<PAGE>
As filed with the Securities and Exchange Commission on April 1, 1999
Post-Effective Amendment No. 2 to Registration Statement No. 333-14209
Post-Effective Amendment No. 4 to Registration Statement No. 333-02571
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
--------------
DUKE ENERGY CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
North Carolina 56-0205520
(State of Incorporation) (I.R.S. Employer Identification No.)
</TABLE>
526 South Church Street
Charlotte, North Carolina 28202
(Address of principal executive offices) (zip code)
(704) 594-6200
(Registrant's telephone number)
--------------
<TABLE>
<S> <C>
RICHARD J. OSBORNE JOHN SPUCHES
Executive Vice President and Dewey Ballantine LLP
Chief Financial Officer 1301 Avenue of the Americas
526 South Church Street New York, New York 10019
Charlotte, North Carolina 28202 Telephone No. (212) 259-7700
Telephone No. (704) 382-5159
</TABLE>
(Names, addresses and telephone numbers of agents for service)
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as determined
by market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] ___________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] _______
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
--------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed
Title of Each Class of Securities to Maximum Aggregate Amount of
be Registered Offering Price Registration Fee
- --------------------------------------------------------------------------------------------
<S> <C> <C>
First and Refunding Mortgage Bonds;
Debt Securities $1,300,000,000(1)(2) $278,000(3)
- --------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
(1) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$1,300,000,000. If any such securities are issued at an original issue
discount, then the aggregate initial offering price as so discounted shall
not exceed $1,300,000,000, 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) 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. 4 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 $300,000,000 (for which a registration fee of
$103,449 was paid) remain unsold. 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>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this Prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This Prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale of these securities is not +
+permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion Dated March 31, 1999
P R O S P E C T U S
$1,300,000,000
Duke Energy Corporation
First and Refunding Mortgage Bonds
Debt Securities
-----------
This Prospectus contains summaries of the general terms of these securities.
We will provide specific terms of these securities, and the manner in which
they are being offered, in supplements to this Prospectus. You should read this
Prospectus and any supplement carefully before you invest. We cannot sell any
of these securities unless this Prospectus is accompanied by a Prospectus
Supplement.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this Prospectus. Any representation to the contrary is
a criminal offense.
-----------
The date of this Prospectus is April , 1999.
<PAGE>
You should rely only on the information provided or incorporated by
reference in this Prospectus or any accompanying Prospectus Supplement. We have
not authorized anyone else to provide you with different information. We are
not making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this Prospectus or any
accompanying Prospectus Supplement is accurate as of any date other than the
date on the front of those documents.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
About This Prospectus...................................................... 3
Where You Can Find More Information........................................ 3
Forward-Looking Statements................................................. 4
Duke Energy Corporation.................................................... 5
Use of Proceeds............................................................ 7
Description of the New Bonds............................................... 7
Description of the New Debt Securities..................................... 11
Plan of Distribution....................................................... 20
Experts.................................................................... 21
Legal Matters.............................................................. 21
</TABLE>
2
<PAGE>
ABOUT THIS PROSPECTUS
This Prospectus is part of a Registration Statement that we filed with the
Securities and Exchange Commission ("SEC") utilizing a "shelf" registration
process. Under the shelf registration process, we may sell any combination of
the securities described in this Prospectus in one or more offerings up to a
total dollar amount of $1,300,000,000. The securities that we may offer are
First and Refunding Mortgage Bonds, Senior Notes and Subordinated Notes.
This Prospectus provides you with a general description of the securities we
may offer. Each time we sell securities, we will provide a Prospectus
Supplement that will contain specific information about the terms of that
offering. The Prospectus Supplement may also add, update or change information
contained in this Prospectus. The Registration Statement we filed with the SEC
includes exhibits that provide more details about the matters discussed in this
Prospectus. You should read this Prospectus and the related exhibits filed with
the SEC and any Prospectus Supplement together with the additional information
described under the next caption, "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with the
SEC. You may read and copy any document we file at the SEC's public reference
rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please
call the SEC's toll-free telephone number at 1-800-SEC-0330 for further
information about the operation of the public reference rooms. In addition, you
may inspect our reports and other information at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, N.Y. 10005, where certain of
our securities are listed. Our SEC filings are available on the SEC's Web site
at http://www.sec.gov. Information about us is also available on our Web site
at http://www.duke-energy.com.
The SEC allows us to "incorporate by reference" the information we file with
it, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is an
important part of this Prospectus and should be read with the same care.
Information that we file later with the SEC will automatically update and
supersede this information.
The following documents are incorporated in and made a part of this
Prospectus by reference:
. our annual report on Form 10-K for the year ended December 31, 1998;
. our current reports on Form 8-K dated January 25, 1999, February 11,
1999, March 8, 1999 and March 10, 1999;
. the definitive joint proxy statement-prospectus that we and PanEnergy
Corp filed dated March 13, 1997;
. the annual report on Form 10-K of PanEnergy Corp for the year ended
December 31, 1996; and
. the quarterly reports on Form 10-Q of PanEnergy Corp for the quarters
ended March 31, 1997 and June 30, 1997.
Any documents that we file with the SEC in the future under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 will also be
incorporated by reference into this Prospectus until we sell all of the
securities being registered.
3
<PAGE>
You may request a copy of these filings at no cost by writing or calling us
at the following address or one of the following telephone numbers:
Investor Relations Department
Duke Energy Corporation
P.O. Box 1005
Charlotte, North Carolina 28201
(704) 382-3853 or (800) 488-3853 (toll-free)
FORWARD-LOOKING STATEMENTS
This Prospectus contains or incorporates by reference statements that do not
directly or exclusively relate to historical facts. Such statements are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. You can typically identify forward-looking
statements by the use of forward-looking words, such as "may," "will," "could,"
"project," "believe," "anticipate," "expect," "estimate," "continue,"
"potential," "plan," "forecasts" and the like. These statements represent our
intentions, plans, expectations and beliefs about future events and are subject
to risks, uncertainties and other factors. Many of these factors are outside
our control and could cause actual results to differ materially from the
results expressed or implied by those forward-looking statements. These factors
include:
. state and federal legislative and regulatory initiatives that affect
cost and investment recovery, have an impact on rate structures, and
affect the speed and degree to which competition enters the electric and
natural gas industries;
. industrial, commercial and residential growth in our service territories
or the service territories of our subsidiaries;
. the weather and other natural phenomena;
. the timing and extent of changes in commodity prices and interest rates;
. changes in environmental and other laws and regulations to which we and
our subsidiaries are subject or other external factors over which we
have no control;
. the results of financing efforts;
. growth in opportunities for our business units;
. achievement of Year 2000 readiness; and
. the effect of accounting policies issued periodically by accounting
standard-setting bodies.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events referred to in this Prospectus and any accompanying Prospectus
Supplement might not occur.
4
<PAGE>
DUKE ENERGY CORPORATION
We, together with our subsidiaries, are an integrated energy and energy
services provider with the ability to offer physical delivery and management of
both electricity and natural gas throughout the United States and abroad. We,
directly or through our subsidiaries, provide these and other services through
seven business segments:
. Electric Operations
. Natural Gas Transmission
. Field Services
. Trading and Marketing
. Global Asset Development
. Other Energy Services
. Real Estate Operations
Electric Operations generates, transmits, distributes and sells electric
energy in central and western North Carolina and the western portion of
South Carolina (doing business as Duke Power or Nantahala Power and Light).
Natural Gas Transmission, through its northeast pipelines, provides
interstate transportation and storage of natural gas for customers
primarily in the Mid-Atlantic and New England states. Until the sale of the
midwest pipelines to a subsidiary of CMS Energy Corporation, which was
consummated on March 29, 1999, Natural Gas Transmission provided interstate
transportation and storage services in the midwest states.
Field Services gathers, processes, transports and markets natural gas
and produces and markets natural gas liquids. Field Services operates
gathering systems in ten states that serve major gas-producing regions in
the Rocky Mountains, Permian Basin, Mid-Continent and Gulf Coast areas.
Field Services significantly expanded its operations by the acquisition on
March 31, 1999 of the natural gas gathering, processing, fractionation and
natural gas liquids pipeline business of a unit of Union Pacific Resources.
Trading and Marketing markets natural gas, electricity and other energy-
related products across North America. We own a 60% interest in Trading and
Marketing, with Mobil Corporation owning a 40% minority interest.
Global Asset Development develops, owns and operates energy-related
facilities worldwide. Global Asset Development conducts its operations
primarily through Duke Energy Power Services, LLC and Duke Energy
International, LLC.
Other Energy Services provides engineering, consulting, construction and
integrated energy solutions worldwide, primarily through Duke Engineering &
Services, Inc., Duke/Fluor Daniel and DukeSolutions, Inc.
Real Estate Operations develops high-quality commercial and residential
real estate projects and manages forest holdings in the southeastern United
States. Real Estate Operations conducts its business through Crescent
Resources, Inc.
We completed a merger with PanEnergy Corp on June 18, 1997 which was
accounted for as a pooling of interests. PanEnergy Corp was involved in the
gathering, processing, transportation and storage of natural gas, the
production of natural gas liquids and the marketing of natural gas, electricity
and other energy-related products.
5
<PAGE>
The foregoing information about us and our subsidiaries is only a general
summary and is not intended to be comprehensive. For additional information
about us and our subsidiaries you should refer to the information described
under the caption "Where You Can Find More Information."
Our principal executive offices are located at 526 South Church Street,
Charlotte, North Carolina 28202, telephone (704) 594-6200.
Recent Financial Data
The following shows only selected consolidated financial information. You
should refer to the financial statements included in the documents incorporated
by reference in this Prospectus for additional information. See "Where You Can
Find More Information."
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1998 1997(1) 1996(1)
------- ------- -------
(Millions, except per
share data)
<S> <C> <C> <C>
Operating Revenues.................................... $17,610 $16,309 $12,302
Net Income............................................ 1,252 974 1,074
Earnings Available for Common Stock................... 1,231 902 1,030
Earnings per share of Common Stock (before
extraordinary item)
Basic............................................... $3.43 $2.51 $2.90
Dilutive............................................ 3.42 2.50 2.88
Earnings per share of Common Stock
Basic............................................... 3.41 2.51 2.85
Dilutive............................................ 3.40 2.50 2.83
</TABLE>
- --------
(1) Data reflects accounting for the combination with PanEnergy Corp on June
18, 1997 as a pooling of interests. As a result, the data gives effect to
the combination as if it had occurred as of January 1, 1996.
<TABLE>
<CAPTION>
Capitalization as of
December 31, 1998
--------------------
(Millions)
<S> <C> <C>
Common Stock Equity........................................ $ 8,150 49%
Preferred Stocks........................................... 333 2
Trust Preferred Securities................................. 919 6
Debt (including short-term debt)........................... 7,168 43
----------- --------
Total.................................................... $ 16,570 100%
=========== ========
</TABLE>
Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------
1998 1997(1) 1996(1) 1995(1) 1994(1)
---- ------- ------ ------- -------
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges........ 4.7 4.1 4.3 4.0 3.6
</TABLE>
For purposes of this ratio (a) earnings consist of income from continuing
operations before income taxes and fixed charges, and (b) fixed charges consist
of all interest deductions and the interest component of rentals.
- --------
(1) Data reflects accounting for the combination with PanEnergy Corp on June
18, 1997 as a pooling of interests. As a result, the data gives effect to
the combination as if it had occurred as of January 1, 1994.
6
<PAGE>
USE OF PROCEEDS
Unless we state otherwise in any Prospectus Supplement, we will use the net
proceeds from the sale of the First and Refunding Mortgage Bonds, Senior Notes
and Subordinated Notes being offered:
. to redeem or purchase from time to time presently outstanding securities
when we anticipate those transactions will result in an overall cost
savings;
. to repay maturing securities;
. to finance our ongoing construction program; or
. for general corporate purposes.
If we do not use the net proceeds immediately, we may temporarily invest them
in short-term interest-bearing obligations or deposit them with banks.
DESCRIPTION OF THE NEW BONDS
We will issue the First and Refunding Mortgage Bonds as one or more series
under our First and Refunding Mortgage, dated as of December 1, 1927, to The
Chase Manhattan Bank, as Trustee, as supplemented and amended. In the following
discussion, we will refer to the First and Refunding Mortgage as the
"Mortgage." We will refer to all of our First and Refunding Mortgage Bonds as
"Bonds" and the Bonds to be issued under this shelf registration as the "New
Bonds." We will refer to the Trustee under the Mortgage as the "Bond Trustee."
The Mortgage and the form of supplemental indenture to the Mortgage relating to
the New Bonds are exhibits to the Registration Statement.
The following description of the New Bonds is only a summary and is not
intended to be comprehensive. For additional information you should refer to
the Mortgage.
General
The amount of Bonds which we may issue under the Mortgage is unlimited. Our
Board of Directors will determine the terms of each series of the New Bonds,
including denominations, maturity and interest rate and whether the New Bonds
will have redemption or sinking fund provisions.
Unless we state otherwise in the applicable Prospectus Supplement, we will
issue the New Bonds only in fully registered form, without coupons. There will
be no service charge for any transfers and exchanges of the New Bonds. We may,
however, require payment to cover any stamp tax or other governmental charge
payable in connection with any transfer or exchange. Transfers and exchanges of
the New Bonds may be made at The Chase Manhattan Bank, 55 Water Street, New
York, New York 10041.
The New Bonds will be issuable in denominations of $1,000 and multiples of
$1,000, unless we state otherwise in any Prospectus Supplement. New Bonds will
be exchangeable for an equivalent principal amount of New Bonds of other
authorized denominations of the same series.
The applicable Prospectus Supplement will describe the maturity, interest
and payment terms of the New Bonds and any relevant redemption provisions.
Security
The Mortgage creates a continuing lien to secure the payment of principal
and interest on the Bonds. All the Bonds are equally and ratably secured
without preference, priority or distinction. The lien of the Mortgage covers
substantially all of our properties, real, personal and mixed, and our
franchises, including properties acquired after the date of the Mortgage, with
certain exceptions. Those exceptions include cash, accounts
7
<PAGE>
receivable, inventories of materials and supplies, merchandise held for sale,
securities that we hold, certain after-acquired property not useful in our
electric business, certain after-acquired franchises and certain after-acquired
non-electric properties.
