<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 16, 1996
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 333-02571
POST-EFFECTIVE AMENDMENT NO. 2 TO REGISTRATION STATEMENT NO. 33-50543
REGISTRATION STATEMENT NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT
and
POST-EFFECTIVE AMENDMENTS
under
THE SECURITIES ACT OF 1933
------------------
DUKE POWER COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
NORTH CAROLINA 56-0205520
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
422 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28242-0001
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
704-594-0887
(REGISTRANT'S TELEPHONE NUMBER)
------------------
<TABLE>
<S> <C>
RICHARD J. OSBORNE JOHN SPUCHES
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER DEWEY BALLANTINE
422 SOUTH CHURCH STREET 1301 AVENUE OF THE AMERICAS
CHARLOTTE, NORTH CAROLINA 28242-0001 NEW YORK, NEW YORK 10019-6092
TELEPHONE NO. 704-382-5159 TELEPHONE NO. 212-259-7700
</TABLE>
(NAMES, ADDRESSES AND TELEPHONE NUMBERS OF AGENTS FOR SERVICE)
------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement
as determined by market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, 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>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------
First and Refunding Mortgage Bonds; Debt Securities... $1,000,000,000(1)(2) $100(3)
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$1,000,000,000. If any such securities are issued at an original issue
discount, then the aggregate initial offering price as so discounted shall
not exceed $1,000,000,000, notwithstanding that the stated principal amount
of such securities may exceed such amount.
(2) Subject to footnote (1), there are being registered hereunder an
indeterminate principal amount of First and Refunding Mortgage Bonds and an
indeterminate principal amount of unsecured debt securities ("Debt
Securities"), such Debt Securities to consist of an indeterminate principal
amount of Senior Notes and an indeterminate principal amount of Subordinated
Debentures, as may be sold at indeterminate prices, from time to time, by
the Registrant.
(3) The minimum registration fee prescribed by Section 6(b) of the Securities
Act of 1933 is being paid because, as explained below, the registration fee
applicable for a maximum aggregate offering price of $1,000,000,000 of First
and Refunding Mortgage Bonds has heretofore been paid.
------------------
Pursuant to Rule 429 of the General Rules and Regulations under the
Securities Act of 1933, the Prospectus which is part of this Registration
Statement constitutes a combined Prospectus which also relates to Post-Effective
Amendment No. 1 to Registration Statement No. 333-02571, previously filed by the
Registrant on Form S-3, as to which First and Refunding Mortgage Bonds having an
aggregate offering price of $700,000,000 (for which a registration fee of
$241,381 was paid) remain unsold and to Post-Effective Amendment No. 2 to
Registration Statement No. 33-50543, previously filed by the Registrant on Form
S-3, as to which First and Refunding Mortgage Bonds having an aggregate offering
price of $300,000,000 (for which a registration fee of $93,750 was paid) remain
unsold. Each such Post-Effective Amendment shall become effective concurrently
with the effectiveness of this Registration Statement in accordance with Section
8(c) of the Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT 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 COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION
DATED OCTOBER 16, 1996
PROSPECTUS
DUKE POWER COMPANY
FIRST AND REFUNDING MORTGAGE BONDS
DEBT SECURITIES
Duke Power Company (the "Company") may offer, from time to time, up to
$1,000,000,000 aggregate principal amount of its First and Refunding Mortgage
Bonds (the "New Bonds"), in one or more series, and its Debt Securities (the
"Debt Securities"), consisting of Senior Notes (the "Senior Notes"), in one or
more series, and Subordinated Debentures (the "Subordinated Debentures"), in one
or more series, on terms to be determined at the time or times of sale. The New
Bonds will be issued under, and secured by, a mortgage which constitutes a lien
on substantially all of the properties and franchises of the Company. The Senior
Notes and the Subordinated Debentures will be unsecured, and the indentures
under which they are to be issued contain no limitations on the issuance by the
Company of other indebtedness (whether secured or unsecured). The Senior Notes
will rank equally and ratably with all other unsecured and unsubordinated
indebtedness of the Company. The Subordinated Debentures will be subordinated to
all Senior Indebtedness (as hereinafter defined) of the Company. Certain series
of Subordinated Debentures may also be subordinated to other series of
Subordinated Debentures. See "Description of the Debt Securities."
For each offering of New Bonds (the "Offered Bonds"), Senior Notes (the
"Offered Notes") or Subordinated Debentures (the "Offered Debentures")
(collectively, the "Offered Securities") for which this Prospectus is being
delivered, there will be an accompanying Prospectus Supplement (the "Prospectus
Supplement") that sets forth the specific designation, aggregate principal
amount, maturity or maturities, rate or rates and times of payment of interest,
sinking fund provisions, redemption terms and any other special terms of the
Offered Securities, and any planned listing thereof on a securities exchange
(although no assurance can be given as to the liquidity of, or the trading
market for, any of the Offered Securities).
The Company may sell the Offered Securities to or through underwriters or
dealers, directly to other purchasers or through agents. The names of any
underwriters, dealers or agents involved in the distribution of the Offered
Securities, any applicable discounts, commissions or allowances, any initial
public offering price and the proceeds to the Company from the sale of the
Offered Securities will be set forth in the Prospectus Supplement. See "Plan of
Distribution" herein.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS OCTOBER , 1996.
<PAGE> 3
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS OR THE PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES OR
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR
THE PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE INFORMATION
CONTAINED OR INCORPORATED BY REFERENCE HEREIN OR THEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
periodic and current reports and other information with the Securities and
Exchange Commission (the "Commission"). Information concerning directors and
officers, their remuneration, the principal holders of securities of the Company
and any material interest of such persons in transactions with the Company, as
of particular dates, is disclosed in proxy statements distributed to
shareholders of the Company and filed with the Commission. Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, 500 West Madison Street, Suite 1400,
Chicago, Ill. 60661, and Seven World Trade Center, 7th Floor, New York, N.Y.
10048. Copies of such material can also be obtained at prescribed rates from the
Public Reference Section of the Commission at its principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549. In addition, reports, proxy statements and
other information concerning the Company can be inspected at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, N.Y. 10005, where
certain securities of the Company are listed. The Commission maintains a Web
site (http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding registrants, such as the Company,
that file electronically with the Commission.
The Company has filed with the Commission a registration statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933 (the "Act"). This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, reference is made to the
Registration Statement.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in this Prospectus by reference as of their respective dates of
filing and shall be deemed to be a part hereof:
- Annual report on Form 10-K for the year ended December 31, 1995.
- Quarterly reports on Form 10-Q for the quarters ended March 31, 1996 and
June 30, 1996.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering made by this Prospectus and the
accompanying Prospectus Supplement shall be deemed to be incorporated by
reference in this Prospectus and to be made a part hereof from the date of
filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein or in the accompanying Prospectus Supplement
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY
BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS AND THE ACCOMPANYING
PROSPECTUS SUPPLEMENT HAS BEEN DELIVERED, UPON ORAL OR WRITTEN REQUEST OF ANY
SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE
BEEN OR MAY BE INCORPORATED BY REFERENCE IN THIS PROSPECTUS, OTHER THAN EXHIBITS
TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE THEREIN. REQUESTS FOR COPIES OF SUCH DOCUMENTS SHOULD BE ADDRESSED TO
INVESTOR RELATIONS DEPARTMENT, DUKE POWER COMPANY, P.O. BOX 1005, CHARLOTTE,
NORTH CAROLINA 28201-1005 (TELEPHONE NO. 704-382-3853 OR 800-488-3853
(TOLL-FREE)).
2
<PAGE> 4
THE COMPANY
The Company is primarily engaged in the generation, transmission,
distribution and sale of electric energy in the central portion of North
Carolina and the western portion of South Carolina, comprising the area in both
States known as the Piedmont Carolinas. Its service area, approximately
two-thirds of which lies in North Carolina, covers about 20,000 square miles
with an estimated population of 5,000,000 and includes a number of cities, of
which the largest are Charlotte, Greensboro, Winston-Salem and Durham in North
Carolina and Greenville and Spartanburg in South Carolina. The Company supplies
electric service directly to approximately 1,800,000 residential, commercial and
industrial customers in more than 200 cities, towns and unincorporated
communities. Electricity is sold at wholesale to incorporated municipalities and
to several public and private utilities. In addition, sales are made through
contractual arrangements to former wholesale municipal or cooperative customers
of the Company who had purchased portions of the Catawba Nuclear Station. The
Company's wholly-owned subsidiary, Nantahala Power and Light Company, supplies
electric service directly to approximately 53,000 mostly residential customers
in five counties in western North Carolina. The Company is also engaged in a
variety of diversified operations, most of which are organized in separate
subsidiaries, through the Associated Enterprises Group ("AEG").
For the twelve months ended June 30, 1996, the Company's operating
revenues, including those of AEG, were $4.8 billion. The Company's executive
offices are located in the Power Building, 422 South Church Street, Charlotte,
North Carolina 28242-0001 (Telephone No. 704-594-0887).
RECENT FINANCIAL DATA
(IN THOUSANDS OF DOLLARS EXCEPT PER SHARE DATA)
The following summary information has been selected from or is based upon
the detailed information and financial statements incorporated by reference in
this Prospectus and is qualified in its entirety by reference thereto and should
be read together therewith.
<TABLE>
<CAPTION>
TWELVE MONTHS
ENDED JUNE 30,
-----------------------
1996 1995
---------- ----------
<S> <C> <C>
RESULTS OF OPERATIONS:
Electric Revenues........................................... $4,503,680 $4,250,639
Net Income.................................................. 724,425 676,056
Earnings for Common Stock................................... 678,774 625,627
Earnings Per Share of Common Stock.......................... $3.31 $3.06
</TABLE>
<TABLE>
<CAPTION>
AS OF
JUNE 30,
1996 %
---------- -----
<S> <C> <C>
CAPITAL STRUCTURE:
Long-Term Debt.............................................. $3,649,199 39.5
Preferred Stocks............................................ 684,000 7.4
Common Equity............................................... 4,902,628 53.1
---------- -----
Total Capitalization................................ $9,235,827 100.0
========= =====
Current Maturities of Long-Term Debt and
Preferred Stocks and Short-Term Debt..................... $ 179,061
</TABLE>
The foregoing amounts with respect to the twelve months ended June 30, 1996
are unaudited but in the opinion of the Company include all adjustments
necessary for a fair presentation of such amounts.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
12 MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------
1996 1995 1994 1993 1992 1991
--------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges............. 5.05 4.94 4.72 4.68 3.49 3.83
</TABLE>
For purposes of this ratio (i) earnings consist of income from continuing
operations before income taxes and fixed charges and (ii) fixed charges consist
of all interest deductions and the interest component of rentals.
3
<PAGE> 5
USE OF PROCEEDS
Except as otherwise provided in the accompanying Prospectus Supplement, the
Company expects to use the net proceeds from the sale of the Offered Securities
(a) to finance the construction of additions to the Company's electric plant
facilities and the acquisition of nuclear fuel and (b) to purchase or redeem
from time to time the Company's presently outstanding securities when such
transactions will result in an overall cost savings to the Company.
DESCRIPTION OF THE NEW BONDS
The New Bonds will be issued as one or more series of First and Refunding
Mortgage Bonds (the "Bonds") under a First and Refunding Mortgage, dated as of
December 1, 1927 (the "Bond Indenture"), from the Company to The Chase Manhattan
Bank, as successor Trustee (the "Trustee"), as supplemented and amended and as
to be supplemented by one or more supplemental indentures relating to the New
Bonds, copies of which are filed as exhibits to the Registration Statement. The
Bond Indenture, as heretofore supplemented and amended and as to be supplemented
by said supplemental indenture or indentures, is hereinafter called the
"Mortgage". The statements under this heading do not purport to be complete, are
subject to the detailed provisions of, and are qualified in their entirety by
reference to, the Mortgage and are summaries which make use of terms defined in
the Mortgage.
GENERAL
Unless otherwise provided in the applicable Prospectus Supplement, the New
Bonds will be issuable only in fully registered form, without coupons, in
denominations of $1,000 and integral multiples thereof and will be exchangeable
for a like aggregate principal amount of New Bonds of other authorized
denominations of the same series. No charge will be made for any transfer or
exchange of the New Bonds, but the Company may require payment of a sum
sufficient to cover any stamp tax or other governmental charge incident thereto.
Transfers and exchanges of the New Bonds may be made at The Chase Manhattan
Bank, 55 Water Street, New York, New York 10041.
INTEREST, MATURITY AND PAYMENT
See the accompanying Prospectus Supplement.
REDEMPTION
See the accompanying Prospectus Supplement.
REPLACEMENT FUND
The Company is required to deposit with the Trustee annually, for a
Replacement Fund, the sum of the replacement requirements (as defined) for all
years beginning with 1949 and ending with the last calendar year preceding the
date of the deposit, after deducting therefrom (1) the aggregate original cost
of all fixed property (electric) retired during such period, which amount shall
not exceed the aggregate of the gross amounts of additional property (electric)
acquired or constructed by the Company during the same period; and (2) the
aggregate amount of cash theretofore deposited by the Company with the Trustee,
or which would have been required to be so deposited except for permitted
reductions, under the Replacement Fund.
The "replacement requirement" in respect of any year is 2 1/2% of the
average "amount of depreciable fixed property" (electric) as at the beginning
and end of such year but shall not exceed the depreciation or retirement charges
permitted by any governmental authority, or the amount deductible as
depreciation or similar expense for Federal income tax purposes. The "amount of
depreciable fixed property" (electric) is the amount by which the sum of
$192,913,385, plus the aggregate gross amount of all depreciable additional
property (electric) acquired or constructed by the Company from January 1, 1949
to the date as of which such amount is determined, exceeds the original cost of
all depreciable fixed property (electric) retired during such period or released
from the lien of the Mortgage.
4
<PAGE> 6
Upon application of the Company, the amount of cash at any time required to
be deposited in the Replacement Fund may be reduced, and any cash previously so
deposited and then held by the Trustee may be withdrawn, (1) in an amount equal
to 150% of the principal amount of Bonds previously authenticated and delivered
under the Mortgage, or refundable prior lien bonds, which shall be deposited
with the Trustee and on the basis of which the Company would otherwise have been
entitled to the authentication and delivery of additional Bonds; and (2) in an
amount equal to 150% of the principal amount of Bonds to the authentication and
delivery of which the Company would otherwise be entitled on the basis of
additional property (electric).
Upon application of the Company, the Trustee shall apply cash deposited in
the Replacement Fund (and not theretofore withdrawn by the Company) to the
payment, purchase or redemption of Bonds issued under the Mortgage or to the
purchase of refundable prior lien bonds.
The Company has never deposited any cash with the Trustee pursuant to the
Replacement Fund. If any cash should be deposited in the future, the Company has
agreed not to apply such cash to the redemption of the New Bonds as long as any
of the Bonds presently outstanding remain outstanding.
SECURITY
The Mortgage creates a continuing lien to secure the payment of the
principal of, and interest on, all Bonds issued thereunder, which are in all
respects equally and ratably secured without preference, priority or
distinction. The lien of the Mortgage covers substantially all of the properties
(real, personal and mixed) and franchises of the Company, whether now owned or
hereafter acquired, with certain exceptions including certain after-acquired
non-electric properties, cash, accounts receivable, choses in action,
inventories of materials and supplies, merchandise held for sale, securities
held by the Company, certain after-acquired property not useful in the Company's
electric business and certain after-acquired franchises.
The lien of the Mortgage is subject to certain permitted liens and to liens
which may exist upon properties acquired subsequent to the making of the
Mortgage to the extent of the amounts of prior lien bonds secured by such
properties (which shall not exceed 75% of the cost or value thereof) and
additions thereto.
ISSUANCE OF ADDITIONAL BONDS
The aggregate amount of Bonds which may be issued under the Mortgage is
unlimited. The Bonds of each series shall be of such denominations, date,
maturity and interest rate, and may have such redemption or sinking fund
provisions and such other terms as the Board of Directors of the Company may
determine.
Subject to the provisions of the Mortgage, additional Bonds may be
authenticated and delivered in an aggregate principal amount not exceeding (1)
the amount of cash deposited with the Trustee therefor, (2) the amount of
previously authenticated and delivered Bonds and/or refundable prior lien bonds
retired or to be retired and which, with certain exceptions, are deposited with
the Trustee therefor, or (3) as to additional property (electric) certified to
the Trustee subsequent to February 18, 1949, 66 2/3% of the aggregate of the net
amounts thereof.
No additional Bonds may be authenticated and delivered under the Mortgage,
other than certain types of refunding Bonds, unless the Company's available net
earnings for twelve consecutive calendar months within the fifteen calendar
months immediately preceding shall have been at least twice the amount of the
annual interest charges on all Bonds outstanding under the Mortgage, including
the Bonds applied for, and on all outstanding prior lien bonds not held by the
Trustee under the Mortgage.
The Company may not apply for the authentication and delivery of any Bonds
(1) in an aggregate principal amount exceeding $26 million on the basis of
additional property (electric) acquired or constructed prior to January 1, 1949,
or (2) on the basis of Bonds or prior lien bonds paid, purchased or redeemed
prior to February 1, 1949; and the Company may not certify any additional
property (electric) which is subject to the lien of any prior lien bonds for the
purpose of establishing such prior lien bonds as refundable if the aggregate
principal amount of such prior lien bonds exceeds 66 2/3% of the net amount of
such additional property subject to the lien of such prior lien bonds.
5
<PAGE> 7
RELEASE PROVISIONS
The Mortgage permits the Company to dispose of certain property and take
certain other action without release by the Trustee, and permits mortgaged
property to be released upon the deposit of cash or equivalent consideration
equal to the value of the property to be released. The Mortgage contains
provisions under which, in certain events and within certain limitations, cash
received by the Trustee (other than for the Replacement Fund or as the basis for
the issuance of Bonds) shall be paid out by the Trustee upon application of the
Company.
Cash deposited with the Trustee for the Replacement Fund may be withdrawn
by the Company as outlined under the subcaption "Replacement Fund" above. Cash
deposited with the Trustee as the basis for the issuance of Bonds may be
withdrawn by the Company, upon application to the Trustee, in an amount equal to
the aggregate principal amount of any Bonds, the authentication and delivery of
which the Company shall have become entitled to on the basis of additional
property (electric), on the basis of Bonds previously authenticated and
delivered, or on the basis of refundable prior lien bonds.
AMENDMENTS OF MORTGAGE
Amendments of the Mortgage may be made with the consent of the holders of
66 2/3% of the Bonds; but no amendment shall affect the terms of payment of the
principal at maturity of, or the interest or premium on, any Bond or affect the
rights of Bondholders to sue to enforce any such payment at maturity, or reduce
the percentage required to effect a valid amendment; nor shall any amendment
affect the rights under the Mortgage of the holders of less than all of the
series of Bonds outstanding unless consented to by the holders of 66 2/3% of the
Bonds of each of the series so affected.
The covenants to be included in the supplemental indenture for the Offered
Bonds will be solely for the benefit of holders of such Offered Bonds and may be
modified by written consent or affirmative vote of holders of 66 2/3% of such
Offered Bonds outstanding, without consent of Bondholders of any other series.
EVENTS OF DEFAULT
The Trustee may, and upon written request by the holders of not less than a
majority of the outstanding Bonds shall, declare the principal of all
outstanding Bonds due upon the happening of any of the events of default
specified in the Mortgage, but the holders of a majority of the outstanding
Bonds may waive such default and rescind any declaration if such default has
been cured. The Trustee is under no obligation to exercise any of its powers at
the request of any of the holders of the Bonds unless such Bondholders have
offered to the Trustee security or indemnity satisfactory to it against the
cost, expenses and liabilities to be incurred therein or thereby. The holders of
a majority in principal amount of the Bonds outstanding may direct 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, and 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 any such direction.
Events of default are defined in the Mortgage as including (a) default in
the payment of principal, (b) default for 60 days in the payment of interest,
(c) default in the performance of any other covenants in the Mortgage continuing
for a period of 60 days after notice by the Trustee or by the holders of not
less than 10% in principal amount of the Bonds then outstanding, and (d) certain
events in bankruptcy or insolvency.
The Company is required to furnish annually to the Trustee a certificate in
respect of compliance or non-compliance by the Company with the covenants of the
Mortgage.
6
<PAGE> 8
DESCRIPTION OF THE DEBT SECURITIES
The Debt Securities will constitute either senior or subordinated unsecured
debt of the Company and will be issued in one or more series under (i) an
indenture (the "Senior Indenture") for senior Debt Securities (sometimes called
"Senior Notes") or (ii) an indenture (the "Subordinated Indenture") for
subordinated Debt Securities (sometimes called "Subordinated Debentures"). The
Senior Indenture and the Subordinated Indenture (collectively, the "Indentures")
are to be dated as of October 1, 1996, and are to be entered into between the
Company and The Chase Manhattan Bank, as Trustee (the "Trustee"). Forms of the
Indentures are filed as exhibits to the Registration Statement of which this
Prospectus is a part. The statements under this heading do not purport to be
complete and are subject to the detailed provisions of, and are qualified in
their entirety by reference to, the applicable Indenture or Indentures and are
summaries which make use of terms defined in one or both Indentures.
GENERAL
Neither Indenture limits the aggregate principal amount of the Debt
Securities issuable thereunder or of any particular series of Debt Securities.
The Debt Securities of any series need not be issued at the same time or bear
interest at the same rate or mature on the same date.
Reference is made to the Prospectus Supplement (the "Prospectus
Supplement") for the following terms of any particular series of Offered Notes
or Offered Debentures (collectively, the "Offered Debt Securities"): (i) the
title of such Debt Securities; (ii) any limit on the aggregate principal amount
of such Debt Securities or the series of which they are a part; (iii) the date
or dates on which the principal of any of such Debt Securities will be payable
or the method by which such date or dates will be determined; (iv) the rate or
rates at which any of such Debt Securities will bear interest, if any, or the
method by which such rate or rates will be determined, and the date or dates
from which any such interest will accrue; (v) the Interest Payment Dates on
which any such interest will be payable and the Regular Record Date, if any, for
any such interest payable on any Interest Payment Date; (vi) if applicable,
whether the interest payment periods may be extended by the Company and, if so,
the duration of any such extension; (vii) the place or places where the
principal of and any premium and interest on any of such Debt Securities will be
payable; (viii) the obligation, if any, of the Company to redeem or purchase any
of such Debt Securities pursuant to any sinking fund, purchase fund or analogous
provision or at the option of the Holder thereof and the terms and conditions on
which any of such Debt Securities may be redeemed or purchased pursuant to such
obligation; (ix) the denominations in which any of such Debt Securities will be
issuable, if other than denominations of $1,000 or any integral multiple
thereof; (x) the terms and conditions, if any, on which any of such Debt
Securities may be redeemed at the option of the Company; (xi) if applicable, the
fact that the terms of the applicable Indenture which are described below under
the caption "Defeasance and Covenant Defeasance" will not apply to any of such
Debt Securities; (xii) the currency, currencies or currency units in which the
principal of and any premium and interest on any of such Debt Securities will be
payable, if other than U.S. dollars, and the manner of determining the
equivalent thereof in U.S. dollars for any purpose; (xiii) if the principal of
or any premium or interest on any of such Debt Securities is to be payable, at
the election of the Company or the Holder thereof, in one or more currencies or
currency units other than those in which such Debt Securities are stated to be
payable, then the currency, currencies or currency units in which such payments
will be made, the terms and conditions upon which such election is to be made
and the amount so payable (or the manner of determining any such amount); (xiv)
the portion of the principal amount of any of such Debt Securities which will be
payable upon declaration of acceleration of the Maturity thereof, if other than
the entire principal amount thereof; (xv) whether any of such Debt Securities
will be issuable in whole or in part in the form of one or more Global
Securities and, if so, the identity of the depositary (the "Depositary") for any
such Global Security and any provisions regarding the transfer, exchange or
legending of any such Global Security if different from those described below
under the caption "Global Securities"; (xvi) any addition to, change in or
deletion from the Events of Default or covenants provided for with respect to
any of such Debt Securities and any change in the right of the Trustee or the
Holders to declare the principal amount of any of such Debt Securities due and
payable; (xvii) any index or formula used to determine the amount of principal
of or any premium or interest on any of such Debt Securities and the manner of
determining any such amounts;
7
<PAGE> 9
(xviii) if the principal amount payable at the Stated Maturity of any of such
Debt Securities will not be determinable as of any one or more dates prior to
the Stated Maturity, the amount which will be deemed to be such principal amount
as of any such date for any purpose, including the principal amount thereof
which will be due and payable upon any Maturity other than the Stated Maturity
(or the manner of determining any such deemed principal amount); (xix) the
subordination of such Debt Securities to any other indebtedness of the Company,
including other series of Subordinated Debentures (for series of Subordinated
Debentures only); and (xx) any other terms of such Debt Securities.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Debt Securities will be issued only in fully registered form, without
coupons, in denominations of $1,000 or any integral multiple thereof, and no
service charge will be made for any registration of transfer or exchange of Debt
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the principal of and any premium and interest on the Offered Debt Securities
will be payable, and the Offered Debt Securities will be exchangeable and
transfers thereof will be registrable, at The Chase Manhattan Bank, 55 Water
Street, New York, New York 10041 and payment of any interest due on any Offered
Debt Security will be made to the Person in whose name such Offered Debt
Security is registered at the close of business on the Regular Record Date for
such interest.
If the Debt Securities of any series (or any series and specified tenor)
are to be redeemed, the Company will not be required to (i) issue, register the
transfer of, or exchange any Debt Security of that series (or of that series and
specified tenor, as the case may be) during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption of any such
Debt Security that may be selected for redemption and ending at the close of
business on the day of such mailing or (ii) register the transfer of or exchange
any Debt Security so selected for redemption, in whole or in part, except the
unredeemed portion of any such Debt Security being redeemed in part.
Debt Securities, including Original Issue Discount Securities, may be
offered and sold at a substantial discount below their principal amount. Special
Federal income tax and other considerations, if any, applicable thereto will be
described in the applicable Prospectus Supplement. In addition, certain special
United States Federal income tax or other considerations, if any, applicable to
any Debt Securities which are denominated in a currency or currency unit other
than U.S. dollars may be described in the applicable Prospectus Supplement.
Except as otherwise described in the applicable Prospectus Supplement, the
covenants contained in either Indenture would not afford any Holders of Debt
Securities issued thereunder protection in the event of a highly leveraged
transaction involving the Company.
GLOBAL SECURITIES
Some or all of the Debt Securities of a series may be represented in whole
or in part by one or more Global Securities that will be deposited with or on
behalf of one or more Depositaries.
The specific terms of the depositary arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
thereto. The Company anticipates that the following provisions will apply to all
depositary arrangements.
Unless otherwise specified in the Prospectus Supplement relating thereto,
Debt Securities which are to be represented by a Global Security to be deposited
with or on behalf of a Depositary will be represented by a Global Security
registered in the name of such Depositary or its nominee. Upon the issuance of a
Global Security in registered form, the Depositary for such Global Security will
credit, on its book-entry registration and transfer system, the respective
principal amounts of the Debt Securities represented by such Global Security to
the accounts of institutions that have accounts with such Depositary or its
nominee ("participants"). The accounts to be credited will be designated by the
underwriters or agents of such Debt Securities or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in such Global Securities will be limited to participants or persons
that may hold interests through participants. Ownership of beneficial interests
by participants in such Global Securities will be shown
8
<PAGE> 10
on, and the transfer of any such ownership interest will be effected only
through, records maintained by the Depositary or its nominee for such Global
Security. Ownership of beneficial interests in Global Securities by persons that
hold through participants will be effected only through records maintained by
such participants. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as set forth below, owners of beneficial interests
in the Global Security will not be entitled to have the Debt Securities
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of the Debt Securities in definitive
form and will not be considered the owners or Holders thereof under the
applicable Indenture.
Payment of principal of and any premium and interest on Debt Securities
registered in the name of or held by a Depositary or its nominee will be made in
immediately available funds to the Depositary or its nominee, as the case may
be, as the registered owner or the Holder of the Global Security representing
such Debt Securities. None of the Company, the Trustee, any Paying Agent or the
Security Registrar for such Debt Securities will have any responsibility or
liability for any aspect of the records relating to, or payments made on account
of, beneficial ownership interests in a Global Security for such Debt Securities
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Company expects that a Depositary for Debt Securities of a series, upon
receipt of any payment of principal or any premium or interest in respect of a
Global Security, will credit immediately participants' accounts with payment in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security as shown on the records of such Depositary. The
Company also expects that payments by participants to owners of beneficial
interests in such Global Security held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers registered in "street name",
and will be the responsibility of such participants.
A Global Security may not be transferred in whole or in part except by the
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. If a Depositary for Debt Securities
of a series is at any time unwilling or unable to continue as Depositary and a
successor Depositary is not appointed by the Company within 90 days, the Company
will issue Debt Securities in definitive registered form in exchange for the
Global Security or Global Securities representing such Debt Securities. In
addition, the Company may at any time determine not to have any Debt Securities
represented by one or more Global Securities and, in such event, will issue Debt
Securities in definitive registered form in exchange for the Global Securities
representing such Debt Securities. In any such instance, an owner of a
beneficial interest in a Global Security will be entitled to physical delivery
in definitive form of Debt Securities of the series represented by such Global
Security equal in principal amount to such beneficial interest and to have such
Debt Securities registered in its name.
REDEMPTION
Any terms and conditions for the optional or mandatory redemption of any
Offered Debt Securities will be set forth in the applicable Prospectus
Supplement. Except as otherwise provided in the applicable Prospectus Supplement
with respect to Debt Securities that are redeemable at the option of the Holder,
Debt Securities will be redeemable by the Company, subject to the subsequent
sentence, only upon notice mailed not less than 30 nor more than 60 days prior
to the date fixed for redemption. With certain exceptions, a notice of
redemption at the option of the Company may state that such redemption will be
conditional upon receipt by the Trustee or any applicable Paying Agent or
Agents, on or prior to the date fixed for such redemption, of money sufficient
to pay the principal of and any premium and interest on such Debt Securities and
that if such
9
<PAGE> 11
money has not been so received, such notice will be of no force and effect and
the Company will not be required to redeem such Debt Securities.
CONSOLIDATION, MERGER, ETC.
Each Indenture provides that the Company may, without the consent of any
Holders of the Debt Securities Outstanding thereunder, consolidate or merge with
or into any other Person or Persons, or convey or transfer its properties and
assets as an entirety or substantially as an entirety to any Person, provided
that the successor Person, if any, assumes by a supplemental indenture the
Company's obligations under such Indenture and such Debt Securities and the
Company delivers an Officers' Certificate and an Opinion of Counsel to the
Trustee stating that all conditions precedent in such Indenture relating to the
transaction have been complied with. Upon the assumption by the successor Person
of the Company's obligations under the applicable Indenture and the Debt
Securities issued thereunder, and the satisfaction of any other condition
precedent provided for in such Indenture, the successor Person will succeed to
and be substituted for the Company under such Indenture and the Company will be
relieved of its obligations under such Indenture and the Debt Securities issued
thereunder.
AMENDMENTS OF INDENTURE; WAIVER
Each Indenture provides that modifications and amendments thereof may be
made by the Company and the Trustee with the consent of the Holders of not less
than a majority in aggregate principal amount of the Outstanding Debt Securities
of each series affected thereby; provided, however, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby, (a) change the Stated Maturity of the principal of,
or any instalment of principal of or interest on, any Debt Security; (b) reduce
the principal amount of or any premium or the rate of interest on any Debt
Security or reduce the amount of principal of any Original Issue Discount
Security or any other Debt Security which would be due and payable upon
acceleration of the Maturity thereof; (c) change the place or currency of
payment of principal of or any premium or interest on any Debt Security; (d)
impair the right to institute suit for the enforcement of any such payment on
any Debt Security on or after the Stated Maturity thereof (or date of
redemption); (e) reduce the percentage in principal amount of Outstanding Debt
Securities of any series, the consent of whose Holders is required for
modification or amendment of such Indenture, for waiver of compliance with
certain provisions of such Indenture or for waiver of certain defaults or (f)
with certain exceptions, modify the above provisions or the sections of the
applicable Indenture governing waiver of certain covenants and past defaults.
Notwithstanding the foregoing, under certain limited circumstances and only upon
the fulfillment of certain conditions, modifications and amendments of the
relevant Indenture may be made by the Company and the Trustee without the
consent of any Holders of the Debt Securities issued thereunder.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Debt Securities of any series may waive, insofar as that series
is concerned, compliance by the Company with certain restrictive provisions of
the Indenture under which such Debt Securities were issued. The Holders of not
less than a majority in aggregate principal amount of the Outstanding Debt
Securities of any series may waive any past default under the Indenture under
which such Debt Securities were issued with respect to that series except a
default in the payment of principal of, or any premium or interest on any Debt
Security of such series or in respect of a covenant or provision under such
Indenture which cannot be modified or amended without the consent of the Holder
of each Outstanding Debt Security of such series affected thereby.
The Subordinated Indenture may not be amended to alter the subordination of
any of the Outstanding Subordinated Debentures without the written consent of
each holder of Senior Indebtedness then outstanding that would be adversely
affected thereby.
EVENTS OF DEFAULT
The following will be Events of Default under each Indenture with respect
to Debt Securities of any series issued thereunder (unless inapplicable to the
particular series, specifically modified or deleted as a term of such series or
otherwise modified or deleted in an indenture supplemental to such Indenture):
(a) failure to
10
<PAGE> 12
pay principal of or any premium on any Debt Security of that series when due;
(b) failure to pay any interest on any Debt Security of that series when due,
continued for 60 days; (c) failure to make any sinking fund payment when and as
due by the terms of any Debt Security of that series, continued for 60 days; (d)
failure to perform any covenant of the Company in the applicable Indenture
(other than a covenant which has expressly been included in such Indenture
solely for the benefit of series of Debt Securities other than that series),
continued for 90 days after written notice has been given by the Trustee or the
Holders of at least 33% in principal amount of the Outstanding Debt Securities
of that series (unless such time period is extended by the Trustee or by the
Trustee and the Holders of a principal amount of Debt Securities of that series
not less than the principal amount of Debt Securities the Holders of which had
given such notice of default; provided, however, that the Trustee, or the
Trustee and such Holders, as the case may be, will be deemed to have agreed to
such an extension if corrective action is initiated, and is being diligently
pursued, by the Company, as further provided in the applicable Indenture); (e)
certain events in bankruptcy, insolvency or reorganization; and (f) any other
Event of Default provided with respect to Debt Securities of that series. No
Event of Default with respect to a particular series of Debt Securities issued
under an Indenture necessarily constitutes an Event of Default with respect to
any other series of Debt Securities issued thereunder.
