemption Price, but without interest, and such
Securities will cease to be outstanding. In the event that any date on which
any Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date shall be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business Day is in the next succeeding
calendar year, payment of such Redemption Price shall be made on the
immediately preceding Business Day, in each case, with
17
<PAGE>
the same force and effect as if made on such date. In the event that payment of
the Redemption Price in respect of Trust Securities is improperly withheld or
refused and not paid either by the Trust or by the Depositor pursuant to the
Guarantee, Distributions on such Trust Securities will continue to accrue at
the then applicable rate, from such Redemption Date originally established by
the Trust for such Preferred Securities to the date such Redemption Price is
actually paid.
(e) Payment of the Redemption Price on the Trust Securities shall be made to
the recordholders thereof as they appear on the Security Register for the Trust
Securities on the relevant record date, which shall be the close of business on
the fifteenth calendar day prior to the Redemption Date.
(f) If less than all the Outstanding Trust Securities are to be redeemed on a
Redemption Date, then the aggregate Liquidation Amount of Trust Securities to
be redeemed shall be allocated 3% to the Common Securities and 97% to the
Preferred Securities, with such adjustments that each amount so allocated shall
be divisible by $ . The particular Preferred Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Property
Trustee from the Outstanding Preferred Securities not previously called for
redemption, by such method as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $ or integral multiples thereof) of the Liquidation Amount of
Preferred Securities of a denomination larger than $ ; provided, however, that
before undertaking redemption of the Preferred Securities on other than a pro
rata basis, the Property Trustee shall have received an Opinion of Counsel that
the status of the Trust as a grantor trust for United States federal income tax
purposes would not be adversely affected. The Property Trustee shall promptly
notify the Security Registrar in writing of the Preferred Securities selected
for redemption and, in the case of any Preferred Securities selected for
partial redemption, the Liquidation Amount thereof to be redeemed. For all
purposes of this Trust Agreement, unless the context otherwise requires, all
provisions relating to the redemption of Preferred Securities shall relate, in
the case of any Preferred Securities redeemed or to be redeemed only in part,
to the portion of the Liquidation Amount of Preferred Securities which has been
or is to be redeemed.
(g) Subject to the foregoing provisions of Section 4.02 and to applicable law
(including, without limitation, United States federal securities laws), the
Corporation or its Affiliates may, at any time and from time to time, purchase
outstanding Preferred Securities by tender, in the open market or by private
agreement.
Section 4.03 Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if applicable) on,
and the Redemption Price of, the Trust Securities, as applicable, shall be made
pro rata based on the Liquidation Amount of the Trust Securities; provided,
however, that if on any Distribution Date or Redemption Date an Indenture Event
of Default shall have occurred and be continuing, no payment of any
Distribution (including Additional Amounts, if applicable) on, or Redemption
Price of, any Common Security, and no other payment on account of the
redemption, liquidation or other acquisition of Common Securities, shall be
made unless payment in full in cash of all accumulated and unpaid Distributions
(including Additional Amounts, if applicable) on all Outstanding Preferred
Securities for all distribution periods terminating on or prior thereto, or in
the case of payment of the Redemption Price the full amount of such Redemption
Price on all Outstanding Preferred Securities, shall have
18
<PAGE>
been made or provided for, and all funds immediately available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions (including Additional Amounts, if applicable) on, or the
Redemption Price of, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Indenture Event of Default, the Holder
of Common Securities will be deemed to have waived any such Event of Default
under this Trust Agreement until the effect of all such Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated. Until any such Events of Default under this Trust Agreement with
respect to the Preferred Securities have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders of
the Preferred Securities and not the Holder of the Common Securities, and only
the Holders of the Preferred Securities will have the right to direct the
Property Trustee to act on their behalf.
Section 4.04 Payment Procedures. Payments in respect of the Preferred
Securities shall be made by check mailed to the address of the Person entitled
thereto as such address shall appear on the Security Register or, if the
Preferred Securities are held by a Clearing Agency, such Distributions shall be
made to the Clearing Agency, which shall credit the relevant Persons' accounts
at such Clearing Agency on the applicable distribution dates. Payments in
respect of the Common Securities shall be made in such manner as shall be
mutually agreed between the Property Trustee and the Holder of the Common
Securities.
Section 4.05 Tax Returns and Reports. The Administrative Trustee(s) shall
prepare (or cause to be prepared), at the Depositor's expense, and file all
United States federal, state and local tax and information returns and reports
required to be filed by or in respect of the Trust.
The Administrative Trustee(s) shall provide or cause to be provided on a timely
basis to each Holder any Internal Revenue Service form required to be so
provided in respect of the Trust Securities.
ARTICLE V
Trust Securities Certificates
Section 5.01 Initial Ownership. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.03 and until the issuance
of the Trust Securities, and at any time during which no Trust Securities are
outstanding, the Depositor shall be the sole beneficial owner of the Trust.
Section 5.02 The Trust Securities Certificates. Each of the Preferred and
Common Securities Certificates shall be issued in minimum denominations of $
and integral multiples in excess thereof. The Trust Securities Certificates
shall be executed on behalf of the Trust by manual or facsimile signature of at
least one Administrative Trustee. Trust Securities Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the authentication and delivery of such Trust Securities
Certificates or did not hold such offices at the date of authentication and
delivery of such Trust
19
<PAGE>
Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Section 5.04.
Section 5.03 Authentication of Trust Securities Certificates. On the Issue
Date, the Administrative Trustees shall cause Trust Securities Certificates, in
an aggregate Liquidation Amount as provided in Sections 2.04 and 2.05, to be
executed on behalf of the Trust, authenticated and delivered to or upon the
written order of the Depositor signed by its Chairman of the Board, its
President or any Vice President, without further corporate action by the
Depositor, in authorized denominations. No Trust Securities Certificate shall
entitle its Holder to any benefit under this Trust Agreement, or shall be valid
for any purpose, unless there shall appear on such Trust Securities Certificate
a certificate of authentication substantially in the form set forth in Exhibit
E or Exhibit C, as applicable, executed by at least one Administrative Trustee
by manual signature; such authentication shall constitute conclusive evidence
that such Trust Securities Certificate shall have been duly authenticated and
delivered hereunder. All Trust Securities Certificates shall be dated the date
of their authentication.
Section 5.04 Registration of Transfer and Exchange of Preferred Securities
Certificates. The Security Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 5.08, a Security Register in
which, subject to such reasonable regulations as it may prescribe, the Security
Registrar shall provide for the registration of Preferred Securities
Certificates and the Common Securities Certificates (subject to Section 5.10 in
the case of the Common Securities Certificates) and registration of transfers
and exchanges of Preferred Securities Certificates as herein provided. The
Property Trustee shall be the initial Security Registrar.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.08, the
Administrative Trustees shall execute, authenticate and deliver in the name of
the designated transferee or transferees, one or more new Preferred Securities
Certificates in authorized denominations of a like aggregate Liquidation Amount
dated the date of authentication by the Administrative Trustee or Trustees. The
Security Registrar shall not be required to register the transfer of any
Preferred Securities that have been called for redemption. At the option of a
Holder, Preferred Securities Certificates may be exchanged for other Preferred
Securities Certificates in authorized denominations of the same class and of a
like aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 5.08.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Administrative Trustees and
the Security Registrar duly executed by the Holder or such Holder's attorney
duly authorized in writing. Each Preferred Securities Certificate surrendered
for registration of transfer or exchange shall be cancelled and subsequently
disposed of by the Security Registrar in accordance with its customary
practice.
No service charge shall be made for any registration of transfer or exchange of
Preferred Securities Certificates, but the Security Registrar or the
Administrative Trustees may require payment of a sum
20
<PAGE>
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Preferred Securities Certificates.
Section 5.05 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates. If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Security Registrar, or if the Security Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Security
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees or any one of them on behalf of the
Trust shall execute and authenticate and make available for delivery, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust
Securities Certificate, a new Trust Securities Certificate of like class, tenor
and denomination. In connection with the issuance of any new Trust Securities
Certificate under this Section, the Administrative Trustees or the Security
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Trust Securities Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
Section 5.06 Persons Deemed Securityholders. Prior to due presentation of a
Trust Securities Certificate for registration of transfer, the Trustees or the
Security Registrar shall treat the Person in whose name any Trust Securities
Certificate shall be registered in the Security Register as the owner of such
Trust Securities Certificate for the purpose of receiving Distributions
(subject to Section 4.01(d)) and for all other purposes whatsoever, and neither
the Trustees nor the Security Registrar shall be bound by any notice to the
contrary.
Section 5.07 Access to List of Securityholders' Names and Addresses. The
Administrative Trustees shall furnish or cause to be furnished to (i) the
Depositor and the Property Trustee semi-annually, not later than June 1 and
December 1 in each year and (ii) the Depositor or the Property Trustee, as the
case may be, within 30 days after receipt by any Administrative Trustee of a
request therefor from the Depositor or the Property Trustee, as the case may
be, in writing, a list, in such form as the Depositor or the Property Trustee,
as the case may be, may reasonably require, of the names and addresses of the
Securityholders as of a date not more than 15 days prior to the time such list
is furnished; provided that the Administrative Trustees shall not be obligated
to provide such list at any time such list does not differ from the most recent
list given to the Depositor and the Property Trustee by the Administrative
Trustees or at any time the Property Trustee is the Security Registrar. If
three or more Securityholders or one or more Holders of Trust Securities
Certificates evidencing not less than 25% of the outstanding Liquidation Amount
apply in writing to the Administrative Trustees, and such application states
that the applicants desire to communicate with other Securityholders with
respect to their rights under this Trust Agreement or under the Trust
Securities Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Administrative
Trustees shall, within five Business Days after the receipt of such
application, afford such applicants access during normal business hours to the
current list of Securityholders. Each Holder, by receiving and holding a Trust
Securities Certificate, shall be deemed to have agreed not to hold either the
Depositor or the Administrative Trustees
21
<PAGE>
accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
Section 5.08 Maintenance of Office or Agency. The Administrative Trustees shall
maintain in the Borough of Manhattan, New York, an office or offices or agency
or agencies where Preferred Securities Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustees in respect of the Trust Securities Certificates may be served. The
Administrative Trustees initially designate The Chase Manhattan Bank, 450 West
33rd Street, New York, New York 10001 as the principal agency for such
purposes. The Administrative Trustees shall give prompt written notice to the
Depositor and to the Securityholders of any change in the location of the
Security Register or any such office or agency.
Section 5.09 Appointment of Paying Agent. The Paying Agent shall make
Distributions and other payments provided hereby to Securityholders from the
Payment Account and shall report the amounts of such Distributions and payments
to the Property Trustee and the Administrative Trustees. Any Paying Agent shall
have the revocable power to withdraw funds from the Payment Account for the
purpose of making the Distributions and payments provided hereby. The
Administrative Trustees may revoke such power and remove the Paying Agent if
such Trustees determine in their sole discretion that the Paying Agent shall
have failed to perform its obligations under this Trust Agreement in any
material respect. The Paying Agent shall initially be the Property Trustee, and
it may choose any co-paying agent that is acceptable to the Administrative
Trustees and the Depositor. Any Person acting as Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Administrative Trustees and the Depositor. In the event that a Paying Agent
shall resign or be removed, the Administrative Trustees shall appoint a
successor that is acceptable to the Depositor to act as Paying Agent (which
shall be a bank or trust company). The Administrative Trustees shall cause such
successor Paying Agent or any additional Paying Agent appointed by the
Administrative Trustees to execute and deliver to the Trustees an instrument in
which such successor Paying Agent or additional Paying Agent shall agree with
the Trustees that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Securityholders in trust for the benefit of the Securityholders entitled
thereto until such sums shall be paid to such Securityholders. The Paying Agent
shall return all unclaimed funds to the Property Trustee and upon removal of a
Paying Agent such Paying Agent shall also return all funds in its possession to
the Property Trustee. The provisions of Sections 8.01, 8.03 and 8.06 shall
apply to the Property Trustee also in its role as Paying Agent, for so long as
the Property Trustee shall act as Paying Agent and, to the extent applicable,
to any other paying agent appointed hereunder. Any reference in this Agreement
to the Paying Agent shall include any co-paying agent unless the context
requires otherwise.
Section 5.10 Ownership of Common Securities by Depositor. On the Issue Date,
the Depositor shall acquire, and thereafter retain, beneficial and record
ownership of the Common Securities. Any attempted transfer of the Common
Securities, except for transfers by operation of law or to an Affiliate of the
Depositor or a permitted successor under Section 801 of the Subordinated
Indenture, shall be void. The Administrative Trustees shall cause each Common
Securities Certificate issued to the Depositor and its permitted transferees to
contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS
PROVIDED IN THE TRUST AGREEMENT REFERRED TO HEREIN."
22
<PAGE>
Section 5.11 Book-Entry Preferred Securities Certificates; Common Securities
Certificate.
(a) The Preferred Securities Certificates, upon original issuance, will be
issued in the form of a typewritten Preferred Securities Certificate or
Certificates representing Book-Entry Preferred Securities Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Trust. Such Preferred Securities Certificate or Certificates
shall initially be registered on the Security Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no Owner will receive a
definitive Preferred Securities Certificate representing such beneficial
owner's interest in such Preferred Securities, except as provided in Section
5.13. Unless and until Definitive Preferred Securities Certificates have been
issued to Owners pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force and
effect;
(ii) the Security Registrar and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Trust Agreement relating to
the Book-Entry Preferred Securities Certificates (including the payment of
principal of and interest on the Book-Entry Preferred Securities and the
giving of instructions or directions to Owners of Book-Entry Preferred
Securities) as the sole Holder of Book-Entry Preferred Securities and shall
have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section conflict with any
other provisions of this Trust Agreement, the provisions of this Section
shall control;
(iv) the rights of the Owners of the Book-Entry Preferred Securities
Certificates shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants. Pursuant
to the Certificate Depository Agreement, unless and until Definitive
Preferred Securities Certificates are issued pursuant to Section 5.13, the
Clearing Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit payments on the Preferred Securities
to such Clearing Agency Participants; and
(v) whenever this Trust Agreement requires or permits actions to be taken
based upon instructions or directions of Holders of Trust Securities
Certificates evidencing a specified percentage of the aggregate Liquidation
Amount, the Clearing Agency shall be deemed to represent such percentage
only to the extent that it has received instructions to such effect from
Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
applicable class of Trust Securities Certificates and has delivered such
instructions to the Trustees.
(b) A single Common Securities Certificate representing the Common Securities
shall be issued to the Depositor in the form of a definitive Common Securities
Certificate.
Section 5.12 Notices to Clearing Agency. To the extent a notice or other
communication to the Owners is required under this Trust Agreement, unless and
until Definitive Preferred Securities Certificates shall have been issued to
Owners pursuant to Section 5.13, the Trustees shall give all such notices and
communications specified herein to be given to Owners to the Clearing Agency,
and shall have no obligations to the Owners.
23
<PAGE>
Section 5.13 Definitive Preferred Securities Certificates. If (i) the Depositor
advises the Trustees in writing that the Clearing Agency is no longer willing
or able to properly discharge its responsibilities with respect to the
Preferred Securities Certificates, and the Depositor is unable to locate a
qualified successor within 90 days of receipt by the Depositor of such written
advice, or (ii) the Depositor at its option advises the Trustees in writing
that it elects to terminate the book-entry system through the Clearing Agency,
then the Administrative Trustees shall notify the Clearing Agency and Holders
of the Preferred Securities. Upon surrender to the Administrative Trustees of
the typewritten Preferred Securities Certificate or Certificates representing
the Book-Entry Preferred Securities Certificates by the Clearing Agency,
accompanied by registration instructions, the Administrative Trustees or any
one of them shall execute and authenticate the Definitive Preferred Securities
Certificates in accordance with the instructions of the Clearing Agency.
Neither the Security Registrar nor the Trustees shall be liable for any delay
in delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Preferred Securities Certificates, the Trustees shall recognize the Holders of
the Definitive Preferred Securities Certificates as Securityholders. The
Definitive Preferred Securities Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by the execution thereof by the
Administrative Trustees or any one of them.
Section 5.14 Rights of Securityholders. The legal title to the Trust Property
is vested exclusively in the Property Trustee (in its capacity as such) in
accordance with Section 2.09, and the Securityholders shall not have any right
or title therein other than the undivided beneficial ownership interest in the
assets of the Trust conferred by their Trust Securities, and they shall have no
right to call for any partition or division of property, profits or rights of
the Trust except as described below. The Trust Securities shall be personal
property giving only the rights specifically set forth therein and in this
Trust Agreement. The Trust Securities shall have no preemptive or other similar
rights and when issued and delivered to Securityholders against payment of the
purchase price therefor will be fully paid and nonassessable by the Trust.
Except as otherwise provided in the Expense Agreement and Section 10.01 hereof
with respect to the Depositor, the Holders of the Trust Securities shall be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware.
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 6.01 Limitations on Voting Rights.
(a) Except as provided in this Section, in Section 8.10 or Section 10.03 of
this Trust Agreement, in the Subordinated Indenture, and as otherwise required
by law, no Holder of Preferred Securities shall have any right to vote or in
any manner otherwise control the administration, operation and management of
the Trust or the obligations of the parties hereto, nor shall anything herein
set forth, or contained in the terms of the Trust Securities Certificates, be
construed so as to constitute the Securityholders from time to time as partners
or members of an association.