The lien of the Mortgage is subject to certain permitted liens and to liens
that exist upon properties that we acquired after we entered into the Mortgage
to the extent of the amounts of prior lien bonds secured by those properties
(not, however, exceeding 75% of the cost or value of those properties) and
additions to those properties. "Prior lien bonds" are bonds or other
indebtedness that are secured at the time of acquisition by a lien upon
property that we acquire after the date of the Mortgage that becomes subject to
the lien of the Mortgage.
Issuance of Additional Bonds
If we satisfy the conditions in the Mortgage, the Bond Trustee may
authenticate and deliver additional Bonds in an aggregate principal amount not
exceeding:
. the amount of cash that we have deposited with the Bond Trustee for that
purpose;
. the amount of previously authenticated and delivered Bonds or refundable
prior lien bonds that have been or are to be retired which, with certain
exceptions, we have deposited with the Bond Trustee for that purpose; or
. 66 2/3% of the aggregate of the net amounts of additional property
(electric) certified to the Bond Trustee after February 18, 1949.
The Bond Trustee may not authenticate and deliver any additional Bonds under
the Mortgage, other than certain types of refunding Bonds, unless our available
net earnings for twelve consecutive calendar months within the immediately
preceding fifteen calendar months have been at least twice the amount of the
annual interest charges on all Bonds outstanding under the Mortgage, including
the Bonds proposed to be issued, and on all outstanding prior lien bonds that
the Bond Trustee does not hold under the Mortgage.
We may not apply to the Bond Trustee to authenticate and deliver any Bonds
(1) in an aggregate principal amount exceeding $26,000,000 on the basis of
additional property (electric) that we 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. We may not certify any additional property
(electric) which is subject to the lien of any prior lien bonds for the purpose
of establishing those prior lien bonds as refundable if the aggregate principal
amount of those prior lien bonds exceeds 66 2/3% of the net amount of the
additional property that is subject to the lien of such prior lien bonds.
Release Provisions
The Mortgage permits us to dispose of certain property and to take other
actions without the Bond Trustee releasing that property. The Mortgage also
permits the release of mortgaged property if we deposit cash or other
consideration equal to the value of the mortgaged property to be released. In
certain events and within certain limitations, the Bond Trustee is required to
pay out cash that the Bond Trustee receives--other than for the Replacement
Fund or as the basis for issuing Bonds--upon our application.
We may withdraw cash that we deposited with the Bond Trustee as the basis
for issuing Bonds in an amount equal to the principal amount of any Bonds that
we are entitled to have authenticated and delivered 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.
Replacement Fund
The Mortgage requires us to deposit with the Bond Trustee annually, for the
Replacement Fund established under the Mortgage, the sum of the "replacement
requirements" for all years beginning with 1949 and ending with the last
calendar year preceding the deposit date, less certain deductions. Those
deductions are
8
<PAGE>
(1) the aggregate original cost of all fixed property (electric) retired during
that time period, not exceeding the aggregate of the gross amounts of
additional property (electric) that we acquired or constructed during the same
period, and (2) the aggregate amount of cash that we deposited with the Bond
Trustee up to that time, or that we would have been required to deposit except
for permitted reductions, under the Replacement Fund.
The "replacement requirement" for any year is 2 1/2% of the average "amount
of depreciable fixed property" (electric) owned by us at the beginning and end
of that year, not exceeding, however, the amount we are permitted to charge as
an operating expense for depreciation or retirement 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) that we acquired
or constructed from January 1, 1949 to the date as of which such amount is
determined exceeds the original cost of all of our depreciable fixed property
(electric) retired during that period or released from the lien of the
Mortgage.
We may reduce the amount of cash at any time required to be deposited in the
Replacement Fund and may withdraw any cash that we previously deposited that is
held in the Replacement Fund (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, deposited with the Bond Trustee and on the basis
of which we would otherwise have been entitled to have additional Bonds
authenticated and delivered and (2) in an amount equal to 150% of the principal
amount of Bonds which we would otherwise be entitled to have authenticated and
delivered on the basis of additional property (electric).
Upon our application, the Bond Trustee will apply cash that we deposited in
the Replacement Fund and have not previously withdrawn to the payment, purchase
or redemption of Bonds issued under the Mortgage or to the purchase of
refundable prior lien bonds.
We have never deposited any cash with the Bond Trustee for the Replacement
Fund. If we deposit any cash in the future, we have agreed not to apply that
cash to the redemption of the New Bonds as long as any Bonds now outstanding
remain outstanding.
Amendments of the Mortgage
We may amend the Mortgage with the consent of the holders of 66 2/3% of the
Bonds, except that no such amendment may:
. affect the terms of payment of principal at maturity or of interest or
premium on any Bond;
. affect the rights of Bondholders to sue to enforce any such payment at
maturity; or
. reduce the percentage of Bonds required to consent to an amendment.
No amendment may affect the rights under the Mortgage of the holders of less
than all of the series of Bonds outstanding unless the holders of 66 2/3% of
the Bonds of each series affected consent to the amendment.
The covenants included in the supplemental indenture for any series of New
Bonds will be solely for the benefit of the holders of those New Bonds. We may
modify any such covenant only with the consent of the holders of 66 2/3% of
those New Bonds outstanding, without the consent of Bondholders of any other
series.
9
<PAGE>
Events of Default
The Bond Trustee may, and at the written request of the holders of a
majority of the outstanding Bonds will, declare the principal of all
outstanding Bonds due when any event of default under the Mortgage occurs. The
holders of a majority of the outstanding Bonds may, however, waive the default
and rescind the declaration if we cure the default.
Events of default under the Mortgage include:
. default in the payment of principal;
. default for 60 days in the payment of interest;
. default in the performance of any other covenant in the Mortgage
continuing for 60 days after the Bond Trustee or the holders of not less
than 10% in principal amount of the Bonds then outstanding give notice
of the default; and
. certain bankruptcy or insolvency events with respect to the Corporation.
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 those Bondholders have
offered to the Bond Trustee security or indemnity satisfactory to it against
the cost, expenses and liabilities to be incurred. The holders of a majority of
the Bonds outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the Bond Trustee, or the exercise of any
trust or power of the Bond Trustee. The Bond Trustee will not be liable for any
action that it takes or omits to take in good faith in accordance with any such
direction.
We provide an officers' certificate each year to the Bond Trustee stating
whether we have complied with the covenants of the Mortgage.
Concerning the Bond Trustee
The Chase Manhattan Bank is the Bond Trustee. We and certain of our
affiliates maintain deposit accounts and banking relationships with The Chase
Manhattan Bank.
10
<PAGE>
DESCRIPTION OF THE NEW DEBT SECURITIES
The New Debt Securities will be either senior unsecured debt securities or
subordinated unsecured debt securities. In the following discussion, we
sometimes refer to the senior unsecured debt securities as "Senior Notes" and
to the subordinated unsecured debt securities as "Subordinated Notes."
We will issue New Debt Securities that are Senior Notes in one or more
series under our Senior Indenture dated as of September 1, 1998 between us and
The Chase Manhattan Bank, as Trustee, as supplemented and amended. We will
issue New Debt Securities that are Subordinated Notes in one or more series
under our Subordinated Indenture dated as of December 1, 1997 between us and
The Chase Manhattan Bank, as Trustee, as supplemented and amended. Each of the
Senior Indenture and the Subordinated Indenture is, as applicable, sometimes
called the "Indenture." The Senior Indenture and the Subordinated Indenture,
together, are sometimes called the "Indentures." Each of the Trustee under the
Senior Indenture and the Trustee under the Subordinated Indenture is, as
applicable, called the "Trustee." The Indentures and the forms of supplemental
indenture to the Indentures are exhibits to the Registration Statement.
The following description of the Debt Securities is only a summary and is
not intended to be comprehensive. For additional information you should refer
to the applicable Indenture.
General
Neither Indenture limits the amount of Debt Securities that we may issue
under it. We may issue Debt Securities from time to time under each Indenture
in one or more series by entering into supplemental indentures or by our Board
of Directors or a duly authorized committee authorizing the issuance. The Debt
Securities of a series need not be issued at the same time, bear interest at
the same rate or mature on the same date.
The Debt Securities are unsecured obligations. The Bonds are effectively
senior to the Debt Securities to the extent of the value of the properties
securing them. As of December 31, 1998, we had approximately $2,265,000,000 of
Bonds outstanding.
We conduct our non-electric operations, and certain of our electric
operations outside our service area in the Carolinas, through subsidiaries.
Accordingly, our ability to meet our obligations under the Debt Securities is
partly dependent on the earnings and cash flows of those subsidiaries and the
ability of those subsidiaries to pay dividends or to advance or repay funds to
us. In addition, the rights that we and our creditors would have to
participate in the assets of any such subsidiary upon the subsidiary's
liquidation or recapitalization will be subject to the prior claims of the
subsidiary's creditors. We anticipate that certain of our subsidiaries will
incur substantial amounts of debt in the expansion of their businesses.
Neither Indenture protects the holders of Debt Securities if we engage in a
highly leveraged transaction.
Provisions Applicable to Particular Series
The Prospectus Supplement for a particular series of Debt Securities will
specify the terms of that series, including, if applicable:
. the title of the series;
. any limit on the principal amount of the Debt Securities of the series;
. the date or dates on which principal is payable or the method for
determining such date or dates, and any right that we have to change the
date on which principal is payable;
. the interest rate or rates, if any, or the method for determining such
rate or rates, and the date or dates from which interest will accrue;
11
<PAGE>
. any interest payment dates and the regular record date, if any;
. whether we may extend the interest payment periods and, if so, the terms
of the extension;
. the place or places where payments will be made, if other than the
principal corporate trust office of the Trustee;
. any obligation that we have to redeem the Debt Securities through a
sinking fund or purchase the Debt Securities through a purchase fund or
at the option of the holder;
. whether we have the option to redeem the Debt Securities and, if so, the
terms of our redemption option;
. whether the provisions described under the caption "Defeasance and
Covenant Defeasance" will not apply to the Debt Securities;
. the currency in which payments will be made if other than U.S. dollars,
and the manner of determining the equivalent of those amounts in U.S.
dollars;
. if payments may be made, at our election or at the holder's election, in
a currency other than that in which the Debt Securities are stated to be
payable, then the currency in which those payments may be made, the
terms and conditions of the election and the manner of determining those
amounts;
. the portion of the principal payable upon acceleration of maturity, if
other than the entire principal;
. whether the Debt Securities will be issuable as global securities and,
if so, the depositary;
. any changes in the events of default or covenants with respect to the
Debt Securities;
. any index or formula used for determining principal, premium or
interest;
. if the principal payable on the maturity date will not be determinable
on one or more dates prior to the maturity date, the amount which will
be deemed to be such principal amount (or the manner of determining it);
. the subordination of the Debt Securities to any other of our
indebtedness, including other series of Subordinated Notes (for series
of Subordinated Notes only); and
. any other terms.
Unless we state otherwise in any Prospectus Supplement, we will issue the
New Debt Securities only in fully registered form, without coupons. There will
be no service charge for any registration of transfer or exchange of the Debt
Securities. We may, however, require payment to cover any tax or other
governmental charge payable in connection with any transfer or exchange.
Transfers and exchanges of the Debt Securities may be made at The Chase
Manhattan Bank, 55 Water Street, New York, New York 10041.
The New Debt Securities will be issuable in denominations of $1,000 and any
multiples of $1,000, unless we state otherwise in any Prospectus Supplement.
We may offer and sell the New Debt Securities, including original issue
discount Debt Securities, at a substantial discount below their principal
amount. The applicable Prospectus Supplement will describe special United
States federal income tax and any other considerations applicable to those
securities. In addition, the applicable Prospectus Supplement may describe
certain special United States federal income tax or other considerations, if
any, applicable to any New Debt Securities which are denominated in a currency
other than U.S. dollars.
12
<PAGE>
Global Securities
We may issue some or all of the Debt Securities of any series as Global
Securities. We will register each Global Security in the name of a depositary
identified in the applicable Prospectus Supplement. The Global Securities will
be deposited with the depositary or nominee or custodian for the depositary.
As long as the depositary or its nominee is the registered holder of a
Global Security, that person will be considered the sole owner and holder of
the Global Security and the Debt Securities it represents for all purposes.
Except in limited circumstances, owners of a beneficial interest in a Global
Security:
. may not have the Global Security or any Debt Securities it represents
registered in their names;
. may not receive or be entitled to receive physical delivery of
certificated Debt Securities in exchange for the Global Security; and
. will not be considered the owners or holders of the Global Security or
any Debt Securities it represents for any purposes under the Debt
Securities or the applicable Indenture.
We will make all payments of principal and any premium and interest on a
Global Security to the depositary or its nominee as the holder of the Global
Security. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. These laws
may impair the ability to transfer beneficial interests in a Global Security.
Ownership of beneficial interests in a Global Security will be limited to
institutions having accounts with the depositary or its nominee, which are
called "participants" in this discussion, and to persons that hold beneficial
interests through participants. When a Global Security is issued, the
depositary will credit on its book entry, registration and transfer system the
principal amounts of Debt Securities the Global Security represents to the
accounts of its participants. Ownership of beneficial interests in a Global
Security will be shown only on, and the transfer of those ownership interests
will be effected only through, records maintained by:
. the depositary, with respect to participants' interests; and
. any participant, with respect to interests the participant holds on behalf
of other persons.
Payments participants make to owners of beneficial interests held through
those participants will be the responsibility of those participants. The
depositary may from time to time adopt various policies and procedures
governing payments, transfers, exchanges and other matters relating to
beneficial interests in a Global Security. None of the following will have any
responsibility or liability for any aspect of the depositary's or any
participant's records relating to beneficial interests in a Global Security,
for payments made on account of such beneficial interests or for maintaining,
supervising or reviewing any records relating to those beneficial interests:
. the Corporation;
. the Trustee under the Senior Indenture;
. the Trustee under the Subordinated Indenture; or
. an agent of any of the above.