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding occurs and is continuing, then the Trustee or the Holders of
not less than 33% in principal amount of the Outstanding Debt Securities of that
series may, by a notice in writing to the Company (and to the Trustee if given
by Holders), declare to be immediately due and payable the principal amount (or,
if any Debt Securities of that series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms of the
series) of all Debt Securities of that series. However, at any time after such a
declaration of acceleration with respect to Debt Securities of any series has
been made and before a judgment or decree for payment of the money due has been
obtained by the Trustee, the Event of Default giving rise to such declaration of
acceleration will, without further act, be deemed to have been waived, and such
declaration will be deemed to have been rescinded and annulled, if (i) the
Company has paid or deposited with the Trustee a sum sufficient to pay all
overdue interest on the Debt Securities of such series, the principal of and any
premium on the Debt Securities of such series which have become due otherwise
than by such declaration of acceleration and interest thereon at the rate or
rates prescribed therefor in such Debt Securities, interest on overdue interest
at the rate or rates prescribed therefor in the Debt Securities of such series
(to the extent that payment of such interest is lawful), and all amounts due to
the Trustee under the applicable Indenture, and (ii) all Events of Default with
respect to the Debt Securities of such series (other than the nonpayment of the
principal of the Debt Securities of such series which has become due solely by
such declaration of acceleration) have been cured or waived as provided in the
applicable Indenture. Reference is made to the Prospectus Supplement relating to
any series of Debt Securities which are Original Issue Discount Securities for
the particular provisions relating to acceleration of a portion of the principal
amount of such Original Issue Discount Securities upon the occurrence of an
Event of Default and the continuation thereof.
Subject to the provisions of each Indenture relating to the duties of the
Trustee in case an Event of Default occurs and is continuing, each Indenture
provides that the Trustee will be under no obligation to exercise any of its
rights or powers under such Indenture at the request or direction of any of the
Holders unless such Holders shall have offered to the Trustee reasonable
security or indemnity. Subject to such provisions for security and
indemnification of the Trustee and certain other rights of the Trustee, the
Holders of a majority in principal amount of the Outstanding Debt Securities of
any series have the right to direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Debt Securities of that
series.
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture under which such Debt
Security was issued or for any remedy thereunder unless such Holder has
previously given to the Trustee written notice of a continuing Event of Default
with respect to the Debt Securities of that series and unless the Holders of not
less than a majority in principal amount of the Outstanding Debt Securities of
that series have made such written request, and offered reasonable indemnity, to
the Trustee to institute such proceeding as trustee under the applicable
Indenture, and the Trustee has not received from the Holders of a majority in
principal amount of the Outstanding Debt Securities of that series a
11
<PAGE> 13
direction inconsistent with such request and has failed to institute such
proceeding within 60 days after receipt of such notice and offer of indemnity.
Notwithstanding the foregoing, the Holder of any Debt Security will have an
absolute and unconditional right to receive payment of the principal of and any
premium and, subject to certain limitations specified in the applicable
Indenture, interest on such Debt Security on the Stated Maturity thereof (or, in
the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment.
The Company is required to furnish annually to the Trustee for each
Indenture a statement by certain officers of the Company to the effect that to
the best of their knowledge the Company is not in default in the performance and
observance of any terms, provisions or conditions of such Indenture or, if there
has been such a default, specifying each such default and the status thereof.
NEGATIVE PLEDGE
The Senior Indenture provides that the Company will not, while any of the
Notes remain Outstanding, create, or suffer to be created or to exist, any
mortgage, lien, pledge, security interest or other encumbrance of any kind upon
any property of the Company, whether now owned or hereafter acquired, to secure
any indebtedness for borrowed money, unless it makes effective provision whereby
the Senior Notes then Outstanding will be secured by such mortgage, lien,
pledge, security interest or other encumbrance equally and ratably with any and
all indebtedness for borrowed money thereby secured so long as any such
indebtedness shall be so secured; provided, however, that the Company will not
be precluded from creating, or from suffering to be created or to exist, any
mortgages, liens, pledges, security interests or other encumbrances, or any
agreements, with respect to (i) purchase money mortgages, or other purchase
money liens, pledges, security interests or encumbrances of any kind upon
property acquired after the date of the Senior Indenture by the Company, or
mortgages, liens, pledges, security interests or other encumbrances of any kind
existing on any property at the time of the acquisition thereof (including
mortgages, liens, pledges, security interests or other encumbrances which exist
on any property of a Person which is consolidated with or merged with or into
the Company or which transfers or leases all or substantially all of its
properties to the Company), or conditional sales agreements or other title
retention agreements and leases in the nature of title retention agreements with
respect to any property acquired after the date of the Senior Indenture;
provided, however, that no such mortgage, lien, pledge, security interest or
other encumbrance will extend to or cover any other property of the Company;
(ii) mortgages, liens, pledges, security interests or other encumbrances of any
kind upon any property of the Company existing as of the date of the initial
issuance of the Senior Notes; liens for taxes or assessments or other
governmental charges or levies; pledges or deposits to secure obligations under
workers' compensation laws, unemployment insurance and other social security
legislation, including liens of judgments thereunder which are not currently
dischargeable; pledges or deposits to secure performance in connection with
bids, tenders, contracts (other than contracts for the payment of money) or
leases to which the Company is a party; pledges or deposits to secure public or
statutory obligations of the Company; builders', materialmen's, mechanics',
carriers', warehousemen's, workers', repairmen's, operators', landlords' or
other like liens in the ordinary course of business, or deposits to obtain the
release of such liens; pledges or deposits to secure, or in lieu of, surety,
stay, appeal, indemnity, customs, performance or return-of-money bonds; other
pledges or deposits for similar purposes in the ordinary course of business;
liens created by or resulting from any litigation or proceeding which at the
time is being contested in good faith by appropriate proceedings; 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; the "permitted liens" specified in Section 2.07 of the First and
Refunding Mortgage referred to in clause (iii) below; liens incurred in
connection with repurchase, swap or other similar agreements; leases made, or
existing on property acquired, in the ordinary course of business; 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
the Company, including the Senior Notes; liens created in connection with, and
created to secure, a non-recourse obligation; zoning restrictions, easements,
licenses, rights-of-way, restrictions on the use of property or minor
irregularities in title thereto, which do not, in the opinion of the Company,
materially impair the use of such property in the
12
<PAGE> 14
operation of the business of the Company or the value of such property for the
purpose of such business; (iii) First and Refunding Mortgage Bonds of the
Company issued or to be issued from time to time under the First and Refunding
Mortgage (the "Mortgage") dated as of December 1, 1927 from the Company to The
Chase Manhattan Bank, as Trustee, as supplemented and amended and as to be
supplemented and amended; (iv) indebtedness which may be issued by the Company
in connection with a consolidation or merger of the Company with or into any
other Person (which may be an Affiliate of the Company) in exchange for or
otherwise in substitution for secured indebtedness of such Person ("Third Party
Debt") which by its terms (1) is secured by a mortgage on all or a portion of
the property of such Person, (2) prohibits secured indebtedness from being
incurred by such Person, unless the Third Party Debt shall be secured equally
and ratably with such secured indebtedness or (3) prohibits secured indebtedness
from being incurred by such Person; (v) indebtedness of any Person which is
required to be assumed by the Company in connection with a consolidation or
merger of such Person, with respect to which any property of the Company is
subjected to a mortgage, lien, pledge, security interest or other encumbrance;
(vi) mortgages, liens, pledges, security interests or other encumbrances of any
kind upon any property acquired, constructed, developed or improved by the
Company (whether alone or in association with others) after the date of the
Senior Indenture which are created prior to, 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 such construction, development or improvement
and commencement of full commercial operation of such property, whichever is
later) to secure or provide for the payment of the purchase price or cost
thereof, provided that in the case of such construction, development or
improvement the mortgages shall not apply to any property theretofore owned by
the Company other than theretofore unimproved real property; (vii) the
replacement, extension or renewal (or successive replacements, extensions or
renewals), as a whole or in part, of any mortgage, lien, pledge, security
interest or other encumbrance, or of any agreement, referred to above in clauses
(i) through (vi) inclusive, or the replacement, extension or renewal (not
exceeding the principal amount of indebtedness secured thereby together with any
premium, interest, fee or expense payable in connection with any such
replacement, extension or renewal) of the indebtedness secured thereby; 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 thereon or
additions or accessions thereto); or (viii) any other mortgage, lien, pledge,
security interest or other encumbrance not excepted by the foregoing clauses (i)
through (vii); provided that immediately after the creation or assumption of
such mortgage, lien, pledge, security interest or other encumbrance, the
aggregate principal amount of indebtedness for borrowed money of the Company
secured by all mortgages, liens, pledges, security interests and other
encumbrances created or assumed under the provisions of clause (viii) will not
exceed an amount equal to 10% of common stockholders' equity of the Company as
shown on its consolidated balance sheet for the accounting period occurring
immediately prior to the creation or assumption of such mortgage, lien, pledge,
security interest or other encumbrance.
DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise provided in the Prospectus Supplement for a series of Debt
Securities, the Company may cause itself (subject to the terms of the Indenture
under which such Debt Securities were issued) (i) to be discharged from any and
all obligations with respect to any Debt Securities or series of Debt Securities
(except for certain obligations to register the transfer or exchange of such
Debt Securities, to replace such Debt Securities if stolen, lost or mutilated,
to maintain paying agencies and to hold money for payment in trust)
("Defeasance") and/or (ii) to be released from any covenants expressly
established in respect of any Debt Securities or series of Debt Securities and,
with respect to any Debt Securities or series issued under the Senior Indenture,
from the obligations, if applicable, described above under the caption "Negative
Pledge" with respect to any such Debt Securities ("Covenant Defeasance"), in
either case on and after the date the conditions set forth in such Indenture are
satisfied. Such conditions include the deposit with the Trustee, in trust for
such purpose, of money and/or U.S. Government Obligations (as such term is
defined in the applicable Indenture), which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of and any premium
and interest on such Debt Securities on the Stated Maturity of such payments or
upon redemption, as the case may be, in accordance with the terms of the
applicable Indenture and such Debt Securities.
13
<PAGE> 15
Defeasance by the Company with respect to any Debt Securities of a series
is permitted under certain circumstances under each Indenture notwithstanding
the Company's prior Covenant Defeasance with respect to Debt Securities of that
series. Following a Defeasance, payment of any of such Debt Securities may not
be accelerated because of an Event of Default (as defined in the applicable
Indenture). Following a Covenant Defeasance, payment of Debt Securities may not
be accelerated under the applicable Indenture by reference to the covenants
noted under clause (ii) above. However, if such an acceleration were to occur,
the realizable value at the acceleration date of the money and U.S. Government
Obligations in the defeasance trust could be less than the principal and
interest then due on such Debt Securities, in that the required deposit in the
defeasance trust is based upon scheduled cash flows rather than market value,
which will vary depending upon interest rates and other factors.
Under current Federal income tax law, the Defeasance contemplated in the
preceding paragraphs would be treated as a taxable exchange of the relevant Debt
Securities in which Holders of Debt Securities would recognize gain or loss. In
addition, thereafter, the amount, timing and character of amounts that Holders
would be required to include in income might be different from that which would
be includible in the absence of such Defeasance. Prospective investors are urged
to consult their own tax advisors as to the specific consequences of a
Defeasance, including the applicability and effect of tax laws other than the
Federal income tax law.
Under current Federal income tax law, unless accompanied by other changes
in the terms of the Debt Securities, Covenant Defeasance should not be treated
as a taxable exchange.
SUBORDINATION OF SUBORDINATED DEBENTURES
The Subordinated Indenture provides that, unless otherwise provided in the
Prospectus Supplement for a series of Subordinated Debentures, the Subordinated
Debentures of any series will be expressly subordinate in right of payment, to
the extent and in the manner set forth in the Subordinated Indenture, to all
Senior Indebtedness. The Subordinated Indenture defines "Senior Indebtedness" to
mean, with respect to any series of Subordinated Debentures, the principal of,
and premium, if any, and interest on and any other payment due pursuant to any
of the following, whether outstanding at the date of execution of the
Subordinated Indenture or thereafter incurred, created or assumed: (a) all
indebtedness of the Company evidenced by notes, debentures, bonds or other
securities sold by the Company for money or other obligations for money
borrowed, (b) all indebtedness of others of the kinds described in the preceding
clause (a) assumed by or guaranteed in any manner by the Company or in effect
guaranteed by the Company through an agreement to purchase, contingent or
otherwise, and (c) all renewals, extensions or refundings of indebtedness of the
kinds described in either of the preceding clauses (a) and (b) unless, in the
case of any particular indebtedness, renewal, extension or refunding, the
instrument creating or evidencing the same or the assumption or guarantee of the
same expressly provides that such indebtedness, renewal, extension or refunding
is not superior in right of payment to or is pari passu with such Subordinated
Debentures.
In the event, with certain exceptions specified in the Indenture, (a) of
any payment by, or distribution of assets of, the Company to creditors upon any
dissolution, winding up, liquidation or reorganization of the Company, whether
in bankruptcy, insolvency or other proceedings, or (b) that (i) a default
(continuing beyond any period of grace) shall have occurred and be continuing
with respect to the payment of principal, interest or any other monetary amounts
due and payable on any Senior Indebtedness or (ii) the maturity of any Senior
Indebtedness shall have been accelerated because of a default with respect to
such Senior Indebtedness, then the holders of all Senior Indebtedness shall
first be entitled to receive payment, in the case of (a) above, of all amounts
due or to become due upon all Senior Indebtedness, and, in the case of (b)
above, of all amounts due thereon, or provision shall be made for such payment
in money or money's worth, before the Holders of the Subordinated Debentures are
entitled to receive a payment on account of the principal of or premium, if any,
or interest on such Subordinated Debentures.
14
<PAGE> 16
On August 31, 1996, approximately $3,610,134,000 of Senior Indebtedness was
outstanding. The Subordinated Indenture does not restrict the amount of Senior
Indebtedness that the Company may incur.
CONCERNING THE TRUSTEE
The Chase Manhattan Bank is the Trustee under the Mortgage and each of the
Indentures. The Chase Manhattan Bank provides general banking services for the
Company and is a participant in the Company's $355 million credit facility under
which its commitment is $30 million.
The occurrence of a default under the Mortgage, the Subordinated Indenture
or the Senior Indenture with respect to one or more series of Bonds or Debt
Securities could create a conflicting interest for the Trustee under the Trust
Indenture Act of 1939, as amended (the "1939 Act"). If such default has not been
cured or waived within 90 days after the Trustee has or acquires a conflicting
interest, the Trustee generally would be required by the 1939 Act to eliminate
such conflicting interest or resign as Trustee with respect to the Bonds issued
under the Mortgage or the Debt Securities issued under the Senior Indenture or
the Subordinated Indenture. In the event of the Trustee's resignation, the
Company shall promptly appoint a successor Trustee with respect to the affected
securities.
PLAN OF DISTRIBUTION
The Offered Securities may be sold (i) by selecting and negotiating with a
managing underwriter or underwriters for the sale, (ii) directly to a limited
number of purchasers or to a single purchaser or (iii) through agents.
The Prospectus Supplement will set forth the manner and terms of the
offering of the related Offered Securities, including the name or names of any
underwriters, dealers or agents, the purchase price or prices of the Offered
Securities, the proceeds to the Company from the sale of the Offered Securities,
any initial public offering price, any underwriting discount or commission and
any discounts, concessions or commissions allowed or reallowed or paid by any
underwriter to other dealers. Any initial public offering price and any
discounts, concessions or commissions allowed or reallowed or paid to dealers
may be changed from time to time. Unless otherwise indicated in the Prospectus
Supplement, any agent will be acting on a best efforts basis for the period of
its appointment.
Underwriters, dealers and agents who participate in the distribution of the
Offered Securities, and their officers, directors and controlling persons, may
be entitled under agreements to be entered into with the Company to
indemnification by the Company against certain liabilities, including
liabilities under the Act.
Unless otherwise set forth in the Prospectus Supplement, the obligations of
any underwriter or underwriters to purchase the related Offered Securities will
be subject to certain conditions precedent and such underwriter or underwriters
with respect to the sale of such Offered Securities will be obligated to
purchase all of such Offered Securities if any are purchased.
The Prospectus Supplement will set forth any planned listing of the related
Offered Securities on a national securities exchange and indicates whether any
underwriters, dealers or agents intend to make a market in the Offered
Securities as permitted by applicable laws and regulations. No assurance can be
given as to the liquidity of or the trading market for the Offered Securities.
EXPERTS
The financial statements included in the Company's annual report on Form
10-K, which are incorporated herein by reference, have been audited by Deloitte
& Touche LLP, as stated in their report appearing therein, and are incorporated
herein in reliance upon such report given upon the authority of that firm as
experts in accounting and auditing.
15
<PAGE> 17
LEGAL OPINIONS
The validity of the Offered Securities will be passed upon for the Company
by Steve C. Griffith, Jr., Esq., Charlotte, North Carolina, and by Dewey
Ballantine, New York, New York, and will be passed upon for any agents, dealers
or underwriters by counsel named in the applicable Prospectus Supplement. In
giving its opinion, Dewey Ballantine may rely as to matters of local law upon
the opinion of Mr. Griffith, who is a Director and Vice Chairman of the Board
and the General Counsel of the Company. Mr. Griffith owns 43,847 shares of
Common Stock of the Company, including 42,677 shares held under the Stock
Purchase-Savings Program for Employees and the Employees' Stock Ownership Plan.
16
<PAGE> 18
L O G O
<PAGE> 19
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION (ESTIMATED):
<TABLE>
<S> <C>
SEC Filing Fee*................................................ $ 100
Trustee Fees................................................... 140,000
Printing and Engraving Costs................................... 190,000
Legal Fees and Expenses........................................ 190,000
Accounting Fees................................................ 35,000
Blue Sky Fees and Expenses..................................... 10,000
Rating Agency Fees............................................. 230,000
Miscellaneous.................................................. 4,900
--------
Total................................................ $800,000
========
</TABLE>
------------------------
* Actual
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 55-8-50 through 55-8-58 of the North Carolina Business Corporation
Act and the By-Laws of the Company permit indemnification of the registrant's
directors and officers in a variety of circumstances, which may include
liabilities under the Securities Act of 1933 ("Act"). In addition, the
registrant has purchased insurance permitted by the law of North Carolina on
behalf of directors, officers, employees or agents which may cover liabilities
under the Act.
ITEM 16. EXHIBITS.
Exhibits filed herewith:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- ---------------------
<S> <C>
1-A -- Form of Underwriting Agreement relating to the New Bonds.
1-B -- Form of Underwriting Agreement relating to the Senior Notes.
1-C -- Form of Underwriting Agreement relating to the Subordinated Debentures.
1-D -- Form of Calculation Agreement relating to the Senior Notes.
4-B-81 -- Form of Supplemental Indenture relating to the New Bonds.
4-D-1 -- Form of Senior Indenture from registrant to The Chase Manhattan Bank
relating to the Senior Notes.
4-D-2 -- Form of Subordinated Indenture from registrant to The Chase Manhattan
Bank relating to the Subordinated Debentures.
5 -- Opinion of Steve C. Griffith, Jr., Esq.
12 -- Computation of Ratio of Earnings to Fixed Charges.
23(A) -- Independent Auditors' Consent.
23(B) -- Consent of Steve C. Griffith, Jr., Esq. (included in Exhibit 5).
23(C) -- Consent of Dewey Ballantine.
24(A) -- Copy of power of attorney authorizing Ellen T. Ruff and others to sign
the registration statement on behalf of the registrant and certain of
its directors and officers.
24(B) -- Certified copy of resolution of the Board of Directors of the registrant
authorizing power of attorney.
25-A -- Statement of Eligibility of the Trustee on Form T-1 of The Chase
Manhattan Bank relating to the New Bonds.
</TABLE>
II-1
<PAGE> 20
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- ---------------------
<S> <C>
25-B -- Statement of Eligibility of the Trustee on Form T-1 of The Chase
Manhattan Bank relating to the Senior Notes.
25-C -- Statement of Eligibility of the Trustee on Form T-1 of The Chase
Manhattan Bank relating to the Subordinated Debentures.
</TABLE>
Exhibits incorporated herein by reference:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
<S> <C>
4-A-1 -- Form of the New Bonds will be substantially as set forth on pages 7
through 12 of Exhibit 4-B-81 hereto.
4-B-1 -- First and Refunding Mortgage from registrant to Guaranty Trust Company
of New York, Trustee, dated as of December 1, 1927 (filed with Form
S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(a)).
4-B-2 -- Supplemental Indenture, dated as of March 12, 1930, supplementing said
Mortgage (filed with Form S-1, File No. 2-7224, effective October 15,
1947, as Exhibit 7(b)).
4-B-3 -- Supplemental Indenture, dated as of July 1, 1935, supplementing said
Mortgage (filed with Form S-1, File No. 2-7224, effective October 15,
1947, as Exhibit 7(c)).
4-B-4 -- Supplemental Indenture, dated as of December 1, 1935, supplementing said
Mortgage (filed with Form S-1, File No. 2-7224, effective October 15,
1947, as Exhibit 7(d)).
4-B-5 -- Supplemental Indenture, dated as of September 1, 1936, supplementing
said Mortgage (filed with Form S-1, File No. 2-7224, effective October
15, 1947, as Exhibit 7(e)).
4-B-6 -- Supplemental Indenture, dated as of January 1, 1941, supplementing said
Mortgage (filed with Form S-1, File No. 2-7224, effective October 15,
1947, as Exhibit 7(f)).
4-B-7 -- Supplemental Indenture, dated as of April 1, 1944, supplementing said
Mortgage (filed with Form S-1, File No. 2-7224, effective October 15,
1947, as Exhibit 7(g)).
4-B-8 -- Supplemental Indenture, dated as of September 1, 1947, supplementing
said Mortgage (filed with Form S-1, File No. 2-7224, effective October
15, 1947, as Exhibit 7(h)).
4-B-9 -- Supplemental Indenture, dated as of September 8, 1947, supplementing
said Mortgage (filed with Form S-1, File No. 2-10401, effective August
21, 1953, as Exhibit 4-B-9).
4-B-10 -- Supplemental Indenture, dated as of February 1, 1949, supplementing said
Mortgage (filed with Form S-1, File No. 2-7808, effective February 3,
1949, as Exhibit 7(j)).
4-B-11 -- Supplemental Indenture, dated as of March 1, 1949, supplementing said
Mortgage (filed with Form S-1, File No. 2-8877, effective April 6,
1951, as Exhibit 7(k)).
4-B-12 -- Supplemental Indenture, dated as of April 1, 1951, supplementing said
Mortgage (filed with Form S-1, File No. 2-8877, effective April 6,
1951, as Exhibit 7(l)).
4-B-13 -- Supplemental Indenture, dated as of September 1, 1953, supplementing
said Mortgage (filed with Form S-1, File No. 2-10401, effective August
21, 1953, as Exhibit 4-B-13).
4-B-14 -- Supplemental Indenture, dated as of October 1, 1954, supplementing said
Mortgage (filed with Form S-9, File No. 2-11297, effective December
30, 1954, as Exhibit 2-B-14).
4-B-15 -- Supplemental Indenture, dated as of January 1, 1955, supplementing said
Mortgage (filed with Form S-9, File No. 2-11297, effective December
30, 1954, as Exhibit 2-B-15).
4-B-16 -- Supplemental Indenture, dated as of May 1, 1956, supplementing said
Mortgage (filed with Form S-9, File No. 2-12402, effective April 26,
1956, as Exhibit 2-B-16).
4-B-17 -- Supplemental Indenture, dated as of January 1, 1960, supplementing said
Mortgage (filed with Form 10, effective June 29, 1961, as Exhibit
3-B-18).
4-B-18 -- Supplemental Indenture, dated as of February 1, 1960, supplementing said
Mortgage (filed with Form 10, effective June 29, 1961, as Exhibit
3-B-19).
</TABLE>
II-2
<PAGE> 21
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
<S> <C>
4-B-19 -- Supplemental Indenture, dated as of February 1, 1962, supplementing said
Mortgage (filed with Form S-9, File No. 2-20577, effective August 16,
1962, as Exhibit 2-B-20).
4-B-20 -- Supplemental Indenture, dated as of August 1, 1962, supplementing said
Mortgage (filed with Form S-1, File No. 2-25367, effective August 23,
1966, as Exhibit 4-B-19).
4-B-21 -- Supplemental Indenture, dated as of June 15, 1964, supplementing said
Mortgage (filed with Form S-1, File No. 2-25367, effective August 23,
1966, as Exhibit 4-B-20).
4-B-22 -- Supplemental Indenture, dated as of February 1, 1965, supplementing said
Mortgage (filed with Form S-1, File No. 2-25367, effective August 23,
1966, as Exhibit 4-B-21).
4-B-23 -- Supplemental Indenture, dated as of April 1, 1967, supplementing said
Mortgage (filed with Form S-9, File No. 2-28023, effective February
15, 1968, as Exhibit 2-B-25).
4-B-24 -- Supplemental Indenture, dated as of February 1, 1968, supplementing said
Mortgage (filed with Form S-9, File No. 2-31304, effective January 21,
1969, as Exhibit 2-B-26).
4-B-25 -- Supplemental Indenture, dated as of February 1, 1969, supplementing said
Mortgage (filed with Form S-7, File No. 2-34289, effective August 27,
1969, as Exhibit 2-B-27).
4-B-26 -- Supplemental Indenture, dated as of September 1, 1969, supplementing
said Mortgage (filed with Form S-7, File No. 2-36095, effective
February 16, 1970, as Exhibit 2-B-39).
4-B-27 -- Supplemental Indenture, dated as of March 1, 1970, supplementing said
Mortgage (filed with Form S-7, File No. 2-37953, effective July 28,
1970, as Exhibit 2-B-42).
4-B-28 -- Supplemental Indenture, dated as of August 1, 1970, supplementing said
Mortgage (filed with Form S-7, File No. 2-39451, effective March 4,
1971, as Exhibit 2-B-28).
4-B-29 -- Supplemental Indenture, dated as of March 1, 1971, supplementing said
Mortgage (filed with Form S-7, File No. 2-42404, effective December 7,
1971, as Exhibit 2-B-29).
4-B-30 -- Supplemental Indenture, dated as of December 1, 1971, supplementing said
Mortgage (filed with Form S-7, File No. 2-43122, effective March 7,
1972, as Exhibit 2-B-30).
4-B-31 -- Supplemental Indenture, dated as of April 1, 1972, supplementing said
Mortgage (filed with Form S-7, File No. 2-46208, effective November
20, 1972, as Exhibit 2-B-31).
4-B-32 -- Supplemental Indenture, dated as of December 1, 1972, supplementing said
Mortgage (filed with Form S-7, File No. 2-48058, effective June 5,
1973, as Exhibit 2-B-32).
4-B-33 -- Supplemental Indenture, dated as of June 1, 1973, supplementing said
Mortgage (filed with Form S-7, File No. 2-49333, effective November 5,
1973, as Exhibit 2-B-33).
4-B-34 -- Supplemental Indenture, dated as of November 1, 1973, supplementing said
Mortgage (filed with Form S-7, File No. 2-50493, effective April 25,
1974, as Exhibit 2-B-34).
4-B-35 -- Supplemental Indenture, dated as of May 1, 1974, supplementing said
Mortgage (filed with Form S-7, File No. 2-52669, effective February
11, 1975, as Exhibit 2-B-35).
4-B-36 -- Supplemental Indenture, dated as of February 1, 1975, supplementing said
Mortgage (filed with Form S-7, File No. 2-57118, effective October 5,
1976, as Exhibit 2-B-36).
</TABLE>
II-3
<PAGE> 22
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
<S> <C>
4-B-37 -- Supplemental Indenture, dated as of July 1, 1975, supplementing said
Mortgage (filed with Form S-7, File No. 2-57118, effective October 5,
1976, as Exhibit 2-B-37).
4-B-38 -- Supplemental Indenture, dated as of October 1, 1976, supplementing said
Mortgage (filed with Form S-7, File No. 2-59494, effective August 10,
1977, as Exhibit 2-B-38).
4-B-39 -- Supplemental Indenture, dated as of September 1, 1977, supplementing
said Mortgage (filed with Form S-7, File No. 2-61995, effective July
26, 1978, as Exhibit 2-B-39).
4-B-40 -- Supplemental Indenture, dated as of August 1, 1978, supplementing said
Mortgage (filed with Form S-7, File No. 2-64541, effective June 7,
1979, as Exhibit 2-B-40).
4-B-41 -- Supplemental Indenture, dated as of June 1, 1979, supplementing said
Mortgage (filed with Form S-7, File No. 2-65371, effective October 2,
1979, as Exhibit 2-B-41).
4-B-42 -- Supplemental Indenture, dated as of October 1, 1979, supplementing said
Mortgage (filed with Form S-7, File No. 2-66659, effective March 12,
1980, as Exhibit 2-B-42).
4-B-43 -- Supplemental Indenture, dated as of March 1, 1980, supplementing said
Mortgage (filed with Form S-16, File No. 2-68571, effective August 19,
1980, as Exhibit 2-B-43).
4-B-44 -- Supplemental Indenture, dated as of August 1, 1980, supplementing said
Mortgage (filed with Form S-16, File No. 2-75951, effective February
23, 1982, as Exhibit 2-B-44).
4-B-45 -- Supplemental Indenture, dated as of March 1, 1982, supplementing said
Mortgage (filed with Form S-3, File No. 2-78882, effective August 30,
1982, as Exhibit 4-B-45).
4-B-46 -- Supplemental Indenture, dated as of September 1, 1982, supplementing
said Mortgage (filed with Form S-3, File No. 2-95931, effective April
1, 1985, as Exhibit 4-B-46).
4-B-47 -- Supplemental Indenture, dated as of May 1, 1983, supplementing said
Mortgage (filed with Form S-3, File No. 2-95931, effective April 1,
1985, as Exhibit 4-B-47).
4-B-48 -- Supplemental Indenture, dated as of September 1, 1983, supplementing
said Mortgage (filed with Form S-3, File No. 2-95931, effective April
1, 1985, as Exhibit 4-B-48).
4-B-49 -- Supplemental Indenture, dated as of September 1, 1984, supplementing
said Mortgage (filed with Form S-3, File No. 2-95931, effective April
1, 1985, as Exhibit 4-B-49).
4-B-50 -- Supplemental Indenture, dated as of March 1, 1985, supplementing said
Mortgage (filed with Form S-3, File No. 2-95931, effective April 1,
1985, as Exhibit 4-B-50).
4-B-51 -- Supplemental Indenture, dated as of December 1, 1985, supplementing said
Mortgage (filed with Form S-3, File No. 33-5163, effective May 2,
1986, as Exhibit 4-B-51).
4-B-52 -- Supplemental Indenture, dated as of April 1, 1986, supplementing said
Mortgage (filed with Form S-3, File No. 33-5163, effective May 2,
1986, as Exhibit 4-B-52).
4-B-53 -- Supplemental Indenture, dated as of May 1, 1986, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1986,
File No. 1-4928, as Exhibit 4-B-53).
4-B-54 -- Supplemental Indenture, dated as of June 1, 1986, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1986,
File No. 1-4928, as Exhibit 4-B-54).
</TABLE>
II-4
<PAGE> 23
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
<S> <C>
4-B-55 -- Supplemental Indenture, dated as of February 1, 1987, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1986,
File No. 1-4928, as Exhibit 4-B-55).
4-B-56 -- Supplemental Indenture, dated as of February 15, 1987, supplementing
said Mortgage (filed with Form 10-K for the year ended December 31,
1986, File No. 1-4928, as Exhibit 4-B-56).
4-B-57 -- Supplemental Indenture, dated as of March 1, 1987, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1986,
File No. 1-4928, as Exhibit 4-B-57).
4-B-58 -- Supplemental Indenture, dated as of October 1, 1987, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1987,
File No. 1-4928, as Exhibit 4-B-58).
4-B-59 -- Supplemental Indenture, dated as of February 1, 1990, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1989,
File No. 1-4928, as Exhibit 4-B-59).
4-B-60 -- Supplemental Indenture, dated as of March 1, 1990, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1990,
File No. 1-4928, as Exhibit 4-B-60).
4-B-61 -- Supplemental Indenture, dated as of May 1, 1990, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1990,
File No. 1-4928, as Exhibit 4-B-61).
4-B-62 -- Supplemental Indenture, dated as of May 15, 1990, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1990,
File No. 1-4928, as Exhibit 4-B-62).
4-B-63 -- Supplemental Indenture, dated as of March 1, 1991, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1990,
File No. 1-4928, as Exhibit 4-B-63).
4-B-64 -- Supplemental Indenture, dated as of July 1, 1991, supplementing said
Mortgage (filed with Form S-3, File No. 33-45501, effective February
13, 1992, as Exhibit 4-B-64).
4-B-65 -- Supplemental Indenture, dated as of December 1, 1991, supplementing said
Mortgage (filed with Form S-3, File No. 33-45501, effective February
13, 1992, as Exhibit 4-B-65).
4-B-66 -- Supplemental Indenture, dated as of March 1, 1992, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1991,
File No. 1-4928, as Exhibit 4-B-66).
4-B-67 -- Supplemental Indenture, dated as of June 1, 1992, supplementing said
Mortgage (filed with Form S-3, File No. 33-50592, effective August 11,
1992, as Exhibit 4-B-67).
4-B-68 -- Supplemental Indenture, dated as of July 1, 1992, supplementing said
Mortgage (filed with Form S-3, File No. 33-50592, effective August 11,
1992, as Exhibit 4-B-68).
4-B-69 -- Supplemental Indenture, dated as of September 1, 1992, supplementing
said Mortgage (filed with Form S-3, File No. 33-53308, effective
November 24, 1992, as Exhibit 4-B-69).
</TABLE>
II-5
<PAGE> 24
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
<S> <C>
4-B-70 -- Supplemental Indenture, dated as of February 1, 1993, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1992,
File No. 1-4928, as Exhibit 4-B-70).
4-B-71 -- Supplemental Indenture, dated as of March 1, 1993, supplementing said
Mortgage (filed with Form S-3, File No. 33-59448, effective March 17,
1993, as Exhibit 4-B-71).
4-B-72 -- Supplemental Indenture, dated as of April 1, 1993, supplementing said
Mortgage (filed with Form S-3, File No. 33-50543, effective October
20, 1993, as Exhibit 4-B-72).
4-B-73 -- Supplemental Indenture, dated as of May 1, 1993, supplementing said
Mortgage (filed with Form S-3, File No. 33-50543, effective October
20, 1993, as Exhibit 4-B-73).
4-B-74 -- Supplemental Indenture, dated as of June 1, 1993, supplementing said
Mortgage (filed with Form S-3, File No. 33-50543, effective October
20, 1993, as Exhibit 4-B-74).
4-B-75 -- Supplemental Indenture, dated as of July 1, 1993, supplementing said
Mortgage (filed with Form S-3, File No. 33-50543, effective October
20, 1993, as Exhibit 4-B-75).
4-B-76 -- Supplemental Indenture, dated as of August 1, 1993, supplementing said
Mortgage (filed with Form S-3, File No. 33-50543, effective October
20, 1993, as Exhibit 4-B-76).
4-B-77 -- Supplemental Indenture, dated as of August 20, 1993, supplementing said
Mortgage (filed with Form S-3, File No. 33-50543, effective October
20, 1993, as Exhibit 4-B-77).