24
<PAGE>
(b) So long as any Junior Subordinated Notes are held by the Property Trustee,
the Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Indenture Trustee, or exercising any
trust or power conferred on the Indenture Trustee with respect to such Junior
Subordinated Notes, (ii) consent to waive any past default which is waivable
under Section 513 of the Subordinated Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Junior
Subordinated Notes shall be due and payable or (iv) consent to any amendment,
modification or termination of the Subordinated Indenture or the Junior
Subordinated Notes, where such consent shall be required, or to any other
action, as holder of the Junior Subordinated Notes, under the Subordinated
Indenture, without, in each case, obtaining the prior approval of the Holders
of at least 66 2/3% in Liquidation Amount of the Outstanding Preferred
Securities; provided, however, that where a consent under the Subordinated
Indenture would require the consent of each holder of Junior Subordinated Notes
affected thereby, no such consent shall be given by the Trustees without the
prior written consent of each Holder of Preferred Securities. The Trustees
shall not revoke any action previously authorized or approved by a vote of the
Holders of Preferred Securities, except pursuant to a subsequent vote of the
Holders of Preferred Securities. The Property Trustee shall notify all Holders
of the Preferred Securities of any notice of default received from the
Indenture Trustee with respect to the Junior Subordinated Notes.
(c) If any proposed amendment to the Trust Agreement provides for, or the
Trustees otherwise propose to effect, (i) any action that would adversely
affect the powers, preferences or special rights of the Preferred Securities,
whether by way of amendment to this Trust Agreement or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than pursuant to the
terms of this Trust Agreement, then the Holders of Outstanding Preferred
Securities as a class will be entitled to vote on such amendment or proposal
and such amendment or proposal shall not be effective except with the approval
of the Holders of at least 66 2/3% in Liquidation Amount of the Outstanding
Preferred Securities.
Section 6.02 Notice of Meetings. Notice of all meetings of the Preferred
Securityholders, stating the time, place and purpose of the meeting, shall be
given by the Administrative Trustees pursuant to Section 10.08 to each
Preferred Securityholder of record, at his registered address, at least 15 days
and not more than 90 days before the meeting. At any such meeting, any business
properly before the meeting may be so considered whether or not stated in the
notice of the meeting. Any adjourned meeting may be held as adjourned without
further notice. Any and all notice to which any Preferred Securityholder
hereunder may be entitled and any and all communications shall be deemed duly
served or given if mailed, postage prepaid, addressed to any Preferred
Securityholders of record at his last known address as recorded on the Security
Register.
Section 6.03 Meetings of Preferred Securityholders. No annual meeting of
Securityholders is required to be held. The Administrative Trustees, however,
shall call a meeting of Securityholders to vote on any matter upon the written
request of the Preferred Securityholders of record of 25% of the Preferred
Securities (based upon their Liquidation Amount) and the Administrative
Trustees or the Property Trustee may, at any time in their discretion, call a
meeting of Preferred Securityholders to vote on any matters as to which
Preferred Securityholders are entitled to vote.
Preferred Securityholders of record of 50% of the Preferred Securities (based
upon their Liquidation Amount), present in person or by proxy, shall constitute
a quorum at any meeting of Securityholders.
25
<PAGE>
If a quorum is present at a meeting, an affirmative vote by the Preferred
Securityholders of record present, in person or by proxy, holding more than 66
2/3% of the Preferred Securities (based upon their Liquidation Amount) held by
the Preferred Securityholders of record present, either in person or by proxy,
at such meeting shall constitute the action of the Securityholders, unless this
Trust Agreement requires a greater proportion of affirmative votes.
Section 6.04 Voting Rights. Securityholders shall be entitled to one vote for
each $ of Liquidation Amount represented by their Trust Securities in respect
of any matter as to which such Securityholders are entitled to vote.
Section 6.05 Proxies, etc. At any meeting of Securityholders, any
Securityholder entitled to vote may vote by proxy, provided that no proxy shall
be voted at any meeting unless it shall have been placed on file with the
Administrative Trustees, or with such other officer or agent of the Trust as
the Administrative Trustees may direct, for verification prior to the time at
which such vote shall be taken. Pursuant to a resolution of the Property
Trustee, proxies may be solicited in the name of the Property Trustee or one or
more officers of the Property Trustee. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several Persons,
any one of them may vote at any meeting in person or by proxy in respect of
such Trust Securities, but if more than one of them shall be present at such
meeting in person or by proxy, and such joint owners or their proxies so
present disagree as to any vote to be cast, such vote shall not be received in
respect of such Trust Securities. A proxy purporting to be executed by or on
behalf of a Securityholder shall be deemed valid unless challenged at or prior
to its exercise, and the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.
Section 6.06 Securityholder Action by Written Consent. Any action which may be
taken by Securityholders at a meeting may be taken without a meeting if
Securityholders holding at least 66 2/3% of all outstanding Trust Securities
entitled to vote in respect of such action (or such other proportion thereof as
shall be required by any express provision of this Trust Agreement) shall
consent to the action in writing (based upon their Liquidation Amount).
Section 6.07 Record Date for Voting and Other Purposes. For the purposes of
determining the Securityholders who are entitled to notice of and to vote at
any meeting or by written consent, or to participate in any Distribution on the
Trust Securities in respect of which a record date is not otherwise provided
for in this Trust Agreement, or for the purpose of any other action, the
Administrative Trustees may from time to time fix a date, not more than 90 days
prior to the date of any meeting of Securityholders or the payment of any
Distribution or other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record for such
purposes.
Section 6.08 Acts of Securityholders. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by
this Trust Agreement to be given, made or taken by Securityholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Securityholders in person or by an agent appointed in
writing; and, except as otherwise expressly provided herein, such action shall
become effective when such instrument or instruments are delivered to the
Administrative Trustees. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Securityholders signing such instrument or instruments. Proof of
execution of
26
<PAGE>
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Trust Agreement and (subject to Section
8.01) conclusive in favor of the Trustees, if made in the manner provided in
this Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgements of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustees deem sufficient.
The ownership of Preferred Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or other
Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
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 Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to take any
action hereunder with regard to any particular Trust Security may do so with
regard to all or any part of the Liquidation Amount of such Trust Security or
by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Holders of Trust Securities and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder
or Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
Section 6.09 Inspection of Records. Upon reasonable notice to the Trustees, the
records of the Trust shall be open to inspection by Securityholders during
normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
ARTICLE VII
Representations and Warranties of the Property Trustee and Delaware Trustee
Section 7.01 Representations and Warranties of the Property Trustee and
Delaware Trustee. The Bank, the Delaware Bank, the Property Trustee and the
Delaware Trustee, each on behalf of and as to itself, hereby represents and
warrants for the benefit of the Depositor and the Securityholders that:
(a) the Bank is a banking corporation or trust company duly organized,
validly existing and in good standing under the laws of the State of New
York, and the Delaware Trustee is a banking
27
<PAGE>
corporation or trust company duly organized, validly existing and in good
standing under the laws of the State of Delaware;
(b) each of the Bank and the Delaware Bank has full corporate power,
authority and legal right to execute, deliver and perform their obligations
under this Trust Agreement and has taken all necessary action to authorize
the execution, delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and delivered
by each of the Bank and the Delaware Bank and constitutes the valid and
legally binding agreement of each of the Bank and the Delaware Bank,
enforceable against it in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles;
(d) the execution, delivery and performance by each of the Bank and the
Delaware Bank of this Trust Agreement have been duly authorized by all
necessary corporate action on the part of the Bank, Property Trustee, the
Delaware Bank and the Delaware Trustee and do not require any approval of
stockholders of the Bank or the Delaware Bank and such execution, delivery
and performance will not (i) violate the Bank's or the Delaware Bank's
charter or by-laws, or (ii) violate any law, governmental rule or
regulation of the United States or the State of New York or Delaware, as
the case may be, governing the banking or trust powers of the Bank and the
Property Trustee or the Delaware Bank and the Delaware Trustee, or any
order, judgment or decree applicable to the Bank, the Property Trustee, the
Delaware Bank or the Delaware Trustee; and
(e) neither the authorization, execution or delivery by the Bank or the
Delaware Bank of this Trust Agreement, nor the consummation of any of the
transactions by the Bank, the Property Trustee, the Delaware Bank or the
Delaware Trustee (as appropriate in context) contemplated herein or
therein, nor the issuance of the Trust Securities Certificates pursuant to
this Trust Agreement require the consent or approval of, the giving of
notice to, the registration with or the taking of any other action with
respect to any governmental authority or agency under any existing federal,
New York or Delaware law governing the banking or trust powers of the Bank
or the Delaware Bank.
Section 7.02 Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates being issued at the Closing Date on
behalf of the Trust have been duly authorized and will have been, duly and
validly executed, issued and delivered by the Trustees pursuant to the
terms and provisions of, and in accordance with the requirements of, this
Trust Agreement and the Securityholders will be, as of the date of
issuance, entitled to the benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by the
Trust (or the Trustees on behalf of the Trust) under the laws of the State
of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Property Trustee or the Delaware
Trustee, as the case may be, of this Trust Agreement.
28
<PAGE>
ARTICLE VIII
The Trustees
Section 8.01 Certain Duties and Responsibilities.
(a) The rights, duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and the Delaware Business Trust Act (except
that the immunities and standard of care of the Property Trustee shall be
governed by New York law) and, in the case of the Property Trustee, the Trust
Indenture Act. Notwithstanding the foregoing, no provision of this Trust
Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
them. Whether or not therein expressly so provided, every provision of this
Trust Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustees shall be subject to the provisions of this
Section.
(b) All payments made by the Property Trustee in respect of the Trust
Securities shall be made only from the income and proceeds from the Trust
Property and only to the extent that there shall be sufficient income or
proceeds from the Trust Property to enable the Property Trustee to make
payments in accordance with the terms hereof. Each Securityholder, by its
acceptance of a Trust Security, agrees that it will look solely to the income
and proceeds from the Trust Property to the extent available for distribution
to it as herein provided and that the Trustees are not personally liable to it
for any amount distributable in respect of any Trust Security or for any other
liability in respect of any Trust Security. This Section 8.01(b) does not limit
the liability of the Trustees expressly set forth elsewhere in this Trust
Agreement or, in the case of the Property Trustee, in the Trust Indenture Act.
Section 8.02 Notice of Defaults. Within 90 days after the occurrence of any
default, the Property Trustee shall transmit, in the manner and to the extent
provided in Section 10.08, notice of any such default known to the Property
Trustee to the Securityholders, the Administrative Trustees and the Depositor,
unless such default shall have been cured or waived. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default.
Section 8.03 Certain Rights of Property Trustee. Subject to the provisions of
Section 8.01 and except as provided by law:
(i) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of
Counsel, certificate, written representation of a Holder or transferee,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) if (A) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of
action, or (B) in construing any of the provisions in this Trust Agreement
the Property Trustee finds the same ambiguous or inconsistent with any
other
29
<PAGE>
provisions contained herein, or (C) the Property Trustee is unsure of the
application of any provision of this Trust Agreement, then, except as to
any matter as to which the Preferred Securityholders are entitled to vote
under the terms of this Trust Agreement, the Property Trustee shall deliver
a notice to the Depositor requesting written instructions of the Depositor
as to the course of action to be taken. The Property Trustee shall take
such action, or refrain from taking such action, as the Property Trustee
shall be instructed in writing to take, or to refrain from taking, by the
Depositor; provided, however, that if the Property Trustee does not receive
such instructions of the Depositor within ten Business Days after it has
delivered such notice, or such reasonably shorter period of time set forth
in such notice (which to the extent practicable shall not be less than two
Business Days), it may, but shall be under no duty to, take or refrain from
taking such action not inconsistent with this Trust Agreement as it shall
deem advisable and in the best interests of the Securityholders, in which
event the Property Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct;
(iii) the Property Trustee may consult with counsel of its selection and
the written 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;
(iv) the Property Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders pursuant to this Trust Agreement,
unless such Securityholders shall have offered to the Property Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request
or direction;
(v) the Property Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other document, unless requested in writing to do so by one or more
Securityholders; and
(vi) the Property Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through its agents
or attorneys, provided that the Property Trustee shall be responsible for
its own negligence or recklessness with respect to selection of any agent
or attorney appointed by it hereunder.
Section 8.04 Not Responsible for Recitals or Issuance of Securities. The
recitals contained herein and in the Trust Securities Certificates shall be
taken as the statements of the Trust, and the Trustees do not assume any
responsibility for their correctness. The Trustees shall not be accountable for
the use or application by the Trust of the proceeds of the Trust Securities in
accordance with Section 2.05.
The Property Trustee may conclusively assume that any funds held by it
hereunder are legally available unless an officer of the Property Trustee
assigned to its Corporate Trustee Administrative Department shall have received
written notice from the Corporation, any Holder or any other Trustee that such
funds are not legally available.
Section 8.05 May Hold Securities. Except as provided in the definition of the
term "Outstanding" in Article I, any Trustee or any other agent of the Trustees
or the Trust, in its
30
<PAGE>
individual or any other capacity, may become the owner or pledgee of Trust
Securities and may otherwise deal with the Trust with the same rights it would
have if it were not a Trustee or such other agent.
Section 8.06 Compensation; Fees; Indemnity.
The Depositor agrees:
(1) to pay to the Trustees from time to time reasonable compensation for
all services rendered by the Trustees hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any provision
of this Trust Agreement (including the reasonable compensation and the
expenses and disbursements of their agents and counsel), except any such
expense, disbursement or advance as may be attributable to their
negligence, willful misconduct or bad faith; and
(3) to indemnify the Trustees for, and to hold the Trustees harmless
against, any and all loss, damage, claims, liability or expense incurred
without negligence, willful misconduct or bad faith on their part, arising
out of or in connection with the acceptance or administration of this Trust
Agreement, including the costs and expenses of defending themselves against
any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
The provisions of this Section 8.06 shall survive the termination of this Trust
Agreement.
Section 8.07 Trustees Required; Eligibility.
(a) There shall at all times be a Property Trustee hereunder with respect to
the Trust Securities. The Property Trustee shall be a Person that has a
combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Property Trustee with
respect to the Trust Securities 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.
(b) There shall at all times be one or more Administrative Trustees hereunder
with respect to the Trust Securities. Each Administrative Trustee shall be
either a natural person who is at least 21 years of age or a legal entity that
shall act through one or more persons authorized to bind such entity.
(c) There shall at all times be a Delaware Trustee with respect to the Trust
Securities. The Delaware Trustee shall either be (i) a natural person who is at
least 21 years of age and a resident of the State of Delaware or (ii) a legal
entity authorized to conduct a trust business and with its principal place of
business in the State of Delaware that shall act through one or more persons
authorized to bind such entity.
31
<PAGE>
Section 8.08 Conflicting Interests.
If the Property Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Property Trustee shall either eliminate
such interest or resign, to the extent and in the manner provided by, and
subject to the provisions of, the Trust Indenture Act and this Trust Agreement.
To the extent permitted by the Trust Indenture Act, the Property Trustee shall
not be deemed to have a conflicting interest by virtue of being trustee under
the Guarantee, the Guarantee Agreements dated as of June 1, 1998, September 15,
1998 and August 18, 1999, between the Depositor, as guarantor, and The Chase
Manhattan Bank, as trustee, and the Amended and Restated Trust Agreements dated
as of June 1, 1998, September 15, 1998 and August 18, 1999, among the
Depositor, as depositor, Chase Manhattan Bank Delaware, as Delaware trustee,
Robert T. Lucas III and S.L. Love, as administrative trustees, and The Chase
Manhattan Bank, as property trustee.
Section 8.09 Co-Property Trustees and Separate Trustee.
At any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Holder of the Common Securities and
the Property Trustee shall have power to appoint, and upon the written request
of the Property Trustee, the Depositor shall for such purpose join with the
Property Trustee in the execution, delivery and performance of all instruments
and agreements necessary or proper to appoint, one or more Persons approved by
the Property Trustee either to act as co-property trustee, jointly with the
Property Trustee, of all or any part of such Trust Property, or to act as
separate trustee of any such Trust Property, in either case with such powers as
may be provided in the instrument of appointment, and to vest in such Person or
Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Agreement. If
the Depositor does not join in such appointment within 15 days after the
receipt by it of a request so to do, or in case an Indenture Event of Default
has occurred and is continuing, the Property Trustee alone shall have power to
make such appointment. Any co-property trustee or separate trustee appointed
pursuant to this Section shall satisfy the requirements of Section 8.07.
Should any written instrument from the Depositor be required by any co-property
trustee or separate trustee so appointed for more fully confirming to such co-
property trustee or separate trustee such property, title, right, or power, any
and all such instruments shall, on request, be executed, acknowledged, and
delivered by the Depositor.
Every co-property trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(i) The Trust Securities shall be executed, authenticated and delivered and
all rights, powers, duties, and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustees hereunder, shall be
exercised, solely by the Trustees.
(ii) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by
such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such co-
property trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-property trustee or separate trustee, except
to the extent that under any law of any
32
<PAGE>
jurisdiction in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such act, in which
event such rights, powers, duties, and obligations shall be exercised and
performed by such co-property trustee or separate trustee.
(iii) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept
the resignation of or remove any co-property trustee or separate trustee
appointed under this Section, and, in case an Indenture Event of Default
has occurred and is continuing, the Property Trustee shall have power to
accept the resignation of, or remove, any such co-property trustee or
separate trustee without the concurrence of the Depositor. Upon the written
request of the Property Trustee, the Depositor shall join with the Property
Trustee in the execution, delivery, and performance of all instruments and
agreements necessary or proper to effectuate such resignation or removal. A
successor to any co-property trustee or separate trustee so resigned or
removed may be appointed in the manner provided in this Section.
(iv) No co-property trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property Trustee,
or any other such trustee hereunder.
(v) The Trustees shall not be liable by reason of any act of a co-property
trustee or separate trustee.
(vi) Any Act of Holders delivered to the Property Trustee shall be deemed
to have been delivered to each such co-property trustee and separate
trustee.