13
<PAGE>
Redemption
Any provisions relating to the redemption of Debt Securities will be set
forth in the applicable Prospectus Supplement. Unless we state otherwise in any
Prospectus Supplement, we may redeem Debt Securities only upon notice mailed at
least 30 but not more than 60 days before the date fixed for redemption. Unless
we state otherwise in the applicable Prospectus Supplement, that notice may
state that the redemption will be conditional upon the Trustee, or the
applicable Paying Agent, receiving sufficient funds to pay the principal,
premium and interest on those Debt Securities on the date fixed for redemption
and that if the Trustee or the applicable Paying Agent does not receive those
funds, the redemption notice will not apply, and we will not be required to
redeem those Debt Securities.
We will not be required to:
. issue, register the transfer of, or exchange any Debt Securities of a
series during the period beginning 15 days before the date the notice is
mailed identifying the Debt Securities of that series that have been
selected for redemption; or
. register the transfer of, or exchange any Debt Security of that series
selected for redemption except the unredeemed portion of a Debt Security
being partially redeemed.
Consolidation, Merger, Conveyance or Transfer
Each Indenture provides that we may consolidate or merge with or into, or
convey or transfer all or substantially all of our properties and assets to,
another corporation or other entity. Any successor must, however, assume our
obligations under that Indenture and the Debt Securities issued under it, and
we must deliver an officers' certificate and an opinion of counsel to the
Trustee that affirm compliance with all conditions in the Indenture relating to
the transaction. When those conditions are satisfied, the successor will
succeed to and be substituted for us under the Indenture, and we will be
relieved of our obligations under that Indenture and the Debt Securities issued
under it.
Modification; Waiver
We may amend or modify either Indenture with the consent of the holders of a
majority of the outstanding Debt Securities of all series of Debt Securities
issued under the Indenture that are affected by the amendment or modification,
voting as one class. The consent of the holder of each outstanding Debt
Security affected is, however, required to:
. change the maturity date of the principal, or any installment of
principal or interest on that Debt Security;
. reduce the principal amount, the interest rate or any premium payable
upon redemption on that Debt Security;
. reduce the amount of principal due and payable upon acceleration of
maturity;
. change the currency of payment of principal, premium or interest on that
Debt Security;
. impair the right to institute suit to enforce any such payment on or
after the maturity date or redemption date;
. reduce the percentage in principal amount of Debt Securities of any
series required to amend or modify the applicable Indenture, to waive
compliance with certain restrictive provisions of the applicable
Indenture or to waive certain defaults; or
. with certain exceptions, modify the provisions of the applicable
Indenture governing amendments of the Indenture or governing waiver of
covenants or past defaults.
In addition, we may supplement either Indenture to create new series of Debt
Securities and for other purposes, without the consent of any holders of Debt
Securities issued under that Indenture.
14
<PAGE>
The holders of a majority of the outstanding Debt Securities of any series
may waive, for that series, our compliance with certain restrictive provisions
of the Indenture under which those Debt Securities were issued. The holders of
a majority of the outstanding Debt Securities of all series under an Indenture
with respect to which a default has occurred and is continuing, all holders of
those series voting as one class, may waive that default for all those series,
except a default in the payment of principal or any premium or interest on any
Debt Security or a default with respect to a covenant or provision which cannot
be amended or modified without the consent of the holder of each outstanding
Debt Security of the series affected.
We may not amend the Subordinated Indenture to change the subordination of
any outstanding Subordinated Notes without the consent of each holder of Senior
Indebtedness that the amendment would adversely affect.
If certain payments on a series of Debt Securities are insured by a
financial guaranty insurance policy or other policy, terms other than those
that are described in the preceding two paragraphs may apply to that series.
Events of Default
The following are Events of Default under each Indenture with respect to any
series, unless we state otherwise in any Prospectus Supplement:
. failure to pay principal of or any premium on any Debt Security of that
series when due;
. failure to pay any interest on any Debt Security of that series, when
due, that continues for 60 days; for this purpose, the date on which
interest is due is the date on which we are required to make payment
following any deferral of interest payments by us under the terms of
Debt Securities that permit such deferrals;
. failure to make any sinking fund payment when required for any Debt
Security of that series that continues for 60 days;
. failure to perform any covenant in the applicable Indenture (other than
a covenant expressly included solely for the benefit of other series)
that continues for 90 days after the Trustee or the holders of at least
33% of the outstanding Debt Securities of that series give us written
notice of the default; and
. certain bankruptcy, insolvency or reorganization events with respect to
the Corporation.
In the case of the fourth Event of Default listed above, the Trustee may extend
the grace period. In addition, if holders of a particular series have given a
notice of default, then holders of at least the same percentage of Debt
Securities of that series, together with the Trustee, may also extend the grace
period. The grace period will be automatically extended if we have initiated
and are diligently pursuing corrective action.
Additional Events of Default may be established for a particular series and,
if established, will be described in the applicable Prospectus Supplement.
If an Event of Default with respect to Debt Securities of a series occurs
and is continuing, then the Trustee or the holders of at least 33% of the
outstanding Debt Securities of that series may declare the principal amount of
all Debt Securities of that series to be immediately due and payable. However,
that Event of Default will be deemed waived at any time after the declaration
but before a judgment for payment of the money due has been obtained if:
. we have paid or deposited with the Trustee all overdue interest, the
principal and any premium due otherwise than by the declaration and any
interest on such amounts, and any interest on overdue interest, to the
extent legally permitted, in each case with respect to that series, and
all amounts due to the Trustee under the applicable Indenture; and
. all Events of Default with respect to that series, other than the
nonpayment of the principal which became due solely by virtue of the
declaration, have been cured or waived.
15
<PAGE>
The Trustee is under no obligation to exercise any of its rights or powers
at the request or direction of any holders of Debt Securities unless those
holders have offered the Trustee security or indemnity against the costs,
expenses and liabilities which it might incur as a result. The holders of a
majority of the outstanding Debt Securities of any series have, with certain
exceptions, the right to direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee or the exercise of any
trust or power of the Trustee with respect to those Debt Securities. The
Trustee may withhold notice of any default (except a default in the payment of
principal or interest) from the holders of any series if the Trustee in good
faith considers it in the interest of the holders to do so.
The holder of any Debt Security will have an absolute and unconditional
right to receive payment of the principal, any premium and, within certain
limitations, any interest on that Debt Security on its maturity date or
redemption date and to enforce those payments.
If certain payments on a series of Debt Securities are insured by a
financial guaranty insurance policy or other policy, terms other than those
that are described in the preceding three paragraphs may apply to that series.
We are required to furnish each year to the Trustee under each Indenture an
officers' certificate to the effect that we are not in default under the
applicable Indenture or, if there has been a default, specifying the default
and its status.
Paying Agent
Unless we state otherwise in any Prospectus Supplement, the Trustee will act
as Paying Agent for the Debt Securities, and the principal corporate trust
office of the Trustee will be the office through which the Paying Agent acts.
We may, however, change or add Paying Agents or approve a change in the office
through which a Paying Agent acts.
Any money that we have paid to a Paying Agent for principal or interest on
any Debt Securities which remains unclaimed at the end of two years after that
principal or interest has become due will be repaid to us at our request. After
repayment to us, holders should look only to us for those payments.
Negative Pledge
While any of the Senior Notes remain outstanding, we will not create, or
permit to be created or to exist, any mortgage, lien, pledge, security interest
or other encumbrance upon any of our property, whether owned on or acquired
after the date of the Senior Indenture, to secure any of our indebtedness for
borrowed money, unless the Senior Notes then outstanding are equally and
ratably secured for so long as any such indebtedness is so secured.
The foregoing restriction does not apply to, among other things:
. purchase money mortgages, or other purchase money liens, pledges,
security interests or encumbrances upon property that we acquired after
the date of the Senior Indenture;
. mortgages, liens, pledges, security interests or other encumbrances
existing on any property at the time we acquired it, including those
which exist on any property of an entity with which we are consolidated
or merged or which transfers or leases all or substantially all of its
properties to us;
. mortgages, liens, pledges, security interests or other encumbrances upon
any of our property that existed on the date of the initial issuance of
the Senior Notes;
16
<PAGE>
. pledges or deposits to secure performance in connection with bids,
tenders, contracts--other than contracts for the payment of money--or
leases to which we are a party;
. liens created by or resulting from any litigation or proceeding which at
the time is being contested in good faith by appropriate proceedings;
. liens incurred in connection with the issuance of bankers' acceptances
and lines of credit, bankers' liens or rights of offset and any security
given in the ordinary course of business to banks or others to secure
any indebtedness payable on demand or maturing within 12 months of the
date that such indebtedness is originally incurred;
. liens incurred in connection with repurchase, swap or other similar
agreements (including commodity price, currency exchange and interest
rate protection agreements);
. liens securing industrial revenue or pollution control bonds;
. liens, pledges, security interests or other encumbrances on any property
arising in connection with any defeasance, covenant defeasance or in-
substance defeasance of any of our indebtedness;
. liens created in connection with, and created to secure, a non-recourse
obligation;
. Bonds issued or to be issued from time to time under the Mortgage, and
the "permitted liens" specified in the Mortgage;
. indebtedness which we issue in connection with our consolidation or
merger with any other entity, which may be our affiliate, in exchange or
in substitution for secured indebtedness of that entity ("Third Party
Debt") which by its terms (1) is secured by a mortgage on all or a
portion of the property of that entity, (2) prevents that entity from
incurring secured indebtedness, unless the Third Party Debt is secured
equally and ratably with such secured indebtedness or (3) prevents that
entity from incurring secured indebtedness;
. indebtedness of any entity which we are required to assume in connection
with a consolidation or merger of that entity, with respect to which any
of our property is subjected to a mortgage, lien, pledge, security
interest or other encumbrance;
. mortgages, liens, pledges, security interests or other encumbrances upon
any property that we acquired, constructed, developed or improved after
the date of the Senior Indenture which are created before, at the time
of, or within 18 months after such acquisition--or in the case of
property constructed, developed or improved, after the completion of the
construction, development or improvement and commencement of full
commercial operation of that property, whichever is later-- to secure or
provide for the payment of any part of its purchase price or cost;
provided that, in the case of such construction, development or
improvement, the mortgages, liens, pledges, security interests or other
encumbrances shall not apply to any property that we own other than real
property that is unimproved up to that time; and
. the replacement, extension or renewal of any mortgage, lien, pledge,
security interest or other encumbrance, or of any agreement described
above; or the replacement, extension or renewal (not exceeding the
principal amount of indebtedness so secured together with any premium,
interest, fee or expense payable in connection with any such
replacement, extension or renewal) of the indebtedness so secured;
provided that such replacement, extension or renewal is limited to all
or a part of the same property that secured the mortgage, lien, pledge,
security interest or other encumbrance replaced, extended or renewed,
plus improvements on it or additions or accessions to it.
In addition, we may create or assume any other mortgage, lien, pledge, security
interest or other encumbrance not excepted in the Senior Indenture without
equally and ratably securing the Senior Notes, if immediately after that
creation or assumption, the principal amount of our indebtedness for borrowed
money that all such other mortgages, liens, pledges, security interests and
other encumbrances secure does not exceed an amount equal to 10% of our common
stockholders' equity as shown on our consolidated balance sheet for the
accounting period occurring immediately before the creation or assumption of
that mortgage, lien, pledge, security interest or other encumbrance.
17
<PAGE>
Defeasance and Covenant Defeasance
Unless the particular series of Debt Securities provides otherwise, we may
be:
. discharged from our obligations (with certain exceptions) with respect
to any series of Debt Securities, such a discharge being called a
"Defeasance" in this Prospectus; and
. released from our obligations under certain restrictive covenants
especially established with respect to any series of Debt Securities,
including the obligations described above under the caption "Negative
Pledge" with respect to any series of Senior Notes, such a release being
called a "Covenant Defeasance" in this Prospectus.
To effect a Defeasance or Covenant Defeasance, we must satisfy certain
conditions. Those conditions include the irrevocable deposit with the Trustee,
in trust, of money or government obligations which through their scheduled
payments of principal and interest would provide sufficient money to pay the
principal and any premium and interest on such Debt Securities on the maturity
dates of such payments or upon redemption.
Following a Defeasance, payment of the Debt Securities defeased may not be
accelerated because of an Event of Default. Following a Covenant Defeasance,
the payment of Debt Securities may not be accelerated by reference to the
covenants from which we have been released. A Defeasance may occur after a
Covenant Defeasance.
Under current United States federal income tax law, a Defeasance would be
treated as an exchange of the relevant Debt Securities in which holders of Debt
Securities might recognize gain or loss. In addition, the amount, timing and
character of amounts that holders would thereafter be required to include in
income might be different from what would be includible absent that Defeasance.
We urge investors to consult their own tax advisors as to the specific
consequences of a Defeasance, including the applicability and effect of tax
laws other than United States federal income tax laws.
Under current United States federal income tax law, unless accompanied by
other changes in the terms of the Debt Securities, Covenant Defeasance should
not be treated as a taxable exchange.
Subordination
Each series of Subordinated Notes will be subordinate and junior in right of
payment, to the extent set forth in the Subordinated Indenture, to all "Senior
Indebtedness" as defined below. If:
. we make a payment or distribution of any of our assets to creditors upon
our dissolution, winding-up, liquidation or reorganization, whether in
bankruptcy, insolvency or otherwise;
. a default beyond any grace period has occurred and is continuing with
respect to the payment of principal, interest or any other monetary
amounts due and payable on any Senior Indebtedness; or
. the maturity of any Senior Indebtedness has been accelerated because of
a default on that Senior Indebtedness,
then the holders of Senior Indebtedness generally will have the right to
receive payment, in the case of the first instance, of all amounts due or to
become due upon that Senior Indebtedness, and, in the case of the second and
third instances, of all amounts due on that Senior Indebtedness, or we will
make provision for those payments, before the holders of any Subordinated Notes
have the right to receive any payments of principal or interest on their
Subordinated Notes.