4-B-78 -- Supplemental Indenture, dated as of May 1, 1994, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1994,
File No. 1-4928, as Exhibit 4-B-78).
4-B-79 -- Supplemental Indenture, dated as of November 1, 1994, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1994,
File No. 1-4928, as Exhibit 4-B-79).
4-B-80 -- Supplemental Indenture, dated as of August 1, 1995, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1995,
File
No. 1-4928, as Exhibit 4-B-80).
4-C -- Instrument of Resignation, Appointment and Acceptance among the
registrant, Morgan Guaranty Trust Company of New York, as Trustee, and
Chemical Bank (now The Chase Manhattan Bank), as Successor Trustee,
dated as of August 30, 1994 (filed with Form 10-K for the year ended
December 31, 1994, File No. 1-4928, as Exhibit 4-C).
4-C-1 -- Form of the Senior Notes will be substantially as set forth on pages 12
through 18 of Exhibit 4-D-1 hereto or as to be filed as Exhibit(s) by
means of Form 8-K.
4-C-2 -- Form of the Subordinated Debentures will be substantially as set forth
on pages 13 through 18 of Exhibit 4-D-2 hereto or as to be filed as
Exhibit(s) by means of Form 8-K.
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this 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 this 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
II-6
<PAGE> 25
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 percent 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 this registration statement
or any material change to such information in this registration
statement;
provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to section 13 or section 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act") that are
incorporated by reference in this registration statement.
(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 herein, 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.
(4) That, for the purposes of determining any liability under the Act,
each filing of the registrant's annual report pursuant to section 13(a) or
section 15(d) of the Exchange Act that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the indemnification provisions described in Item 15 above or in
contractual arrangements pursuant thereto, or otherwise, the 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 the registrant of expenses incurred
or paid by a director, officer or controlling person of the 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, the 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.
II-7
<PAGE> 26
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
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 THE CITY OF CHARLOTTE AND STATE OF NORTH CAROLINA,
ON THE 16TH DAY OF OCTOBER, 1996.
DUKE POWER COMPANY
Registrant
By: W. H. GRIGG
-----------------------------------------------------------------------------
Chairman of the Board 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
PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------- --------------------------------------- -----------------
<S> <C> <C>
W. H. GRIGG Chairman of the Board and October 16, 1996
Chief Executive Officer
(Principal Executive Officer)
RICHARD J. OSBORNE Senior Vice President and October 16, 1996
Chief Financial Officer
(Principal Financial Officer)
JEFFREY L. BOYER Controller (Principal October 16, 1996
Accounting Officer)
G. ALEX BERNHARDT
CRANDALL C. BOWLES
ROBERT J. BROWN
W. A. COLEY
STEVE C. GRIFFITH, JR.
W. H. GRIGG
GEORGE DEAN JOHNSON, JR. October 16, 1996
W. W. JOHNSON
MAX LENNON
JAMES G. MARTIN
BUCK MICKEL
R. B. PRIORY
RUSSELL M. ROBINSON, II
</TABLE>
I,1
ELLEN T. RUFF, by signing her name hereto, does hereby sign this document
on behalf of the registrant and on behalf of each of the above-named persons
pursuant to a power of attorney duly executed by the registrant and such
persons, filed with the Securities and Exchange Commission as an exhibit hereto.
ELLEN T. RUFF
------------------------------------------------------------------------
ELLEN T. RUFF
Attorney-in-fact
A majority of the Directors
<PAGE> 27
EXHIBIT 12
DUKE POWER COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
12 MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1996 -----------------
199319921991 -------------------------- 1995
-----------------
1994
--
---------- --------- ---------
<S> <C> <C> <C> <C>
Earnings Before Income Taxes......... $1,203,371 $1,180,979 $1,035,895 $1,036,392 $ 812,053 $ 876,641
Fixed Charges........................ 297,162 299,633 278,117 281,428 326,575 310,030
---------- ---------- ---------- ---------- ---------- ----------
Total................... $1,500,533 $1,480,612 $1,314,012 $1,317,820 $1,138,628 $1,186,671
=========== ========== ========== ========== ========== ==========
Fixed Charges
Interest on long-term debt....... $ 253,781 $ 253,058 $ 237,063 $ 243,047 $ 257,149 $ 269,419
Other interest................... 17,962 21,143 16,814 17,704 47,239 23,947
Amortization of debt discount,
premium, and expense........... 16,085 16,239 16,340 13,300 8,497 5,243
Interest component of rentals.... 9,334 9,193 7,900 7,377 13,690 11,421
---------- ---------- ---------- ---------- ---------- ----------
Fixed Charges........... $ 297,162 $ 299,633 $ 278,117 $ 281,428 $ 326,575 $ 310,030
=========== ========== ========== ========== ========== ==========
Ratio of Earnings to Fixed Charges... 5.05 4.94 4.72 4.68 3.49 3.83
</TABLE>
II-9
<PAGE> 28
EXHIBIT 23(A)
INDEPENDENT AUDITORS' CONSENT
We consent to (i) the incorporation by reference in this Registration
Statement on Form S-3 of Duke Power Company, (ii) the incorporation by reference
in Post-Effective Amendment No. 1 to Registration Statement No. 333-02571 on
Form S-3 of Duke Power Company and (iii) the incorporation by reference in
Post-Effective Amendment No. 2 to Registration Statement No. 33-50543 on Form
S-3 of Duke Power Company of our report dated February 9, 1996, appearing in the
annual report on Form 10-K of Duke Power Company for the year ended December 31,
1995 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.
DELOITTE & TOUCHE LLP
- ------------------------
DELOITTE & TOUCHE LLP
Charlotte, North
Carolina
October 16, 1996
II-10
<PAGE> 29
EXHIBIT 23(B)
CONSENT OF COUNSEL
The consent of Steve C. Griffith, Jr., Esq. is contained in his opinion
filed as Exhibit 5 to this Registration Statement.
II-11
<PAGE> 30
EXHIBIT 23(C)
We hereby consent to the reference to our firm under the heading "Legal
Opinions" in the Prospectus forming a part of this Registration Statement. In
giving such 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 of 1933
and the rules and regulations of the Securities and Exchange Commission
thereunder.
DEWEY BALLANTINE
- ------------------------
DEWEY BALLANTINE
New York, New York
October 16, 1996
II-12
<PAGE> 31
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- --------------------- ----------------------------------------------------------
<S> <C> <C>
1-A -- Form of Underwriting Agreement relating to the New Bonds.
1-B -- Form of Underwriting Agreement relating to the Senior
Notes.
1-C -- Form of Underwriting Agreement relating to the
Subordinated Debentures.
1-D -- Form of Calculation Agreement relating to the Senior
Notes.
4-B-81 -- Form of Supplemental Indenture relating to the New Bonds.
4-D-1 -- Form of Senior Indenture from registrant to The Chase
Manhattan Bank relating to the Senior Notes.
4-D-2 -- Form of Subordinated Indenture from registrant to The
Chase Manhattan Bank relating to the Subordinated
Debentures.
5 -- Opinion of Steve C. Griffith, Jr., Esq.
12 -- Computation of Ratio of Earnings to Fixed Charges (see
page II-9 of Registration Statement).
23(A) -- Independent Auditors' Consent (see page II-10 of
Registration Statement).
23(B) -- Consent of Steve C. Griffith, Jr., Esq. (included in
Exhibit 5 -- see page II-11 of Registration Statement).
23(C) -- Consent of Dewey Ballantine (see page II-12 of
Registration Statement).
24(A) -- Copy of power of attorney authorizing Ellen T. Ruff and
others to sign the Registration Statement on behalf of
the registrant and certain of its directors and
officers.
24(B) -- Certified copy of resolution of the Board of Directors of
the registrant authorizing power of attorney.
25-A -- Statement of Eligibility of the Trustee on Form T-1 of The
Chase Manhattan Bank relating to the New Bonds.
25-B -- Statement of Eligibility of the Trustee on Form T-1 of The
Chase Manhattan Bank relating to the Senior Notes.
25-C -- Statement of Eligibility of the Trustee on Form T-1 of The
Chase Manhattan Bank relating to the Subordinated
Debentures.
</TABLE>
<PAGE> 1
(Proof of October 16, 1996)
$
DUKE POWER COMPANY
FIRST AND REFUNDING MORTGAGE BONDS,
% SERIES DUE
UNDERWRITING AGREEMENT
, 199
Gentlemen:
1. Introductory. DUKE POWER COMPANY, a North Carolina corporation
("Company"), proposes to issue and sell $ aggregate principal amount
of First and Refunding Mortgage Bonds, % Series Due ("Bonds"), to be
issued pursuant to the provisions of a First and Refunding Mortgage, dated as of
December 1, 1927 ("Original Indenture"), from the Company to The Chase Manhattan
Bank, successor Trustee, as amended and supplemented by various supplemental
indentures, including the supplemental indenture dated as of , (the
Original Indenture, as so amended and supplemented, being hereinafter called the
"Mortgage"), and hereby agrees with you (the "Underwriter") as follows:
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the Underwriter that:
(a) A registration statement (No. ), including a prospectus,
relating to the Bonds has been filed with the Securities and Exchange
Commission ("Commission") under the Securities Act of 1933 (the "1933 Act")
and has been declared effective by the Commission. The Company will file
with, or will transmit for filing to, the Commission a supplemented
prospectus relating to the Bonds pursuant to Rule 424 under the 1933 Act.
The registration statement as amended at the date of this Agreement
(including all documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the 1933 Act) is hereinafter referred to as the
"Registration Statement", and such supplemented prospectus (including all
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act) is hereinafter referred to as the "Prospectus".
(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 Company by the Underwriter specifically for use therein.
(c) The documents incorporated by reference in the Prospectus pursuant
to Item 12 of Form S-3 under the 1933 Act, at the time they were filed with
the Commission, complied in all material respects with the requirements of
the Securities Exchange Act of 1934 (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
<PAGE> 2
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.
3. Purchase, Sale and Delivery of Bonds. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the Company, the entire
principal amount of the Bonds at a purchase price of % of the principal
amount thereof, plus accrued interest from , to the Closing Date
(as hereinafter defined).
Payment of the purchase price for the Bonds to be purchased by the
Underwriter shall be made at the offices of Dewey Ballantine, 1301 Avenue of the
Americas, New York, N.Y., or at such other place as shall be mutually agreed
upon by you and the Company, at 10:00 A.M., New York City time, on ,
or such other time not later than three full business days after such date
as shall be agreed upon by you and the Company (the "Closing Date"). Payment
shall be made to the Company by certified or official bank check or checks in
New York Clearing House or similar next day funds, payable to the order of the
Company, against delivery to you of the Bonds. The Bonds shall be in such
denominations and registered in such names as you may request in writing at
least two full business days before the Closing Date.
4. Offering by the Underwriter. It is understood that the Underwriter
proposes to offer the Bonds for sale to the public as set forth in the
Prospectus.
5. Covenants of the Company. The Company covenants and agrees with the
Underwriter that:
(a) The Company 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 Bonds 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 Company 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 Company, during the period when a prospectus relating to the
Bonds 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 Company 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 Company'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 Company's fiscal quarter next following
the date of this Agreement.
(e) The Company will furnish to you 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 Company will arrange or cooperate in arrangements for the
qualification of the Bonds for sale under the laws of such jurisdictions as
you designate and will continue such qualifications in effect so
2
<PAGE> 3
long as required for the distribution; provided, however, that the Company
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 Company 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, the Blue
Sky Survey and any Underwriter's Questionnaire, (ii) the issuance and
delivery of the Bonds to the Underwriter, (iii) the fees and disbursements
of counsel for the Underwriter in connection with the qualification of the
Bonds 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 $5,000, and (iv) the printing and
delivery to the Underwriter, in quantities as hereinabove referred to, of
copies of the Registration Statement and any amendments thereto, and of the
Prospectus and any amendments or supplements thereto.
6. Conditions of the Obligations of the Underwriter. The obligations of
the Underwriter to purchase and pay for the Bonds will be subject to the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of Company officers made pursuant to
the provisions hereof, to the performance by the Company 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 Company 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 Corporation to any debt
securities or preferred stock of the Company 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 Company, 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 Company other than
transactions contemplated by the Prospectus and transactions in the
ordinary course of business.
(d) You shall have received an opinion of Steve C. Griffith, Jr.,
Esq., General Counsel to the Company, dated the Closing Date, to the effect
that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of North
Carolina, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus.
(ii) The Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which it owns
or leases substantial properties or in which the conduct of its business
requires such qualification.
(iii) The Mortgage has been duly authorized, executed and delivered
by the Company, is duly qualified under the Trust Indenture Act of 1939,
and is a legal, valid and enforceable instrument in accordance with its
terms, except (x) as the same may be limited by the laws of the States
of North Carolina and South Carolina (in which States such counsel is
advised all physical property of the Company subject to the Mortgage is
located except for certain interconnection lines) with respect to or
affecting the remedies to enforce the security provided by the Mortgage,
which laws do not, in the opinion of such counsel, make inadequate the
remedies necessary for the realization of the benefits of such security,
and by bankruptcy, insolvency, reorganization or other laws affecting
the enforcement of creditors' rights, and (y) that the provisions of the
Mortgage subjecting to the lien thereof the revenues and income from the
mortgaged property may not be effective prior to the
3
<PAGE> 4
delivery or taking of possession of such revenues or income or of the
mortgaged property by or on behalf of the bondholders.
(iv) The Bonds have been duly authorized by all necessary corporate
action and, when the same have been executed and authenticated as
specified in the Mortgage and delivered to the Underwriter against
payment of the consideration therefor specified in this Agreement, will
be legal, valid and binding obligations of the Company enforceable in
accordance with their terms, except, in each case, as the same may be
limited by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights, and are entitled to the
benefits and security afforded by the Mortgage in accordance with the
terms of the Mortgage and the Bonds, except as set forth in paragraph
(iii) above.
(v) The Company has good title to all properties owned by it,
subject only (a) to the lien of the Mortgage, (b) to permitted
encumbrances as defined in the Mortgage, (c) to minor exceptions and
defects which do not, in the aggregate, in the opinion of such counsel,
materially interfere with the use by the Company of such properties for
the purposes for which they are held, materially detract from the value
of said properties or in any material way impair the security afforded
by the Mortgage, and (d) in the case of the Company's existing
hydroelectric plants, to provisions of licenses issued by the Federal
Power Commission or the Federal Energy Regulatory Commission and to the
provisions of the Federal Power Act.
(vi) The Mortgage complies as to form with all applicable laws of
the States wherein the properties subjected or intended to be subjected
to the lien of the Mortgage are located, including all applicable
recording laws, and constitutes a valid, direct first mortgage lien on
all properties and franchises purported to be owned by the Company,
except such property as is specifically excepted from the lien thereof,
subject only to the liens, charges and encumbrances stated in paragraph
(v) above; all fixed electric properties hereafter acquired by the
Company will, upon such acquisition, become subject to the lien of the
Mortgage, subject, however, to liens or charges of the character
permitted to exist by the Mortgage, and to liens, if any, existing or
placed on such property at the time of the acquisition thereof by the
Company; and the description of such property and franchises in the
Mortgage is adequate to constitute the same a lien on such property and
franchises of the Company except as aforesaid.
(vii) The Company holds valid and subsisting franchises, licenses
and permits in all communities wherein it operates its properties, which
are free from unduly burdensome restrictions, are individually
satisfactory and vest in the Company adequate authority to operate its
public utility system therein, except that in a few municipalities the
Company is operating either without franchises or with franchises the
validity of which might possibly be called into question; in the opinion
of such counsel, however, the Company's franchises, licenses and permits
relating to its public utility business, as a system, are satisfactory
for the adequate conduct of the business of the Company in the territory
which it serves, the rights of the Company to maintain transmission
lines through unincorporated communities and over public lands not
located in incorporated communities and over private rights of way are,
as a system, satisfactory for the adequate conduct of the business of
the Company in the territory which it serves, and, as a public utility
corporation operating under the laws of the States of North Carolina and
South Carolina, the Company has adequate rights to operate its system.
(viii) The Original Indenture and the supplemental indentures
thereto, other than the supplemental indenture dated as of ,
, have been duly recorded or filed for recordation in all such
offices as are necessary to perfect and to preserve and protect the lien
of the Mortgage upon the property intended to be subjected to the lien
thereof, and upon the filing and recording of the supplemental indenture
dated as of , , no other recording or any periodic or other
refiling or rerecording of the Mortgage is or will be required in order
to perfect and to preserve and protect the lien of the Mortgage upon
such property, and there are no mortgage, recording or other
4
<PAGE> 5
taxes required to be paid in connection with such filing and recording
or in connection with the issuance of the Bonds other than customary
filing and recording fees.
(ix) 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.
(x) This Agreement has been duly authorized, executed and delivered
by the Company.
(xi) The North Carolina Utilities Commission and The Public Service
Commission of South Carolina have issued appropriate orders with respect
to the issuance and sale of the Bonds in accordance with this Agreement,
and, to the best of the knowledge of such counsel, such orders are still
in effect; the issuance and sale of the Bonds to the Underwriter are in
conformity with the terms of such orders; and no other authorization,
approval or consent of any other governmental body (other than in
connection or compliance with the provisions of the securities or blue
sky laws of any jurisdiction) is legally required for the issuance and
sale of the Bonds pursuant to this Agreement.
(xii) The performance by the Company of this Agreement will not
contravene any of the provisions of the Restated Articles of
Incorporation or By-Laws of the Company.
(xiii) The descriptions in the Registration Statement and
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 other legal or governmental proceedings required to be
described in the Registration Statement or Prospectus which are not
described as required.
(e) You shall have received an opinion or opinions of Dewey
Ballantine, counsel to the Company, dated the Closing Date, with respect to
the matters set forth in (i), (iii), (iv) and (ix) through (xii) of Section
6(d) and to the further effect that:
(i) 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 (in each case, other than
the financial statements and other financial information included
therein, as to which no opinion need be rendered) 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 Company 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.
(ii) The statements made in the Prospectus under the captions
"Description of the New Bonds" and "Certain Terms of the Offered Bonds",
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 giving their opinion Dewey Ballantine may rely on the opinion of
Steve C. Griffith, Jr., Esq. as to matters of the laws of North Carolina
and South Carolina.
(f) You shall have received the opinion of Willkie Farr & Gallagher,
counsel for the Underwriter, dated the Closing Date, with respect to the
matters set forth in (i), (iii), (iv) and (ix) through (xi) of Section 6(d)
and in (i) and (ii) of Section 6(e) and other related matters as you may
require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of
5
<PAGE> 6
enabling them to pass upon such matters. In giving their opinion Willkie
Farr & Gallagher may rely on the opinion of Steve C. Griffith, Jr., Esq. as
to matters of the laws of North Carolina and South Carolina.
(g) You shall have received a certificate of the President or any Vice
President and a principal financial or accounting officer of the Company,
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 Company in this Agreement are true
and correct, that the Company 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.
(h) On the date of this Agreement, you shall have received from
Deloitte & Touche LLP a letter dated the date hereof, in form and substance
reasonably satisfactory to you, to the effect that (i) they are independent
certified public accountants with respect to the Company within the meaning
of the 1933 Act and the applicable published 1933 Act Regulations; (ii) in
their opinion, the financial statements and supplemental schedules
incorporated by reference in the Registration Statement from the Company's
Form 10-K Annual Reports filed with the Commission under Section 13 of the
1934 Act (such 10-K Annual Report for December 31 of the most recent year
for which the Company has filed an Annual Report on Form 10-K, or, if the
Company has filed a Current Report on Form 8-K including audited financial
statements for a later year but has not theretofore filed an Annual Report
on Form 10-K for such year, such Current Report on Form 8-K, being
hereinafter referred to as the "Form 10-K") comply as to form in all
material respects with the applicable accounting requirements of the 1934
Act and the applicable published 1934 Act Regulations; (iii) they have read
the unaudited balance sheets of the Company as of the end of each quarter
since the end of the year covered by the Form 10-K and the related
unaudited statements of income and cash flows of the Company for the
interim periods ended as of the end of each of the quarters since the end
of the year covered by the Form 10-K and the corresponding interim periods
in the preceding year incorporated by reference in the Registration
Statement and included in the Company's Form 10-Q Quarterly Reports, if
any, filed with the Commission under Section 13 of the 1934 Act for the
quarters ended since the end of the year covered by the Form 10-K (the
"Form 10-Q's"); and on the basis of a reading of such unaudited balance
sheets and such unaudited statements of income and cash flows and of the
latest available unaudited financial statements of the Company, the minutes
of the meetings of shareholders, the Board of Directors and the Management
Committee of the Board of Directors of the Company as set forth in the
minute books at a specified date not more than five days prior to the date
of such letter and inquiries of officers of the Company who have
responsibility for financial and accounting matters (it being understood
that the foregoing procedures do not constitute an examination made in
accordance with generally accepted auditing standards and that they would
not necessarily reveal matters of significance with respect to the comments
made in such letter, and, accordingly, that Deloitte & Touche LLP make no
representation as to the sufficiency of such procedures for your purposes),
nothing has come to their attention which caused them to believe that (A)
any material modifications should be made to the unaudited financial
statements of the Company as at the end of each quarter since the end of
the year covered by the Form 10-K and for the interim periods ended as of
the end of each of the quarters since the end of the year covered by the
Form 10-K and the corresponding interim periods in the preceding year
included in the Form 10-Q's and incorporated by reference in the
Registration Statement for it to be in conformity with generally accepted
accounting principles, (B) such unaudited financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of the 1934 Act and the applicable published 1934 Act
Regulations or (C) at a specified date not more than five days prior to the
date of such letter there was any change in the capital stock (except for
the issuance of common stock under the Company's Stock Purchase-Savings
Program for Employees, Employees' Stock Ownership Plan, Stock Purchase and
Dividend Reinvestment Plan or Stock Ownership Plan for Nonemployee
Directors) or long-term debt of the Company (except for increases resulting
from issuances of debt pursuant to the Company's Medium-Term Notes Program
or reductions resulting from redemptions, purchases, payments of sinking
fund obligations or scheduled maturities) or any decrease in its net
assets,
6
<PAGE> 7
in each case as compared with amounts shown in the most recent balance
sheet of the Company incorporated by reference in the Prospectus except,
with respect to clause (C), for changes or decreases which the Prospectus
discloses have occurred or may occur; and (iv) they have carried out
certain procedures, and made certain findings confirming certain other
financial information contained or incorporated by reference in the
Registration Statement and Prospectus.
(i) At the Closing Date you shall have received from Deloitte & Touche
LLP a letter, dated the Closing Date, to the effect that such accountants
reaffirm the statements made in the letter furnished pursuant to paragraph
(h) of this Section 6, except that the specified date referred to shall be
a date not more than four days prior to the Closing Date.
The Company will furnish you with such conformed copies of such opinions,
certificates, letters and documents as you reasonably request.
7. Indemnification. (a) The Company agrees to indemnify and hold harmless
the Underwriter and each person, if any, who controls the 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 Company by the Underwriter 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
Company; 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 Company be liable under this indemnity agreement with
respect to any claim made against the Underwriter or any such controlling person
unless the Company 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 Company shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. The Company 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 controlling person or persons, defendant or defendants in any
suit so brought, which approval shall not be unreasonably withheld. In any such
suit, the 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 the Underwriter or such controlling person unless (i) the Company
and the 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 the Underwriter or such controlling person and the Company
and the Underwriter or such controlling person shall have been advised by such
counsel that a conflict of interest
7
<PAGE> 8
between the Company and the 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 Company shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys for the
Underwriter and all such controlling persons, which firm shall be designated in
writing by you). The Company 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 Company within the meaning of Section 15 of the 1933
Act, in connection with the sale of the Bonds.
(b) The Underwriter agrees that it will indemnify and hold harmless the
Company, its directors, and each of its officers who signed the Registration
Statement and each person, if any, who controls the Company 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 Company by the Underwriter 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 Company 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 the
Underwriter, the Underwriter shall have the rights and duties given to the
Company, and the Company and each person so indemnified shall have the rights
and duties given to the Underwriter, by the provisions of subsection (a) of this
Section.
8. Termination of this Agreement. (a) You shall have the right to
terminate this Agreement by giving the notice indicated below in this Section at
any time at or prior to the Closing Date if (i) trading on the New York Stock
Exchange shall be suspended by that Exchange or by order of the Commission or
any other governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by either Federal or New York authorities, or (iii)
there shall have occurred any outbreak of hostilities or other national or
international calamity or crisis, or any declaration of war or a national
emergency by the United States, the effect of which on the financial markets of
the United States shall be such as, in your reasonable judgment, to make it
impracticable for you to enforce contracts for the sale of the Bonds. If you
shall so terminate this Agreement, such termination shall be without liability
of any party to any other party except for any expenses to be paid or reimbursed
by the Company pursuant to Section 5(g).
(b) If the Underwriter elects to terminate this Agreement as provided in
this Section, the Company shall be notified promptly by the Underwriter, by
telephone or telecopy, confirmed by letter.
9. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the Underwriter set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Underwriter or the Company, or any of its officers or directors or any
controlling person, and will survive delivery of and payment for the Bonds.
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriter, will be mailed, delivered, or telecopied and confirmed to
you at ,
, , ,
attention of
, or, if sent to the Company, will be mailed, delivered,
or telecopied and confirmed to it at 422 South Church Street, Charlotte, N.C.
28242-0001, attention of Richard J. Osborne, Senior Vice President and Chief
Financial Officer.
11. Successors. This Agreement shall inure to the benefit of and be
binding upon the Underwriter and the Company 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
8
<PAGE> 9
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
Bonds from the Underwriter shall be deemed to be a successor by reason merely of
such purchase.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicate hereof, whereupon it will
become a binding agreement between the Company and the Underwriter in accordance
with its terms.
Very truly yours,
DUKE POWER COMPANY
By:
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
By:
9
<PAGE> 1
(Proof of October 16, 1996)
$
DUKE POWER COMPANY
% SENIOR NOTES DUE
UNDERWRITING AGREEMENT
, 199
Gentlemen:
1. Introductory. DUKE POWER COMPANY, a North Carolina corporation
("Company"), proposes to issue and sell $ aggregate principal amount
of % Senior Notes due ("Notes"), to be issued pursuant to the provisions
of a Senior Indenture, dated as of October 1, 1996 ("Indenture"), between the
Company and The Chase Manhattan Bank, and hereby agrees with you (the
"Underwriter") as follows:
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the Underwriter 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 (the "1933 Act")
and has been declared effective by the Commission. The Company will file
with, or will transmit for filing to, the Commission a supplemented
prospectus relating to the Notes pursuant to Rule 424 under the 1933 Act.
The registration statement as amended at the date of this Agreement
(including all documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the 1933 Act) is hereinafter referred to as the
"Registration Statement", and such supplemented prospectus (including all
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act) is hereinafter referred to as the "Prospectus".
(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 Company by the Underwriter specifically for use therein.
(c) The documents incorporated by reference in the Prospectus pursuant
to Item 12 of Form S-3 under the 1933 Act, at the time they were filed with
the Commission, complied in all material respects with the requirements of
the Securities Exchange Act of 1934 (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.
<PAGE> 2
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 Company agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the Company, the entire
principal amount of the Notes at a purchase price of % of the principal
amount thereof, plus accrued interest from , to the Closing Date
(as hereinafter defined).
Payment of the purchase price for the Notes to be purchased by the
Underwriter shall be made at the offices of Dewey Ballantine, 1301 Avenue of the
Americas, New York, N.Y., or at such other place as shall be mutually agreed
upon by you and the Company, at 10:00 A.M., New York City time, on ,
or such other time not later than three full business days after such date
as shall be agreed upon by you and the Company (the "Closing Date"). Payment
shall be made to the Company by wire transfer in immediately available funds,
payable to the order of the Company against delivery of the Notes, in fully
registered form, to or upon your order. The Notes shall be delivered in the form
of a global note in the 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.
4. Offering by the Underwriter. It is understood that the Underwriter
proposes to offer the Notes for sale to the public as set forth in the
Prospectus.
5. Covenants of the Company. The Company covenants and agrees with the
Underwriter that:
(a) The Company 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 Company 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 Company, 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 Company 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 Company'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 Company's fiscal quarter next following
the date of this Agreement.
(e) The Company will furnish to you 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 Company 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 Company 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.
2
<PAGE> 3
(g) The Company 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, the Blue
Sky Survey and any Underwriter's Questionnaire, (ii) the issuance and
delivery of the Notes as specified herein, (iii) the fees and disbursements
of counsel for the Underwriter 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 $5,000, and (iv) the printing and
delivery to the Underwriter, in quantities as hereinabove referred to, of
copies of the Registration Statement and any amendments thereto, and of the
Prospectus and any amendments or supplements thereto.
6. Conditions of the Obligations of the Underwriter. The obligations of
the Underwriter to purchase and pay for the Notes will be subject to the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of Company officers made pursuant to
the provisions hereof, to the performance by the Company 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 Company 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 Corporation to any debt
securities or preferred stock of the Company 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 Company, 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 Company other than
transactions contemplated by the Prospectus and transactions in the
ordinary course of business.
(d) You shall have received an opinion of Steve C. Griffith, Jr.,
Esq., General Counsel to the Company, dated the Closing Date, to the effect
that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of North
Carolina, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus.
(ii) The Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which it owns
or leases substantial properties or in which the conduct of its business
requires such qualification.
(iii) The Indenture has been duly authorized, executed and
delivered by the Company, is duly qualified under the Trust Indenture
Act of 1939 and is a legal, valid and enforceable instrument in
accordance with its terms except as the same may be limited by
bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights.
(iv) The Notes have been duly authorized by all necessary corporate
action and, when the same have been executed and authenticated as
specified in the Indenture and delivered to the Underwriter against
payment of the consideration therefor specified in this Agreement, will
be legal, valid and binding obligations of the Company enforceable in
accordance with their terms, except, in each case, as the same may be
limited by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights, 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
3
<PAGE> 4
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 Company.
(vii) The North Carolina Utilities Commission and The Public
Service Commission of South Carolina have issued appropriate orders with
respect to the issuance and sale of the Notes in accordance with this
Agreement, and, to the best of the knowledge of such counsel, such
orders are still in effect; the issuance and sale of the Notes to the
Underwriter are in conformity with the terms of such orders; and no
other authorization, approval or consent of any other governmental body
(other than in connection or compliance with the provisions of the
securities or blue sky laws of any jurisdiction) is legally required for
the issuance and sale of the Notes pursuant to this Agreement.
(viii) The performance by the Company of this Agreement will not
contravene any of the provisions of the Restated Articles of
Incorporation or By-Laws of the Company.
(ix) The descriptions in the Registration Statement and 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
other legal or governmental proceedings required to be described in the
Registration Statement or Prospectus which are not described as
required.
(e) You shall have received an opinion or opinions of Dewey
Ballantine, counsel to the Company, dated the Closing Date, with respect to
the matters set forth in (i), (iii), (iv) and (v) through (viii) of Section
6(d) and to the further effect that:
(i) 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 (in each case, other than
the financial statements and other financial information included
therein, as to which no opinion need be rendered) 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 Company 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.
(ii) The statements made in the Prospectus under the captions
"Description of the Debt Securities" (but only with respect to the
Notes) and "Certain Terms of the Offered 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 giving their opinion Dewey Ballantine may rely on the opinion of
Steve C. Griffith, Jr., Esq. as to matters of the laws of North Carolina
and South Carolina.
(f) You shall have received the opinion of Willkie Farr & Gallagher,
counsel for the Underwriter, dated the Closing Date, with respect to the
matters set forth in (i), (iii), (iv) and (v) through (viii) of Section
6(d) and in (i) and (ii) of Section 6(e) and other related matters as you
may require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters. In giving their opinion Willkie Farr & Gallagher may rely on
the opinion of Steve C. Griffith, Jr., Esq. as to matters of the laws of
North Carolina and South Carolina.
(g) You shall have received a certificate of the President or any Vice
President and a principal financial or accounting officer of the Company,
dated the Closing Date, in which such officers, to the best
4
<PAGE> 5
of their knowledge after reasonable investigation, shall state that the
representations and warranties of the Company in this Agreement are true
and correct, that the Company 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.
(h) On the date of this Agreement, you shall have received from
Deloitte & Touche LLP a letter dated the date hereof, in form and substance
reasonably satisfactory to you, to the effect that (i) they are independent
certified public accountants with respect to the Company within the meaning
of the 1933 Act and the applicable published 1933 Act Regulations; (ii) in
their opinion, the financial statements and supplemental schedules
incorporated by reference in the Registration Statement from the Company's
Form 10-K Annual Reports filed with the Commission under Section 13 of the
1934 Act (such 10-K Annual Report for December 31 of the most recent year
for which the Company has filed an Annual Report on Form 10-K, or, if the
Company has filed a Current Report on Form 8-K including audited financial
statements for a later year but has not theretofore filed an Annual Report
on Form 10-K for such year, such Current Report on Form 8-K, being
hereinafter referred to as the "Form 10-K") comply as to form in all
material respects with the applicable accounting requirements of the 1934
Act and the applicable published 1934 Act Regulations; (iii) they have read
the unaudited balance sheets of the Company as of the end of each quarter
since the end of the year covered by the Form 10-K and the related
unaudited statements of income and cash flows of the Company for the
interim periods ended as of the end of each of the quarters since the end
of the year covered by the Form 10-K and the corresponding interim periods
in the preceding year incorporated by reference in the Registration
Statement and included in the Company's Form 10-Q Quarterly Reports, if
any, filed with the Commission under Section 13 of the 1934 Act for the
quarters ended since the end of the year covered by the Form 10-K (the
"Form 10-Q's"); and on the basis of a reading of such unaudited balance
sheets and such unaudited statements of income and cash flows and of the
latest available unaudited financial statements of the Company, the minutes
of the meetings of shareholders, the Board of Directors and the Management
Committee of the Board of Directors of the Company as set forth in the
minute books at a specified date not more than five days prior to the date
of such letter and inquiries of officers of the Company who have
responsibility for financial and accounting matters (it being understood
that the foregoing procedures do not constitute an examination made in
accordance with generally accepted auditing standards and that they would
not necessarily reveal matters of significance with respect to the comments
made in such letter, and, accordingly, that Deloitte & Touche LLP make no
representation as to the sufficiency of such procedures for your purposes),
nothing has come to their attention which caused them to believe that (A)
any material modifications should be made to the unaudited financial
statements of the Company as at the end of each quarter since the end of
the year covered by the Form 10-K and for the interim periods ended as of
the end of each of the quarters since the end of the year covered by the
Form 10-K and the corresponding interim periods in the preceding year
included in the Form 10-Q's and incorporated by reference in the
Registration Statement for it to be in conformity with generally accepted
accounting principles, (B) such unaudited financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of the 1934 Act and the applicable published 1934 Act
Regulations or (C) at a specified date not more than five days prior to the
date of such letter there was any change in the capital stock (except for
the issuance of common stock under the Company's Stock Purchase-Savings
Program for Employees, Employees' Stock Ownership Plan, Stock Purchase and
Dividend Reinvestment Plan or Stock Ownership Plan for Nonemployee
Directors) or long-term debt of the Company (except for increases resulting
from issuances of debt pursuant to the Company's Medium-Term Notes Program
or reductions resulting from redemptions, purchases, payments of sinking
fund obligations or scheduled maturities) or any decrease in its net
assets, in each case as compared with amounts shown in the most recent
balance sheet of the Company incorporated by reference in the Prospectus
except, with respect to clause (C), for changes or decreases which the
Prospectus discloses have occurred or may occur; and (iv) they have carried
out certain
5
<PAGE> 6
procedures, and made certain findings confirming certain other financial
information contained or incorporated by reference in the Registration
Statement and Prospectus.
