<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 31, 1998
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 333-14209
POST-EFFECTIVE AMENDMENT NO. 3 TO REGISTRATION STATEMENT NO. 333-02571
POST-EFFECTIVE AMENDMENT NO. 4 TO REGISTRATION STATEMENT NO. 33-50543
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
DUKE ENERGY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NORTH CAROLINA 56-0205520
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
422 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28202
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(704) 594-6200
(REGISTRANT'S TELEPHONE NUMBER)
---------------
RICHARD J. OSBORNE JOHN SPUCHES
EXECUTIVE VICE PRESIDENT AND CHIEF DEWEY BALLANTINE LLP
FINANCIAL OFFICER 1301 AVENUE OF THE AMERICAS
422 SOUTH CHURCH STREET NEW YORK, NEW YORK 10019-6092
CHARLOTTE, NORTH CAROLINA 28202 TELEPHONE NO. (212) 259-7700
TELEPHONE NO. (704) 382-5159
(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>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM
AGGREGATE OFFERING AMOUNT OF REGISTRATION
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED PRICE FEE
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
First and Refunding Mortgage Bonds; Debt
Securities......................................... $1,000,000,000(1)(2) (3)(4)
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
</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
("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 Notes, as may be sold at indeterminate
prices, from time to time, by the Registrant.
(3) No registration fee is being paid because, as explained below, the
registration fee applicable for a maximum aggregate offering price of
$1,000,000,000 of Bonds has heretofore been paid.
(4) 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. 3 to Registration Statement No. 333-02571,
previously filed by the Registrant on Form S-3, as to which 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. 4
to Registration Statement No. 33-50543, previously filed by the Registrant
on Form S-3, as to which 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>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+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 AUGUST 31, 1998
PROSPECTUS
- ----------
DUKE ENERGY CORPORATION
FIRST AND REFUNDING MORTGAGE BONDS
DEBT SECURITIES
Duke Energy Corporation (the "Corporation") 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 Notes (the "Subordinated
Notes"), 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
Corporation. See "Description of the New Bonds." The Senior Notes and the
Subordinated Notes will be unsecured, and the indentures under which they are
to be issued contain no limitations on the issuance by the Corporation of other
indebtedness (whether secured or unsecured). The Senior Notes will rank equally
and ratably with all other unsecured and unsubordinated indebtedness of the
Corporation. The Subordinated Notes will be subordinated to all Senior
Indebtedness (as hereinafter defined) of the Corporation. Certain series of
Subordinated Notes may also be subordinated to other series of Subordinated
Notes. See "Description of the Debt Securities."
For each offering of New Bonds (the "Offered Bonds"), Senior Notes (the
"Offered Senior Notes") or Subordinated Notes (the "Offered Subordinated
Notes") (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 Corporation 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 Corporation 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 , 1998.
<PAGE>
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 CORPORATION 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 Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files periodic and current reports and other information
with the Commission. Information concerning directors and officers, their
remuneration, the principal holders of securities of the Corporation and any
material interest of such persons in transactions with the Corporation, as of
particular dates, is disclosed in proxy statements distributed to shareholders
of the Corporation 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, Suite 1300, 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 Corporation 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 Corporation 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 Corporation, that file electronically with the Commission.
The Corporation 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 Corporation 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 of the Corporation for the year ended
December 31, 1997.
. Quarterly reports on Form 10-Q of the Corporation for the quarters ended
March 31, 1998 and June 30, 1998.
. Definitive Joint Proxy Statement-Prospectus of the Corporation and
PanEnergy Corp dated March 13, 1997.
. Annual Report on Form 10-K of PanEnergy Corp for the year ended December
31, 1996.
. Quarterly Reports on Form 10-Q of PanEnergy Corp for the quarters ended
March 31, 1997 and June 30, 1997.
2
<PAGE>
All documents filed by the Corporation with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to 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 herein by reference and made a part of this Prospectus from the
respective dates 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 and the
accompanying Prospectus Supplement 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 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 or the
accompanying Prospectus Supplement.
THE CORPORATION WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT ARE DELIVERED, ON THE
WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL DOCUMENTS
INCORPORATED HEREIN BY REFERENCE (OTHER THAN THE EXHIBITS TO SUCH DOCUMENTS
UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE). SUCH
REQUESTS SHOULD BE DIRECTED TO THE INVESTOR RELATIONS DEPARTMENT, DUKE ENERGY
CORPORATION, P.O. BOX 1005, CHARLOTTE, NORTH CAROLINA 28201, TELEPHONE: (704)
382-3853 OR (800) 488-3853 (TOLL-FREE).
3
<PAGE>
THE CORPORATION
Duke Power Company completed a merger with PanEnergy Corp on June 18, 1997
and changed its name to Duke Energy Corporation. The Corporation is a global
energy company with more than $20 billion in assets which conducts business in
four principal areas of operations:
Electric Operations
The Corporation is 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. The Corporation's service territory, approximately
two-thirds of which lies in North Carolina, covers approximately 20,000 square
miles 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 Corporation supplies electric service to
approximately two million residential, commercial and industrial customers in
over 200 cities, towns and unincorporated communities. As of August 31, 1998,
the Corporation owned 48 generating facilities with a total capacity of 17,300
MW. Net generation of electricity by source for the six months ended June 30,
1998 was as follows: fossil, 48.5%; nuclear, 46.7%; and hydroelectric
(including pumped storage) and combustion turbine, 4.8%. The Corporation's
electric utility service territory, in which its business is conducted under
the name "Duke Power," is shown below.
[MAP SHOWING SERVICE AREA OF DUKE POWER]
4
<PAGE>
Energy Transmission
The Corporation is engaged in the interstate transportation and storage of
natural gas. Through its four major pipeline subsidiaries--Texas Eastern
Transmission Corporation, Algonquin Gas Transmission Company, Panhandle
Eastern Pipe Line Company and Trunkline Gas Company--the Corporation owns and
operates one of the nation's largest gas transmission networks, delivering
approximately 12% of the natural gas consumed in the United States. This fully
interconnected, 22,000-mile system can receive natural gas from most major
North American producing regions for delivery to markets throughout the Mid-
Atlantic, New England and Midwest states as shown below.
[MAP SHOWING NATURAL GAS TRANSMISSION PIPELINE SYSTEM]
Energy Services
The Energy Services group offers a broad variety of worldwide services in
energy asset monetization, engineering, construction, liquids, gas and
electric marketing, risk management, natural gas liquids shipping, gas
processing and transport and "inside-the-fence" and merchant power generation.
The Field Services unit is engaged in the business of purchasing, gathering,
transporting and marketing natural gas, natural gas liquids and crude oil to
industrial end-users, local distribution companies, liquid petroleum gas
wholesalers and retailers and refiners. Through Duke Energy Trading and
Marketing L.L.C., Duke Energy Marketing, L.P., and Duke/Louis Dreyfus L.L.C.,
the Corporation markets natural gas and electric power and provides risk
management services to utilities, municipalities and other large energy users.
5
<PAGE>
Duke Engineering & Services, Inc., provides full-scope engineering,
technical and professional services to public and private sector clients
worldwide in all phases of nuclear, renewable and conventional power
generation, from conceptual design through construction and full life-cycle
operation. Specialized capabilities include engineering, design, project and
construction management, operations and maintenance, quality assurance,
environmental management, facility siting, petroleum services, power delivery
services and safety and health training. Duke/Fluor Daniel provides services
related to the engineering, procurement, construction and operation and
maintenance of fossil-fueled generating stations. The Global Asset Development
group develops, owns, manages and operates energy projects internationally,
electric generation facilities in the United States and Canada, and on-site,
"inside-the-fence" electric generation and energy conversion facilities for
industrial customers. DukeSolutions is the Corporation's retail energy
services provider, offering customers a "one-stop shop" solution for natural
gas and electric commodities, energy efficiency and productivity services and
asset monetization.
The scope of the activities of Energy Services is shown below.
[MAP SHOWING ACTIVITIES OF ENERGY
SERVICES IN THE UNITED STATES]
[MAP SHOWING INTERNATIONAL
ACTIVITIES OF ENERGY SERVICES]
6
<PAGE>
Other Operations
Crescent Resources, Inc. ("Crescent Resources") conducts real estate
management, forestry, and commercial and residential real estate development
operations. DukeNet Communications, Inc. ("DukeNet") develops and manages
communications systems, including fiber optic and wireless digital network
services.
The scope of the activities of Crescent Resources and DukeNet is shown
below.
[MAP SHOWING ACTIVITIES OF CRESCENT RESOURCES AND DUKENET IN THE SOUTHEASTERN
PART OF THE UNITED STATES]
The principal executive offices of the Corporation are located at 422 South
Church Street, Charlotte, North Carolina 28202, telephone (704) 594-6200.
7
<PAGE>
RECENT FINANCIAL DATA
(MILLIONS, EXCEPT PER SHARE DATA)
The following financial information is qualified in its entirety by the
financial statements included in the documents incorporated by reference in
this Prospectus. See "Documents Incorporated by Reference."
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------------- ----------------------------
1998 1997(1) 1997(1) 1996(1) 1995(1)
-------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Operating Revenues............. $8,128.5 $6,898.6 $16,308.9 $12,302.4 $9,694.7
Net Income..................... 599.6 480.3 974.4 1,074.3 1,018.1
Earnings for Common Stock...... 588.0 458.2 901.6 1,030.1 969.2
Earnings per share of Common
Stock (before extraordinary
item)
Basic......................... $1.65 $1.27 $2.51 $2.90 $2.68
Dilutive...................... 1.65 1.26 2.50 2.88 2.67
Earnings per share of Common
Stock
Basic......................... 1.63 1.27 2.51 2.85 2.68
Dilutive...................... 1.63 1.26 2.50 2.83 2.67
</TABLE>
- --------
(1) Data reflects accounting for the combination with PanEnergy Corp as a
pooling of interests. As a result, the data gives effect to the
combination as if it had occurred as of January 1, 1995.
<TABLE>
<CAPTION>
CAPITALIZATION AS OF
JUNE 30, 1998
----------------------
(MILLIONS)
<S> <C> <C>
Common Stock Equity.................................... $ 7,579.3 49.6%
Preferred Stocks....................................... 332.9 2.2
Guaranteed Preferred Beneficial Interests in
Corporation's Subordinated Notes...................... 581.3 3.8
Debt (including short-term debt)....................... 6,794.4 44.4
------------ --------
Total.................................................. $ 15,287.9 100.0%
============ ========
</TABLE>
The foregoing amounts with respect to the six months ended June 30, 1998 are
unaudited but in the opinion of the Corporation include all adjustments
necessary for a fair presentation of such amounts.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------------- ---------------------------------------
1998 1997(1) 1997(1) 1996(1) 1995(1) 1994(1) 1993(1)
-------- --------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges.......... 4.7 4.1 4.1 4.3 4.0 3.6 3.3
</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.
- --------
(1) Data reflects accounting for the combination with PanEnergy Corp as a
pooling of interests. As a result, the data gives effect to the
combination as if it had occurred as of January 1, 1993.
8
<PAGE>
USE OF PROCEEDS
Except as otherwise provided in the accompanying Prospectus Supplement, the
Corporation expects to use the net proceeds from the sale of the Offered
Securities (a) to finance the construction of additions to the Corporation's
electric plant facilities and the acquisition of nuclear fuel and (b) to
purchase or redeem from time to time the Corporation's presently outstanding
securities when such transactions will result in an overall cost savings to
the Corporation.
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 Corporation to The Chase
Manhattan Bank, as successor Trustee (the "Bond 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 Corporation 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 Corporation is required to deposit with the Bond 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 Corporation during the same period;
and (2) the aggregate amount of cash theretofore deposited by the Corporation
with the Bond 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)
9
<PAGE>
acquired or constructed by the Corporation 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.
Upon application of the Corporation, 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 Bond 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 Bond Trustee and on the basis of
which the Corporation 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
Corporation would otherwise be entitled on the basis of additional property
(electric).
Upon application of the Corporation, the Bond Trustee shall apply cash
deposited in the Replacement Fund (and not theretofore withdrawn by the
Corporation) to the payment, purchase or redemption of Bonds issued under the
Mortgage or to the purchase of refundable prior lien bonds.
The Corporation has never deposited any cash with the Bond Trustee pursuant
to the Replacement Fund. If any cash should be deposited in the future, the
Corporation 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 Corporation,
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 Corporation, certain after-acquired property not
useful in the Corporation'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 Corporation
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 Bond 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 Bond Trustee therefor, or (3) as to additional property
(electric) certified to the Bond 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 Corporation'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 Bond Trustee under the Mortgage.
10
<PAGE>
The Corporation 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 Corporation 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.
RELEASE PROVISIONS
The Mortgage permits the Corporation to dispose of certain property and take
certain other action without release by the Bond 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 Bond Trustee (other than for the Replacement
Fund or as the basis for the issuance of Bonds) shall be paid out by the Bond
Trustee upon application of the Corporation.
Cash deposited with the Bond Trustee for the Replacement Fund may be
withdrawn by the Corporation as outlined under the subcaption "Replacement
Fund" above. Cash deposited with the Bond Trustee as the basis for the
issuance of Bonds may be withdrawn by the Corporation, upon application to the
Bond Trustee, in an amount equal to the aggregate principal amount of any
Bonds, the authentication and delivery of which the Corporation 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 Bond 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 Bond 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 Bond 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 Bond Trustee, or exercising any trust or power
conferred upon the Bond Trustee, and the Bond 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 Bond 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 Corporation is required to furnish annually to the Bond Trustee a
certificate in respect of compliance or non-compliance by the Corporation with
the covenants of the Mortgage.
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DESCRIPTION OF THE DEBT SECURITIES
The Debt Securities will constitute either senior or subordinated unsecured
debt of the Corporation 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," and
together with the Senior Indenture, the "Indentures") for subordinated Debt
Securities (sometimes called "Subordinated Notes"). The Senior Indenture is to
be dated as of September 1, 1998 and is to be entered into between the
Corporation and The Chase Manhattan Bank, as Trustee. The Subordinated
Indenture is dated as of December 1, 1997 and has been entered into between
the Corporation and The Chase Manhattan Bank, as Trustee. Each of the Trustee
under the Senior Indenture and the Trustee under the Subordinated Indenture
is, as applicable, herein called the "Trustee." The Indentures are filed as
exhibits to the Registration Statement of which this Prospectus is a part. The
following description does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, the applicable Indenture or
Indentures. Certain capitalized terms used herein are defined in one or both
Indentures.
GENERAL
Neither Indenture limits the aggregate principal amount of the Debt
Securities issuable thereunder. Each Indenture provides that Debt Securities
may be issued thereunder from time to time in one or more series pursuant to
supplemental indentures or pursuant to resolutions of the Corporation's Board
of Directors or a duly authorized committee thereof. 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.
The Corporation conducts its non-electric operations through subsidiaries.
Accordingly, the ability of the Corporation to meet its obligations under the
Debt Securities will be dependent in part on the earnings and cash flows of
such subsidiaries and the ability of such subsidiaries to pay dividends or to
advance or repay funds to the Corporation. In addition, the rights of the
Corporation and its creditors to participate in the assets of any such
subsidiary upon the latter's liquidation or recapitalization will be subject
to the prior claims of such subsidiary's creditors. It is anticipated that
certain of the subsidiaries conducting the non-electric operations of the
Corporation will incur substantial amounts of debt in the expansion of their
business.
Reference is made to the applicable Prospectus Supplement (the "Prospectus
Supplement") for the following terms of any particular series of Offered
Senior Notes or Offered Subordinated Notes (collectively, the "Offered Debt
Securities"): (i) the title of such Debt Securities; (ii) any limit on the
aggregate principal amount of such Debt Securities; (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, and the right, if any,
of the Corporation to shorten or extend the date on which the principal of any
Debt Securities of the series is payable and the conditions to any such
change; (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 Corporation and, if so, the terms 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 if other than the principal corporate
trust office of the Trustee; (viii) the obligation, if any, of the Corporation
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 Corporation; (xi) if applicable, the fact that certain 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
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is to be payable, at the election of the Corporation 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
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 with respect to any of such Debt Securities; (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; (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 Corporation, including other series of Subordinated Notes
(for series of Subordinated Notes 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, and no service charge will be made for any registration of transfer
or exchange of Debt Securities, but the Corporation 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 a series (or of a series and specified tenor) are
to be redeemed, the Corporation 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 United States 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.
Neither Indenture contains provisions that afford any holders of Debt
Securities protection in the event of a highly leveraged transaction involving
the Corporation.
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.
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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 Corporation 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 Corporation, if such Debt Securities are offered and sold directly by the
Corporation. 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 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 their owners or holders thereof
under the applicable Indenture.
Payment of principal of and 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 Corporation, 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 Corporation 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 Corporation 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 Corporation within 90 days or if
at any time the Depositary ceases to be a clearing agency registered under the
Exchange Act when the Depositary is required to be registered to act as such
Depositary and no successor is appointed by the Corporation within 90 days,
then the Corporation will issue Debt Securities in definitive registered form
in exchange for the Global Security or Global Securities representing such
Debt Securities. In addition, the Corporation may at any time
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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 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, Debt Securities that are redeemable by the Corporation may be
redeemed, 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 Corporation
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 money has not been so
received, such notice will be of no force and effect and the Corporation will
not be required to redeem such Debt Securities.
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
Each Indenture provides that the Corporation may consolidate or merge with
or into another corporation or other entity of a sort specified in such
Indenture, or convey or transfer its properties and assets as an entirety or
substantially as an entirety to any such entity, provided that the successor,
if any, assumes by supplemental indenture the Corporation's obligations under
such Indenture and the Debt Securities issued thereunder and the Corporation
delivers an officers' certificate and an opinion of counsel to the Trustee
stating that all conditions precedent in such Indenture relating to such
consolidation, merger, conveyance or transfer have been complied with. Upon
the assumption by the successor of the Corporation'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 will succeed to and be substituted for the Corporation under
such Indenture and the Corporation will be relieved of its obligations under
such Indenture and the Debt Securities issued thereunder.
MODIFICATION; WAIVER
Each Indenture provides that modifications and amendments thereof may be
made by the Corporation 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 all series of Debt Securities affected thereby (voting as one
class); 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 installment of
principal of or interest on, any Debt Security; (b) reduce the principal
amount of, or the rate of interest on, or any premium payable upon the
redemption of, any Debt Security or reduce the amount of principal of any Debt
Security which would be due and payable upon acceleration of the maturity
thereof; (c) change the 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 Debt Securities of any series, the consent of whose
holders is required to modify or amend such Indenture, to waive compliance
with certain provisions of such Indenture or to waive 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.
In addition, the Corporation and the Trustee may execute, without the consent
of any holders of the Debt Securities issued under such Indenture, indentures
supplemental to such Indenture for certain other purposes, including for the
purpose of creating a new series of Debt Securities 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 Corporation with certain restrictive
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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 all series under the applicable Indenture with
respect to which a default has occurred and is continuing (voting as one
class) may waive any past default under the Indenture under which such Debt
Securities were issued with respect to all such 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 affected thereby.
The Subordinated Indenture may not be amended to alter the subordination of
any of the outstanding Subordinated Notes 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, or otherwise modified or deleted in an indenture
supplemental to such Indenture, as set forth in the applicable Prospectus
Supplement): (a) failure to 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; provided, however,
that the date on which such payment is due and payable shall be the date on
which the Corporation is required to make payment following any deferral of
payments of interest by the Corporation pursuant to the terms of such Debt
Securities; (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 Corporation 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 Corporation, 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.
If an Event of Default with respect to Debt Securities of a series occurs
and is continuing, then the Trustees 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 Corporation (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, if (i) the
Corporation 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 permitted by applicable law), 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.
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.
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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
indemnity against the costs, expenses and liabilities which might be incurred
thereby. Subject to such provisions for indemnification 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. The Trustee may withhold notice to the
holders of Debt Securities of any series of any default (except in payment of
principal or interest) with respect to such series of Debt Securities, if it
in good faith considers it in the interest of such holders to do so.
No holder of a 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, and the Trustee has not received
from the holders of a majority in principal amount of the outstanding Debt
Securities of that series a 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, 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 Corporation is required to furnish annually to the Trustee for each
Indenture an officers' certificate to the effect that, to the best knowledge
of the officers providing such certificate, the Corporation 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 Corporation will not, while any of
the Senior 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 Corporation, whether owned on or acquired
after the date of the Senior Indenture, to secure any indebtedness for
borrowed money of the Corporation, 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 Corporation 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
Corporation, 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 Corporation or which transfers or
leases all or substantially all of its properties to the Corporation), 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 Corporation; (ii) mortgages, liens,
pledges, security interests or other encumbrances of any kind upon any
property of the Corporation existing as of the date of the initial issuance of
the Senior Notes; liens for taxes or assessments or other governmental changes
or levies; pledges or deposits to secure obligations under workers'
compensation laws, unemployment insurance and other social security
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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 Corporation is a party; pledges or deposits to secure
public or statutory obligations of the Corporation; 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 Mortgage; liens incurred in connection with repurchase,
swap or other similar agreements (including, without limitation, commodity
price, currency exchange and interest rate protection 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 Corporation, 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 Corporation, materially impair the use of such property in the
operation of the business of the Corporation or the value of such property for
the purpose of such business; (iii) Bonds issued or to be issued from time to
time under the Mortgage; (iv) indebtedness which may be issued by the
Corporation in connection with a consolidation or merger of the Corporation
with or into any other Person (which may be an affiliate of the Corporation)
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 Corporation
in connection with a consolidation or merger of such Person, with respect to
which any property of the Corporation 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 Corporation
(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 any part of the
purchase price or cost thereof, provided that in the case of such
construction, development or improvement the mortgages, liens, pledges,
security interests or other encumbrances shall not apply to any property
theretofore owned by the Corporation 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 Corporation 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 Corporation 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.
18
<PAGE>
DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise provided in the Prospectus Supplement for a series of Debt
Securities, the Corporation may cause itself (subject to the terms of the
Indenture under which such Debt Securities were issued) to be (i) discharged
from its obligations (with certain exceptions) with respect to any Debt
Securities or series of Debt Securities ("Defeasance") and/or (ii) released
from its obligations under 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"), on and after the
date certain conditions set forth in such Indenture are satisfied. Such
conditions include the irrevocable deposit with the Trustee, in trust for such
purpose, of money and/or Government Obligations (as such term is defined in
the applicable Indenture), which through the scheduled payment of principal
and interest thereon will provide moneys in an amount sufficient to pay the
principal of and any premium and interest on such Debt Securities on the
stated maturities of such payments or upon redemption.
Defeasance by the Corporation with respect to any Debt Securities of a
series is permitted under certain circumstances under each Indenture
notwithstanding the Corporation'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 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 United States federal income tax law, the Defeasance
contemplated in the preceding paragraphs would be treated as an exchange of
the relevant Debt Securities in which holders of Debt Securities might
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 includable 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 United States federal income tax laws.
Under current United States 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 NOTES
The Subordinated Indenture provides that, unless otherwise provided for a
series of Subordinated Notes, the Subordinated Notes of any series will be
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 Notes, the principal of, and premium, if any, and interest on and
any other payment in respect of indebtedness 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 Corporation evidenced by notes, debentures, bonds or other securities sold
by the Corporation 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 Corporation or in effect
guaranteed by the Corporation 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 by its terms provides that such indebtedness,
19
<PAGE>
renewal, extension or refunding is not superior in right of payment to or is
pari passu with such Subordinated Notes.
In the event, subject to certain exceptions specified in the Subordinated
Indenture, (a) of any payment by, or distribution of assets of, the
Corporation to creditors upon any dissolution, winding-up, liquidation or
reorganization of the Corporation, whether in bankruptcy, insolvency or other
proceedings, or (b) that (i) a default (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 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, before the holders of the
Subordinated Notes are entitled to receive payments of principal or interest
on such Subordinated Notes.
As of June 30, 1998, approximately $3,977,766,000 of Senior Indebtedness was
outstanding. The Subordinated Indenture does not restrict the amount of Senior
Indebtedness that may be issued by the Corporation.
CONCERNING THE TRUSTEE
The Chase Manhattan Bank is the Bond Trustee under the Mortgage and the
Trustee under each of the Indentures. The Corporation and certain of its
affiliates maintain deposit accounts and banking relationships with The Chase
Manhattan Bank.
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 Bond Trustee, the
Trustee under the Senior Indenture or the Trustee under the Subordinated
Indenture, as the case may be, 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 such Trustee has or acquires a conflicting interest, such
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, as the case may be. In the event of the Trustee's
resignation, the Corporation 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 Corporation 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 Corporation to
indemnification by the Corporation against certain liabilities, including
liabilities under the Act.
20
<PAGE>
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 will indicate 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 consolidated financial statements of the Corporation as of December 31,
1997, included in the Corporation's annual report on Form 10-K, which are
incorporated herein by reference, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report which is incorporated herein
by reference. The consolidated financial statements of the Corporation and its
subsidiaries, except PanEnergy Corp and subsidiaries as of December 31, 1996
and for each of the two years in the period ended December 31, 1996, included
in the Corporation's annual report on Form 10-K for the year ended December
31, 1997, which are incorporated herein by reference, have been audited by
Deloitte & Touche LLP, as stated in their report which is incorporated herein
by reference. The financial statements of PanEnergy Corp and subsidiaries
(consolidated with those of the Corporation) as of December 31, 1996 and for
each of the two years in the period ended December 31, 1996 have been audited
by KPMG Peat Marwick LLP, independent auditors, as stated in their report
incorporated by reference herein. Such financial statements of the Corporation
and its consolidated subsidiaries are incorporated herein in reliance upon the
respective reports of such firms given upon their authority as experts in
accounting and auditing.