18
<PAGE>
"Senior Indebtedness" means, with respect to any series of Subordinated
Notes, the principal, premium, interest and any other payment in respect of any
of the following:
. all of our indebtedness that is evidenced by notes, debentures, bonds or
other securities we sell for money or other obligations for money
borrowed;
. all indebtedness of others of the kinds described in the preceding
category which we have assumed or guaranteed or which we have in effect
guaranteed through an agreement to purchase, contingent or otherwise;
and
. all renewals, extensions or refundings of indebtedness of the kinds
described in either of the preceding two categories.
Any such indebtedness, renewal, extension or refunding, however, will not be
"Senior Indebtedness" if the instrument creating or evidencing it or the
assumption or guarantee of it provides that it is not superior in right of
payment to or is equal in right of payment with those Subordinated Notes.
Senior Indebtedness will be entitled to the benefits of the subordination
provisions in the Subordinated Indenture irrespective of the amendment,
modification or waiver of any term of the Senior Indebtedness.
Some future series of Subordinated Notes may rank senior to other series of
Subordinated Notes and would constitute Senior Indebtedness with respect to
those series.
The Subordinated Indenture does not limit the amount of Senior Indebtedness
that we may issue. As of December 31, 1998, our Senior Indebtedness totaled
approximately $4,044,000,000.
Concerning the Trustee
The Chase Manhattan Bank is the Bond Trustee under the Mortgage and the
Trustee under each Indenture. We and some of our affiliates maintain deposit
accounts and banking relationships with The Chase Manhattan Bank.
19
<PAGE>
PLAN OF DISTRIBUTION
We may sell the New Bonds and the New Debt Securities in any of three ways:
. through underwriters or dealers;
. directly to a limited number of institutional purchasers or to a single
purchaser; or
. through agents.
The applicable Prospectus Supplement will describe the terms under which the
New Bonds and the New Debt Securities are offered, including:
. the names of any underwriters, dealers or agents;
. the purchase price and our net proceeds from the sale;
. any underwriting discounts and other items constituting underwriters'
compensation;
. any initial public offering price; and
. any discounts or concessions allowed, re-allowed or paid to dealers.
We or any underwriters or dealers may change from time to time any initial
public offering price and any discounts or concessions allowed, re-allowed or
paid to dealers.
If we use underwriters in the sale of New Bonds and New Debt Securities,
those underwriters will acquire the New Bonds and the New Debt Securities for
their own account and may resell them in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices
determined at the time of the sale. Unless we state otherwise in the applicable
Prospectus Supplement, the obligations of any underwriter to purchase the New
Bonds and the New Debt Securities will be subject to conditions, and the
underwriter will be obligated to purchase all the New Bonds and the New Debt
Securities, except that in some cases involving a default by an underwriter,
less than all of the New Bonds and the New Debt Securities may be purchased. If
we sell the New Bonds and the New Debt Securities through an agent, the
applicable Prospectus Supplement will state the name and any commission we may
pay to the agent. Unless we state otherwise in the Prospectus Supplement, that
agent will be acting on a best-efforts basis for the period of its appointment.
The applicable Prospectus Supplement will state whether we will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase securities at the public offering price specified in
the Prospectus Supplement under delayed delivery contracts providing for
payment and delivery on a specified future date. These contracts will be
subject to the conditions specified in the applicable Prospectus Supplement.
Additionally, the applicable Prospectus Supplement will set forth the
commission payable for solicitation of those contracts.
Agents and underwriters may be entitled under agreements entered into with
us to indemnification against certain civil liabilities, including liabilities
under the Securities Act of 1933.
Underwriters and their affiliates may engage in transactions with, or
perform services for, us or our affiliates in the ordinary course of their
business.
20
<PAGE>
EXPERTS
Our consolidated financial statements as of December 31, 1998 and 1997 and
for each of the three years in the period ended December 31, 1998, except
PanEnergy Corp and subsidiaries as of and for the period ended December 31,
1996, included in our annual report on Form 10-K, which are incorporated by
reference in this Prospectus, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report which is incorporated by
reference in this Prospectus. The financial statements of PanEnergy Corp and
subsidiaries (consolidated with our financial statements) as of and for the
period ended December 31, 1996 have been audited by KPMG LLP, independent
auditors, as stated in their report incorporated by reference in this
Prospectus. Those financial statements are incorporated in this Prospectus in
reliance upon the respective reports of such firms given upon their authority
as experts in accounting and auditing.
LEGAL MATTERS
Ellen T. Ruff, Esq., who is our Vice President and General Counsel,
Corporate, Gas and Electric Operations, or another of our lawyers and Dewey
Ballantine LLP, our outside counsel, will issue opinions about the legality of
the New Bonds and the New Debt Securities. Ms. Ruff owns, and such other lawyer
likely would own, our Common Stock and options to purchase shares of our Common
Stock. Counsel named in the applicable Prospectus Supplement will issue
opinions about the legality of the New Bonds and the New Debt Securities on
behalf of any underwriters, dealers or agents.
21
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution (Estimated):
<TABLE>
<S> <C>
SEC Filing Fee..................................................... $ 278,000*
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...................................................... 7,000
----------
Total............................................................ $1,080,000
==========
</TABLE>
- --------
*Actual
Item 15. Indemnification of Directors and Officers.
Sections 55-8-50 through 55-8-58 of the North Carolina Business Corporation
Act and the By-Laws of the 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 --Senior Indenture from registrant to The Chase Manhattan Bank, dated
as of September 1, 1998, relating to the Senior Notes.
4-D-1(A) --First Supplemental Indenture dated as of December 4, 1998
supplementing said Senior Indenture.
4-D-1(B) --Second Supplemental Indenture dated as of January 12, 1999
supplementing said Senior Indenture.
4-D-1(C) --Third Supplemental Indenture dated as of March 11, 1999
supplementing said Senior Indenture.
4-D-1(D) --Form of Supplemental Indenture relating to the Senior Notes.
4-D-2(A) --First Supplemental Indenture dated as of December 8, 1997
supplementing the Subordinated Indenture incorporated by reference
as Exhibit 4-D-2 hereto.
4-D-2(B) --Form of Supplemental Indenture relating to the Subordinated Notes.
5 --Opinion of Ellen T. Ruff, Esq.
12 --Computation of Ratio of Earnings to Fixed Charges.
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number
-------
<C> <S>
23(A)-1 --Consent of Deloitte & Touche LLP.
23(A)-2 --Consent of KPMG LLP.
23(A)-3 --Consent of Ellen T. Ruff, Esq. (included in Exhibit 5 above).
23(A)-4 --Consent of Dewey Ballantine LLP.
24(A) --Copy of power of attorney of certain officers and directors of
registrant.
24(B) --Resolution of Duke Energy Corporation regarding power of attorney.
25(A) --Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as First and Refunding Mortgage
Bond Indenture Trustee.
25(B) --Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Senior Indenture Trustee.
25(C) --Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Subordinated Indenture
Trustee.
</TABLE>
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)).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number
-------
<C> <S>
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).
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).
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number
-------
<C> <S>
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).
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).
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number
-------
<C> <S>
4-B-56 --Supplemental Indenture, dated as of February 15, 1987, supplementing
said Mortgage (filed with Form 10-K for the year ended December 31,
1986, File No. 1-4928, as Exhibit 4-B-56).
4-B-57 --Supplemental Indenture, dated as of March 1, 1987, supplementing
said Mortgage (filed with Form 10-K for the year ended December 31,
1986, File No. 1-4928, as Exhibit 4-B-57).
4-B-58 --Supplemental Indenture, dated as of October 1, 1987, supplementing
said Mortgage (filed with Form 10-K for the year ended December 31,
1987, File No. 1-4928, as Exhibit 4-B-58).
4-B-59 --Supplemental Indenture, dated as of February 1, 1990, supplementing
said Mortgage (filed with Form 10-K for the year ended December 31,
1989, File No. 1-4928, as Exhibit 4-B-59).
4-B-60 --Supplemental Indenture, dated as of March 1, 1990, supplementing
said Mortgage (filed with Form 10-K for the year ended December 31,
1990, File No. 1-4928, as Exhibit 4-B-60).
4-B-61 --Supplemental Indenture, dated as of May 1, 1990, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1990,
File No. 1-4928, as Exhibit 4-B-61).
4-B-62 --Supplemental Indenture, dated as of May 15, 1990, supplementing said
Mortgage (filed with Form 10-K for the year ended December 31, 1990,
File No. 1-4928, as Exhibit 4-B-62).
4-B-63 --Supplemental Indenture, dated as of March 1, 1991, supplementing
said Mortgage (filed with Form 10-K for the year ended December 31,
1990, File No. 1-4928, as Exhibit 4-B-63).
4-B-64 --Supplemental Indenture, dated as of July 1, 1991, supplementing said
Mortgage (filed with Form S-3, File No. 33-45501, effective February
13, 1992, as Exhibit 4-B-64).
4-B-65 --Supplemental Indenture, dated as of December 1, 1991, supplementing
said Mortgage (filed with Form S-3, File No. 33-44501, 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-D-2 --Subordinated Indenture from registrant to The Chase Manhattan Bank,
dated as of December 1, 1997, relating to the Subordinated Notes
(filed with Form S-3, File No. 333-14209 effective September 3,
1998, as Exhibit 4-D-2).
4-D-1(B) --Form of the Senior Notes will be substantially as set forth on
pages A-1 through A-6 of Exhibit 4-D-1(D) hereto or as to be filed
as Exhibit(s) by means of Form 8-K.
4-D-2(B) --Form of the Subordinated Notes will be substantially as set forth
on pages A-1 through A-6 of Exhibit 4-D-2(B) 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;
II-6
<PAGE>
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 therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(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 therein, 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 March, 1999.
Duke Energy Corporation
Registrant
R. B. Priory
By:__________________________________
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or amendment thereto has been signed by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<C> <S> <C>
R. B. Priory Chairman of the March 31, 1999
Board, President
and Chief Executive
Officer
(Principal
Executive Officer)
Richard J. Osborne Executive Vice March 31, 1999
President and
Chief Financial
Officer
(Principal
Financial Officer)
Jeffrey L. Boyer Vice President and March 31, 1999
Corporate
Controller
(Principal
Accounting Officer)
G. Alex Bernhardt, Sr.
Robert J. Brown
William A. Coley
William T. Esrey
Ann Maynard Gray
Dennis R. Hendrix
Harold S. Hook All of the March 31, 1999
Directors
George Dean Johnson
Max Lennon
Leo E. Linbeck, Jr.
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 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 --Senior Indenture from registrant to The Chase Manhattan Bank, dated
as of September 1, 1998, relating to the Senior Notes.
4-D-1(A) --First Supplemental Indenture dated as of December 4, 1998
supplementing said Senior Indenture.
4-D-1(B) --Second Supplemental Indenture dated as of January 12, 1999
supplementing said Senior Indenture.
4-D-1(C) --Third Supplemental Indenture dated as of March 11, 1999
supplementing said Senior Indenture.
4-D-1(D) --Form of Supplemental Indenture relating to the Senior Notes.
4-D-2(A) --First Supplemental Indenture dated as of December 8, 1997
supplementing the Subordinated Indenture incorporated by reference
as Exhibit 4-D-2 hereto.
4-D-2(B) --Form of Supplemental Indenture relating to the Subordinated Notes.
5 --Opinion of Ellen T. Ruff, Esq.
12 --Computation of Ratio of Earnings to Fixed Charges.
23(A)-1 --Consent of Deloitte & Touche LLP.
23(A)-2 --Consent of KPMG LLP.
23(A)-3 --Consent of Ellen T. Ruff, Esq. (included in Exhibit 5 above).
23(A)-4 --Consent of Dewey Ballantine LLP.
24(A) --Copy of power of attorney of certain officers and directors of
registrant.
24(B) --Resolution of Duke Energy Corporation regarding power of attorney.
25(A) --Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as First and Refunding
Mortgage Bond Indenture Trustee.
25(B) --Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Senior Indenture Trustee.
25(C) --Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Chase Manhattan Bank, as Subordinated Indenture
Trustee.
</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
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. 333-14209, which also constitutes a post-
effective amendment to a previous registration statement No. 333-02571),
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, 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 Corporation makes no warranty or representation to the Underwriters
with respect to any statements or omissions made in reliance upon and in
conformity with 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, except that the Corporation makes no warranty or representation to
the Underwriters with respect to any statements or omissions made in reliance
upon and in conformity with written information furnished to the Corporation
by any Underwriter specifically for use therein.
(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 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, Texas Eastern
Transmission Corporation and Algonquin Gas Transmission Company, each a
Delaware corporation (and herein called a "Principal Subsidiary"), is a direct
or indirect wholly-owned subsidiary of the Corporation.
<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 , , 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 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 Services 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 Ellen T. Ruff, Esq., Vice
President and General Counsel, Corporate, Gas and Electric Operations, 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 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 and the
Mortgage 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 her attention that
has caused her to believe that the Registration Statement as of the date of
effectiveness under the 1933 Act and the Prospectus as of the date it was
filed with, or transmitted for filing to, the Commission, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus as of the date it was filed with, or
transmitted for filing to, the Commission and at the Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Such counsel may also state that, except as otherwise expressly
provided in such opinion, she does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus and does not express any opinion
or belief as to the financial statements or other financial data contained
in the Registration Statement and the Prospectus or as to the statement of
the eligibility and qualification of the Trustee.
In rendering the foregoing opinion, such counsel may state that she
expresses no opinion as to the laws of any jurisdiction other than North
Carolina and may rely on the opinion of Austin, Lewis & Rogers of Columbia,
South Carolina as to matters of South Carolina law. Such counsel may also
state that she has relied as to certain factual matters on information
obtained from public officials, officers of the Corporation and other
sources believed by her to be responsible.
(e) You shall have received an opinion or opinions of Dewey Ballantine LLP,
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 Ellen T. Ruff, Esq. as to matters of North Carolina law and on
the opinion of Austin, Lewis & Rogers of Columbia, South Carolina as to
matters of South Carolina law. In addition, such counsel may state that
they have relied as to certain factual matters on information obtained from
public officials, officers of the Corporation and other sources believed by
them to be responsible and that the signatures on all documents examined by
them are genuine, assumptions which such counsel have not independently
verified.