Section 8.10 Resignation and Removal; Appointment of Successor.
No resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee may resign
at any time by giving written notice thereof to the Holders. If the instrument
of acceptance by the successor Trustee required by Section 8.11 shall not have
been delivered to the Relevant Trustee within 30 days after the giving of such
notice of resignation, the resigning Relevant Trustee may petition, at the
expense of the Trust, any court of competent jurisdiction for the appointment
of a successor Relevant Trustee.
Unless an Indenture Event of Default shall have occurred and be continuing, any
Trustee may be removed at any time by Act of the Holder of the Common
Securities. If an Indenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed at such time by Act of the Holders of a majority in Liquidation
Amount of the Preferred Securities, delivered to the Relevant Trustee (in its
individual capacity and on behalf of the Trust). An Administrative Trustee may
be removed by the Holder of the Common Securities at any time. In no event will
the Holders of the Preferred Securities have a right to vote to appoint, remove
or replace the Administrative Trustees.
If any Trustee shall resign, be removed or become incapable of continuing to
act as Trustee, or if a vacancy shall occur in the office of any Trustee for
any reason, at a time when no Indenture Event of Default shall have occurred
and be continuing, the Holder of the Common Securities, by Act of the
33
<PAGE>
Holder of the Common Securities, shall promptly appoint a successor Trustee or
successor Trustees, and the retiring Trustee shall comply with the applicable
requirements of Section 8.11. If the Property Trustee or the Delaware Trustee
shall resign, be removed or become incapable of continuing to act as the
Property Trustee or the Delaware Trustee, as the case may be, or a vacancy
shall occur in the office of any such Trustee for any reason, at a time when an
Indenture Event of Default shall have occurred and be continuing, the Holders
of Preferred Securities, by Act of the Holders of a majority in Liquidation
Amount of the Preferred Securities then Outstanding, shall promptly appoint a
successor Relevant Trustee or Relevant Trustees and such successor Relevant
Trustee or Relevant Trustees shall comply with the applicable requirements of
Section 8.11. If an Administrative Trustee shall resign, be removed or become
incapable of acting as Administrative Trustee, or a vacancy shall occur in the
office of any such Trustee for any reason, at a time when an Indenture Event of
Default shall have occurred and be continuing, the Holder of the Common
Securities, by Act of the Holder of the Common Securities, shall promptly
appoint a successor Administrative Trustee or Administrative Trustees and such
successor Administrative Trustee or Administrative Trustees shall comply with
the applicable requirements of Section 8.11. If no successor Relevant Trustee
shall have been so appointed in accordance with this Section 8.10 and accepted
appointment in the manner required by Section 8.11, any Holder who has been a
Holder of Trust Securities for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Relevant Trustee.
The Property Trustee shall give notice of each resignation and each removal of
a Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 10.08 and shall give notice to the Depositor. Each
notice shall include the name of the successor Relevant Trustee and the address
of its Corporate Trust Office if it is the Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust Agreement,
in the event any Administrative Trustee or a Delaware Trustee who is a natural
person dies or becomes, in the opinion of the Depositor, incompetent or
incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (i) the act of the remaining Administrative Trustee or (ii)
otherwise by the Depositor (with the successor in each case being a Person who
satisfies the eligibility requirements for an Administrative Trustee or a
Delaware Trustee, as the case may be, set forth in Section 8.07).
Section 8.11 Acceptance of Appointment by Successor. In case of the appointment
hereunder of a successor Relevant Trustee, every such successor Relevant
Trustee so appointed shall execute, acknowledge and deliver to the Trust and to
the retiring Relevant Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Relevant Trustee shall
become effective and such successor Relevant Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Relevant Trustee; but, on the request of the Depositor
or the successor Relevant Trustee, such retiring Relevant Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Relevant Trustee all the rights, powers and trusts of the retiring
Relevant Trustee and shall duly assign, transfer and deliver to such successor
Relevant Trustee all property and money held by such retiring Relevant Trustee
hereunder.
34
<PAGE>
Upon request of any such successor Relevant Trustee, the Trust shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Relevant Trustee all such rights, powers and trusts referred
to in the preceding paragraph.
No successor Relevant Trustee shall accept its appointment unless at the time
of such acceptance such successor Relevant Trustee shall be qualified and
eligible under this Article.
Section 8.12 Merger, Conversion, Consolidation or Succession to Business. Any
Person into which the Property Trustee, Delaware Trustee or any Administrative
Trustee which is not a natural person may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Relevant Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of such
Relevant Trustee, shall be the successor of such Relevant Trustee hereunder,
provided such Person shall be otherwise qualified and eligible, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
Section 8.13 Preferential Collection of Claims Against Depositor or Trust. If
and when the Property Trustee shall be or become a creditor of the Depositor or
the Trust (or any other obligor upon the Junior Subordinated Notes or the Trust
Securities), the Property Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against the Depositor or
Trust (or any such other obligor). For purposes of Section 311(b)(4) and (6) of
the Trust Indenture Act:
(a) "cash transaction" means any transaction in which full payment for
goods or securities sold is made within seven days after delivery of the
goods or securities in currency or in checks or other orders drawn upon
banks or bankers and payable upon demand; and
(b) "self-liquidating paper" means any draft, bill of exchange, acceptance
or obligation which is made, drawn, negotiated or incurred by the Depositor
or the Trust (or any such obligor) for the purpose of financing the
purchase, processing, manufacturing, shipment, storage or sale of goods,
wares or merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Property Trustee simultaneously with the creation of the
creditor relationship with the Depositor or the Trust (or any such obligor)
arising from the making, drawing, negotiating or incurring of the draft,
bill of exchange, acceptance or obligation.
Section 8.14 Reports by the Property Trustee.
(a) Within 60 days after October 1 of each year commencing with October 1,
, if required by Section 313(a) of the Trust Indenture Act, the Property
Trustee shall transmit a brief report dated as of such October 1 with respect
to any of the events specified in such Section 313(a) that may have occurred
since the later of the date of this Trust Agreement or the preceding October 1.
(b) The Property Trustee shall transmit to Securityholders the reports required
by Section 313(b) of the Trust Indenture Act at the times specified therein.
35
<PAGE>
(c) Reports pursuant to this Section shall be transmitted in the manner and to
the Persons required by Sections 313(c) and (d) of the Trust Indenture Act.
Section 8.15 Reports to the Property Trustee. The Depositor and the
Administrative Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and, within 120 days after the end of each
fiscal year of the Depositor, the compliance certificate required by Section
314(a)(4) of the Trust Indenture Act in the form and in the manner required by
Section 314 of the Trust Indenture Act.
Section 8.16 Evidence of Compliance with Conditions Precedent. Each of the
Depositor and the Administrative Trustees on behalf of the Trust shall provide
to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Trust Agreement that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given pursuant to Section 314(c)(1) of
the Trust Indenture Act shall comply with Section 314(e) of the Trust Indenture
Act.
Section 8.17 Number of Trustees.
(a) The number of Trustees shall initially be four, provided that the Depositor
by written instrument may increase or decrease the number of Administrative
Trustees.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy, incompetence or
incapacity to perform the duties of a Trustee shall not operate to annul the
Trust. Whenever a vacancy in the number of Administrative Trustees shall occur,
until such vacancy is filled by the appointment of an Administrative Trustee in
accordance with Section 8.10, the Administrative Trustees in office, regardless
of their number (and notwithstanding any other provision of this Trust
Agreement), shall have all powers granted to the Administrative Trustees and
shall discharge the duties imposed upon the Administrative Trustees by this
Trust Agreement.
Section 8.18 Delegation of Power.
(a) Any Administrative Trustee, may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
2.07(A), including any registration statement or amendment thereto filed with
the Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time to time
to such of their number the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Administrative
Trustees or otherwise as the Administrative Trustees may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary to the
provisions of the Trust, as set forth herein.
36
<PAGE>
Section 8.19 Enforcement of Rights of Property Trustee by Securityholders. If
an Indenture Event of Default occurs and is continuing, then (i) the Holders of
Preferred Securities will rely on the enforcement by the Property Trustee of
its rights against the Corporation as the holder of the Junior Subordinated
Notes and (ii) the Holders of a majority in aggregate Liquidation Amount of the
Preferred Securities will have the right to direct the time, method, and place
of conducting any proceeding for any remedy available to the Property Trustee
or to direct the exercise of any trust or power conferred upon the Property
Trustee under this Trust Agreement, including the right to direct the Property
Trustee to exercise the remedies available to it as a holder of the Junior
Subordinated Notes, provided that such direction shall not be in conflict with
any rule of law or with this Trust Agreement, and could not involve the
Property Trustee in personal liability in circumstances where reasonable
indemnity would not be adequate. If the Property Trustee fails to enforce its
rights under the Junior Subordinated Notes, a Holder of Preferred Securities
may, to the extent permitted by applicable law, institute a legal proceeding
against the Corporation to enforce its rights under this Trust Agreement
without first instituting any legal proceeding against the Property Trustee or
any other Person, including the Trust; it being understood and intended that no
one or more of such Holders shall have any right in any manner whatsoever by
virtue of, or by availing of, any provision of this Trust Agreement to affect,
disturb or prejudice the rights of any other of such Holders or to obtain or to
seek to obtain priority or preference over any other of such Holders or to
enforce any right under this Trust Agreement, except in the manner herein
provided and for the equal and ratable benefit of all such Holders.
Notwithstanding the foregoing, a Holder of Preferred Securities may institute a
legal proceeding directly against the Corporation without first instituting a
legal proceeding against or requesting or directing that action be taken by the
Property Trustee or any other Person, for enforcement of payment to such Holder
of principal of or interest on the Junior Subordinated Notes having a principal
amount equal to the aggregate stated Liquidation Amount of the Preferred
Securities of such Holder on or after the due dates therefor specified or
provided for in the Junior Subordinated Notes. The Corporation shall be
subrogated to all rights of the Holders of Preferred Securities in respect of
any amounts paid to such Holders by the Corporation pursuant to this Section.
Section 8.20 Delaware Trustee.
(a) Notwithstanding any other provision of this Trust Agreement, the Delaware
Trustee shall not be entitled to exercise any powers, nor shall the Delaware
Trustee have any of the duties and responsibilities, of the Administrative
Trustees or the Property Trustee described in this Trust Agreement. The
Delaware Trustee shall be a trustee for the sole and limited purpose of
fulfilling the requirements of (S)3807 of the Delaware Business Trust Act.
(b) It is expressly understood and agreed by the parties hereto that in
fulfilling its obligations as Delaware Trustee hereunder on behalf of the Trust
(i) any agreements or instruments executed and delivered by Chase Manhattan
Bank Delaware are executed and delivered not in its individual capacity but
solely as Delaware Trustee under this Trust Agreement in the exercise of the
powers and authority conferred and vested in it, (ii) each of the
representations, undertakings and agreements herein made on the part of the
Trust is made and intended not as representations, warranties, covenants,
undertakings and agreements by Chase Manhattan Bank Delaware in its individual
capacity but is made and intended for the purpose of binding only the Trust,
and (iii) under no
37
<PAGE>
circumstances shall Chase Manhattan Bank Delaware in its individual capacity be
personally liable for the payment of any indebtedness or expenses of the Trust
or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Trust under this Trust
Agreement, except if such breach or failure is due to any gross negligence or
willful misconduct of Chase Manhattan Bank Delaware as the Delaware Trustee.
ARTICLE IX
Termination and Liquidation
Section 9.01 Termination Upon Expiration Date. The Trust shall automatically
terminate on , (the "Expiration Date") or earlier pursuant to
Section 9.02.
Section 9.02 Early Termination. Upon the first to occur of any of the following
events (such first occurrence, an "Early Termination Event"), the Trust shall
be dissolved and terminated in accordance with the terms hereof:
(i) the occurrence of a Bankruptcy Event in respect of the Depositor,
dissolution or liquidation of the Depositor, or the dissolution of the
Trust pursuant to judicial decree;
(ii) the delivery of written direction to the Property Trustee by the
Depositor at any time (which direction is optional and wholly within the
discretion of the Depositor) to terminate the Trust and distribute the
Junior Subordinated Notes to Securityholders as provided in Section 9.04;
and
(iii) the payment at maturity or redemption of all of the Junior
Subordinated Notes, and the consequent payment of the Trust Securities.
Section 9.03 Termination. The respective obligations and responsibilities of
the Trust and the Trustees created hereby shall terminate upon the latest to
occur of the following: (a) the distribution by the Property Trustee to
Securityholders upon the liquidation of the Trust pursuant to Section 9.04, or
upon the redemption of all of the Trust Securities pursuant to Section 4.02, of
all amounts or instruments required to be distributed hereunder upon the final
payment of the Trust Securities; (b) the payment of any expenses owed by the
Trust; and (c) the discharge of all administrative duties of the Administrative
Trustees, including the performance of any tax reporting obligations with
respect to the Trust or the Securityholders.
Section 9.04 Liquidation.
(a) If any Early Termination Event specified in clause (ii) of Section 9.02
occurs, the Trust shall be liquidated and the Property Trustee shall distribute
the Junior Subordinated Notes to the Securityholders as provided in this
Section 9.04.
(b) In connection with a distribution of the Junior Subordinated Notes, each
Holder of Trust Securities shall be entitled to receive, after the satisfaction
of liabilities to creditors of the Trust (as evidenced by a certificate of the
Administrative Trustees), a Like Amount of Junior Subordinated Notes. Notice of
liquidation shall be given by the Trustees by first-class mail, postage
prepaid, mailed not later than 30 nor more than 60 days prior to the
Liquidation Date to each Holder of Trust Securities at such Holder's address
appearing in the Security Register. All notices of liquidation shall:
38
<PAGE>
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust Securities
will no longer be deemed to be Outstanding and any Trust Securities
Certificates not surrendered for exchange will be deemed to represent a
Like Amount of Junior Subordinated Notes; and
(iii) provide such information with respect to the mechanics by which
Holders may exchange Trust Securities Certificates for Junior Subordinated
Notes as the Administrative Trustees or the Property Trustee shall deem
appropriate.
(c) In order to effect the liquidation of the Trust and distribution of the
Junior Subordinated Notes to Securityholders, the Property Trustee shall
establish a record date for such distribution (which shall be not more than 45
days prior to the Liquidation Date) and, either itself acting as exchange agent
or through the appointment of a separate exchange agent, shall establish such
procedures as it shall deem appropriate to effect the distribution of Junior
Subordinated Notes in exchange for the Outstanding Trust Securities
Certificates.
(d) After the Liquidation Date, (i) the Trust Securities will no longer be
deemed to be Outstanding, (ii) certificates representing a Like Amount of
Junior Subordinated Notes will be issued to Holders of Trust Securities
Certificates, upon surrender of such certificates to the Administrative
Trustees or their agent for exchange, (iii) any Trust Securities Certificates
not so surrendered for exchange will be deemed to represent a Like Amount of
Junior Subordinated Notes, accruing interest at the rate provided for in the
Junior Subordinated Notes from the last Distribution Date on which a
Distribution was made on such Trust Securities Certificates until such
certificates are so surrendered (and until such certificates are so
surrendered, no payments of interest or principal will be made to Holders of
Trust Securities Certificates with respect to such Junior Subordinated Notes)
and (iv) all rights of Securityholders holding Trust Securities will cease,
except the right of such Securityholders to receive Junior Subordinated Notes
upon surrender of Trust Securities Certificates.
(e) The Depositor will use its best efforts to have the Junior Subordinated
Notes that are distributed in exchange for the Preferred Securities to be
listed on such securities exchange as the Preferred Securities are then listed.
The Depositor may elect to have the Junior Subordinated Notes issued in book-
entry form to the Clearing Agency or its nominee pursuant to a Certificate
Depository Agreement.
Section 9.05 Bankruptcy. If an Early Termination Event specified in clause (i)
of Section 9.02 has occurred, the Trust shall be liquidated. The Property
Trustee shall distribute the Junior Subordinated Notes to the Securityholders
as provided in Section 9.04, unless such distribution is determined by the
Administrative Trustees not to be practical, in which event the Holders will be
entitled to receive out of the assets of the Trust available for distribution
to Securityholders, after satisfaction of liabilities to creditors, an amount
equal to the Liquidation Amount per Trust Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid only
in part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then, subject to the next succeeding
sentence, the amounts payable by the Trust on the Trust Securities shall be
paid on a pro rata basis (based upon Liquidation Amounts). The Holder of the
Common Securities will be entitled to receive Liquidation Distributions upon
any such dissolution, winding-up
39
<PAGE>
or termination pro rata (determined as aforesaid) with Holders of Preferred
Securities, except that, if an Indenture Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities.
ARTICLE X
Miscellaneous Provisions
Section 10.01 Guarantee by the Depositor. Subject to the terms and conditions
hereof, the Depositor irrevocably and unconditionally guarantees to each person
or entity to whom the Trust is now or hereafter becomes indebted or liable (the
"Beneficiaries") the full payment, when and as due, of any and all Obligations
(as hereinafter defined) to such Beneficiaries. As used herein, "Obligations"
means any indebtedness, expenses or liabilities of the Trust, other than
obligations of the Trust to pay to Holders of any Preferred Securities or other
similar interests in the Trust the amounts due such Holders pursuant to the
terms of the Preferred Securities or such other similar interests, as the case
may be. Such guarantee is intended to be for the benefit of, and to be
enforceable by, all such Beneficiaries, whether or not such Beneficiaries have
received notice hereof.
Section 10.02 Limitation of Rights of Securityholders. The death or incapacity
of any Person having an interest, beneficial or otherwise, in a Trust Security
shall not operate to terminate this Trust Agreement, nor entitle the legal
representatives or heirs of such Person or any Securityholder for such Person,
to claim an accounting, take any action or bring any proceeding in and for a
partition or winding-up of the arrangements contemplated hereby, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.