(i) At the Closing Date you shall have received from Deloitte & Touche
LLP a letter, dated the Closing Date, to the effect that such accountants
reaffirm the statements made in the letter furnished pursuant to paragraph
(h) of this Section 6, except that the specified date referred to shall be
a date not more than four days prior to the Closing Date.
The Company will furnish you with such conformed copies of such opinions,
certificates, letters and documents as you reasonably request.
7. Indemnification. (a) The Company agrees to indemnify and hold harmless
the Underwriter and each person, if any, who controls the 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 Company by the Underwriter 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
Company; 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 Company be liable under this indemnity agreement with
respect to any claim made against the Underwriter or any such controlling person
unless the Company 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 Company shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. The Company 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 controlling person or persons, defendant or defendants in any
suit so brought, which approval shall not be unreasonably withheld. In any such
suit, the 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 the Underwriter or such controlling person unless (i) the Company
and the 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 the Underwriter or such controlling person and the Company
and the Underwriter or such controlling person shall have been advised by such
counsel that a conflict of interest between the Company and the 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 Company shall not, in
connection with any one such action or separate
6
<PAGE> 7
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 the
Underwriter and all such controlling persons, which firm shall be designated in
writing by you). The Company 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 Company within the meaning of Section 15 of the 1933
Act, in connection with the sale of the Notes.
(b) The Underwriter agrees that it will indemnify and hold harmless the
Company, its directors, and each of its officers who signed the Registration
Statement and each person, if any, who controls the Company 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 Company by the Underwriter 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 Company 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 the
Underwriter, the Underwriter shall have the rights and duties given to the
Company, and the Company and each person so indemnified shall have the rights
and duties given to the Underwriter, by the provisions of subsection (a) of this
Section.
8. Termination of this Agreement. (a) You shall have the right to
terminate this Agreement by giving the notice indicated below in this Section at
any time at or prior to the Closing Date if (i) trading on the New York Stock
Exchange shall be suspended by that Exchange or by order of the Commission or
any other governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by either Federal or New York authorities, or (iii)
there shall have occurred any outbreak of hostilities or other national or
international calamity or crisis, or any declaration of war or a national
emergency by the United States, the effect of which on the financial markets of
the United States shall be such as, in your reasonable judgment, to make it
impracticable for you to enforce contracts for the sale of the Notes. If you
shall so terminate this Agreement, such termination shall be without liability
of any party to any other party except for any expenses to be paid or reimbursed
by the Company pursuant to Section 5(g).
(b) If the Underwriter elects to terminate this Agreement as provided in
this Section, the Company shall be notified promptly by the Underwriter, by
telephone or telecopy, confirmed by letter.
9. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the Underwriter set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Underwriter or the Company, 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 Underwriter, will be mailed, delivered, or telecopied and confirmed to
you at ,
, , ,
attention of
, or, if sent to the Company, will be mailed, delivered,
or telecopied and confirmed to it at 422 South Church Street, Charlotte, N.C.
28242-0001, attention of Richard J. Osborne, Senior Vice President and Chief
Financial Officer.
11. Successors. This Agreement shall inure to the benefit of and be
binding upon the Underwriter and the Company 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
7
<PAGE> 8
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 the
Underwriter shall be deemed to be a successor by reason merely of such purchase.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicate hereof, whereupon it will
become a binding agreement between the Company and the Underwriter in accordance
with its terms.
Very truly yours,
DUKE POWER COMPANY
By:
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
By:
8
<PAGE> 1
(Proof of October 16, 1996)
$
DUKE POWER COMPANY
% SUBORDINATED DEBENTURES DUE
UNDERWRITING AGREEMENT
, 199
Gentlemen:
1. Introductory. DUKE POWER COMPANY, a North Carolina corporation
("Company"), proposes to issue and sell $ aggregate principal amount
of % Subordinated Debentures due
("Debentures"), to be issued pursuant to the provisions of a Subordinated
Indenture, dated as of October 1, 1996 ("Indenture"), between the Company and
The Chase Manhattan Bank, and hereby agrees with you (the "Underwriter") as
follows:
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the Underwriter that:
(a) A registration statement (No. ), including a prospectus,
relating to the Debentures has been filed with the Securities and Exchange
Commission ("Commission") under the Securities Act of 1933 (the "1933 Act")
and has been declared effective by the Commission. The Company will file
with, or will transmit for filing to, the Commission a supplemented
prospectus relating to the Debentures pursuant to Rule 424 under the 1933
Act. The registration statement as amended at the date of this Agreement
(including all documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the 1933 Act) is hereinafter referred to as the
"Registration Statement", and such supplemented prospectus (including all
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act) is hereinafter referred to as the "Prospectus".
(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 Company by the Underwriter specifically for use therein.
(c) The documents incorporated by reference in the Prospectus pursuant
to Item 12 of Form S-3 under the 1933 Act, at the time they were filed with
the Commission, complied in all material respects with the requirements of
the Securities Exchange Act of 1934 (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.
<PAGE> 2
3. Purchase, Sale and Delivery of Debentures. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the Company, the entire
principal amount of the Debentures at a purchase price of % of the
principal amount thereof, plus accrued interest from , to the
Closing Date (as hereinafter defined).
Payment of the purchase price for the Debentures to be purchased by the
Underwriter shall be made at the offices of Dewey Ballantine, 1301 Avenue of the
Americas, New York, N.Y., or at such other place as shall be mutually agreed
upon by you and the Company, at 10:00 A.M., New York City time, on ,
or such other time not later than three full business days after such date
as shall be agreed upon by you and the Company (the "Closing Date"). Payment
shall be made to the Company by wire transfer in immediately available funds,
payable to the order of the Company against delivery of the Debentures, in fully
registered form, to or upon your order. The Debentures shall be delivered in the
form of a global note in the denomination equal to the aggregate principal
amount of the Debentures upon original issuance and registered in the name of
Cede & Co., as nominee for The Depository Trust Company.
4. Offering by the Underwriter. It is understood that the Underwriter
proposes to offer the Debentures for sale to the public as set forth in the
Prospectus.
5. Covenants of the Company. The Company covenants and agrees with the
Underwriter that:
(a) The Company 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 Debentures 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 Company
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 Company, during the period when a prospectus relating to the
Debentures 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 Company 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 Company'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 Company's fiscal quarter next following
the date of this Agreement.
(e) The Company will furnish to you 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 Company will arrange or cooperate in arrangements for the
qualification of the Debentures 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 Company 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.
2
<PAGE> 3
(g) The Company 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, the Blue
Sky Survey and any Underwriter's Questionnaire, (ii) the issuance and
delivery of the Debentures as specified herein, (iii) the fees and
disbursements of counsel for the Underwriter in connection with the
qualification of the Debentures 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 $5,000, and (iv) the printing and delivery to the Underwriter, in
quantities as hereinabove referred to, of copies of the Registration
Statement and any amendments thereto, and of the Prospectus and any
amendments or supplements thereto.
6. Conditions of the Obligations of the Underwriter. The obligations of
the Underwriter to purchase and pay for the Debentures will be subject to the
accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of Company officers made pursuant to
the provisions hereof, to the performance by the Company 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 Company 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 Corporation to any debt
securities or preferred stock of the Company 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 Company, 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 Company other than
transactions contemplated by the Prospectus and transactions in the
ordinary course of business.
(d) You shall have received an opinion of Steve C. Griffith, Jr.,
Esq., General Counsel to the Company, dated the Closing Date, to the effect
that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of North
Carolina, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus.
(ii) The Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which it owns
or leases substantial properties or in which the conduct of its business
requires such qualification.
(iii) The Indenture has been duly authorized, executed and
delivered by the Company, is duly qualified under the Trust Indenture
Act of 1939 and is a legal, valid and enforceable instrument in
accordance with its terms except as the same may be limited by
bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights.
(iv) The Debentures have been duly authorized by all necessary
corporate action and, when the same have been executed and authenticated
as specified in the Indenture and delivered to the Underwriter against
payment of the consideration therefor specified in this Agreement, will
be legal, valid and binding obligations of the Company enforceable in
accordance with their terms, except, in each case, as the same may be
limited by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights, and are entitled to the
benefits afforded by the Indenture in accordance with the terms of the
Indenture and the Debentures.
(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
3
<PAGE> 4
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 Company.
(vii) The North Carolina Utilities Commission and The Public
Service Commission of South Carolina have issued appropriate orders with
respect to the issuance and sale of the Debentures in accordance with
this Agreement, and, to the best of the knowledge of such counsel, such
orders are still in effect; the issuance and sale of the Debentures to
the Underwriter are in conformity with the terms of such orders; and no
other authorization, approval or consent of any other governmental body
(other than in connection or compliance with the provisions of the
securities or blue sky laws of any jurisdiction) is legally required for
the issuance and sale of the Debentures pursuant to this Agreement.
(viii) The performance by the Company of this Agreement will not
contravene any of the provisions of the Restated Articles of
Incorporation or By-Laws of the Company.
(ix) The descriptions in the Registration Statement and 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
other legal or governmental proceedings required to be described in the
Registration Statement or Prospectus which are not described as
required.
(e) You shall have received an opinion or opinions of Dewey
Ballantine, counsel to the Company, dated the Closing Date, with respect to
the matters set forth in (i), (iii), (iv) and (v) through (viii) of Section
6(d) and to the further effect that:
(i) 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 (in each case, other than
the financial statements and other financial information included
therein, as to which no opinion need be rendered) 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 Company 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.
(ii) The statements made in the Prospectus under the captions
"Description of the Debt Securities" (but only with respect to the
Debentures) and "Certain Terms of the Offered Debentures", 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 giving their opinion Dewey Ballantine may rely on the opinion of
Steve C. Griffith, Jr., Esq. as to matters of the laws of North Carolina
and South Carolina.
(f) You shall have received the opinion of Brown & Wood, counsel for
the Underwriter, dated the Closing Date, with respect to the matters set
forth in (i), (iii), (iv) and (v) through (viii) of Section 6(d) and in (i)
and (ii) of Section 6(e) and other related matters as you may require, and
the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters. In
giving their opinion Brown & Wood may rely on the opinion of Steve C.
Griffith, Jr., Esq. as to matters of the laws of North Carolina and South
Carolina.
(g) You shall have received a certificate of the President or any Vice
President and a principal financial or accounting officer of the Company,
dated the Closing Date, in which such officers, to the best
4
<PAGE> 5
of their knowledge after reasonable investigation, shall state that the
representations and warranties of the Company in this Agreement are true
and correct, that the Company 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.
(h) On the date of this Agreement, you shall have received from
Deloitte & Touche LLP a letter dated the date hereof, in form and substance
reasonably satisfactory to you, to the effect that (i) they are independent
certified public accountants with respect to the Company within the meaning
of the 1933 Act and the applicable published 1933 Act Regulations; (ii) in
their opinion, the financial statements and supplemental schedules
incorporated by reference in the Registration Statement from the Company's
Form 10-K Annual Reports filed with the Commission under Section 13 of the
1934 Act (such 10-K Annual Report for December 31 of the most recent year
for which the Company has filed an Annual Report on Form 10-K, or, if the
Company has filed a Current Report on Form 8-K including audited financial
statements for a later year but has not theretofore filed an Annual Report
on Form 10-K for such year, such Current Report on Form 8-K, being
hereinafter referred to as the "Form 10-K") comply as to form in all
material respects with the applicable accounting requirements of the 1934
Act and the applicable published 1934 Act Regulations; (iii) they have read
the unaudited balance sheets of the Company as of the end of each quarter
since the end of the year covered by the Form 10-K and the related
unaudited statements of income and cash flows of the Company for the
interim periods ended as of the end of each of the quarters since the end
of the year covered by the Form 10-K and the corresponding interim periods
in the preceding year incorporated by reference in the Registration
Statement and included in the Company's Form 10-Q Quarterly Reports, if
any, filed with the Commission under Section 13 of the 1934 Act for the
quarters ended since the end of the year covered by the Form 10-K (the
"Form 10-Q's"); and on the basis of a reading of such unaudited balance
sheets and such unaudited statements of income and cash flows and of the
latest available unaudited financial statements of the Company, the minutes
of the meetings of shareholders, the Board of Directors and the Management
Committee of the Board of Directors of the Company as set forth in the
minute books at a specified date not more than five days prior to the date
of such letter and inquiries of officers of the Company who have
responsibility for financial and accounting matters (it being understood
that the foregoing procedures do not constitute an examination made in
accordance with generally accepted auditing standards and that they would
not necessarily reveal matters of significance with respect to the comments
made in such letter, and, accordingly, that Deloitte & Touche LLP make no
representation as to the sufficiency of such procedures for your purposes),
nothing has come to their attention which caused them to believe that (A)
any material modifications should be made to the unaudited financial
statements of the Company as at the end of each quarter since the end of
the year covered by the Form 10-K and for the interim periods ended as of
the end of each of the quarters since the end of the year covered by the
Form 10-K and the corresponding interim periods in the preceding year
included in the Form 10-Q's and incorporated by reference in the
Registration Statement for it to be in conformity with generally accepted
accounting principles, (B) such unaudited financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of the 1934 Act and the applicable published 1934 Act
Regulations or (C) at a specified date not more than five days prior to the
date of such letter there was any change in the capital stock (except for
the issuance of common stock under the Company's Stock Purchase-Savings
Program for Employees, Employees' Stock Ownership Plan, Stock Purchase and
Dividend Reinvestment Plan or Stock Ownership Plan for Nonemployee
Directors) or long-term debt of the Company (except for increases resulting
from issuances of debt pursuant to the Company's Medium-Term Notes Program
or reductions resulting from redemptions, purchases, payments of sinking
fund obligations or scheduled maturities) or any decrease in its net
assets, in each case as compared with amounts shown in the most recent
balance sheet of the Company incorporated by reference in the Prospectus
except, with respect to clause (C), for changes or decreases which the
Prospectus discloses have occurred or may occur; and (iv) they have carried
out certain
5
<PAGE> 6
procedures, and made certain findings confirming certain other financial
information contained or incorporated by reference in the Registration
Statement and Prospectus.
(i) At the Closing Date you shall have received from Deloitte & Touche
LLP a letter, dated the Closing Date, to the effect that such accountants
reaffirm the statements made in the letter furnished pursuant to paragraph
(h) of this Section 6, except that the specified date referred to shall be
a date not more than four days prior to the Closing Date.
The Company will furnish you with such conformed copies of such opinions,
certificates, letters and documents as you reasonably request.
7. Indemnification. (a) The Company agrees to indemnify and hold harmless
the Underwriter and each person, if any, who controls the 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 Company by the Underwriter 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
Company; 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 Company be liable under this indemnity agreement with
respect to any claim made against the Underwriter or any such controlling person
unless the Company 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 Company shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. The Company 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 controlling person or persons, defendant or defendants in any
suit so brought, which approval shall not be unreasonably withheld. In any such
suit, the 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 the Underwriter or such controlling person unless (i) the Company
and the 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 the Underwriter or such controlling person and the Company
and the Underwriter or such controlling person shall have been advised by such
counsel that a conflict of interest between the Company and the 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 Company shall not, in
connection with any one such action or separate
6
<PAGE> 7
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 the
Underwriter and all such controlling persons, which firm shall be designated in
writing by you). The Company 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 Company within the meaning of Section 15 of the 1933
Act, in connection with the sale of the Debentures.
(b) The Underwriter agrees that it will indemnify and hold harmless the
Company, its directors, and each of its officers who signed the Registration
Statement and each person, if any, who controls the Company 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 Company by the Underwriter 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 Company 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 the
Underwriter, the Underwriter shall have the rights and duties given to the
Company, and the Company and each person so indemnified shall have the rights
and duties given to the Underwriter, by the provisions of subsection (a) of this
Section.
8. Termination of this Agreement. (a) You shall have the right to
terminate this Agreement by giving the notice indicated below in this Section at
any time at or prior to the Closing Date if (i) trading on the New York Stock
Exchange shall be suspended by that Exchange or by order of the Commission or
any other governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by either Federal or New York authorities, or (iii)
there shall have occurred any outbreak of hostilities or other national or
international calamity or crisis, or any declaration of war or a national
emergency by the United States, the effect of which on the financial markets of
the United States shall be such as, in your reasonable judgment, to make it
impracticable for you to enforce contracts for the sale of the Debentures. If
you shall so terminate this Agreement, such termination shall be without
liability of any party to any other party except for any expenses to be paid or
reimbursed by the Company pursuant to Section 5(g).
(b) If the Underwriter elects to terminate this Agreement as provided in
this Section, the Company shall be notified promptly by the Underwriter, by
telephone or telecopy, confirmed by letter.
9. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the Underwriter set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Underwriter or the Company, or any of its officers or directors or any
controlling person, and will survive delivery of and payment for the Debentures.
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriter, will be mailed, delivered, or telecopied and confirmed to
you at ,
, , ,
attention of
, or, if sent to the Company, will be mailed, delivered,
or telecopied and confirmed to it at 422 South Church Street, Charlotte, N.C.
28242-0001, attention of Richard J. Osborne, Senior Vice President and Chief
Financial Officer.
11. Successors. This Agreement shall inure to the benefit of and be
binding upon the Underwriter and the Company 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
7
<PAGE> 8
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 Debentures from
the Underwriter shall be deemed to be a successor by reason merely of such
purchase.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicate hereof, whereupon it will
become a binding agreement between the Company and the Underwriter in accordance
with its terms.
Very truly yours,
DUKE POWER COMPANY
By:
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
By:
8
<PAGE> 1
(Proof of October 16, 1996)
CALCULATION AGENT AGREEMENT
THIS AGREEMENT dated as of October 1, 1996 between Duke Power Company
(hereinafter called the "Issuer"), having its principal office at 422 South
Church Street, Charlotte, North Carolina 28242, and The Chase Manhattan Bank, a
New York banking corporation (hereinafter sometimes called the "Calculation
Agent" which term shall, unless the context shall otherwise require, include its
successors and assigns), having its principal corporate trust office at 450 West
33rd Street, New York, New York 10001.
RECITALS OF THE ISSUER
The Issuer proposes to issue from time to time Senior Notes (the "Notes")
under a Senior Indenture dated as of October 1, 1996 (the "Indenture"), between
the Issuer and The Chase Manhattan Bank, as Trustee. Capitalized terms used in
this Agreement and not otherwise defined herein are used as defined in the
Indenture. Certain of the Notes may bear interest at one of several floating
rates determined by reference to an interest rate formula (the "Floating Rate
Notes") and the Issuer desires to engage the Calculation Agent to perform
certain services in connection therewith.
NOW IT IS HEREBY AGREED THAT:
1. The Issuer hereby appoints The Chase Manhattan Bank as Calculation
Agent for the Floating Rate Notes, upon the terms and subject to the
conditions herein mentioned, subject to the Issuer's right to designate a
different party as Calculation Agent in the Prospectus Supplement relating
to the Floating Rate Notes, and The Chase Manhattan Bank hereby accepts
such appointment. This appointment shall apply only to those series of
Floating Rate Notes for which no other Calculation Agent is designated in
the applicable Prospectus Supplement relating to the Floating Rate Notes
and the term "Floating Rate Notes" in this Agreement shall mean only
Floating Rate Notes as to which this appointment applies. Subject to the
foregoing, the Calculation Agent shall act as an agent of the Issuer for
the purpose of determining the interest rate or rates of the Floating Rate
Notes.
2. The Issuer agrees to deliver to the Calculation Agent, prior to the
issuance of any Floating Rate Notes, copies of the proposed forms of such
Notes, including copies of the terms and conditions relating to the
determination of the interest rate thereunder. The Issuer shall not issue
any Floating Rate Note prior to the receipt of confirmation from the
Calculation Agent of its acceptance of the proposed form of such Note.
3. The Issuer shall notify the Calculation Agent of the issuance of
any Floating Rate Notes prior to the issuance thereof and at the time of
such issuance shall deliver to the Calculation Agent the information
required to be provided by the Issuer for the calculation of the applicable
interest rates thereunder. The Calculation Agent shall calculate the
applicable interest rates for Floating Rate Notes in accordance with the
terms of such Notes, the Indenture and the provisions of this Agreement.
4. Upon the determination of an interest rate applicable to a Floating
Rate Note, the Calculation Agent shall promptly notify the Issuer, the
Trustee and any Paying Agent of such interest rate. Upon the request of the
holder of a Floating Rate Note, the Calculation Agent shall advise such
holder of the interest rate then in effect and, if different, the interest
rate which will become effective as a result of a determination already
made with respect to such Floating Rate Note.
5. The Issuer will pay such compensation as shall be agreed upon with
the Calculation Agent and the out-of-pocket expenses, including reasonable
counsel fees, incurred by the Calculation Agent in connection with its
duties hereunder, upon receipt of such invoices as the Issuer shall
reasonably require.
<PAGE> 2
6. Notwithstanding any satisfaction or discharge of the Notes or the
Indenture, the Issuer will indemnify the Calculation Agent against any
losses, liabilities, costs, claims, actions or demands which it may incur
or sustain or which may be made against it in connection with its
appointment or the exercise of its powers and duties hereunder as well as
the reasonable costs, including the reasonable expenses and fees of counsel
in defending any claim, action or demand, except such as may result from
the gross negligence, wilful misconduct or bad faith of the Calculation
Agent or any of its employees or agents. The Calculation Agent shall give
the Issuer prompt notice of any such claim, action or demand known to it,
but failure to do so shall not affect the indemnity provided hereby. Except
as provided in the preceding sentence, the Calculation Agent shall incur no
liability and shall be indemnified and held harmless by the Issuer for, or
in respect of, any actions taken or suffered to be taken in good faith by
the Calculation Agent in reliance upon (i) the written opinion or advice of
counsel or (ii) written instructions from an officer of the Issuer.
7. The Calculation Agent accepts its obligations herein set forth upon
the terms and conditions hereof, including the following, to all of which
the Issuer agrees:
(i) in acting under this Agreement and in connection with the
Floating Rate Notes, the Calculation Agent, acting as agent for the
Issuer, does not assume any obligation toward, or any relationship of
agency or trust for or with, any of the holders of such Floating Rate
Notes;
(ii) unless herein otherwise specifically provided, any order,
certificate, notice, request or communication from the Issuer made or
given under any provisions of this Agreement shall be sufficient if
signed by any person whom the Calculation Agent reasonably believes to
be a duly authorized officer or attorney-in-fact of the Issuer;
(iii) the Calculation Agent shall be obligated to perform only such
duties as are set forth specifically herein, in the Floating Rate Notes
or in the Indenture and any duties necessarily incidental thereto;
(iv) the Calculation Agent shall be protected and shall incur no
liability for or in respect of any action taken or omitted to be taken
or anything suffered by it in reliance upon any provision contained in a
Floating Rate Note, the Indenture or any information supplied to it by
an officer of the Issuer pursuant to this Agreement, including the
information to be supplied pursuant to paragraph 3 above;
(v) the Calculation Agent, whether acting for itself or in any
other capacity, may become the owner or pledgee of Notes with the same
rights as it would have had if it were not acting hereunder as
Calculation Agent; and
(vi) the Calculation Agent shall incur no liability hereunder
except for loss sustained by reason of its or its employees' or agents'
gross negligence, wilful misconduct or bad faith.
8. (a) The Issuer agrees to notify the Calculation Agent at least
three Business Days prior to the issuance of any Floating Rate Note with an
interest rate to be determined by any formula that would require the
Calculation Agent to select banks or other financial institutions (the
"Reference Banks") for purposes of quoting rates. Immediately prior to
seeking such quotes from such Reference Banks, the Calculation Agent will
notify the Issuer and the Trustee of the names and addresses of such
Reference Banks. The Calculation Agent shall not be responsible to the
Issuer or any third party for any failure of the Reference Banks to fulfill
their duties or meet their obligations as Reference Banks or as a result of
the Calculation Agent having acted (except in the event of gross
negligence, wilful misconduct or bad faith) on any quotation or other
information given by any Reference Bank which subsequently may be found to
be incorrect.
(b) Except as provided below, the Calculation Agent may at any time
resign as Calculation Agent by giving written notice to the Issuer and
the Trustee of such intention on its part, specifying the date on which
its desired resignation shall become effective, provided
2
<PAGE> 3
that such notice shall be given not less than 60 days prior to the said
effective date unless the Issuer agrees in writing. The Calculation
Agent may be removed by the filing with it and the Trustee of an
instrument in writing signed by the Issuer specifying such removal and
the date when it shall become effective. Any resignation or removal of
the Calculation Agent shall take effect only upon:
(i) the appointment by the Issuer as hereinafter provided of a
successor Calculation Agent; and
(ii) the acceptance of such appointment by such successor
Calculation Agent;
provided, however, that in the event the Calculation Agent has given not
less than 60 days' prior notice of its desired resignation, and during
such 60 days there has not been acceptance by a successor Calculation
Agent of its appointment as successor Calculation Agent, the Calculation
Agent so resigning may petition any court of competent jurisdiction for
the appointment of a successor Calculation Agent. The Issuer covenants
that it shall appoint a successor Calculation Agent as soon as
practicable after receipt of any notice of resignation hereunder. Upon
its resignation or removal becoming effective, the retiring Calculation
Agent shall be entitled to the payment of all compensation and the
reimbursement of its expenses (including reasonable counsel fees)
incurred by such retiring Calculation Agent, in accordance with
paragraph 5 hereof, to the date such resignation or removal becomes
effective.
(c) If at any time the Calculation Agent shall resign or be
removed, or shall become incapable of acting or shall be adjudged
bankrupt or insolvent, or liquidated or dissolved, or an order is made
or an effective resolution is passed to wind up the Calculation Agent,
or if the Calculation Agent shall file a voluntary petition in
bankruptcy or make an assignment for the benefit of its creditors, or
shall consent to the appointment of a receiver, administrator or other
similar official of all or any substantial part of its property, or
shall admit in writing its inability to pay or meet its debts as they
mature, or if a receiver, administrator or other similar official of the
Calculation Agent or of all or any substantial part of its property
shall be appointed, or if any order of any court shall be entered
approving any petition filed by or against the Calculation Agent under
the provisions of any applicable bankruptcy or insolvency law, or if any
public officer shall take charge or control of the Calculation Agent or
its property or affairs for the purpose of rehabilitation, conservation
or liquidation, then a successor Calculation Agent shall be appointed by
the Issuer by an instrument in writing filed with the predecessor
Calculation Agent, the successor Calculation Agent and the Trustee. Upon
the appointment as aforesaid of a successor Calculation Agent and
acceptance by the latter of such appointment the former Calculation
Agent shall cease to be Calculation Agent hereunder.
(d) Any successor Calculation Agent appointed hereunder shall
execute and deliver to its predecessor, the Issuer and the Trustee an
instrument accepting such appointment hereunder, and thereupon such
successor Calculation Agent, without any further act, deed or
conveyance, shall become vested with all the authority, rights, powers,
immunities, duties and obligations of such predecessor with like effect
as if originally named as the Calculation Agent hereunder, and such
predecessor shall thereupon become obliged to transfer and deliver, and
such successor Calculation Agent shall be entitled to receive, copies of
any relevant records maintained by such predecessor Calculation Agent.
(e) Any corporation into which the Calculation Agent may be merged
or converted or any corporation with which the Calculation Agent may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Calculation Agent shall be a party shall, to
the extent permitted by applicable law, be the successor Calculation
Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto. Notice of
any such merger, conversion or consolidation shall forthwith be given to
the Issuer and the Trustee.
3
<PAGE> 4
(f) The provisions of paragraph 6 hereof shall survive any
resignation or removal hereunder.
9. Any notice required to be given hereunder shall be delivered in
person against written receipt, sent by letter or telecopy or communicated
by telephone (subject, in the case of communication by telephone, to
confirmation dispatched within two Business Days by letter or telecopy), in
the case of the Issuer, to it at the address set forth in the heading of
this Agreement, Attention: Treasurer; in the case of the Calculation Agent,
to it at the address set forth in the heading of this Agreement, Attention:
Corporate Trust Agency Department; in the case of the Trustee, to it at 450
West 33rd Street, New York, New York 10001, Attention: Corporate Trustee
Administration Department; or, in any case, to any other address of which
the party receiving notice shall have notified the party giving such notice
in writing.
10. This Agreement may be amended only by a writing duly executed and
delivered by each of the parties signing below.
11. The provisions of this Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
12. This Agreement may be executed in counterparts and the executed
counterparts shall together constitute a single instrument.
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of
the day and year first above written.
DUKE POWER COMPANY
By:
------------------------------------
Title:
THE CHASE MANHATTAN BANK
By:
------------------------------------
Title:
4
<PAGE> 1
Exhibit 4-B-81
(Proof of October 16, 1996)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DUKE POWER COMPANY
TO
THE CHASE MANHATTAN BANK,
TRUSTEE
------------------
EIGHTY - SUPPLEMENTAL INDENTURE
DATED AS OF , 199
------------------
CREATING AN ISSUE OF FIRST AND REFUNDING
MORTGAGE BONDS, % SERIES DUE
------------------
SUPPLEMENTAL TO
FIRST AND REFUNDING MORTGAGE
DATED AS OF DECEMBER 1, 1927
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
SUPPLEMENTAL INDENTURE, bearing date as of the day
of , , made and entered into by and between DUKE POWER
COMPANY, a corporation duly organized and existing under the laws of the State
of North Carolina, hereinafter called the "Company", party of the first part,
and THE CHASE MANHATTAN BANK, formerly known as Chemical Bank (successor to
Morgan Guaranty Trust Company of New York as Trustee), a corporation duly
organized and existing under the laws of the State of New York, having its
principal place of business in the Borough of Manhattan, City and State of New
York, hereinafter called the "Trustee", as Trustee, party of the second part.
WHEREAS Duke Power Company, a New Jersey corporation, hereinafter called
the "New Jersey Company", duly executed and delivered its First and Refunding
Mortgage, dated as of December 1, 1927, to Guaranty Trust Company of New York,
as Trustee, to secure its First and Refunding Mortgage Gold Bonds, to be issued
from time to time in series as provided in said Mortgage, and has from time to
time duly executed and delivered supplemental indentures, including supplemental
indentures dated as of September 1, 1947 and February 1, 1949, to Guaranty Trust
Company of New York (the corporate name of which has been changed to Morgan
Guaranty Trust Company of New York), as Trustee, and a supplemental indenture
dated as of February 1, 1960 to Morgan Guaranty Trust Company of New York, as
Trustee, supplementing and modifying said Mortgage (said Mortgage, as so
supplemented and modified, being hereinafter referred to as the "original
indenture"); and
WHEREAS bonds of a series known as the "First and Refunding Mortgage Bonds,
2.65% Series Due 1977" (herein called "bonds of the 2.65% Series"), bonds of a
series known as the "First and Refunding Mortgage Bonds, 2 7/8% Series Due 1979"
(herein called "bonds of the 1979 Series"), bonds of a series known as the
"First and Refunding Mortgage Bonds, 5 3/8% Series Due 1997" (herein called
"bonds of the 1997 Series"), bonds of a series known as the "First and Refunding
Mortgage Bonds, 6 3/8% Series Due 1998" (herein called "bonds of the 1998
Series"), bonds of a series known as the "First and Refunding Mortgage Bonds,
Annual Tender Pollution Control Series 1987 A" (herein called "bonds of the 1987
Pollution Control Series A"), bonds of a series known as the "First and
Refunding Mortgage Bonds, Annual Tender Pollution Control Series 1987 B" (herein
called "bonds of the 1987 Pollution Control Series B"), bonds of a series known
as the "First and Refunding Mortgage Bonds, Annual Tender Pollution Control
Series 1987 C" (herein called "bonds of the 1987 Pollution Control Series C"),
bonds of a series known as the "First and Refunding Mortgage Bonds, Pollution
Control Facilities Revenue Refunding Series Due 2014" (herein called "bonds of
the
<PAGE> 3
2
1990 Pollution Control Series"), bonds of a series known as the "First and
Refunding Mortgage Bonds, 8 3/4% Series Due 2021" (herein called "bonds of the
2021 Series"), bonds of a series known as the "First and Refunding Mortgage
Bonds, City of Greensboro Series Due 2027" (herein called "bonds of the 2027
City of Greensboro Series"), bonds of a series known as the "First and Refunding
Mortgage Bonds, Medium-Term Notes Series" (herein called "bonds of the
Medium-Term Notes Series"), bonds of a series known as the "First and Refunding
Mortgage Bonds, 8 3/8% Series B Due 2021" (herein called "bonds of the 2021
Series B"), bonds of a series known as the "First and Refunding Mortgage Bonds,
8% Series Due 2004" (herein called "bonds of the 2004 Series"), bonds of a
series known as the "First and Refunding Mortgage Bonds, 8 5/8% Series Due 2022"
(herein called "bonds of the 2022 Series"), bonds of a series known as the
"First and Refunding Mortgage Bonds, 7% Series Due 2000" (herein called "bonds
of the 2000 Series"), bonds of a series known as the "First and Refunding
Mortgage Bonds, 7% Series B Due 2000" (herein called "bonds of the 2000 Series
B"), bonds of a series known as the "First and Refunding Mortgage Bonds, 7%
Series Due 2005" (herein called "bonds of the 2005 Series"), bonds of a series
known as the "First and Refunding Mortgage Bonds, 6 5/8% Series B Due 2003"
(herein called "bonds of the 2003 Series B"), bonds of a series known as the
"First and Refunding Mortgage Bonds, 7 3/8% Series Due 2023" (herein called
"bonds of the 2023 Series"), bonds of a series known as the "First and Refunding
Mortgage Bonds, 6 3/8% Series Due 2008" (herein called "bonds of the 2008
Series"), bonds of a series known as the "First and Refunding Mortgage Bonds,
5 7/8% Series C Due 2003" (herein called "bonds of the 2003 Series C"), bonds of
a series known as the "First and Refunding Mortgage Bonds, Pollution Control
Facilities Revenue Refunding Series Due 2014" (herein called "bonds of the 1993
Pollution Control Series"), bonds of a series known as the "First and Refunding
Mortgage Bonds, 6 1/4% Series B 2004" (herein called "bonds of the 2004 Series
B"), bonds of a series known as the "First and Refunding Mortgage Bonds, 5 7/8%
Series Due 2001" (herein called "bonds of the 2001 Series"), bonds of a series
known as the "First and Refunding Mortgage Bonds, 7% Series Due 2033" (herein
called "bonds of the 2033 Series"), bonds of a series known as the "First and
Refunding Mortgage Bonds, 6 7/8% Series B Due 2023" (herein called "bonds of the
2023 Series B"), bonds of a series known as the "First and Refunding Mortgage
Bonds, 6 3/4% Series Due 2025" (herein called "bonds of the 2025 Series"), bonds
of a series known as the "First and Refunding Mortgage Bonds, 7 7/8% Series Due
2024" (herein called "bonds of the 2024 Series"), bonds of a series known as the
"First and Refunding Mortgage Bonds, 8% Series B Due 1999" (herein called "bonds
of the 1999 Series B") and bonds of a series known as the "First and Refunding
Mortgage Bonds, 7 1/2% Series B Due 2025" (herein called "bonds of
<PAGE> 4
3
the 2025 Series B") have heretofore been issued and (except for bonds of the
2.65% Series, bonds of the 1979 Series and bonds of the 1998 Series which have
been retired in their entirety) are the only bonds now outstanding under the
original indenture as heretofore supplemented; and
WHEREAS the Company has duly executed and delivered a supplemental
indenture, dated as of June 15, 1964, to Morgan Guaranty Trust Company of New
York, as Trustee, for the purpose of evidencing the succession by merger of the
Company to the New Jersey Company and the assumption by the Company of the
covenants and conditions of the New Jersey Company in the original indenture and
to enable the Company to have and exercise the powers and rights of the New
Jersey Company under the original indenture in accordance with the terms thereof
and whereby the Company assumed and agreed to pay duly and punctually the
principal of and interest on the bonds issued under the original indenture in
accordance with the provisions of said bonds and the coupons thereto
appertaining and the original indenture, and agreed to perform and fulfill all
the terms, covenants and conditions of the original indenture binding upon the
New Jersey Company; and
WHEREAS Morgan Guaranty Trust Company of New York resigned as Trustee under
the original indenture as heretofore supplemented and Chemical Bank was
appointed successor Trustee, said resignation and appointment having taken
effect on August 30, 1994 pursuant to an Instrument of Resignation, Appointment
and Acceptance dated as of August 30, 1994 among the Company, Morgan Guaranty
Trust Company of New York, as Trustee, and Chemical Bank (now The Chase
Manhattan Bank), as successor Trustee; and
WHEREAS the Company desires to create under the original indenture, as
heretofore supplemented and as to be supplemented by this supplemental
indenture, a new series of bonds, to be known as its "First and Refunding
Mortgage Bonds, % Series Due ", and to determine the terms and
provisions and the form of the bonds of such series; and
WHEREAS for the purposes hereinabove recited, and pursuant to due corporate
action, the Company has duly determined to execute and deliver to the Trustee a
supplemental indenture in the form hereof supplementing the original indenture
(the original indenture, as supplemented by the aforesaid supplemental indenture
dated as of June 15, 1964, by supplemental indentures dated as of April 1, 1967,
February 1, 1968, February 15, 1987, October 1, 1987, March 1, 1990, May 15,
1990, March 1, 1991, July 1, 1991, December 1, 1991, March 1, 1992, June 1,
1992, July 1, 1992, September 1, 1992, February 1, 1993, March 1, 1993, April 1,
1993, May 1, 1993, June 1, 1993, July 1, 1993, August 1, 1993, August 20, 1993,
May 1, 1994, November 1, 1994, August 1,
<PAGE> 5
4
1995 and as hereby supplemented, being sometimes hereinafter referred to as the
"Indenture"); and
WHEREAS all conditions and requirements necessary to make this supplemental
indenture a valid, legal and binding instrument in accordance with its terms
have been done and performed, and the execution and delivery hereof have been in
all respects duly authorized:
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in consideration of the premises and of the sum of one dollar duly
paid by the Company to the Trustee at or before the execution and delivery of
these presents, the receipt whereof is hereby acknowledged, the Company hereby
covenants and agrees with the Trustee and its successors in the trust under the
Indenture as follows:
PART ONE.