LEGAL OPINIONS
The validity of the Offered Securities will be passed upon for the
Corporation by Robert S. Lilien, Esq., Charlotte, North Carolina, and by Dewey
Ballantine LLP, 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 LLP may rely as to matters
of North Carolina law upon the opinion of Mr. Lilien, who is a Vice President
and the General Counsel, Corporate and Energy Services, of the Corporation. As
of July 31, 1998, Mr. Lilien was the beneficial owner of 1,109 shares of
Common Stock of the Corporation, and of options to purchase 9,800 shares of
Common Stock of the Corporation, none of which options is currently
exercisable.
21
<PAGE>
(LOGO)
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION (ESTIMATED):
<TABLE>
<S> <C>
SEC Filing Fee.................................................. $ --
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................................................... 5,000
--------
Total......................................................... $800,000
========
</TABLE>
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 registrant 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
---------
<C> <S>
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
Notes.
1-D --Form of Calculation Agent 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-1(A) --Form of Supplemental Indenture relating to the Senior Notes.
4-D-2 --Subordinated Indenture from registrant to The Chase Manhattan
Bank, dated as of December 1, 1997, relating to the Subordinated
Notes.
4-D-2(A) --Form of Supplemental Indenture relating to the Subordinated
Notes.
12 --Computation of Ratio of Earnings to Fixed Charges.
23(A)-1 --Consent of Deloitte & Touche LLP.
23(A)-2 --Consent of KPMG Peat Marwick LLP.
24(A) --Copy of power of attorney authorizing Richard J. Osborne to
sign the registration statement on behalf of R.B. Priory as
Chairman of the Board and Chief Executive Officer of registrant.
</TABLE>
II-1
<PAGE>
Exhibits incorporated herein by reference:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
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).
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).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
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).
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).
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
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).
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).
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
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-
44501, 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).
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, 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).
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
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 10 through 14 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 Notes 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>
The total amount of securities of the registrant or its subsidiaries
authorized under any instrument with respect to long-term debt not filed as an
exhibit does not exceed 10% of the total assets of the registrant and its
subsidiaries on a consolidated basis. The registrant agrees, upon request of
the Securities and Exchange Commission, to furnish copies of any or all of
such instruments.
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 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.
II-6
<PAGE>
(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>
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 31ST DAY OF AUGUST, 1998.
Duke Energy Corporation
Registrant
R. B. Priory
By: _________________________________
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>
R. B. Priory Chairman of the Board and August 31, 1998
Chief Executive Officer
(Principal Executive Officer)
Richard J. Osborne Executive Vice President and August 31, 1998
Chief Financial Officer
(Principal Financial Officer)
Jeffrey L. Boyer Vice President and Corporate August 31, 1998
Controller (Principal
Accounting Officer)
G. Alex Bernhardt
Robert J. Brown
W. A. Coley
George Dean Johnson, Jr.
W. W. Johnson A majority of Directors August 31, 1998
Max Lennon
James G. Martin
R. B. Priory
Russell M. Robinson, II
</TABLE>
Richard J. Osborne, by signing his 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.
/s/ Richard J. Osborne
_____________________________________
Richard J. Osborne
Attorney-in-fact
II-8
<PAGE>
EXHIBIT 12
DUKE ENERGY CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, TWELVE MONTHS ENDED DECEMBER 31,
----------------- --------------------------------------------
1998 1997(a) 1997(a) 1996(a) 1995(a) 1994(a) 1993(a)
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings Before Income
Taxes.................. $ 981.8 $ 809.8 $1,613.3 $1,788.8 $1,682.3 $1,422.5 $1,326.9
Fixed Charges........... 267.1 258.3 519.8 540.2 556.2 537.7 576.6
-------- -------- -------- -------- -------- -------- --------
Total................. $1,248.9 $1,068.1 $2,133.1 $2,329.0 $2,238.5 $1,960.2 $1,903.5
======== ======== ======== ======== ======== ======== ========
Fixed Charges
Interest on debt....... $ 256.0 $ 243.8 $ 496.7 $ 513.6 $ 535.7 $ 519.8 $ 559.9
Interest component of
rentals............... 11.1 14.5 23.1 26.6 20.5 17.9 16.7
-------- -------- -------- -------- -------- -------- --------
Fixed Charges......... $ 267.1 $ 258.3 $ 519.8 $ 540.2 $ 556.2 $ 537.7 $ 576.6
======== ======== ======== ======== ======== ======== ========
Ratio of Earnings to
Fixed Charges.......... 4.7 4.1 4.1 4.3 4.0 3.6 3.3
</TABLE>
- --------
(a) Financial information reflects accounting for the combination with
PanEnergy Corp as a pooling of interests. As a result, the financial
information gives effect to the combination as if it had occurred on
January 1, 1993.
II-9
<PAGE>
EXHIBIT 23(A)-1
CONSENT OF DELOITTE & TOUCHE LLP
We consent to (i) the incorporation by reference in this Post-Effective
Amendment No. 1 to Registration Statement No. 333-14209 on Form S-3 of Duke
Energy Corporation, (ii) the incorporation by reference in Post-Effective
Amendment No. 3 to Registration Statement No. 333-02571 on Form S-3 of Duke
Energy Corporation and (iii) the incorporation by reference in Post-Effective
Amendment No. 4 to Registration Statement No. 33-50543 on Form S-3 of Duke
Energy Corporation of our report dated February 13, 1998, appearing in the
annual report on Form 10-K of Duke Energy Corporation for the year ended
December 31, 1997 filed with the Securities and Exchange Commission, and to
the reference to us under the heading "Experts" in the Prospectus which is a
part of these Registration Statements.
/s/ Deloitte & Touche LLP
- -------------------------------------
Deloitte & Touche LLP
Charlotte, North Carolina
August 31, 1998
II-10
<PAGE>
EXHIBIT 23(A)-2
CONSENT OF KPMG PEAT MARWICK LLP
We consent to the incorporation by reference in this Post-Effective
Amendment No. 1 to the Registration Statement on Form S-3 (No. 333-14209) of
Duke Energy Corporation of our report dated January 16, 1997 on the
consolidated balance sheet of PanEnergy Corp as of December 31, 1996 and the
related consolidated statements of income, common stockholders' equity and
cash flows for the years ended December 31, 1996 and 1995 appearing in the
annual report on Form 10-K of PanEnergy Corp for the year ended December 31,
1996 and to the reference to our firm under the heading "Experts" in the
Prospectus.
/s/ KPMG Peat Marwick LLP
- -------------------------------------
KPMG Peat Marwick LLP
Houston, Texas
August 31, 1998
II-11
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
<C> <S>
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 Notes.
1-D --Form of Calculation Agent 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-1(A) --Form of Supplemental Indenture relating to the Senior Notes.
4-D-2 --Subordinated Indenture from registrant to The Chase Manhattan
Bank, dated as of December 1, 1997, relating to the Subordinated
Notes.
4-D-2(A) --Form of Supplemental Indenture relating to the Subordinated Notes.
12 --Computation of Ratio of Earnings to Fixed Charges (see page II-9
of Registration Statement).
23(A)-1 --Consent of Deloitte & Touche LLP (see page II-10 of Registration
Statement).
23(A)-2 --Consent of KPMG Peat Marwick LLP (see page II-11 of Registration
Statement).
24(A) --Copy of power of attorney authorizing Richard J. Osborne to sign
the registration statement on behalf of R.B. Priory as Chairman of
the Board and Chief Executive Officer of registrant.
</TABLE>
<PAGE>
Exhibit 1-A
$
DUKE ENERGY CORPORATION
FIRST AND REFUNDING MORTGAGE BONDS,
% SERIES DUE
UNDERWRITING AGREEMENT
Gentlemen:
1. Introductory. DUKE ENERGY CORPORATION, a North Carolina corporation
("Corporation"), 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 Corporation 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 the several Underwriters herein
after named ("Underwriters") as follows:
2. Representations and Warranties of the Corporation. The Corporation
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. ), including a prospectus, relating
to the Bonds has been filed with the Securities and Exchange Commission
("Commission") under the Securities Act of 1933 (the "1933 Act"). Such
registration statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto but
including all documents incorporated by reference in the prospectus
contained therein, to you for each of the other Underwriters, have been
declared effective by the Commission in such form, and no stop order
suspending the effectiveness of such registration statement has been issued
and no proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) of the rules
and regulations of the Commission under the 1933 Act being hereinafter
called a "Preliminary Prospectus"; the various parts of such registration
statement, including all exhibits thereto and including the documents
incorporated by reference in the prospectus contained in the registration
statement at the time such part of the registration statement became
effective, each as amended at the time such part of the registration
statement became effective, being hereinafter called the "Registration
Statement"; and the final prospectus relating to the Bonds, in the form first
filed pursuant to Rule 424(b) under the 1933 Act, being hereinafter called the
"Prospectus"; and any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment or supplement
to any Preliminary Prospectus or Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; and any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Corporation filed pursuant to Section 13(a)
or 15(d) of the 1934 Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement).
(b) The Registration Statement conforms and the Prospectus will conform
in all material respects to the requirements of the 1933 Act and the rules
and regulations thereunder ("1933 Act Regulations"), and the Registration
Statement does not and the Prospectus will not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, except
that the foregoing does not apply to statements or omissions in any such
document based upon written information furnished to the Corporation by any
Underwriter specifically for use therein.
(c) The documents incorporated by reference in the Prospectus, at the
time they were filed with the Commission, complied in all material respects
with the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
with the other information in the Prospectus, do not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
any documents deemed to be incorporated by reference in the Prospectus will,
when they are filed with the Commission, comply in all material respects with
the requirements of the 1934 Act and the 1934 Act Regulations, and will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they are made, not
misleading.
(d) The compliance by the Corporation with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Corporation or any of its Principal Subsidiaries (as hereinafter defined) is a
party or by which any of them or their respective property is bound or to
which any of their property or assets is subject, nor will such action result
in any violation of the provisions of the Restated Certificate of
Incorporation or By-Laws of the Corporation or any statute or any order, rule
or regulation of any court or governmental agency or body having jurisdiction
over the Corporation or its Principal Subsidiaries or any of their respective
property; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the consummation by the Corporation of the transactions
contemplated by this Agreement, except for authorization by the North Carolina
Utilities Commission and The Public Service Commission of South Carolina and
the registration under the 1933 Act of the Bonds and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution
of the Bonds by the Underwriters.
(e) Each of Duke Capital Corporation, PanEnergy Corp, Panhandle Eastern
Pipe Line Company, Texas Eastern Transmission Corporation, Trunkline Gas
Company and Algonquin Gas Transmission Company, each a Delaware corporation
(and herein called a "Principal Subsidiary"), is a direct or indirect wholly-
owned subsidiary of the Corporation.
<PAGE>
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 Corporation agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to
purchase from the Corporation, at a purchase price of % of the principal amount
of the Bonds, plus accrued interest from , to the Closing Date (as hereinafter
defined), the respective principal amount of Bonds set forth opposite the names
of the Underwriters in Schedule A hereto plus the respective principal amount
of additional Bonds which each such Underwriter may become obligated to
purchase pursuant to the provisions of Section 8 hereof.
Payment of the purchase price for the Bonds to be purchased by the
Underwriters shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue
of the Americas, New York, N.Y., or at such other place as shall be mutually
agreed upon by you and the Corporation, at 10:00 A.M., New York City time, on
, (unless postponed in accordance with the provisions of Section
8) or such other time not later than three full business days after such date as
shall be agreed upon by you and the Corporation (the "Closing Date"). Payment
shall be made to the Corporation by certified or official bank check or checks
in New York Clearing House or similar next day funds, payable to the order of
the Corporation, 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 Underwriters. It is understood that the several
Underwriters propose to offer the Bonds for sale to the public as set forth in
the Prospectus.
5. Covenants of the Corporation. The Corporation covenants and agrees with
the several Underwriters that:
(a) The Corporation will advise you promptly of any amendment or
supplementation of the Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of
the Registration Statement, and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(b) If at any time when a prospectus relating to the 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 Corporation promptly
will prepare and file with the Commission an amendment, supplement or an
appropriate document pursuant to Section 13 or 14 of the 1934 Act which
will correct such statement or omission or which will effect such
compliance.
(c) The Corporation, during the period when a prospectus relating to the
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 Corporation will make generally available to its security
holders, in each case as soon as practicable but not later than 60 days
after the close of the period covered thereby, earnings statements (in form
complying with the provisions of Section 11(a) of the 1933 Act, which need
not be certified by independent certified public accountants unless
required by the 1933 Act) covering (i) a twelve-month period beginning not
later than the first day of the Corporation's fiscal quarter next following
the effective date of the Registration Statement and (ii) a twelve-month
period beginning not later than the first day of the Corporation's fiscal
quarter next following the date of this Agreement.
(e) The Corporation will furnish to you, without charge, copies of the
Registration Statement ( of which will be signed and will include all
exhibits other than those incorporated by reference), the Prospectus, and
all amendments and supplements to such documents, in each case as soon as
available and in such quantities as you reasonably request.
(f) The Corporation will arrange or cooperate in arrangements for the
qualification of the Bonds for sale under the laws of such jurisdictions as
you designate and will continue such qualifications in effect so long as
required for the distribution; provided, however, that the Corporation
shall not be required to qualify as a foreign corporation or to file any
general consents to service of process under the laws of any state where it
is not now so subject.
(g) The Corporation will not, during the period beginning from the date
hereof and continuing to and including the date days after the date
hereof, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of any Bonds, any security convertible into or exchangeable for the
Bonds or any debt security substantially similar to the Bonds (except for
the Bonds issued pursuant to this Agreement), without your prior written
consent.
(h) The Corporation will pay all expenses incident to the performance of
its obligations under this Agreement including (i) the printing and filing
of the Registration Statement and the printing of this Agreement and the
Blue Sky Survey, (ii) the issuance and delivery of the Bonds as specified
herein, (iii) the fees and disbursements of counsel for the Underwriters 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, (iv) the printing and delivery to the Underwriters, 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, (v) any fees charged by independent rating agencies
for rating the Bonds, (vi) any fees and expenses in connection with the
listing of the Bonds on the New York Stock Exchange and (vii) any filing fee
required by the National Association of Securities Dealers, Inc.
2
<PAGE>
6. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Bonds will be subject to the
accuracy of the representations and warranties on the part of the Corporation
herein, to the accuracy of the statements of officers of the Corporation made
pursuant to the provisions hereof, to the performance by the Corporation of its
obligations hereunder and to the following additional conditions precedent:
(a) Prior to the Closing Date, no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of the
Corporation or you, shall be threatened by the Commission.
(b) Prior to the Closing Date, the rating assigned by Moody's Investors
Service, Inc. or Standard & Poor's Ratings Group to (i) any debt securities
or preferred stock of the Corporation or (ii) any trust preferred securities
of Duke Energy Capital Trust I as of the date of this Agreement shall not have
been lowered.
(c) Since the respective most recent dates as of which information is given
in the Prospectus and up to the Closing Date, there shall not have been any
material adverse change in the condition of the Corporation, financial or
otherwise, except as reflected in or contemplated by the Prospectus, and,
since such dates and up to the Closing Date, there shall not have been any
material transaction entered into by the Corporation other than transactions
contemplated by the Prospectus and transactions in the ordinary course of
business.
(d) You shall have received an opinion of Robert S. Lilien, Esq., General
Counsel, Corporate and Energy Services, to the Corporation, dated the Closing
Date, to the effect that:
(i) The Corporation has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of North
Carolina, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus.
(ii) Each of the Corporation and the Principal Subsidiaries is duly
qualified to do business in each jurisdiction in which the ownership or
leasing of its property or the conduct of its business requires such
qualification, except where the failure to so qualify, considering all such
cases in the aggregate, does not have a material adverse effect on the
business, properties, financial position or results of operations of the
Corporation and its subsidiaries taken as a whole.
(iii) The Mortgage has been duly authorized, executed and delivered by
the Corporation 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 Corporation 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>
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 Underwriters against payment of the
consideration therefor specified in this Agreement, will be legal, valid and
binding obligations of the Corporation 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 Corporation 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 Corporation 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 Corporation'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 Corporation, 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 Corporation 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 Corporation, 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 Corporation except as aforesaid.
(vii) The Corporation 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 Corporation adequate authority to operate its public utility
system therein, except that in a few municipalities the Corporation 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 Corporation'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 Corporation in the territory which it serves,
the rights of the Corporation 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 Corporation 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 Corporation 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>
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 Corporation.
(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 Underwriters 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 Corporation of this Agreement will not
contravene any of the provisions of the Restated Articles of Incorporation
or By-Laws of the Corporation.
(xiii) The descriptions in the Registration Statement and the
Prospectus of legal or governmental proceedings are accurate and fairly
present the information required to be shown, and such counsel does not
know of any litigation or any legal or governmental proceeding instituted
or threatened against the Corporation or any of its subsidiaries or any of
their respective properties that would be required to be disclosed in the
Prospectus and is not so disclosed.
Such counsel shall also state that nothing has come to his attention that
has caused him to believe that the Registration Statement as of the date of
effectiveness under the 1933 Act and the Prospectus as of the date it was
filed with, or transmitted for filing to, the Commission, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus as of the date it was filed with, or
transmitted for filing to, the Commission and at the Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Such counsel may also state that, except as otherwise expressly
provided in such opinion, he does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus and does not express any opinion
or belief as to the financial statements or other financial data contained
in the Registration Statement and the Prospectus or as to the statement of
the eligibility and qualification of the Trustee.
In rendering the foregoing opinion, such counsel may state that he
expresses no opinion as to the laws of any jurisdiction other than North
Carolina and may rely on the opinion of South Carolina counsel satisfactory
to you as to matters of South Carolina law. Such counsel may also state
that he has relied as to certain factual matters on information obtained
from public officials, officers of the Corporation and other sources
believed by him to be responsible.
(e) You shall have received an opinion or opinions of Dewey Ballantine,
counsel to the Corporation, 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) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the issue and sale of the Bonds or the consummation by the
Corporation of the transactions contemplated by this Agreement or the
Mortgage, except for authorization by the North Carolina Utilities
Commission and The Public Service Commission of South Carolina and such as
have been obtained under the 1933 Act and the Trust Indenture Act of 1939
and such consents, approvals, authorizations, orders, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Bonds by the
Underwriters.
(ii) Each of the Principal Subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Prospectus.
(iii) The Mortgage is duly qualified under the Trust Indenture Act of
1939.
(iv) The Registration Statement as of the date of effectiveness under
the 1933 Act and the Prospectus as of the date it was filed with, or
transmitted for filing to, the Commission complied as to form in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations; and nothing has come to their attention that would lead them
to believe that the Registration Statement as of the date of effectiveness
under the 1933 Act (or if an amendment to such Registration Statement or an
annual report on Form 10-K has been filed by the Corporation with the
Commission subsequent to the effectiveness of the Registration Statement,
then at the time of the most recent such filing) contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus as of the date it was filed with, or
transmitted for filing to, the Commission and at the Closing Date contained
or contains an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Such opinion may state that such counsel do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in
the Registration Statement and Prospectus except as otherwise expressly
provided in such opinion and do not express any opinion or belief as to the
financial statements or other financial data contained in the Registration
Statement and the Prospectus or as to the statement of the eligibility and
qualification of the Trustee.
(v) 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 rendering the foregoing opinion or opinions, Dewey Ballantine LLP may
state that such opinion or opinions are limited to the Federal laws of the
United States, the laws of the State of New York and the General
Corporation Law of the State of Delaware, and that they are relying on the
opinion of Robert S. Lilien, Esq. as to matters of North Carolina law and
on the opinion of South Carolina counsel satisfactory to you as to matters
of South Carolina law. In addition, such counsel may state that they have
relied as to certain matters on information obtained from public officials,
officers of the Corporation and other sources believed by them to be
responsible and that the signatures on all documents examined by them are
genuine, assumptions which such counsel have not independently verified.
(f) You shall have received the opinion of Willkie Farr & Gallagher,
counsel for the Underwriters, 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 (iii) through (v) of Section 6(e) and other related matters as you may
require, and the Corporation shall have furnished to such counsel such
documents as they request for the purpose of
5
<PAGE>
enabling them to pass upon such matters. In giving their opinion Willkie Farr
& Gallagher may rely on the opinion of Robert S. Lilien, Esq. as to matters of
North Carolina law and on the opinion of South Carolina counsel satisfactory
to you as to matters of South Carolina law.
(g) On or after the date hereof, there shall not have occurred any of the
following: (i) a suspension in trading in securities generally or of the
securities of the Corporation or Duke Energy Capital Trust I on the New York
Stock Exchange; or (ii) a general moratorium on commercial banking activities
in New York declared by either Federal or New York State authorities; or (iii)
the outbreak of hostilities involving the United States or the declaration by
the United States of a national emergency or war if the effect of any such
event specified in this clause (g) in your judgment makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Bonds
being delivered at the Closing Date on the terms and in the manner
contemplated in the Prospectus. In such event there shall be no liability on
the part of any party to any other party except for the expenses to be borne
by the Corporation as provided in Section 5(h) hereof.
(h) You shall have received a certificate of the Chairman of the Board, the
President or any Vice President and a principal financial or accounting
officer of the Corporation, dated the Closing Date, in which such officers, to
the best of their knowledge after reasonable investigation, shall state that
the representations and warranties of the Corporation in this Agreement are
true and correct, that the Corporation has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior
to the Closing Date, that the conditions specified in Section 6(b) and Section
6(c) have been satisfied, and that no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are threatened by the Commission.
(i) On the date of this Agreement, you shall have received letters dated the
date hereof, in form and substance satisfactory to you, from the Corporation's
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in or incorporated by reference into the Prospectus.
(j) At the Closing Date you shall have received from the Corporation's
independent public accountants letters, dated the Closing Date, to the effect
that such accountants reaffirm the statements made in the letters furnished
pursuant to paragraph (i) of this Section 6, except that the specified date
referred to shall be a date not more than three business days prior to the
Closing Date.
6
<PAGE>
The Corporation will furnish you with such conformed copies of such
opinions, certificates, letters and documents as you reasonably request.
7. Indemnification. (a) The Corporation agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever arising out of any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or any
amendment thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the prospectus constituting a part of the Registration
Statement in the form in which it became effective or the Prospectus (or
any amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, unless such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with written
information furnished to the Corporation by any Underwriter through you
expressly for use in the Registration Statement (or any amendment thereto)
or such Preliminary Prospectus, such prospectus, or the Prospectus (or any
amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission or any such alleged untrue statement
or omission, if such settlement is effected with the written consent of the
Corporation; and
(iii) against any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above.
In no case shall the Corporation be liable under this indemnity agreement
with respect to any claim made against any Underwriter or any such controlling
person unless the Corporation shall be notified in writing of the nature of
the claim within a reasonable time after the assertion thereof, but failure so
to notify the Corporation shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. The Corporation
shall be entitled to participate at its own expense in the defense, or, if it
so elects, within a reasonable time after receipt of such notice, to assume
the defense of any suit brought to enforce any such claim, but if it so elects
to assume the defense, such defense shall be conducted by counsel chosen by it
and approved by the Underwriter or Underwriters or controlling person or
persons, or defendant or defendants in any suit so brought, which approval
shall not be unreasonably withheld. In any such suit, any Underwriter or any
such controlling person shall have the right to employ its own counsel, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the Corporation and such
Underwriter shall have mutually agreed to the employment of such counsel, or
(ii) the named parties to any such action (including any impleaded parties)
include both such Underwriter or such controlling person and the Corporation
and such Underwriter or such controlling person shall have been advised by
such counsel that a conflict of interest between the Corporation and such
Underwriter or such controlling person may arise and for this reason it is not
desirable for the same counsel to represent both the indemnifying party and
also the indemnified party (it being understood, however, that the Corporation
shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys for all such
Underwriters and all such controlling persons, which firm shall be designated
in writing by you). The Corporation agrees to notify you within a reasonable
time of the assertion of any claim against it, any of its officers or
directors or any person who controls the Corporation within the meaning of
Section 15 of the 1933 Act, in connection with the sale of the Notes.
(b) Each Underwriter severally agrees that it will indemnify and hold
harmless the Corporation, its directors and each of the officers of the
Corporation who signed the Registration Statement and each person, if any, who
controls the Corporation within the meaning of Section 15 of the 1933 Act to
the same extent as the indemnity contained in subsection (a) of this Section,
but only with respect to statements or omissions made in the Registration
Statement (or any amendment thereto) or any Preliminary Prospectus, such
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Corporation by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), such Preliminary Prospectus,
such prospectus or the Prospectus (or any amendment or supplement thereto). In
case any action shall be brought against the Corporation or any person so
indemnified based on the Registration Statement (or any amendment thereto) or
such Preliminary Prospectus, such prospectus or the Prospectus (or any amendment
or supplement thereto) and in respect of which indemnity may be sought against
any Underwriter, such Underwriter shall have the rights and duties given to the
Corporation, and the Corporation and each person so indemnified shall have the
rights and duties given to the Underwriters, by the provisions of subsection (a)
of this Section.