Section 10.03 Amendment.
(a) This Trust Agreement may be amended from time to time by the Trustees and
the Depositor, without the consent of any Securityholders, (i) to cure any
ambiguity, correct or supplement any provision herein which may be inconsistent
with any other provision herein, or to make any other provisions with respect
to matters or questions arising under this Trust Agreement, which shall not be
inconsistent with the other provisions of this Trust Agreement, provided,
however, that any such amendment shall not adversely affect in any material
respect the interests of any Securityholder, (ii) to modify, eliminate or add
to any provisions of this Trust Agreement to such extent as shall be necessary
to ensure that the Trust will not be classified as other than a grantor trust
for United States federal income tax purposes at any time that any Trust
Securities are outstanding; provided, however, that, in the case of clause (i),
any amendments of this Trust Agreement shall become effective when notice
thereof is given to the Securityholders or (iii) to provide the Property
Trustee with the authority to execute on behalf of the Administrative Trustees
Definitive Preferred Securities Certificates.
(b) Except as provided in Section 10.03(c) hereof, any provision in this Trust
Agreement may be amended by the Trust or the Trustees with (i) the consent of
Securityholders representing not less than 66 2/3% (based upon Liquidation
Amounts) of the Trust Securities then Outstanding and (ii) receipt by the
Trustees of an Opinion of Counsel to the effect that such amendment or the
exercise of any power granted to the Trustees in accordance with such amendment
will not affect the Trust's
40
<PAGE>
status as a grantor trust for United States federal income tax purposes or the
Trust's exemption from status of an "investment company" under the Investment
Company Act.
(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 6.03 or 6.06 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution (or payment upon redemption) on the Trust Securities or otherwise
adversely affect the amount of any Distribution (or payment upon redemption)
required to be made in respect of the Trust Securities as of a specified date,
(ii) restrict the right of a Securityholder to institute suit for the
enforcement of any such payment on or after such date, (iii) change the purpose
of the Trust, (iv) authorize the issuance of any additional beneficial
interests in the Trust, or (v) change the consent required pursuant to this
Section 10.03.
(d) Notwithstanding any other provisions of this Trust Agreement, the Trustees
shall not enter into or consent to any amendment to this Trust Agreement which
would cause the Trust to fail or cease to qualify for the exemption from status
of an "investment company" under the Investment Company Act of 1940, as
amended, afforded by Rule 3a-5 thereunder.
(e) Without the consent of the Depositor, this Trust Agreement may not be
amended in a manner which imposes any additional obligation on the Depositor.
In executing any amendment permitted by this Trust Agreement, the Trustees
shall be entitled to receive, and (subject to Section 8.01) shall be fully
protected in relying upon an Opinion of Counsel stating that the execution of
such amendment is authorized or permitted by this Trust Agreement. Any Trustee
may, but shall not be obligated to, enter into any such amendment which affects
such Trustee's own rights, duties, immunities or liabilities under this Trust
Agreement or otherwise.
(f) In the event that any amendment to this Trust Agreement is made, the
Administrative Trustees shall promptly provide to the Depositor a copy of such
amendment.
Section 10.04 Separability. In case any provision in this Trust Agreement or in
the Trust Securities Certificates 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 10.05 Governing Law. THIS TRUST AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH
RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF DELAWARE;
PROVIDED THAT THE IMMUNITIES AND STANDARD OF CARE OF THE PROPERTY TRUSTEE SHALL
BE GOVERNED BY NEW YORK LAW.
Section 10.06 Notice of Deferral of Distribution. In the event that the
Depositor exercises its right to extend an interest payment period in respect
of the Junior Subordinated Notes pursuant to Section 104 of the Supplemental
Indenture and notice of such extension has been provided by the Depositor to
the Property Trustee, the Property Trustee shall give written notice of such
extension and of the deferral of the related Distribution on the Trust
Securities, by first-class mail, postage prepaid, mailed not later than ten
days prior to the Distribution Date upon which such Distribution
41
<PAGE>
would otherwise be payable, to each Holder of Preferred Securities at such
Holder's address appearing in the Security Register.
Section 10.07 Headings. The Article and Section headings are for convenience
only and shall not affect the construction of this Trust Agreement.
Section 10.08 Notice and Demand. Any notice, demand or other communication
which by any provision of this Trust Agreement is required or permitted to be
given or served to or upon any Securityholder or the Depositor may be given or
served in writing by deposit thereof, first class postage prepaid, in the
United States mail, hand delivery or facsimile transmission, in each case,
addressed, (i) in the case of a Preferred Securityholder, to such Preferred
Securityholder as such Securityholder's name and address appear on the Security
Register and (ii) in the case of the Common Securityholder or the Depositor, to
Duke Capital Corporation, 526 South Church Street, Charlotte, North Carolina
28202, Attention: Treasurer, Facsimile No. (704) 382-4964, with a copy to
Corporate Secretary, Facsimile No. (704) 382-8137. Such notice, demand or other
communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.
Any notice, demand or other communication which by any provision of this Trust
Agreement is required or permitted to be given or served to or upon the Trust
or the Trustees shall be given in writing addressed (until another address is
published by the Trust) as follows: (i) with respect to the Property Trustee
and the Delaware Trustee, The Chase Manhattan Bank, 450 West 33rd Street, New
York, New York 10001, Attention: Capital Markets Fiduciary Services; Chase
Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801,
Attention: Corporate Trust Department, as the case may be; and (ii) with
respect to the Administrative Trustees, to them at the address above for
notices to the Depositor, marked Attention: Administrative Trustees of Duke
Capital Financing Trust [ ] c/o Corporate Secretary. Such notice, demand or
other communication to or upon the Trust or the Trustees shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing by
the applicable Trustee.
Section 10.09 Agreement Not to Petition. Each of the Trustees and the Depositor
agrees for the benefit of the Securityholders that, until at least one year and
one day after the Trust has been terminated in accordance with Article IX, it
shall not file, or join in the filing of, a petition against the Trust under
any bankruptcy, reorganization, arrangement, insolvency, liquidation or other
similar law (including, without limitation, the United States Bankruptcy Code)
(collectively, "Bankruptcy Laws") or otherwise join in the commencement of any
proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 10.09, the Property Trustee
agrees, for the benefit of Securityholders, that it shall file an answer with
the bankruptcy court or otherwise properly contest the filing of such petition
by the Depositor against the Trust or the commencement of such action and raise
the defense that the Depositor has agreed in writing not to take such action
and should be stopped and precluded therefrom and such other defenses, if any,
as counsel for the Trustees or the Trust may assert. The provisions of this
Section 10.09 shall survive the termination of this Trust Agreement.
42
<PAGE>
Section 10.10 Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust Indenture
Act that are required to be part of this Trust Agreement and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a Trustee for the
purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by
any of the provisions of the Trust Indenture Act, such required provision shall
control.
(d) The application of the Trust Indenture Act to this Trust Agreement shall
not affect the nature of the Trust Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON
BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST
SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND AGREEMENT
TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE
SUBORDINATED INDENTURE AND THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND
SUCH OTHERS THAT THOSE TERMS AND PROVISIONS SHALL BE BINDING, OPERATIVE AND
EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
Section 10.11 Successors. This Trust Agreement shall be binding upon and shall
inure to the benefit of any successor to both the Trust and the Trustees,
including any successor by operation of law.
43
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Trust Agreement or
have caused this Trust Agreement to be executed on their behalf, all as of the
day and year first above written.
Duke Capital Corporation
By: _________________________________
Title: ______________________________
The Chase Manhattan Bank,
as Property Trustee
By: _________________________________
Title: ______________________________
Chase Manhattan Bank Delaware,
as Delaware Trustee
By: _________________________________
Title: ______________________________
_____________________________________
Robert T. Lucas III,
as Administrative Trustee
_____________________________________
S. L. Love,
as Administrative Trustee
44
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
DUKE CAPITAL FINANCING TRUST [ ]
THIS Certificate of Trust of Duke Capital Financing Trust [ ] (the "Trust"),
dated as of , , is being duly executed and filed by the undersigned, as
trustee, to form a business trust under the Delaware Business Trust Act (12
Del. C. (S)3801, et seq.).
1. Name. The name of the business trust formed hereby is Duke Capital Financing
Trust [ ].
2. Delaware Trustee. The name and business address of the trustee of the Trust
with a principal place of business in the State of Delaware are Chase Manhattan
Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective upon filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust, has
executed this Certificate of Trust as of the date first-above written.
CHASE MANHATTAN BANK DELAWARE, not
in its individual capacity but
solely as trustee of the Trust
By: _________________________________
Name:
Title:
A-1
<PAGE>
EXHIBIT B
(RESERVED)
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
EXCEPT AS PROVIDED IN THE TRUST
AGREEMENT REFERRED TO HEREIN
Certificate Number Number of Common Securities
C-
Certificate Evidencing Common Securities
of
Duke Capital Financing Trust [ ]
Common Securities
(Liquidation Amount $ per Common Security)
Duke Capital Financing Trust [ ], a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that (the
"Holder") is the registered owner of ( ) common securities of
the Trust representing undivided beneficial interests in the assets of the
Trust and designated the Common Securities (Liquidation Amount $ per Common
Security) (the "Common Securities"). In accordance with Section 5.10 of the
Trust Agreement (as defined below) the Common Securities are not transferable,
except by operation of law or to an Affiliate of the Holder or a permitted
successor under Section 801 of the Subordinated Indenture, dated as of April
1, 1998, between the Holder and The Chase Manhattan Bank, as trustee, and any
attempted transfer hereof shall be void. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the
terms and provisions of, the Amended and Restated Trust Agreement of the Trust
dated as of , , as the same may be amended from time to time (the
"Trust Agreement"), including the designation of the terms of the Common
Securities as set forth therein. The Trust will furnish a copy of the Trust
Agreement to the Holder without charge upon written request to the Trust at
its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust Agreement
and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Administrative Trustees of the Trust have executed
this certificate this day of , .
Duke Capital Financing Trust [ ]
By: _________________________________
Robert T. Lucas III,
as Administrative Trustee
By: _________________________________
S.L. Love,
as Administrative Trustee
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the within-mentioned Trust
Agreement.
_____________________________________
as Administrative Trustee
C-2
<PAGE>
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
THIS AGREEMENT AS TO EXPENSES AND LIABILITIES (this "Agreement") is made as of
, between Duke Capital Corporation, a Delaware corporation (the
"Corporation"), and Duke Capital Financing Trust [ ], a Delaware business
trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to and receive Series % Junior Subordinated Notes due ,
(the "Junior Subordinated Notes") from the Corporation and to issue and sell
Duke Capital Financing Trust [ ] % Trust Preferred Securities (the
"Preferred Securities") with such powers, preferences and special rights and
restrictions as are set forth in the Amended and Restated Trust Agreement of
the Trust dated as of , as the same may be amended from time to time
(the "Trust Agreement"); and
WHEREAS, the Corporation is the issuer of the Junior Subordinated Notes.
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase the Corporation hereby agrees shall
benefit the Corporation and which purchase the Corporation acknowledges will be
made in reliance upon the execution and delivery of this Agreement, the
Corporation and the Trust hereby agree as follows:
ARTICLE I
Section 1.01. Guarantee by the Corporation. Subject to the terms and conditions
hereof, the Corporation hereby irrevocably and unconditionally guarantees to
each person or entity to whom the Trust is now or hereafter becomes indebted or
liable (the "Beneficiaries") the full payment, when and as due, of any and all
Obligations (as hereinafter defined) to such Beneficiaries. As used herein,
"Obligations" means any indebtedness, expenses or liabilities of the Trust,
other than obligations of the Trust to pay to holders of any Preferred
Securities or other similar interests in the Trust the amounts due such holders
pursuant to the terms of the Preferred Securities or such other similar
interests, as the case may be. This Agreement is intended to be for the benefit
of, and to be enforceable by, all such Beneficiaries, whether or not such
Beneficiaries have received notice hereof.
Section 1.02. Term of Agreement. This Agreement shall terminate and be of no
further force and effect upon the date on which there are no Beneficiaries
remaining; provided, however, that this Agreement shall continue to be
effective or shall be reinstated, as the case may be, if at any time any holder
of Preferred Securities or any Beneficiary must restore payment of any sums
paid under the Preferred Securities, under any Obligation, under the Guarantee
Agreement dated the date hereof by the Corporation and The Chase Manhattan
Bank, as guarantee trustee, or under this Agreement for any reason whatsoever.
This Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.03. Waiver of Notice. The Corporation hereby waives notice of
acceptance of this Agreement and of any Obligation to which it applies or may
apply, and the Corporation hereby waives presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
D-1
<PAGE>
Section 1.04. No Impairment. The obligations, covenants, agreements and duties
of the Corporation under this Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or any
portion of the Obligations or for the performance of any other obligation
under, arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part of the
Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the Obligations or
any action on the part of the Trust granting indulgence or extension of any
kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Trust
or any of the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Corporation with respect to the happening of any of the
foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce this Agreement directly
against the Corporation and the Corporation waives any right or remedy to
require that any action be brought against the Trust or any other person or
entity before proceeding against the Corporation.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and agreements contained in this
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the
Beneficiaries.
Section 2.02. Amendment. So long as there remains any Beneficiary or any
Preferred Securities are outstanding, this Agreement shall not be modified or
amended in any manner adverse to such Beneficiary or to the holders of the
Preferred Securities.
Section 2.03. Notices. Any notice, request or other communication required or
permitted to be given hereunder shall be given in writing by delivering the
same against receipt therefor by facsimile transmission (confirmed by mail), or
by registered or certified mail, addressed as follows (and if so given, shall
be deemed given when mailed), to wit:
Duke Capital Financing Trust [ ]
c/o The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Facsimile No.: (212) 946-8159
Attention: Capital Markets
Fiduciary Services
D-2
<PAGE>
Duke Capital Corporation
526 South Church Street
Charlotte, North Carolina 28202
Facsimile No.: (704) 382-8137
Attention: Corporate Secretary
Section 2.04. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
THIS AGREEMENT is executed as of the date and year first above written.
Duke Capital Corporation
By: _________________________________
Name:
Title:
Duke Capital Financing Trust [ ]
By: _________________________________
Robert T. Lucas III,
as Administrative Trustee
By: _________________________________
S.L. Love,
as Administrative Trustee
D-3
<PAGE>
EXHIBIT E
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Duke Capital
Financing Trust [ ] or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
in such other name as is requested by an authorized representative of DTC (and
any payment made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), any transfer, pledge or other use hereof for
value or otherwise by or to any person is wrongful inasmuch as the registered
owner thereof, Cede & Co., has an interest herein.
Certificate Number Number of Preferred Securities
P- CUSIP No.
Certificate Evidencing Preferred Securities
of
Duke Capital Financing Trust [ ]
% Trust Preferred Securities
(Liquidation Amount $ per Preferred Security)
Duke Capital Financing Trust [ ], a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that (the
"Holder") is the registered owner of ( ) Preferred Securities of the
Trust representing undivided beneficial interests in the assets of the Trust
and designated the Duke Capital Financing Trust [ ] % Trust Preferred
Securities (Liquidation Amount $ per Preferred Security) (the "Preferred
Securities"). The Preferred Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.04 of the Trust Agreement (as defined below). The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust, dated as of , , as the same may be amended
from time to time (the "Trust Agreement"), including the designation of the
terms of Preferred Securities as set forth therein. The holder of this
certificate is entitled to the benefits of a guarantee by Duke Capital
Corporation, a Delaware corporation (the "Corporation"), pursuant to a
Guarantee Agreement between the Corporation and The Chase Manhattan Bank, as
guarantee trustee, dated as of , , as the same may be amended from time to
time (the "Guarantee"), to the extent provided therein. The Trust will furnish
a copy of the Trust Agreement and the Guarantee to the holder of this
certificate without charge upon written request to the Trust at its principal
place of business or registered office.
Upon receipt of this certificate, the holder of this certificate is bound by
the Trust Agreement and is entitled to the benefits thereunder.
E-1
<PAGE>
IN WITNESS WHEREOF, the Administrative Trustees of the Trust have executed
this certificate this day of , .
Duke Capital Financing Trust [ ]
By: _________________________________
Robert T. Lucas III,
as Administrative Trustee
By: _________________________________
S.L. Love,
as Administrative Trustee
E-2
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the within-mentioned
Trust Agreement.