BONDS OF THE % SERIES DUE .
SECTION 1. The Company hereby creates a new series of bonds to be issued
under and secured by the Indenture and known as its First and Refunding Mortgage
Bonds, % Series Due (herein called "bonds of the Series"), and
the Company hereby establishes, determines and fixes the terms and provisions of
the bonds of the Series as hereinafter in this Part One set forth.
Each bond of the Series shall be dated the date of its authentication
(except that if any such bond shall be authenticated on any interest payment
date, it shall be dated the following day) and interest shall be payable on the
principal represented thereby commencing , , from the
or , as the case may be, next preceding the date
thereof to which interest has been paid, unless such date of authentication is
prior to , , in which case interest shall be payable from
, ; provided, however, that interest shall be payable on
each bond of the Series authenticated after the record date (as defined in
the next succeeding paragraph of this Section 1) with respect to any interest
payment date and prior to such interest payment date, only from such interest
payment date.
Interest on any bond of the Series shall be paid to the person who,
according to the bond register of the Company, is the registered holder of such
bond of the Series at the close of business on the applicable record date,
and such interest payments shall be made by check mailed to such registered
holder at his last address shown on such bond register; provided, however, that,
if the Company shall default in the payment of the interest due on any interest
payment date on any bond of the Series, such defaulted interest shall be
<PAGE> 6
5
paid to the registered holder of such bond (or any bond or bonds of the
Series issued upon transfer, exchange or substitution thereof) on the date of
subsequent payment of such defaulted interest or, at the election of the
Company, to the person in whose name such bond (or any bond or bonds of the
Series issued upon transfer, exchange or substitution thereof) is
registered on a subsequent record date established by notice given by mail by or
on behalf of the Company to the holders of all bonds of the Series not less
than ten (10) days preceding such subsequent record date. The term "record date"
as used in this Section 1 shall mean, with respect to any semi-annual interest
payment date, the close of business on the or ,
as the case may be, next preceding such interest payment date or, in the case of
a payment of defaulted interest, the close of business on any subsequent record
date established as provided above.
SECTION 2. All bonds of the Series shall mature as to principal on
, , and shall bear interest at the rate of % per annum,
payable semi-annually on the day of and in
each year.
SECTION 3. The bonds of the Series shall be fully registered bonds,
without coupons, in denominations of one thousand dollars ($1,000) and any
integral multiple of one thousand dollars ($1,000), all such bonds to be
numbered, and shall be transferable and exchangeable as provided in the form of
bond set forth in this supplemental indenture. The provisions of sec. 1.19 and
any other provision in the Indenture in respect of coupon bonds or reservation
of coupon bond numbers shall be inapplicable to the bonds of the Series.
SECTION 4. The bonds of the Series are not subject to redemption
(otherwise than through the operation of the Replacement Fund provided in Part
Two of this supplemental indenture or through the application of moneys paid to
the Trustee pursuant to the provisions of sec. 5.05 of the Indenture) prior to
, . On and after , , the bonds of the
Series are subject to redemption (otherwise than through the operation of
the Replacement Fund provided in Part Two of this supplemental indenture or
through the application of moneys paid to the Trustee pursuant to the provisions
of sec. 5.05 of the Indenture) prior to maturity, at the option of the Company,
as a whole at any time or in part from time to time, in principal amounts equal
to $1,000 or any multiple thereof, upon prior notice as hereinafter provided, at
the redemption prices specified in the third paragraph of the reverse side of
the form of bond set forth in this supplemental indenture, together with
interest accrued thereon to the date fixed for redemption thereof.
The bonds of the Series are also subject to redemption through the
operation of the Replacement Fund provided in Part Two of this supplemental
<PAGE> 7
6
indenture or through the application of moneys paid to the Trustee pursuant to
the provisions of sec. 5.05 of the Indenture, at any time or from time to time
prior to maturity, upon prior notice as hereinafter provided, at the redemption
prices specified in the fourth paragraph of the reverse side of the form of bond
set forth in this supplemental indenture, together with interest accrued thereon
to the date fixed for redemption thereof.
All such redemption of bonds of the Series shall be effected as
provided in Article 3 of the Indenture except that, in case a part only of the
bonds of the Series is to be paid and redeemed, the particular bonds or
part thereof shall be selected by the Trustee in such manner as the Trustee in
its uncontrolled discretion shall determine to be fair and in any case where
several bonds are registered in the same name, the Trustee may treat the
aggregate principal amount so registered as if it were represented by one bond
and except that when bonds are redeemed in part only the notice given to any
particular holder need state only the principal amount of the bonds of that
holder which are to be redeemed and except that notice to the holders of bonds
to be redeemed shall be given by mailing to such holders a notice of such
redemption, first class mail postage prepaid, not later than the thirtieth day,
and not earlier than the sixtieth day, before the date fixed for redemption, at
their last addresses as they shall appear upon the bond register of the Company.
Any notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the holder receives such
notice; and failure duly to give such notice by mail, or any defect in such
notice, to the holder of any bond designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other bond. No publication of notice of such redemption shall be required.
SECTION 5. The aggregate principal amount of the bonds of the Series
shall be unlimited.
SECTION 6. The place or places of payment (as to principal and premium, if
any, and interest), redemption, transfer, exchange and registration of the bonds
of the Series shall be the office or offices or the agency or agencies of
the Company in the Borough of Manhattan, The City of New York, designated from
time to time by the Board of Directors of the Company.
SECTION 7. The form of the bonds of the Series and the certificate of
the Trustee to be endorsed on the bonds, respectively, shall be substantially as
follows:
<PAGE> 8
7
[FORM OF BOND OF THE SERIES]
[FACE SIDE OF BOND]
DUKE POWER COMPANY
FIRST AND REFUNDING MORTGAGE BOND,
% Series Due
No. $
DUKE POWER COMPANY, a North Carolina corporation (hereinafter called the
"Company"), for value received, hereby promises to pay to or
registered assigns, the principal sum of Dollars on
, , in any coin or currency of the United States of America
which at the time of payment shall be legal tender for the payment of public and
private debts, at the office or agency of the Company in the Borough of
Manhattan, The City of New York, and to pay interest thereon at said office or
agency from the interest payment date next preceding the date hereof to which
interest on outstanding bonds of this series has been paid (unless the date
hereof is prior to , in which case from , ,
and unless the date hereof is a date subsequent to
, or a date subsequent to , in which case
from the next succeeding or , as the case may
be), at the rate of per cent per annum, in like coin or currency,
semi-annually on and in each year until the
principal hereof shall become due and payable. Such interest payments shall be
made by check mailed to the person in whose name this bond is registered at the
close of business on the day of or preceding each
semi-annual interest payment date, as the case may be (subject to certain
exceptions provided in the Indenture hereinafter mentioned), at his last address
as it shall appear upon the bond register of the Company.
The provisions of this bond are continued on the reverse hereof and such
continued provisions shall for all purposes have the same effect as though fully
set forth in this place.
This bond shall not become or be valid or obligatory for any purpose until
the Trustee shall have signed the form of certificate endorsed hereon.
<PAGE> 9
8
IN WITNESS WHEREOF, the Company has caused this instrument to be signed in
its name by its President or one of its Vice Presidents, manually or by
facsimile signature, and its corporate seal to be hereto affixed, or a facsimile
thereof to be hereon engraved, lithographed or printed, and to be attested by
the manual or facsimile signature of its Secretary or one of its Assistant
Secretaries.
Dated:
DUKE POWER COMPANY
By: .................................
President
Attest:
.....................................
Secretary
[FORM OF TRUSTEE'S CERTIFICATE FOR
BOND OF THE SERIES]
This bond is one of the bonds, of the series designated therein, described
in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, Trustee
By: .................................
Authorized Officer
<PAGE> 10
9
[REVERSE SIDE OF BOND]
This bond is one of the bonds of a series, designated specially as First
and Refunding Mortgage Bonds, % Series Due , of an authorized issue of
bonds of the Company, without limit as to aggregate principal amount, designated
generally as First and Refunding Mortgage Bonds, all issued and to be issued
under and equally and ratably secured by an indenture dated as of December 1,
1927, duly executed by Duke Power Company, a New Jersey corporation (hereinafter
called the "New Jersey Company"), to Guaranty Trust Company of New York (now
Morgan Guaranty Trust Company of New York), as Trustee (The Chase Manhattan
Bank, formerly known as Chemical Bank, successor Trustee), as supplemented and
modified by indentures supplemental thereto, including supplemental indentures
dated as of September 1, 1947, February 1, 1949, February 1, 1960, June 15, 1964
(under which the Company succeeded to and was substituted for the New Jersey
Company), April 1, 1967, February 1, 1968, February 15, 1987, October 1, 1987,
March 1, 1990, May 15, 1990, March 1, 1991, July 1, 1991, December 1, 1991,
March 1, 1992, June 1, 1992, July 1, 1992, September 1, 1992, February 1, 1993,
March 1, 1993, April 1, 1993, May 1, 1993, June 1, 1993, July 1, 1993, August 1,
1993, August 20, 1993, May 1, 1994, November 1, 1994, August 1, 1995 and
, , the latter providing for said series (said indenture as so
supplemented and modified being hereinafter referred to as the "Indenture"), to
which Indenture reference is made for a description of the property mortgaged,
the nature and extent of the security, the rights of the holders of the bonds in
respect thereof, the terms and conditions upon which the bonds are secured and
the restrictions subject to which additional bonds secured thereby may be
issued. To the extent permitted by, and as provided in, the Indenture,
modifications or alterations of the Indenture, or of any indenture supplemental
thereto, and of the rights and obligations of the Company and of the holders of
the bonds, may be made with the consent of the Company by the affirmative vote,
or with the written consent, of the holders of not less than 66 2/3% in
principal amount of the bonds then outstanding, and by the affirmative vote, or
with the written consent, of the holders of not less than 66 2/3% in principal
amount of the bonds of any series then outstanding and affected by such
modification or alteration, in case one or more but less than all of the series
of bonds then outstanding under the Indenture are so affected, evidenced, in
each case, as provided in the Indenture; provided that any supplemental
indenture may be modified in accordance with the provisions contained therein
for its modification; and provided, further, that no such modification or
alteration shall be made which will affect the terms of payment of the principal
of, or interest or premium on, this bond, or the right of any bondholder to
institute suit for the enforcement of any such payment on or after the
<PAGE> 11
10
respective due dates expressed in this bond, or reduce the percentage required
for the taking of any such action. Any such affirmative vote of, or written
consent given by, any holder of this bond is binding upon all subsequent holders
hereof as provided in the Indenture.
In case an event of default as defined in the Indenture shall occur, the
principal of all the bonds outstanding thereunder may become or be declared due
and payable, at the time, in the manner and with the effect provided in the
Indenture.
The bonds of this series are not subject to redemption (otherwise than for
the Replacement Fund hereinafter mentioned or upon application of certain moneys
included in the trust estate) prior to , . On and after
, , the bonds of this series are subject to redemption (otherwise
than for the Replacement Fund hereinafter mentioned or upon application of
certain moneys included in the trust estate) prior to maturity, at the option of
the Company, as a whole at any time or in part from time to time, at the
following redemption prices (expressed as percentages of their principal
amounts), in each case together with accrued interest to the date fixed for
redemption:
If redeemed during the twelve-month period beginning :
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- ---------------------- ----------
<S> <C>
REDEMPTION
YEAR PRICE
- ---------------------- ----------
%
%
</TABLE>
<PAGE> 12
11
The bonds of this series are also subject to redemption for the Replacement
Fund for bonds of this series provided for in the supplemental indenture dated
as of , , providing for this series, or upon application of
certain moneys included in the trust estate, at any time or from time to time
prior to maturity, at the following redemption prices (expressed as percentages
of their principal amounts), in each case together with accrued interest to the
date fixed for redemption:
If redeemed during the twelve-month period beginning :
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- ---------------------- ----------
<S> <C>
REDEMPTION
YEAR PRICE
- ---------------------- ----------
%
%
</TABLE>
Redemption is in every case to be effected at the office or agency of the
Company in the Borough of Manhattan, The City of New York, upon at least thirty
days' prior notice, given by mail as more fully provided in the Indenture.
If this bond or any portion hereof ($1,000 or a multiple thereof) is called
for redemption and payment is duly provided, this bond or such portion thereof
shall cease to bear interest from and after the date fixed for such redemption.
This bond is transferable, as provided in the Indenture, by the registered
owner hereof in person or by duly authorized attorney, at the office or agency
of the Company in the Borough of Manhattan, The City of New York, upon surrender
and cancellation of this bond, and thereupon a new bond of the same series and
of like aggregate principal amount will be issued to the transferee in exchange
herefor as provided in the Indenture; or the registered owner of this bond, at
his option, may surrender the same for cancellation at said office or agency of
the Company and receive in exchange herefor the same aggregate
<PAGE> 13
12
principal amount of bonds of the same series of authorized denominations; all
subject to the terms of the Indenture but without payment of any charges other
than a sum sufficient to reimburse the Company for any stamp taxes or other
governmental charges incident thereto.
This bond is a corporate obligation only and no recourse whatsoever, either
directly or through the Company or any trustee, receiver, assignee or any other
person, shall be had for the payment of the principal of or premium, if any, or
interest on this bond, or for the enforcement of any claim based hereon, or
otherwise in respect hereof or of the Indenture, against any promoter,
subscriber to the capital stock, incorporator, or any past, present or future
stockholder, officer or director of the Company as such, or of any successor or
predecessor corporation, whether by virtue of any constitutional provision,
statute or rule of law, or by the enforcement of any assessment, penalty,
subscription or otherwise, any and all such liability of promoters, subscribers,
incorporators, stockholders, officers and directors being waived and released by
each successive holder hereof by the acceptance of this bond, and as a part of
the consideration for the issue hereof, and being likewise waived and released
by the terms of the Indenture.
[END OF BOND FORM]
PART TWO.
REPLACEMENT FUND.
SECTION 1. So long as any of the bonds of the Series are outstanding,
the Company will continue to maintain the Replacement Fund set forth in, and in
accordance with the applicable terms and conditions now contained in, Part Two
of the supplemental indenture dated as of February 1, 1949, and the covenants on
the part of the Company contained in such Part Two shall continue and remain in
full force and effect, whether or not bonds of the 1979 Series are outstanding
and to the same extent as though the words "or any bonds of the Series"
were inserted after the word "Series" appearing in the second line of Section 1
and the second line of Section 4 of said Part Two of said supplemental indenture
dated as of February 1, 1949.
SECTION 2. If at any time (a) bonds of the Series are outstanding and
(b) no bonds of the 1997 Series, of the 2021 Series, of the Medium-Term Notes
Series, of the 2021 Series B, of the 2004 Series, of the 2022 Series, of the
2000 Series, of the 2000 Series B, of the 2005 Series, of the 2003 Series B, of
the 2023 Series, of the 2008 Series, of the 2003 Series C, of the 2004 Series B,
of the 2001 Series, of the 2033 Series, of the 2023 Series B, of the 2025
Series, of the 2024 Series, of the 1999 Series B or of the 2025 Series B are
outstanding and (c) cash which shall have been deposited with the Trustee
<PAGE> 14
13
pursuant to such Replacement Fund shall not within five years from the date of
deposit thereof have been paid out, or used or set aside by the Trustee for the
payment, purchase or redemption of bonds, pursuant to such Replacement Fund,
such cash shall, if in excess of fifty thousand dollars ($50,000), be applied to
the redemption of bonds of the Series in an aggregate principal amount
sufficient to exhaust as nearly as possible the full amount of such cash.
Anything in Section 5 of Part Two of the aforesaid supplemental indenture dated
as of February 1, 1949, in Section 3 of Part Two of the supplemental indentures
dated as of April 1, 1967, March 1, 1991, December 1, 1991, June 1, 1992, July
1, 1992, September 1, 1992, February 1, 1993, May 1, 1993, June 1, 1993, July 1,
1993, August 1, 1993, August 20, 1993, May 1, 1994, November 1, 1994 and August
1, 1995, in Section 3 of Part Three of the supplemental indenture dated as of
March 1, 1990, in Section 4 of Part Three of the supplemental indenture dated as
of March 1, 1992 and in Section 5 of Part Four of the supplemental indenture
dated as of March 1, 1993 to the contrary notwithstanding, no cash shall be paid
over to the Company thereunder if at the time any bonds of the Series are
then outstanding, and such cash shall in such event be applied as in this Part
Two set forth.
SECTION 3. Whenever all of the bonds of the Series, the 1997 Series,
the 2021 Series, the Medium-Term Notes Series, the 2021 Series B, the 2004
Series, the 2022 Series, the 2000 Series, the 2000 Series B, the 2005 Series,
the 2003 Series B, the 2023 Series, the 2008 Series, the 2003 Series C, the 2004
Series B, the 2001 Series, the 2033 Series, the 2023 Series B, the 2025 Series,
the 2024 Series, the 1999 Series B and the 2025 Series B shall have been paid,
purchased or redeemed, the Trustee shall, upon application of the Company, pay
to or upon the order of the Company all cash theretofore deposited with the
Trustee pursuant to the provisions of the Replacement Fund and not previously
disposed of pursuant to the provisions of the Replacement Fund, and shall
deliver to the Company any bonds which shall theretofore have been deposited
with the Trustee pursuant to the provisions of the Replacement Fund or paid,
purchased or redeemed pursuant to the provisions of the Replacement Fund.
PART THREE.
ADDITIONAL COVENANTS OF THE COMPANY.
SECTION 1. Whether or not the covenants on the part of the Company
contained in Part Three of the supplemental indenture dated as of February 1,
1949 are modified with the consent of the holders of bonds of the 1997 Series,
the 1987 Pollution Control Series A, the 1987 Pollution Control Series B, the
1987 Pollution Control Series C, the 1990 Pollution Control Series, the 2021
<PAGE> 15
14
Series, the 2027 City of Greensboro Series, the Medium-Term Notes Series, the
2021 Series B, the 2004 Series, the 2022 Series, the 2000 Series, the 2000
Series B, the 2005 Series, the 2003 Series B, the 2023 Series, the 2008 Series,
the 2003 Series C, the 1993 Pollution Control Series, the 2004 Series B, the
2001 Series, the 2033 Series, the 2023 Series B, the 2025 Series, the 2024
Series, the 1999 Series B or the 2025 Series B and whether or not the bonds of
the 1997 Series, the 1987 Pollution Control Series A, the 1987 Pollution Control
Series B, the 1987 Pollution Control Series C, the 1990 Pollution Control
Series, the 2021 Series, the 2027 City of Greensboro Series, the Medium-Term
Notes Series, the 2021 Series B, the 2004 Series, the 2022 Series, the 2000
Series, the 2000 Series B, the 2005 Series, the 2003 Series B, the 2023 Series,
the 2008 Series, the 2003 Series C, the 1993 Pollution Control Series, the 2004
Series B, the 2001 Series, the 2033 Series, the 2023 Series B, the 2025 Series,
the 2024 Series, the 1999 Series B or the 2025 Series B are outstanding, such
covenants on the part of the Company contained in said Part Three shall continue
and remain in full force and effect so long as any of the bonds of the
Series are outstanding and to the same extent as though the words "or so long as
any bonds of the Series are outstanding" were inserted after the words "so
long as any of the bonds of the 1979 Series or any bonds of the 2.65% Series are
outstanding" wherever such words appear in said Part Three of the supplemental
indenture dated as of February 1, 1949.
SECTION 2. Whether or not the second sentence of paragraph (a) of
sec. 2.08 of the original indenture (making certain provisions for the
definition of the term "net amount" applicable while bonds of the 2.65% Series
were outstanding and which was originally set forth in Section 4 of Article One
of the supplemental indenture dated as of September 1, 1947 and which is
corrected and clarified by Section 2 of Part Four of the supplemental indenture
dated as of February 1, 1968) is modified with the consent of the holders of
bonds of the 1997 Series, the 1987 Pollution Control Series A, the 1987
Pollution Control Series B, the 1987 Pollution Control Series C, the 1990
Pollution Control Series, the 2021 Series, the 2027 City of Greensboro Series,
the Medium-Term Notes Series, the 2021 Series B, the 2004 Series, the 2022
Series, the 2000 Series, the 2000 Series B, the 2005 Series, the 2003 Series B,
the 2023 Series, the 2008 Series, the 2003 Series C, the 1993 Pollution Control
Series, the 2004 Series B, the 2001 Series, the 2033 Series, the 2023 Series B,
the 2025 Series, the 2024 Series, the 1999 Series B or the 2025 Series B and
whether or not bonds of the 1997 Series, the 1987 Pollution Control Series A,
the 1987 Pollution Control Series B, the 1987 Pollution Control Series C, the
1990 Pollution Control Series, the 2021 Series, the 2027 City of Greensboro
Series, the Medium-Term Notes Series, the 2021 Series B, the 2004 Series, the
2022 Series, the 2000 Series, the 2000 Series B, the 2005 Series, the 2003
<PAGE> 16
15
Series B, the 2023 Series, the 2008 Series, the 2003 Series C, the 1993
Pollution Control Series, the 2004 Series B, the 2001 Series, the 2033 Series,
the 2023 Series B, the 2025 Series, the 2024 Series, the 1999 Series B or the
2025 Series B are outstanding, said sentence shall continue and remain in full
force and effect so long as any bonds of the Series are outstanding, and
with the same force and effect as though said sentence had stated that such
provisions were to be applicable so long as any of the bonds of the Series
are outstanding.
PART FOUR.
MISCELLANEOUS.
SECTION 1. (a) For the purposes of sec. 2.10 of the Indenture and for the
purposes of any modification of the provisions of the Replacement Fund referred
to in Part Two of this supplemental indenture, the covenants and provisions on
the part of the Company which are set forth or incorporated in Part Two of this
supplemental indenture shall be for the benefit only of the holders of the bonds
of the Series. Such covenants and provisions shall remain in force and be
applicable only so long as any bonds of the Series shall be outstanding,
and, subject to the provisions of paragraph (2) of subdivision (c) of sec. 10.01
of the Indenture, any such covenants and provisions may be modified with the
consent, in writing or by vote at a bondholders' meeting, of the holders of
sixty-six and two-thirds per cent (66 2/3%) of the principal amount of the bonds
of the Series at the time outstanding and without the consent of the
holders of any other bonds then outstanding under the Indenture; provided that
no such consent shall be effective to waive any past default under such
covenants and provisions, and its consequences, unless the consent of the
holders of at least a majority in principal amount of all bonds then outstanding
under the Indenture is obtained. Such covenants shall be deemed to be additional
covenants and none of them shall affect or derogate from, or relieve the Company
from, its obligation to comply with any of the other covenants, conditions,
requirements or provisions of the Indenture or any other supplemental indenture.
(b) For the purposes of sec. 2.10 of the Indenture and for the purposes of
any modification of the provisions of Part Three of this supplemental indenture,
the covenants and provisions on the part of the Company which are set forth or
incorporated in said Part Three shall be for the benefit only of the holders of
the bonds of the Series. Such covenants and provisions shall remain in
force and be applicable only so long as any bonds of the Series shall be
outstanding, and, subject to the provisions of paragraph (2) of subdivision (c)
of sec. 10.01 of the Indenture, any such covenants and provisions may be
<PAGE> 17
16
modified with the consent, in writing or by vote at a bondholders' meeting, of
the holders of sixty-six and two-thirds per cent (66 2/3%) of the principal
amount of the bonds of the Series at the time outstanding and without the
consent of the holders of any other bonds then outstanding under the Indenture;
provided that no such consent shall be effective to waive any past default under
such covenants and provisions, and its consequences, unless the consent of the
holders of at least a majority in principal amount of all bonds then outstanding
under the Indenture is obtained. Such covenants shall be deemed to be additional
covenants and none of them shall affect or derogate from, or relieve the Company
from, its obligation to comply with any of the other covenants, conditions,
requirements or provisions of the Indenture or any other supplemental indenture.
SECTION 2. All terms contained in this supplemental indenture shall,
except as specifically provided herein or except as the context may otherwise
require, have the meanings given to such terms in the Indenture.
SECTION 3. In case any one or more of the provisions contained in this
supplemental indenture should be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision contained in this supplemental indenture, and, to the extent,
but only to the extent, that such provision is invalid, illegal or
unenforceable, this supplemental indenture shall be construed as if such
provision had never been contained herein.
SECTION 4. The Trustee hereby accepts the trusts herein declared and
provided upon the terms and conditions in the Indenture set forth.
SECTION 5. This supplemental indenture may be executed in several
counterparts, each of which shall be an original, and all collectively but one
instrument.
<PAGE> 18
17
IN WITNESS WHEREOF, Duke Power Company, the party of the first part hereto,
has caused this supplemental indenture to be signed in its name by one of its
Vice Presidents and its corporate seal to be hereunto affixed, and the same to
be attested by one of its Assistant Secretaries, and The Chase Manhattan Bank,
the party of the second part hereto, in token of its acceptance of the trust
hereby created, has caused this supplemental indenture to be signed in its name
by one of its Vice Presidents and its corporate seal to be hereunto affixed, and
the same to be attested by one of its Senior Trust Officers, all as of the day
and year first above written.
DUKE POWER COMPANY
By:.............................
Senior Vice President
ATTEST:
.....................................
Assistant Secretary
Signed, sealed, executed,
acknowledged and delivered by DUKE
POWER COMPANY, in the presence of:
.....................................
.....................................
THE CHASE MANHATTAN BANK
By:.............................
Vice President
ATTEST:
.....................................
Senior Trust Officer
Signed, sealed, executed,
acknowledged and delivered by THE
CHASE MANHATTAN BANK, in the presence
of:
.....................................
.....................................
<PAGE> 19
18
<TABLE>
<S> <C>
STATE OF NEW YORK
COUNTY OF NEW YORK SS.:
</TABLE>
Personally appeared before me and made oath that she saw
, a Vice President, and , a Senior Trust
Officer, respectively, of THE CHASE MANHATTAN BANK, sign, attest and affix
hereto the corporate seal of said Chemical Bank, and, as the act and deed of
said corporation, deliver the within written and foregoing deed, and that she,
with , witnessed the execution thereof.
.....................................
Sworn and subscribed before me
this day of , .
.....................................
Notary Public, State of New York
No.
Qualified in County
Certificate Filed in New York County
Commission Expires , .
<TABLE>
<S> <C>
STATE OF NEW YORK
COUNTY OF NEW YORK SS.:
</TABLE>
I, , a Notary Public in and for the State and
County aforesaid, certify that personally came before me this
day and acknowledged that he is a Senior Trust Officer of THE CHASE MANHATTAN
BANK, a New York corporation, and that, by authority duly given and as the act
of the corporation, the foregoing instrument was signed in its name by one of
its Vice Presidents, sealed with its corporate seal, and attested by himself as
one of its Senior Trust Officers.
Witness my hand and official seal, this day of , .
.....................................
Notary Public, State of New York
No.
Qualified in County
Certificate Filed in New York County
Commission Expires , .
<PAGE> 20
19
<TABLE>
<S> <C>
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG SS.:
</TABLE>
Personally appeared before me and made oath
that she saw , a Senior Vice President, and
, an Assistant Secretary, respectively, of DUKE POWER
COMPANY, sign, attest and affix hereto the corporate seal of said Duke Power
Company, and, as the act and deed of said corporation, deliver the within
written and foregoing deed, and that she, with ,
witnessed the execution thereof.
.....................................
Sworn and subscribed before me
this day of ,
.
.....................................
Notary Public
County, N.C.
My Commission expires ,
.
<TABLE>
<S> <C>
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG SS.:
</TABLE>
I, , a Notary Public in and for the State and
County aforesaid, certify that personally came before
me this day and acknowledged that he is an Assistant Secretary of DUKE POWER
COMPANY, a North Carolina corporation, and that, by authority duly given and as
the act of the corporation, the foregoing instrument was signed in its name by
one of its Senior Vice Presidents, sealed with its corporate seal, and attested
by himself as one of its Assistant Secretaries.
My commission expires , .
Witness my hand and official seal, this day of ,
.
.....................................
Notary Public
County, N.C.
<PAGE> 1
(Proof of October 16, 1996)
DUKE POWER COMPANY
TO
THE CHASE MANHATTAN BANK
Trustee
--------------------------------------------
SENIOR INDENTURE
Dated as of October 1, 1996
--------------------------------------------
<PAGE> 2
INDENTURE, dated as of October 1, 1996, between Duke Power
Company, a corporation duly organized and existing under the laws of the State
of North Carolina (herein called the "Company"), having its principal office at
422 South Church Street, Charlotte, North Carolina 28242, and The Chase
Manhattan Bank, a New York banking corporation, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
senior debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted in the United
States of America;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Indenture; and
<PAGE> 3
(5) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of
Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not
a day on which banking institutions in that Place of Payment are authorized or
obligated by law or executive order to close.
"Commission" means the Securities and Exchange Commission,
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee in
the City of New York, New York at which at any particular time its corporate
trust business shall be principally administered, which office at the date
hereof is located at 450 West 33rd Street, New York, New York 10001.
2
<PAGE> 4
"corporation" means a corporation, association, company,
joint-stock company or business trust.
"Covenant Defeasance" has the meaning specified in Section
1303.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series
issuable in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Exchange Act that is designated to act as
Depositary for such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 and
any statute successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 104.
"Global Security" means a Security that evidences all or part
of the Securities of any series which is issued to a Depositary or a nominee
thereof for such series in accordance with Section 301(17).
"Holder" means a Person in whose name a Security is registered
in the Security Register.
"Indenture" means this instrument as originally executed and
as it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.
"interest", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any
Security, means the Stated Maturity of an instalment of interest on such
Security.
"Investment Company Act" means the Investment Company Act of
1940 and any statute successor thereto, in each case as amended from time to
time.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security or an instalment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
3
<PAGE> 5
"Notice of Default" means a written notice of the kind
specified in Section 501(4).
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the Vice 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 Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 1005 shall
be the principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company, or other counsel who shall be reasonably
acceptable to the Trustee.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if
such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected
pursuant to Section 1302; and
(4) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the
4
<PAGE> 6
amount as specified or determined as contemplated by Section 301, (C) the
principal amount of a Security denominated in one or more foreign currencies or
currency units which shall be deemed to be Outstanding shall be the U.S. dollar
equivalent, determined as of such date in the manner provided as contemplated by
Section 301, of the principal amount of such Security (or, in the case of a
Security described in Clause (A) or (B) above, of the amount determined as
provided in such Clause), and (D) Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other
action, only Securities which the Trustee actually knows to be so owned shall be
so disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of or any premium or interest on any Securities on behalf of
the Company.
"Periodic Offering" means an offering of Securities of a
series from time to time the specific terms of which Securities, including
without limitation the rate or rates of interest or formula for determining the
rate or rates of interest thereon, if any, the Stated Maturity or Maturities
thereof and the redemption provisions, if any, with respect thereto, are to be
determined by the Company upon the issuance of such Securities.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities
of any series, means the place or places where the principal of and any premium
and interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
5
<PAGE> 7
"Responsible Officer", when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any senior trust officer, any trust officer or
assistant trust officer, the controller or any assistant controller or any other
officer 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 his knowledge of and familiarity with the particular
subject.
"Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Securities Act" means the Securities Act of 1933 and any
statute successor thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or
any instalment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such instalment of principal or interest is due and payable.