8. Default by One or More of the Underwriters. (a) If any Underwriter shall
default in its obligation to purchase the Bonds which it has agreed to
purchase hereunder on the Closing Date, you may in your discretion arrange for
you or another party or other parties to purchase such Bonds on the terms
contained herein. If within thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such Bonds, then the
Corporation shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties satisfactory to you to
purchase such Bonds on such terms. In the event that, within the respective
prescribed periods, you notify the Corporation that you have so arranged for
the purchase of such Bonds, or the Corporation notifies you that it has so
arranged for the purchase of such Bonds, you or the Corporation shall have the
right to postpone such Closing Date for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Corporation agrees to file promptly any amendments to
the Registration Statement or the Prospectus which may be required. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Bonds.
(b) If, after giving effect to any arrangements for the purchase of the
Bonds of a defaulting Underwriter or Underwriters by you or the Corporation as
provided in subsection (a) above, the aggregate amount of such Bonds which
remains unpurchased does not exceed one-eleventh of the aggregate amount of
all the Bonds to be purchased at such Closing Date, then the Corporation shall
have the right to require each non-defaulting Underwriter to purchase the
amount of Bonds which such Underwriter agreed to purchase hereunder at such
Closing Date and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the amount of Bonds which such
Underwriter agreed to purchase hereunder) of the Bonds of such defaulting
Underwriter or Underwriters for which such arrangements have not been made;
but nothing herein shall relieve a defaulting Underwriter from liability for
its default.
(c) If, after giving effect to any arrangements for the purchase of the
Bonds of a defaulting Underwriter or Underwriters by you or the Corporation as
provided in subsection (a) above, the aggregate amount of such Bonds which
remains unpurchased exceeds one-eleventh of the aggregate amount of all the
Bonds to be purchased at such Closing Date, or if the Corporation shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Bonds of a defaulting Underwriter or Underwriters,
then this Agreement shall thereupon terminate, without liability on the part
of any non-defaulting Underwriter or the Corporation, except for the expenses
to be borne by the Corporation as provided in Section 5(h) hereof and the
indemnity agreement in Section 7 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
9. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of
the Corporation or its officers and of the several Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made
by or on behalf of any Underwriter or the Corporation, or any of its officers
or directors or any controlling person, and will survive delivery of and
payment for the Bonds.
7
<PAGE>
10. Reliance on Your Acts. In all dealings hereunder, you shall act on
behalf of each of the Underwriters, and the parties hereto shall be entitled
to act and rely upon any statement, request, notice or agreement on behalf of
any Underwriter made or given by you.
11. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters, will be mailed, delivered or telecopied and confirmed to you
as the representatives in care of at , attention of
or, if sent to the Corporation, will be mailed, delivered or telecopied and
confirmed to it at 422 South Church Street, Charlotte, N.C. 28202, telephone
number (704) 382-5159, attention of Richard J. Osborne, Executive Vice
President and Chief Financial Officer; provided, however, that any notice to
an Underwriter pursuant to Section 7 hereof shall be delivered or sent by
mail or telecopy to such Underwriter at its address or telecopy number set
forth in its Underwriters' Questionnaire or telex constituting such
Questionnaire, which address or telecopy number will be supplied to the
Corporation by you. Any such communications shall take effect upon receipt
thereof.
12. Business Day. As used herein, the term "business day" shall mean any day
when the Commission's office in Washington, D.C. is open for business.
13. Successors. This Agreement shall inure to the benefit of and be binding
upon the Underwriters and the Corporation and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the parties
hereto and their respective successors and the controlling persons and the
officers and directors referred to in Section 7, and their respective
successors, heirs and legal representatives any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective successors and said controlling persons, officers
and directors and their respective successors, heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Notes from any Underwriter shall be deemed to be a successor
or assign by reason merely of such purchase.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
15. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
If the foregoing is in accordance with your understanding, kindly sign and
return to us two counterparts hereof, and upon your acceptance on behalf of
each of the Underwriters, this letter and such acceptance will become a
binding agreement between the Corporation, on the one hand, and each of the
Underwriters, on the other hand, in accordance with its terms. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement
Among Underwriters, the form of which shall be submitted to the Corporation
for examination, but without warranty on your part as to the authority of the
signers thereof.
8
<PAGE>
Very truly yours,
DUKE ENERGY CORPORATION
By: ___________________________
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of
the date first above written.
By:____________________________________
9
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
OF BONDS TO BE
UNDERWRITER PURCHASED
----------- ----------------
<S> <C>
-----
Total.......................................................... $
=====
</TABLE>
<PAGE>
EXHIBIT 1-B
$
DUKE ENERGY CORPORATION
SERIES % SENIOR NOTES DUE
UNDERWRITING AGREEMENT
Gentlemen:
1. Introductory. DUKE ENERGY CORPORATION, a North Carolina corporation
("Corporation") proposes to issue and sell $ aggregate principal amount
of Series % Senior Notes Due ("Notes"), to be issued pursuant to the
provisions of a Senior Indenture, dated as of September 1, 1998, as the same
may be amended and supplemented by supplemental indentures to the date hereof
(including the supplemental indenture dated as of , , relating to the
Notes), between the Corporation and The Chase Manhattan Bank (the
"Indenture"), and hereby agrees with the several Underwriters hereinafter
named ("Underwriters") as follows:
2. Representations and Warranties of the Corporation. The Corporation
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. ), including a prospectus, relating
to the Notes has been filed with the Securities and Exchange Commission
("Commission") under the Securities Act of 1933 (the "1933 Act"). Such
registration statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto but
including all documents incorporated by reference in the prospectus
contained therein, to you for each of the other Underwriters, have been
declared effective by the Commission in such form, and no stop order
suspending the effectiveness of such registration statement has been issued
and no proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) of the rules
and regulations of the Commission under the 1933 Act being hereinafter
called a "Preliminary Prospectus"; the various parts of such registration
statement, including all exhibits thereto and including the documents
incorporated by reference in the prospectus contained in the registration
statement at the time such part of the registration statement became
effective, each as amended at the time such part of the registration
statement became effective, being hereinafter called the "Registration
Statement"; and the final prospectus relating to the Notes, in the form
first filed pursuant to Rule 424(b) under the 1933 Act, being hereinafter
called the "Prospectus"; and any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference to
any amendment or supplement to any Preliminary Prospectus or Prospectus
shall be deemed to refer to and include any documents filed after the date
of such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
Corporation filed pursuant to Section 13(a) or 15(d) of the 1934 Act after
the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement).
(b) The Registration Statement conforms and the Prospectus will conform
in all material respects to the requirements of the 1933 Act and the rules
and regulations thereunder ("1933 Act Regulations"), and the Registration
Statement does not and the Prospectus will not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, except
that the foregoing does not apply to statements or omissions in any such
document based upon written information furnished to the Corporation by any
Underwriter specifically for use therein.
<PAGE>
(c) The documents incorporated by reference in the Prospectus, at the
time they were filed with the Commission, complied in all material respects
with the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
with the other information in the Prospectus, do not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and any documents deemed to be incorporated by reference in the
Prospectus will, when they are filed with the Commission, comply in all
material respects with the requirements of the 1934 Act and the 1934 Act
Regulations, and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they are made, not misleading.
(d) The compliance by the Corporation with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Corporation or any of its Principal Subsidiaries (as hereinafter defined)
is a party or by which any of them or their respective property is bound or
to which any of their property or assets is subject, nor will such action
result in any violation of the provisions of the Restated Articles of
Incorporation or By-Laws of the Corporation or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Corporation or its Principal Subsidiaries or any of
their respective property; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the consummation by the Corporation of the
transactions contemplated by this Agreement, except for authorization by
the North Carolina Utilities Commission and The Public Service Commission
of South Carolina and the registration under the 1933 Act of the Notes and
such consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Notes by the Underwriters.
(e) Each of Duke Capital Corporation, PanEnergy Corp, Panhandle Eastern
Pipe Line Company, Texas Eastern Transmission Corporation, Trunkline Gas
Company and Algonquin Gas Transmission Company, each a Delaware corporation
(and herein called a "Principal Subsidiary"), is a direct or indirect
wholly-owned subsidiary of the Corporation.
3. Purchase, Sale and Delivery of Notes. On the basis of the
representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Corporation agrees to sell to
the Underwriters, and the Underwriters agree, severally and not jointly, to
purchase from the Corporation, at a purchase price of % of the principal
amount of the Notes, plus accrued interest from , to the Closing Date
(as hereinafter defined), the respective principal amount of Notes set forth
opposite the names of the Underwriters in Schedule A hereto plus the
respective principal amount of additional Notes which each such Underwriter
may become obligated to purchase pursuant to the provisions of Section 8
hereof.
Payment of the purchase price for the Notes to be purchased by the
Underwriters shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue
of the Americas, New York, N.Y., or at such other place as shall be mutually
agreed upon by you and the Corporation, at 10:00 A.M., New York City time, on
, (unless postponed in accordance with the provisions of Section 8) or
such other time not later than three full business days after such date as
shall be agreed upon by you and the Corporation (the "Closing Date"). Payment
shall be made to the Corporation by wire transfer in immediately available
funds, payable to the order of the Corporation against delivery of the Notes,
in fully registered form, to you or upon your order. The Notes shall be
delivered in the form of one or more global certificates in aggregate
denomination equal to the aggregate principal amount of the Notes upon
original issuance and registered in the name of Cede & Co., as nominee for The
Depository Trust Company ("DTC").
4. Offering by the Underwriters. It is understood that the several
Underwriters propose to offer the Notes for sale to the public as set forth in
the Prospectus.
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5. Covenants of the Corporation. The Corporation covenants and agrees with
the several Underwriters that:
(a) The Corporation will advise you promptly of any amendment or
supplementation of the Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of
the Registration Statement, and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(b) If at any time when a prospectus relating to the Notes is required to
be delivered under the 1933 Act any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact, or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the 1933 Act, the Corporation promptly
will prepare and file with the Commission an amendment, supplement or an
appropriate document pursuant to Section 13 or 14 of the 1934 Act which
will correct such statement or omission or which will effect such
compliance.
(c) The Corporation, during the period when a prospectus relating to the
Notes is required to be delivered under the 1933 Act, will file promptly
all documents required to be filed with the Commission pursuant to Section
13 or 14 of the 1934 Act.
(d) The Corporation will make generally available to its security
holders, in each case as soon as practicable but not later than 60 days
after the close of the period covered thereby, earnings statements (in form
complying with the provisions of Section 11(a) of the 1933 Act, which need
not be certified by independent certified public accountants unless
required by the 1933 Act) covering (i) a twelve-month period beginning not
later than the first day of the Corporation's fiscal quarter next following
the effective date of the Registration Statement and (ii) a twelve-month
period beginning not later than the first day of the Corporation's fiscal
quarter next following the date of this Agreement.
(e) The Corporation will furnish to you, without charge, copies of the
Registration Statement ( of which will be signed and will include all
exhibits other than those incorporated by reference), the Prospectus, and
all amendments and supplements to such documents, in each case as soon as
available and in such quantities as you reasonably request.
(f) The Corporation will arrange or cooperate in arrangements for the
qualification of the Notes for sale under the laws of such jurisdictions as
you designate and will continue such qualifications in effect so long as
required for the distribution; provided, however, that the Corporation
shall not be required to qualify as a foreign corporation or to file any
general consents to service of process under the laws of any state where it
is not now so subject.
(g) The Corporation will not, during the period beginning from the date
hereof and continuing to and including the date days after the date
hereof, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of any Notes, any security convertible into or exchangeable for the
Notes or any debt security substantially similar to the Notes (except for
the Notes issued pursuant to this Agreement), without your prior written
consent.
(h) The Corporation will pay all expenses incident to the performance of
its obligations under this Agreement including (i) the printing and filing
of the Registration Statement and the printing of this Agreement and the
Blue Sky Survey, (ii) the issuance and delivery of the Notes as specified
herein, (iii) the fees and disbursements of counsel for the Underwriters in
connection with the qualification of the Notes under the securities laws of
any jurisdiction in accordance with the provisions of Section 5(f) and in
connection with the preparation of the Blue Sky Survey, such fees not to
exceed $5,000, (iv) the printing and delivery to the Underwriters, 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, (v) any fees charged by independent
rating agencies for rating the Notes, (vi) any fees and expenses in
connection with the listing of the Notes on the New York Stock Exchange,
(vii) any filing fee required by the National Association of Securities
Dealers, Inc. and (viii) the costs of any depository arrangements for the
Notes with DTC or any successor depositary.
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6. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Notes will be subject to the
accuracy of the representations and warranties on the part of the Corporation
herein, to the accuracy of the statements of officers of the Corporation made
pursuant to the provisions hereof, to the performance by the Corporation of
its obligations hereunder and to the following additional conditions
precedent:
(a) Prior to the Closing Date, no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of the
Corporation or you, shall be threatened by the Commission.
(b) Prior to the Closing Date, the rating assigned by Moody's Investors
Service, Inc. or Standard & Poor's Ratings Group to (i) any debt securities
or preferred stock of the Corporation or (ii) any trust preferred
securities of Duke Energy Capital Trust I as of the date of this Agreement
shall not have been lowered.
(c) Since the respective most recent dates as of which information is
given in the Prospectus and up to the Closing Date, there shall not have
been any material adverse change in the condition of the Corporation,
financial or otherwise, except as reflected in or contemplated by the
Prospectus, and, since such dates and up to the Closing Date, there shall
not have been any material transaction entered into by the Corporation
other than transactions contemplated by the Prospectus and transactions in
the ordinary course of business.
(d) You shall have received an opinion of Robert S. Lilien, Esq., General
Counsel, Corporate and Energy Services, of the Corporation, dated the
Closing Date, to the effect that:
(i) The Corporation has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of North Carolina, with power and authority (corporate and other) to
own its properties and conduct its business as described in the
Prospectus.
(ii) Each of the Corporation and the Principal Subsidiaries is duly
qualified to do business in each jurisdiction in which the ownership or
leasing of its property or the conduct of its business requires such
qualification, except where the failure to so qualify, considering all
such cases in the aggregate, does not have a material adverse effect on
the business, properties, financial position or results of operations
of the Corporation and its subsidiaries taken as a whole.
(iii) The Indenture has been duly authorized, executed and delivered
by the Corporation and, assuming the due authorization, execution and
delivery thereof by The Chase Manhattan Bank, as Trustee, constitutes a
valid and legally binding instrument of the Corporation, enforceable
against the Corporation in accordance with its terms, subject to the
qualifications that the enforceability of the Corporation's obligations
under the Indenture may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(iv) The Notes have been duly authorized and executed by the
Corporation and, when authenticated by The Chase Manhattan Bank, as
Trustee, in the manner provided in the Indenture and delivered against
payment therefor, will constitute valid and legally binding obligations
of the Corporation enforceable against the Corporation in accordance
with their terms, subject to the qualifications that the enforceability
of the Corporation's obligations under the Notes may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law), and are entitled to
the benefits afforded by the Indenture in accordance with the terms of
the Indenture and the Notes.
(v) The Registration Statement has become effective under the 1933
Act, and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or threatened under the 1933 Act.
(vi) This Agreement has been duly authorized, executed and delivered
by the Corporation.
(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
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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 Underwriters 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 Corporation of this Agreement will not
contravene any of the provisions of the Restated Articles of
Incorporation or By-Laws of the Corporation.
(ix) The descriptions in the Registration Statement and the
Prospectus of legal or governmental proceedings are accurate and fairly
present the information required to be shown, and such counsel does not
know of any litigation or any legal or governmental proceeding
instituted or threatened against the Corporation or any of its
subsidiaries or any of their respective properties that would be
required to be disclosed in the Prospectus and is not so disclosed.
Such counsel shall also state that nothing has come to his attention that
has caused him to believe that the Registration Statement as of the date of
effectiveness under the 1933 Act and the Prospectus as of the date it was
filed with, or transmitted for filing to, the Commission, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus as of the date it was filed with, or
transmitted for filing to, the Commission and at the Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Such counsel may also state that, except as otherwise expressly
provided in such opinion, he does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus and does not express any opinion
or belief as to the financial statements or other financial data contained
in the Registration Statement and the Prospectus or as to the statement of
the eligibility and qualification of the Trustee.
In rendering the foregoing opinion, such counsel may state that he
expresses no opinion as to the laws of any jurisdiction other than North
Carolina and may rely on the opinion of South Carolina counsel satisfactory
to you as to matters of South Carolina law. Such counsel may also state
that he has relied as to certain factual matters on information obtained
from public officials, officers of the Corporation and other sources
believed by him to be responsible.
(e) You shall have received an opinion or opinions of Dewey Ballantine,
counsel to the Corporation, dated the Closing Date, with respect to the
matters set forth in (i) and (iii) through (viii) of Section 6(d) and to
the further effect that:
(i) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the issue and sale of the Notes or the consummation by the
Corporation of the transactions contemplated by this Agreement or the
Indenture, except for authorization by the North Carolina Utilities
Commission and The Public Service Commission of South Carolina and such
as have been obtained under the 1933 Act and the Trust Indenture Act of
1939 and such consents, approvals, authorizations, orders,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Notes by the Underwriters.
(ii) Each of the Principal Subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus.
(iii) The Indenture is duly qualified under the Trust Indenture Act
of 1939.
(iv) The Registration Statement as of the date of effectiveness under
the 1933 Act and the Prospectus as of the date it was filed with, or
transmitted for filing to, the Commission complied as to form in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations; and nothing has come to their attention that would
lead them to believe that the Registration Statement as of the date of
effectiveness under the 1933 Act (or if an amendment to such
Registration Statement or
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an annual report on Form 10-K has been filed by the Corporation with
the Commission subsequent to the effectiveness of the Registration
Statement, then at the time of the most recent such filing) contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus as of the date it was
filed with, or transmitted for filing to, the Commission and at the
Closing Date contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. Such opinion may state that such
counsel do not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement
and Prospectus except as otherwise expressly provided in such opinion
and do not express any opinion or belief as to the financial statements
or other financial data contained in the Registration Statement and the
Prospectus or as to the statement of the eligibility and qualification
of the Trustee.
(v) The statements made in the Prospectus under the captions
"Description of the Debt Securities" and "Description of the Series
Senior Notes," insofar as they purport to summarize provisions of
documents specifically referred to therein, fairly present the
information called for with respect thereto by Form S-3.
In rendering the foregoing opinion or opinions, Dewey Ballantine LLP may
state that such opinion or opinions are limited to the Federal laws of the
United States, the laws of the State of New York and the General
Corporation Law of the State of Delaware, and that they are relying on the
opinion of Robert S. Lilien, Esq. as to matters of North Carolina law and
on the opinion of South Carolina counsel satisfactory to you as to matters
of South Carolina law. In addition, such counsel may state that they have
relied as to certain matters on information obtained from public officials,
officers of the Corporation and other sources believed by them to be
responsible and that the signatures on all documents examined by them are
genuine, assumptions which such counsel have not independently verified.
(f) You shall have received an opinion of Willkie Farr & Gallagher,
counsel for the Underwriters, dated the Closing Date, with respect to the
incorporation of the Corporation, the validity of the Notes, the
Registration Statement and the Prospectus, as amended or supplemented, and
such other related matters as you may require, and the Corporation shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters. In giving their opinion
Willkie Farr & Gallagher may rely on the opinion of Robert S. Lilien, Esq.
as to matters of North Carolina law and on the opinion of South Carolina
counsel satisfactory to you as to matters of South Carolina law.
(g) On or after the date hereof, there shall not have occurred any of the
following: (i) a suspension in trading in securities generally or of the
securities of the Corporation or Duke Energy Capital Trust I on the New
York Stock Exchange; or (ii) a general moratorium on commercial banking
activities in New York declared by either Federal or New York State
authorities; or (iii) the outbreak of hostilities involving the United
States or the declaration by the United States of a national emergency or
war if the effect of any such event specified in this clause (g) in your
judgment makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Notes being delivered at the Closing Date
on the terms and in the manner contemplated in the Prospectus. In such
event there shall be no liability on the part of any party to any other
party except for the expenses to be borne by the Corporation as provided in
Section 5(h) hereof.
(h) You shall have received a certificate of the Chairman of the Board,
the President or any Vice President and a principal financial or accounting
officer of the Corporation, dated the Closing Date, in which such officers,
to the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Corporation in this
Agreement are true and correct, that the Corporation has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Date, that the conditions specified in
Section 6(b) and Section 6(c) have been satisfied, and that no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are threatened
by the Commission.
(i) On the date of this Agreement, you shall have received letters dated
the date hereof, in form and substance satisfactory to you, from the
Corporation's independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with
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respect to the financial statements and certain financial information
contained in or incorporated by reference into the Prospectus.
(j) At the Closing Date you shall have received from the Corporation's
independent public accountants letters, dated the Closing Date, to the
effect that such accountants reaffirm the statements made in the letters
furnished pursuant to paragraph (i) of this Section 6, except that the
specified date referred to shall be a date not more than three business
days prior to the Closing Date.
The Corporation will furnish you with such conformed copies of such
opinions, certificates, letters and documents as you reasonably request.
7. Indemnification. (a) The Corporation agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever arising out of any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or any
amendment thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the prospectus constituting a part of the Registration
Statement in the form in which it became effective or the Prospectus (or
any amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, unless such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with written
information furnished to the Corporation by any Underwriter through you
expressly for use in the Registration Statement (or any amendment thereto)
or such Preliminary Prospectus, such prospectus, or the Prospectus (or any
amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission or any such alleged untrue statement
or omission, if such settlement is effected with the written consent of the
Corporation; and
(iii) against any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above.
In no case shall the Corporation be liable under this indemnity agreement
with respect to any claim made against any Underwriter or any such controlling
person unless the Corporation shall be notified in writing of the nature of
the claim within a reasonable time after the assertion thereof, but failure so
to notify the Corporation shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. The Corporation
shall be entitled to participate at its own expense in the defense, or, if it
so elects, within a reasonable time after receipt of such notice, to assume
the defense of any suit brought to enforce any such claim, but if it so elects
to assume the defense, such defense shall be conducted by counsel chosen by it
and approved by the Underwriter or Underwriters or controlling person or
persons, or defendant or defendants in any suit so brought, which approval
shall not be unreasonably withheld. In any such suit, any Underwriter or any
such controlling person shall have the right to employ its own counsel, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the Corporation and such
Underwriter shall have mutually agreed to the employment of such counsel, or
(ii) the named parties to any such action (including any impleaded parties)
include both such Underwriter or such controlling person and the Corporation
and such Underwriter or such controlling person shall have been advised by
such counsel that a conflict of interest between the Corporation and such
Underwriter or such controlling person may arise and for this reason it is not
desirable for the same counsel to represent both the indemnifying party and
also the indemnified party (it being understood, however, that the Corporation
shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys for all such
Underwriters and all such controlling persons, which firm shall be designated
in
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writing by you). The Corporation agrees to notify you within a reasonable time
of the assertion of any claim against it, any of its officers or directors or
any person who controls the Corporation within the meaning of Section 15 of
the 1933 Act, in connection with the sale of the Notes.
(b) Each Underwriter severally agrees that it will indemnify and hold
harmless the Corporation, its directors and each of the officers of the
Corporation who signed the Registration Statement and each person, if any, who
controls the Corporation within the meaning of Section 15 of the 1933 Act to
the same extent as the indemnity contained in subsection (a) of this Section,
but only with respect to statements or omissions made in the Registration
Statement (or any amendment thereto) or any Preliminary Prospectus, such
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Corporation by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), such Preliminary
Prospectus, such prospectus or the Prospectus (or any amendment or supplement
thereto). In case any action shall be brought against the Corporation or any
person so indemnified based on the Registration Statement (or any amendment
thereto) or such Preliminary Prospectus, such prospectus or the Prospectus (or
any amendment or supplement thereto) and in respect of which indemnity may be
sought against any Underwriter, such Underwriter shall have the rights and
duties given to the Corporation, and the Corporation and each person so
indemnified shall have the rights and duties given to the Underwriters, by the
provisions of subsection (a) of this Section.
8. Default by One or More of the Underwriters. (a) If any Underwriter shall
default in its obligation to purchase the Notes which it has agreed to
purchase hereunder on the Closing Date, you may in your discretion arrange for
you or another party or other parties to purchase such Notes on the terms
contained herein. If within thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such Notes, then the
Corporation shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties satisfactory to you to
purchase such Notes on such terms. In the event that, within the respective
prescribed periods, you notify the Corporation that you have so arranged for
the purchase of such Notes, or the Corporation notifies you that it has so
arranged for the purchase of such Notes, you or the Corporation shall have the
right to postpone such Closing Date for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Corporation agrees to file promptly any amendments to
the Registration Statement or the Prospectus which may be required. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Notes.
(b) If, after giving effect to any arrangements for the purchase of the
Notes of a defaulting Underwriter or Underwriters by you or the Corporation as
provided in subsection (a) above, the aggregate amount of such Notes which
remains unpurchased does not exceed one-eleventh of the aggregate amount of
all the Notes to be purchased at such Closing Date, then the Corporation shall
have the right to require each non-defaulting Underwriter to purchase the
amount of Notes which such Underwriter agreed to purchase hereunder at such
Closing Date and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the amount of Notes which such
Underwriter agreed to purchase hereunder) of the Notes of such defaulting
Underwriter or Underwriters for which such arrangements have not been made;
but nothing herein shall relieve a defaulting Underwriter from liability for
its default.