---------------------------------
as Administrative Trustee
E-3
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Preferred Securities Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Preferred
Securities Certificate)
<PAGE>
EXHIBIT 4.11
GUARANTEE AGREEMENT
between
DUKE CAPITAL CORPORATION
(as Guarantor)
and
THE CHASE MANHATTAN BANK
(as Trustee)
dated as of ,
<PAGE>
CROSS-REFERENCE TABLE(1)
<TABLE>
<CAPTION>
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
------------------- -----------------
<S> <C>
310(a)................................................. 4.01(a)
310(b)................................................. 4.01(c), 2.08
310(c)................................................. Inapplicable
311(a)................................................. 2.02(b)
311(b)................................................. 2.02(b)
311(c)................................................. Inapplicable
312(a)................................................. 2.02(a)
312(b)................................................. 2.02(b)
313 ................................................. 2.03
314(a)................................................. 2.04
314(b)................................................. Inapplicable
314(c)................................................. 2.05
314(d)................................................. Inapplicable
314(e)................................................. 1.01, 2.05, 3.02
314(f)................................................. 2.01, 3.02
315(a)................................................. 3.01(d)
315(b)................................................. 2.07
315(c)................................................. 3.01
315(d)................................................. 3.01(d)
315(e)................................................. Inapplicable
316(a)................................................. 5.04(i), 2.06
316(b)................................................. 5.03
316(c)................................................. 2.02
317(a)................................................. Inapplicable
317(b)................................................. Inapplicable
318(a)................................................. 2.01(b)
318(b)................................................. 2.01
318(c)................................................. 2.01(a)
</TABLE>
- --------
(1) This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE I
Definitions
Page
----
<C> <S> <C>
Section 1.01. Definitions................................................ 1
ARTICLE II
Trust Indenture Act
Section 2.01. Trust Indenture Act; Application........................... 3
Section 2.02. Lists of Holders of Securities............................. 3
Section 2.03. Reports by the Trustee..................................... 4
Section 2.04. Periodic Reports to Trustee................................ 4
Section 2.05. Evidence of Compliance with Conditions Precedent........... 4
Section 2.06. Events of Default; Waiver.................................. 4
Section 2.07. Event of Default; Notice................................... 4
Section 2.08. Conflicting Interests...................................... 4
ARTICLE III
Powers, Duties And Rights Of Trustee
Section 3.01. Powers and Duties of the Trustee........................... 5
Section 3.02. Certain Rights of Trustee.................................. 6
Section 3.03. Compensation; Fees; Indemnity.............................. 7
ARTICLE IV
Trustee
Section 4.01. Trustee; Eligibility....................................... 8
Section 4.02. Appointment, Removal and Resignation of Trustee............ 8
ARTICLE V
Guarantee
Section 5.01. Guarantee.................................................. 9
Section 5.02. Waiver of Notice and Demand................................ 9
Section 5.03. Obligations Not Affected................................... 9
Section 5.04. Rights of Holders.......................................... 10
Section 5.05. Guarantee of Payment....................................... 10
Section 5.06. Subrogation................................................ 10
Section 5.07. Independent Obligations.................................... 11
ARTICLE VI
Subordination
Section 6.01. Subordination.............................................. 11
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
ARTICLE VII
Termination
Page
----
<C> <S> <C>
Section 7.01. Termination............................................... 11
ARTICLE VIII
Miscellaneous
Section 8.01. Successors and Assigns.................................... 11
Section 8.02. Amendments................................................ 11
Section 8.03. Notices................................................... 12
Section 8.04. Benefit................................................... 12
Section 8.05. Interpretation............................................ 12
Section 8.06. Governing Law............................................. 13
</TABLE>
ii
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of , ,
is executed and delivered by DUKE CAPITAL CORPORATION, a Delaware corporation
(the "Guarantor"), and THE CHASE MANHATTAN BANK, a New York banking
corporation, as trustee (the "Trustee"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of DUKE CAPITAL FINANCING TRUST [ ], a Delaware statutory business
trust (the "Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of , , among the Trustee, the other
Trustees named therein, and Duke Capital Corporation, as Depositor, and the
holders of undivided beneficial interests in the assets of the Trust, the Trust
is issuing as of the date hereof $ aggregate liquidation amount of
its % Trust Preferred Securities (the "Preferred Securities") representing
preferred undivided beneficial interests in the assets of the Trust and having
the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Trust and the proceeds
thereof will be used to purchase Junior Subordinated Notes (as defined in the
Trust Agreement) of the Guarantor, which will be held by the Trust as trust
assets; and
WHEREAS, as incentive for the Holders to purchase the Preferred Securities, the
Guarantor desires to irrevocably and unconditionally agree, to the extent set
forth herein, to pay to the Holders the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the payment for Preferred Securities by
each Holder thereof, which payment the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders from time to time of the Preferred Securities.
ARTICLE I
Definitions
Section 1.01. Definitions. As used in this Guarantee Agreement, the terms set
forth below shall, unless the context otherwise requires, have the following
meanings. Capitalized or otherwise defined terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Trust Agreement as
in effect on the date hereof.
"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.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Trust.
<PAGE>
"Event of Default" means a failure by the Guarantor to perform any of its
payment obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent
not paid or made by or on behalf of the Trust: (i) any accrued and unpaid
distributions that are required to be paid on such Preferred Securities but if
and only if and to the extent the Trust has funds legally and immediately
available therefor to make such payment; (ii) the redemption price, including
all accrued and unpaid distributions to the date of redemption (the "Redemption
Price"), with respect to the Preferred Securities called for redemption by the
Trust but if and only if and to the extent that the Trust has funds legally and
immediately available therefor sufficient to make such payment; and (iii) upon
a voluntary or involuntary dissolution, winding-up or termination of the Trust
(other than in connection with the distribution of Junior Subordinated Notes to
the holders of Trust Securities or the redemption of all of the Preferred
Securities), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on the Preferred Securities to the date of
payment, to the extent the Trust has funds legally and immediately available
therefor, and (b) the amount of assets of the Trust remaining available for
distribution to Holders in liquidation of the Trust (in either case, the
"Liquidation Distribution").
"Holder" shall mean any holder, as registered on the books and records of the
Trust, of any Preferred Securities; provided, however, that in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indenture" means the Subordinated Indenture, dated as of April 1, 1998 among
the Guarantor, as issuer, and The Chase Manhattan Bank, as trustee, as
heretofore supplemented and amended and as supplemented by the
Supplemental Indenture dated as of , , by and between the
Guarantor and The Chase Manhattan Bank, as trustee.
"Majority in liquidation amount of Preferred Securities" means a vote by
Holder(s) of Preferred Securities, voting separately as a class, of more than
50% of the liquidation amount of all Preferred Securities outstanding at the
time of determination.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Guarantor, and
delivered to the Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee
Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has read
such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in the Officers'
Certificate are based;
(c) a statement that, in the opinion of each such officer, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
2
<PAGE>
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Responsible Officer" means, with respect to the Trustee, any vice president,
any assistant vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, any senior trust officer, trust officer or
assistant trust officer or any other officer of the Corporate Trust Department
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor Trustee" means a successor Trustee possessing the qualifications to
act as Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trust Securities" means the Preferred Securities and the Common Securities.
"Trustee" means The Chase Manhattan Bank until a Successor Trustee has been
appointed and has accepted such appointment pursuant to the terms of this
Guarantee Agreement and thereafter means each such Successor Trustee.
ARTICLE II
Trust Indenture Act
Section 2.01. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions; and
(b) If and to the extent that any provision of this Guarantee Agreement limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
Section 2.02. Lists of Holders of Securities.
(a) The Guarantor shall furnish or cause to be furnished to the Trustee (i)
semiannually, not later than June 1 and December 1 in each year, a list, in
such form as the Trustee may reasonably require, of the names and addresses of
the Holders ("List of Holders") as of a date not more than 15 days prior to the
time such list is furnished, and (ii) at such other times as the Trustee may
request in writing, within 30 days after the receipt by the Guarantor of any
such request, a List of Holders as of a date not more than 15 days prior to the
time such list is furnished; provided that the Guarantor shall not be obligated
to provide such List of Holders at any time the List of Holders does not differ
from
3
<PAGE>
the most recent List of Holders given to the Trustee by the Guarantor or at any
time the Trustee is the Securities Registrar under the Trust Agreement. The
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Trustee shall comply with its obligations under Sections 311(a), 311(b)
and 312(b) of the Trust Indenture Act.
Section 2.03. Reports by the Trustee. Within 60 days after October 1 of each
year, the Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313(a) of the Trust Indenture Act, if any,
in the form and in the manner provided by Section 313 of the Trust Indenture
Act. The Trustee shall also comply with the other requirements of Section 313
of the Trust Indenture Act.
Section 2.04. Periodic Reports to Trustee. The Guarantor shall provide to the
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) in the form, in the manner and at the times
required by Section 314 of the Trust Indenture Act, and shall provide, within
120 days after the end of each fiscal year of the Guarantor, the compliance
certificate required by Section 314(a)(4) of the Trust Indenture Act in the
form and in the manner required by such Section.
Section 2.05. Evidence of Compliance with Conditions Precedent. The Guarantor
shall provide to the Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Guarantee Agreement that relate to any
of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
Section 2.06. Events of Default; Waiver. The Holders of a Majority in
liquidation amount of Preferred Securities may, by vote, on behalf of all of
the Holders, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured and not to have
existed, for every purpose of this Guarantee Agreement, but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon.
Section 2.07. Event of Default; Notice.
(a) The Trustee shall, within 90 days after the occurrence of an Event of
Default, transmit by mail, first-class postage prepaid, to the Holders, notices
of all Events of Default known to the Trustee, unless such defaults have been
cured before the giving of such notice, provided that the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders.
(b) The Trustee shall not be deemed to have knowledge of any Event of Default
unless the Trustee shall have received written notice, or a Responsible Officer
charged with the administration of the Trust Agreement shall have obtained
written notice, of such Event of Default.
Section 2.08. Conflicting Interests. The Trust Agreement, the Guarantee
Agreements dated as of June 1, 1998, September 15, 1998 and August 18, 1999,
between the Guarantor, as guarantor, and
4
<PAGE>
The Chase Manhattan Bank, as trustee, and the Amended and Restated Trust
Agreements dated as of June 1, 1998, September 15, 1998 and August 18, 1999,
among the Guarantor, as depositor, Chase Manhattan Bank Delaware, as Delaware
trustee, Robert T. Lucas III and S.L. Love, as administrative trustees, and The
Chase Manhattan Bank, as property trustee, shall be deemed to be specifically
described in this Guarantee Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
Powers, Duties and Rights of Trustee
Section 3.01. Powers and Duties of the Trustee.
(a) This Guarantee Agreement shall be held by the Trustee for the benefit of
the Holders, and the Trustee shall not transfer this Guarantee Agreement to any
Person unless the Trustee shall assign rights hereunder to a Holder to the
extent such assignment is necessary to exercise such Holder's rights pursuant
to Section 5.04 or to a Successor Trustee upon acceptance by such Successor
Trustee of its appointment to act as Successor Trustee. The right, title and
interest of the Trustee shall automatically vest in any Successor Trustee, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Trustee.
(b) If an Event of Default has occurred and is continuing, the Trustee shall
enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Trustee, before the occurrence of any Event of Default and after the
curing or waiving of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants shall be read into this Guarantee
Agreement against the Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.06), the Trustee shall
exercise such of the rights and powers vested in it by this Guarantee
Agreement, and use the same degree of care and skill in its exercise thereof,
as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the curing or
waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Trustee shall be determined solely by the
express provisions of this Guarantee Agreement, and the Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates
5
<PAGE>
or opinions furnished to the Trustee and conforming to the requirements of this
Guarantee Agreement; but in the case of any such certificates or opinions that
by any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Guarantee Agreement;
(ii) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Trustee 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 liquidation amount of the Preferred Securities
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur personal financial liability in
the performance of any of its duties or in the exercise of any of its rights or
powers, if the Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it under the
terms of this Guarantee Agreement or adequate indemnity against such risk or
liability is not reasonably assured to it.
Section 3.02. Certain Rights of Trustee.
(a) Subject to the provisions of Section 3.01:
(i) the Trustee may 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, debenture, note,
other evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties;
(ii) any direction or act of the Guarantor contemplated by this Guarantee
Agreement shall be sufficiently evidenced by an Officers' Certificate;
(iii) whenever, in the administration of this Guarantee Agreement, the Trustee
shall deem it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Guarantor;
(iv) the Trustee may consult with counsel of its choice, and the written advice
or opinion of such counsel with respect to legal matters 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 accordance with such advice or
opinion; such counsel may be counsel to the Guarantor or any of its Affiliates
and may include any of its employees; the Trustee shall have the right at any
time to seek instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction;
6
<PAGE>
(v) the Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Guarantee Agreement at the request or direction of
any Holder, unless such Holder shall have provided to the Trustee such adequate
security and indemnity as would satisfy a reasonable person in the position of
the Trustee, against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be requested by
the Trustee; provided that nothing contained in this Section 3.02(a)(v) shall
be taken to relieve the Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this Guarantee
Agreement;
(vi) the Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(vii) the Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys, and
the Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder; and
(viii) whenever in the administration of this Guarantee Agreement the Trustee
shall deem it desirable to receive instructions with respect to enforcing any
remedy or right or taking any other action hereunder, the Trustee (i) may
request instructions from the Holders, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received, and (iii) shall be protected in acting in accordance with such
instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any duty
or obligation on the Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it in any jurisdiction in
which it shall be illegal, or in which the Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power
or authority available to the Trustee shall be construed to be a duty.
Section 3.03. Compensation; Fees; Indemnity.
The Guarantor agrees:
(a) to pay to the Trustee from time to time reasonable compensation for all
services rendered by the Trustee hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust);
(b) except as otherwise expressly provided herein, to reimburse the Trustee
upon request for all reasonable expenses, disbursements and advances incurred
or made by the Trustee in accordance with any provision of this Guarantee
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 negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold the Trustee harmless against, any
and all loss, damage, claims, liability or expense incurred without negligence
or bad faith on its part, arising out of or in
7
<PAGE>
connection with the acceptance or administration of this Guarantee Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder.
The provisions of this Section 3.03 shall survive the termination of this
Guarantee Agreement.
ARTICLE IV
Trustee
Section 4.01. Trustee; Eligibility.
(a) There shall at all times be a Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of the United
States of America or any State or Territory thereof or of the District of
Columbia, or a corporation or Person permitted by the Securities and Exchange
Commission to act as an institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then, for the purposes of
this Section 4.01(a)(ii), 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.
(b) If at any time the Trustee shall cease to be eligible to so act under
Section 4.01(a), the Trustee shall immediately resign in the manner and with
the effect set out in Section 4.02(c).
(c) If the Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Trustee and Guarantor
shall in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act, subject to the rights of the Trustee under the penultimate
paragraph thereof.
Section 4.02. Appointment, Removal and Resignation of Trustee.
(a) Subject to Section 4.02(b), the Trustee may be appointed or removed without
cause at any time by the Guarantor.
(b) The Trustee shall not be removed until a Successor Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Trustee and delivered to the Guarantor.
(c) The Trustee appointed to office shall hold office until a Successor Trustee
shall have been appointed or until its removal or resignation. The Trustee may
resign from office (without need for
8
<PAGE>
prior or subsequent accounting) by an instrument in writing executed by the
Trustee and delivered to the Guarantor, which resignation shall not take effect
until a Successor Trustee has been appointed and has accepted such appointment
by instrument in writing executed by such Successor Trustee and delivered to
the Guarantor and the resigning Trustee.
(d) If no Successor Trustee shall have been appointed and accepted appointment
as provided in this Section 4.02 within 60 days after delivery to the Guarantor
of an instrument of resignation, the resigning Trustee may petition any court
of competent jurisdiction for appointment of a Successor Trustee. Such court
may thereupon, after prescribing such notice, if any, as it may deem proper,
appoint a Successor Trustee.
ARTICLE V
Guarantee
Section 5.01. Guarantee. The Guarantor irrevocably and unconditionally agrees
to pay in full to the Holders the Guarantee Payments (without duplication of
amounts theretofore paid by or on behalf of the Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which the Guarantor
may have or assert against any person. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Trust to pay such amounts to the
Holders.
Section 5.02. Waiver of Notice and Demand. The Guarantor hereby waives notice
of acceptance of this Guarantee Agreement and of any liability to which it
applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Trust or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
Section 5.03. Obligations Not Affected. The obligation of the Guarantor to make
the Guarantee Payments under this Guarantee Agreement shall in no way be
affected or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or otherwise, of the performance
or observance by the Trust of any express or implied agreement, covenant, term
or condition relating to the Preferred Securities to be performed or observed
by the Trust;
(b) the extension of time for the payment by the Trust of all or any portion of
the Distributions, Redemption Price, Liquidation Distribution or any other sums
payable under the terms of the Preferred Securities or the extension of time
for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Junior Subordinated Notes permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Trust granting indulgence or extension of any
kind;
9
<PAGE>
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust;
(e) any invalidity of, or defect or deficiency in, the Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or hereby
incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a legal
or equitable discharge or defense of a guarantor, it being the intent of this
Section 5.03 that the obligations of the Guarantor hereunder shall be absolute
and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the
foregoing.
Section 5.04. Rights of Holders. The Guarantor expressly acknowledges that: (i)
this Guarantee Agreement will be deposited with the Trustee to be held for the
benefit of the Holders; (ii) the Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority
in liquidation amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee in respect of this Guarantee Agreement or to direct the exercise of
any trust or power conferred upon the Trustee under this Guarantee Agreement,
provided that such direction shall not be in conflict with any rule of law or
with this Guarantee Agreement, and could not involve the Trustee in personal
liability in circumstances where reasonable indemnity would not be adequate;
and (iv) any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement, without first
instituting a legal proceeding against or requesting or directing that action
be taken by the Trustee or any other person; it being understood and intended
that no one or more of such Holders shall have any right in any manner
whatsoever by virtue of, or by availing of, any provision of this Guarantee
Agreement to affect, disturb or prejudice the rights of any other of such
Holders or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Guarantee Agreement, except
in the manner herein provided and for the equal and ratable benefit of all of
such Holders.
Section 5.05. Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not of collection. This Guarantee Agreement will not
be discharged except by payment of the Guarantee Payments in full (without
duplication) or upon the distribution of Junior Subordinated Notes to the
Holders in exchange for all of the Preferred Securities.
Section 5.06. Subrogation. The Guarantor shall be subrogated to all (if any)
rights of the Holders against the Trust in respect of any amounts paid to the
Holders by the Guarantor under this Guarantee Agreement; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts of Guarantee Payments are due
and unpaid under this Guarantee Agreement. If any amount shall be
10
<PAGE>
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
Section 5.07. Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Trust with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof.