(f) You shall have received the opinion of ,
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,
may rely on the opinion of Ellen T. Ruff, Esq. as to matters of
North Carolina law and on the opinion of Austin, Lewis & Rogers of Columbia,
South Carolina 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 or material limitation 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 or material escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war if the effect of any such event specified in this
clause (g) in your judgment makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the 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 as of the Closing Date, 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 Bonds.
(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, shall act on behalf
of each of the Underwriters, and the Corporation 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
as your representative in care of at ,
telephone number ( ) , or, if sent to the Corporation, will be mailed,
delivered or telecopied and confirmed to it at 526 South Church Street,
Charlotte, N.C. 28202, telephone number (704) 382-5159, attention of Richard J.
Osborne, 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 . 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 by 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 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. 333-14209, which also constitutes a post-
effective amendment to a previous registration statement No. 333-02571),
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, 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)
<PAGE>
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 Corporation makes no warranty or representation to the Underwriters
with respect to any statements or omissions made in reliance upon and in
conformity with written information furnished to the Corporation by any
Underwriter specifically for use therein or any information set forth in the
Prospectus under the caption "Description of the Series Senior Notes - Book-
Entry Only Issuance - The Depository Trust Company."
(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, except that the Corporation makes no warranty
or representation to the Underwriters with respect to any statements or
omissions made in reliance upon and in conformity with written information
furnished to the Corporation by any Underwriter specifically for use therein.
(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, Texas Eastern
Transmission Corporation and Algonquin Gas Transmission Company, each a
Delaware corporation (and herein called a "Principal Subsidiary"), is a direct
or indirect wholly-owned subsidiary of the Corporation.
3. Purchase, Sale and Delivery of Notes. On the basis of the
representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Corporation agrees to sell to
the Underwriters, and the Underwriters agree, severally and not jointly, to
purchase from the Corporation, at a purchase price of % of the principal
amount of the Notes, plus accrued interest from , , the
respective principal amount of Notes set forth opposite the names of the
Underwriters in Schedule A hereto plus the respective principal amount of
additional Notes which each such Underwriter may become obligated to purchase
pursuant to the provisions of Section 8 hereof.
Payment of the purchase price for the Notes to be purchased by the
Underwriters shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue
of the Americas, New York, N.Y., or at such other place as shall be mutually
agreed upon by you and the Corporation, at 10:00 A.M., New York City time, on
, , (unless postponed in accordance with the provisions of
Section 8) or such other time not later than three full business days after
such date as shall be agreed upon by you and the Corporation (the "Closing
Date"). Payment shall be made to the Corporation by wire transfer in
immediately available funds, payable to the order of the
2
<PAGE>
Corporation against delivery of the Notes, in fully registered form, to you or
upon your order. The Notes shall be delivered in the form of one or more
global certificates in aggregate denomination equal to the aggregate principal
amount of the Notes upon original issuance and registered in the name of Cede
& Co., as nominee for The Depository Trust Company ("DTC").
4. Offering by the Underwriters. It is understood that the several
Underwriters propose to offer the Notes for sale to the public as set forth in
the Prospectus.
5. Covenants of the Corporation. The Corporation covenants and agrees with
the several Underwriters that:
(a) The Corporation will advise you promptly of any amendment or
supplementation of the Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of
the Registration Statement, and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(b) If at any time when a prospectus relating to the Notes is required to
be delivered under the 1933 Act any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact, or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the 1933 Act, the Corporation promptly
will prepare and file with the Commission an amendment, supplement or an
appropriate document pursuant to Section 13 or 14 of the 1934 Act which
will correct such statement or omission or which will effect such
compliance.
(c) The Corporation, during the period when a prospectus relating to the
Notes is required to be delivered under the 1933 Act, will file promptly
all documents required to be filed with the Commission pursuant to Section
13 or 14 of the 1934 Act.
(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 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
3
<PAGE>
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.
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 Services 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 Ellen T. Ruff, Esq., Vice
President and General Counsel, Corporate, Gas and Electric Operations, 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
4
<PAGE>
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 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 and the
Indenture 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 her attention that
has caused her to believe that the Registration Statement as of the date of
effectiveness under the 1933 Act and the Prospectus as of the date it was
filed with, or transmitted for filing to, the Commission, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus as of the date it was filed with, or
transmitted for filing to, the Commission and at the Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Such counsel may also state that, except as otherwise expressly
provided in such opinion, she does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus and does not express any opinion
or belief as to the financial statements or other financial data contained
in the Registration Statement and the Prospectus or as to the statement of
the eligibility and qualification of the Trustee.
In rendering the foregoing opinion, such counsel may state that she
expresses no opinion as to the laws of any jurisdiction other than North
Carolina and may rely on the opinion of Austin, Lewis & Rogers of Columbia,
South Carolina as to matters of South Carolina law. Such counsel may also
state that she has relied as to certain factual matters on information
obtained from public officials, officers of the Corporation and other sources
believed by her to be responsible.
(e) You shall have received an opinion or opinions of Dewey Ballantine
LLP, 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
5
<PAGE>
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 New 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 Ellen T. Ruff, Esq. as to matters of North Carolina law and on
the opinion of Austin, Lewis & Rogers of Columbia, South Carolina as to
matters of South Carolina law. In addition, such counsel may state that they
have relied as to certain factual matters on information obtained from public
officials, officers of the Corporation and other sources believed by them to
be responsible and that the signatures on all documents examined by them are
genuine, assumptions which such counsel have not independently verified.
(f) You shall have received an opinion of , counsel for
the Underwriters, dated the Closing Date, with respect to the incorporation of
the Corporation, the validity of the Notes, the Registration Statement and the
Prospectus, as amended or supplemented, and such other related matters as you
may require, and the Corporation shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters. In giving their opinion, may rely on the opinion
of Ellen T. Ruff, Esq. as to matters of North Carolina law and on the opinion
of Austin, Lewis & Rogers of Columbia, South Carolina 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 or material limitation 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 or material escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war if the effect of any such event
specified in this clause (g) in your judgment makes
6
<PAGE>
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 as of the Closing Date, that the Corporation
has complied with all agreements and satisfied all conditions on its part to
be performed or satisfied at or prior to the Closing Date, that the conditions
specified in Section 6(b) and Section 6(c) have been satisfied, and that no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
threatened by the Commission.
(i) On the date of this Agreement, you shall have received letters dated
the date hereof, in form and substance satisfactory to you, from the
Corporation's independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in or incorporated by reference
into the Prospectus.
(j) At the Closing Date you shall have received from the Corporation's
independent public accountants letters, dated the Closing Date, to the
effect that such accountants reaffirm the statements made in the letters
furnished pursuant to paragraph (i) of this Section 6, except that the
specified date referred to shall be a date not more than three business
days prior to the Closing Date.
The Corporation will furnish you with such conformed copies of such
opinions, certificates, letters and documents as you reasonably request.
7. Indemnification. (a) The Corporation agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever arising out of any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or any
amendment thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the prospectus constituting a part of the Registration
Statement in the form in which it became effective or the Prospectus (or
any amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, unless such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with written
information furnished to the Corporation by any Underwriter through you
expressly for use in the Registration Statement (or any amendment thereto)
or such Preliminary Prospectus, such prospectus, or the Prospectus (or any
amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, commenced or threatened, or of any claim 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
7
<PAGE>
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 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
8
<PAGE>
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 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,
shall act on behalf of each of the Underwriters, and the Corporation
shall be entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Underwriter made or given by .
11. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters, will be mailed, delivered or telecopied and confirmed to
as your representative in care of at
, , ,
telephone number ( ) , or, if sent to the Corporation, will be
mailed, delivered or telecopied and confirmed to it at 526 South Church
Street, Charlotte, N.C. 28202, telephone number (704) 382-5159, attention of
Richard J. Osborne, 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 . 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.
9
<PAGE>
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 acceptance by
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 acceptance of this letter by 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: ________________________________
10
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Principal Amount
of Notes to be
Underwriter Purchased
----------- ----------------
<S> <C>
$
------------
Total.......................................................... $
============
</TABLE>
11
<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. 333-14209, which also constitutes a post-
effective amendment to a previous registration statement No. 333-02571),
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, 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 Corporation makes no warranty or
representation to the Underwriters with respect to any statements or omissions
made in reliance upon and in conformity with written information furnished to
the Corporation by any Underwriter specifically for use therein or any
information set forth in the Prospectus under the caption "Description of the
Series Senior Notes - Book-Entry Only Issuance - The Depository Trust
Company."
(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, except that the Corporation makes no warranty or representation to
the Underwriters with respect to any statements or omissions made in reliance
upon and in conformity with written information furnished to the Corporation
by any Underwriter specifically for use therein or any information set forth
in the Prospectus under the caption "Description of the Series Senior Notes -
Book-Entry Only Issuance - The Depository Trust Company."
(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, Texas Eastern
Transmission Corporation and Algonquin Gas Transmission Company, each a
Delaware corporation (and herein called a "Principal Subsidiary"), is a direct
or indirect wholly-owned subsidiary of the Corporation.
3. Purchase, Sale and Delivery of Notes. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Corporation agrees to sell to the Underwriters,
and the Underwriters agree, severally and not jointly, to purchase from the
Corporation, at a purchase price of % of the principal amount of the Notes, plus
accrued interest from , , the respective principal amount of
Notes set forth opposite the names of the Underwriters in Schedule A hereto plus
the respective principal amount of additional Notes which each such Underwriter
may become obligated to purchase pursuant to the provisions of Section 8 hereof.
Payment of the purchase price for the Notes to be purchased by the
Underwriters shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue
of the Americas, New York, N.Y., or at such other place as shall be mutually
agreed upon by you and the Corporation, at 10:00 A.M., New York City time, on
, , (unless postponed in accordance with the provisions of Section 8) or
such other time not later than three full business days after such date as shall
be agreed upon by you and the Corporation (the "Closing Date"). Payment shall be
made to the Corporation by wire transfer in immediately available funds, payable
to the order of the Corporation against delivery of the Notes, in fully
registered form, to you or upon your order. The Notes shall be delivered in the
form of one or more global certificates in aggregate denomination equal to the
aggregate principal amount of the Notes upon original issuance and registered in
the name of Cede & Co., as nominee for The Depository Trust Company ("DTC").
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 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 Services 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 Ellen T. Ruff, Esq., Vice
President and General Counsel, Corporate, Gas and Electric Operations, 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 and the
Indenture 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 her attention that
has caused her to believe that the Registration Statement as of the date of
effectiveness under the 1933 Act and the Prospectus as of the date it was
filed with, or transmitted for filing to, the Commission, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or that the Prospectus as of the date it was filed with, or
transmitted for filing to, the Commission and at the Closing Date, contained
or contains any untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. Such
counsel may also state that, except as otherwise expressly provided in such
opinion, she does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus and does not express any opinion or belief as to
the financial statements or other financial data contained in the
Registration Statement and the Prospectus or as to the statement of the
eligibility and qualification of the Trustee.
In rendering the foregoing opinion, such counsel may state that she
expresses no opinion as to the laws of any jurisdiction other than North
Carolina and may rely on the opinion of Austin, Lewis & Rogers of Columbia,
South Carolina as to matters of South Carolina law. Such counsel may also
state that she has relied as to certain factual matters on information
obtained from public officials, officers of the Corporation and other sources
believed by him to be responsible.
(e) You shall have received an opinion or opinions of Dewey
Ballantine LLP, 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 New 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
Ellen T. Ruff, Esq. as to matters of North Carolina law and on the opinion
Austin, Lewis & Rogers of Columbia, South Carolina as to matters of South
Carolina law. In addition, such counsel may state that they have relied as to
certain factual matters on information obtained from public officials,
officers of the Corporation and other sources believed by them to be
responsible and that the signatures on all documents examined by them are
genuine, assumptions which such counsel have not independently verified.
5
<PAGE>
(f) You shall have received an opinion of , counsel
for the Underwriters, dated the Closing Date, with respect to the
incorporation of the Corporation, the validity of the Notes, the Registration
Statement and the Prospectus, as amended or supplemented, and such other
related matters as you may require, and the Corporation shall have furnished
to such counsel such documents as they request for the purpose of enabling
them to pass upon such matters. In giving their opinion,
may rely on the opinion of Ellen T. Ruff, Esq. as to matters of North
Carolina law and on the opinion of Austin, Lewis & Rogers of Columbia,
South Carolina 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 or material limitation 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 or material escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war if the effect of any such event specified in this
clause (g) in your judgment makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Notes being delivered at the
Closing Date on the terms and in the manner contemplated in the Prospectus. In
such event there shall be no liability on the part of any party to any other
party except 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 as of the Closing Date, 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, shall act on
behalf of each of the Underwriters, and the Corporation shall be entitled
to act and rely upon any statement, request, notice or agreement on behalf of
any Underwriter made or given by .
11. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters, will be mailed, delivered or telecopied and confirmed to
as your representative in care of at , ,
telephone number ( ) , or, if sent to the Corporation, will be mailed,
delivered or telecopied and confirmed to it at 526 South Church Street,
Charlotte, N.C. 28202, telephone number (704) 382-5159, attention of Richard J.
Osborne, 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 . 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 by 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 by 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 , between Duke Energy
Corporation (hereinafter called the "Issuer"), having its principal office at
526 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, 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,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, 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, 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>
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 2003 Series B, 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, 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 2003 Series B, 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 2003 Series B, 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
2003 Series B, 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 2003 Series B, 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 2003
14
<PAGE>
Series B, 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>
- --------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
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
</TABLE>
i
<PAGE>
ARTICLE FIVE
Remedies
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
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>
ii
<PAGE>
ARTICLE NINE
Supplemental Indentures
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
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>
iii
<PAGE>
ARTICLE FOURTEEN
Immunity of Incorporators, Stockholders, Officers and Directors
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
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.
2
<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
6
<PAGE>
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.
8
<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.]
10
<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.
13
<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);
14
<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.
16
<PAGE>
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
17
<PAGE>
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.
18
<PAGE>
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
19
<PAGE>
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
20
<PAGE>
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
21
<PAGE>
(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
22
<PAGE>
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.
23
<PAGE>
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.