(c) If, after giving effect to any arrangements for the purchase of the
Notes of a defaulting Underwriter or Underwriters by you or the Corporation as
provided in subsection (a) above, the aggregate amount of such Notes which
remains unpurchased exceeds one-eleventh of the aggregate amount of all the
Notes to be purchased at such Closing Date, or if the Corporation shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Notes of a defaulting Underwriter or Underwriters,
then this Agreement shall thereupon terminate, without liability on the part
of any non-defaulting Underwriter or the Corporation, except for the expenses
to be borne by the Corporation as provided in Section 5(h) hereof and the
indemnity agreement in Section 7 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
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9. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of
the Corporation or its officers and of the several Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made
by or on behalf of any Underwriter or the Corporation, or any of its officers
or directors or any controlling person, and will survive delivery of and
payment for the Notes.
10. Reliance on Your Acts. In all dealings hereunder, you shall act on
behalf of each of the Underwriters, and the parties hereto shall be entitled
to act and rely upon any statement, request, notice or agreement on behalf of
any Underwriter made or given by you.
11. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters, will be mailed, delivered or telecopied and confirmed to you
as the representatives in care of at , attention of or, if
sent to the Corporation, will be mailed, delivered or telecopied and confirmed
to it at 422 South Church Street, Charlotte, N.C. 28202, telephone number
(704) 382-5159, attention of Richard J. Osborne, Executive Vice President and
Chief Financial Officer; provided, however, that any notice to an Underwriter
pursuant to Section 7 hereof shall be delivered or sent by mail or telecopy to
such Underwriter at its address or telecopy number set forth in its
Underwriters' Questionnaire or telex constituting such Questionnaire, which
address or telecopy number will be supplied to the Corporation by you. Any
such communications shall take effect upon receipt thereof.
12. Business Day. As used herein, the term "business day" shall mean any day
when the Commission's office in Washington, D.C. is open for business.
13. Successors. This Agreement shall inure to the benefit of and be binding
upon the Underwriters and the Corporation and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the parties
hereto and their respective successors and the controlling persons and the
officers and directors referred to in Section 7, and their respective
successors, heirs and legal representatives any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective successors and said controlling persons, officers
and directors and their respective successors, heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Notes from any Underwriter shall be deemed to be a successor
or assign by reason merely of such purchase.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
15. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
If the foregoing is in accordance with your understanding, kindly sign and
return to us two counterparts hereof, and upon your acceptance on behalf of
each of the Underwriters, this letter and such acceptance will become a
binding agreement between the Corporation, on the one hand, and each of the
Underwriters, on the other hand, in accordance with its terms. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement
Among Underwriters, the form of which shall be submitted to the Corporation
for examination, but without warranty on your part as to the authority of the
signers thereof.
Very truly yours,
Duke Energy Corporation
By: _________________________________
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
By: _________________________________
9
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
OF NOTES TO BE
UNDERWRITER PURCHASED
----------- ----------------
<S> <C>
-----
Total.......................................................... $
=====
</TABLE>
<PAGE>
EXHIBIT 1-C
$
DUKE ENERGY CORPORATION
SERIES % SUBORDINATED NOTES DUE
UNDERWRITING AGREEMENT
Gentlemen:
1. Introductory. DUKE ENERGY CORPORATION, a North Carolina corporation
("Corporation"), proposes to issue and sell $ aggregate principal amount
of Series % Subordinated Notes Due ("Notes"), to be issued pursuant to the
provisions of a Subordinated Indenture, dated as of December 1, 1997, as the
same may be amended and supplemented by supplemental indentures to the date
hereof (including the supplemental indenture dated as of , , relating to
the Notes), between the Corporation and The Chase Manhattan Bank (the
"Indenture"), and hereby agrees with the several Underwriters hereinafter named
("Underwriters") as follows:
2. Representations and Warranties of the Corporation. The Corporation
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. ), including a prospectus,
relating to the Notes has been filed with the Securities and Exchange
Commission ("Commission") under the Securities Act of 1933 (the "1933
Act"). Such registration statement and any post-effective amendment
thereto, each in the form heretofore delivered to you, and, excluding
exhibits thereto but including all documents incorporated by reference in
the prospectus contained therein, to you for each of the other
Underwriters, have been declared effective by the Commission in such form,
and no stop order suspending the effectiveness of such registration
statement has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary prospectus
included in such registration statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission
under the 1933 Act being hereinafter called a "Preliminary Prospectus"; the
various parts of such registration statement, including all exhibits
thereto and including the documents incorporated by reference in the
prospectus contained in the registration statement at the time such part of
the registration statement became effective, each as amended at the time
such part of the registration statement became effective, being hereinafter
called the "Registration Statement"; and the final prospectus relating to
the Notes, in the form first filed pursuant to Rule 424(b) under the 1933
Act, being hereinafter called the "Prospectus"; and any reference herein to
any Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein, as of the date
of such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary Prospectus or
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as amended (the "1934
Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual
report of the Corporation filed pursuant to Section 13(a) or 15(d) of the
1934 Act after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement).
(b) The Registration Statement conforms and the Prospectus will conform
in all material respects to the requirements of the 1933 Act and the rules
and regulations thereunder ("1933 Act Regulations"), and the Registration
Statement does not and the Prospectus will not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements
<PAGE>
therein not misleading, except that the foregoing does not apply to
statements or omissions in any such document based upon written information
furnished to the Corporation by any Underwriter specifically for use
therein.
(c) The documents incorporated by reference in the Prospectus, at the
time they were filed with the Commission, complied in all material respects
with the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
with the other information in the Prospectus, do not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
any documents deemed to be incorporated by reference in the Prospectus will,
when they are filed with the Commission, comply in all material respects with
the requirements of the 1934 Act and the 1934 Act Regulations, and will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they are made, not
misleading.
(d) The compliance by the Corporation with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Corporation or any of its Principal Subsidiaries (as hereinafter defined) is a
party or by which any of them or their respective property is bound or to
which any of their property or assets is subject, nor will such action result
in any violation of the provisions of the Restated Articles of Incorporation
or By-Laws of the Corporation or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Corporation or its Principal Subsidiaries or any of their respective property;
and no consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required for the
consummation by the Corporation of the transactions contemplated by this
Agreement, except for authorization by the North Carolina Utilities Commission
and The Public Service Commission of South Carolina and the registration under
the 1933 Act of the Notes and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Notes by
the Underwriters.
(e) Each of Duke Capital Corporation, PanEnergy Corp, Panhandle Eastern
Pipe Line Company, Texas Eastern Transmission Corporation, Trunkline Gas
Company and Algonquin Gas Transmission Company, each a Delaware corporation
(and herein called a "Principal Subsidiary"), is a direct or indirect wholly-
owned subsidiary of the Corporation.
3. Purchase, Sale and Delivery of Notes. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Corporation agrees to sell to the Underwriters,
and the Underwriters agree, severally and not jointly, to purchase from the
Corporation, at a purchase price of % of the principal amount of the Notes, plus
accrued interest from , to the Closing Date (as hereinafter defined),
the respective principal amount of Notes set forth opposite the names of the
Underwriters in Schedule A hereto plus the respective principal amount of
additional Notes which each such Underwriter may become obligated to purchase
pursuant to the provisions of Section 8 hereof.
Payment of the purchase price for the Notes to be purchased by the
Underwriters shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue
of the Americas, New York, N.Y., or at such other place as shall be mutually
agreed upon by you and the Corporation, at 10:00 A.M., New York City time, on
, (unless postponed in accordance with the provisions of Section 8) or
such other time not later than three full business days after such date as shall
be agreed upon by you and the Corporation (the "Closing Date"). Payment shall be
made to the Corporation by wire transfer in immediately available funds, payable
to the order of the Corporation against delivery of the Notes, in fully
registered form, to you or upon your order. The Notes shall be delivered in the
form of one or more global certificates in aggregate denomination equal to the
aggregate principal amount of the Notes upon original issuance and registered in
the name of Cede & Co., as nominee for The Depository Trust Company ("DTC").
2
<PAGE>
4. Offering by the Underwriters. It is understood that the several
Underwriters propose to offer the Notes for sale to the public as set forth in
the Prospectus.
5. Covenants of the Corporation. The Corporation covenants and agrees with
the several Underwriters that:
(a) The Corporation will advise you promptly of any amendment or
supplementation of the Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of
the Registration Statement, and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(b) If at any time when a prospectus relating to the Notes is required to
be delivered under the 1933 Act any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact, or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the 1933 Act, the Corporation promptly
will prepare and file with the Commission an amendment, supplement or an
appropriate document pursuant to Section 13 or 14 of the 1934 Act which
will correct such statement or omission or which will effect such
compliance.
(c) The Corporation, during the period when a prospectus relating to the
Notes is required to be delivered under the 1933 Act, will file promptly
all documents required to be filed with the Commission pursuant to Section
13 or 14 of the 1934 Act.
(d) The Corporation will make generally available to its security
holders, in each case as soon as practicable but not later than 60 days
after the close of the period covered thereby, earnings statements (in form
complying with the provisions of Section 11(a) of the 1933 Act, which need
not be certified by independent certified public accountants unless
required by the 1933 Act) covering (i) a twelve-month period beginning not
later than the first day of the Corporation's fiscal quarter next following
the effective date of the Registration Statement and (ii) a twelve-month
period beginning not later than the first day of the Corporation's fiscal
quarter next following the date of this Agreement.
(e) The Corporation will furnish to you, without charge, copies of the
Registration Statement ( of which will be signed and will include all
exhibits other than those incorporated by reference), the Prospectus, and
all amendments and supplements to such documents, in each case as soon as
available and in such quantities as you reasonably request.
(f) The Corporation will arrange or cooperate in arrangements for the
qualification of the Notes for sale under the laws of such jurisdictions as
you designate and will continue such qualifications in effect so long as
required for the distribution; provided, however, that the Corporation
shall not be required to qualify as a foreign corporation or to file any
general consents to service of process under the laws of any state where it
is not now so subject.
(g) The Corporation will not, during the period beginning from the date
hereof and continuing to and including the date days after the date
hereof, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of any Notes, any security convertible into or exchangeable for the
Notes or any debt security substantially similar to the Notes (except for
the Notes issued pursuant to this Agreement), without your prior written
consent.
(h) The Corporation will pay all expenses incident to the performance of
its obligations under this Agreement including (i) the printing and filing
of the Registration Statement and the printing of this Agreement and the
Blue Sky Survey, (ii) the issuance and delivery of the Notes as specified
herein, (iii) the fees and disbursements of counsel for the Underwriters in
connection with the qualification of the Notes under the securities laws of
any jurisdiction in accordance with the provisions of Section 5(f) and in
connection with the preparation of the Blue Sky Survey, such fees not to
exceed $5,000, (iv) the printing and delivery to the Underwriters, 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, (v) any fees charged by independent
rating agencies for rating the Notes, (vi) any fees and expenses in
3
<PAGE>
connection with the listing of the Notes on the New York Stock Exchange,
(vii) any filing fee required by the National Association of Securities
Dealers, Inc. and (viii) the costs of any depository arrangements for the
Notes with DTC or any successor depositary.
6. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Notes will be subject to the
accuracy of the representations and warranties on the part of the Corporation
herein, to the accuracy of the statements of officers of the Corporation made
pursuant to the provisions hereof, to the performance by the Corporation of
its obligations hereunder and to the following additional conditions
precedent:
(a) Prior to the Closing Date, no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of the
Corporation or you, shall be threatened by the Commission.
(b) Prior to the Closing Date, the rating assigned by Moody's Investors
Service, Inc. or Standard & Poor's Ratings Group to (i) any debt securities
or preferred stock of the Corporation or (ii) any trust preferred securities
of Duke Energy Capital Trust I as of the date of this Agreement shall not have
been lowered.
(c) Since the respective most recent dates as of which information is
given in the Prospectus and up to the Closing Date, there shall not have
been any material adverse change in the condition of the Corporation,
financial or otherwise, except as reflected in or contemplated by the
Prospectus, and, since such dates and up to the Closing Date, there shall
not have been any material transaction entered into by the Corporation
other than transactions contemplated by the Prospectus and transactions in
the ordinary course of business.
(d) You shall have received an opinion of Robert S. Lilien, Esq., General
Counsel, Corporate and Energy Services, of the Corporation, dated the Closing
Date, to the effect that:
(i) The Corporation has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
North Carolina, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus.
(ii) Each of the Corporation and the Principal Subsidiaries is duly
qualified to do business in each jurisdiction in which the ownership or
leasing of its property or the conduct of its business requires such
qualification, except where the failure to so qualify, considering all
such cases in the aggregate, does not have a material adverse effect on
the business, properties, financial position or results of operations
of the Corporation and its subsidiaries taken as a whole.
(iii) The Indenture has been duly authorized, executed and delivered by
the Corporation and, assuming the due authorization, execution and delivery
thereof by The Chase Manhattan Bank, as Trustee, constitutes a valid and
legally binding instrument of the Corporation enforceable against the
Corporation in accordance with its terms, subject to the qualifications that
the enforceability of the Corporation's obligations under the Indenture may
be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(iv) The Notes have been duly authorized and executed by the
Corporation and, when authenticated by The Chase Manhattan Bank, as
Trustee, in the manner provided in the Indenture and delivered against
payment therefor, will constitute valid and legally binding obligations
of the Corporation, enforceable against the Corporation in accordance
with their terms, subject to the qualifications that the enforceability
of the Corporation's obligations under the Notes may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law), and are entitled to the
benefits afforded by the Indenture in accordance with the terms of the
Indenture and the Notes.
(v) The Registration Statement has become effective under the 1933
Act, and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or threatened under the 1933 Act.
4
<PAGE>
(vi) This Agreement has been duly authorized, executed and delivered
by the Corporation.
(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 Underwriters 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 Corporation of this Agreement will not
contravene any of the provisions of the Restated Articles of
Incorporation or By-Laws of the Corporation.
(ix) The descriptions in the Registration Statement and the
Prospectus of legal or governmental proceedings are accurate and fairly
present the information required to be shown, and such counsel does not
know of any litigation or any legal or governmental proceeding
instituted or threatened against the Corporation or any of its
subsidiaries or any of their respective properties that would be
required to be disclosed in the Prospectus and is not so disclosed.
Such counsel shall also state that nothing has come to his attention that
has caused him to believe that the Registration Statement as of the date of
effectiveness under the 1933 Act and the Prospectus as of the date it was
filed with, or transmitted for filing to, the Commission, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or that the Prospectus as of the date it was filed with, or
transmitted for filing to, the Commission and at the Closing Date, contained
or contains any untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. Such
counsel may also state that, except as otherwise expressly provided in such
opinion, he does not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement and the
Prospectus and does not express any opinion or belief as to the financial
statements or other financial data contained in the Registration Statement
and the Prospectus or as to the statement of the eligibility and
qualification of the Trustee.
In rendering the foregoing opinion, such counsel may state that he
expresses no opinion as to the laws of any jurisdiction other than North
Carolina and may rely on the opinion of South Carolina counsel satisfactory
to you as to matters of South Carolina law. Such counsel may also state that
he has relied as to certain factual matters on information obtained from
public officials, officers of the Corporation and other sources believed by
him to be responsible.
(e) You shall have received an opinion or opinions of Dewey Ballantine,
counsel to the Corporation, dated the Closing Date, with respect to the
matters set forth in (i) and (iii) through (viii) of Section 6(d) and to the
further effect that:
(i) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the issue and sale of the Notes or the consummation by the
Corporation of the transactions contemplated by this Agreement or the
Indenture, except for authorization by the North Carolina Utilities
Commission and The Public Service Commission of South Carolina and such as
have been obtained under the 1933 Act and the Trust Indenture Act of 1939
and such consents, approvals, authorizations, orders, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Notes by the
Underwriters.
(ii) Each of the Principal Subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Prospectus.
(iii) The Indenture is duly qualified under the Trust Indenture Act of
1939.
(iv) The Registration Statement as of the date of effectiveness under
the 1933 Act and the Prospectus as of the date it was filed with, or
transmitted for filing to, the Commission complied as to form in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations; and nothing has come to their attention that would
lead them to believe that the Registration Statement as of the date of
effectiveness under the 1933 Act (or if an amendment to such
Registration Statement or an annual report on Form 10-K has been filed
by the Corporation with the Commission subsequent to the effectiveness
of the Registration Statement, then at the time of the most recent such
filing) contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus as of
the date it was filed with, or transmitted for filing to, the
Commission and at the Closing Date contained or contains an untrue
statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. Such
opinion may state that such counsel do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statement and Prospectus except as otherwise
expressly provided in such opinion and do not express any opinion or
belief as to the financial statements or other financial data contained
in the Registration Statement and the Prospectus or as to the statement
of the eligibility and qualification of the Trustee.
(v) The statements made in the Prospectus under the captions "Description
of the Debt Securities" and "Description of the Series Subordinated Notes,"
insofar as they purport to summarize provisions of documents specifically
referred to therein, fairly present the information called for with respect
thereto by Form S-3.
In rendering the foregoing opinion or opinions, Dewey Ballantine LLP may
state that such opinion or opinions are limited to the Federal laws of the
United States, the laws of the State of New York and the General Corporation
Law of the State of Delaware, and that they are relying on the opinion of
Robert S. Lilien, Esq. as to matters of North Carolina law and on the opinion
of South Carolina counsel satisfactory to you as to matters of South Carolina
law. In addition, such counsel may state that they have relied as to certain
matters on information obtained from public officials, officers of the
Corporation and other sources believed by them to be responsible and that the
signatures on all documents examined by them are genuine, assumptions which
such counsel have not independently verified.
5
<PAGE>
(f) You shall have received an opinion of Willkie Farr &
Gallagher, counsel for the Underwriters, dated the Closing Date, with
respect to the incorporation of the Corporation, the validity of the Notes,
the Registration Statement and the Prospectus, as amended or supplemented,
and such other related matters as you may require, and the Corporation shall
have furnished to such counsel such documents as they request for the purpose
of enabling them to pass upon such matters. In giving their opinion Willkie
Farr & Gallagher may rely on the opinion of Robert S. Lilien, Esq. as to
matters of North Carolina law and on the opinion of South Carolina
counsel satisfactory to you as to matters of South Carolina law.
(g) On or after the date hereof, there shall not have occurred any of the
following: (i) a suspension in trading in securities generally or of the
securities of the Corporation or Duke Energy Capital Trust I on the New York
Stock Exchange; or (ii) a general moratorium on commercial banking activities
in New York declared by either Federal or New York State authorities; or (iii)
the outbreak of hostilities involving the United States or the declaration by
the United States of a national emergency or war if the effect of any such
event specified in this clause (g) in your judgment makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Notes
being delivered at the Closing Date on the terms and in the manner
contemplated in the Prospectus. In such event there shall be no liability on
the part of any party to any other party except for the expenses to be borne
by the Corporation as provided in Section 5(h) hereof.
(h) You shall have received a certificate of the Chairman of the Board, the
President or any Vice President and a principal financial or accounting
officer of the Corporation, dated the Closing Date, in which such officers,
to the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Corporation in this
Agreement are true and correct, that the Corporation has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Date, that the conditions specified in
Section 6(b) and Section 6(c) have been satisfied, and that no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are threatened
by the Commission.
(i) On the date of this Agreement, you shall have received letters dated
the date hereof, in form and substance satisfactory to you, from the
Corporation's independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in or incorporated by reference
into the Prospectus.
(j) At the Closing Date you shall have received from the Corporation's
independent public accountants letters, dated the Closing Date, to the
effect that such accountants reaffirm the statements made in the letters
6
<PAGE>
furnished pursuant to paragraph (i) of this Section 6, except that the
specified date referred to shall be a date not more than three business
days prior to the Closing Date.
The Corporation will furnish you with such conformed copies of such
opinions, certificates, letters and documents as you reasonably request.
7. Indemnification. (a) The Corporation agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever arising out of any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or any
amendment thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the prospectus constituting a part of the Registration
Statement in the form in which it became effective or the Prospectus (or
any amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, unless such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with written
information furnished to the Corporation by any Underwriter through you
expressly for use in the Registration Statement (or any amendment thereto)
or such Preliminary Prospectus, such prospectus, or the Prospectus (or any
amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission or any such alleged untrue statement
or omission, if such settlement is effected with the written consent of the
Corporation; and
(iii) against any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above.
In no case shall the Corporation be liable under this indemnity agreement
with respect to any claim made against any Underwriter or any such controlling
person unless the Corporation shall be notified in writing of the nature of
the claim within a reasonable time after the assertion thereof, but failure so
to notify the Corporation shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. The Corporation
shall be entitled to participate at its own expense in the defense, or, if it
so elects, within a reasonable time after receipt of such notice, to assume
the defense of any suit brought to enforce any such claim, but if it so elects
to assume the defense, such defense shall be conducted by counsel chosen by it
and approved by the Underwriter or Underwriters or controlling person or
persons, or defendant or defendants in any suit so brought, which approval
shall not be unreasonably withheld. In any such suit, any Underwriter or any
such controlling person shall have the right to employ its own counsel, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the Corporation and such
Underwriter shall have mutually agreed to the employment of such counsel, or
(ii) the named parties to any such action (including any impleaded parties)
include both such Underwriter or such controlling person and the Corporation
and such Underwriter or such controlling person shall have been advised by
such counsel that a conflict of interest between the Corporation and such
Underwriter or such controlling person may arise and for this reason it is not
desirable for the same counsel to represent both the indemnifying party and
also the indemnified party (it being understood, however, that the Corporation
shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys for all such
Underwriters and all such controlling persons, which firm shall be designated
in writing by you). The Corporation agrees to notify you within a reasonable
time of the assertion of any claim against it, any of its officers or
directors or any person who controls the Corporation within the meaning of
Section 15 of the 1933 Act, in connection with the sale of the Notes.
7
<PAGE>
(b) Each Underwriter severally agrees that it will indemnify and hold
harmless the Corporation, its directors and each of the officers of the
Corporation who signed the Registration Statement and each person, if any, who
controls the Corporation within the meaning of Section 15 of the 1933 Act to
the same extent as the indemnity contained in subsection (a) of this Section,
but only with respect to statements or omissions made in the Registration
Statement (or any amendment thereto) or any Preliminary Prospectus, such
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Corporation by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), such Preliminary
Prospectus, such prospectus or the Prospectus (or any amendment or supplement
thereto). In case any action shall be brought against the Corporation or any
person so indemnified based on the Registration Statement (or any amendment
thereto) or such Preliminary Prospectus, such prospectus or the Prospectus (or
any amendment or supplement thereto) and in respect of which indemnity may be
sought against any Underwriter, such Underwriter shall have the rights and
duties given to the Corporation, and the Corporation and each person so
indemnified shall have the rights and duties given to the Underwriters, by the
provisions of subsection (a) of this Section.
8. Default by One or More of the Underwriters. (a) If any Underwriter shall
default in its obligation to purchase the Notes which it has agreed to
purchase hereunder on the Closing Date, you may in your discretion arrange for
you or another party or other parties to purchase such Notes on the terms
contained herein. If within thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such Notes, then the
Corporation shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties satisfactory to you to
purchase such Notes on such terms. In the event that, within the respective
prescribed periods, you notify the Corporation that you have so arranged for
the purchase of such Notes, or the Corporation notifies you that it has so
arranged for the purchase of such Notes, you or the Corporation shall have the
right to postpone such Closing Date for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Corporation agrees to file promptly any amendments to
the Registration Statement or the Prospectus which may be required. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Notes.
(b) If, after giving effect to any arrangements for the purchase of the
Notes of a defaulting Underwriter or Underwriters by you or the Corporation as
provided in subsection (a) above, the aggregate amount of such Notes which
remains unpurchased does not exceed one-eleventh of the aggregate amount of
all the Notes to be purchased at such Closing Date, then the Corporation shall
have the right to require each non-defaulting Underwriter to purchase the
amount of Notes which such Underwriter agreed to purchase hereunder at such
Closing Date and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the amount of Notes which such
Underwriter agreed to purchase hereunder) of the Notes of such defaulting
Underwriter or Underwriters for which such arrangements have not been made;
but nothing herein shall relieve a defaulting Underwriter from liability for
its default.
(c) If, after giving effect to any arrangements for the purchase of the
Notes of a defaulting Underwriter or Underwriters by you or the Corporation as
provided in subsection (a) above, the aggregate amount of such Notes which
remains unpurchased exceeds one-eleventh of the aggregate amount of all the
Notes to be purchased at such Closing Date, or if the Corporation shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Notes of a defaulting Underwriter or Underwriters,
then this Agreement shall thereupon terminate, without liability on the part
of any non-defaulting Underwriter or the Corporation, except for the expenses
to be borne by the Corporation as provided in Section 5(h) hereof and the
indemnity agreement in Section 7 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
9. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of
the Corporation or its officers and of the several Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any
8
<PAGE>
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter or the Corporation, or any of its officers or directors or any
controlling person, and will survive delivery of and payment for the Notes.
10. Reliance on Your Acts. In all dealings hereunder, you shall act on
behalf of each of the Underwriters, and the parties hereto shall be entitled
to act and rely upon any statement, request, notice or agreement on behalf of
any Underwriter made or given by you.
11. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters, will be mailed, delivered or telecopied and confirmed to you
as the representatives in care of at , attention of or,
if sent to the Corporation, will be mailed, delivered or telecopied and
confirmed to it at 422 South Church Street, Charlotte, N.C. 28202, telephone
number (704) 382-5159, attention of Richard J. Osborne, Executive Vice
President and Chief Financial Officer; provided, however, that any notice to
an Underwriter pursuant to Section 7 hereof shall be delivered or sent by
mail or telecopy to such Underwriter at its address or telecopy number set
forth in its Underwriters' Questionnaire or telex constituting such
Questionnaire, which address or telecopy number will be supplied to the
Corporation by you. Any such communications shall take effect upon receipt
thereof.