ARTICLE VI
Subordination
Section 6.01. Subordination. This Guarantee Agreement will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other liabilities of the Guarantor, including the
Junior Subordinated Notes, except those obligations or liabilities made pari
passu or subordinate by their terms, (ii) pari passu with the most senior
preferred stock now or hereafter issued by the Guarantor, and (iii) senior to
all common stock of the Guarantor. This Guarantee Agreement ranks pari passu
with each other substantially similar guarantee agreement entered into by the
Guarantor in respect of trust or other preferred securities issued by an
Affiliate of the Guarantor.
ARTICLE VII
Termination
Section 7.01. Termination. This Guarantee Agreement shall terminate and be of
no further force and effect upon: (i) full payment of the Redemption Price of
all Preferred Securities, (ii) the distribution of Junior Subordinated Notes to
the Holders in exchange for all of the Preferred Securities, or (iii) full
payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Trust. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid with
respect to Preferred Securities or under this Guarantee Agreement.
ARTICLE VIII
Miscellaneous
Section 8.01. Successors and Assigns. All guarantees and agreements contained
in this Guarantee Agreement shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the benefit of
the Holders then outstanding. Except in connection with a consolidation,
merger, conveyance, transfer, or lease involving the Guarantor that is
permitted under Article Eight of the Indenture, the Guarantor shall not assign
its obligations hereunder.
Section 8.02. Amendments. Except with respect to any changes which do not
materially and adversely affect the rights of Holders (in which case no consent
of Holders will be required), this Guarantee Agreement may only be amended with
the prior approval of the Holders of not less than
11
<PAGE>
66 2/3% in liquidation amount of all the outstanding Preferred Securities. The
provisions of Article Six of the Trust Agreement concerning meetings of Holders
shall apply to the giving of such approval.
Section 8.03. Notices. Any notice, request or other communication required or
permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first-class mail as
follows:
(a) if given to the Guarantor, to the address set forth below or such other
address as the Guarantor may give notice of to the Trustee and the Holders:
Duke Capital Corporation
526 South Church Street
Charlotte, North Carolina 28202
Attention: Corporate Secretary
(b) if given to the Trust, in care of the Trustee, or to the Trustee at the
Trust's (and the Trustee's) address set forth below or such other address as
the Trustee on behalf of the Trust may give notice to the Holders:
Duke Capital Financing Trust [ ]
c/o The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Capital Markets Fiduciary Services
with a copy, in the case of a notice to the Trust (other than a notice from the
Guarantor), to the Guarantor.
(c) if given to any Holder, at the address set forth on the books and records
of the Trust.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first-class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
Section 8.04. Benefit. This Guarantee Agreement is solely for the benefit of
the Holders and, subject to Section 3.01(a), is not separately transferable
from the Preferred Securities.
Section 8.05. Interpretation. In this Guarantee Agreement, unless the context
otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined in the
preamble hereto have the respective meanings assigned to them in Section 1.01;
(b) a term defined anywhere in this Guarantee Agreement has the same meaning
throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee Agreement"
are to this Guarantee Agreement as modified, supplemented or amended from time
to time;
12
<PAGE>
(d) all references in this Guarantee Agreement to Articles and Sections are to
Articles and Sections of this Guarantee Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when used in
this Guarantee Agreement unless otherwise defined in this Guarantee Agreement
or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include the
masculine, feminine and neuter genders.
Section 8.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK. THE GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY
COURT IN THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK IN
ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN
CONNECTION WITH THIS GUARANTEE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE GUARANTOR HEREBY
WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN
ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY
SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING
IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER, OR THAT THIS GUARANTEE AGREEMENT OR ANY DOCUMENT OR ANY
INSTRUMENT REFERRED TO HEREIN OR THE SUBJECT MATTER HEREOF MAY NOT BE LITIGATED
IN OR BY SUCH COURTS. THE GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE MADE
UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN
THIS GUARANTEE AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK.
This instrument may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
13
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
Duke Capital Corporation
By: _________________________________
Name: _______________________________
Title: ______________________________
The Chase Manhattan Bank,
as Trustee
By: _________________________________
Name: _______________________________
Title: ______________________________
14
<PAGE>
EXHIBIT 5.1
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
December 7, 1999
Duke Capital Corporation
526 South Church Street
Charlotte, North Carolina 28202
Re: Registration Statement on Form S-3
----------------------------------
Dear Sirs:
We are acting as counsel to Duke Capital Corporation (the "Corporation") in
connection with the preparation of a Registration Statement on Form S-3 (the
"Registration Statement"), including a preliminary prospectus and preliminary
prospectus supplements, which is to be filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), for the registration under the Act of (1) Junior Subordinated Notes (the
"Junior Subordinated Notes") to be issued by the Corporation, (2) Trust
Preferred Securities (liquidation amount $ per Trust Preferred Security) to be
issued by Duke Capital Financing Trust IV, Duke Capital Financing Trust V and
Duke Capital Financing Trust VI, (3) the Corporation's Guarantees (as defined in
the Registration Statement) with respect to such Trust Preferred Securities and
(4) Senior Notes (the "Senior Notes") to be issued by the Corporation. The
Junior Subordinated Notes will be issued pursuant to supplemental indentures
between the Corporation and the trustee named therein (the "Subordinated
Supplemental Indentures") to the subordinated indenture, as supplemented,
between the Corporation and the trustee named therein (the "Subordinated
Indenture"), the Guarantees will be issued pursuant to separate guarantee
agreements between the Corporation and the trustee named therein (the "Guarantee
Agreements") and the Senior Notes will be issued pursuant to supplemental
indentures between the Corporation and the trustee named therein (the "Senior
Supplemental Indentures") to the senior indenture, as supplemented, between the
Corporation and the trustee named therein (the "Senior Indenture"), in each case
substantially in the respective forms filed as exhibits to the Registration
Statement.
We are of the opinion that, upon compliance with the pertinent provisions of
the Act and the Trust Indenture Act of 1939, as amended, upon compliance with
applicable securities or blue sky laws of various jurisdictions and upon the
adoption of appropriate resolutions by the Board of Directors of the Corporation
or a duly authorized committee thereof, when the Subordinated Supplemental
Indentures, the Guarantee Agreements and the Senior Supplemental Indentures have
been duly executed and delivered by the proper officers of the Corporation
<PAGE>
and the trustees named therein, and when the Junior Subordinated Notes, the
Guarantees and the Senior Notes have been executed, authenticated and delivered
in accordance with the terms of the Subordinated Indenture as supplemented by
the relevant Subordinated Supplemental Indenture, the relevant Guarantee
Agreement and the Senior Indenture as supplemented by the relevant Senior
Supplemental Indenture, as the case may be, the Junior Subordinated Notes, the
Guarantees and the Senior Notes will be valid, binding and legal obligations of
the Corporation (subject to applicable bankruptcy, moratorium and similar laws
from time to time in force and to general principles of equity, whether
considered in a proceeding at law or in equity).
The foregoing opinion is limited solely to the Federal laws of the United
States, the laws of the State of New York and the General Corporation Law of the
State of Delaware, and we are expressing no opinion as to the effect of the laws
of any other jurisdiction.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the statements with respect to our firm under the
caption "Validity of the Securities" in the Registration Statement. In giving
the foregoing consent, we do not hereby admit that we come within the category
of persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission thereunder.
Very truly yours,
/s/ Dewey Ballantine LLP
<PAGE>
Exhibit 5.2-A
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
Wilmington, Delaware 19899
December 7, 1999
Duke Capital Financing Trust IV
c/o Duke Capital Corporation
526 South Church Street
Charlotte, North Carolina 28202
Re: Duke Capital Financing Trust IV
-------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Duke Capital Corporation, a
Delaware corporation (the "Corporation"), and Duke Capital Financing Trust IV, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our examination
of documents has been limited to the examination of originals or copies of the
following:
(a) The Certificate of Trust of the Trust, dated September 25, 1998 as
filed with the office of the Secretary of State of the State of Delaware (the
"Secretary of State") on September 25, 1998;
(b) The Trust Agreement of the Trust, dated as of September 25, 1998
between the Corporation, as Depositor, and the trustee of the Trust named
therein;
(c) The Registration Statement (the "Registration Statement") on Form S-3,
including a preliminary prospectus
<PAGE>
(the "Prospectus") and form of prospectus supplement (the "Prospectus
Supplement"), relating to the % Trust Preferred Securities of the Trust
representing preferred undivided beneficial interests in the assets of the Trust
(each, a "Preferred Security" and collectively, the "Preferred Securities"),
filed by the Corporation, the Trust and others as set forth therein with the
Securities and Exchange Commission on or about December 7, 1999;
(d) A form of Amended and Restated Trust Agreement for the Trust, to be
entered into between the Corporation, the trustees of the Trust named therein,
and the holders, from time to time, of undivided beneficial interests in the
assets of the Trust (including Exhibits C and E thereto) (the "Trust
Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated December 7, 1999,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are used
as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other than
the documents listed in paragraphs (a) through (e) above. In particular, we have
not reviewed any document (other than the documents listed in paragraphs (a)
through (e) above) that is referred to in or incorporated by reference into the
documents reviewed by us. We have assumed that there exists no provision in any
document that we have not reviewed that is inconsistent with the opinions stated
herein. We have conducted no independent factual investigation of our own but
rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust Agreement
and the Certificate of Trust are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
creation or due organization or due formation, as the case may be, and valid
existence in good standing of each party to the documents examined by us under
the laws of the jurisdiction governing its creation, organization or formation,
(iii) the legal capacity of natural persons who are parties to the documents
examined by us, (iv) that each of the parties to the documents examined by us
has the power and authority to execute and deliver, and to perform its
obligations under, such documents, (v) the due authorization, execution and
delivery
2
<PAGE>
by all parties thereto of all documents examined by us, (vi) the receipt by each
Person to whom a Preferred Security is to be issued by the Trust (collectively,
the "Preferred Security Holders") of a Preferred Security Certificate for such
Preferred Security and the payment for such Preferred Security, in accordance
with the Trust Agreement and the Registration Statement, and (vii) that the
Preferred Securities are issued and sold to the Preferred Security Holders in
accordance with the Trust Agreement and the Registration Statement. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
This opinion is limited to the laws of the State of Delaware (excluding the
securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder which are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of law
and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act.
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the Trust, will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. In addition, we hereby
consent to the use of our name under the heading "Validity of the Securities" in
the Prospectus and the Prospectus Supplement. In giving the foregoing consents,
we do not thereby admit that we come within the category of persons whose
consent is required under Section 7 of the Securities Act of 1933, as amended,
or the rules and regulations of the Securities and Exchange Commission
thereunder. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other person
for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
<PAGE>
Exhibit 5.2-B
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
Wilmington, Delaware 19899
December 7, 1999
Duke Capital Financing Trust V
c/o Duke Capital Corporation
526 South Church Street
Charlotte, North Carolina 28202
Re: Duke Capital Financing Trust V
------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Duke Capital Corporation, a
Delaware corporation (the "Corporation"), and Duke Capital Financing Trust V,
a Delaware business trust (the "Trust"), in connection with the matters set
forth herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our examination
of documents has been limited to the examination of originals or copies of the
following:
(a) The Certificate of Trust of the Trust, dated September 25, 1998 as
filed with the office of the Secretary of State of the State of Delaware (the
"Secretary of State") on September 25, 1998;
(b) The Trust Agreement of the Trust, dated as of September 25, 1998
between the Corporation, as Depositor, and the trustee of the Trust named
therein;
(c) The Registration Statement (the "Registration Statement") on Form S-3,
including a preliminary prospectus
<PAGE>
(the "Prospectus") and form of prospectus supplement (the "Prospectus
Supplement"), relating to the % Trust Preferred Securities of the Trust
representing preferred undivided beneficial interests in the assets of the Trust
(each, a "Preferred Security" and collectively, the "Preferred Securities"),
filed by the Corporation, the Trust and others as set forth therein with the
Securities and Exchange Commission on or about December 7, 1999;
(d) A form of Amended and Restated Trust Agreement for the Trust, to be
entered into between the Corporation, the trustees of the Trust named therein,
and the holders, from time to time, of undivided beneficial interests in the
assets of the Trust (including Exhibits C and E thereto) (the "Trust
Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated December 7, 1999,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are used
as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other than
the documents listed in paragraphs (a) through (e) above. In particular, we have
not reviewed any document (other than the documents listed in paragraphs (a)
through (e) above) that is referred to in or incorporated by reference into the
documents reviewed by us. We have assumed that there exists no provision in any
document that we have not reviewed that is inconsistent with the opinions stated
herein. We have conducted no independent factual investigation of our own but
rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust Agreement
and the Certificate of Trust are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
creation or due organization or due formation, as the case may be, and valid
existence in good standing of each party to the documents examined by us under
the laws of the jurisdiction governing its creation, organization or formation,
(iii) the legal capacity of natural persons who are parties to the documents
examined by us, (iv) that each of the parties to the documents examined by us
has the power and authority to execute and deliver, and to perform its
obligations under, such documents, (v) the due authorization, execution and
delivery
2
<PAGE>
by all parties thereto of all documents examined by us, (vi) the receipt by each
Person to whom a Preferred Security is to be issued by the Trust (collectively,
the "Preferred Security Holders") of a Preferred Security Certificate for such
Preferred Security and the payment for such Preferred Security, in accordance
with the Trust Agreement and the Registration Statement, and (vii) that the
Preferred Securities are issued and sold to the Preferred Security Holders in
accordance with the Trust Agreement and the Registration Statement. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
This opinion is limited to the laws of the State of Delaware (excluding the
securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder which are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of law
and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act.
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the Trust, will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. In addition, we hereby
consent to the use of our name under the heading "Validity of the Securities" in
the Prospectus and the Prospectus Supplement. In giving the foregoing consents,
we do not thereby admit that we come within the category of persons whose
consent is required under Section 7 of the Securities Act of 1933, as amended,
or the rules and regulations of the Securities and Exchange Commission
thereunder. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other person
for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
<PAGE>
Exhibit 5.2-C
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
Wilmington, Delaware 19899
December 7, 1999
Duke Capital Financing Trust VI
c/o Duke Capital Corporation
526 South Church Street
Charlotte, North Carolina 28202
Re: Duke Capital Financing Trust VI
-------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Duke Capital Corporation, a
Delaware corporation (the "Corporation"), and Duke Capital Financing Trust VI,
a Delaware business trust (the "Trust"), in connection with the matters set
forth herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our examination
of documents has been limited to the examination of originals or copies of the
following:
(a) The Certificate of Trust of the Trust, dated August 24, 1999 as filed
with the office of the Secretary of State of the State of Delaware (the
"Secretary of State") on August 24, 1999;
(b) The Trust Agreement of the Trust, dated as of August 24, 1999 between
the Corporation, as Depositor, and the trustee of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on Form S-3,
including a preliminary prospectus
<PAGE>
(the "Prospectus") and form of prospectus supplement (the "Prospectus
Supplement"), relating to the % Trust Preferred Securities of the Trust
representing preferred undivided beneficial interests in the assets of the Trust
(each, a "Preferred Security" and collectively, the "Preferred Securities"),
filed by the Corporation, the Trust and others as set forth therein with the
Securities and Exchange Commission on or about December 7, 1999;
(d) A form of Amended and Restated Trust Agreement for the Trust, to be
entered into between the Corporation, the trustees of the Trust named therein,
and the holders, from time to time, of undivided beneficial interests in the
assets of the Trust (including Exhibits C and E thereto) (the "Trust
Agreement"), attached as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated December 7, 1999,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are used
as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other than
the documents listed in paragraphs (a) through (e) above. In particular, we have
not reviewed any document (other than the documents listed in paragraphs (a)
through (e) above) that is referred to in or incorporated by reference into the
documents reviewed by us. We have assumed that there exists no provision in any
document that we have not reviewed that is inconsistent with the opinions stated
herein. We have conducted no independent factual investigation of our own but
rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust Agreement
and the Certificate of Trust are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
creation or due organization or due formation, as the case may be, and valid
existence in good standing of each party to the documents examined by us under
the laws of the jurisdiction governing its creation, organization or formation,
(iii) the legal capacity of natural persons who are parties to the documents
examined by us, (iv) that each of the parties to the documents examined by us
has the power and authority to execute and deliver, and to perform its
obligations under, such documents, (v) the due authorization, execution and
delivery
2
<PAGE>
by all parties thereto of all documents examined by us, (vi) the receipt by each
Person to whom a Preferred Security is to be issued by the Trust (collectively,
the "Preferred Security Holders") of a Preferred Security Certificate for such
Preferred Security and the payment for such Preferred Security, in accordance
with the Trust Agreement and the Registration Statement, and (vii) that the
Preferred Securities are issued and sold to the Preferred Security Holders in
accordance with the Trust Agreement and the Registration Statement. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
This opinion is limited to the laws of the State of Delaware (excluding the
securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder which are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of law
and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act.