24
<PAGE>
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;
25
<PAGE>
(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.
26
<PAGE>
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.
27
<PAGE>
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
28
<PAGE>
(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.
29
<PAGE>
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
30
<PAGE>
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
31
<PAGE>
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
32
<PAGE>
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
33
<PAGE>
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.
34
<PAGE>
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.
35
<PAGE>
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.
36
<PAGE>
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
37
<PAGE>
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
38
<PAGE>
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
39
<PAGE>
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
40
<PAGE>
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;
41
<PAGE>
(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.
42
<PAGE>
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: /s/ Richard J. Osborne
---------------------------------
Vice President
Attest:
/s/ Robert T. Lucas III
- -----------------------------
The Chase Manhattan Bank, as Trustee
By: /s/ P. Kelly
---------------------------------
Vice President
Attest:
/s/ N. Rodriguez
- -----------------------------
46
<PAGE>
EXHIBIT 4-D-1(A)
DUKE ENERGY CORPORATION
TO
THE CHASE MANHATTAN BANK
Trustee
----------------
First Supplemental Indenture
Dated as of December 4, 1998
----------------
$300,000,000
Series A 6% Senior Notes
due 2028
----------------
<PAGE>
TABLE OF CONTENTS (1)
ARTICLE 1
Series A 6% 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 A 6% Senior Note due 2028
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 FIRST SUPPLEMENTAL INDENTURE is made as of the 4th day of December,
1998, 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 First 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 First 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 A 6% 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 A 6% Senior Notes due 2028 (the "Series A Notes").
There are to be authenticated and delivered $300,000,000 principal amount of
Series A Notes, and no further Series A Notes shall be authenticated and
delivered except as provided by Section 304, 305, 306, 906 or 1106 of the
Original Indenture. The Series A Notes shall be issued in fully registered
form without coupons.
The Series A 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 A Notes shall be in substantially the form set forth in Exhibit B
hereto.
Each Series A 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 June 1 and December 1, commencing June 1,
1999.
"Original Issue Date" means December 4, 1998.
"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 December 1, 2028.
Section 103. Payment of Principal and Interest. The unpaid principal amount
of the Series A Notes shall bear interest at the rate of 6% per annum until
paid or duly provided for, such interest to accrue from December 4, 1998 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 A
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 A 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 A 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 A
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 A Notes shall include interest accrued to
but excluding the respective Interest Payment Dates. Interest payments for the
Series A 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 A 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 A 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 A 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 A 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 A Notes shall be made at the office of the Paying Agent upon surrender
of such Series A 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 A Notes shall be issued in
denominations of $1,000 or any integral multiple thereof.
Section 105. Global Securities. The Series A 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 A
Notes represented
2
<PAGE>
by such Global Security or Global Securities shall not be exchangeable for,
and shall not otherwise be issuable as, Series A 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 A 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 A Notes registered in such names as the
Depositary shall direct.
Section 106. Redemption at the Option of the Corporation. The Series A Notes
will be redeemable, as a whole or in part, at the option of the Corporation,
at any time or from time to time, on at least 30 days', but not more than 60
days', prior notice mailed to each Holder of the Series A Notes. The
Redemption Prices will be equal to the greater of (1) 100% of the principal
amount of the Series A Notes to be redeemed or (2) the sum of the present
values of the Remaining Scheduled Payments (as defined below) discounted, on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months),
at a rate equal to the sum of the Treasury Rate (as defined below) and 20
basis points. In the case of each of clauses (1) and (2), accrued interest
will be payable to the Redemption Date.
"Treasury Rate" means, with respect to any Redemption Date, the rate per
annum equal to the semiannual equivalent yield to maturity (computed as of the
second Business Day immediately preceding such Redemption Date) of the
Comparable Treasury Issue, assuming 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.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable
to the remaining term of the Series A Notes 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 A Notes.
"Comparable Treasury Price" means, with respect to any Redemption Date, (1)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for
U.S. Government Securities" or (2) if such release (or any successor release)
is not published or does not contain such prices on such Business Day, (A) the
average of the Reference Treasury Dealer Quotations for such Redemption Date,
after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all such quotations. "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 3:30 p.m., New York City time, on the
third Business Day preceding such Redemption Date.
"Independent Investment Banker" means the Reference Treasury Dealer
identified in clause (1) of the definition thereof appointed by the
Corporation.
3
<PAGE>
"Reference Treasury Dealer" means (1) Salomon Smith Barney Inc. and its
successors and (2) any other primary U.S. government securities dealer (a
"Primary Treasury Dealer") selected by the Independent Investment Banker after
consultation with the Corporation. If Salomon Smith Barney Inc. shall cease to
be a Primary Treasury Dealer, the Corporation shall substitute another
nationally recognized investment banking firm that is a Primary Treasury
Dealer.
"Remaining Scheduled Payments" means, with respect to any Series A Note, the
remaining scheduled payments of principal of and interest on such Series A
Note that would be due after the related Redemption Date but for such
redemption. If such Redemption Date is not an Interest Payment Date with
respect to such Series A Note, the amount of the next succeeding scheduled
interest payment on such Series A Note will be reduced by the amount of
interest accrued on such Series A Note to 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 A Notes are to be redeemed, the Trustee shall
select the Series A Notes or portions of Series A Notes to be redeemed by such
method as the Trustee shall deem fair and appropriate. The Trustee may select
for redemption Series A Notes and portions of Series A Notes in amounts of
whole multiples of $1,000.
The Series A Notes shall not have a sinking fund.
Section 107. Paying Agent. The Trustee shall initially serve as Paying Agent
with respect to the Series A 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 First
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 A Notes and of this First
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 First Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
Section 203. Executed in Counterparts. This First 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 A 6% SENIOR NOTE
due 2028
No. CUSIP NO.
DUKE ENERGY CORPORATION
SERIES A 6% SENIOR NOTE
due 2028
Principal Amount: $300,000,000
Regular Record Date: close of business on the 15th calendar day prior to the
relevant Interest Payment Date
Original Issue Date: December 4, 1998
Stated Maturity: December 1, 2028
Interest Payment Dates: June 1 and December 1, commencing June 1, 1999
Interest Rate: 6% 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 A 6% Senior Note due 2028 (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 A 6%
Senior Notes due 2028 in the aggregate principal amount of $300,000,000.
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, as a whole or in part, at
the option of the Corporation, at any time or from time to time, on at least
30 days', but not more than 60 days', prior notice mailed to each Holder of
such Securities. The Redemption Prices will be equal to the greater of (1)
100% of the principal amount of the Securities of this series to be redeemed
or (2) the sum of the present values of the Remaining Scheduled Payments (as
defined below) discounted, on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months), at a rate equal to the sum of the
Treasury Rate (as defined below) and 20 basis points. In the case of each of
clauses (1) and (2), accrued interest will be payable to the Redemption Date.
"Treasury Rate" means, with respect to any Redemption Date, the rate per
annum equal to the semiannual equivalent yield to maturity (computed as of the
second Business Day immediately preceding such Redemption Date) of the
Comparable Treasury Issue, assuming 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.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable
to the remaining term of the Securities of this series 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.
"Comparable Treasury Price" means, with respect to any Redemption Date, (1)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such Redemption Date, as set forth in the daily
statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for
U.S. Government Securities" or (2) if such release (or any successor release)
is not published or does not contain such prices on such Business Day, (A) the
average of the Reference Treasury Dealer Quotations for such Redemption Date,
after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all such quotations. "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 3:30 p.m., New York City time, on the
third Business Day preceding such Redemption Date.
"Independent Investment Banker" means the Reference Treasury Dealer
identified in clause (1) of the definition thereof appointed by the
Corporation.
"Reference Treasury Dealer" means (1) Salomon Smith Barney Inc. and its
successors and (2) any other primary U.S. government securities dealer (a
"Primary Treasury Dealer") selected by the Independent Investment Banker after
consultation with the Corporation. If Salomon Smith Barney Inc. shall cease to
be a Primary Treasury Dealer, the Corporation shall substitute another
nationally recognized investment banking firm that is a Primary Treasury
Dealer.
A-3
<PAGE>
"Remaining Scheduled Payments" means, with respect to any Security of this
series, the remaining scheduled payments of principal of and interest on such
Security that would be due after the related Redemption Date but for such
redemption. If such Redemption Date is not an Interest Payment Date with
respect to such Security, the amount of the next succeeding scheduled interest
payment on such Security will be reduced by the amount of interest accrued on
such Security to such Redemption Date.
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.
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
A-4
<PAGE>
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-1(B)
DUKE ENERGY CORPORATION
TO
THE CHASE MANHATTAN BANK
Trustee
----------------
Second Supplemental Indenture
Dated as of January 12, 1999
----------------
$200,000,000
Series B 5 3/8% Senior Notes
due 2009
----------------
<PAGE>
TABLE OF CONTENTS (1)
ARTICLE 1
Series B 5 3/8% 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 B 5 3/8% Senior Note due 2009
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 SECOND SUPPLEMENTAL INDENTURE is made as of the 12th day of January,
1999, 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 Second 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 Second 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 B 5 3/8% 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 B 5 3/8% Senior Notes due 2009 (the "Series B Notes").
There are to be authenticated and delivered $200,000,000 principal amount of
Series B Notes, and no further Series B Notes shall be authenticated and
delivered except as provided by Section 304, 305, 306, 906 or 1106 of the
Original Indenture. The Series B Notes shall be issued in fully registered
form without coupons.
The Series B 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 B Notes shall be in substantially the form set forth in Exhibit B
hereto.
Each Series B 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 January 1 and July 1, commencing July 1,
1999.
"Original Issue Date" means January 12, 1999.
"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 January 1, 2009.
Section 103. Payment of Principal and Interest. The unpaid principal amount
of the Series B Notes shall bear interest at the rate of 5 3/8% per annum
until paid or duly provided for, such interest to accrue from January 12, 1999
or from the most recent Interest Payment Date to which interest has been paid
or duly provided for. Interest shall be paid semiannually in arrears on each
Interest Payment Date to the Person or Persons in whose name the Series B
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 B 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 B 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 B
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 B Notes shall include interest accrued to
but excluding the respective Interest Payment Dates. Interest payments for the
Series B 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 B 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 B 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 B 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 B 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 B Notes shall be made at the office of the Paying Agent upon surrender
of such Series B 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 B Notes shall be issued in
denominations of $1,000 or any integral multiple thereof.
Section 105. Global Securities. The Series B 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 B
Notes represented
2
<PAGE>
by such Global Security or Global Securities shall not be exchangeable for,
and shall not otherwise be issuable as, Series B 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 B 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 B Notes registered in such names as the
Depositary shall direct.
Section 106. Redemption at the Option of the Corporation. The Series B Notes
shall be redeemable, in whole or from time to time in part, at the option of
the Corporation on any date, on at least 30 days', but not more than 60 days',
prior notice mailed to each Holder of the Series B Notes, at a Redemption
Price equal to the greater of (i) 100% of their principal amount and (ii) the
sum of the present values of the remaining scheduled payments of principal and
interest thereon (exclusive of interest accrued to the Redemption Date)
discounted to such Redemption Date on a semiannual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate plus 10 basis
points, plus, in either case, accrued and unpaid interest on the principal
amount being redeemed to such Redemption Date.
"Treasury Rate" means, with respect to any Redemption Date for the Series B
Notes, (i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which
is published weekly by the Board of Governors of the Federal Reserve System
and which establishes yields on actively traded United States Treasury
securities adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Comparable Treasury Issue
(if no maturity is within three months before or after the Stated Maturity,
yields for the two published maturities most closely corresponding to the
Comparable Treasury Issue shall be determined and the Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or
does not contain such yields, the rate per annum equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue, calculated
using a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such
Redemption Date. The Treasury Rate shall be calculated on the third Business
Day preceding the Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable
to the remaining term of the Series B Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Series B Notes.
"Independent Investment Banker" means Morgan Stanley & Co. Incorporated and
any successor firm or, if such firm is unwilling or unable to select the
Comparable Treasury Issue, an independent investment banking institution of
national standing appointed by the Trustee after consultation with the
Corporation.
"Comparable Treasury Price" means with respect to any Redemption Date for
the Series B Notes (i) the average of five 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 five such Reference Treasury Dealer Quotations, the average of all
such quotations.
3
<PAGE>
"Reference Treasury Dealer" means Morgan Stanley & Co. Incorporated, and its
successors; provided, however, that if Morgan Stanley & Co. Incorporated shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Corporation shall substitute therefor another
Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to the 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. The
quotations provided by the Reference Treasury Dealer to the Trustee with
respect to any applicable Redemption Date shall be the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) quoted in writing by the Reference Treasury Dealer and
such other Primary Treasury Dealers as are selected by the Independent
Investment Banker after consultation with the Corporation.
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 B Notes are to be redeemed, the Trustee shall
select the Series B Notes or portions of Series B Notes to be redeemed by such
method as the Trustee shall deem fair and appropriate. The Trustee may select
for redemption Series B Notes and portions of Series B Notes in amounts of
whole multiples of $1,000.
The Series B Notes shall not have a sinking fund.
Section 107. Paying Agent. The Trustee shall initially serve as Paying Agent
with respect to the Series B 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 Second
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 B Notes and of this
Second 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 Second Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
Section 203. Executed in Counterparts. This Second 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 B 5 3/8% SENIOR NOTE
due 2009
No. CUSIP NO.
DUKE ENERGY CORPORATION
SERIES B 5 3/8% SENIOR NOTE
due 2009
Principal Amount: $
Regular Record Date: close of business on the 15th calendar day prior to the
relevant Interest Payment Date
Original Issue Date: January 12, 1999
Stated Maturity: January 1, 2009
Interest Payment Dates: January 1 and July 1, commencing July 1, 1999
Interest Rate: 5 3/8% per annum
Authorized Denomination: $1,000 and any integral multiples thereof
Duke Energy Corporation, a North Carolina corporation (the "Corporation,"
which term includes any successor corporation under the Indenture referred to
on the reverse hereof), for value received, hereby promises to pay to
, or registered assigns, the principal sum of DOLLARS
($ ) 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, semiannually 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 B 5 3/8% Senior Note due 2009 (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 B 5 3/8%
Senior Notes due 2009 in the aggregate principal amount of $200,000,000.