"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.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"U.S. Government Obligation" has the meaning specified in
Section 1304.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
6
<PAGE> 8
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee such certificates and opinions as may be required under
the Trust Indenture Act. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer of the Company,
or an Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include,
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
7
<PAGE> 9
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Whenever, subsequent to the receipt by the Trustee of any
Board Resolution, Officers' Certificate, Opinion of Counsel or other document or
instrument, a clerical, typographical or other inadvertent or unintentional
error or omission shall be discovered therein, a new document or instrument may
be substituted therefor in corrected form with the same force and effect as if
originally filed in the corrected form and, irrespective of the date or dates of
the actual execution and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or delivered as of the date
or dates required with respect to the document or instrument for which it is
substituted. Anything in this Indenture to the contrary notwithstanding, if any
such corrective document or instrument indicates that action has been taken by
or at the request of the Company which could not have been taken had the
original document or instrument not contained such error or omission, the action
so taken shall not be invalidated or otherwise rendered ineffective but shall be
and remain in full force and effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without limiting the generality of
the foregoing, any Securities issued under the authority of such defective
document or instrument shall nevertheless be the valid obligations of the
Company entitled to the benefits of this Indenture equally and ratably with all
other Outstanding Securities, except as aforesaid.
SECTION 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 601) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
8
<PAGE> 10
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series; provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take or revoke the relevant action, whether or not such
Holders remain Holders after such record date; provided that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Company, at its own expense, shall cause notice
of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Trustee in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities of any series entitled to
join in the giving or making of (i) any Notice of Default, (ii) any declaration
of acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction or to revoke
the same, whether or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities of such series on such record date. Nothing in
this paragraph shall be construed to prevent the Trustee from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Trustee, at the
Company's expense, shall cause notice of such record date, the proposed action
by
9
<PAGE> 11
Holders and the applicable Expiration Date to be sent to the Company in writing
and to each Holder of Securities of the relevant series in the manner set forth
in Section 106.
With respect to any record date set pursuant to this Section,
the party hereto which sets such record dates may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities of the relevant series in the manner
set forth in Section 106, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the party hereto which set such record date shall be deemed to
have initially designated the 180th day after such record date as the Expiration
Date with respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date
shall be later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to
take any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trustee Administration, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this instrument, attention:
Treasurer, or at any other address previously furnished in writing to
the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event,
10
<PAGE> 12
and such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act which is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act which may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the law of the State of New York, without regard to
conflicts of laws principles thereof.
11
<PAGE> 13
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities (other than a provision of any Security which specifically states
that such provision shall apply in lieu of this Section)) payment of interest or
principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the
form set forth in this Article, or in such other form as shall be established by
or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
SECTION 202. Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]
DUKE POWER COMPANY
____________________
No. __________ $ __________
CUSIP No. ____
Duke Power Company, a corporation duly organized and existing
under the laws of North Carolina (herein called the "Company", which term
includes any successor
12
<PAGE> 14
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to ______________________, or registered assigns, the principal
sum of ________ Dollars on _________________________ [if the Security is to bear
interest prior to Maturity, insert - , and to pay interest thereon from
__________ or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, [insert - semi-annually, quarterly, monthly or
other description of the relevant payment period] on [________, ________,] and
__________ in each year, commencing _______________, at the rate of ____% per
annum, until the principal hereof is paid or made available for payment [if
applicable, insert - , provided that any principal and premium, and any such
instalment of interest, which is overdue shall bear interest at the rate of ___%
per annum (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand]. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the [___________________] (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for will forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture].
[If the Security is not to bear interest prior to Maturity,
insert - The principal of this Security shall not bear interest except in the
case of a default in payment of principal upon acceleration, upon redemption or
at Stated Maturity and in such case the overdue principal and any overdue
premium shall bear interest at the rate of ____% per annum (to the extent that
the payment of such interest shall be legally enforceable), from the dates such
amounts are due until they are paid or made available for payment. Interest on
any overdue principal or premium shall be payable on demand. Any such interest
on overdue principal or premium which is not paid on demand shall bear interest
at the rate of ____% per annum (to the extent that the payment of such interest
on interest shall be legally enforceable), from the date of such demand until
the amount so demanded is paid or made available for payment.
Interest on any overdue interest shall be payable on demand.]
Payment of the principal of (and premium, if any) and [if
applicable, insert - any such] interest on this Security will be made at the
office or agency of the Company maintained for that purpose in
_________________, in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts
[if applicable, insert - ; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register].
13
<PAGE> 15
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
DUKE POWER COMPANY
By_______________________
Attest:
_____________________
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture, dated as of October 1, 1996 (herein called
the "Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [if applicable,
insert - , limited in aggregate principal amount to $__________].
[If applicable, insert - The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, [if
applicable, insert - (1) on ____________ in any year commencing with the year
_____ and ending with the year _____ through operation of the sinking fund for
this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [if applicable, insert - on or after ___________, 19__], as a
whole or in part, at the election of the Company, at the following Redemption
Prices (expressed as percentages of the principal amount): If redeemed [if
applicable, insert - on or before _________________, ___%, and if redeemed]
during the 12-month period beginning _________ of the years indicated,
14
<PAGE> 16
Year Redemption Price Year Redemption Price
---- ---------------- ---- ----------------
and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption [if applicable, insert - (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest instalments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert - The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, (1) on
____________ in any year commencing with the year ______ and ending with the
year _____ through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below,
and (2) at any time [if applicable, insert - on or after _____________], as a
whole or in part, at the election of the Company, at the Redemption Prices for
redemption otherwise than through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below: If redeemed
during the 12-month period beginning ________ of the years indicated,
Redemption Price for Redemption Price for
Redemption Through Redemption Otherwise Than
Operation of the Through Operation
Year Sinking Fund of the Sinking Fund
---- ------------ -------------------
and thereafter at a Redemption Price equal to _____% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest instalments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert - Notwithstanding the foregoing, the
Company may not, prior to _________, redeem any Securities of this series as
contemplated by [if applicable, insert - Clause (2) of] the preceding paragraph
as a part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than ____% per annum.]
15
<PAGE> 17
[If applicable, insert - The sinking fund for this series
provides for the redemption on __________ in each year beginning with the year
_______ and ending with the year ______ of [if applicable, insert - not less
than $___________ ("mandatory sinking fund") and not more than] $____________
aggregate principal amount of Securities of this series. Securities of this
series acquired or redeemed by the Company otherwise than through [if
applicable, insert - mandatory] sinking fund payments may be credited against
subsequent [if applicable, insert - mandatory] sinking fund payments otherwise
required to be made [if applicable, insert - , in the inverse order in which
they become due].]
[If the Security is subject to redemption of any kind, insert
- - In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]
[If applicable, insert - The Indenture contains provisions for
defeasance at any time of [the entire indebtedness of this Security] [or]
[certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain conditions set forth in
the Indenture.]
[If the Security is not an Original Issue Discount Security,
insert - If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.]
[If the Security is an Original Issue Discount Security,
insert - If an Event of Default with respect to Securities of this series shall
occur and be continuing, an amount of principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture. Such amount shall be equal to [insert formula for determining the
amount]. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange therefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
16
<PAGE> 18
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.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of and any premium and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
17
<PAGE> 19
SECTION 204. Form of Legend for Global Securities.
Unless otherwise specified as contemplated by Section 301 for
the Securities evidenced thereby, every Global Security authenticated and
delivered hereunder shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
SECTION 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
As Trustee
By____________________________
Authorized Officer
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution and, subject to
Section 303, set forth, or determined in the manner provided, in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
18
<PAGE> 20
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906 or 1106
and except for any Securities which, pursuant to Section 303, are
deemed never to have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of any Securities
of the series is payable or the method by which such date or dates
shall be determined;
(5) the rate or rates at which any Securities of the series
shall bear interest, if any, or the method by which such rate or rates
shall be determined; the date or dates from which any such interest
shall accrue; the Interest Payment Dates on which any such interest
shall be payable; the manner (if any) of determination of such Interest
Payment Dates; and the Regular Record Date, if any, for any such
interest payable on any Interest Payment Date;
(6) the right, if any, to extend the interest payment periods
and the duration of such extension;
(7) the place or places where the principal of and any premium
and interest on any Securities of the series shall be payable and
whether, if acceptable to the Trustee, any principal of such Securities
shall be payable without presentation or surrender thereof;
(8) the period or periods within which, or the date or dates
on which, the price or prices at which and the terms and conditions
upon which any Securities of the series may be redeemed, in whole or in
part, at the option of the Company and, if other than by a Board
Resolution, the manner in which any election by the Company to redeem
the Securities shall be evidenced;
(9) the obligation, if any, of the Company to redeem or
purchase any Securities of the series pursuant to any sinking fund,
purchase fund or analogous provisions or at the option of the Holder
thereof and the period or periods within which, the price or prices at
which and the terms and conditions upon which any Securities of the
series shall be redeemed or purchased, in whole or in part, pursuant to
such obligation;
(10) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which any Securities of the
series shall be issuable;
(11) if the amount of principal of or any premium or interest
on any Securities of the series may be determined with reference to an
index or pursuant to a formula, the manner in which such amounts shall
be determined;
19
<PAGE> 21
(12) if other than the currency of the United States of
America, the currency, currencies or currency units in which the
principal of or any premium or interest on any Securities of the series
shall be payable and the manner of determining the equivalent thereof
in the currency of the United States of America for any purpose,
including for purposes of the definition of "Outstanding" in Section
101;
(13) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the
Company or the Holder thereof, in one or more currencies or currency
units other than that or those in which such Securities are stated to
be payable, the currency, currencies or currency units in which the
principal of or any premium or interest on such Securities as to which
such election is made shall be payable, the periods within which and
the terms and conditions upon which such election is to be made and the
amount so payable (or the manner in which such amount shall be
determined);
(14) if other than the entire principal amount thereof, the
portion of the principal amount of any Securities of the series which
shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 502;
(15) if the principal amount payable at the Stated Maturity of
any Securities of the series will not be determinable as of any one or
more dates prior to the Stated Maturity, the amount which shall be
deemed to be the principal amount of such Securities as of any such
date for any purpose thereunder or hereunder, including the principal
amount thereof which shall be due and payable upon any Maturity other
than the Stated Maturity or which shall be deemed to be Outstanding as
of any date prior to the Stated Maturity (or, in any such case, the
manner in which such amount deemed to be the principal amount shall be
determined);
(16) if either or both of Sections 1302 and 1303 do not apply
to any Securities of the series;
(17) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global
Securities and, in such case, the respective Depositary or Depositaries
for such Global Securities, the form of any legend or legends which
shall be borne by any such Global Security in addition to or in lieu of
that set forth in Section 204 and any circumstances in addition to or
in lieu of those set forth in Clause (2) of the last paragraph of
Section 305 in which any such Global Security may be exchanged in whole
or in part for Securities registered, and any transfer of such Global
Security in whole or in part may be registered, in the name or names of
Persons other than the Depositary for such Global Security or a nominee
thereof;
(18) any addition, modification or deletion of any Events of
Default or covenants provided with respect to any Securities of the
series and any change in the right of the Trustee or the requisite
Holders of such Securities to declare the principal amount thereof due
and payable pursuant to Section 502;
(19) any addition to or change in the covenants set forth in
Article Ten which applies to Securities of the series; and
20
<PAGE> 22
(20) any other terms of the series.
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to the Board Resolution referred to above and (subject to Section
303) set forth, or determined in the manner provided, in the Officers'
Certificate referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms or the manner of determining the
terms of the series.
With respect to Securities of a series offered in a Periodic
Offering, the Board Resolution (or action taken pursuant thereto), Officers'
Certificate or supplemental indenture referred to above may provide general
terms or parameters for Securities of such series and provide either that the
specific terms of particular Securities of such series shall be specified in a
Company Order or that such terms shall be determined by the Company in
accordance with other procedures specified in a Company Order as contemplated by
the third paragraph of Section 303.
Notwithstanding Section 301(2) herein and unless otherwise
expressly provided with respect to a series of Securities, the aggregate
principal amount of a series of Securities may be increased and additional
Securities of such series may be issued up to the maximum aggregate principal
amount authorized with respect to such series as increased.
SECTION 302. Denominations.
The Securities of each series shall be issuable only in fully
registered form without coupons and only in such denominations as shall be
specified as contemplated by Section 301. In the absence of any such specified
denomination with respect to the Securities of any series, the Securities of
such series shall be issuable in denominations of $1,000 and any integral
multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its Vice Chairman of the Board, its President or one
of its Vice Presidents, under its corporate seal reproduced thereon attested by
its Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
21
<PAGE> 23
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and deliver such
Securities, provided, however, that in the case of Securities offered in a
Periodic Offering, the Trustee shall authenticate and deliver such Securities
from time to time in accordance with such other procedures (including, without
limitation, the receipt by the Trustee of oral or electronic instructions from
the Company or its duly authorized agents, promptly confirmed in writing)
acceptable to the Trustee as may be specified by or pursuant to a Company Order
delivered to the Trustee prior to the time of the first authentication of
Securities of such series. If the form or terms of the Securities of the series
have been established by or pursuant to one or more Board Resolutions as
permitted by Sections 201 and 301, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to
Section 601) shall be fully protected in relying upon, an Opinion of Counsel
stating,
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such
form has been established in conformity with the provisions of this
Indenture;
(2) if the terms of such Securities have been, or in the case
of Securities of a series offered in a Periodic Offering, will be,
established by or pursuant to Board Resolution as permitted by Section
301, that such terms have been, or in the case of Securities of a
series offered in a Periodic Offering, will be, established in
conformity with the provisions of this Indenture, subject, in the case
of Securities of a series offered in a Periodic Offering, to any
conditions specified in such Opinion of Counsel; and
(3) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officers'
Certificate otherwise required pursuant to Section 301 or the Company Order and
Opinion of Counsel otherwise required pursuant to such preceding paragraph at or
prior to the authentication of each Security of such series if such documents
are delivered at or prior to the authentication upon original issuance of the
first Security of such series to be issued.
22
<PAGE> 24
With respect to Securities of a series offered in a Periodic
Offering, the Trustee may rely, as to the authorization by the Company of any of
such Securities, the form and terms thereof and the legality, validity, binding
effect and enforceability thereof, upon the Opinion of Counsel and the other
documents delivered pursuant to Sections 201 and 301 and this Section, as
applicable, in connection with the first authentication of Securities of such
series.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature of an authorized officer, and
such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 309, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company
will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities
of such series at the office or agency of the Company in a Place of Payment for
that series, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and of
like tenor and aggregate principal amount. Until so exchanged, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office or in
any other office or agency of the Company in a Place of Payment being herein
sometimes referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
23
<PAGE> 25
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of
a series at the office or agency of the Company in a Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount.
At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series, of any authorized
denominations and of like tenor and aggregate principal amount, upon surrender
of the Securities to be exchanged at such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906 or 1106 not involving any transfer.
If the Securities of any series (or of any series and
specified tenor) are to be redeemed, the Company shall not be required (A) to
issue, register the transfer of or exchange any Securities of that series (or of
that series and specified tenor, as the case may be) during a period beginning
at the opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities selected for redemption and ending at the
close of business on the day of such mailing, or (B) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
The provisions of Clauses (1), (2), (3) and (4) below shall
apply only to Global Securities:
(1) Each Global Security authenticated under this Indenture
shall be registered in the name of the Depositary designated for such
Global Security or a nominee thereof and delivered to such Depositary
or a nominee thereof or custodian
24
<PAGE> 26
therefor, and each such Global Security shall constitute a single
Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities
registered, and no transfer of a Global Security in whole or in part
may be registered, in the name of any Person other than the Depositary
for such Global Security or a nominee thereof unless (A) such
Depositary has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Security and a successor
Depositary has not been appointed by the Company within 90 days of
receipt by the Company of such notification or (B) there shall exist
such circumstances, if any, in addition to or in lieu of the foregoing
as have been specified for this purpose as contemplated by Section 301.
Notwithstanding the foregoing, the Company may at any time in its sole
discretion determine that Securities issued in the form of a Global
Security shall no longer be represented in whole or in part by such
Global Security, and the Trustee, upon receipt of a Company Order
therefor, shall authenticate and deliver definitive Securities in
exchange in whole or in part for such Global Security.
(3) Subject to Clause (2) above, any exchange or transfer of a
Global Security for other Securities may be made in whole or in part,
and all Securities issued in exchange for or upon transfer of a Global
Security or any portion thereof shall be registered in such names as
the Depositary for such Global Security shall direct.
(4) Every Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global
Security or any portion thereof, whether pursuant to this Section,
Section 304, 306, 906 or 1106 or otherwise, shall be authenticated and
delivered in the form of, and shall be, a Global Security, unless such
Security is registered in the name of a Person other than the
Depositary for such Global Security or a nominee thereof.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
25
<PAGE> 27
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, interest on any Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest.
Except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, any interest on any Security of any
series which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease
to be payable to the Holder on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the Company,
at its election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to
be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be given to each Holder of Securities
of such series in the manner set forth in Section 106, not less than 10
days
26
<PAGE> 28
prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and any
premium and (subject to Section 307) any interest on such Security and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and shall be promptly cancelled by it. The Company may at any
time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed of as
directed by a Company Order; provided, however, that the Trustee shall not be
required to destroy such cancelled Securities.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301
for Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
27
<PAGE> 29
SECTION 311. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of
further effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306 and (ii) Securities for whose
payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee
for cancellation; or
(B) all such Securities not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee
in the name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited
or caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore
28
<PAGE> 30
delivered to the Trustee for cancellation, for principal and any
premium and interest to the date of such deposit (in the case of
Securities which have become due and payable) or to the Stated Maturity
or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 607, the
obligations of the Company to any Authenticating Agent under Section 614 and, if
money shall have been deposited with the Trustee pursuant to subclause (B) of
Clause (1) of this Section, the obligations of the Trustee under Section 402 and
the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
1003, all money deposited with the Trustee pursuant to Section 401 shall be held
in trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body), unless it is inapplicable to a particular
series or is specifically deleted or modified in the Board Resolution (or action
taken pursuant thereto), Officers' Certificate or supplemental indenture under
which such series of Securities is issued or has been deleted or modified in an
indenture supplemental hereto:
(1) default in the payment of any interest upon any Security
of that series when it becomes due and payable, and continuance of such
default for a period of 60 days; or
(2) default in the payment of the principal of or any premium
on any Security of that series at its Maturity; or
29
<PAGE> 31
(3) default in the making of any sinking fund payment, when
and as due by the terms of a Security of that series, and continuance
of such default for a period of 60 days; or
(4) default in the performance, or breach, of any covenant of
the Company in this Indenture (other than a covenant a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with or which has expressly been included in this Indenture
solely for the benefit of series of Securities other than that series),
and continuance of such default or breach for a period of 90 days after
there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at
least 33% in principal amount of the Outstanding Securities of that
series a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of Default"
hereunder, unless the Trustee, or the Trustee and the Holders of a
principal amount of Securities of such series not less than the
principal amount of Securities the Holders of which gave such notice,
as the case may be, shall agree in writing to an extension of such
period prior to its expiration; provided, however, that the Trustee, or
the Trustee and the Holders of such principal amount of Securities of
such series, as the case may be, shall be deemed to have agreed to an
extension of such period if corrective action is initiated by the
Company within such period and is being diligently pursued; or
(5) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 90 consecutive
days; or
(6) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by
it to the entry of a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable
Federal or State law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company 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; or
30
<PAGE> 32
(7) any other Event of Default provided with respect to
Securities of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any
series at the time Outstanding occurs and is continuing, then in every such case
the Trustee or the Holders of not less than 33% in principal amount of the
Outstanding Securities of that series may declare the principal amount of all
the Securities of that series (or, if any Securities of that series are Original
Issue Discount Securities, such portion of the principal amount of such
Securities as may be specified by the terms thereof) to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Event of Default giving rise to such
declaration of acceleration shall, without further act, be deemed to have been
waived, and such declaration and its consequences shall, without further act, be
deemed to have been rescinded and annulled, if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that
series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than
by such declaration of acceleration and any interest thereon
at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of
that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
31
<PAGE> 33
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 60 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding;
provided, however, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a
creditors' or other similar committee.
32
<PAGE> 34
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
or any premium or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal and any
premium and interest, respectively; and
THIRD: To the payment of the balance, if any, to the Company
or any other Person or Persons legally entitled thereto.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of that series;
(2) the Holders of not less than a majority in principal
amount of the Outstanding Securities of that series shall have made
written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
33
<PAGE> 35
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Section 307) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
34
<PAGE> 36
SECTION 512. Control By Holders.
The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Securities of such series; provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) subject to the provisions of Section 601, the Trustee
shall have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer or Officers of
the Trustee, determine that the proceeding so directed would involve
the Trustee in personal liability.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of
the Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of or any premium or
interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and may assess
costs against any such party litigant, in the manner and to the extent provided
in the Trust Indenture Act; provided that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the Company
or the Trustee.
35
<PAGE> 37
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to
the Trustee shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of
any series, the Trustee shall give the Holders of Securities of such series
notice of such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 501(4) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
36
<PAGE> 38
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
or as otherwise expressly provided herein, and any resolution of the
Board of Directors shall be sufficiently evidenced by a Board
Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(4) the Trustee may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(5) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled, at reasonable
times previously notified to the Company, to examine the relevant
books, records and premises of the Company, personally or by agent or
attorney; and
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
37
<PAGE> 39
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation
as shall be agreed to in writing between the Company and the Trustee
for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
The Trustee shall have a lien prior to the Securities upon all
property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section 607, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.
Without limiting any rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(5) or Section
501(6), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or State bankruptcy,
insolvency or other similar law.
38
<PAGE> 40
The provisions of this Section shall survive the termination
of this Indenture.
SECTION 608. Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture. To
the extent permitted by such Act, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a trustee under this Indenture with
respect to Securities of more than one series.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be one (and only one) Trustee
hereunder with respect to the Securities of each series, which may be Trustee
hereunder for Securities of one or more other series. Each Trustee shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes of
this Section and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee with respect to the Securities of any
series shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
39
<PAGE> 41
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
to all Holders of Securities of such series in the manner provided in Section
106. Each notice shall include the name of the successor Trustee with respect to
the Securities of such series and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all
40
<PAGE> 42
the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder.
In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Securities
of one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in the first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any
41
<PAGE> 43
of the parties hereto. In case any Securities shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents
acceptable to the Company with respect to one or more series of Securities which
shall be authorized to act on behalf of the Trustee to authenticate Securities
of such series issued upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 306, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and
42
<PAGE> 44
to the Company. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time such Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be acceptable to the
Company and shall give notice of such appointment in the manner provided in
Section 106 to all Holders of Securities of the series with respect to which
such Authenticating Agent will serve. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
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_____________________________,
As Authenticating Agent
By_____________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the
Trustee
(1) 15 days after each Regular Record Date, a list, in such
form as the Trustee may reasonably require, of the names and addresses
of the Holders of Securities of each series as of such Regular Record
Date, and
(2) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
43
<PAGE> 45
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto. If required by Section 313(a) of the Trust Indenture Act, the Trustee
shall, within 60 days after each October 1 following the date of this Indenture,
deliver to Holders a brief report, dated as of such October 1, which complies
with the provisions of such Section 313(a).
A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are listed, with the Commission and with the Company. The
Company will promptly notify the Trustee when any Securities are listed on any
stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
44
<PAGE> 46
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
SECTION 801. Company May Consolidate, Etc., on Certain Terms.
Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of the Company with or into
any other Person or Persons (whether or not affiliated with the Company), or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any conveyance or
transfer of the properties and assets of the Company as an entirety or
substantially as an entirety to any other Person (whether or not affiliated with
the Company) lawfully entitled to acquire the same; provided, however, and the
Company hereby covenants and agrees, that upon any such consolidation, merger,
conveyance or transfer, (i) the due and punctual payment of the principal of and
premium, if any, and interest on all of the Securities, according to their
tenor, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by the Company, shall
be expressly assumed, by indenture supplemental hereto, in form reasonably
satisfactory to the Trustee, executed and delivered to the Trustee by the Person
(if other than the Company) formed by such consolidation, or into which the
Company shall have been merged, or by the Person which shall have acquired such
properties and assets, and (ii) the Company shall deliver to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance or transfer and, if a supplemental indenture
is required in connection with such transaction, such supplemental indenture
comply with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance or transfer of the properties
and assets of the Company as an entirety or substantially as an entirety in
accordance with Section 801, the successor Person formed by such consolidation
or into which the Company is merged or to which such conveyance or transfer is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.
45
<PAGE> 47
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
reasonably satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such additional
Events of Default are to be for the benefit of less than all series of
Securities, stating that such additional Events of Default are
expressly being included solely for the benefit of such series); or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest coupons, or
to facilitate the issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of
this Indenture in respect of one or more series of Securities; provided
that any such addition, change or elimination (A) shall neither (i)
apply to any Security of any series created prior to the execution of
such supplemental indenture and entitled to the benefit of such
provision nor (ii) modify the rights of the Holder of any such Security
with respect to such provision or (B) shall become effective only when
there is no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series
as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for
46
<PAGE> 48
or facilitate the administration of the trusts hereunder by more than
one Trustee, pursuant to the requirements of Section 611; or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture; provided that such
action pursuant to this Clause (9) shall not adversely affect the
interests of the Holders of Securities of any series in any material
respect.
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture with respect to
Securities of such series, or modifying in any manner the rights of the Holders
of Securities of such series under this Indenture; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
instalment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security or any other Security
which would be due and payable upon a declaration of acceleration of
the Maturity thereof pursuant to Section 502, or change any Place of
Payment where, or the coin or currency in which, any Security or any
premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513
or Section 1006, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby; provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant changes in this Section
and Section 1006, or the deletion of this proviso, in accordance with
the requirements of Sections 611 and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular
47
<PAGE> 49
series of Securities, or which modifies the rights of the Holders of Securities
of such series with respect to such covenant or other provision, shall be deemed
not to affect the rights under this Indenture of the Holders of Securities of
any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
48
<PAGE> 50
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of and
any premium and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more
other offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in each Place of Payment for Securities of any series for
such purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent
with respect to any series of Securities, it will, on or before each due date of
the principal of or any premium or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium and interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and will promptly notify the Trustee of its action or
failure so to act.
Whenever the Company shall have one or more Paying Agents for
any series of Securities, it will, on or prior to each due date of the principal
of or any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
49
<PAGE> 51
The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will (1) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2)
during the continuance of any default by the Company (or any other obligor upon
the Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust hereunder by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of or any
premium or interest on any Security of any series and remaining unclaimed for
two years after such principal, premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, New York, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 1004. Limitation on Liens.
The Company will not, while any of the Securities remain
Outstanding, create, or suffer to be created or to exist, any mortgage, lien,
pledge, security interest or other encumbrance of any kind upon any property of
the Company, whether now owned or hereafter acquired, to secure any indebtedness
for borrowed money, unless it shall make effective provision whereby the
Securities then Outstanding shall be secured by such mortgage, lien, pledge,
security interest or other encumbrance equally and ratably with any and all
indebtedness for borrowed money thereby secured so long as any such indebtedness
shall be so secured; provided, however, that nothing in this Section shall be
construed to prevent the Company from creating, or from suffering to be created
or to exist, any mortgages, liens, pledges, security interests or other
encumbrances, or any agreements, with respect to:
50
<PAGE> 52
(1) purchase money mortgages, or other purchase money liens,
pledges, security interests or encumbrances of any kind upon property
hereafter acquired by the Company, or mortgages, liens, pledges,
security interests or other encumbrances of any kind existing on any
property at the time of the acquisition thereof (including mortgages,
liens, pledges, security interests or other encumbrances which exist on
any property of a Person which is consolidated with or merged with or
into the Company or which transfers or leases all or substantially all
of its properties to the Company), or conditional sales agreements or
other title retention agreements and leases in the nature of title
retention agreements with respect to any property hereafter acquired;
provided, however, that no such mortgage, lien, pledge, security
interest or other encumbrance shall extend to or cover any other
property of the Company;
(2) mortgages, liens, pledges, security interests or other
encumbrances of any kind upon any property of the Company existing as
of the date of the initial issuance of the Securities; liens for taxes
or assessments or other governmental charges or levies; pledges or
deposits to secure obligations under worker's compensation laws,
unemployment insurance and other social security legislation, including
liens of judgments thereunder which are not currently dischargeable;
pledges or deposits to secure performance in connection with bids,
tenders, contracts (other than contracts for the payment of money) or
leases to which the Company is a party; pledges or deposits to secure
public or statutory obligations of the Company; builders',
materialmen's, mechanics', carriers', warehousemen's, workers',
repairmen's, operators', landlords' or other like liens in the ordinary
course of business, or deposits to obtain the release of such liens;
pledges or deposits to secure, or in lieu of, surety, stay, appeal,
indemnity, customs, performance or return-of-money bonds; other pledges
or deposits for similar purposes in the ordinary course of business;
liens created by or resulting from any litigation or proceeding which
at the time is being contested in good faith by appropriate
proceedings; 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;
the "permitted liens" specified in Section 2.07 of the First and
Refunding Mortgage referred to in clause (3) of this Section; liens
incurred in connection with repurchase, swap or other similar
agreements; leases made, or existing on property acquired, in the
ordinary course of business; 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 the
Company, including the Securities; liens created in connection with,
and created to secure, a non-recourse obligation; zoning restrictions,
easements, licenses, rights-of-way, restrictions on the use of property
or minor irregularities in title thereto, which do not, in the opinion
of the Company, materially impair the use of such property in the
operation of the business of the Company or the value of such property
for the purpose of such business;
(3) First and Refunding Mortgage Bonds of the Company issued
or to be issued from time to time under the First and Refunding
Mortgage dated as of December 1, 1927 from the Company to The Chase
Manhattan Bank (formerly known
51
<PAGE> 53
as Chemical Bank), as successor trustee, as supplemented and amended
and as to be supplemented and amended;
(4) indebtedness which may be issued by the Company in
connection with a consolidation or merger of the Company with or into
any other Person (which may be an Affiliate of the Company) in exchange
for or otherwise in substitution for secured indebtedness of such
Person ("Third Party Debt") which by its terms (i) is secured by a
mortgage on all or a portion of the property of such Person, (ii)
prohibits secured indebtedness from being incurred by such Person,
unless the Third Party Debt shall be secured equally and ratably with
such secured indebtedness or (iii) prohibits secured indebtedness from
being incurred by such Person;
(5) indebtedness of any Person which is required to be assumed
by the Company in connection with a consolidation or merger of such
Person, with respect to which any property of the Company is subjected
to a mortgage, lien, pledge, security interest or other encumbrance;
(6) mortgages, liens, pledges, security interests or other
encumbrances of any kind upon any property acquired, constructed,
developed or improved by the Company (whether alone or in association
with others) after the date of the Indenture which are created prior
to, 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 such construction, development or improvement and
commencement of full commercial operation of such property, whichever
is later) to secure or provide for the payment of the purchase price or
cost thereof, provided that in the case of such construction,
development or improvement the mortgages shall not apply to any
property theretofore owned by the Company other than theretofore
unimproved real property;
(7) the replacement, extension or renewal (or successive
replacements, extensions or renewals), as a whole or in part, of any
mortgage, lien, pledge, security interest or other encumbrance, or of
any agreement, referred to above in clauses (1) through (6) inclusive,
or the replacement, extension or renewal (not exceeding the principal
amount of indebtedness secured thereby together with any premium,
interest, fee or expense payable in connection with any such
replacement, extension or renewal) of the indebtedness secured thereby;
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 thereon or additions or accessions thereto); or
(8) any other mortgage, lien, pledge, security interest or
other encumbrance not excepted by the foregoing clauses (1) through
(7); provided that immediately after the creation or assumption of
such mortgage, lien, pledge, security interest or other encumbrance,
the aggregate principal amount of indebtedness for borrowed money of
the Company secured by all mortgages, liens, pledges, security
interests and other encumbrances created or assumed under the
provisions of this clause (8) shall not exceed an amount equal to 10%
of common stockholders' equity of the Company as shown on its
consolidated balance sheet for the accounting period occurring
immediately prior to the creation or assumption of such mortgage,
lien, pledge, security interest or other encumbrance.
52
<PAGE> 54
SECTION 1005. Statement by Officers as to Default.
The Company will deliver to the Trustee, on or before October
15 of each calendar year or on or before such other day in each calendar year as
the Company and the Trustee may from time to time agree upon, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
SECTION 1006. Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 301
for Securities of such series, the Company may, with respect to the Securities
of any series, omit in any particular instance to comply with any term,
provision or condition set forth in any covenant provided pursuant to Section
301(19), 901(2) or 901(7) for the benefit of the Holders of such series or in
Section 1004 if before the time for such compliance the Holders of at least a
majority in principal amount of the Outstanding Securities of such series shall,
by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.
SECTION 1007. Calculation of Original Issue Discount.
The Company shall file with the Trustee promptly after the end
of each calendar year a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of such year.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified as contemplated by Section 301 for such Securities) in
accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities. In case of any redemption at the election of
the Company, the Company shall, at least 45 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall
53
<PAGE> 55
be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of
the principal amount of Securities of such series to be redeemed and, if
applicable, of the tenor of the Securities to be redeemed. In the case of any
redemption of Securities (a) prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, or (b) pursuant to an election of the Company which is subject to a
condition specified in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction or condition.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be
redeemed (unless all the Securities of such series and of a specified tenor are
to be redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series;
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption as aforesaid and, in the case of any
Securities selected for partial redemption as aforesaid, the principal amount
thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply
with respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given 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 Securities to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall state:
54
<PAGE> 56
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of any series
and of a specified tenor consisting of more than a single Security are
to be redeemed, the identification (and, in the case of partial
redemption of any such Securities, the principal amounts) of the
particular Securities to be redeemed and, if less than all the
Outstanding Securities of any series and of a specified tenor
consisting of a single Security are to be redeemed, the principal
amount of the particular Security to be redeemed;
(4) that on the Redemption Date the Redemption Price, together
with accrued interest, if any, to the Redemption Date, will become due
and payable upon each such Security to be redeemed and, if applicable,
that interest thereon will cease to accrue on and after said date;
(5) the place or places where each such Security is to be
surrendered for payment of the Redemption Price and accrued interest,
if any, unless it shall have been specified as contemplated by Section
301 with respect to such Securities that such surrender shall not be
required;
(6) that the redemption is for a sinking fund, if such is the
case; and
(7) such other matters as the Company shall deem desirable
or appropriate.
Unless otherwise specified with respect to any Securities in
accordance with Section 301, with respect to any redemption of Securities at the
election of the Company, unless, upon the giving of notice of such redemption,
Defeasance shall have been effected with respect to such Securities pursuant to
Section 1302, such notice may state that such redemption shall be conditional
upon the receipt by the Trustee or the Paying Agent(s) for such Securities, on
or prior to the date fixed for such redemption, of money sufficient to pay the
principal of and any premium and interest on such Securities and that if such
money shall not have been so received such notice shall be of no force or effect
and the Company shall not be required to redeem such Securities. In the event
that such notice of redemption contains such a condition and such money is not
so received, the redemption shall not be made and within a reasonable time
thereafter notice shall be given, in the manner in which the notice of
redemption was given, that such money was not so received and such redemption
was not required to be made, and the Trustee or Paying Agent(s) for the
Securities otherwise to have been redeemed shall promptly return to the Holders
thereof any of such Securities which had been surrendered for payment upon such
redemption.