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the Trust, will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. In addition, we hereby
consent to the use of our name under the heading "Validity of the Securities" in
the Prospectus and the Prospectus Supplement. In giving the foregoing consents,
we do not thereby admit that we come within the category of persons whose
consent is required under Section 7 of the Securities Act of 1933, as amended,
or the rules and regulations of the Securities and Exchange Commission
thereunder. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other person
for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
<PAGE>
EXHIBIT 8
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
December 7, 1999
Duke Capital Corporation
526 South Church Street
Charlotte, North Carolina 28202
Re: Registration Statement on Form S-3
Dear Sirs:
We have acted as counsel to Duke Capital Corporation (the "Corporation") in
connection with the preparation of a Registration Statement on Form S-3 (the
"Registration Statement"), including a preliminary prospectus and preliminary
prospectus supplements, which is to be filed with the Securities and Exchange
Commission (the "Commission") for the registration under the Securities Act of
1933 (the "Securities Act"), of (1) Junior Subordinated Notes (the "Junior
Subordinated Notes") to be issued by the Corporation to Duke Capital Financing
Trust IV, Duke Capital Financing Trust V and Duke Capital Financing Trust VI
(the "Trusts"), (2) Trust Preferred Securities (liquidation amount $ per
Preferred Security) to be issued by the Trusts and (3) the Corporation's
Guarantees (as defined in the Registration Statement) with respect to such Trust
Preferred Securities. The Trusts will be organized pursuant to amended and
restated trust agreements between the Corporation and the trustees named
therein. The Junior Subordinated Notes will be issued pursuant to a subordinated
indenture, as supplemented, between the Corporation and the trustee named
therein and the Guarantees will be issued pursuant to guarantee agreements
between the Corporation and the trustee named therein, in each case
substantially in the respective forms filed as exhibits to the Registration
Statement.
On the basis and subject to the accuracy of the statements contained in the
materials referred to above, and our consideration of such other matters as we
have deemed necessary, it is our opinion that under current law the material
federal income tax consequences to holders of Trust Preferred Securities issued
by the Trusts will be as described under the heading "Material Federal Income
Tax Considerations" in the preliminary prospectus supplement relating thereto
constituting part of the Registration Statement. You have not requested, and we
do not express, an opinion concerning any other tax consequences of the issuance
by the Trusts of the Trust Preferred Securities. This opinion is not to be used,
circulated, quoted or otherwise referred to for any purpose without our express
written permission.
1
<PAGE>
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the statements with respect to our
firm in the section captioned "Material Federal Income Tax Considerations" in
the preliminary prospectus supplement relating to the Trust Preferred Securities
constituting part of the Registration Statement. In giving the foregoing
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act or the rules and
regulations of the Commission thereunder.
Very truly yours,
/s/ Dewey Ballantine LLP
2
<PAGE>
EXHIBIT 12
DUKE CAPITAL CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
Nine Months Ended Twelve Months Ended December 31,
September 30,
------------------- ------------------------------------------------
1999 1998 1998 1997(1) 1996(1) 1995(1) 1994(1)
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings Before Income
Taxes.................. $ 521 $ 578 $ 829 $ 637 $ 651 $ 572 $ 448
Fixed Charges........... 230 195 258 235 254 264 263
------- ------- ------- ----- ----- ----- -----
Total............... $ 751 $ 773 $1,087 $ 872 $ 905 $ 836 $ 711
======= ======= ======= ===== ===== ===== =====
Fixed Charges
Interest on debt....... $ 225 $ 189 $ 251 $ 224 $ 238 $ 253 $ 253
Interest component of
rentals............... 5 6 7 11 16 11 10
------- ------- ------- ----- ----- ----- -----
Fixed Charges....... $ 230 $ 195 $ 258 $ 235 $ 254 $ 264 $ 263
======= ======= ======= ===== ===== ===== =====
Ratio of Earnings to
Fixed Charges.......... 3.3 4.0 4.2 3.7 3.6 3.2 2.7
</TABLE>
- ----------------------
(1) Financial information reflects accounting for the combination with PanEnergy
Corp on June 30, 1997 similar to a pooling of interests. As a result, the
financial information gives effect to the combination as if it had occurred as
of January 1, 1994.
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to (i) the incorporation by reference in this Registration
Statement on Form S-3 of Duke Capital Corporation, (ii) the incorporation by
reference in Post-Effective Amendment No. 2 to Registration Statement
No. 333-71297 on Form S-3 of Duke Capital Corporation and (iii) the
incorporation by reference in Post-Effective Amendment No. 1 to Registration
Statement No. 333-85995 on Form S-3 of Duke Capital Corporation of our report
dated February 12, 1999, appearing in the annual report on Form 10-K of Duke
Capital Corporation for the year ended December 31, 1998 filed with the
Securities and Exchange Commission, and to the reference to us under the heading
"Experts" in the Prospectus which is a part of these Registration Statements.
/s/ DELOITTE & TOUCHE LLP
- -------------------------------
DELOITTE & TOUCHE LLP
Charlotte, North Carolina
December 7, 1999
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to (i) the incorporation by reference in this Registration
Statement on Form S-3 of Duke Capital Corporation, (ii) the incorporation by
reference in Post-Effective Amendment No. 2 to Registration Statement
No. 333-71297 on Form S-3 of Duke Capital Corporation and (iii) the
incorporation by reference in Post-Effective Amendment No. 1 to Registration
Statement No. 333-85995 on Form S-3 of Duke Capital Corporation of our report
dated January 16, 1997 on the consolidated balance sheet of PanEnergy Corp as of
December 31, 1996 and the related consolidated statements of income, common
stockholders' equity and cash flows for the years ended December 31, 1996 and
1995 appearing in the annual report on Form 10-K of PanEnergy Corp for the year
ended December 31, 1996 and to the reference to our firm under the heading
"Experts" in the Prospectus.
/s/ KPMG LLP
- ---------------------------
KPMG LLP
Houston, Texas
December 7, 1999
<PAGE>
EXHIBIT 24.1
DUKE CAPITAL CORPORATION
POWER OF ATTORNEY
-----------------
$2,000,000,000
Senior Notes
Junior Subordinated Notes
(Securities)
The undersigned DUKE CAPITAL CORPORATION, a Delaware corporation, and
certain of its officers and/or directors, do each hereby constitute and appoint
Richard J. Osborne, David L. Hauser and Robert T. Lucas III, and each of them,
to act as attorneys-in-fact for and in the respective names, places and stead of
the undersigned, to execute, seal, sign, and file with the Securities and
Exchange Commission a Registration Statement of said Duke Capital Corporation on
Form S-3 and any and all amendments thereto for the purpose of registering under
the Securities Act of 1933 the Securities, hereby granting to said attorneys-in-
fact, and each of them, full power and authority to do and perform all and every
act and thing whatsoever requisite, necessary, or proper to be done in and about
the premises, as fully to all intents and purposes as the undersigned, or any of
them, might or could do if personally present, hereby ratifying and approving
the acts of said attorneys-in-fact.
Executed the 5th day of November, 1999.
DUKE CAPITAL CORPORATION
By /s/ Richard B. Priory
-----------------------
President and
Chief Executive Officer
(Corporate Seal)
ATTEST:
/s/ Robert T. Lucas III
- -----------------------
Assistant Secretary
<PAGE>
/s/ Richard B. Priory President and Director
------------------ (Principal Executive Officer)
Richard B. Priory
/s/ Richard J. Osborne Vice President, Chief Financial Officer
------------------ and Director (Principal Financial Officer)
Richard J. Osborne
/s/ Sandra P. Meyer Controller
------------------ (Principal Accounting Officer)
Sandra P. Meyer
/s/ Fred J. Fowler (Director)
------------------
Fred J. Fowler
/s/ Robert S. Lilien (Director)
------------------
Robert S. Lilien
/s/ Harvey J. Padewer (Director)
------------------
Harvey J. Padewer
<PAGE>
EXHIBIT 24.2
DUKE CAPITAL CORPORATION
CERTIFICATE
The undersigned officer of DUKE CAPITAL CORPORATION, a Delaware
corporation (the "Corporation"), does hereby certify that attached hereto is a
true and complete copy of a resolution adopted by a written consent of the Board
of Directors of the Corporation with respect to the Registration Statement,
which resolution is presently in full force and effect.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and affixed
the seal of the Corporation this 7th day of December, 1999.
/s/ Robert T. Lucas III
----------------------------
Robert T. Lucas III
Assistant Secretary
(Corporate Seal)
FURTHER RESOLVED, that each officer and director who may be required to
execute such Registration Statement or any amendments thereto (whether on behalf
of the Corporation or as an officer or director thereof or by attesting the seal
of the Corporation or otherwise) be and hereby is authorized to execute a power
of attorney appointing Richard J. Osborne, David L. Hauser and Robert T. Lucas
III, and each of them, as true and lawful attorneys and agents to execute in his
name, place and stead (in any such capacity) such Registration Statement and any
and all amendments thereto and all instruments necessary or advisable in
connection therewith, to attest the seal of the Corporation thereon and to file
the same with the Securities and Exchange Commission, each of said attorneys and
agents to have power to act with or without the others and to have full power
and authority to do and perform in the name and on behalf of each of such
officers and directors, or both, as the case may be, every act whatsoever
necessary or advisable to be done in the premises as fully and to all intents
and purposes as any such officer or director might or could do in person;
<PAGE>
EXHIBIT 25.1
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM T-1
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) ________
_______________________________________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
____________________________________________
DUKE CAPITAL CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 56-0282142
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
526 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28202
(Address of principal executive offices) (Zip Code)
____________________________________________
SENIOR NOTES
(Title of the indenture securities)
_________________________________________________
<PAGE>
GENERAL
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.
New York State Banking Department, Suite 2310, 5 Empire State Plaza,
Albany, N.Y. 12223.
Board of Governors of the Federal Reserve System, 20th and C Street,
NW, Washington, D.C. 20551.
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y. 10045.
Federal Deposit Insurance Corporation, 550 Seventeenth Street, NW,
Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
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. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 18th day of November, 1999.
THE CHASE MANHATTAN BANK
By /s/ N. Rodriguez
------------------
N. Rodriguez
Trust Officer
-3-
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1999, in
accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the
Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ............................................ $ 13,119
Interest-bearing balances .................................... 6,761
Securities:
Held to maturity securities ....................................... 892
Available for sale securities ..................................... 42,965
Federal funds sold and securities purchased under
agreements to resell ......................................... 32,277
Loans and lease financing receivables:
Loans and leases, net of unearned income .......... $130,602
Less: Allowance for loan and lease losses ......... 2,551
Less: Allocated transfer risk reserve ............. 0
--------
Loans and leases, net of unearned income,
allowance and reserve ........................................ 128,051
Trading Assets .................................................... 41,426
Premises and fixed assets (including capitalized
leases) ...................................................... 3,190
Other real estate owned ........................................... 28
Investments in unconsolidated subsidiaries and
associated companies ......................................... 182
Customers' liability to this bank on acceptances
outstanding .................................................. 901
Intangible assets ................................................. 2,010
Other assets ...................................................... 14,567
--------
TOTAL ASSETS ...................................................... $286,369
========
</TABLE>
- 4 -
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices .................................................... $ 101,979
Noninterest-bearing ......................................... $ 42,241
Interest-bearing ............................................ 59,738
---------
In foreign offices, Edge and Agreement,
subsidiaries and IBF's ................................................. 76,395
Noninterest-bearing............................................ $ 4,645
Interest-bearing .............................................. 71,750
Federal funds purchased and securities sold under agreements to repurchase... 36,604
Demand notes issued to the U.S. Treasury .................................... 1,001
Trading liabilities ......................................................... 30,287
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less .......................... 3,606
With a remaining maturity of more than one year through three years .... 14
With a remaining maturity of more than three years ..................... 91
Bank's liability on acceptances executed and outstanding .................... 901
Subordinated notes and debentures ........................................... 5,427
Other liabilities ........................................................... 11,247
TOTAL LIABILITIES ........................................................... 267,552
---------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ............................... 0
Common stock ................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ................... 11,016
Undivided profits and capital reserves ...................................... 7,317
Net unrealized holding gains (losses)
on available-for-sale securities ............................................ (743)
Accumulated net gains (losses) on cash flow hedges........................... 0
Cumulative foreign currency translation adjustments ......................... 16
TOTAL EQUITY CAPITAL ........................................................ 18,817
---------
TOTAL LIABILITIES AND EQUITY CAPITAL ........................................ $ 286,369
=========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
WILLIAM B. HARRISON, JR. ) DIRECTORS
FRANK A. BENNACK, JR. )
-5-
<PAGE>
Exhibit 25.2
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM T-1
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) ________
---------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
- --------------------------------------------------------------------------------
DUKE CAPITAL CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 56-0282142
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
526 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28202
(Address of principal executive offices) (Zip Code)
--------------------------------------------
JUNIOR SUBORDINATED NOTES
(Title of the indenture securities)
------------------------------------------------
<PAGE>
GENERAL
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.
New York State Banking Department, Suite 2310, 5 Empire State Plaza,
Albany, N.Y. 12223.
Board of Governors of the Federal Reserve System, 20th and C Street,
NW, Washington, D.C. 20551.
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y. 10045.
Federal Deposit Insurance Corporation, 550 Seventeenth Street,
NW, Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
50010, which is incorporated by reference. On July 14, 1996, in connection with
the merger of Chemical Bank and The Chase Manhattan Bank (National Association),
Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank).
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. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 18th day of November, 1999.
THE CHASE MANHATTAN BANK
By /s/ N. Rodriguez
-------------------
N. Rodriguez
Trust Officer
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1999, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
ASSETS IN MILLIONS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.............. $ 13,119
Interest-bearing balances....................................... 6,761
Securities:
Held to maturity securities....................................... 892
Available for sale securities..................................... 42,965
Federal funds sold and securities purchased under agreements
to resell....................................................... 32,277
Loans and lease financing receivables:
Loans and leases, net of unearned income ...............$130,602
Less: Allowance for loan and lease losses .............. 2,551
Less: Allocated transfer risk reserve................... 0
--------
Loans and leases, net of unearned income, allowance
and reserve..................................................... 128,051
Trading Assets.................................................... 41,426
Premises and fixed assets (including capitalized leases).......... 3,190
Other real estate owned........................................... 28
Investments in unconsolidated subsidiaries and associated
companies....................................................... 182
Customers' liability to this bank on acceptances outstanding...... 901
Intangible assets................................................. 2,010
Other assets...................................................... 14,567
--------
TOTAL ASSETS...................................................... $286,369
========
-4-
<PAGE>
LIABILITIES
Deposits:
In domestic offices ........................................ $101,979
Noninterest-bearing ............................... $42,241
Interest-bearing .................................. 59,738
------
In foreign offices, Edge and Agreement, subsidiaries
and IBF's ................................................ 76,395
Noninterest-bearing ............................... $ 4,645
Interest-bearing .................................. 71,750
Federal funds purchased and securities sold under agreements
to repurchase ................................................ 36,604
Demand notes issued to the U.S. Treasury ........................ 1,001
Trading liabilities ............................................. 30,287
Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
With a remaining maturity of one year or less .............. 3,606
With a remaining maturity of more than one year through
three years .............................................. 14
With a remaining maturity of more than three years ......... 91
Bank's liability on acceptances executed and outstanding ........ 901
Subordinated notes and debentures ............................... 5,427
Other liabilities ............................................... 11,247
TOTAL LIABILITIES ............................................... 267,552
---------
EQUITY CAPITAL
Perpetual preferred stock and related surplus .................. 0
Common stock ................................................... 1,211
Surplus (exclude all surplus related to preferred stock) ...... 11,016
Undivided profits and capital reserves ......................... 7,317
Net unrealized holding gains (losses) on available-for-sale
securities .................................................. (743)
Accumulated net gains (losses) on cash flow hedges ............. 0
Cumulative foreign currency translation adjustments ............ 16
TOTAL EQUITY CAPITAL ........................................... 18,817
--------
TOTAL LIABILITIES AND EQUITY CAPITAL ........................... $286,369
========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
WILLIAM B. HARRISON, JR.) DIRECTORS
FRANK A. BENNACK, JR. )
-5-
<PAGE>
Exhibit 25.3-A
___________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM T-1
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) ________
________________________________________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
____________________________________________
DUKE CAPITAL FINANCING TRUST IV
(Exact name of obligor as specified in its charter)
DELAWARE 62-6349496
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
526 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28202
(Address of principal executive offices) (Zip Code)
--------------------------------------------
PREFERRED SECURITIES
(Title of the indenture securities)
-------------------------------------------------------
<PAGE>
GENERAL
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.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, N.Y. 12223.
Board of Governors of the Federal Reserve System, 20th and
C Street, NW, Washington, D.C. 20551.
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y. 10045.
Federal Deposit Insurance Corporation, 550 Seventeenth Street, NW,
Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
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. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 18th day of November, 1999.
THE CHASE MANHATTAN BANK
By: /s/ N. Rodriguez
-----------------
N. Rodriguez
Trust Officer
-3-
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1999, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin............................................ $ 13,119
Interest-bearing balances.................................... 6,761
Securities:
Held to maturity securities...................................... 892
Available for sale securities.................................... 42,965
Federal funds sold and securities purchased under
agreements to resell......................................... 32,277
Loans and lease financing receivables:
Loans and leases, net of unearned income.... $130,602
Less: Allowance for loan and lease losses... 2,551
Less: Allocated transfer risk reserve....... 0
--------
Loans and leases, net of unearned income,
allowance and reserve........................................ 128,051
Trading Assets................................................... 41,426
Premises and fixed assets (including capitalized
leases)...................................................... 3,190
Other real estate owned.......................................... 28
Investments in unconsolidated subsidiaries and
associated companies......................................... 182
Customers' liability to this bank on acceptances
outstanding.................................................. 901
Intangible assets................................................ 2,010
Other assets..................................................... 14,567
---------
TOTAL ASSETS..................................................... $ 286,369
=========
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices................................. $101,979
Noninterest-bearing........................$42,241
Interest-bearing........................... 59,738
------
In foreign offices, Edge and Agreement,
subsidiaries and IBF's.............................. 76,395
Noninterest-bearing........................$ 4,645
Interest-bearing........................... 71,750
Federal funds purchased and securities sold under agree-
ments to repurchase..................................... 36,604
Demand notes issued to the U.S. Treasury................ 1,001
Trading liabilities..................................... 30,287
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less....... 3,606
With a remaining maturity of more than one year
through three years............................. 14
With a remaining maturity of more
than three years................................ 91
Bank's liability on acceptances executed and outstanding 901
Subordinated notes and debentures....................... 5,427
Other liabilities....................................... 11,247
TOTAL LIABILITIES....................................... 267,552
-------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock............................................ 1,211
Surplus (exclude all surplus related to preferred stock) 11,016
Undivided profits and capital reserves.................. 7,317
Net unrealized holding gains (losses)
on available-for-sale securities........................ (743)
Accumulated net gains (losses) on cash flow hedges...... 0
Cumulative foreign currency translation adjustments..... 16
TOTAL EQUITY CAPITAL.................................... 18,817
--------
TOTAL LIABILITIES AND EQUITY CAPITAL.................... $286,369
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
WILLIAM B. HARRISON, JR. ) DIRECTORS
FRANK A. BENNACK, JR. )
-5-
<PAGE>
Exhibit 25.3-B
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM T-1
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) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
- -------------------------------------------------------------------------------
DUKE CAPITAL FINANCING TRUST V
(Exact name of obligor as specified in its charter)
DELAWARE 62-6349495
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
526 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28202
(Address of principal executive offices) (Zip Code)
----------------------------------------------------
PREFERRED SECURITIES
(Title of the indenture securities)
-------------------------------------------------------------
<PAGE>
GENERAL
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.