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 shall be redeemable, in whole or from time to
time in part, at the option of the Corporation on any date, on at least 30
days', but not more than 60 days', prior notice mailed to each Holder of such
Securities, at a Redemption Price equal to the greater of (i) 100% of their
principal amount and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon (exclusive of interest
accrued to the Redemption Date) discounted to such Redemption Date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate plus 10 basis points, plus, in either case, accrued and
unpaid interest on the principal amount being redeemed to such Redemption
Date.
"Treasury Rate" means, with respect to any Redemption Date for the
Securities of this series, (i) the yield, under the heading which represents
the average for the immediately preceding week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Comparable
Treasury Issue (if no maturity is within three months before or after the
Stated Maturity, yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue shall be determined and the
Treasury Rate shall be interpolated or extrapolated from such yields on a
straight-line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semiannual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding the Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable
to the remaining term of the Securities of this series to be redeemed that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Securities of this series.
"Independent Investment Banker" means Morgan Stanley & Co. Incorporated 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 five 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 five such Reference Treasury Dealer Quotations, the average
of all such quotations.
"Reference Treasury Dealer" means Morgan Stanley & Co. Incorporated, and its
successors; provided, however, that if Morgan Stanley & Co. Incorporated shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Corporation shall substitute therefor another
Primary Treasury Dealer.
A-3
<PAGE>
"Reference Treasury Dealer Quotations" means, with respect to the 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. The
quotations provided by the Reference Treasury Dealer to the Trustee with
respect to any applicable Redemption Date shall be the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing by the Reference Treasury Dealer and such
other Primary Treasury Dealers as are selected by the Independent Investment
Banker after consultation with the Corporation.
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.
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
A-4
<PAGE>
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-1(C)
DUKE ENERGY CORPORATION
TO
THE CHASE MANHATTAN BANK
Trustee
----------------
Third Supplemental Indenture
Dated as of March 11, 1999
----------------
$200,000,000
Series C 6.60% Senior Notes
Due 2038
----------------
<PAGE>
TABLE OF CONTENTS (1)
ARTICLE 1
Series C 6.60% 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............................................... 3
Section 105. Global Securities........................................... 3
Section 106. Redemption at the Option of the Corporation................. 3
Section 107. Paying Agent................................................ 3
ARTICLE 2
Special Insurance Provisions
Section 201. Supplemental Indentures..................................... 3
Section 202. Events of Default and Remedies.............................. 3
Section 203. Insurance Policy Payment Procedures......................... 4
Section 204. Application of Term "Outstanding"........................... 5
Section 205. Insurer as Third-Party Beneficiary.......................... 5
Section 206. Notices..................................................... 5
Section 207. Concerning the Special Insurance Provisions................. 5
Section 208. Amendments or Supplements.................................... 5
ARTICLE 3
Miscellaneous Provisions
Section 301. Recitals by Corporation..................................... 5
Section 302. Ratification and Incorporation of Original Indenture........ 5
Section 303. Executed in Counterparts.................................... 5
</TABLE>
Exhibit A Form of Series C 6.60% Senior Note Due 2038
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 THIRD SUPPLEMENTAL INDENTURE is made as of the 11th day of March, 1999,
by and between DUKE ENERGY CORPORATION, a North Carolina corporation, having
its principal office at 526 South Church Street, Charlotte, North Carolina
28202 (the "Corporation"), and THE CHASE MANHATTAN BANK, a New York banking
corporation, as Trustee (herein called the "Trustee").
W I T N E S S E T H:
WHEREAS, the Corporation has heretofore entered into a Senior Indenture,
dated as of 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 the same may be amended and supplemented to the
date hereof, including by this Third Supplemental Indenture, is herein called
the "Indenture";
WHEREAS, under the Indenture, a new series of Securities may at any time be
established in accordance with the provisions of the Indenture and the terms
of such series may be described by a supplemental indenture executed by the
Corporation and the Trustee;
WHEREAS, the Corporation proposes to create under the Indenture a new series
of Securities;
WHEREAS, additional Securities of other series hereafter established, except
as may be limited in the Indenture as at the time supplemented and modified,
may be issued from time to time pursuant to the Indenture as at the time
supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution and delivery of
this Third 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 C 6.60% 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 C 6.60% Senior Notes Due 2038 (the "Series C Notes").
There are to be authenticated and delivered $200,000,000 principal amount of
Series C Notes, and no further Series C Notes shall be authenticated and
delivered except as provided by Section 304, 305, 306, 906 or 1106 of the
Original Indenture. The Series C Notes shall be issued in fully registered
form without coupons.
The Series C 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 C Notes shall be in substantially the form set forth in Exhibit B
hereto.
Each Series C 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>
"Insurance Paying Agent" means State Street Bank and Trust Company, N.A.,
New York, New York, or any successor thereto, as the fiscal agent under the
Policy.
"Insurer" means MBIA Insurance Corporation, a New York-domiciled stock
insurance corporation.
"Interest Payment Dates" means March 31, June 30, September 30 and December
31, commencing June 30, 1999.
"Original Issue Date" means March 11, 1999.
"Policy" means the financial guaranty insurance policy issued by the Insurer
with respect to regularly scheduled payments due for principal of and interest
on the Series C Notes as provided in such policy.
"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 December 31, 2038.
Section 103. Payment of Principal and Interest. The principal of the Series
C Notes shall be due at Stated Maturity (unless earlier redeemed). The unpaid
principal amount of the Series C Notes shall bear interest at the rate of
6.60% per annum until paid or duly provided for, such interest to accrue from
March 11, 1999 or from the most recent Interest Payment Date to which interest
has been paid or duly provided for. Interest shall be paid quarterly in
arrears on each Interest Payment Date to the Person or Persons in whose name
the Series C 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 C 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 C 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 C 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 C Notes shall include interest accrued to
but excluding the respective Interest Payment Dates. Interest payments for the
Series C 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 C 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 C 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 C 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 C 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 C Notes shall be made at the office of the Paying Agent upon surrender
of such Series C 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
2
<PAGE>
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 C Notes shall be issued in
denominations of $25 or any integral multiple thereof.
Section 105. Global Securities. The Series C 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 C
Notes represented by such Global Security or Global Securities shall not be
exchangeable for, and shall not otherwise be issuable as, Series C 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 C 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 C Notes registered in such names as the
Depositary shall direct.
Section 106. Redemption at the Option of the Corporation. The Series C Notes
shall be redeemable, in whole or from time to time in part, at the option of
the Corporation, on or after March 11, 2004, on at least 30 days', but not
more than 60 days', prior notice mailed to each Holder of the Series C Notes
to be redeemed, at a Redemption Price equal to 100% of the principal amount to
be redeemed plus accrued and unpaid interest to the Redemption Date.
If less than all of the Series C Notes are to be redeemed, the Trustee shall
select the Series C Notes or portions of Series C Notes to be redeemed by such
method as the Trustee shall deem fair and appropriate. The Trustee may select
for redemption Series C Notes and portions of Series C Notes in amounts of
whole multiples of $25.
The Series C Notes shall not have a sinking fund.
Section 107. Paying Agent. The Trustee shall initially serve as Paying Agent
with respect to the Series C Notes, with the Place of Payment initially being
the Corporate Trust Office.
ARTICLE 2
Special Insurance Provisions
Section 201. Supplemental Indentures. The consent of the Insurer shall be
required with respect to any indenture supplemental to the Original Indenture
requiring the consent of the Holders of the Series C Notes pursuant to Section
902 of the Original Indenture for such supplemental indenture to be effective
with respect to the Series C Notes.
Section 202. Events of Default and Remedies. Subject to Section 107 of the
Original Indenture and to the Trust Indenture Act, including, without
limitation, Sections 316(a)(1) and 317(a) thereof, if an Event of Default with
respect to the Series C Notes occurs and is continuing, the Insurer shall be
entitled to control and direct the enforcement of all rights and remedies
granted to the Holders of the Series C Notes or the Trustee for
3
<PAGE>
the benefit of the Holders of the Series C Notes under the Indenture,
including, without limitation, the right to accelerate the principal of the
Series C Notes as provided in Section 502 of the Original Indenture, and the
Insurer shall also be entitled to approve any waiver of an Event of Default
with respect to the Series C Notes, the obligation of the Trustee to comply
with any such direction to be subject to compliance with the conditions set
forth in Sections 512 and 603(5) of the Original Indenture (as if references
in those Sections to Holders were references to the Insurer) and the
protections provided to the Trustee by Section 315(d)(3) of the Trust
Indenture Act shall be applicable with respect to any direction from the
Insurer given pursuant hereto (as if references in said Section to holders
were references to the Insurer).
Section 203. Insurance Policy Payment Procedures. If the Trustee does not
have sufficient funds for any payment of principal or interest on the due date
or if the Trustee has notice that any Holder has been required to disgorge
payments of principal or interest on the Series C Notes to a trustee in
bankruptcy or creditors or others pursuant to a final judgment by a court of
competent jurisdiction that such payment constitutes an avoidable preference
to such Holder within the meaning of any applicable bankruptcy laws, then the
Trustee shall notify the Insurer or its designee of such fact by telephone or
telegraphic notice, confirmed in writing by registered or certified mail.
The Trustee is hereby irrevocably designated, appointed, directed and
authorized to act as attorney-in-fact for Holders of the Series C Notes as
follows:
(1) If and to the extent there is a deficiency in amounts required to pay
interest on the Series C Notes, the Trustee shall (a) execute and deliver
to the Insurance Paying Agent, in form satisfactory to the Insurance Paying
Agent, an instrument appointing the Insurer as agent for such Holders in
any legal proceeding related to the payment of such interest and an
assignment to the Insurer of the claims for interest to which such
deficiency relates and which are paid by the Insurer, (b) receive as
designee of the respective Holders (and not as Trustee) in accordance with
the tenor of the Policy payment from the Insurance Paying Agent with
respect to the claims for interest so assigned, and (c) disburse the same
to such respective Holders; and
(2) If and to the extent there is a deficiency in amounts required to pay
principal of the Series C Notes, the Trustee shall (a) execute and deliver
to the Insurance Paying Agent in form satisfactory to the Insurance Paying
Agent an instrument appointing the Insurer as agent for such Holders in any
legal proceeding relating to the payment of such principal and an
assignment to the Insurer of any of the Series C Notes surrendered to the
Insurance Paying Agent to the extent of the principal amount thereof as has
not previously been paid or for which moneys are not held by the Trustee
and available for such payment (but such assignment shall be delivered only
if payment from the Insurance Paying Agent is received), (b) receive as
designee of the respective Holders (and not as Trustee) in accordance with
the tenor of the Policy payment therefor from the Insurance Paying Agent,
and (c) disburse the same to such Holders.
Payments with respect to claims for interest on and principal of Series C
Notes disbursed by the Trustee from proceeds of the Policy shall not be
considered to discharge the obligation of the Corporation with respect to such
Series C Notes, and the Insurer shall become the owner of such unpaid Series C
Notes and claims for the interest thereon in accordance with the tenor of the
assignment made to it under the provisions of the preceding paragraph or
otherwise.
Irrespective of whether any such assignment is executed and delivered, the
Corporation and the Trustee hereby agree for the benefit of the Insurer that,
(1) They recognize that to the extent the Insurer makes payments,
directly or indirectly (as by paying through the Trustee), on account of
principal of or interest on the Series C Notes, the Insurer will be
subrogated to the rights of such Holders to receive the amount of such
principal and interest from the Corporation, with interest thereon as
provided and solely from the sources stated in the Indenture and the Series
C Notes; and
4
<PAGE>
(2) They will accordingly pay to the Insurer the amount of such principal
and interest (including principal and interest recovered under subparagraph
(ii) of the first paragraph of the Policy, which principal and interest
shall be deemed past due and not to have been paid), with interest thereon
as provided in the Indenture and the Series C Notes, but only from the
sources and in the manner provided herein for the payment of principal of
and interest on the Series C Notes to Holders, and will otherwise treat the
Insurer as the owner of such rights to the extent of the amount of such
principal and interest.
Section 204. Application of Term "Outstanding" to Series C Notes. In the
event that the principal and/or interest due on the Series C Notes shall be
paid by the Insurer pursuant to the Policy, the Series C Notes shall remain
Outstanding for all purposes of the Indenture, not be considered defeased or
otherwise satisfied and not be considered paid by the Corporation, and the
Indenture and all covenants, agreements and other obligations of the
Corporation to the Holders of the Series C Notes shall continue to exist and
such covenants, agreements and other obligations shall run to the benefit of
the Insurer, and the Insurer shall be subrogated to the rights of such Holders
to the extent of each such payment.
Section 205. Insurer as Third-Party Beneficiary. To the extent that the
Indenture confers upon or gives or grants to the Insurer any right, remedy or
claim under or by reason of the Indenture, the Insurer is hereby explicitly
recognized as being a third-party beneficiary hereunder and may enforce any
such right, remedy or claim conferred, given or granted hereunder.
Section 206. Notices. Any notice that is required to be given to a Holder of
the Series C Notes or to the Trustee pursuant to the Indenture shall also be
provided to the Insurer. All notices required to be given to the Insurer under
the Indenture shall be in writing and shall be sent by registered or certified
mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New
York 10504, Attention: Surveillance.
Section 207. Concerning the Special Insurance Provisions. The provisions of
this Article 2 shall apply notwithstanding anything in the Indenture to the
contrary, but only so long as the Policy shall be in full force and effect and
the Insurer is not in default thereunder.
Section 208. Amendments or Supplements. The Trustee, in determining whether
any amendments or supplements to the Indenture may be made without the consent
of the Holders, or in determining whether any action should be taken, shall
consider the effect of such action on the rights of the Holders as if the
Policy were not in effect.
ARTICLE 3
Miscellaneous Provisions
Section 301. Recitals by Corporation. The recitals in this Third
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 C Notes and of this Third
Supplemental Indenture as fully and with like effect as if set forth herein in
full.
Section 302. 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 Third Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
Section 303. Executed in Counterparts. This Third Supplemental Indenture may
be executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts shall together constitute but one and the same
instrument.