12. Business Day. As used herein, the term "business day" shall mean any day
when the Commission's office in Washington, D.C. is open for business.
13. Successors. This Agreement shall inure to the benefit of and be binding
upon the Underwriters and the Corporation and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the parties
hereto and their respective successors and the controlling persons and the
officers and directors referred to in Section 7, and their respective
successors, heirs and legal representatives any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective successors and said controlling persons, officers
and directors and their respective successors, heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Notes from any Underwriter shall be deemed to be a successor
or assign by reason merely of such purchase.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
15. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
If the foregoing is in accordance with your understanding, kindly sign and
return to us two counterparts hereof, and upon your acceptance on behalf of
each of the Underwriters, this letter and such acceptance will become a
binding agreement between the Corporation, on the one hand, and the each of
the Underwriters, on the other hand, in accordance with its terms. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement
Among Underwriters, the form of which shall be submitted to the Corporation
for examination, but without warranty on your part as to the authority of the
signers thereof.
Very truly yours,
DUKE ENERGY CORPORATION
By: _________________________________
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
By: _________________________________
9
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
OF NOTES TO BE
UNDERWRITER PURCHASED
----------- ----------------
<S> <C>
-----
Total.......................................................... $
=====
</TABLE>
<PAGE>
Exhibit 1-D
CALCULATION AGENT AGREEMENT
THIS AGREEMENT dated as of September 1, 1998 between Duke Energy
Corporation (hereinafter called the "Issuer"), having its principal office at
422 South Church Street, Charlotte, North Carolina 28202, 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 September 1, 1998 (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.
<PAGE>
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.
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
2
<PAGE>
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.
3
<PAGE>
(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 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
4
<PAGE>
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.
(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: Global Trust
Services; in the case of the Trustee, to it at 450 West 33rd Street, New York,
New York 10001, Attention: Global Trust Services; or, in any case,
5
<PAGE>
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 ENERGY CORPORATION
By:
-------------------------------
Title:
THE CHASE MANHATTAN BANK
By:
-------------------------------
Title:
6
<PAGE>
Exhibit 4-B-81
================================================================================
DUKE ENERGY CORPORATION
TO
THE CHASE MANHATTAN BANK,
Trustee
__________
EIGHTY - SUPPLEMENTAL INDENTURE
Dated as of ,
__________
CREATING AN ISSUE OF FIRST AND REFUNDING
MORTGAGE BONDS, % SERIES DUE
__________
SUPPLEMENTAL TO
FIRST AND REFUNDING MORTGAGE
DATED AS OF DECEMBER 1, 1927
================================================================================
<PAGE>
SUPPLEMENTAL INDENTURE, bearing date as of the day of , , made
and entered into by and between Duke Energy Corporation, formerly known as Duke
Power Company, a corporation duly organized and existing under the laws of the
State of North Carolina, hereinafter called the "Corporation," 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 New York
banking corporation, 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, 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>
1990 Pollution Control 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, 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
2
<PAGE>
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 Corporation 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
Corporation to the New Jersey Company and the assumption by the Corporation of
the covenants and conditions of the New Jersey Company in the original indenture
and to enable the Corporation 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 Corporation 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 Corporation, Morgan
Guaranty Trust Company of New York, as Trustee, and Chemical Bank (now The Chase
Manhattan Bank), as successor Trustee; and
WHEREAS the Corporation 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 Corporation 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
February 1, 1968, February 15, 1987, October 1, 1987, March 1, 1990, May 15,
1990, July 1, 1991, 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,
3
<PAGE>
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 Corporation to the Trustee at or before the execution and delivery
of these presents, the receipts whereof is hereby acknowledged, the Corporation
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 Corporation 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 Corporation 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 Corporation, 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 Corporation 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
4
<PAGE>
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
Corporation, 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 Corporation 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 a 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 (S) 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 (S) 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 (S) 5.05 of the
Indenture) prior to maturity, at the option of the Corporation, 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
5
<PAGE>
indenture or through the application of moneys paid to the Trustee pursuant to
the provisions of (S) 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
Corporation. 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
Corporation in the Borough of Manhattan, The City of New York, designated from
time to time by the Board of Directors of the Corporation.
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:
6
<PAGE>
[FORM OF BOND OF THE SERIES]
[FACE SIDE OF BOND]
DUKE ENERGY CORPORATION
FIRST AND REFUNDING MORTGAGE BOND,
% Series Due
No. $
Duke Energy Corporation, a North Carolina corporation (hereinafter called
the "Corporation"), 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 Corporation 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 Corporation.
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.
7
<PAGE>
In Witness Whereof, the Corporation 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 Energy Corporation
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
8
<PAGE>
[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 Corporation, 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 Corporation succeeded to and was substituted for the New Jersey
Company), February 1, 1968, February 15, 1987, October 1, 1987, March 1, 1990,
May 15, 1990, July 1, 1991, 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 Corporation and
of the holders of the bonds, may be made with the consent of the Corporation 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
9
<PAGE>
<PAGE>
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
Corporation, 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 :
REDEMPTION REDEMPTION
YEAR PRICE YEAR PRICE
- ---- ---------- ---- ----------
% %
10
<PAGE>
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 REDEMPTION
YEAR PRICE YEAR PRICE
- ---- ---------- ---- ----------
<S> <C> <C> <C>
% %
</TABLE>
Redemption is in every case to be effected at the office or agency of the
Corporation 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 Corporation 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 Corporation and receive in exchange herefor the same aggregate
11
<PAGE>
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 Corporation 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 Corporation 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 Corporation 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 Corporation 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 Corporation 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 Medium-Term Notes 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
12
<PAGE>
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 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 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 Corporation 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 Medium-Term
Notes 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 Corporation,
pay to or upon the order of the Corporation 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 Corporation 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 Corporation.
Section 1. Whether or not the covenants on the part of the Corporation
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 1987 Pollution
Control Series A, the 1987 Pollution Control Series B, the 1987 Pollution
Control Series C, the 1990 Pollution Control Series,
13
<PAGE>
the 2027 City of Greensboro Series, the Medium-Term Notes 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 1987 Pollution Control Series A, the 1987 Pollution Control Series
B, the 1987 Pollution Control Series C, the 1990 Pollution Control Series, the
2027 City of Greensboro Series, the Medium-Term Notes 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 Corporation 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 (S) 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
1987 Pollution Control Series A, the 1987 Pollution Control Series B, the 1987
Pollution Control Series C, the 1990 Pollution Control Series, the 2027 City of
Greensboro Series, the Medium-Term Notes 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
1987 Pollution Control Series A, the 1987 Pollution Control Series B, the 1987
Pollution Control Series C, the 1990 Pollution Control Series, the 2027 City of
Greensboro Series, the Medium-Term Notes Series, the 2000 Series, the 2000
Series B, the 2005 Series, the 2003
14
<PAGE>
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 (S) 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 Corporation 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 (S) 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
Corporation 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 (S) 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 Corporation 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 (S) 10.01 of the Indenture, any such covenants and provisions may be
15
<PAGE>
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
Corporation 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.
16
<PAGE>
In Witness Whereof, Duke Energy Corporation, 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 Energy Corporation
By: ........................
Vice President
Attest:
..........................................
Assistant Secretary
Signed, sealed, executed, acknowledged
and delivered by Duke Energy Corporation,
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:
..........................................
..........................................
17
<PAGE>
State of New York )
) ss.:
County of New York )
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 The Chase Manhattan 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 , .
State of New York )
) ss.:
County of New York )
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 may 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 , .
18
<PAGE>
State of North Carolina )
ss.:
County of Mecklenburg )
Personally appeared before me and made oath that she saw
, a Vice President, and , an Assistant Secretary,
respectively, of Duke Energy Corporation, sign, attest and affix hereto the
corporate seal of said Duke Energy Corporation, 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 , .
State of North Carolina )
ss.:
County of Mecklenburg )
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 Energy Corporation, 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
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.
19
<PAGE>
EXHIBIT 4-D-1
DUKE ENERGY CORPORATION
TO
THE CHASE MANHATTAN BANK
TRUSTEE
----------------
SENIOR INDENTURE
DATED AS OF SEPTEMBER 1, 1998
----------------
<PAGE>
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310 THROUGH 318,
INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:
<TABLE>
<CAPTION>
TRUST
INDENTURE INDENTURE
ACT SECTION SECTION
----------- --------------
<C> <S> <C>
Section 310 (a)(1)............................................. 609
(a)(2)............................................. 609
(a)(3)............................................. Not Applicable
(a)(4)............................................. Not Applicable
(b) ............................................... 608
610
Section 311 (a)................................................ 613
(b) ............................................... 613
Section 312 (a) ............................................... 701
702
(b) ............................................... 702
(c) ............................................... 702
Section 313 (a) ............................................... 703
(b) ............................................... 703
(c) ............................................... 703
(d) ............................................... 703
Section 314 (a) ............................................... 704
(a)(4) ............................................ 101
1005
(b) ............................................... Not Applicable
(c)(1) ............................................ 102
(c)(2) ............................................ 102
(c)(3) ............................................ Not Applicable
(d) ............................................... Not Applicable
(e) ............................................... 102
Section 315 (a) ............................................... 601
(b) ............................................... 602
(c) ............................................... 601
(d) ............................................... 601
(e) ............................................... 514
Section 316 (a) ............................................... 101
(a)(1)(A) ......................................... 502
512
(a)(1)(B) ......................................... 513
(a)(2) ............................................ Not Applicable
(b) ............................................... 508
(c) ............................................... 104
Section 317 (a)(1) ............................................ 503
(a)(2) ............................................ 504
(b) ............................................... 1003
Section 318 (a) ............................................... 107
</TABLE>
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Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
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Parties................................................................... 1
Recitals of the Corporation............................................... 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions................................................. 1
Section 102. Compliance Certificates and Opinions........................ 5
Section 103. Form of Documents Delivered to Trustee...................... 6
Section 104. Acts of Holders; Record Dates............................... 6
Section 105. Notices, Etc., to Trustee and Corporation .................. 8
Section 106. Notice to Holders; Waiver................................... 8
Section 107. Conflict with Trust Indenture Act........................... 9
Section 108. Effect of Headings and Table of Contents.................... 9
Section 109. Successors and Assigns...................................... 9
Section 110. Separability Clause......................................... 9
Section 111. Benefits of Indenture....................................... 9
Section 112. Governing Law............................................... 9
Section 113. Legal Holidays.............................................. 9
ARTICLE TWO
Security Forms
Section 201. Forms Generally............................................. 9
Section 202. Form of Face of Security.................................... 10
Section 203. Form of Reverse of Security................................. 11
Section 204. Form of Legend for Global Securities........................ 14
Section 205. Form of Trustee's Certificate of Authentication............. 14
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series........................ 14
Section 302. Denominations............................................... 16
Section 303. Execution, Authentication, Delivery and Dating.............. 16
Section 304. Temporary Securities........................................ 18
Section 305. Registration; Registration of Transfer and Exchange......... 18
Section 306. Mutilated, Destroyed, Lost and Stolen Securities............ 19
Section 307. Payment of Interest; Interest Rights Preserved.............. 20
Section 308. Persons Deemed Owners....................................... 21
Section 309. Cancellation................................................ 21
Section 310. Computation of Interest..................................... 21
Section 311. CUSIP Numbers............................................... 21
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture..................... 21
Section 402. Application of Trust Money.................................. 22
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ARTICLE FIVE
Remedies
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Section 501. Events of Default......................................... 22
Section 502. Acceleration of Maturity; Rescission and Annulment........ 24
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee................................................... 24
Section 504. Trustee May File Proofs of Claim.......................... 25
Section 505. Trustee May Enforce Claims Without Possession of
Securities................................................ 25
Section 506. Application of Money Collected............................ 25
Section 507. Limitation on Suits....................................... 25
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest...................................... 26
Section 509. Restoration of Rights and Remedies........................ 26
Section 510. Rights and Remedies Cumulative............................ 26
Section 511. Delay or Omission Not Waiver.............................. 26
Section 512. Control by Holders........................................ 27
Section 513. Waiver of Past Defaults................................... 27
Section 514. Undertaking for Costs..................................... 27
Section 515. Waiver of Stay or Extension Laws.......................... 27
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities....................... 28
Section 602. Notice of Defaults........................................ 28
Section 603. Certain Rights of Trustee................................. 28
Section 604. Not Responsible for Recitals or Issuance of Securities.... 29
Section 605. May Hold Securities....................................... 29
Section 606. Money Held in Trust....................................... 29
Section 607. Compensation and Reimbursement............................ 29
Section 608. Conflicting Interests..................................... 30
Section 609. Corporate Trustee Required; Eligibility................... 30
Section 610. Resignation and Removal; Appointment of Successor......... 30
Section 611. Acceptance of Appointment by Successor.................... 31
Section 612. Merger, Conversion, Consolidation or Succession to
Business.................................................. 32
Section 613. Preferential Collection of Claims Against Corporation..... 32
Section 614. Appointment of Authenticating Agent....................... 32
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Corporation
Section 701. Corporation to Furnish Trustee Names and Addresses of
Holders................................................... 33
Section 702. Preservation of Information; Communications to Holders.... 33
Section 703. Reports by Trustee........................................ 34
Section 704. Reports by Corporation.................................... 34
ARTICLE EIGHT
Consolidation, Merger, Conveyance or Transfer
Section 801. Corporation May Consolidate, Etc., on Certain Terms....... 34
Section 802. Successor Substituted..................................... 35
</TABLE>
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ARTICLE NINE
Supplemental Indentures
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Section 901. Supplemental Indentures Without Consent of Holders....... 35
Section 902. Supplemental Indentures With Consent of Holders.......... 36
Section 903. Execution of Supplemental Indentures..................... 36
Section 904. Effect of Supplemental Indentures........................ 36
Section 905. Conformity with Trust Indenture Act...................... 36
Section 906. Reference in Securities to Supplemental Indentures....... 37
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest............... 37
Section 1002. Maintenance of Office or Agency.......................... 37
Section 1003. Money for Securities Payments to Be Held in Trust........ 37
Section 1004. Limitation on Liens...................................... 38
Section 1005. Statement by Officers as to Default...................... 40
Section 1006. Waiver of Certain Covenants.............................. 40
Section 1007. Calculation of Original Issue Discount................... 40
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article................................. 40
Section 1102. Election to Redeem; Notice to Trustee.................... 40
Section 1103. Selection by Trustee of Securities to Be Redeemed........ 41
Section 1104. Notice of Redemption..................................... 41
Section 1105. Securities Payable on Redemption Date.................... 42
Section 1106. Securities Redeemed in Part.............................. 42
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article................................. 43
Section 1202. Satisfaction of Sinking Fund Payments with Securities.... 43
Section 1203. Redemption of Securities for Sinking Fund................ 43
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Applicability of Article................................. 43
Section 1302. Defeasance and Discharge................................. 44
Section 1303. Covenant Defeasance...................................... 44
Section 1304. Conditions to Defeasance or Covenant Defeasance.......... 44
Section 1305. Deposited Money and Government Obligations to Be Held in
Trust; Miscellaneous Provisions.......................... 45
</TABLE>
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<PAGE>
ARTICLE FOURTEEN
Immunity of Incorporators, Stockholders, Officers and Directors
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Section 1401. Indenture and Securities Solely Corporate Obligations..... 45
Testimonium.............................................................. 46
Signatures and Seals..................................................... 46
</TABLE>
iv
<PAGE>
INDENTURE, dated as of September 1, 1998, between Duke Energy Corporation, a
corporation duly organized and existing under the laws of the State of North
Carolina (herein called the "Corporation"), having its principal office at 422
South Church Street, Charlotte, North Carolina 28202, and The Chase Manhattan
Bank, a New York banking corporation, as Trustee (herein called the
"Trustee").
RECITALS OF THE CORPORATION
The Corporation 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
Corporation, 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
(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.
<PAGE>
"Board of Directors" means either the board of directors of the Corporation
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 Corporation 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 a day
other than (i) a Saturday or a Sunday, (ii) a day on which banking
institutions in that Place of Payment are authorized or obligated by law or
executive order to remain closed or (iii) a day on which the Corporate Trust
Office of the Trustee is closed for business.
"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.
"Corporation" means the Person named as the "Corporation" 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
"Corporation" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order signed
in the name of the Corporation by its 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 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.
"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).
"Government Obligation" has the meaning specified in Section 1304.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
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<PAGE>
"Indenture" means this instrument as originally executed and as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including,
for all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and
govern this instrument and any such supplemental indenture, respectively. The
term "Indenture" shall also include the terms of particular series of
Securities established as contemplated by Section 301.
"interest," when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.
"Maturity," when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in Section
501(4).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Corporation, 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 Corporation.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Corporation, 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 the necessary amount of
money or money's worth has been theretofore deposited with the Trustee or
any Paying Agent (other than the Corporation) in trust or set aside and
segregated in trust by the Corporation (if the Corporation shall act as its
own Paying Agent) for the Holders of such 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 Corporation;
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
3
<PAGE>
other action hereunder as of any date, (A) the principal amount of an Original
Issue Discount Security which shall be deemed to be Outstanding shall be the
amount of the principal thereof which would be due and payable as of such date
upon acceleration of the Maturity thereof to such date pursuant to Section
502, (B) if, as of such date, the principal amount payable at the Stated
Maturity of a Security is not determinable, the principal amount of such
Security which shall be deemed to be Outstanding shall be the amount as
specified or determined as contemplated by Section 301, (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 Corporation or any
other obligor upon the Securities or any Affiliate of the Corporation or of
such other obligor, whether of record or beneficially, 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 Corporation or any other obligor upon the Securities or
any Affiliate of the Corporation or of such other obligor.
"Paying Agent" means any Person authorized by the Corporation to pay the
principal of or any premium or interest on any Securities on behalf of the
Corporation.
"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 Corporation upon the issuance of such Securities.
"Person" means any individual, corporation, partnership, limited liability
company or corporation, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any series,
means the place or places where the principal of and any premium and interest
on the Securities of that series are payable as specified as contemplated by
Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price," when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Responsible Officer," when used with respect to the Trustee, means 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.
4
<PAGE>
"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 installment
of principal thereof or interest thereon, means the date specified in such
Security as the date on which the principal of such Security or such
installment of principal or interest is due and payable, in the case of such
principal, as such date may be advanced or extended as provided pursuant to
the terms of such Security and this Indenture.
"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" shall mean, 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.
"Vice President," when used with respect to the Corporation 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 Corporation to the Trustee to take
any action under any provision of this Indenture, the Corporation 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
Corporation, 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
5
<PAGE>
(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 Corporation 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 Corporation
stating that the information with respect to such factual matters is in the
possession of the Corporation, 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 Corporation 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 Corporation 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
Corporation. 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
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Section 601) conclusive in favor of the Trustee and the Corporation, if made
in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the
Corporation in reliance thereon, whether or not notation of such action is
made upon such Security.
The Corporation 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 Corporation 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 Corporation 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 Corporation, 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,
7
<PAGE>
the Trustee, at the Corporation's expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
sent to the Corporation 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 Corporation.
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 Corporation 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 Corporation 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 Corporation
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 Corporation.
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.
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<PAGE>
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 Corporation shall bind
its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto, their successors hereunder
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 laws 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
9
<PAGE>
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
Corporation 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 ENERGY CORPORATION
----------------
No. $
-------- ------
CUSIP No.
-----
Duke Energy Corporation, a corporation duly organized and existing under the
laws of the State of North Carolina (herein called the "Corporation," 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 installment 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.]
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<PAGE>
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 Corporation 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 Corporation 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 or by wire transfer at such
place and to such account at a banking institution in the United States as may
be designated in writing to the Trustee at least sixteen (16) days prior to
the date for payment by the Person entitled thereto].
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee 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 Corporation has caused this instrument to be duly
executed under its corporate seal.
Dated: Duke Energy Corporation
By:
---------------------------------
Attest:
- ------------------------
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Corporation (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture, dated as of , 1998 (herein called the
"Indenture," which term shall have the meaning assigned to it in such
instrument), between the Corporation 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, limitation of rights, duties and immunities
thereunder of the Corporation, 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 Corporation, 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>
</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
11
<PAGE>
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 Corporation, 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.]
[If applicable, insert--Notwithstanding the foregoing, the Corporation 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 Corporation
(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 Corporation 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
12
<PAGE>
equal to [insert formula for determining the amount]. Upon payment of (i) the
amount of principal so declared due and payable and (ii) 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
Corporation'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
Corporation and the rights of the Holders of the Securities of all series
affected under the Indenture at any time by the Corporation and the Trustee
with the consent of the Holders of a majority in principal amount of the
Securities of all series at the time Outstanding affected thereby (voting as
one class). The Indenture contains provisions permitting the Holders of not
less than a majority in principal amount of the Securities of all series at
the time Outstanding with respect to which a default under the Indenture shall
have occurred and be continuing (voting as one class), on behalf of the
Holders of the Securities of all such series, to waive, with certain
exceptions, such past default with respect to all such series and its
consequences. The Indenture also permits the Holders of not less than a
majority in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Corporation with certain provisions of the Indenture.
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 Corporation, 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 Corporation 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 Corporation 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 Corporation may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
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<PAGE>
Prior to due presentment of this Security for registration of transfer, the
Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue, and neither the
Corporation, the Trustee nor any such agent shall be affected by notice to the
contrary.
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
The Securities
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate,
or established in one or more indentures supplemental hereto, prior to the
issuance of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906 or 1106 and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
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<PAGE>
(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 shall be determined and
the right, if any, to shorten or extend the date on which the principal of
any Securities of the series is payable and the conditions to any such
change;
(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
terms of such extension or extensions;
(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 Corporation and, if other than by a Board Resolution, the
manner in which any election by the Corporation to redeem the Securities
shall be evidenced;
(9) the obligation, if any, of the Corporation 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 Corporation 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);
15
<PAGE>
(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) 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 Corporation 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 Corporation 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 Corporation by its
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.
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Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Corporation shall bind the
Corporation, 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 Corporation may deliver Securities of any series executed by
the Corporation 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 Corporation 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 Corporation in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally
binding obligations of the Corporation 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 Corporation 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
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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
Corporation, and the Corporation 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
Corporation 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 Corporation 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 Corporation 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 Corporation 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 Corporation 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 Corporation 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 Corporation 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 Corporation in a Place of Payment for that series,
the Corporation 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 Corporation 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 Corporation, 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 Corporation or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Corporation and the Security Registrar duly executed, by
the Holder thereof or his attorney duly authorized in writing.
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No service charge shall be made for any registration of transfer or exchange
of Securities, but the Corporation 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 Corporation 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
Corporation that it is unwilling or unable to continue as Depositary for
such Global Security and a successor Depositary has not been appointed by
the Corporation within 90 days of receipt by the Corporation of such
notification, (B) at any time the Depositary ceases to be a clearing agency
registered under the Exchange Act at a time when the Depositary is required
to be so registered to act as such Depositary and no successor Depositary
shall have been appointed by the Corporation within 90 days after it became
aware of such cessation, or (C) 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 Corporation 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 Corporation
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 Corporation 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 Corporation or the Trustee that such Security has been acquired by a
bona fide purchaser, the Corporation shall execute and the
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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 Corporation in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Corporation
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 Corporation, 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 Corporation,
at its election in each case, as provided in Clause (1) or (2) below:
(1) The Corporation 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 Corporation 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 Corporation 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 Corporation of such Special Record Date
and, in the name and at the expense of the Corporation, 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 Corporation 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, if any, on which
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such Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Corporation 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
Corporation, the Trustee and any agent of the Corporation 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 Corporation, the Trustee nor any agent of the Corporation 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 Corporation may at any time deliver
to the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Corporation 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 Corporation 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 Corporation 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 Corporation, shall execute proper instruments acknowledging satisfaction
and discharge of this Indenture, when
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(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 Corporation and thereafter
repaid to the Corporation 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
Corporation,
and the Corporation, 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 (I) money in an amount, (II) Government
Obligations (as defined in Section 1304) 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 (III) a combination thereof, sufficient, in the
case of (II) or (III), 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 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 Corporation has paid or caused to be paid all other sums payable
hereunder by the Corporation; and
(3) the Corporation 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 Corporation to the Trustee under Section 607, the
obligations of the Corporation 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 Corporation 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
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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; provided, however, that if the Corporation is
permitted by the terms of the Securities of such series to defer the
payment in question, the date on which such payment is due and payable
shall be the date on which the Corporation is required to make payment
following such deferral, if such deferral has been elected pursuant to the
terms of the Securities; 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
Corporation 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 Corporation by the Trustee or to
the Corporation 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 Corporation 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 Corporation 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 Corporation a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Corporation under any applicable
federal or state law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the
Corporation 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 Corporation 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 Corporation 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 Corporation or of any
substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the
authorization of any such action by the Board of Directors; or
(7) any other Event of Default provided with respect to Securities of
that series.
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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 Corporation (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 Corporation 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 has 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 Corporation 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 Corporation 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.
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Section 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Corporation (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys
or other property payable or deliverable on any such claims and to distribute
the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section
607.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article 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 Corporation 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;
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(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
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 Corporation, 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.
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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 all series with respect to which any default under
the Indenture shall have occurred and be continuing (voting as one class) may,
on behalf of the Holders of all Securities of all such series, waive such past
default under the Indenture 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 the series affected.
Upon any such waiver, such default shall cease to exist and be deemed not to
have occurred, and any Event of Default arising therefrom shall be deemed to
have been cured and not to have occurred, 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 Corporation or the
Trustee.
Section 515. Waiver of Stay or Extension Laws.