New York State Banking Department, Suite 2310, 5 Empire Street
Plaza, Albany, N.Y. 12223.
Board of Governors of the Federal Reserve System, 20th and
C Street, NW, Washington, D.C. 20551.
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y. 10045.
Federal Deposit Insurance Corporation, 550 Seventeenth Street,
NW, Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
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. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 18th day of November, 1999.
THE CHASE MANHATTAN BANK
By /s/ N. Rodriguez
---------------------
N. Rodriguez
Trust Officer
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1999, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
ASSETS IN MILLIONS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.............. $ 13,119
Interest-bearing balances....................................... 6,761
Securities:
Held to maturity securities....................................... 892
Available for sale securities..................................... 42,965
Federal funds sold and securities purchased under agreements
to resell....................................................... 32,277
Loans and lease financing receivables:
Loans and leases, net of unearned income ...............$130,602
Less: Allowance for loan and lease losses .............. 2,551
Less: Allocated transfer risk reserve................... 0
--------
Loans and leases, net of unearned income, allowance
and reserve..................................................... 128,051
Trading Assets.................................................... 41,426
Premises and fixed assets (including capitalized leases).......... 3,190
Other real estate owned........................................... 28
Investments in unconsolidated subsidiaries and associated
companies....................................................... 182
Customers' liability to this bank on acceptances outstanding...... 901
Intangible assets................................................. 2,010
Other assets...................................................... 14,567
--------
TOTAL ASSETS...................................................... $286,369
========
-4-
<PAGE>
LIABILITIES
Deposits:
In domestic offices ........................................ $101,979
Noninterest-bearing ............................... $42,241
Interest-bearing .................................. 59,738
------
In foreign offices, Edge and Agreement, subsidiaries and
IBF's ................................................... 76,395
Noninterest-bearing ............................... $ 4,645
Interest-bearing .................................. 71,750
Federal funds purchased and securities sold under agreements
to repurchase ................................................ 36,604
Demand notes issued to the U.S. Treasury ........................ 1,001
Trading liabilities ............................................. 30,287
Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
With a remaining maturity of one year or less .............. 3,606
With a remaining maturity of more than one year through
three years ............................................. 14
With a remaining maturity of more than three years ......... 91
Bank's liability on acceptances executed and outstanding ........ 901
Subordinated notes and debentures ............................... 5,427
Other liabilities ............................................... 11,247
TOTAL LIABILITIES ............................................... 267,552
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus .................. 0
Common stock ................................................... 1,211
Surplus (exclude all surplus related to preferred stock) ...... 11,016
Undivided profits and capital reserves ......................... 7,317
Net unrealized holding gains (losses) on available-for-sale
securities................................................... (743)
Accumulated net gains (losses) on cash flow hedges.............. 0
Cumulative foreign currency translation adjustments ............ 16
TOTAL EQUITY CAPITAL ........................................... 18,817
-------
TOTAL LIABILITIES AND EQUITY CAPITAL ........................... $286,369
========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
WILLIAM B. HARRISON, JR. ) DIRECTORS
FRANK A. BENNACK, JR. )
-5-
<PAGE>
Exhibit 25.3-C
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM T-1
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) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
- --------------------------------------------------------------------------------
DUKE CAPITAL FINANCING TRUST VI
(Exact name of obligor as specified in its charter)
DELAWARE 52-7011988
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
526 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28202
(Address of principal executive offices) (Zip Code)
--------------------------------------------
PREFERRED SECURITIES
(Title of the indenture securities)
-------------------------------------------------------------
<PAGE>
GENERAL
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.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, N.Y. 12223.
Board of Governors of the Federal Reserve System, 20th and
C Street, NW, Washington, D.C. 20551.
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y. 10045.
Federal Deposit Insurance Corporation, 550 Seventeenth Street,
NW, Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
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. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 18th day of November, 1999.
THE CHASE MANHATTAN BANK
By /s/ N. Rodriguez
--------------------
N. Rodriguez
Trust Officer
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1999, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
ASSETS IN MILLIONS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.............. $ 13,119
Interest-bearing balances....................................... 6,761
Securities:
Held to maturity securities....................................... 892
Available for sale securities..................................... 42,965
Federal funds sold and securities purchased under agreements
to resell....................................................... 32,277
Loans and lease financing receivables:
Loans and leases, net of unearned income ...............$130,602
Less: Allowance for loan and lease losses .............. 2,551
Less: Allocated transfer risk reserve................... 0
--------
Loans and leases, net of unearned income, allowance
and reserve..................................................... 128,051
Trading Assets.................................................... 41,426
Premises and fixed assets (including capitalized leases).......... 3,190
Other real estate owned........................................... 28
Investments in unconsolidated subsidiaries and associated
companies....................................................... 182
Customers' liability to this bank on acceptances outstanding...... 901
Intangible assets................................................. 2,010
Other assets...................................................... 14,567
--------
TOTAL ASSETS...................................................... $286,369
========
-4-
<PAGE>
LIABILITIES
Deposits:
In domestic offices ...................................... $101,979
Noninterest-bearing ............................. $42,241
Interest-bearing ................................ 59,738
------
In foreign offices, Edge and Agreement, subsidiaries
and IBF's .............................................. 76,395
Noninterest-bearing ............................. $ 4,645
Interest-bearing ................................ 71,750
Federal funds purchased and securities sold under agreements
to repurchase .............................................. 36,604
Demand notes issued to the U.S. Treasury ...................... 1,001
Trading liabilities ........................................... 30,287
Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
With a remaining maturity of one year or less ............ 3,606
With a remaining maturity of more than one year through
three years ............................................ 14
With a remaining maturity of more than three years ....... 91
Bank's liability on acceptances executed and outstanding ...... 901
Subordinated notes and debentures ............................. 5,427
Other liabilities ............................................. 11,247
TOTAL LIABILITIES ............................................. 267,552
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ................ 0
Common stock ................................................. 1,211
Surplus (exclude all surplus related to preferred stock) .... 11,016
Undivided profits and capital reserves ....................... 7,317
Net unrealized holding gains (losses) on
available-for-sale securities .............................. (743)
Accumulated net gains (losses) on cash flow hedges............ 0
Cumulative foreign currency translation adjustments .......... 16
TOTAL EQUITY CAPITAL ......................................... 18,817
-------
TOTAL LIABILITIES AND EQUITY CAPITAL ......................... $286,369
========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
WILLIAM B. HARRISON, JR.) DIRECTORS
FRANK A. BENNACK, JR. )
-5-
<PAGE>
Exhibit 25.4-A
___________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM T-1
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) ________
________________________________________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
____________________________________________
DUKE CAPITAL CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 62-6349496
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
526 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28202
(Address of principal executive offices) (Zip Code)
------------------------------------------
PREFERRED SECURITIES GUARANTEE
(DUKE CAPITAL FINANCING TRUST IV)
(Title of the indenture securities)
____________________________________________________________
<PAGE>
GENERAL
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.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, N.Y. 12223.
Board of Governors of the Federal Reserve System, 20th and C
Street, NW, Washington, D.C. 20551.
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y. 10045.
Federal Deposit Insurance Corporation, 550 Seventeenth Street,
NW, Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
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. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 18th day of November, 1999.
THE CHASE MANHATTAN BANK
By: /s/ N. Rodriguez
------------------
N. Rodriguez
Trust Officer
-3-
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1999, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin............................................ $ 13,119
Interest-bearing balances.................................... 6,761
Securities:
Held to maturity securities...................................... 892
Available for sale securities.................................... 42,965
Federal funds sold and securities purchased under
agreements to resell......................................... 32,277
Loans and lease financing receivables:
Loans and leases, net of unearned income.... $130,602
Less: Allowance for loan and lease losses... 2,551
Less: Allocated transfer risk reserve....... 0
--------
Loans and leases, net of unearned income,
allowance and reserve........................................ 128,051
Trading Assets................................................... 41,426
Premises and fixed assets (including capitalized
leases)...................................................... 3,190
Other real estate owned.......................................... 28
Investments in unconsolidated subsidiaries and
associated companies......................................... 182
Customers' liability to this bank on acceptances
outstanding.................................................. 901
Intangible assets................................................ 2,010
Other assets..................................................... 14,567
------
TOTAL ASSETS..................................................... $ 286,369
=========
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
In domestic offices................................... $101,979
Noninterest-bearing......................$42,241
Interest-bearing......................... 59,738
------
In foreign offices, Edge and Agreement,
subsidiaries and IBF's................................ 76,395
Noninterest-bearing........................$ 4,645
Interest-bearing........................... 71,750
Federal funds purchased and securities sold under agree-
ments to repurchase....................................... 36,604
Demand notes issued to the U.S. Treasury.................. 1,001
Trading liabilities....................................... 30,287
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less......... 3,606
With a remaining maturity of more than one year
through three years............................... 14
With a remaining maturity of more
than three years.................................. 91
Bank's liability on acceptances executed and outstanding.. 901
Subordinated notes and debentures......................... 5,427
Other liabilities......................................... 11,247
TOTAL LIABILITIES......................................... 267,552
-------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock.............................................. 1,211
Surplus (exclude all surplus related to preferred stock).. 11,016
Undivided profits and capital reserves.................... 7,317
Net unrealized holding gains (losses)
on available-for-sale securities.......................... (743)
Accumulated net gains (losses) on cash flow hedges........ 0
Cumulative foreign currency translation adjustments....... 16
TOTAL EQUITY CAPITAL...................................... 18,817
--------
TOTAL LIABILITIES AND EQUITY CAPITAL...................... $286,369
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
WILLIAM B. HARRISON, JR.) DIRECTORS
FRANK A. BENNACK, JR. )
-5-
<PAGE>
Exhibit 25.4-B
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM T-1
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) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
- --------------------------------------------------------------------------------
DUKE CAPITAL CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 62-6349495
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
526 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28202
(Address of principal executive offices) (Zip Code)
------------------------------------------------------------
PREFERRED SECURITIES GUARANTEE
(DUKE CAPITAL FINANCING TRUST V)
(Title of the indenture securities)
----------------------------------------------------------------------
<PAGE>
GENERAL
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.
New York State Banking Department, Suite 2310, 5 Empire State
Plaza, Albany, N.Y. 12223.
Board of Governors of the Federal Reserve System, 20th and
C Street, NW, Washington, D.C. 20551.
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y. 10045.
Federal Deposit Insurance Corporation, 550 Seventeenth Street, NW,
Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
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. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 18th day of November, 1999.
THE CHASE MANHATTAN BANK
By /s/ N. Rodriguez
-----------------
N. Rodriguez
Trust Officer
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1999, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
ASSETS IN MILLIONS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.............. $ 13,119
Interest-bearing balances....................................... 6,761
Securities:
Held to maturity securities....................................... 892
Available for sale securities..................................... 42,965
Federal funds sold and securities purchased under agreements
to resell....................................................... 32,277
Loans and lease financing receivables:
Loans and leases, net of unearned income ...............$130,602
Less: Allowance for loan and lease losses .............. 2,551
Less: Allocated transfer risk reserve................... 0
--------
Loans and leases, net of unearned income, allowance
and reserve..................................................... 128,051
Trading Assets.................................................... 41,426
Premises and fixed assets (including capitalized leases).......... 3,190
Other real estate owned........................................... 28
Investments in unconsolidated subsidiaries and associated
companies....................................................... 182
Customers' liability to this bank on acceptances outstanding...... 901
Intangible assets................................................. 2,010
Other assets...................................................... 14,567
--------
TOTAL ASSETS...................................................... $286,369
========
-4-
<PAGE>
LIABILITIES
Deposits:
In domestic offices ....................................... $101,979
Noninterest-bearing ............................... $42,241
Interest-bearing .................................. 59,738
------
In foreign offices, Edge and Agreement, subsidiaries
and IBF's .............................................. 76,395
Noninterest-bearing .............................. $ 4,645
Interest-bearing ................................. 71,750
Federal funds purchased and securities sold under agreements to
repurchase .................................................. 36,604
Demand notes issued to the U.S. Treasury ....................... 1,001
Trading liabilities ............................................ 30,287
Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
With a remaining maturity of one year or less ............. 3,606
With a remaining maturity of more than one year through
three years ............................................. 14
With a remaining maturity of more than three years ........ 91
Bank's liability on acceptances executed and outstanding ....... 901
Subordinated notes and debentures .............................. 5,427
Other liabilities .............................................. 11,247
TOTAL LIABILITIES .............................................. 267,552
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus .................. 0
Common stock ................................................... 1,211
Surplus (exclude all surplus related to preferred stock) ...... 11,016
Undivided profits and capital reserves ......................... 7,317
Net unrealized holding gains (losses) on available-for-sale
securities .................................................. (743)
Accumulated net gains (losses) on cash flow hedges ............. 0
Cumulative foreign currency translation adjustments ............ 16
TOTAL EQUITY CAPITAL ........................................... 18,817
-------
TOTAL LIABILITIES AND EQUITY CAPITAL ........................... $286,369
========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
WILLIAM B. HARRISON, JR.) DIRECTORS
FRANK A. BENNACK, JR. )
-5-
<PAGE>
Exhibit 25.4-C
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM T-1
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) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
- --------------------------------------------------------------------------------
DUKE CAPITAL CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 52-7011988
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
526 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28202
(Address of principal executive offices) (Zip Code)
-------------------------------------------
PREFERRED SECURITIES GUARANTEE
(DUKE CAPITAL FINANCING TRUST VI)
(Title of the indenture securities)
<PAGE>
GENERAL
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.
New York State Banking Department, Suite 2310, Empire State
Plaza, Albany, N.Y. 12223.
Board of Governors of the Federal Reserve System, 20th and C
Street, NW, Washington, D.C. 20551.
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y. 10045.
Federal Deposit Insurance Corporation, 550 Seventeenth Street,
NW, Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
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. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 18th day of November, 1999.
THE CHASE MANHATTAN BANK
By /s/ N. Rodriguez
----------------
N. Rodriguez
Trust Officer
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1999, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
ASSETS IN MILLIONS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.............. $ 13,119
Interest-bearing balances....................................... 6,761
Securities:
Held to maturity securities....................................... 892
Available for sale securities..................................... 42,965
Federal funds sold and securities purchased under agreements
to resell....................................................... 32,277
Loans and lease financing receivables:
Loans and leases, net of unearned income ...............$130,602
Less: Allowance for loan and lease losses .............. 2,551
Less: Allocated transfer risk reserve................... 0
--------
Loans and leases, net of unearned income, allowance
and reserve..................................................... 128,051
Trading Assets.................................................... 41,426
Premises and fixed assets (including capitalized leases).......... 3,190
Other real estate owned........................................... 28
Investments in unconsolidated subsidiaries and associated
companies....................................................... 182
Customers' liability to this bank on acceptances outstanding...... 901
Intangible assets................................................. 2,010
Other assets...................................................... 14,567
--------
TOTAL ASSETS...................................................... $286,369
========
-4-
<PAGE>
LIABILITIES
Deposits:
In domestic offices ................................... $101,979
Noninterest-bearing ........................... $42,241
Interest-bearing .............................. 59,738
------
In foreign offices, Edge and Agreement, subsidiaries
and IBF's .......................................... 76,395
Noninterest-bearing ........................... $ 4,645
Interest-bearing .............................. 71,750
Federal funds purchased and securities sold under agreements
to repurchase .......................................... 36,604
Demand notes issued to the U.S. Treasury ................... 1,001
Trading liabilities ........................................ 30,287
Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
With a remaining maturity of one year or less ......... 3,606
With a remaining maturity of more than one year
through three years................. ................ 14
With a remaining maturity of more than three years .... 91
Bank's liability on acceptances executed and outstanding ... 901
Subordinated notes and debentures .......................... 5,427
Other liabilities .......................................... 11,247
TOTAL LIABILITIES .......................................... 267,552
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus .............. 0
Common stock ............................................... 1,211
Surplus (exclude all surplus related to preferred stock) .. 11,016
Undivided profits and capital reserves ..................... 7,317
Net unrealized holding gains (losses) on available-for-sale
securities .............................................. (743)
Accumulated net gains (losses) on cash flow hedges.......... 0
Cumulative foreign currency translation adjustments ........ 16
TOTAL EQUITY CAPITAL ....................................... 18,817
--------
TOTAL LIABILITIES AND EQUITY CAPITAL ....................... $286,369
========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
WILLIAM B. HARRISON, JR. ) DIRECTORS
FRANK A. BENNACK, JR. )
-5-