Notice of redemption of Securities to be redeemed at the
election of the Company, and any notice of non-satisfaction of redemption as
aforesaid, shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company. Subject to the preceding
paragraph, any such notice of redemption shall be irrevocable.
55
<PAGE> 57
SECTION 1105. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, and the
conditions, if any, set forth in such notice having been satisfied, the
Securities or portions thereof so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein specified, and from and
after such date (unless, in the case of an unconditional notice of redemption,
the Company shall default in the payment of the Redemption Price and accrued
interest, if any) such Securities or portions thereof, if interest-bearing,
shall cease to bear interest. Upon surrender of any such Security for redemption
in accordance with said notice, such Security or portion thereof shall be paid
by the Company at the Redemption Price, together with accrued interest, if any,
to the Redemption Date; provided, however, that no such surrender shall be a
condition to such payment if so specified as contemplated by Section 301 with
respect to such Security, and provided further that, unless otherwise specified
as contemplated by Section 301, instalments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and any premium shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 1106. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities of the same series and of
like tenor, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of any series except as otherwise
specified as contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by
the terms of any Securities is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of such Securities is
56
<PAGE> 58
herein referred to as an "optional sinking fund payment". If provided for by the
terms of any Securities, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 1202. Each sinking fund payment
shall be applied to the redemption of Securities as provided for by the terms of
such Securities.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to any Securities of such series required to be made
pursuant to the terms of such Securities as and to the extent provided for by
the terms of such Securities; provided that the Securities to be so credited
have not been previously so credited. The Securities to be so credited shall be
received and credited for such purpose by the Trustee at the Redemption Price,
as specified in the Securities so to be redeemed, for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date
for any Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1202 and stating the basis for such credit and that such Securities have
not been previously so credited and will also deliver to the Trustee any
Securities to be so delivered. Not less than 30 days prior to each such sinking
fund payment date, the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1105 and 1106.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Applicability of Article.
Unless, pursuant to Section 301, provision is made that either
or both of (a) defeasance of any Securities or any series of Securities under
Section 1302 and (b) covenant defeasance of any Securities or any series of
Securities under Section 1303 shall not apply to such Securities of a series,
then the provisions of either or both of Sections 1302 and Section 1303, as the
case may be, together with Sections 1304 and 1305, shall be applicable to the
57
<PAGE> 59
Outstanding Securities of such series upon compliance with the conditions set
forth below in this Article.
SECTION 1302. Defeasance and Discharge.
The Company may cause itself to be discharged from its
obligations with respect to any Securities or any series of Securities on and
after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Defeasance"). For this purpose, such Defeasance means that
the Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Securities and to have satisfied all its other obligations
under such Securities and this Indenture insofar as such Securities are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), subject to the following which shall
survive until otherwise terminated or discharged hereunder: (1) the rights of
Holders of such Securities to receive, solely from the trust fund described in
Section 1304 and as more fully set forth in such Section, payments in respect of
the principal of and any premium and interest on such Securities when payments
are due, (2) the Company's obligations with respect to such Securities under
Sections 304, 305, 306, 1002 and 1003 and with respect to the Trustee under
Section 607, (3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (4) this Article. Subject to compliance with this Article,
Defeasance with respect to any Securities or any series of Securities by the
Company is permitted under this Section 1302 notwithstanding the prior exercise
by the Company of its rights under Section 1303 with respect to such Securities.
Following a Defeasance, payment of such Securities may not be accelerated
because of an Event of Default.
SECTION 1303. Covenant Defeasance.
The Company may cause itself to be released from its
obligations under Section 1004 and any covenants provided pursuant to Section
301(19), 901(2), 901(6) or 901(7) with respect to any Securities or any series
of Securities for the benefit of the Holders of such Securities and the
occurrence of any event specified in Sections 501(4) (with respect to Section
1004 and any such covenants provided pursuant to Section 301(19), 901(2), 901(6)
or 901(7)) or 501(7) shall be deemed not to be or result in an Event of Default
with respect to such Securities as provided in this Section, in each case on and
after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that, with respect to such Securities, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such specified Section (to the extent so specified
in the case of Section 501(4)), whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or by reason of any reference in
any such Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of
Section 1302 or Section 1303 to any Securities or any series of Securities, as
the case may be:
58
<PAGE> 60
(1) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of such Securities,
(A) money in an amount, or (B) U.S. Government Obligations which
through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than the
due date of any payment, money in an amount, or (C) a combination
thereof, in each case sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee to pay and
discharge, the principal of and any premium and interest on such
Securities on the respective Stated Maturities or on any Redemption
Date established pursuant to Clause (3) below, in accordance with the
terms of this Indenture and such Securities. As used herein, "U.S.
Government Obligation" means (x) any security which is (i) a direct
obligation of the United States of America for the payment of which the
full faith and credit of the United States of America is pledged or
(ii) an obligation of a Person controlled or supervised by and acting
as an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either
case (i) or (ii), is not callable or redeemable at the option of the
issuer thereof, and (y) any depositary receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with
respect to any U.S. Government Obligation which is specified in clause
(x) above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any specific payment of
principal of or interest on any U.S. Government Obligation which is so
specified and held, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the U.S. Government Obligation
or the specific payment of principal or interest evidenced by such
depositary receipt.
(2) No event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to such Securities
or any other Securities shall have occurred and be continuing at the
time of such deposit or, with regard to any such event specified in
Sections 501(5) and (6), at any time on or prior to the 90th day after
the date of such deposit (it being understood that this condition shall
not be deemed satisfied until after such 90th day).
(3) If the Securities are to be redeemed prior to Stated
Maturity (other than from mandatory sinking fund payments or analogous
payments), notice of such redemption shall have been duly given
pursuant to this Indenture or provision therefor satisfactory to the
Trustee shall have been made.
(4) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.
59
<PAGE> 61
SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section
1003, all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee pursuant to Section 1304 in respect of any Securities
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal
and any premium and interest, but money so held in trust need not be segregated
from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1304 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 with respect to any Securities which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect the
Defeasance or Covenant Defeasance, as the case may be, with respect to such
Securities.
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 1401. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of or any premium
or interest on any Security, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture or in any supplemental indenture, or
in any Security, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Securities.
60
<PAGE> 62
------------------------------------
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
DUKE POWER COMPANY
By______________________________
President
Attest:
________________________________
THE CHASE MANHATTAN BANK
By_____________________________
Vice President
Attest:
__________________________________
61
<PAGE> 63
STATE OF NORTH CAROLINA )
) ss.:
COUNTY OF MECKLENBURG )
On the day of October, 1996, before me personally came
, to me known, who, being duly sworn, did depose and say
that he is of DUKE POWER
COMPANY, one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation; and that he signed his name thereto
by like authority.
___________________________
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of October, 1996, before me personally came
, to me known, who, being by me duly sworn, did depose and
say that he is of THE CHASE
MANHATTAN BANK, one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation; and that he signed his
name thereto by like authority.
___________________________
Notary Public
[NOTARIAL SEAL]
62
<PAGE> 1
(Proof of October 16, 1996)
DUKE POWER COMPANY
TO
THE CHASE MANHATTAN BANK
Trustee
--------------------------------------------
SUBORDINATED INDENTURE
Dated as of October 1, 1996
--------------------------------------------
<PAGE> 2
INDENTURE, dated as of October 1, 1996, between Duke Power
Company, a corporation duly organized and existing under the laws of the State
of North Carolina (herein called the "Company"), having its principal office at
422 South Church Street, Charlotte, North Carolina 28242, and The Chase
Manhattan Bank, a New York banking corporation, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures, notes or other evidences of indebtedness (herein called
the "Securities"), to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted in the United
States of America;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Indenture; and
<PAGE> 3
(5) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of
Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not
a day on which banking institutions in that Place of Payment are authorized or
obligated by law or executive order to close.
"Commission" means the Securities and Exchange Commission,
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee in
the City of New York, New York at which at any particular time its corporate
trust business shall be principally administered, which office at the date
hereof is located at 450 West 33rd Street, New York, New York 10001.
2
<PAGE> 4
"corporation" means a corporation, association, company,
joint-stock company or business trust.
"Covenant Defeasance" has the meaning specified in Section
1303.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series
issuable in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Exchange Act that is designated to act as
Depositary for such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 and
any statute successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 104.
"Global Security" means a Security that evidences all or part
of the Securities of any series which is issued to a Depositary or a nominee
thereof for such series in accordance with Section 301(17).
"Holder" means a Person in whose name a Security is registered
in the Security Register.
"Indenture" means this instrument as originally executed and
as it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.
"interest", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any
Security, means the Stated Maturity of an instalment of interest on such
Security.
"Investment Company Act" means the Investment Company Act of
1940 and any statute successor thereto, in each case as amended from time to
time.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security or an instalment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
3
<PAGE> 5
"Notice of Default" means a written notice of the kind
specified in Section 501(4).
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the Vice 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 Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 1004 shall
be the principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company, or other counsel who shall be reasonably
acceptable to the Trustee.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if
such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected
pursuant to Section 1302; and
(4) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the
4
<PAGE> 6
amount as specified or determined as contemplated by Section 301, (C) the
principal amount of a Security denominated in one or more foreign currencies or
currency units which shall be deemed to be Outstanding shall be the U.S. dollar
equivalent, determined as of such date in the manner provided as contemplated by
Section 301, of the principal amount of such Security (or, in the case of a
Security described in Clause (A) or (B) above, of the amount determined as
provided in such Clause), and (D) Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other
action, only Securities which the Trustee actually knows to be so owned shall be
so disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of or any premium or interest on any Securities on behalf of
the Company.
"Periodic Offering" means an offering of Securities of a
series from time to time the specific terms of which Securities, including
without limitation the rate or rates of interest or formula for determining the
rate or rates of interest thereon, if any, the Stated Maturity or Maturities
thereof and the redemption provisions, if any, with respect thereto, are to be
determined by the Company upon the issuance of such Securities.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities
of any series, means the place or places where the principal of and any premium
and interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
5
<PAGE> 7
"Responsible Officer", when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any senior trust officer, any trust officer or
assistant trust officer, the controller or any assistant controller or any other
officer 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 his knowledge of and familiarity with the particular
subject.
"Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Securities Act" means the Securities Act of 1933 and any
statute successor thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Senior Indebtedness" means with respect to any series of
Securities, the principal of, and premium, if any, and interest on and any other
payment due pursuant to any of the following, whether outstanding at the date of
execution of this Indenture or thereafter incurred, created or assumed: (a) all
indebtedness of the Company evidenced by notes, debentures, bonds or other
securities sold by the Company for money or other obligations for money
borrowed, (b) all indebtedness of others of the kinds described in the preceding
clause (a) assumed by or guaranteed in any manner by the Company or in effect
guaranteed by the Company through an agreement to purchase, contingent or
otherwise, and (c) all renewals, extensions or refundings of indebtedness of the
kinds described in either of the preceding clauses (a) and (b) unless, in the
case of any particular indebtedness, renewal, extension or refunding, the
instrument creating or evidencing the same or the assumption or guarantee of the
same expressly provides that such indebtedness, renewal, extension or refunding
is not superior in right of payment to or is pari passu with such Securities.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or
any instalment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such instalment of principal or interest is due and payable.
"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.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable
6
<PAGE> 8
provisions of this Indenture, and thereafter "Trustee" shall mean or include
each Person who is then a Trustee hereunder, and if at any time there is more
than one such Person, "Trustee" as used with respect to the Securities of any
series shall mean the Trustee with respect to Securities of that series.
"U.S. Government Obligation" has the meaning specified in
Section 1304.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee such certificates and opinions as may be required under
the Trust Indenture Act. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer of the Company,
or an Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include,
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel,
7
<PAGE> 9
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous. Any such
certificate or opinion of counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Whenever, subsequent to the receipt by the Trustee of any
Board Resolution, Officers' Certificate, Opinion of Counsel or other document or
instrument, a clerical, typographical or other inadvertent or unintentional
error or omission shall be discovered therein, a new document or instrument may
be substituted therefor in corrected form with the same force and effect as if
originally filed in the corrected form and, irrespective of the date or dates of
the actual execution and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or delivered as of the date
or dates required with respect to the document or instrument for which it is
substituted. Anything in this Indenture to the contrary notwithstanding, if any
such corrective document or instrument indicates that action has been taken by
or at the request of the Company which could not have been taken had the
original document or instrument not contained such error or omission, the action
so taken shall not be invalidated or otherwise rendered ineffective but shall be
and remain in full force and effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without limiting the generality of
the foregoing, any Securities issued under the authority of such defective
document or instrument shall nevertheless be the valid obligations of the
Company entitled to the benefits of this Indenture equally and ratably with all
other Outstanding Securities, except as aforesaid.
SECTION 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 601) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof.
8
<PAGE> 10
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series; provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take or revoke the relevant action, whether or not such
Holders remain Holders after such record date; provided that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Company, at its own expense, shall cause notice
of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Trustee in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities of any series entitled to
join in the giving or making of (i) any Notice of Default, (ii) any declaration
of acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction or to revoke
the same, whether or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities of such series on such record date. Nothing in
this paragraph shall be construed to
9
<PAGE> 11
prevent the Trustee from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Trustee, at the Company's expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be sent to the
Company in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 106.
With respect to any record date set pursuant to this Section,
the party hereto which sets such record dates may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities of the relevant series in the manner
set forth in Section 106, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the party hereto which set such record date shall be deemed to
have initially designated the 180th day after such record date as the Expiration
Date with respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date
shall be later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to
take any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trustee Administration, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this instrument, attention:
Treasurer, or at any other address previously furnished in writing to
the Trustee by the Company.
10
<PAGE> 12
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act which is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act which may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
11
<PAGE> 13
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto, their
successors hereunder, the holders of Senior Indebtedness and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the law of the State of New York, without regard to
conflicts of laws principles thereof.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities (other than a provision of any Security which specifically states
that such provision shall apply in lieu of this Section)) payment of interest or
principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the
form set forth in this Article, or in such other form as shall be established by
or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
12
<PAGE> 14
SECTION 202. Form of Face of Security.
[Insert any legend required by the Internal Revenue Code
and the regulations thereunder.]
DUKE POWER COMPANY
__________________
No.________________________ $____________________
CUSIP No._____________
Duke Power Company, a corporation duly organized and existing
under the laws of North Carolina (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ______________________, or registered
assigns, the principal sum of ________ Dollars on _________________________ [if
the Security is to bear interest prior to Maturity and interest payment periods
are not extendable, insert - , and to pay interest thereon from __________ or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, [insert - semi-annually, quarterly, monthly or other
description of the relevant payment period] on [________, ________,] and
__________ in each year, commencing _______________, at the rate of ____% per
annum, until the principal hereof is paid or made available for payment [if
applicable, insert - , provided that any principal and premium, and any such
instalment of interest, which is overdue shall bear interest at the rate of ___%
per annum (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand]. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the [___________________] (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for will forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture].
[If the Security is not to bear interest prior to Maturity,
insert - The principal of this Security shall not bear interest except in the
case of a default in payment of principal upon acceleration, upon redemption or
at Stated Maturity and in such case the overdue principal and any overdue
premium shall bear interest at the rate of ____% per annum (to the extent that
the payment of such interest shall be legally enforceable), from the dates such
amounts are due until they are paid or made available for payment. Interest on
any overdue principal or premium shall be payable on demand. Any such interest
on overdue principal or premium which is not paid on demand shall bear interest
at the rate of ____% per annum (to the extent that the payment of such interest
on interest shall be legally enforceable), from the
13
<PAGE> 15
date of such demand until the amount so demanded is paid or made available for
payment. Interest on any overdue interest shall be payable on demand.]
Payment of the principal of (and premium, if any) and [if
applicable, insert- any such] interest on this Security will be made at the
office or agency of the Company maintained for that purpose in
_________________, in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts
[if applicable, insert - ; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register].
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
DUKE POWER COMPANY
By______________________________
Attest:
_______________________________________
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture, dated as of October 1, 1996 (herein called
the "Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights thereunder of the Company, the Trustee, the holders of
Senior Indebtedness and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [if applicable,
insert - , limited in aggregate principal amount to $__________].
[If applicable, insert - The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, [if
applicable, insert - (1) on ____________ in any year commencing with the year
_____ and ending with the year _____ through operation of
14
<PAGE> 16
the sinking fund for this series at a Redemption Price equal to 100% of the
principal amount, and (2)] at any time [if applicable, insert - on or after
___________, 19__], as a whole or in part, at the election of the Company, at
the following Redemption Prices (expressed as percentages of the principal
amount): If redeemed [if applicable, insert - on or before _________________,
___%, and if redeemed] during the 12-month period beginning _________ of the
years indicated,
<TABLE>
<CAPTION>
Year Redemption Price Year Redemption Price
<S> <C> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption [if applicable, insert - (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert - The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, (1) on
____________ in any year commencing with the year ______ and ending with the
year _____ through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below,
and (2) at any time [if applicable, insert - on or after _____________], as a
whole or in part, at the election of the Company, at the Redemption Prices for
redemption otherwise than through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below: If redeemed
during the 12-month period beginning ________ of the years indicated,
<TABLE>
<CAPTION>
Redemption Price for Redemption Price for
Redemption Through Redemption Otherwise Than
Operation of the Through Operation
Year Sinking Fund of the Sinking Fund
<S> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to _____% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
15
<PAGE> 17
[If applicable, insert - Notwithstanding the foregoing, the
Company may not, prior to _________, redeem any Securities of this series as
contemplated by [if applicable, insert - Clause (2) of] the preceding paragraph
as a part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than ____% per annum.]
[If applicable, insert - The sinking fund for this series
provides for the redemption on __________ in each year beginning with the year
_______ and ending with the year ______ of [if applicable, insert - not less
than $___________ ("mandatory sinking fund") and not more than] $____________
aggregate principal amount of Securities of this series. Securities of this
series acquired or redeemed by the Company otherwise than through [if
applicable, insert - mandatory] sinking fund payments may be credited against
subsequent [if applicable, insert - mandatory] sinking fund payments otherwise
required to be made [if applicable, insert - , in the inverse order in which
they become due].]
[If the Security is subject to redemption of any kind, insert
- - In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]
[If applicable, insert - The Indenture contains provisions for
defeasance at any time of [the entire indebtedness of this Security] [or]
[certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain conditions set forth in
the Indenture.]
[If the Security is not an Original Issue Discount Security,
insert - If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.]
[If the Security is an Original Issue Discount Security,
insert - If an Event of Default with respect to Securities of this series shall
occur and be continuing, an amount of principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture. Such amount shall be equal to [insert formula for determining the
amount]. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]
The indebtedness represented by the Securities of this series
is, to the extent and in the manner set forth in the Indenture, expressly
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness, as defined in the Indenture, with respect to this series, and this
Security is issued subject to such provisions, and each Holder of this Security,
by acceptance thereof, agrees to and shall be bound by such provisions and
authorizes and directs the Trustee in his, her or its behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in the Indenture and
16
<PAGE> 18
appoints the Trustee his, her or its attorney-in-fact, as the case may be, for
any and all such purposes.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange therefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 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.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of and any premium and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the
17
<PAGE> 19
Indenture and subject to certain limitations therein set forth, Securities of
this series are exchangeable for a like aggregate principal amount of Securities
of this series and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
SECTION 204. Form of Legend for Global Securities.
Unless otherwise specified as contemplated by Section 301 for
the Securities evidenced thereby, every Global Security authenticated and
delivered hereunder shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
SECTION 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
As Trustee
By_____________________________
Authorized Officer
ARTICLE THREE
18
<PAGE> 20
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series, with the
Securities issued hereunder being expressly subordinated in right of payment, to
the extent and in the manner set forth in Article Fourteen, to all Senior
Indebtedness of the Company. There shall be established in or pursuant to a
Board Resolution and, subject to Section 303, set forth, or determined in the
manner provided, in an Officers' Certificate, or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906 or 1106
and except for any Securities which, pursuant to Section 303, are
deemed never to have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of any Securities
of the series is payable or the method by which such date or dates
shall be determined;
(5) the rate or rates at which any Securities of the series
shall bear interest, if any, or the method by which such rate or rates
shall be determined; the date or dates from which any such interest
shall accrue; the Interest Payment Dates on which any such interest
shall be payable; the manner (if any) of determination of such Interest
Payment Dates; and the Regular Record Date, if any, for any such
interest payable on any Interest Payment Date;
(6) the right, if any, to extend the interest payment periods
and the duration of such extension;
(7) the place or places where the principal of and any premium
and interest on any Securities of the series shall be payable and
whether, if acceptable to the Trustee, any principal of such Securities
shall be payable without presentation or surrender thereof;
19
<PAGE> 21
(8) the period or periods within which, or the date or dates
on which, the price or prices at which and the terms and conditions
upon which any Securities of the series may be redeemed, in whole or in
part, at the option of the Company and, if other than by a Board
Resolution, the manner in which any election by the Company to redeem
the Securities shall be evidenced;
(9) the obligation, if any, of the Company to redeem or
purchase any Securities of the series pursuant to any sinking fund,
purchase fund or analogous provisions or at the option of the Holder
thereof and the period or periods within which, the price or prices at
which and the terms and conditions upon which any Securities of the
series shall be redeemed or purchased, in whole or in part, pursuant to
such obligation;
(10) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which any Securities of the
series shall be issuable;
(11) if the amount of principal of or any premium or interest
on any Securities of the series may be determined with reference to an
index or pursuant to a formula, the manner in which such amounts shall
be determined;
(12) if other than the currency of the United States of
America, the currency, currencies or currency units in which the
principal of or any premium or interest on any Securities of the series
shall be payable and the manner of determining the equivalent thereof
in the currency of the United States of America for any purpose,
including for purposes of the definition of "Outstanding" in Section
101;
(13) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the
Company or the Holder thereof, in one or more currencies or currency
units other than that or those in which such Securities are stated to
be payable, the currency, currencies or currency units in which the
principal of or any premium or interest on such Securities as to which
such election is made shall be payable, the periods within which and
the terms and conditions upon which such election is to be made and the
amount so payable (or the manner in which such amount shall be
determined);
(14) if other than the entire principal amount thereof, the
portion of the principal amount of any Securities of the series which
shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 502;
(15) if the principal amount payable at the Stated Maturity of
any Securities of the series will not be determinable as of any one or
more dates prior to the Stated Maturity, the amount which shall be
deemed to be the principal amount of such Securities as of any such
date for any purpose thereunder or hereunder, including the principal
amount thereof which shall be due and payable upon any Maturity other
than the Stated Maturity or which shall be deemed to be Outstanding as
of any date prior to the Stated Maturity (or, in any such case, the
manner in which such amount deemed to be the principal amount shall be
determined);
20
<PAGE> 22
(16) if either or both of Sections 1302 and 1303 do not apply
to any Securities of the series;
(17) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global
Securities and, in such case, the respective Depositary or Depositaries
for such Global Securities, the form of any legend or legends which
shall be borne by any such Global Security in addition to or in lieu of
that set forth in Section 204 and any circumstances in addition to or
in lieu of those set forth in Clause (2) of the last paragraph of
Section 305 in which any such Global Security may be exchanged in whole
or in part for Securities registered, and any transfer of such Global
Security in whole or in part may be registered, in the name or names of
Persons other than the Depositary for such Global Security or a nominee
thereof;
(18) any addition, modification or deletion of any Events of
Default or covenants provided with respect to any Securities of the
series and any change in the right of the Trustee or the requisite
Holders of such Securities to declare the principal amount thereof due
and payable pursuant to Section 502;
(19) any addition to or change in the covenants set forth in
Article Ten which applies to Securities of the series;
(20) the subordination of the Securities of such series to any
other indebtedness of the Company, including, without limitation, the
Securities of any other series; and
(21) any other terms of the series.
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to the Board Resolution referred to above and (subject to Section
303) set forth, or determined in the manner provided, in the Officers'
Certificate referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms or the manner of determining the
terms of the series.
With respect to Securities of a series offered in a Periodic
Offering, the Board Resolution (or action taken pursuant thereto), Officers'
Certificate or supplemental indenture referred to above may provide general
terms or parameters for Securities of such series and provide either that the
specific terms of particular Securities of such series shall be specified in a
Company Order or that such terms shall be determined by the Company in
accordance with other procedures specified in a Company Order as contemplated by
the third paragraph of Section 303.
Notwithstanding Section 301(2) herein and unless otherwise
expressly provided with respect to a series of Securities, the aggregate
principal amount of a series of Securities
21
<PAGE> 23
may be increased and additional Securities of such series may be issued up to
the maximum aggregate principal amount authorized with respect to such series as
increased.
SECTION 302. Denominations.
The Securities of each series shall be issuable only in fully
registered form without coupons and only in such denominations as shall be
specified as contemplated by Section 301. In the absence of any such specified
denomination with respect to the Securities of any series, the Securities of
such series shall be issuable in denominations of $1,000 and any integral
multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its Vice Chairman of the Board, its President or one
of its Vice Presidents, under its corporate seal reproduced thereon attested by
its Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and deliver such
Securities, provided, however, that in the case of Securities offered in a
Periodic Offering, the Trustee shall authenticate and deliver such Securities
from time to time in accordance with such other procedures (including, without
limitation, the receipt by the Trustee of oral or electronic instructions from
the Company or its duly authorized agents, promptly confirmed in writing)
acceptable to the Trustee as may be specified by or pursuant to a Company Order
delivered to the Trustee prior to the time of the first authentication of
Securities of such series. If the form or terms of the Securities of the series
have been established by or pursuant to one or more Board Resolutions as
permitted by Sections 201 and 301, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to
Section 601) shall be fully protected in relying upon, an Opinion of Counsel
stating,
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such
form has been established in conformity with the provisions of this
Indenture;
(2) if the terms of such Securities have been, or in the case
of Securities of a series offered in a Periodic Offering, will be,
established by or pursuant to Board Resolution as permitted by Section
301, that such terms have been, or in the case of Securities of a
series offered in a Periodic Offering, will be, established in
conformity with the provisions of this Indenture, subject, in the case
of Securities of a series
22
<PAGE> 24
offered in a Periodic Offering, to any conditions specified in such
Opinion of Counsel; and
(3) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officers'
Certificate otherwise required pursuant to Section 301 or the Company Order and
Opinion of Counsel otherwise required pursuant to such preceding paragraph at or
prior to the authentication of each Security of such series if such documents
are delivered at or prior to the authentication upon original issuance of the
first Security of such series to be issued.
With respect to Securities of a series offered in a Periodic
Offering, the Trustee may rely, as to the authorization by the Company of any of
such Securities, the form and terms thereof and the legality, validity, binding
effect and enforceability thereof, upon the Opinion of Counsel and the other
documents delivered pursuant to Sections 201 and 301 and this Section, as
applicable, in connection with the first authentication of Securities of such
series.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature of an authorized officer, and
such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 309, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
23
<PAGE> 25
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company
will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities
of such series at the office or agency of the Company in a Place of Payment for
that series, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and of
like tenor and aggregate principal amount. Until so exchanged, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office or in
any other office or agency of the Company in a Place of Payment being herein
sometimes referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of
a series at the office or agency of the Company in a Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount.
At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series, of any authorized
denominations and of like tenor and aggregate principal amount, upon surrender
of the Securities to be exchanged at such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
24
<PAGE> 26
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906 or 1106 not involving any transfer.
If the Securities of any series (or of any series and
specified tenor) are to be redeemed, the Company shall not be required (A) to
issue, register the transfer of or exchange any Securities of that series (or of
that series and specified tenor, as the case may be) during a period beginning
at the opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities selected for redemption and ending at the
close of business on the day of such mailing, or (B) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
The provisions of Clauses (1), (2), (3) and (4) below shall
apply only to Global Securities:
(1) Each Global Security authenticated under this Indenture
shall be registered in the name of the Depositary designated for such
Global Security or a nominee thereof and delivered to such Depositary
or a nominee thereof or custodian therefor, and each such Global
Security shall constitute a single Security for all purposes of this
Indenture.
(2) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities
registered, and no transfer of a Global Security in whole or in part
may be registered, in the name of any Person other than the Depositary
for such Global Security or a nominee thereof unless (A) such
Depositary has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Security and a successor
Depositary has not been appointed by the Company within 90 days of
receipt by the Company of such notification or (B) there shall exist
such circumstances, if any, in addition to or in lieu of the foregoing
as have been specified for this purpose as contemplated by Section 301.
Notwithstanding the foregoing, the Company may at any time in its sole
discretion determine that Securities issued in the form of a Global
Security shall no longer be represented in whole or in part by such
Global Security, and the Trustee, upon receipt of a Company Order
therefor, shall authenticate and deliver definitive Securities in
exchange in whole or in part for such Global Security.
(3) Subject to Clause (2) above, any exchange or transfer of a
Global Security for other Securities may be made in whole or in part,
and all Securities issued in exchange for or upon transfer of a Global
Security or any portion thereof shall be registered in such names as
the Depositary for such Global Security shall direct.
25
<PAGE> 27
(4) Every Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global
Security or any portion thereof, whether pursuant to this Section,
Section 304, 306, 906 or 1106 or otherwise, shall be authenticated and
delivered in the form of, and shall be, a Global Security, unless such
Security is registered in the name of a Person other than the
Depositary for such Global Security or a nominee thereof.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, interest on any Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest.
26
<PAGE> 28
Except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, any interest on any Security of any
series which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease
to be payable to the Holder on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the Company,
at its election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to
be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be given to each Holder of Securities
of such series in the manner set forth in Section 106, not less than 10
days prior to such Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
27
<PAGE> 29
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and any
premium and (subject to Section 307) any interest on such Security and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and shall be promptly cancelled by it. The Company may at any
time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed of as
directed by a Company Order; provided, however, that the Trustee shall not be
required to destroy such cancelled Securities.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301
for Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 311. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
28
<PAGE> 30
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of
further effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306 and (ii) Securities for whose
payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee
for cancellation; or
(B) all such Securities not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited
or caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal and any premium and interest to
the date of such deposit (in the case of Securities which have become
due and payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
29
<PAGE> 31
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 607, the
obligations of the Company to any Authenticating Agent under Section 614 and, if
money shall have been deposited with the Trustee pursuant to subclause (B) of
Clause (1) of this Section, the obligations of the Trustee under Section 402 and
the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
1003, all money deposited with the Trustee pursuant to Section 401 shall be held
in trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or Article Fourteen or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body), unless it is inapplicable to a
particular series or is specifically deleted or modified in the Board Resolution
(or action taken pursuant thereto), Officers' Certificate or supplemental
indenture under which such series of Securities is issued or has been deleted
or modified in an indenture supplemental hereto:
(1) default in the payment of any interest upon any Security
of that series when it becomes due and payable, and continuance of such
default for a period of 60 days; or
(2) default in the payment of the principal of or any premium
on any Security of that series at its Maturity; or
(3) default in the making of any sinking fund payment, when
and as due by the terms of a Security of that series, and continuance
of such default for a period of 60 days; or
(4) default in the performance, or breach, of any covenant of
the Company in this Indenture (other than a covenant a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with or which has expressly been included in this Indenture
solely for the benefit of series of Securities other than that series),
and continuance of such default or breach for a period of 90 days after
there has been given, by registered or certified mail, to the Company
by the Trustee or to
30
<PAGE> 32
the Company and the Trustee by the Holders of at least 33% in principal
amount of the Outstanding Securities of that series a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder, unless the
Trustee, or the Trustee and the Holders of a principal amount of
Securities of such series not less than the principal amount of
Securities the Holders of which gave such notice, as the case may be,
shall agree in writing to an extension of such period prior to its
expiration; provided, however, that the Trustee, or the Trustee and the
Holders of such principal amount of Securities of such series, as the
case may be, shall be deemed to have agreed to an extension of such
period if corrective action is initiated by the Company within such
period and is being diligently pursued; or
(5) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 90 consecutive
days; or
(6) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by
it to the entry of a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable
Federal or State law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company 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; or
(7) any other Event of Default provided with respect to
Securities of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any
series at the time Outstanding occurs and is continuing, then in every such case
the Trustee or the Holders of not less than 33% in principal amount of the
Outstanding Securities of that series may declare the principal amount of all
the Securities of that series (or, if any Securities of that series are Original
Issue Discount Securities, such portion of the principal amount of such
Securities as
31
<PAGE> 33
may be specified by the terms thereof) to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified amount) shall
become immediately due and payable.
At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Event of Default giving rise to such
declaration of acceleration shall, without further act, be deemed to have been
waived, and such declaration and its consequences shall, without further act, be
deemed to have been rescinded and annulled, if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that
series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than
by such declaration of acceleration and any interest thereon
at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of
that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 60 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
32
<PAGE> 34
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding;
provided, however, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a
creditors' or other similar committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
33
<PAGE> 35
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article
shall, subject (in the case of clauses SECOND and THIRD below) to the
subordination provisions hereof, be applied in the following order, at the date
or dates fixed by the Trustee and, in case of the distribution of such money on
account of principal or any premium or interest, upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal and any
premium and interest, respectively; and
THIRD: To the payment of the balance, if any, to the Company
or any other Person or Persons legally entitled thereto.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of that series;
(2) the Holders of not less than a majority in principal
amount of the Outstanding Securities of that series shall have made
written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this
34
<PAGE> 36
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all of such Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Section 307) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
SECTION 512. Control By Holders.
The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Securities of such series; provided that
35
<PAGE> 37
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) subject to the provisions of Section 601, the Trustee
shall have the right to decline to follow any such direction if the
Trustee in good faith shall, by a Responsible Officer or Officers of
the Trustee, determine that the proceeding so directed would involve
the Trustee in personal liability.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of
the Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of or any premium or
interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and may assess
costs against any such party litigant, in the manner and to the extent provided
in the Trust Indenture Act; provided that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the Company
or the Trustee.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
36
<PAGE> 38
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to
the Trustee shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of
any series, the Trustee shall give the Holders of Securities of such series
notice of such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 501(4) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
or as otherwise expressly provided herein, and any resolution of the
Board of Directors shall be sufficiently evidenced by a Board
Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
37
<PAGE> 39
(4) the Trustee may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(5) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled, at reasonable
times previously notified to the Company, to examine the relevant
books, records and premises of the Company, personally or by agent or
attorney; and
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
38
<PAGE> 40
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation
as shall be agreed to in writing between the Company and the Trustee
for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
The Trustee shall have a lien prior to the Securities upon all
property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section 607, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.
Without limiting any rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(5) or Section
501(6), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or State bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the termination
of this Indenture.
SECTION 608. Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture. To
the extent permitted by such Act, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a trustee under this Indenture with
respect to Securities of more than one series.