The Corporation 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 Corporation (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.
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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 Corporation 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
Corporation, to examine the relevant books, records and premises of the
Corporation, personally or by agent or attorney; and
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(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
Corporation, 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 Corporation 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 Corporation, 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 Corporation 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 Corporation.
Section 607. Compensation and Reimbursement.
The Corporation agrees
(1) to pay to the Trustee from time to time such compensation as shall be
agreed to in writing between the Corporation 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, willful
misconduct or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence, willful misconduct
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.
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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 a 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 Corporation. 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
Corporation.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Corporation 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 Corporation 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 Corporation 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 Corporation, by a Board
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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 Corporation 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 Corporation. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Corporation 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 Corporation 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 Corporation 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 Corporation 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 Corporation, 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 Corporation or any successor Trustee, such retiring Trustee
shall duly assign, transfer and deliver to such
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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 Corporation 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 that such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any 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 Corporation.
If and when the Trustee shall be or become a creditor of the Corporation (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 Corporation (or any such other obligor).
Section 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents acceptable to the
Corporation 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 Corporation 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 that such
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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 Corporation. 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 Corporation. 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 Corporation 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 Corporation 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 Corporation
Section 701. Corporation to Furnish Trustee Names and Addresses of Holders.
The Corporation 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 Corporation 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
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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 Corporation and the Trustee that neither the Corporation 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 Corporation. The
Corporation will promptly notify the Trustee when any Securities are listed on
any stock exchange.
Section 704. Reports by Corporation.
The Corporation 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. Corporation 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 Corporation with or into any other
Person or Persons (whether or not affiliated with the Corporation), or
successive consolidations or mergers in which the Corporation 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 Corporation as an entirety or
substantially as an entirety to any other Person (whether or not affiliated
with the Corporation) lawfully entitled to acquire the same; provided,
however, and the Corporation 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 Corporation, 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 Corporation)
formed by such consolidation, or into which the Corporation shall have been
merged, or by the Person which shall have acquired such properties and assets,
and (ii) the Corporation 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.
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Section 802. Successor Substituted.
Upon any consolidation of the Corporation with, or merger of the Corporation
into, any other Person or any conveyance or transfer of the properties and
assets of the Corporation as an entirety or substantially as an entirety in
accordance with Section 801, the successor Person formed by such consolidation
or into which the Corporation 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 Corporation under this Indenture with the same
effect as if such successor Person had been named as the Corporation 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 Corporation, 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 Corporation and
the assumption by any such successor of the covenants of the Corporation
herein and in the Securities; or
(2) to add to the covenants of the Corporation 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
Corporation; 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 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.
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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 all series affected by such
supplemental indenture (voting as one class), by Act of said Holders delivered
to the Corporation and the Trustee, the Corporation, 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, or modifying in any manner the rights of the Holders
of Securities under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or reduce the amount of the principal of an Original
Issue Discount Security or any other Security which would be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 502 or change 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 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.
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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 Corporation shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Corporation, to any such supplemental indenture
may be prepared and executed by the Corporation and authenticated and
delivered by the Trustee in exchange for Outstanding Securities of such
series.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
The Corporation 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 Corporation 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 Corporation in respect of the Securities of that series
and this Indenture may be served. The Corporation 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 Corporation 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
Corporation hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Corporation 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 Corporation of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Corporation 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 Corporation 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 Corporation 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 Corporation will promptly notify the Trustee of its action or
failure so to act.
The Corporation 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
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applicable to it as a Paying Agent and (2) during the continuance of any
default by the Corporation (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 Corporation 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 Corporation 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 Corporation 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 Corporation, 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 Corporation on Company Request, or (if then held by the
Corporation) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Corporation for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the
Corporation 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 Corporation 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 Corporation.
Section 1004. Limitation on Liens.
The Corporation 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
Corporation, whether now owned or hereafter acquired, to secure any
indebtedness for borrowed money of the Corporation, 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 Corporation 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:
(1) purchase money mortgages, or other purchase money liens, pledges,
security interests or encumbrances of any kind upon property hereafter
acquired by the Corporation, 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 Corporation or
which transfers or leases all or substantially all of its properties to the
Corporation), 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 Corporation;
(2) mortgages, liens, pledges, security interests or other encumbrances
of any kind upon any property of the Corporation 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
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which the Corporation is a party; pledges or deposits to secure public or
statutory obligations of the Corporation; 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 (including,
without limitation, commodity price, currency exchange and interest rate
protection 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
Corporation, 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
Corporation, materially impair the use of such property in the operation of
the business of the Corporation or the value of such property for the
purpose of such business;
(3) First and Refunding Mortgage Bonds of the Corporation issued or to be
issued from time to time under the First and Refunding Mortgage dated as of
December 1, 1927 from the Corporation to The Chase Manhattan Bank (formerly
known 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 Corporation in connection
with a consolidation or merger of the Corporation with or into any other
Person (which may be an Affiliate of the Corporation) 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
Corporation in connection with a consolidation or merger of such Person,
with respect to which any property of the Corporation 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 Corporation (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
any part of the purchase price or cost thereof; provided that in the case
of such construction, development or improvement the mortgages, liens,
pledges, security interests or other encumbrances shall not apply to any
property theretofore owned by the Corporation 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
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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 Corporation 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 Corporation 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.
Section 1005. Statement by Officers as to Default.
The Corporation 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
Corporation 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 Corporation 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
Corporation 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 Corporation 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 not less than 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 Corporation 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 Corporation 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 Corporation 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 Corporation, the Corporation shall, at least 45 days prior to the
Redemption Date fixed by the Corporation (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
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on such redemption provided in the terms of such Securities or elsewhere in
this Indenture, or (b) pursuant to an election of the Corporation which is
subject to a condition specified in the terms of such Securities or elsewhere
in this Indenture, the Corporation 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 Corporation 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:
(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;
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(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 Corporation 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 Corporation, 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 Corporation 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
Corporation, and any notice of non-satisfaction of redemption as aforesaid,
shall be given by the Corporation or, at the Corporation's request, by the
Trustee in the name and at the expense of the Corporation. 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
Corporation 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 Corporation 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 Corporation or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Corporation and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Corporation 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.
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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 Corporation (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
Corporation 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 Corporation 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 Corporation 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
Outstanding Securities of such series upon compliance with the conditions set
forth below in this Article.
43
<PAGE>
Section 1302. Defeasance and Discharge.
The Corporation 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 Corporation
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 Corporation, 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 Corporation'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 Corporation is permitted under this Section
1302 notwithstanding the prior exercise by the Corporation 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 Corporation 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 Section 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 Corporation 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:
(1) The Corporation 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) 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, sufficient,
in the case of (B) or (C), 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, "Government Obligation" means (x) any security which is (i) a
direct obligation of the United States of America or the government which
issued the foreign currency in which such Securities are payable, for the
payment of which its full faith and credit 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 or such government which
issued the foreign currency in which such Securities are payable, the
44
<PAGE>
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government, 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 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
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 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 Corporation 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 Government Obligations to Be Held in
Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all money
and 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 Corporation 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 Corporation shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the 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 Corporation from time to time upon Company Request any
money or 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
45
<PAGE>
agreement of the Corporation 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 Corporation or
of any successor corporation, either directly or through the Corporation 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.
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 Energy Corporation
By:
---------------------------------
Vice President
Attest:
- -----------------------------
The Chase Manhattan Bank, as Trustee
By:
---------------------------------
Vice President
Attest:
- -----------------------------
46
<PAGE>
EXHIBIT 4-D-1(A)
DUKE ENERGY CORPORATION
TO
THE CHASE MANHATTAN BANK
TRUSTEE
----------------
SUPPLEMENTAL INDENTURE
DATED AS OF ,
----------------
$
SERIES % SENIOR NOTES
DUE
----------------
<PAGE>
TABLE OF CONTENTS (1)
ARTICLE 1
Series % Senior Notes
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Section 101. Establishment............................................... 1
Section 102. Definitions................................................. 1
Section 103. Payment of Principal and Interest........................... 2
Section 104. Denominations............................................... 2
Section 105. Global Securities........................................... 2
Section 106. Redemption at the Option of the Corporation................. 3
Section 107. Paying Agent................................................ 4
ARTICLE 2
Miscellaneous Provisions
Section 201. Recitals by Corporation..................................... 4
Section 202. Ratification and Incorporation of Original Indenture........ 4
Section 203. Executed in Counterparts.................................... 4
</TABLE>
Exhibit A Form of Series % Senior Note Due
Exhibit B Certificate of Authentication
- --------
(1) This Table of Contents does not constitute part of the Indenture or have
any bearing upon the interpretation of any of its terms and provisions.
i
<PAGE>
THIS SUPPLEMENTAL INDENTURE is made as of the day of , , by
and between DUKE ENERGY CORPORATION, a North Carolina corporation, having its
principal office at 422 South Church Street, Charlotte, North Carolina 28202
(the "Corporation"), and THE CHASE MANHATTAN BANK, a New York banking
corporation, as Trustee (herein called the "Trustee").
W I T N E S S E T H:
WHEREAS, the Corporation has heretofore entered into a Senior Indenture,
dated as of September 1, 1998 (the "Original Indenture"), with The Chase
Manhattan Bank, as Trustee;
WHEREAS, the Original Indenture is incorporated herein by this reference and
the Original Indenture, as may be amended and supplemented to the date hereof,
including by this Supplemental Indenture, is herein called the
"Indenture";
WHEREAS, under the Indenture, a new series of Securities may at any time be
established in accordance with the provisions of the Indenture and the terms
of such series may be described by a supplemental indenture executed by the
Corporation and the Trustee;
WHEREAS, the Corporation proposes to create under the Indenture a series of
Securities;
WHEREAS, additional Securities of other series hereafter established, except
as may be limited in the Indenture as at the time supplemented and modified,
may be issued from time to time pursuant to the Indenture as at the time
supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution and delivery of
this Supplemental Indenture and to make it a valid and binding obligation
of the Corporation have been done or performed.
NOW, THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
Series % Senior Notes
Section 101. Establishment. There is hereby established a new series of
Securities to be issued under the Indenture, to be designated as the
Corporation's Series % Senior Notes Due (the "Series Notes").
There are to be authenticated and delivered $ principal amount of
Series Notes, and no further Series Notes shall be authenticated and
delivered except as provided by Section 304, 305, 306, 906 or 1106 of the
Original Indenture. The Series Notes shall be issued in fully registered
form without coupons.
The Series Notes shall be in substantially the form set out in Exhibit A
hereto, and the form of the Trustee's Certificate of Authentication for the
Series Notes shall be in substantially the form set forth in Exhibit B
hereto.
Each Series Note shall be dated the date of authentication thereof and
shall bear interest from the date of original issuance thereof or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for.
Section 102. Definitions. The following defined terms used herein shall,
unless the context otherwise requires, have the meanings specified below.
Capitalized terms used herein for which no definition is provided herein shall
have the meanings set forth in the Original Indenture.
<PAGE>
"Interest Payment Dates" means and .
"Original Issue Date" means , .
"Regular Record Date" means, with respect to each Interest Payment Date, the
close of business on the 15th calendar day prior to such Interest Payment
Date.
"Stated Maturity" means , .
Section 103. Payment of Principal and Interest. The unpaid principal amount
of the Series Notes shall bear interest at the rate of % per annum until
paid or duly provided for, such interest to accrue from , or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for. Interest shall be paid semi-annually in arrears on each Interest
Payment Date to the Person or Persons in whose name the Series Notes are
registered on the Regular Record Date for such Interest Payment Date; provided
that interest payable at the Stated Maturity of principal or on a Redemption
Date as provided herein shall be paid to the Person to whom principal is
payable. Any such interest that is not so punctually paid or duly provided for
shall forthwith cease to be payable to the Holders on such Regular Record Date
and may either be paid to the Person or Persons in whose name the Series
Notes are registered at the close of business on a Special Record Date for the
payment of such defaulted interest to be fixed by the Trustee ("Special Record
Date"), notice whereof shall be given to Holders of the Series Notes not
less than ten (10) days prior to such Special Record Date, or be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange, if any, on which the Series Notes may be listed, and
upon such notice as may be required by any such exchange, all as more fully
provided in the Original Indenture.
Payments of interest on the Series Notes shall include interest accrued to
but excluding the respective Interest Payment Dates. Interest payments for the
Series Notes shall be computed and paid on the basis of a 360-day year of
twelve 30-day months. In the event that any date on which interest is payable
on the Series Notes is not a Business Day, then payment of the interest
payable on such date shall be made on the next succeeding day that is a
Business Day (and without any interest or payment in respect of any such
delay) with the same force and effect as if made on the date the payment was
originally payable. "Business Day" means a day other than (i) a Saturday or a
Sunday, (ii) a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to remain closed or (iii) a
day on which the Corporate Trust Office is closed for business.
Payment of principal of, premium, if any, and interest on the Series Notes
shall be made in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
Payments of principal of, premium, if any, and interest on Series Notes
represented by a Global Security shall be made by wire transfer of immediately
available funds to the Holder of such Global Security, provided that, in the
case of payments of principal and premium, if any, such Global Security is
first surrendered to the Paying Agent. If any of the Series Notes are no
longer represented by a Global Security, (i) payments of principal, premium,
if any, and interest due at the Stated Maturity or earlier redemption of such
Series Notes shall be made at the office of the Paying Agent upon surrender
of such Series Notes to the Paying Agent and (ii) payments of interest shall
be made, at the option of the Corporation, subject to such surrender where
applicable, (A) by check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register or (B) by wire transfer
at such place and to such account at a banking institution in the United
States as may be designated in writing to the Trustee at least sixteen (16)
days prior to the date for payment by the Person entitled thereto.
Section 104. Denominations. The Series Notes shall be issued in
denominations of $1,000 or any integral multiple thereof.
Section 105. Global Securities. The Series Notes shall initially be issued
in the form of one or more Global Securities registered in the name of the
Depositary (which initially shall be The Depository Trust Company) or its
nominee. Except under the limited circumstances described below, Series
Notes represented
2
<PAGE>
by such Global Security or Global Securities shall not be exchangeable for,
and shall not otherwise be issuable as, Series Notes in definitive form. The
Global Securities described above may not be transferred except by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or to a successor
Depositary or its nominee.
A Global Security shall be exchangeable for Series Notes registered in the
names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Corporation that it is unwilling or unable to continue
as a Depositary for such Global Security and no successor Depositary shall
have been appointed by the Corporation within 90 days of receipt by the
Corporation of such notification, or if at any time the Depositary ceases to
be a clearing agency registered under the Exchange Act at a time when the
Depositary is required to be so registered to act as such Depositary and no
successor Depositary shall have been appointed by the Corporation within 90
days after it becomes aware of such cessation or (ii) the Corporation in its
sole discretion determines that such Global Security shall be so exchangeable.
Any Global Security that is exchangeable pursuant to the preceding sentence
shall be exchangeable for Series Notes registered in such names as the
Depositary shall direct.
Section 106. Redemption at the Option of the Corporation. The Series Notes
shall be redeemable, in whole or from time to time in part, at the option of
the Corporation on any date (a "Redemption Date"), at a Redemption Price equal
to the greater of (i) 100% of the principal amount of the Series Notes to be
redeemed and (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon (exclusive of interest accrued to
such Redemption Date) discounted to such Redemption Date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate plus basis points, plus, in either case, accrued and unpaid
interest on the principal amount being redeemed to such Redemption Date;
provided that installments of interest on Series Notes which are due and
payable on an Interest Payment Date falling on or prior to the relevant
Redemption Date shall be payable to the holders of such Series Notes,
registered as such at the close of business on the relevant Record Date
according to their terms and the provisions of the Indenture.
"Treasury Rate" means, with respect to any Redemption Date for the Series
Notes, (i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which
is published weekly by the Board of Governors of the Federal Reserve System
and which establishes yields on actively traded United States Treasury
securities adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Comparable Treasury Issue
(if no maturity is within three months before or after the Stated Maturity,
yields for the two published maturities most closely corresponding to the
Comparable Treasury Issue shall be determined, and the Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or
does not contain such yields, the rate per annum equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue, calculated
using a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such
Redemption Date. The Treasury Rate shall be calculated on the third Business
Day preceding the Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable
to the remaining term of the Series Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Series Notes.
"Independent Investment Banker" means and any successor
firm or, if such firm is unwilling or unable to select the Comparable Treasury
Issue, an independent investment banking institution of national standing
appointed by the Trustee after consultation with the Corporation.
3
<PAGE>
"Comparable Treasury Price" means with respect to any Redemption Date for
the Series Notes (i) the average of Reference Treasury Dealer Quotations
for such Redemption Date, after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer
than such Reference Treasury Dealer Quotations, the average of all such
quotations.
"Reference Treasury Dealer" means each of , ,
, and and their respective
successors; provided, however, that if any of the foregoing shall cease to be
a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Corporation will substitute therefor another Primary
Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New
York City time, on the third Business Day preceding such Redemption Date.
Notwithstanding Section 1104 of the Original Indenture, the notice of
redemption with respect to the foregoing redemption need not set forth the
Redemption Price but only the manner of calculation thereof.
The Corporation shall notify the Trustee of the Redemption Price with
respect to the foregoing redemption promptly after the calculation thereof.
The Trustee shall not be responsible for calculating said Redemption Price.
If less than all of the Series Notes are to be redeemed, the Trustee shall
select the Series Notes or portions of Series Notes to be redeemed by such
method as the Trustee shall deem fair and appropriate. The Trustee may select
for redemption Series Notes and portions of Series Notes in amounts of
whole multiples of $1,000.
The Series Notes shall not have a sinking fund.
Section 107. Paying Agent. The Trustee shall initially serve as Paying Agent
with respect to the Series Notes, with the Place of Payment initially being
the Corporate Trust Office.
ARTICLE 2
Miscellaneous Provisions
Section 201. Recitals by Corporation. The recitals in this Supplemental
Indenture are made by the Corporation only and not by the Trustee, and all of
the provisions contained in the Original Indenture in respect of the rights,
privileges, immunities, powers and duties of the Trustee shall be applicable
in respect of the Series Notes and of this Supplemental Indenture as
fully and with like effect as if set forth herein in full.
Section 202. Ratification and Incorporation of Original Indenture. As
supplemented hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture and this Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
Section 203. Executed in Counterparts. This Supplemental Indenture may
be executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts shall together constitute but one and the same
instrument.
4
<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed
in its name and behalf by its duly authorized officers, all as of the day and
year first above written.
Duke Energy Corporation
By:
---------------------------------
Vice President
Attest:
- -----------------------------
The Chase Manhattan Bank,
as Trustee
By:
---------------------------------
Vice President
Attest:
- -----------------------------
5
<PAGE>
EXHIBIT A
FORM OF
SERIES % SENIOR NOTE
DUE
No. CUSIP NO.
DUKE ENERGY CORPORATION
SERIES % SENIOR NOTE
DUE
Principal Amount:
Regular Record Date: close of business on the 15th calendar day prior to the
relevant Interest Payment Date
Original Issue Date: ,
Stated Maturity: ,
Interest Payment Dates: and
Interest Rate: % per annum
Authorized Denomination: $1,000 or any integral multiples thereof
Duke Energy Corporation, a North Carolina corporation (the "Corporation,"
which term includes any successor corporation under the Indenture referred to
on the reverse hereof), for value received, hereby promises to pay to
, or registered assigns, the principal sum of DOLLARS
($ ) on the Stated Maturity shown above and to pay interest thereon from
the Original Issue Date shown above, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually in
arrears on each Interest Payment Date as specified above, commencing on the
Interest Payment Date next succeeding the Original Issue Date shown above and
on the Stated Maturity at the rate per annum shown above (the "Interest Rate")
until the principal hereof is paid or made available for payment and on any
overdue principal and on any overdue installment of interest. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment
Date (other than an Interest Payment Date that is the Stated Maturity or a
Redemption Date) will, as provided in the Indenture, be paid to the Person in
whose name this Series % Senior Note Due (this "Security") is
registered on the Regular Record Date as specified above next preceding such
Interest Payment Date; provided that any interest payable at Stated Maturity
or on a Redemption Date will be paid to the Person to whom principal is
payable. Except as otherwise provided in the Indenture, any such interest not
so punctually paid or duly provided for will forthwith cease to be payable to
the Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange, if any, on which the Securities of this series shall be
listed, and upon such notice as may be required by any such exchange, all as
more fully provided in the Indenture.
Payments of interest on this Security will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this
Security shall be computed and paid on the basis of a 360-day year of twelve
30-day months. In the event that any date on which interest is payable on this
Security is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and
without any interest or payment in respect of any such delay) with the same
force and effect as if made on the date the payment was originally payable.
"Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day
on which banking institutions in New York, New York are authorized or
obligated by law or executive order to remain closed or (iii) a day on which
the Corporate Trust Office is closed for business.
A-1
<PAGE>
Payment of principal of, premium, if any, and interest on the Securities of
this series shall be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. Payments of principal of, premium, if any, and interest on
Securities of this series represented by a Global Security shall be made by
wire transfer of immediately available funds to the Holder of such Global
Security, provided that, in the case of payments of principal and premium, if
any, such Global Security is first surrendered to the Paying Agent. If any of
the Securities of this series are no longer represented by a Global Security,
(i) payments of principal, premium, if any, and interest due at the Stated
Maturity or earlier redemption of such Securities shall be made at the office
of the Paying Agent upon surrender of such Securities to the Paying Agent, and
(ii) payments of interest shall be made, at the option of the Corporation,
subject to such surrender where applicable, (A) by check mailed to the address
of the Person entitled thereto as such address shall appear in the Security
Register or (B) by wire transfer at such place and to such account at a
banking institution in the United States as may be designated in writing to
the Trustee at least sixteen (16) days prior to the date for payment by the
Person entitled thereto.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Corporation has caused this instrument to be duly
executed under its corporate seal.
Dated:
Duke Energy Corporation
By:
---------------------------------
Vice President
Attest:
- -------------------------------------
Assistant Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
The Chase Manhattan Bank,
as Trustee
By:
---------------------------------
A-2
<PAGE>
(REVERSE SIDE OF SECURITY)
This Security is one of a duly authorized issue of Securities of the
Corporation (the "Securities"), issued and issuable in one or more series
under a Senior Indenture, dated as of September 1, 1998, as supplemented (the
"Indenture"), between the Corporation and The Chase Manhattan Bank, as Trustee
(the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitation
of rights, duties and immunities thereunder of the Corporation, the Trustee
and the Holders of the Securities issued thereunder and of the terms upon
which said Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof as Series %
Senior Notes Due in the aggregate principal amount of up to $ .
Capitalized terms used herein for which no definition is provided herein shall
have the meanings set forth in the Indenture.
The Securities of this series will be redeemable, in whole or from time to
time in part, at the option of the Corporation on any date (a "Redemption
Date"), at a Redemption Price equal to the greater of (i) 100% of the
principal amount of the Securities of this series to be redeemed and (ii) the
sum of the present values of the remaining scheduled payments of principal and
interest thereon (exclusive of interest accrued to such Redemption Date)
discounted to such Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate plus basis
points, plus, in either case, accrued and unpaid interest on the principal
amount being redeemed to such Redemption Date; provided that installments of
interest on Securities of this series which are due and payable on an Interest
Payment Date falling on or prior to the relevant Redemption Date shall be
payable to the Holders of such Securities, registered as such at the close of
business on the relevant record date according to their terms and the
provisions of the Indenture.
"Treasury Rate" means, with respect to any Redemption Date for the
Securities of this series, (i) the yield, under the heading which represents
the average for the immediately preceding week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Comparable
Treasury Issue (if no maturity is within three months before or after the
Stated Maturity, yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue shall be determined and the
Treasury Rate shall be interpolated or extrapolated from such yields on a
straight-line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding the Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable
to the remaining term of the Securities of this series to be redeemed that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Securities of this series.
"Independent Investment Banker" means and
any successor firm or, if such firm is unwilling or unable to select the
Comparable Treasury Issue, an independent investment banking institution of
national standing appointed by the Trustee after consultation with the
Corporation.
"Comparable Treasury Price" means with respect to any Redemption Date for
the Securities of this series (i) the average of Reference Treasury Dealer
Quotations for such Redemption Date, after excluding the highest and lowest
such Reference Treasury Dealer Quotations or (ii) if the Trustee obtains fewer
than such Reference Treasury Dealer Quotations, the average of all such
quotations.
A-3
<PAGE>
"Reference Treasury Dealer" means each of ,
, ,
and and their respective successors;
provided, however, that if any of the foregoing shall cease to be a primary
U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Corporation will substitute therefor another Primary Treasury
Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
Notice of any redemption by the Corporation will be mailed at least 30 days
but not more than 60 days before any Redemption Date to each Holder of
Securities of this series to be redeemed. If less than all the Securities of
this series are to be redeemed at the option of the Corporation, the Trustee
shall select, in such manner as it shall deem fair and appropriate, the
Securities of this series to be redeemed in whole or in part. The Trustee may
select for redemption Securities of this series and portions of Securities of
this series in amounts of whole multiples of $1,000.
If an Event of Default with respect to the Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Corporation and the rights of the Holders of the Securities of all series
affected under the Indenture at any time by the Corporation and the Trustee
with the consent of the Holders of not less than a majority in principal amount
of the Outstanding Securities of all series affected thereby (voting as one
class). The Indenture contains provisions permitting the Holders of not less
than a majority in principal amount of the Outstanding Securities of all series
with respect to which a default under the Indenture shall have occurred and be
continuing (voting as one class), on behalf of the Holders of the Securities of
all such series, to waive, with certain exceptions, such default under the
Indenture and its consequences. The Indenture also permits the Holders of not
less than a majority in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Corporation with certain provisions of the
Indenture affecting such series. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Corporation, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Corporation for such purpose, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Corporation and
the Security Registrar and duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Securities of this
series, of authorized denominations and of like tenor and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
A-4
<PAGE>
As provided in and subject to the provisions of the Indenture, the Holder of
this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with respect
to the Securities of this series, the Holders of not less than a majority in
principal amount of the Securities of this series at the time Outstanding
shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the Trustee reasonable
indemnity, and the Trustee shall not have received from the Holders of a
majority in principal amount of Securities of this series at the time
Outstanding a direction inconsistent with such request and shall have failed
to institute any such proceeding for 60 days after receipt of such notice,
request and offer of indemnity. The foregoing shall not apply to any suit
instituted by the Holder of this Security for the enforcement of any payment
of principal hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of the Securities of this series and for covenant defeasance at
any time of certain covenants in the Indenture upon compliance with certain
conditions set forth in the Indenture.
Prior to due presentment of this Security for registration of transfer, the
Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue, and neither the
Corporation, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to the limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same upon surrender of the Security
or Securities to be exchanged at the office or agency of the Corporation.
This Security shall be governed by, and construed in accordance with, the
internal laws of the State of New York.
A-5
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT - Custodian
------- -------
(Cust) (Minor)
under Uniform Gifts to Minors
Act
--------------------------
(State)
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with rights of
survivorship and not as tenants
in common
Additional abbreviations may also be used though not on the above list.
- -------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
--------
(please insert Social Security or other identifying number of assignee)
- -------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
- -------------------------------------------------------------------------------
agent to transfer said Security on the books of the Corporation, with full
power of substitution in the premises.
Dated:
-------------------------- -------------------------------------------
-------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within instrument in
every particular without alteration or
enlargement, or any change whatever.
A-6
<PAGE>
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
The Chase Manhattan Bank, as Trustee
By:
---------------------------------
Authorized Officer
B-1
<PAGE>
Exhibit 4-D-2
DUKE ENERGY CORPORATION
TO
THE CHASE MANHATTAN BANK
Trustee
____________________________________________
Subordinated Indenture
Dated as of December 1, 1997
____________________________________________
<PAGE>
.......................
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310 THROUGH 318,
INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
Section 310(a)(1) ................................... 609
(a)(2) ................................... 609
(a)(3) ................................... Not Applicable
(a)(4) ................................... Not Applicable
(b) ................................... 608
610
Section 311(a) ................................... 613
(b) ................................... 613
Section 312(a) ................................... 701
702
(b) ................................... 702
(c) ................................... 702
Section 313(a) ................................... 703
(b) ................................... 703
(c) ................................... 703
(d) ................................... 703
Section 314(a) ................................... 704
(a)(4) ................................... 101
1004
(b) ................................... Not Applicable
(c)(1) ................................... 102
(c)(2) ................................... 102
(c)(3) ................................... Not Applicable
(d) ................................... Not Applicable
(e) ................................... 102
Section 315(a) ................................... 601
(b) ................................... 602
(c) ................................... 601
(d) ................................... 601
(e) ................................... 514
Section 316(a) ................................... 101
(a)(1)(A) ................................... 502
512
(a)(1)(B) ................................... 513
(a)(2) ................................... Not Applicable
(b) ................................... 508
(c) ................................... 104
Section 317(a)(1) ................................... 503
(a)(2) ................................... 504
(b) ................................... 1003
Section 318(a) ................................... 107
- ---------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
PAGE
Parties................................................................1
Recitals of the Corporation............................................1
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions........................................ 1
Section 102. Compliance Certificates and Opinions............... 7
Section 103. Form of Documents Delivered to Trustee............. 7
Section 104. Acts of Holders; Record Dates...................... 8
Section 105. Notices, Etc., to Trustee and Corporation.......... 10
Section 106. Notice to Holders; Waiver.......................... 11
Section 107. Conflict with Trust Indenture Act.................. 11
Section 108. Effect of Headings and Table of Contents........... 11
Section 109. Successors and Assigns............................. 11
Section 110. Separability Clause................................ 11
Section 111. Benefits of Indenture.............................. 12
Section 112. Governing Law...................................... 12
Section 113. Legal Holidays..................................... 12
ARTICLE TWO
Security Forms
Section 201. Forms Generally.................................... 12
Section 202. Form of Face of Security........................... 13
Section 203. Form of Reverse of Security........................ 14
Section 204. Form of Legend for Global Securities............... 18
Section 205. Form of Trustee's Certificate of Authentication.... 18
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series............... 20
Section 302. Denominations...................................... 23
Section 303. Execution, Authentication, Delivery and Dating..... 23
Section 304. Temporary Securities............................... 25
Section 305. Registration, Registration of Transfer and
Exchange........................................... 25
Section 306. Mutilated, Destroyed, Lost and Stolen Securities... 27
Section 307. Payment of Interest; Interest Rights Preserved..... 27
Section 308. Persons Deemed Owners.............................. 29
Section 309. Cancellation....................................... 29
Section 310. Computation of Interest............................ 29
Section 311. CUSIP Numbers...................................... 29
(i)
<PAGE>
PAGE
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture............ 30
Section 402. Application of Trust Money......................... 31
ARTICLE FIVE
Remedies
Section 501. Events of Default.................................. 31
Section 502. Acceleration of Maturity; Rescission and
Annulment.......................................... 33
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee............................. 34
Section 504. Trustee May File Proofs of Claim................... 34
Section 505. Trustee May Enforce Claims Without Possession of
Securities......................................... 35
Section 506. Application of Money Collected..................... 35
Section 507. Limitation on Suits................................ 35
Section 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest.................... 36
Section 509. Restoration of Rights and Remedies................. 36
Section 510. Rights and Remedies Cumulative..................... 36
Section 511. Delay or Omission Not Waiver....................... 36
Section 512. Control By Holders................................. 37
Section 513. Waiver of Past Defaults............................ 37
Section 514. Undertaking for Costs.............................. 37
Section 515. Waiver of Stay or Extension Laws................... 38
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities................ 38
Section 602. Notice of Defaults................................. 38
Section 603. Certain Rights of Trustee.......................... 38
Section 604. Not Responsible for Recitals or Issuance of
Securities......................................... 39
Section 605. May Hold Securities................................ 40
Section 606. Money Held in Trust................................ 40
Section 607. Compensation and Reimbursement..................... 40
Section 608. Conflicting Interests.............................. 41
Section 609. Corporate Trustee Required; Eligibility............ 41
Section 610. Resignation and Removal; Appointment of Successor.. 41
Section 611. Acceptance of Appointment by Successor............. 42
Section 612. Merger, Conversion, Consolidation or Succession
to Business........................................ 43
Section 613. Preferential Collection of Claims Against
Corporation........................................ 44
Section 614. Appointment of Authenticating Agent................ 44
(ii)
<PAGE>
PAGE
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Corporation
Section 701. Corporation to Furnish Trustee Names and
Addresses of Holders............................... 46
Section 702. Preservation of Information; Communications to
Holders............................................ 46
Section 703. Reports by Trustee................................. 46
Section 704. Reports by Corporation............................. 47
ARTICLE EIGHT
Consolidation, Merger, Conveyance or Transfer
Section 801. Corporation May Consolidate, Etc., on Certain
Terms.............................................. 47
Section 802. Successor Substituted.............................. 47
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of
Holders............................................ 48
Section 902. Supplemental Indentures With Consent of Holders.... 49
Section 903. Execution of Supplemental Indentures............... 50
Section 904. Effect of Supplemental Indentures.................. 50
Section 905. Conformity with Trust Indenture Act................ 50
Section 906. Reference in Securities to Supplemental
Indentures......................................... 50
Section 907. Subordination Unimpaired........................... 50
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest......... 51
Section 1002. Maintenance of Office or Agency.................... 51
Section 1003. Money for Securities Payments to Be Held in Trust.. 51
Section 1004. Statement by Officers as to Default................ 52
Section 1005. Waiver of Certain Covenants........................ 53
Section 1006. Calculation of Original Issue Discount............. 53
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article........................... 54
Section 1102. Election to Redeem; Notice to Trustee.............. 54
Section 1103. Selection by Trustee of Securities to Be Redeemed.. 54
Section 1104. Notice of Redemption............................... 55
Section 1105. Securities Payable on Redemption Date.............. 56
Section 1106. Securities Redeemed in Part........................ 56
(iii)
<PAGE>
PAGE
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article........................... 57
Section 1202. Satisfaction of Sinking Fund Payments with
Securities......................................... 57
Section 1203. Redemption of Securities for Sinking Fund.......... 57
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Applicability of Article........................... 58
Section 1302. Defeasance and Discharge........................... 58
Section 1303. Covenant Defeasance................................ 59
Section 1304. Conditions to Defeasance or Covenant Defeasance.... 59
Section 1305. Deposited Money and Government Obligations to Be
Held in Trust; Miscellaneous Provisions............ 60
ARTICLE FOURTEEN
Subordination
Section 1401. Securities Subordinated to Senior Indebtedness..... 61
Section 1402. Disputes with Holders of Certain Senior
Indebtedness....................................... 63
Section 1403. Subrogation........................................ 63
Section 1404. Obligation of Corporation Unconditional............ 63
Section 1405. Payments on Securities Permitted................... 64
Section 1406. Effectuation of Subordination by Trustee........... 64
Section 1407. Knowledge of Trustee............................... 65
Section 1408. Trustee May Hold Senior Indebtedness............... 65
Section 1409. Rights of Holders of Senior Indebtedness Not
Impaired........................................... 65
Section 1410. Trust Moneys Not Subordinated...................... 65
Section 1411. Article Applicable to Paying Agents................ 66
Section 1412. Trustee; Compensation Not Prejudiced............... 66
ARTICLE FIFTEEN
Immunity of Incorporators, Stockholders, Officers and Directors
Section 1501. Indenture and Securities Solely Corporate
Obligations........................................ 66
Testimonium.......................................................... 67
Signatures and Seals................................................. 67
Acknowledgments...................................................... 68
(iv)
<PAGE>
INDENTURE, dated as of December 1, 1997, between Duke Energy
Corporation, a corporation duly organized and existing under the laws of the
State of North Carolina (herein called the "Corporation"), having its principal
office at 422 South Church Street, Charlotte, North Carolina 28202, and The
Chase Manhattan Bank, a New York banking corporation, as Trustee (herein called
the "Trustee").
Recitals of the Corporation
The Corporation 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
Corporation, 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>
(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
Corporation 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 Corporation 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
a day other than (i) a Saturday or a Sunday, (ii) a day on which banking
institutions in that Place of Payment are authorized or obligated by law or
executive order to remain closed or (iii) a day on which the Corporate Trust
Office of the Trustee is closed for business.
"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 Request" or "Company Order" means a written request or order
signed in the name of the Corporation by its 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 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.
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"corporation" means a corporation, association, company, joint-stock
company or business trust.
"Corporation" means the Person named as the "Corporation" 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
"Corporation" shall mean such successor Person.
"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).
"Government Obligation" has the meaning specified in Section 1304.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.
"interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Investment Company Act" means the Investment Company Act of 1940 and
any statute successor thereto, in each case as amended from time to time.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as
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therein or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 501(4).
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Corporation, 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 Corporation.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Corporation, 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 the necessary amount of
money or money's worth has been theretofore deposited with the Trustee or
any Paying Agent (other than the Corporation) in trust or set aside and
segregated in trust by the Corporation (if the Corporation shall act as its
own Paying Agent) for the Holders of such 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 Corporation;
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
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acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (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 Corporation or any other obligor upon the Securities or any
Affiliate of the Corporation or of such other obligor, whether of record or
beneficially, 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 Corporation or any other obligor upon the Securities or
any Affiliate of the Corporation or of such other obligor.
"Paying Agent" means any Person authorized by the Corporation to pay
the principal of or any premium or interest on any Securities on behalf of the
Corporation.
"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 Corporation upon the issuance of such Securities.
"Person" means any individual, corporation, partnership, limited
liability company or corporation, 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.
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"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Responsible Officer," when used with respect to the Trustee, means
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 in
respect of indebtedness 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 Corporation evidenced by notes,
debentures, bonds or other securities sold by the Corporation 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 Corporation or in effect guaranteed by the Corporation 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 by its terms 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
installment of principal thereof or interest thereon, means the date specified
in such Security as the date on which the principal of such Security or
such installment of principal or interest is due and payable, in the case of
such principal, as such date may be advanced or extended as provided pursuant to
the terms of such Security and this Indenture.
"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
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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.
"Vice President," when used with respect to the Corporation 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 Corporation to the Trustee to
take any action under any provision of this Indenture, the Corporation 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
Corporation, 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.
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Any certificate or opinion of an officer of the Corporation 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 Corporation stating that the
information with respect to such factual matters is in the possession of the
Corporation, 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 Corporation 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
Corporation 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 Corporation.
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 Corporation, if made in the manner provided in this Section.
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The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is
by a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Corporation
in reliance thereon, whether or not notation of such action is made upon such
Security.
The Corporation 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
Corporation 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 Corporation 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 Corporation, 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
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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 Corporation's expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be sent to the
Corporation 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 Corporation.
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 Corporation 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 Corporation 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
Corporation 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 Corporation.
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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 Corporation
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.
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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 laws 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
Corporation 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.
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Section 202. Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]
DUKE ENERGY CORPORATION
_____________________
No. _________ $ __________
CUSIP No. ____
Duke Energy Corporation, a corporation duly organized and existing
under the laws of North Carolina (herein called the "Corporation," 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
installment 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
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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 Corporation 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 Corporation 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 or by wire transfer at such
place and to such account at a banking institution in the United States as may
be designated in writing to the Trustee at least sixteen (16) days prior to the
date for payment by the Person entitled thereto].
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee 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 Corporation has caused this instrument to be
duly executed under its corporate seal.
DUKE ENERGY CORPORATION
By____________________________
Attest:
____________________________
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Corporation (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture, dated as of , 199 (herein called the
"Indenture," which term shall have the meaning assigned to it in such
instrument), between the Corporation 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, limitation of rights, duties and immunities thereunder of
the Corporation, 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 $__________].
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[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 Corporation, 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,
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 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 Corporation, 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 installments whose Stated Maturity is on
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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
Corporation 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
Corporation (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 Corporation 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 Corporation'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
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<PAGE>
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 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
Corporation and the rights of the Holders of the Securities of all series
affected under the Indenture at any time by the Corporation and the Trustee with
the consent of the Holders of a majority in principal amount of the Securities
of all series at the time Outstanding affected thereby (voting as one class).
The Indenture contains provisions permitting the Holders of not less than a
majority in principal amount of the Securities of all series at the time
Outstanding with respect to which a default under the Indenture shall have
occurred and be continuing (voting as one class), on behalf of the Holders of
the Securities of all such series, to waive, with certain exceptions, such past
default with respect to all such series and its consequences. The Indenture
also permits the Holders of not less than a majority in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Corporation with
certain provisions of the Indenture. 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 Corporation,
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 Corporation in any place where the principal of and any
premium and interest on this Security are payable, duly
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<PAGE>
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Corporation 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 Corporation 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 Corporation, the Trustee and any agent of the Corporation or the
Trustee may treat the Person in whose name this Security is registered as the
owner hereof for all purposes, whether or not this Security be overdue, and
neither the Corporation, the Trustee nor any such agent shall be affected by
notice to the contrary.
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:
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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
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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, 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 Corporation. 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 shall be determined and
the right, if any, to shorten or extend the date on which the principal of
any Securities of the series is payable and the conditions to any such
change;
(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
terms of such extension or extensions;
(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
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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 Corporation and, if other than by a Board Resolution, the
manner in which any election by the Corporation to redeem the Securities
shall be evidenced;
(9) the obligation, if any, of the Corporation 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 Corporation 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
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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;
(20) the subordination of the Securities of such series to any other
indebtedness of the Corporation, 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 Corporation
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 Corporation in accordance
with other procedures specified in a Company Order as contemplated by the third
paragraph of Section 303.
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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 Corporation by its
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 Corporation shall bind the
Corporation, 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 Corporation may deliver Securities of any series executed by
the Corporation 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 Corporation 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;
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<PAGE>
(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 Corporation in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Corporation 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 Corporation 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
Corporation, and the Corporation 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.
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Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Corporation 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 Corporation 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 Corporation 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 Corporation 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 Corporation 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 Corporation 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 Corporation 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 Corporation in a Place of Payment for that
series, the Corporation 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 Corporation 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 Corporation, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
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Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Corporation or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Corporation 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 Corporation 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 Corporation 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
Corporation that it is unwilling or unable to continue as Depositary for
such Global Security and a successor Depositary has not been appointed by
the Corporation within 90 days of receipt by the Corporation of such
notification, (B) if at any time the Depositary ceases to be a clearing
agency registered under the Exchange Act at a time when the Depositary is
required to be so registered to act as such Depositary and no successor
Depositary shall have been appointed by the Corporation within 90 days
after it became aware of such cessation, or (C) 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 Corporation 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.
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(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
Corporation 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 Corporation 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 Corporation or the Trustee that such Security has been acquired by a bona
fide purchaser, the Corporation 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 Corporation in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Corporation 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 Corporation, 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.
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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
Corporation, at its election in each case, as provided in Clause (1) or (2)
below:
(1) The Corporation 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 Corporation
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 Corporation 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 Corporation of
such Special Record Date and, in the name and at the expense of the
Corporation, 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 Corporation 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, if any, on which such
Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Corporation 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
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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 Corporation, the Trustee and any agent of the Corporation 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
Corporation, the Trustee nor any agent of the Corporation 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 Corporation may at any time deliver
to the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Corporation 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 Corporation 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 Corporation 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.
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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 Corporation, 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 Corporation and
thereafter repaid to the Corporation 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 Corporation,
and the Corporation, 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 (I) money in an amount, (II) Government
Obligations (as defined in Section 1304) 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 (III) a combination thereof,
sufficient, in the case of (II) or (III), 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 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;
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(2) the Corporation has paid or caused to be paid all other sums
payable hereunder by the Corporation; and
(3) the Corporation 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 Corporation to the Trustee under Section 607, the obligations
of the Corporation 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 Corporation 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; provided, however, that if the Corporation is
permitted by the terms of the Securities of such series to defer the
payment in question, the date on which such payment is due and payable
shall be the date on which the Corporation is required to make payment
following such deferral, if such deferral has been elected pursuant to the
terms of the Securities; or
(2) default in the payment of the principal of or any premium on any
Security of that series at its Maturity; or
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(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
Corporation 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 Corporation by the Trustee or to
the Corporation 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 Corporation 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 Corporation 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 Corporation a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Corporation under any applicable
Federal or State law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the
Corporation 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 Corporation 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 Corporation 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 Corporation or of any
substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the
authorization of any such action by the Board of Directors; or
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(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 Corporation (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 Corporation 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.
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Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Corporation 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 Corporation 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 Corporation (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.
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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,
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 Corporation 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;
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(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
Section 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section 307)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Corporation, 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.
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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 all series with respect to which any default under the
Indenture shall have occurred and be continuing (voting as one class) may, on
behalf of the Holders of all Securities of all such series, waive such past
default under the Indenture 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 the series affected.
Upon any such waiver, such default shall cease to exist and be deemed
not to have occurred, and any Event of Default arising therefrom shall be deemed
to have been cured and not to have occurred, 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
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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 Corporation or the
Trustee.
Section 515. Waiver of Stay or Extension Laws.
The Corporation 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 Corporation (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
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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 Corporation 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
Corporation, to examine the relevant books, records and premises of the
Corporation, 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 Corporation, 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 Corporation of Securities or the proceeds thereof.
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Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Corporation, 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 Corporation 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 Corporation.
Section 607. Compensation and Reimbursement.
The Corporation agrees
(1) to pay to the Trustee from time to time such compensation as shall
be agreed to in writing between the Corporation 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, willful
misconduct or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence, willful misconduct
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.
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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 a 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 Corporation. 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
Corporation.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Corporation or by any Holder who has been a bona
fide Holder of a Security for at least six months, or
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(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Corporation 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 Corporation 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 Corporation, 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 Corporation 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 Corporation. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Corporation 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 Corporation 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 Corporation 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
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the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Corporation 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 Corporation,
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 Corporation 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 Corporation 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
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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 Corporation.
If and when the Trustee shall be or become a creditor of the
Corporation (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 Corporation (or any such other obligor).
Section 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents acceptable
to the Corporation 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 Corporation 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 Corporation. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating
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Agent and to the Corporation. 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 Corporation 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 Corporation 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
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ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Corporation
Section 701. Corporation to Furnish Trustee Names and Addresses of Holders.
The Corporation 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 Corporation 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.
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 Corporation and the Trustee that neither the Corporation 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 Corporation. The
Corporation will promptly notify the Trustee when any Securities are listed on
any stock exchange.
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Section 704. Reports by Corporation.
The Corporation 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. Corporation 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 Corporation with or into any other
Person or Persons (whether or not affiliated with the Corporation), or
successive consolidations or mergers in which the Corporation 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 Corporation as an entirety or
substantially as an entirety to any other Person (whether or not affiliated with
the Corporation) lawfully entitled to acquire the same; provided, however, and
the Corporation 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
Corporation, 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 Corporation) formed by such
consolidation, or into which the Corporation shall have been merged, or by the
Person which shall have acquired such properties and assets, and (ii) the
Corporation 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 Corporation with, or merger of the
Corporation into, any other Person or any conveyance or transfer of the
properties and assets of the Corporation as an entirety or substantially as an
entirety in accordance with Section 801, the successor Person formed by such
consolidation or into which the Corporation 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 Corporation under this Indenture with the
same effect as if such successor Person had been named as the Corporation
herein, and thereafter the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
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ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Corporation, 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 Corporation
and the assumption by any such successor of the covenants of the
Corporation herein and in the Securities; or
(2) to add to the covenants of the Corporation 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
Corporation; 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
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or facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 611; or
(9) subject to Section 907, to make any change in Article Fourteen
that would limit or terminate the benefits available to any holder of
Senior Indebtedness under such Article; or
(10) 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 (10) 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 all series affected by such
supplemental indenture (voting as one class), by Act of said Holders delivered
to the Corporation and the Trustee, the Corporation, 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, or modifying in any manner the rights of the Holders of
Securities under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable upon
the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security or any other Security which would be due
and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502 or change 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).
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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.
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 Corporation
shall so determine, new Securities of any series so modified as to conform, in
the opinion of the Trustee and the Corporation, to any such supplemental
indenture may be prepared and executed by the Corporation 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.
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ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
The Corporation 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 Corporation 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 Corporation in respect of the Securities of that series
and this Indenture may be served. The Corporation 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 Corporation 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 Corporation
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Corporation 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 Corporation of its obligation to maintain an
office or agency in each Place of Payment for Securities of any series for such
purposes. The Corporation 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 Corporation 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 Corporation 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
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Paying Agent is the Trustee) the Corporation will promptly notify the Trustee of
its action or failure so to act.
The Corporation 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 Corporation (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 Corporation 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 Corporation 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
Corporation 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 Corporation, 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 Corporation on Company Request, or (if then held by the Corporation)
shall be discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Corporation for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Corporation 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 Corporation 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
Corporation.
Section 1004. Statement by Officers as to Default.
The Corporation 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 Corporation 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 Corporation 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 Corporation
shall be in default, specifying all such defaults and the nature and status
thereof of which they may have knowledge.
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Section 1005. Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 301 for
Securities of such series, the Corporation 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 not less than 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 Corporation 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 Corporation 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.
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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 Corporation 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 Corporation, the Corporation shall, at least 45 days prior to the
Redemption Date fixed by the Corporation (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 Corporation which is subject to a condition
specified in the terms of such Securities or elsewhere in this Indenture, the
Corporation 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 Corporation 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.
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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:
(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 Corporation 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 Corporation, unless, upon the giving of notice of such
redemption, Defeasance shall have been effected with
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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 Corporation 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 Corporation, and any notice of non-satisfaction of redemption as aforesaid,
shall be given by the Corporation or, at the Corporation's request, by the
Trustee in the name and at the expense of the Corporation. 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 Corporation 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 Corporation 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 Corporation or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Corporation and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Corporation 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
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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 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 Corporation (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
Corporation 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 Corporation 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
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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 Corporation 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 Outstanding
Securities of such series upon compliance with the conditions set forth below in
this Article.
Section 1302. Defeasance and Discharge.
The Corporation 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 Corporation
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 Corporation, 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
Corporation'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 Corporation is
permitted under this Section 1302 notwithstanding the prior exercise by the
Corporation 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.
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Section 1303. Covenant Defeasance.
The Corporation 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 Corporation 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:
(1) The Corporation 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) 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,
sufficient, in the case of (B) or (C), 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, "Government Obligation" means (x) any security which is (i)
a direct obligation of the United States of America or the government which
issued the foreign currency in which such Securities are payable, for the
payment of which its full faith and credit 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 or such government which
issued the foreign currency in which such Securities are payable, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government, 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 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
Government Obligation which is so specified and held, provided that (except
as required by law) such
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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 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 Corporation 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 Government Obligations to Be Held in Trust;
Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all
money and 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 Corporation 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 Corporation shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the 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 Corporation from time to time upon Company Request
any money or 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.