39
<PAGE> 41
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be one (and only one) Trustee
hereunder with respect to the Securities of each series, which may be Trustee
hereunder for Securities of one or more other series. Each Trustee shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes of
this Section and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee with respect to the Securities of any
series shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly
40
<PAGE> 42
situated, petition any court of competent jurisdiction for the removal of the
Trustee with respect to all Securities and the appointment of a successor
Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
to all Holders of Securities of such series in the manner provided in Section
106. Each notice shall include the name of the successor Trustee with respect to
the Securities of such series and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Securities
of one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to
41
<PAGE> 43
transfer and confirm to, and to vest in, each successor Trustee all the rights,
powers, trusts and duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such successor Trustee
relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.
Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in the first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust
42
<PAGE> 44
Indenture Act regarding the collection of claims against the Company (or any
such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents
acceptable to the Company with respect to one or more series of Securities which
shall be authorized to act on behalf of the Trustee to authenticate Securities
of such series issued upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 306, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
43
<PAGE> 45
The Company agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
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___________________________
As Authenticating Agent
By_________________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the
Trustee
(1) 15 days after each Regular Record Date, a list, in such
form as the Trustee may reasonably require, of the names and addresses
of the Holders of Securities of each series as of such Regular Record
Date, and
(2) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
44
<PAGE> 46
The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto. If required by Section 313(a) of the Trust Indenture Act, the Trustee
shall, within 60 days after each October 1 following the date of this Indenture,
deliver to Holders a brief report, dated as of such October 1, which complies
with the provisions of such Section 313(a).
A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are listed, with the Commission and with the Company. The
Company will promptly notify the Trustee when any Securities are listed on any
stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
SECTION 801. Company May Consolidate, Etc., on Certain Terms.
Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of the Company with or into
any other Person or Persons (whether or not affiliated with the Company), or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any conveyance or
transfer of the properties and assets of the Company as an entirety or
substantially as an entirety to any other Person (whether or not affiliated with
the Company) lawfully entitled to acquire the same; provided, however, and the
Company hereby covenants and agrees, that upon any such consolidation, merger,
conveyance or transfer, (i) the due and punctual payment of the principal of and
premium, if any, and interest on all of the Securities,
45
<PAGE> 47
according to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed by the
Company, shall be expressly assumed, by indenture supplemental hereto, in form
reasonably satisfactory to the Trustee, executed and delivered to the Trustee by
the Person (if other than the Company) formed by such consolidation, or into
which the Company shall have been merged, or by the Person which shall have
acquired such properties and assets, and (ii) the Company shall deliver to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance or transfer and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture comply with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance or transfer of the properties
and assets of the Company as an entirety or substantially as an entirety in
accordance with Section 801, the successor Person formed by such consolidation
or into which the Company is merged or to which such conveyance or transfer is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
reasonably satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such additional
Events of Default are to be for
46
<PAGE> 48
the benefit of less than all series of Securities, stating that such
additional Events of Default are expressly being included solely for
the benefit of such series); or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest coupons, or
to facilitate the issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of
this Indenture in respect of one or more series of Securities; provided
that any such addition, change or elimination (A) shall neither (i)
apply to any Security of any series created prior to the execution of
such supplemental indenture and entitled to the benefit of such
provision nor (ii) modify the rights of the Holder of any such Security
with respect to such provision or (B) shall become effective only when
there is no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series
as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 611; or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture; provided that such
action pursuant to this Clause (9) shall not adversely affect the
interests of the Holders of Securities of any series in any material
respect.
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture with respect to
Securities of such series, or modifying in any manner the rights of the Holders
of Securities of such series under this Indenture; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
instalment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security or any other
47
<PAGE> 49
Security which would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 502, or change
any Place of Payment where, or the coin or currency in which, any
Security or any premium or interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of redemption, on or
after the Redemption Date), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513
or Section 1005, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby; provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant changes in this Section
and Section 1005, or the deletion of this proviso, in accordance with
the requirements of Sections 611 and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
48
<PAGE> 50
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
SECTION 907. Subordination Unimpaired.
This Indenture may not be amended to alter the subordination
of any of the Outstanding Securities without the written consent of each holder
of Senior Indebtedness then outstanding that would be adversely affected
thereby.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of and
any premium and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more
other offices or agencies where the Securities of one or more series may be
presented or surrendered for
49
<PAGE> 51
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for Securities of any series for such purposes. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent
with respect to any series of Securities, it will, on or before each due date of
the principal of or any premium or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium and interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and will promptly notify the Trustee of its action or
failure so to act.
Whenever the Company shall have one or more Paying Agents for
any series of Securities, it will, on or prior to each due date of the principal
of or any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will (1) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2)
during the continuance of any default by the Company (or any other obligor upon
the Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust hereunder by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of or any
premium or interest on any Security of any series and remaining unclaimed for
two years after such principal, premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease;
50
<PAGE> 52
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
SECTION 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, on or before October
15 of each calendar year or on or before such other day in each calendar year as
the Company and the Trustee may from time to time agree upon, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
SECTION 1005. Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 301
for Securities of such series, the Company may, with respect to the Securities
of any series, omit in any particular instance to comply with any term,
provision or condition set forth in any covenant provided pursuant to Section
301(19), 901(2) or 901(7) for the benefit of the Holders of such series if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities of such series shall, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.
SECTION 1006. Calculation of Original Issue Discount.
The Company shall file with the Trustee promptly after the end
of each calendar year a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of such year.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
51
<PAGE> 53
Securities of any series which are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified as contemplated by Section 301 for such Securities) in
accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities. In case of any redemption at the election of
the Company, the Company shall, at least 45 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the
Securities to be redeemed. In the case of any redemption of Securities (a) prior
to the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, or (b) pursuant to an election
of the Company which is subject to a condition specified in the terms of such
Securities or elsewhere in this Indenture, the Company shall furnish the Trustee
with an Officers' Certificate evidencing compliance with such restriction or
condition.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be
redeemed (unless all the Securities of such series and of a specified tenor are
to be redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series;
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption as aforesaid and, in the case of any
Securities selected for partial redemption as aforesaid, the principal amount
thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply
with respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities
52
<PAGE> 54
redeemed or to be redeemed only in part, to the portion of the principal amount
of such Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given 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 Securities to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of any series
and of a specified tenor consisting of more than a single Security are
to be redeemed, the identification (and, in the case of partial
redemption of any such Securities, the principal amounts) of the
particular Securities to be redeemed and, if less than all the
Outstanding Securities of any series and of a specified tenor
consisting of a single Security are to be redeemed, the principal
amount of the particular Security to be redeemed;
(4) that on the Redemption Date the Redemption Price, together
with accrued interest, if any, to the Redemption Date, will become due
and payable upon each such Security to be redeemed and, if applicable,
that interest thereon will cease to accrue on and after said date;
(5) the place or places where each such Security is to be
surrendered for payment of the Redemption Price and accrued interest,
if any, unless it shall have been specified as contemplated by Section
301 with respect to such Securities that such surrender shall not be
required;
(6) that the redemption is for a sinking fund, if such is the
case; and
(7) such other matters as the Company shall deem desirable or
appropriate.
Unless otherwise specified with respect to any Securities in
accordance with Section 301, with respect to any redemption of Securities at the
election of the Company, unless, upon the giving of notice of such redemption,
Defeasance shall have been effected with respect to such Securities pursuant to
Section 1302, such notice may state that such redemption shall be conditional
upon the receipt by the Trustee or the Paying Agent(s) for such Securities, on
or prior to the date fixed for such redemption, of money sufficient to pay the
principal of and any premium and interest on such Securities and that if such
money shall not have been so received such notice shall be of no force or effect
and the Company shall not be required to redeem such Securities. In the event
that such notice of redemption contains such a condition and such money is not
so received, the redemption shall not be made and within a reasonable time
thereafter notice shall be given, in the manner in which the notice of
redemption was given, that such money was not so received and such redemption
was not required to be made,
53
<PAGE> 55
and the Trustee or Paying Agent(s) for the Securities otherwise to have been
redeemed shall promptly return to the Holders thereof any of such Securities
which had been surrendered for payment upon such redemption.
Notice of redemption of Securities to be redeemed at the
election of the Company, and any notice of non-satisfaction of redemption as
aforesaid, shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company. Subject to the preceding
paragraph, any such notice of redemption shall be irrevocable.
SECTION 1105. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, and the
conditions, if any, set forth in such notice having been satisfied, the
Securities or portions thereof so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein specified, and from and
after such date (unless, in the case of an unconditional notice of redemption,
the Company shall default in the payment of the Redemption Price and accrued
interest, if any) such Securities or portions thereof, if interest-bearing,
shall cease to bear interest. Upon surrender of any such Security for redemption
in accordance with said notice, such Security or portion thereof shall be paid
by the Company at the Redemption Price, together with accrued interest, if any,
to the Redemption Date; provided, however, that no such surrender shall be a
condition to such payment if so specified as contemplated by Section 301 with
respect to such Security, and provided further that, unless otherwise specified
as contemplated by Section 301, installments of interest whose Stated Maturity
is on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and any premium shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 1106. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities of the same series and of
like tenor, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
54
<PAGE> 56
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of any series except as otherwise
specified as contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by
the terms of any Securities is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of such Securities is herein referred to as an "optional sinking fund
payment". If provided for by the terms of any Securities, the cash amount of any
sinking fund payment may be subject to reduction as provided in Section 1202.
Each sinking fund payment shall be applied to the redemption of Securities as
provided for by the terms of such Securities.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to any Securities of such series required to be made
pursuant to the terms of such Securities as and to the extent provided for by
the terms of such Securities; provided that the Securities to be so credited
have not been previously so credited. The Securities to be so credited shall be
received and credited for such purpose by the Trustee at the Redemption Price,
as specified in the Securities so to be redeemed, for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date
for any Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1202 and stating the basis for such credit and that such Securities have
not been previously so credited and will also deliver to the Trustee any
Securities to be so delivered. Not less than 30 days prior to each such sinking
fund payment date, the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1105 and 1106.
55
<PAGE> 57
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Applicability of Article.
Unless, pursuant to Section 301, provision is made that either
or both of (a) defeasance of any Securities or any series of Securities under
Section 1302 and (b) covenant defeasance of any Securities or any series of
Securities under Section 1303 shall not apply to such Securities of a series,
then the provisions of either or both of Sections 1302 and Section 1303, as the
case may be, together with Sections 1304 and 1305, shall be applicable to the
Outstanding Securities of such series upon compliance with the conditions set
forth below in this Article.
SECTION 1302. Defeasance and Discharge.
The Company may cause itself to be discharged from its
obligations with respect to any Securities or any series of Securities on and
after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Defeasance"). For this purpose, such Defeasance means that
the Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Securities and to have satisfied all its other obligations
under such Securities and this Indenture insofar as such Securities are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), subject to the following which shall
survive until otherwise terminated or discharged hereunder: (1) the rights of
Holders of such Securities to receive, solely from the trust fund described in
Section 1304 and as more fully set forth in such Section, payments in respect of
the principal of and any premium and interest on such Securities when payments
are due, (2) the Company's obligations with respect to such Securities under
Sections 304, 305, 306, 1002 and 1003 and with respect to the Trustee under
Section 607, (3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (4) this Article. Subject to compliance with this Article,
Defeasance with respect to any Securities or any series of Securities by the
Company is permitted under this Section 1302 notwithstanding the prior exercise
by the Company of its rights under Section 1303 with respect to such Securities.
Following a Defeasance, payment of such Securities may not be accelerated
because of an Event of Default.
SECTION 1303. Covenant Defeasance.
The Company may cause itself to be released from its
obligations under any covenants provided pursuant to Section 301(19), 901(2),
901(6) or 901(7) with respect to any Securities or any series of Securities for
the benefit of the Holders of such Securities and the occurrence of any event
specified in Sections 501(4) (with respect to any such covenants provided
pursuant to Section 301(19), 901(2), 901(6) or 901(7)) or 501(7) shall be deemed
not to be or result in an Event of Default with respect to such Securities as
provided in this Section, in each case on and after the date the conditions set
forth in Section 1304 are satisfied (hereinafter called "Covenant Defeasance").
For this purpose, such Covenant Defeasance means that, with respect to such
Securities, the Company may omit to comply with and shall
56
<PAGE> 58
have no liability in respect of any term, condition or limitation set forth in
any such specified Section (to the extent so specified in the case of Section
501(4)), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of
Section 1302 or Section 1303 to any Securities or any series of Securities, as
the case may be:
(1) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of such Securities,
(A) money in an amount, or (B) U.S. Government Obligations which
through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than the
due date of any payment, money in an amount, or (C) a combination
thereof, in each case sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee to pay and
discharge, the principal of and any premium and interest on such
Securities on the respective Stated Maturities or on any Redemption
Date established pursuant to Clause (3) below, in accordance with the
terms of this Indenture and such Securities. As used herein, "U.S.
Government Obligation" means (x) any security which is (i) a direct
obligation of the United States of America for the payment of which the
full faith and credit of the United States of America is pledged or
(ii) an obligation of a Person controlled or supervised by and acting
as an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either
case (i) or (ii), is not callable or redeemable at the option of the
issuer thereof, and (y) any depositary receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with
respect to any U.S. Government Obligation which is specified in clause
(x) above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any specific payment of
principal of or interest on any U.S. Government Obligation which is so
specified and held, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the U.S. Government Obligation
or the specific payment of principal or interest evidenced by such
depositary receipt.
(2) No event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to such Securities
or any other Securities shall have occurred and be continuing at the
time of such deposit or, with regard to any such event specified in
Sections 501(5) and (6), at any time on or prior to the 90th day after
the date of such deposit (it being understood that this condition shall
not be deemed satisfied until after such 90th day).
57
<PAGE> 59
(3) If the Securities are to be redeemed prior to Stated
Maturity (other than from mandatory sinking fund payments or analogous
payments), notice of such redemption shall have been duly given
pursuant to this Indenture or provision therefor satisfactory to the
Trustee shall have been made.
(4) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.
SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section
1003, all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee pursuant to Section 1304 in respect of any Securities
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal
and any premium and interest, but money so held in trust need not be segregated
from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1304 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 with respect to any Securities which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect the
Defeasance or Covenant Defeasance, as the case may be, with respect to such
Securities.
ARTICLE FOURTEEN
SUBORDINATION
SECTION 1401. Securities Subordinated to Senior Indebtedness.
Except as otherwise specified as contemplated by Section 301
for any series of Securities, the Company covenants and agrees, and each Holder
of a Security, by his acceptance thereof, likewise covenants and agrees, that
the indebtedness represented by the Securities of any series and the payment of
the principal of and any premium or interest on each and all of the Securities
of each series is subordinate, to the extent and in the manner hereinafter set
forth, in right of payment to the prior payment in full of all Senior
58
<PAGE> 60
Indebtedness. Senior Indebtedness shall continue to be Senior Indebtedness and
entitled to the benefits of these subordination provisions irrespective of any
amendment, modification or waiver of any term of the Senior Indebtedness or
extension or renewal of the Senior Indebtedness.
In the event (a) of any payment by, or distribution of assets
of, the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, winding-up, liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, or (b) subject to the
provisions of Section 1402 that (i) a default shall have occurred and be
continuing with respect to the payment of principal, interest or any other
monetary amounts due and payable on any Senior Indebtedness and such default
shall have continued beyond the period of grace, if any, specified in the
instrument evidencing such Senior Indebtedness, (and the Trustee shall have
received written notice thereof from the Company or one or more holders of
Senior Indebtedness or their representative or representatives or the trustee or
trustees under any indenture pursuant to which any such Senior Indebtedness may
have been issued), or (ii) the maturity of any Senior Indebtedness shall have
been accelerated because of a default in respect of such Senior Indebtedness
(and the Trustee shall have received written notice thereof from the Company or
one or more holders of Senior Indebtedness or their representative or
representatives or the trustee or trustees under any indenture pursuant to which
any such Senior Indebtedness may have been issued), then:
(i) the holders of all Senior Indebtedness shall first be
entitled to receive, in the case of (a) above, payment of all amounts
due or to become due upon all Senior Indebtedness and, in the case of
subclauses (i) and (ii) of clause (b) above, payment of all amounts due
thereon, or provision shall be made for such payment in money or
money's worth, before the Holders of any of the Securities are entitled
to receive any payment on account of the principal of or any premium or
interest on the indebtedness evidenced by the Securities, including,
without limitation, any payments made pursuant to Article Eleven or
Article Twelve;
(ii) any payment by, or distribution of assets of, the Company
of any kind or character, whether in cash, property or securities, to
which the Holders of any of the Securities would be entitled except for
the provisions of this Article, including any such payment or
distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Company being subordinated to
the payment of such Securities, shall be paid or delivered by the
Person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly to
the holders of such Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Indebtedness may
have been issued, ratably according to the aggregate amounts remaining
unpaid on account of such Senior Indebtedness held or represented by
each, to the extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid after giving effect to any concurrent
payment or distribution (or provision therefor) to the holders of such
Senior Indebtedness, before any payment or distribution is made to the
Holders of the indebtedness evidenced by such Securities; and
59
<PAGE> 61
(iii) in the event that, notwithstanding the foregoing, any
payment by, or distribution of assets of, the Company of any kind or
character, whether in cash, property or securities, including any such
payment or distribution which may be payable or deliverable by reason
of the payment of any other indebtedness of the Company being
subordinated to the payment of such Securities, in respect of principal
of or any premium or interest on any of the Securities or in connection
with the repurchase by the Company of any of the Securities, shall be
received by the Trustee or the Holders of any of the Securities when
such payment or distribution is prohibited pursuant to this Section,
such payment or distribution shall be paid over to the holders of such
Senior Indebtedness or their representative or representatives or to
the trustee or trustees under any indenture pursuant to which any
instruments evidencing any such Senior Indebtedness may have been
issued, ratably as aforesaid, for application to the payment of all
Senior Indebtedness remaining unpaid until all such Senior Indebtedness
shall have been paid in full, after giving effect to any concurrent
payment or distribution (or provision therefor) to the holders of such
Senior Indebtedness.
Notwithstanding the foregoing, at any time after the 90th day
following the date of deposit of money or U.S. Government Obligations pursuant
to Section 1304 (provided all other conditions set out in such Section shall
have been satisfied) the funds so deposited and any interest thereon will not be
subject to any rights of holders of Senior Indebtedness including, without
limitation, those arising under this Article.
For purposes of this Article Fourteen, the words "cash,
property or securities" shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or any other
Person provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article
with respect to the Securities to the payment of all Senior Indebtedness which
may at the time be outstanding; provided that (i) the Senior Indebtedness is
assumed by the Person, if any, resulting from any such reorganization
or readjustment, and (ii) the rights of the holders of the Senior Indebtedness
are not, without the consent of each such holder adversely affected thereby,
altered by such reorganization or readjustment. The consolidation of the Company
with, or the merger of the Company into, another Person or the liquidation
or dissolution of the Company following the conveyance or transfer of its
property as an entirety, or substantially as an entirety, to another Person
upon the terms and conditions provided for in Article Eight hereof shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of this Section if such other Person shall, as part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article
Eight hereof.
SECTION 1402. Disputes with Holders of Certain Senior Indebtedness.
Any failure by the Company to make any payment on or perform
any other obligation under Senior Indebtedness, other than any indebtedness
incurred by the Company or assumed or guaranteed, directly or indirectly, by the
Company for money borrowed (or any deferral, renewal, extension or refunding
thereof) or any indebtedness or obligation as to which the provisions of this
Section shall have been waived by the Company in the instrument or instruments
by which the Company incurred, assumed, guaranteed or otherwise created such
indebtedness or obligation, shall not be deemed a default or event of default
under Section 1401(b) if (i) the Company shall be disputing its obligation to
make such payment or perform
60
<PAGE> 62
such obligation and (ii) either (A) no final judgment relating to such dispute
shall have been issued against the Company which is in full force and effect and
is not subject to further review, including a judgment that has become final by
reason of the expiration of the time within which a party may seek further
appeal or review, and (B) in the event of a judgment that is subject to further
review or appeal has been issued, the Company shall in good faith be prosecuting
an appeal or other proceeding for review and a stay of execution shall have been
obtained pending such appeal or review.
SECTION 1403. Subrogation.
Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities shall be subrogated (equally and ratably with the
holders of all obligations of the Company which by their express terms are
subordinated to Senior Indebtedness of the Company to the same extent as the
Securities are subordinated and which are entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until all amounts owing on the Securities
shall be paid in full, and as between the Company, its creditors other than
holders of such Senior Indebtedness and the Holders, no such payment or
distribution made to the holders of Senior Indebtedness by virtue of this
Article that otherwise would have been made to the Holders shall be deemed to be
a payment by the Company on account of such Senior Indebtedness, it being
understood that the provisions of this Article are and are intended solely for
the purpose of defining the relative rights of the Holders, on the one hand, and
the holders of Senior Indebtedness, on the other hand.
SECTION 1404. Obligation of Company Unconditional.
Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than the holders of Senior Indebtedness and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders the principal of and any premium or interest on the
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Company other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
of the holders of Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy.
Upon payment or distribution of assets of the Company referred
to in this Article, the Trustee and the Holders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which any
such dissolution, winding up, liquidation or reorganization proceeding affecting
the affairs of the Company is pending or upon a certificate of the trustee in
bankruptcy, receiver, assignee for the benefit of creditors, liquidating trustee
or agent or other person making any payment or distribution, delivered to the
Trustee or to the Holders, for the purpose of ascertaining the persons entitled
to participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
61
<PAGE> 63
The Trustee shall be entitled to rely on the delivery to it of
a written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee or representative on behalf of such holder) to
establish that such notice has been given by a holder of Senior Indebtedness or
a trustee or representative on behalf of any such holder or holders. In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article, and, if such evidence is not furnished, the
Trustee may defer payment to such Person pending judicial determination as to
the right of such Person to receive such payment.
SECTION 1405. Payments on Securities Permitted.
Nothing contained in this Article or elsewhere in this
Indenture or in the Securities shall affect the obligations of the Company to
make, or prevent the Company from making, payment of the principal of or any
premium or interest on the Securities in accordance with the provisions hereof
and thereof, except as otherwise provided in this Article.
SECTION 1406. Effectuation of Subordination by Trustee.
Each Holder of Securities, by his acceptance thereof,
authorizes and directs the Trustee in his, her or its behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article and appoints the Trustee his, her or its attorney-in-fact, as the
case may be, for any and all such purposes.
SECTION 1407. Knowledge of Trustee.
The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment of
moneys to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article. Notwithstanding the provisions of this Article or
any other provisions of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of any
payment of moneys to or by the Trustee, or the taking of any other action by the
Trustee, unless and until the Trustee shall have received written notice thereof
mailed or delivered to the Trustee at its Corporate Trust Office from the
Company, any Holder, any paying agent or the holder or representative of any
Senior Indebtedness; provided that if at least two Business Days prior to the
date upon which by the terms hereof any such moneys may become payable for any
purpose (including, without limitation, the payment of the principal or any
premium or interest on any Security) the Trustee shall not have received with
respect to such moneys the notice provided for in this Section, then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such moneys and to apply the same to the purpose
for which they were received and shall not be affected by any notice to the
contrary that may be received by it within two Business Days prior to or on or
after such date.
62
<PAGE> 64
SECTION 1408. Trustee May Hold Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any Senior Indebtedness
at the time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
SECTION 1409. Rights of Holders of Senior Indebtedness Not Impaired.
No right of any present or future holder of any Senior
Indebtedness to enforce the subordination herein shall at any time or in any way
be prejudiced or impaired by any act or failure to act on the part of the
Company or by any noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with.
With respect to the holders of Senior Indebtedness, (i) the
duties and obligations of the Trustee shall be determined solely by the express
provisions of this Indenture; (ii) the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set forth in
this Indenture; (iii) no implied covenants or obligations shall be read into
this Indenture against the Trustee; and (iv) the Trustee shall not be deemed to
be a fiduciary as to such holders.
SECTION 1410. Trust Moneys Not Subordinated.
Notwithstanding anything contained herein to the contrary,
payments from money or U.S. Government Obligations held in trust under Article
Four or Article Thirteen by the Trustee for the payment of principal of and any
premium or interest on the Securities of any series shall not be subordinated to
the prior payment of any Senior Indebtedness of the Company or subject to the
restrictions set forth in this Article and none of the Holders shall be
obligated to pay over any such amount to the Company or any holder of Senior
Indebtedness or any other creditor of the Company.
SECTION 1411. Article Applicable to Paying Agents.
In case at any time any paying agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context shall
otherwise require) be construed as extending to and including such paying agent
within its meaning as fully for all intents and purposes as if such paying agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Sections 1407 and 1408 shall not apply to the Company if it acts
as its own paying agent.
63
<PAGE> 65
SECTION 1412. Trustee; Compensation Not Prejudiced.
Nothing in this Article shall apply to claims of, or payments
to, the Trustee pursuant to Section 607.
ARTICLE FIFTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 1501. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of or any premium
or interest on any Security, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture or in any supplemental indenture, or
in any Security, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Securities.
64
<PAGE> 66
_____________________
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
DUKE POWER COMPANY
By_________________________________
President
Attest:
____________________________________
THE CHASE MANHATTAN BANK
By_________________________________
Vice President
Attest:
____________________________________________________
65
<PAGE> 67
STATE OF NORTH CAROLINA )
) ss.:
COUNTY OF MECKLENBURG )
On the day of October, 1996, before me personally came
,to me known, who, being duly sworn, did depose and say
that he is of DUKE POWER COMPANY, one of the corporations
described in and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors
of said corporation; and that he signed his name thereto by like authority.
____________________
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the day of October, 1996, before me personally came
, to me known, who, being by me duly sworn, did depose and
say that he is of THE CHASE MANHATTAN BANK, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
_______________________
Notary Public
[NOTARIAL SEAL]
66
<PAGE> 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 POWER COMPANY
(Exact name of obligor as specified in its charter)
NORTH CAROLINA 56-0205520
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
422 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28242
(Address of principal executive offices) (Zip Code)
-------------------------------------------
FIRST AND REFUNDING MORTGAGE BONDS
(Title of the indenture securities)
-----------------------------------------------------
<PAGE> 2
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, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, 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> 3
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. 333-06249, 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. (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.)
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 25TH day of SEPTEMBER, 1996.
THE CHASE MANHATTAN BANK
By /s/Patricia A. Kelly
-----------------------------
Patricia A. Kelly
Vice President
- 3 -
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
CHEMICAL 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, 1996, 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> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ........................................... $ 4,167
Interest-bearing balances ................................... 5,094
Securities:
Held to maturity securities ...................................... 3,367
Available for sale securities .................................... 27,786
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold .......................................... 7,204
Securities purchased under agreements to resell ............. 136
Loans and lease financing receivables:
Loans and leases, net of unearned income .................... $ 67,215
Less: Allowance for loan and lease losses ................... 1,768
Less: Allocated transfer risk reserve ....................... 75
--------
Loans and leases, net of unearned income,
allowance, and reserve ...................................... 65,372
Trading Assets ................................................... 28,610
Premises and fixed assets (including capitalized
leases) ..................................................... 1,326
Other real estate owned .......................................... 26
Investments in unconsolidated subsidiaries and
associated companies ........................................ 68
Customer's liability to this bank on acceptances
outstanding ................................................. 995
Intangible assets ................................................ 309
Other assets ..................................................... 6,993
--------
TOTAL ASSETS ..................................................... $151,453
========
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
Deposits
In domestic offices ..................................... $ 46,917
Noninterest-bearing .....................................$16,711
Interest-bearing ........................................ 30,206
In foreign offices, Edge and Agreement subsidiaries, -------
and IBF's ............................................... 31,577
Noninterest-bearing......................................$ 2,197
Interest-bearing ........................................ 29,380
-------
Federal funds purchased and securities sold under agree-
ments to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased ................................. 12,155
Securities sold under agreements to repurchase .......... 8,536
Demand notes issued to the U.S. Treasury ..................... 1,000
Trading liabilities .......................................... 20,914
Other Borrowed money:
With a remaining maturity of one year or less ........... 10,018
With a remaining maturity of more than one year ......... 192
Mortgage indebtedness and obligations under capitalized
leases .................................................. 12
Bank's liability on acceptances executed and outstanding...... 1,001
Subordinated notes and debentures ............................ 3,411
Other liabilities ............................................ 8,091
TOTAL LIABILITIES ............................................ 143,824
---------
EQUITY CAPITAL
Common stock ................................................. 620
Surplus ...................................................... 4,664
Undivided profits and capital reserves ....................... 2,970
Net unrealized holding gains (Losses)
on available-for-sale securities ............................. (633)
Cumulative foreign currency translation adjustments .......... 8
TOTAL EQUITY CAPITAL ......................................... 7,629
---------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL ................................ $ 151,453
=========
</TABLE>
I, Joseph L. Sclafani, S.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 )
EDWARD D. MILLER )DIRECTORS
THOMAS G. LABRECQUE )
- 5 -
<PAGE> 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 POWER COMPANY
(Exact name of obligor as specified in its charter)
NORTH CAROLINA 56-0205520
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
422 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28242
(Address of principal executive offices) (Zip Code)
-------------------------------------------
SENIOR NOTES
(Title of the indenture securities)
-----------------------------------------------------
<PAGE> 2
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, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, 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> 3
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. 333-06249, 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. (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.)
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 25TH day of SEPTEMBER, 1996.
THE CHASE MANHATTAN BANK
By /s/Patricia A. Kelly
-----------------------------
Patricia A. Kelly
Vice President
- 3 -
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
CHEMICAL 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, 1996, 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> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ........................................... $ 4,167
Interest-bearing balances ................................... 5,094
Securities: ......................................................
Held to maturity securities ...................................... 3,367
Available for sale securities .................................... 27,786
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold .......................................... 7,204
Securities purchased under agreements to resell ............. 136
Loans and lease financing receivables:
Loans and leases, net of unearned income .................... $ 67,215
Less: Allowance for loan and lease losses ................... 1,768
Less: Allocated transfer risk reserve ....................... 75
--------
Loans and leases, net of unearned income,
allowance, and reserve ...................................... 65,372
Trading Assets ................................................... 28,610
Premises and fixed assets (including capitalized
leases) ..................................................... 1,326
Other real estate owned .......................................... 26
Investments in unconsolidated subsidiaries and
associated companies ........................................ 68
Customer's liability to this bank on acceptances
outstanding ................................................. 995
Intangible assets ................................................ 309
Other assets ..................................................... 6,993
--------
TOTAL ASSETS ..................................................... $151,453
========
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
Deposits
In domestic offices ..................................... $ 46,917
Noninterest-bearing ..................................... $16,711
Interest-bearing ........................................ 30,206
In foreign offices, Edge and Agreement subsidiaries, -------
and IBF's ............................................... 31,577
Noninterest-bearing...................................... $ 2,197
Interest-bearing ........................................ 29,380
-------
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased ................................. 12,155
Securities sold under agreements to repurchase .......... 8,536
Demand notes issued to the U.S. Treasury ..................... 1,000
Trading liabilities .......................................... 20,914
Other Borrowed money:
With a remaining maturity of one year or less ........... 10,018
With a remaining maturity of more than one year ......... 192
Mortgage indebtedness and obligations under capitalized
leases .................................................. 12
Bank's liability on acceptances executed and outstanding...... 1,001
Subordinated notes and debentures ............................ 3,411
Other liabilities ............................................ 8,091
TOTAL LIABILITIES ............................................ 143,824
---------
EQUITY CAPITAL
Common stock ................................................. 620
Surplus ...................................................... 4,664
Undivided profits and capital reserves ....................... 2,970
Net unrealized holding gains (Losses)
on available-for-sale securities ............................. (633)
Cumulative foreign currency translation adjustments .......... 8
TOTAL EQUITY CAPITAL ......................................... 7,629
---------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL ................................ $ 151,453
=========
</TABLE>
I, Joseph L. Sclafani, S.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 )
EDWARD D. MILLER )DIRECTORS
THOMAS G. LABRECQUE )
- 5 -
<PAGE> 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 POWER COMPANY
(Exact name of obligor as specified in its charter)
NORTH CAROLINA 56-0205520
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
422 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28242
(Address of principal executive offices) (Zip Code)
-------------------------------------------
SUBORDINATED DEBENTURES
(Title of the indenture securities)
-----------------------------------------------------
<PAGE> 2
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, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, 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> 3
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. 333-06249, 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. (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.)
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 25TH day of SEPTEMBER, 1996.
THE CHASE MANHATTAN BANK
By /s/Patricia A. Kelly
-----------------------------
Patricia A. Kelly
Vice President
- 3 -
<PAGE> 4
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
CHEMICAL 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, 1996, 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> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ........................................... $ 4,167
Interest-bearing balances ................................... 5,094
Securities:
Held to maturity securities ...................................... 3,367
Available for sale securities .................................... 27,786
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold .......................................... 7,204
Securities purchased under agreements to resell ............. 136
Loans and lease financing receivables:
Loans and leases, net of unearned income .................... $ 67,215
Less: Allowance for loan and lease losses ................... 1,768
Less: Allocated transfer risk reserve ....................... 75
--------
Loans and leases, net of unearned income,
allowance, and reserve ...................................... 65,372
Trading Assets ................................................... 28,610
Premises and fixed assets (including capitalized
leases) ..................................................... 1,326
Other real estate owned .......................................... 26
Investments in unconsolidated subsidiaries and
associated companies ........................................ 68
Customer's liability to this bank on acceptances
outstanding ................................................. 995
Intangible assets ................................................ 309
Other assets ..................................................... 6,993
--------
TOTAL ASSETS ..................................................... $151,453
========
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
Deposits
In domestic offices ..................................... $ 46,917
Noninterest-bearing ..................................... $16,711
Interest-bearing ........................................ 30,206
In foreign offices, Edge and Agreement subsidiaries, -------
and IBF's ............................................... 31,577
Noninterest-bearing...................................... $ 2,197
Interest-bearing ........................................ 29,380
-------
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased ................................. 12,155
Securities sold under agreements to repurchase .......... 8,536
Demand notes issued to the U.S. Treasury ..................... 1,000
Trading liabilities .......................................... 20,914
Other Borrowed money:
With a remaining maturity of one year or less ........... 10,018
With a remaining maturity of more than one year ......... 192
Mortgage indebtedness and obligations under capitalized
leases .................................................. 12
Bank's liability on acceptances executed and outstanding...... 1,001
Subordinated notes and debentures ............................ 3,411
Other liabilities ............................................ 8,091
TOTAL LIABILITIES ............................................ 143,824
---------
EQUITY CAPITAL
Common stock ................................................. 620
Surplus ...................................................... 4,664
Undivided profits and capital reserves ....................... 2,970
Net unrealized holding gains (Losses)
on available-for-sale securities ............................. (633)
Cumulative foreign currency translation adjustments .......... 8
TOTAL EQUITY CAPITAL ......................................... 7,629
---------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL ................................ $ 151,453
=========
</TABLE>
I, Joseph L. Sclafani, S.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 )
EDWARD D. MILLER )DIRECTORS
THOMAS G. LABRECQUE )
- 5 -