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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 Corporation 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
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
Corporation of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution, winding-up, liquidation or reorganization of
the Corporation, 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 Corporation 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 Corporation 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 Corporation 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 Corporation being subordinated to the payment of such
Securities, shall be paid or delivered by the Person making such
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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
(iii) in the event that, notwithstanding the foregoing, any payment
by, or distribution of assets of, the Corporation 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 Corporation 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 Corporation 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 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 Corporation as
reorganized or readjusted, or securities of the Corporation 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 indebtedness or guarantee of indebtedness,
as the case may be, that constitutes 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 Corporation with, or
the merger of the Corporation into, another Person or the liquidation or
dissolution of the Corporation 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
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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 Corporation to make any payment on or perform any
other obligation under Senior Indebtedness, other than any indebtedness incurred
by the Corporation or assumed or guaranteed, directly or indirectly, by the
Corporation 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 Corporation in the instrument or
instruments by which the Corporation 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 Corporation shall be disputing its
obligation to make such payment or perform such obligation and (ii) either (A)
no final judgment relating to such dispute shall have been issued against the
Corporation 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 Corporation 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 Corporation which by their express terms are subordinated
to Senior Indebtedness of the Corporation 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 Corporation applicable to
the Senior Indebtedness until all amounts owing on the Securities shall be paid
in full, and as between the Corporation, 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
Corporation 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 Corporation Unconditional.
Nothing contained in this Article or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as among the Corporation, its
creditors other than the holders of Senior Indebtedness and the Holders, the
obligation of the Corporation, 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 Corporation 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
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Article of the holders of Senior Indebtedness in respect of cash, property or
securities of the Corporation received upon the exercise of any such remedy.
Upon payment or distribution of assets of the Corporation 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 Corporation 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 Corporation, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
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 Corporation to make, or
prevent the Corporation 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.
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Section 1407. Knowledge of Trustee.
The Corporation shall give prompt written notice to the Trustee of any
fact known to the Corporation 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
Corporation, 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.
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 Corporation or by
any noncompliance by the Corporation 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 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 Corporation or subject to the
restrictions set forth in this Article and none of the Holders shall
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be obligated to pay over any such amount to the Corporation or any holder of
Senior Indebtedness or any other creditor of the Corporation.
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 Corporation 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 Corporation if it
acts as its own paying agent.
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 Corporation 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 Corporation or of any successor
corporation, either directly or through the Corporation 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.
--------------------
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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 ENERGY CORPORATION
By /s/ Robert S. Lilien
----------------------------
Robert S. Lilien
Vice President and General Counsel,
Corporate and Energy Services
Attest:
/s/ Robert T. Lucas III
- ----------------------------
Robert T. Lucas III
Assistant Secretary
THE CHASE MANHATTAN BANK,
as Trustee
By /s/ P. Kelly
----------------------------
P. Kelly
Vice President
Attest:
/s/ Gregory P. Shea
- ----------------------------
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STATE OF NORTH CAROLINA )
) ss.:
COUNTY OF MECKLENBURG )
On the 6th day of December, 1997, before me personally came Robert S.
Lilien, to me known, who, being duly sworn, did depose and say that he is Vice
President and General Counsel, Corporate and Energy Services, of DUKE ENERGY
CORPORATION, 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.
/s/ Sue C. Harrington
-------------------------------
Notary Public
[NOTARIAL SEAL]
My Commission Expires 10/3/2001
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 4th day of December, 1997, before me personally came P. Kelly,
to me known, who, being by me duly sworn, did depose and say that she is a Vice
President of THE CHASE MANHATTAN BANK, one of the corporations described in and
which executed the foregoing instrument; that she 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 she signed her name thereto by like authority.
/s/ Annabelle DeLuca
-------------------------------
Notary Public
[NOTARIAL SEAL] [Notary's Stamp]
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EXHIBIT 4-D-2(A)
DUKE ENERGY CORPORATION
TO
THE CHASE MANHATTAN BANK
TRUSTEE
----------------
SUPPLEMENTAL INDENTURE
DATED AS OF ,
----------------
$
SERIES % SUBORDINATED NOTES
DUE
----------------
<PAGE>
TABLE OF CONTENTS (1)
ARTICLE 1
Series % Subordinated Notes
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Section 101. Establishment............................................... 1
Section 102. Definitions................................................. 1
Section 103. Payment of Principal and Interest........................... 2
Section 104. Denominations............................................... 2
Section 105. Global Securities........................................... 2
Section 106. Redemption at the Option of the Corporation................. 3
Section 107. Subordination............................................... 4
Section 108. Paying Agent................................................ 4
ARTICLE 2
Miscellaneous Provisions
Section 201. Recitals by Corporation..................................... 4
Section 202. Ratification and Incorporation of Original Indenture........ 4
Section 203. Executed in Counterparts.................................... 4
</TABLE>
Exhibit A Form of Series % Subordinated Note Due
Exhibit B Certificate of Authentication
- --------
(1) This Table of Contents does not constitute part of the Indenture or have
any bearing upon the interpretation of any of its terms and provisions.
i
<PAGE>
THIS SUPPLEMENTAL INDENTURE is made as of the day of , , by
and between DUKE ENERGY CORPORATION, a North Carolina corporation, having its
principal office at 422 South Church Street, Charlotte, North Carolina 28202
(the "Corporation"), and THE CHASE MANHATTAN BANK, a New York banking
corporation, as Trustee (herein called the "Trustee").
W I T N E S S E T H:
WHEREAS, the Corporation has heretofore entered into a Subordinated
Indenture, dated as of December 1, 1997 (the "Original Indenture") with The
Chase Manhattan Bank, as Trustee;
WHEREAS, the Original Indenture is incorporated herein by this reference and
the Original Indenture, as may be amended and supplemented to the date hereof,
including by this Supplemental Indenture, is herein called the
"Indenture";
WHEREAS, under the Indenture, a new series of Securities may at any time be
established in accordance with the provisions of the Indenture and the terms
of such series may be described by a supplemental indenture executed by the
Corporation and the Trustee;
WHEREAS, the Corporation proposes to create under the Indenture a series of
Securities;
WHEREAS, additional Securities of other series hereafter established, except
as may be limited in the Indenture as at the time supplemented and modified,
may be issued from time to time pursuant to the Indenture as at the time
supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution and delivery of
this Supplemental Indenture and to make it a valid and binding obligation
of the Corporation have been done or performed.
NOW, THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
Series % Subordinated Notes
Section 101. Establishment. There is hereby established a new series of
Securities to be issued under the Indenture, to be designated as the
Corporation's Series % Subordinated Notes Due (the "Series Notes").
There are to be authenticated and delivered $ principal amount of
Series Notes, and no further Series Notes shall be authenticated and
delivered except as provided by Section 304, 305, 306, 906 or 1106 of the
Original Indenture. The Series Notes shall be issued in fully registered
form without coupons.
The Series Notes shall be in substantially the form set out in Exhibit A
hereto, and the form of the Trustee's Certificate of Authentication for the
Series Notes shall be in substantially the form set forth in Exhibit B
hereto.
Each Series Note shall be dated the date of authentication thereof and
shall bear interest from the date of original issuance thereof or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for.
Section 102. Definitions. The following defined terms used herein shall,
unless the context otherwise requires, have the meanings specified below.
Capitalized terms used herein for which no definition is provided herein shall
have the meanings set forth in the Original Indenture.
<PAGE>
"Interest Payment Dates" means and .
"Original Issue Date" means , .
"Regular Record Date" means, with respect to each Interest Payment Date, the
close of business on the 15th calendar day prior to such Interest Payment
Date.
"Stated Maturity" means , .
Section 103. Payment of Principal and Interest. The unpaid principal amount
of the Series Notes shall bear interest at the rate of % per annum until
paid or duly provided for, such interest to accrue from , or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for. Interest shall be paid semi-annually in arrears on each Interest
Payment Date to the Person or Persons in whose name the Series Notes are
registered on the Regular Record Date for such Interest Payment Date; provided
that interest payable at the Stated Maturity of principal or on a Redemption
Date as provided herein shall be paid to the Person to whom principal is
payable. Any such interest that is not so punctually paid or duly provided for
shall forthwith cease to be payable to the Holders on such Regular Record Date
and may either be paid to the Person or Persons in whose name the Series
Notes are registered at the close of business on a Special Record Date for the
payment of such defaulted interest to be fixed by the Trustee ("Special Record
Date"), notice whereof shall be given to Holders of the Series Notes not
less than ten (10) days prior to such Special Record Date, or be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange, if any, on which the Series Notes may be listed, and
upon such notice as may be required by any such exchange, all as more fully
provided in the Original Indenture.
Payments of interest on the Series Notes shall include interest accrued to
but excluding the respective Interest Payment Dates. Interest payments for the
Series Notes shall be computed and paid on the basis of a 360-day year of
twelve 30-day months. In the event that any date on which interest is payable
on the Series Notes is not a Business Day, then payment of the interest
payable on such date shall be made on the next succeeding day that is a
Business Day (and without any interest or payment in respect of any such
delay) with the same force and effect as if made on the date the payment was
originally payable. "Business Day" means a day other than (i) a Saturday or a
Sunday, (ii) a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to remain closed or (iii) a
day on which the Corporate Trust Office is closed for business.
Payment of principal of, premium, if any, and interest on the Series Notes
shall be made in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
Payments of principal of, premium, if any, and interest on Series Notes
represented by a Global Security shall be made by wire transfer of immediately
available funds to the Holder of such Global Security, provided that, in the
case of payments of principal and premium, if any, such Global Security is
first surrendered to the Paying Agent. If any of the Series Notes are no
longer represented by a Global Security, (i) payments of principal, premium,
if any, and interest due at the Stated Maturity or earlier redemption of such
Series Notes shall be made at the office of the Paying Agent upon surrender
of such Series Notes to the Paying Agent and (ii) payments of interest shall
be made, at the option of the Corporation, subject to such surrender where
applicable, (A) by check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register or (B) by wire transfer
at such place and to such account at a banking institution in the United
States as may be designated in writing to the Trustee at least sixteen (16)
days prior to the date for payment by the Person entitled thereto.
Section 104. Denominations. The Series Notes shall be issued in
denominations of $1,000 or any integral multiple thereof.
Section 105. Global Securities. The Series Notes shall initially be issued
in the form of one or more Global Securities registered in the name of the
Depositary (which initially shall be The Depository Trust Company) or its
nominee. Except under the limited circumstances described below, Series
Notes represented
2
<PAGE>
by such Global Security or Global Securities shall not be exchangeable for,
and shall not otherwise be issuable as, Series Notes in definitive form. The
Global Securities described above may not be transferred except by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or to a successor
Depositary or its nominee.
A Global Security shall be exchangeable for Series Notes registered in the
names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Corporation that it is unwilling or unable to continue
as a Depositary for such Global Security and no successor Depositary shall
have been appointed by the Corporation within 90 days of receipt by the
Corporation of such notification, or if at any time the Depositary ceases to
be a clearing agency registered under the Exchange Act at a time when the
Depositary is required to be so registered to act as such Depositary and no
successor Depositary shall have been appointed by the Corporation within 90
days after it becomes aware of such cessation or (ii) the Corporation in its
sole discretion determines that such Global Security shall be so exchangeable.
Any Global Security that is exchangeable pursuant to the preceding sentence
shall be exchangeable for Series Notes registered in such names as the
Depositary shall direct.
Section 106. Redemption at the Option of the Corporation. The Series Notes
shall be redeemable, in whole or from time to time in part, at the option of
the Corporation on any date (a "Redemption Date"), at a Redemption Price equal
to the greater of (i) 100% of the principal amount of the Series Notes to be
redeemed and (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon (exclusive of interest accrued to
such Redemption Date) discounted to such Redemption Date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate plus basis points, plus, in either case, accrued and unpaid
interest on the principal amount being redeemed to such Redemption Date;
provided that installments of interest on Series Notes which are due and
payable on an Interest Payment Date falling on or prior to the relevant
Redemption Date shall be payable to the holders of such Series Notes,
registered as such at the close of business on the relevant Record Date
according to their terms and the provisions of the Indenture.
"Treasury Rate" means, with respect to any Redemption Date for the Series
Notes, (i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published statistical
release designated "H.15(519)" or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after the Stated Maturity, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue
shall be determined, and the Treasury Rate shall be interpolated or extrapolated
from such yields on a straight-line basis, rounding to the nearest month) or
(ii) if such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date. The Treasury Rate shall be calculated
on the third Business Day preceding the Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable
to the remaining term of the Series Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Series Notes.
"Independent Investment Banker" means and any successor firm
or, if such firm is unwilling or unable to select the Comparable Treasury
Issue, an independent investment banking institution of national standing
appointed by the Trustee after consultation with the Corporation.
3
<PAGE>
"Comparable Treasury Price" means with respect to any Redemption Date for
the Series Notes (i) the average of Reference Treasury Dealer Quotations
for such Redemption Date, after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer
than such Reference Treasury Dealer Quotations, the average of all such
quotations.
"Reference Treasury Dealer" means each of , ,
, and and their respective
successors; provided, however, that if any of the foregoing shall cease to be
a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Corporation will substitute therefor another Primary
Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New
York City time, on the third Business Day preceding such Redemption Date.
Notwithstanding Section 1104 of the Original Indenture, the notice of
redemption with respect to the foregoing redemption need not set forth the
Redemption Price but only the manner of calculation thereof.
The Corporation shall notify the Trustee of the Redemption Price with
respect to the foregoing redemption promptly after the calculation thereof.
The Trustee shall not be responsible for calculating said Redemption Price.
If less than all of the Series Notes are to be redeemed, the Trustee shall
select the Series Notes or portions of Series Notes to be redeemed by such
method as the Trustee shall deem fair and appropriate. The Trustee may select
for redemption Series Notes and portions of Series Notes in amounts of
whole multiples of $1,000.
The Series Notes shall not have a sinking fund.
Section 107. Subordination. The indebtedness evidenced by the Series Notes
shall be, to the extent and in the manner set forth in the Original Indenture,
subordinate and junior in right of payment to the prior payment in full of all
Senior Indebtedness (as defined in the Original Indenture) with respect to the
Series Notes, and the Series Notes shall rank pari passu in right of
payment with each other series of Securities issued under the Indenture, with
the exception of any series of Securities which by its terms provides
otherwise.
Section 108. Paying Agent. The Trustee shall initially serve as Paying Agent
with respect to the Series Notes, with the Place of Payment initially being
the Corporate Trust Office.
ARTICLE 2
Miscellaneous Provisions
Section 201. Recitals by Corporation. The recitals in this Supplemental
Indenture are made by the Corporation only and not by the Trustee, and all of
the provisions contained in the Original Indenture in respect of the rights,
privileges, immunities, powers and duties of the Trustee shall be applicable
in respect of the Series Notes and of this Supplemental Indenture as
fully and with like effect as if set forth herein in full.
Section 202. Ratification and Incorporation of Original Indenture. As
supplemented hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture and this Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
Section 203. Executed in Counterparts. This Supplemental Indenture may
be executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts shall together constitute but one and the same
instrument.
4
<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed
in its name and behalf by its duly authorized officers, all as of the day and
year first above written.
Duke Energy Corporation
By:
---------------------------------
Vice President
Attest:
- -----------------------------
The Chase Manhattan Bank,
as Trustee
By:
---------------------------------
Vice President
Attest:
- -----------------------------
5
<PAGE>
EXHIBIT A
FORM OF
SERIES % SUBORDINATED NOTE
DUE
No. CUSIP NO.
DUKE ENERGY CORPORATION
SERIES % SUBORDINATED NOTE
DUE
Principal Amount:
Regular Record Date: close of business on the 15th calendar day prior to the
relevant Interest Payment Date
Original Issue Date: ,
Stated Maturity: ,
Interest Payment Dates: and
Interest Rate: % per annum
Authorized Denomination: $1,000 or any integral multiples thereof
Duke Energy Corporation, a North Carolina corporation (the "Corporation,"
which term includes any successor corporation under the Indenture referred to
on the reverse hereof), for value received, hereby promises to pay to
, or registered assigns, the principal sum of DOLLARS
($ ) on the Stated Maturity shown above and to pay interest thereon from
the Original Issue Date shown above, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually in
arrears on each Interest Payment Date as specified above, commencing on the
Interest Payment Date next succeeding the Original Issue Date shown above and
on the Stated Maturity at the rate per annum shown above (the "Interest Rate")
until the principal hereof is paid or made available for payment and on any
overdue principal and on any overdue installment of interest. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment
Date (other than an Interest Payment Date that is the Stated Maturity or a
Redemption Date) will, as provided in the Indenture, be paid to the Person in
whose name this Series % Subordinated Note Due (this "Security") is
registered on the Regular Record Date as specified above next preceding such
Interest Payment Date; provided that any interest payable at Stated Maturity
or on a Redemption Date will be paid to the Person to whom principal is
payable. Except as otherwise provided in the Indenture, any such interest not
so punctually paid or duly provided for will forthwith cease to be payable to
the Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange, if any, on which the Securities of this series shall be
listed, and upon such notice as may be required by any such exchange, all as
more fully provided in the Indenture.
Payments of interest on this Security will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this
Security shall be computed and paid on the basis of a 360-day year of twelve
30-day months. In the event that any date on which interest is payable on this
Security is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and
without any interest or payment in respect of any such delay) with the same
force and effect as if made on the date the payment was originally payable.
"Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day
on which banking institutions in New York, New York are authorized or
obligated by law or executive order to remain closed or (iii) a day on which
the Corporate Trust Office is closed for business.
A-1
<PAGE>
Payment of principal of, premium, if any, and interest on the Securities of
this series shall be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. Payments of principal of, premium, if any, and interest on
Securities of this series represented by a Global Security shall be made by
wire transfer of immediately available funds to the Holder of such Global
Security, provided that, in the case of payments of principal and premium, if
any, such Global Security is first surrendered to the Paying Agent. If any of
the Securities of this series are no longer represented by a Global Security,
(i) payments of principal, premium, if any, and interest due at the Stated
Maturity or earlier redemption of such Securities shall be made at the office
of the Paying Agent upon surrender of such Securities to the Paying Agent, and
(ii) payments of interest shall be made, at the option of the Corporation,
subject to such surrender where applicable, (A) by check mailed to the address
of the Person entitled thereto as such address shall appear in the Security
Register or (B) by wire transfer at such place and to such account at a
banking institution in the United States as may be designated in writing to
the Trustee at least sixteen (16) days prior to the date for payment by the
Person entitled thereto.
The indebtedness evidenced by this Security is, to the extent and in the
manner set forth in the Indenture, subordinate in right of payment to the
prior payment in full of all Senior Indebtedness (as defined in the
Indenture), and this Security is issued subject to the provisions of the
Indenture with respect thereto. Each Holder of this Security, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided, and (c) appoints the
Trustee his attorney-in-fact for any and all such purposes. Each Holder
hereof, by his acceptance hereof, waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder
of Senior Indebtedness whether now outstanding or hereafter incurred and
waives reliance by each such holder upon said provisions.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Corporation has caused this instrument to be duly
executed under its corporate seal.
Dated:
Duke Energy Corporation
By:
---------------------------------
Vice President
Attest:
- -------------------------------------
Assistant Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
The Chase Manhattan Bank,
as Trustee
By:
---------------------------------
A-2
<PAGE>
(REVERSE SIDE OF SECURITY)
This Security is one of a duly authorized issue of Securities of the
Corporation (the "Securities"), issued and issuable in one or more series
under a Subordinated Indenture, dated as of December 1, 1997, as supplemented
(the "Indenture"), between the Corporation and The Chase Manhattan Bank, as
Trustee (the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitation
of rights, duties and immunities thereunder of the Corporation, the Trustee
and the Holders of the Securities issued thereunder and of the terms upon
which said Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof as Series %
Subordinated Notes Due in the aggregate principal amount of up to
$ . Capitalized terms used herein for which no definition is provided
herein shall have the meanings set forth in the Indenture.
The Securities of this series will be redeemable, in whole or from time to
time in part, at the option of the Corporation on any date (a "Redemption
Date"), at a Redemption Price equal to the greater of (i) 100% of the
principal amount of the Securities of this series to be redeemed and (ii) the
sum of the present values of the remaining scheduled payments of principal and
interest thereon (exclusive of interest accrued to such Redemption Date)
discounted to such Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate plus basis
points, plus, in either case, accrued and unpaid interest on the principal
amount being redeemed to such Redemption Date; provided that installments of
interest on Securities of this series which are due and payable on an Interest
Payment Date falling on or prior to the relevant Redemption Date shall be
payable to the Holders of such Securities, registered as such at the close of
business on the relevant record date according to their terms and the
provisions of the Indenture.
"Treasury Rate" means, with respect to any Redemption Date for the
Securities of this series, (i) the yield, under the heading which represents
the average for the immediately preceding week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Comparable
Treasury Issue (if no maturity is within three months before or after the
Stated Maturity, yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue shall be determined, and the
Treasury Rate shall be interpolated or extrapolated from such yields on a
straight-line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding the Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable
to the remaining term of the Securities of this series to be redeemed that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Securities of this series.
"Independent Investment Banker" means and any
successor firm or, if such firm is unwilling or unable to select the
Comparable Treasury Issue, an independent investment banking institution of
national standing appointed by the Trustee after consultation with the
Corporation.
"Comparable Treasury Price" means with respect to any Redemption Date for
the Securities of this series (i) the average of Reference Treasury Dealer
Quotations for such Redemption Date, after excluding the highest and lowest
such Reference Treasury Dealer Quotations or (ii) if the Trustee obtains fewer
than such Reference Treasury Dealer Quotations, the average of all such
quotations.
A-3
<PAGE>
"Reference Treasury Dealer" means each of , ,
, and and their respective
successors; provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Corporation will substitute therefor another Primary Treasury
Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
Notice of any redemption by the Corporation will be mailed at least 30 days
but not more than 60 days before any Redemption Date to each Holder of
Securities of this series to be redeemed. If less than all the Securities of
this series are to be redeemed at the option of the Corporation, the Trustee
shall select, in such manner as it shall deem fair and appropriate, the
Securities of this series to be redeemed in whole or in part. The Trustee may
select for redemption Securities of this series and portions of Securities of
this series in amounts of whole multiples of $1,000.
If an Event of Default with respect to the Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Corporation and the rights of the Holders of the Securities of all series
affected under the Indenture at any time by the Corporation and the Trustee
with the consent of the Holders of not less than a majority in principal amount
of the Outstanding Securities of all series affected thereby (voting as one
class). The Indenture contains provisions permitting the Holders of not less
than a majority in principal amount of the Outstanding Securities of all series
with respect to which a default under the Indenture shall have occurred and be
continuing (voting as one class), on behalf of the Holders of the Securities of
all such series, to waive, with certain exceptions, such default under the
Indenture and its consequences. The Indenture also permits the Holders of not
less than a majority in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Corporation with certain provisions of the
Indenture affecting such series. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Corporation, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Corporation for such purpose, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Corporation and
the Security Registrar and duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Securities of this
series, of authorized denominations and of like tenor and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
A-4
<PAGE>
As provided in and subject to the provisions of the Indenture, the Holder of
this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with respect
to the Securities of this series, the Holders of not less than a majority in
principal amount of the Securities of this series at the time Outstanding
shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the Trustee reasonable
indemnity, and the Trustee shall not have received from the Holders of a
majority in principal amount of Securities of this series at the time
Outstanding a direction inconsistent with such request and shall have failed
to institute any such proceeding for 60 days after receipt of such notice,
request and offer of indemnity. The foregoing shall not apply to any suit
instituted by the Holder of this Security for the enforcement of any payment
of principal hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of the Securities of this series and for covenant defeasance at
any time of certain covenants in the Indenture upon compliance with certain
conditions set forth in the Indenture.
Prior to due presentment of this Security for registration of transfer, the
Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue, and neither the
Corporation, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to the limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same upon surrender of the Security
or Securities to be exchanged at the office or agency of the Corporation.
This Security shall be governed by, and construed in accordance with, the
internal laws of the State of New York.
A-5
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT - Custodian
------- ------
(Cust) (Minor)
under Uniform Gifts to Minors
Act
--------------------------
(State)
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with rights of
survivorship and not as tenants
in common
Additional abbreviations may also be used though not on the above list.
- -------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
--------
(please insert Social Security or other identifying number of assignee)
- -------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
- -------------------------------------------------------------------------------
agent to transfer said Security on the books of the Corporation, with full
power of substitution in the premises.
Dated:
-------------------------- ------------------------------------------
------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within instrument in
every particular without alteration or
enlargement, or any change whatever.
A-6
<PAGE>
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
The Chase Manhattan Bank,
as Trustee
By:
---------------------------------
Authorized Officer
B-1
<PAGE>
Exhibit 24(A)
DUKE ENERGY CORPORATION
Power of Attorney
-----------------
$1,000,000,000
aggregate principal amount of
First and Refunding Mortgage Bonds
and
Debt Securities
(Securities)
The undersigned does hereby constitute and appoint Richard J. Osborne to
act as attorney-in-fact for and in the name, place and stead of the undersigned
to execute, seal, sign and file with the Securities and Exchange Commission a
Registration Statement of Duke Energy Corporation on Form S-3 and any and all
amendments thereto for the purpose of registering under the Securities Act of
1933 the Securities, hereby granting to said attorney-in-fact, full power and
authority to do and perform all and every act and thing whatsoever requisite,
necessary or proper to be done in and about the premises, as fully to all
intents and purposes as the undersigned might or could do if personally present,
hereby ratifying and approving the acts of said attorney-in-fact.
Executed as of the 31st day of August, 1998.
-------------------------
R. B. Priory
Chairman of the Board and
Chief Executive Officer