5
<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed
in its name and behalf by its duly authorized officers, all as of the day and
year first above written.
Duke Energy Corporation
By: _________________________________
Vice President
Attest:
_____________________________
The Chase Manhattan Bank, as Trustee
By: _________________________________
Vice President
Attest:
_____________________________
6
<PAGE>
EXHIBIT A
FORM OF
SERIES C 6.60% SENIOR NOTE
DUE 2038
No. CUSIP No. 264 399 619
DUKE ENERGY CORPORATION
SERIES C 6.60% SENIOR NOTE
DUE 2038
Principal Amount: $
Regular Record Date: close of business on the 15th calendar day prior to the
relevant Interest Payment Date
Original Issue Date: March 11, 1999
Stated Maturity: December 31, 2038
Interest Payment Dates: March 31, June 30, September 30 and December 31
Interest Rate: 6.60% per annum
Authorized Denominations: $25 or any integral multiples thereof
Initial Redemption Date: March 11, 2004
Duke Energy Corporation, a North Carolina corporation (the "Corporation,"
which term includes any successor corporation under the Indenture referred to
on the reverse hereof), for value received, hereby promises to pay to
, or registered assigns, the principal sum of DOLLARS ($ )
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, quarterly in arrears on
each Interest Payment Date as specified above, commencing on June 30, 1999 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 C 6.60% Senior Note Due 2038 (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 C 6.60%
Senior Notes Due 2038 in the aggregate principal amount of $200,000,000.
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 shall be redeemable, in whole or from time to
time in part, at the option of the Corporation on or after March 11, 2004, on
at least 30 days', but not more than 60 days', prior notice mailed to each
Holder of the Securities of this series to be redeemed, at a Redemption Price
equal to 100% of the principal amount to be redeemed plus accrued and unpaid
interest to the Redemption Date.
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 $25.
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-3
<PAGE>
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 $25 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-4
<PAGE>
STATEMENT OF INSURANCE
The MBIA Insurance Corporation (the "Insurer") has issued a policy
containing the following provisions, such policy being on file at The Chase
Manhattan Bank in New York, New York:
The Insurer, in consideration of the payment of the premium and subject to
the terms of the policy, hereby unconditionally and irrevocably guarantees to
any owner, as hereinafter defined, of the following described obligations, the
full and complete payment required to be made by or on behalf of the Issuer to
The Chase Manhattan Bank or its successor (the "Paying Agent") of an amount
equal to (i) the principal of (either at the stated maturity or by any
advancement of maturity pursuant to a mandatory sinking fund payment) and
interest on, the Obligations (as that term is defined below) as such payments
shall become due but shall not be so paid (except that in the event of any
acceleration of the due date of such principal by reason of mandatory or
optional redemption or acceleration resulting from default or otherwise, other
than any advancement of maturity pursuant to a mandatory sinking fund payment,
the payments guaranteed hereby shall be made in such amounts and at such times
as such payments of principal would have been due had there not been any such
acceleration); and (ii) the reimbursement of any such payment which is
subsequently recovered from any owner pursuant to a final judgment by a court
of competent jurisdiction that such payment constitutes an avoidable
preference to such owner within the meaning of any applicable bankruptcy law.
The amounts referred to in clauses (i) and (ii) of the preceding sentence
shall be referred to herein collectively as the "Insured Amounts."
"Obligations" shall mean:
$200,000,000
DUKE ENERGY CORPORATION
Series C 6.60% Senior Notes Due 2038
Upon receipt of telephonic or telegraphic notice, such notice subsequently
confirmed in writing by registered or certified mail, or upon receipt of
written notice by registered or certified mail, by the Insurer from the Paying
Agent or any owner of an Obligation the payment of an Insured Amount for which
is then due, that such required payment has not been made, the Insurer on the
due date of such payment or within one business day after receipt of notice of
such nonpayment, whichever is later, will make a deposit of funds, in an
account with State Street Bank and Trust Company, N.A., in New York, New York,
or its successor, sufficient for the payment of any such Insured Amounts which
are then due. Upon presentment and surrender of such Obligations or
presentment of such other proof of ownership of the Obligations, together with
any appropriate instruments of assignment to evidence the assignment of the
Insured Amounts due on the Obligations as are paid by the Insurer, and
appropriate instruments to effect the appointment of the Insurer as agent for
such owners of the Obligations in any legal proceeding related to payment of
Insured Amounts on the Obligations, such instruments being in a form
satisfactory to State Street Bank and Trust Company, N.A., State Street Bank
and Trust Company, N.A. shall disburse to such owners or the Paying Agent
payment of the Insured Amounts due on such Obligations, less any amount held
by the Paying Agent for the payment of such Insured Amounts and legally
available therefor. The policy does not insure against loss of any prepayment
premium which may at any time be payable with respect to any Obligation.
As used herein, the term "owner" shall mean the registered owner of any
Obligation as indicated in the books maintained by the Paying Agent, the
Issuer, or any designee of the Issuer for such purpose. The term owner shall
not include the Issuer or any party whose agreement with the Issuer
constitutes the underlying security for the Obligations.
Any service of process on the Insurer may be made to the Insurer at its
offices located at 113 King Street, Armonk, New York 10504 and such service of
process shall be valid and binding.
This policy is not covered by the Property/Casualty Insurance Security Fund
specified in Article 76 of the New York Insurance Law.
This policy is non-cancelable for any reason. The premium on this policy is
not refundable for any reason including the payment prior to maturity of the
Obligations.
MBIA INSURANCE CORPORATION
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-1(D)
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 526 South Church Street, Charlotte, North
Carolina 28202 (the "Corporation"), and THE CHASE MANHATTAN BANK, a New York
banking corporation, as Trustee (herein called the "Trustee").
W I T N E S S E T H:
WHEREAS, the Corporation has heretofore entered into a Senior Indenture,
dated as of 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 , commencing ,
.
"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 $ 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.
"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.
3
<PAGE>
Notwithstanding Section 1104 of the Original Indenture, the notice of
redemption with respect to the foregoing redemption need not set forth the
Redemption Price but only the manner of calculation thereof.
The Corporation shall notify the Trustee of the Redemption Price with
respect to the foregoing redemption promptly after the calculation thereof.
The Trustee shall not be responsible for calculating said Redemption Price.
If less than all of the Series Notes are to be redeemed, the Trustee shall
select the Series Notes or portions of Series Notes to be redeemed by such
method as the Trustee shall deem fair and appropriate. The Trustee may select
for redemption Series Notes and portions of Series Notes in amounts of
whole multiples of $ .
The Series Notes shall not have a sinking fund.
Section 107. 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 , commencing ,
Interest Rate: % per annum
Authorized Denomination: $ 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 $ .
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.
"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 prinicpal 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 $ .
A-3
<PAGE>
If an Event of Default with respect to the Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Corporation and the rights of the Holders of the Securities of all series
affected under the Indenture at any time by the Corporation and the Trustee
with the consent of the Holders of not less than a majority in principal amount
of the Outstanding Securities of all series affected thereby (voting as one
class). The Indenture contains provisions permitting the Holders of not less
than a majority in principal amount of the Outstanding Securities of all series
with respect to which a default under the Indenture shall have occurred and be
continuing (voting as one class), on behalf of the Holders of the Securities of
all such series, to waive, with certain exceptions, such default under the
Indenture and its consequences. The Indenture also permits the Holders of not
less than a majority in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Corporation with certain provisions of the
Indenture affecting such series. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Corporation, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Corporation for such purpose, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Corporation and
the Security Registrar and duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Securities of this
series, of authorized denominations and of like tenor and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
A-4
<PAGE>
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of the Securities of this series and for covenant defeasance at
any time of certain covenants in the Indenture upon compliance with certain
conditions set forth in the Indenture.
Prior to due presentment of this Security for registration of transfer, the
Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue, and neither the
Corporation, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Securities of this series are issuable only in registered form without
coupons in denominations of $ and any integral multiple thereof. As
provided in the Indenture and subject to the limitations 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(A)
- --------------------------------------------------------------------------------
DUKE ENERGY CORPORATION
TO
THE CHASE MANHATTAN BANK
Trustee
-------------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of December 8, 1997
-------------------------
$360,824,750
SERIES A 7.20% JUNIOR SUBORDINATED NOTES
DUE SEPTEMBER 30, 2037
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS/1/
-----------------
PAGE
ARTICLE I Series A 7.20% Junior Subordinated Notes................ 1
SECTION 101. Establishment................................... 1
SECTION 102. Definitions...................................... 2
SECTION 103. Payment of Principal and Interest................ 4
SECTION 104. Deferral of Interest Payments.................... 5
SECTION 105. Denominations.................................... 6
SECTION 106. Global Securities................................ 6
SECTION 107. Redemption....................................... 7
SECTION 108. Additional Interest.............................. 7
SECTION 109. Limitations on Dividend
and Certain Other Payments..................... 8
SECTION 110. Covenants Regarding Securities Trust............. 9
SECTION 111. No Fiduciary Duty of Trustee to Holders
of Trust Securities............................ 9
SECTION 112. Listing of Series A Notes........................ 9
SECTION 113. Covenant Defeasance.............................. 9
SECTION 114. Set-Off.......................................... 9
SECTION 115. Subordination.................................... 9
SECTION 116. Paying Agent..................................... 10
ARTICLE 2 Miscellaneous Provisions................................ 10
SECTION 201. Recitals by Corporation.......................... 10
SECTION 202. Ratification and Incorporation
of Original Indenture.......................... 10
SECTION 203. Executed in Counterparts......................... 10
EXHIBIT A FORM OF SERIES A 7.20% JUNIOR SUBORDINATED NOTE DUE
SEPTEMBER 30, 2037
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 FIRST SUPPLEMENTAL INDENTURE is made as of the 8th day of December,
1997, 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").
WITNESSETH:
WHEREAS, the Corporation has heretofore entered into a Subordinated
Indenture, dated as of December 1, 1997 (the "Original Indenture") with The
Chase Manhattan Bank;
WHEREAS, the Original Indenture is incorporated herein by this reference
and the Original Indenture, as supplemented by this First Supplemental
Indenture, is herein called the "Indenture";
WHEREAS, under the Original Indenture, a new series of Securities may at
any time be established in accordance with the provisions of the Original
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 Original 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 First 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 A 7.20% Junior Subordinated Notes
SECTION 101. Establishment. There is hereby established a new series
-------------
of Securities to be issued under the Indenture, to be designated as the
Corporation's Series A 7.20% Junior Subordinated Notes due September 30, 2037
(the "Series A Notes").
There are to be authenticated and delivered $360,824,750 principal
amount of Series A Notes, and no further Series A Notes shall be authenticated
and delivered except as provided by Sections 304, 305, 306, 906 or 1106 of the
Original Indenture. The Series A Notes shall be issued in definitive fully
registered form without coupons.
<PAGE>
The Series A Notes shall be in substantially the form set out in Exhibit
A hereto. The entire principal amount of the Series A Notes shall initially be
evidenced by one certificate issued to the Property Trustee of Duke Energy
Capital Trust I.
The form of the Trustee's Certificate of Authentication for the Series A
Notes shall be in substantially the form set forth in Exhibit B hereto.
Each Series A 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 1.02. Definitions. The following defined terms used herein
-----------
shall, unless the context otherwise requires, have the meanings specified below.
Capitalized terms used herein for which no definition is provided herein shall
have the meanings set forth in the Original Indenture.
"Additional Interest" means (i) such additional amounts as may be
required so that the net amounts received and retained by the Holder (if the
Holder is the Securities Trust) after paying taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes) imposed
by the United States or any other taxing authority will not be less than the
amounts the Holder would have received had not such taxes, duties, assessments,
or other governmental charges been imposed; and (ii) such interest as shall
accrue on interest due and not paid on an Interest Payment Date, accruing at the
rate of 7.20% per annum from the applicable Interest Payment Date to the date of
payment, compounded quarterly, on each Interest Payment Date, to the extent
permitted by applicable law.
"Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a
day on which banks in New York, New York are authorized or obligated by law or
executive order to remain closed or (iii) a day on which the Corporate Trust
Office or the principal corporate trust office of the Property Trustee is closed
for business.
"Deferred Interest" means such installments of interest as are not paid
during any Extension Period, plus Additional Interest (as defined in clause (ii)
of the definition thereof) thereon.
"Extension Period" means any period during which the Corporation has
elected to defer payments of interest, which deferral may be for a period of up
to twenty (20) consecutive quarters.
"Guarantee" means the Guarantee Agreement executed and delivered by the
Corporation and The Chase Manhattan Bank, as guarantee trustee, for the benefit
of the holders of the Preferred Securities, as such Agreement may be amended
from time to time.
"Interest Payment Dates" means March 31, June 30, September 30 and
December 31 of each year.
" Investment Company Act Event" means that the Administrative Trustees
(as defined in the Trust Agreement) and the Corporation shall have received an
Opinion of Counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or
2
<PAGE>
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that the Securities Trust
is or will be considered an "investment company" that is required to be
registered under the Investment Company Act of 1940, as amended, which change
becomes effective on or after the Original Issue Date.
"Original Issue Date" means December 8, 1997.
"Outstanding", when used with respect to the Series A Notes, means , as
of the date of determination, all Series A Notes, theretofore authenticated and
delivered under the Indenture, except:
(i) Series A Notes theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Series A Notes for whose payment or redemption the
necessary amount of money or money's worth has been theretofore
deposited with the Trustee or any Paying Agent (other than the
Corporation) in trust or set aside and segregated in trust by
the Corporation (if the Corporation shall act as its own Paying
Agent) for the Holders of such Series A Notes; provided that if
such Series A Notes are to be redeemed, notice of such
redemption has been duly given pursuant to the Indenture or
provision therefor satisfactory to the Trustee has been made;
(iii) Series A Notes as to which Defeasance has been effected
pursuant to Section 1302 of the Original Indenture; and
(iv) Series A Notes that have been paid or in exchange for or
in lieu of which other Series A Notes have been authenticated
and delivered pursuant to the Indenture, other than any such
Series A notes in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such
Series A Notes are held by a bona fide purchaser in whose hands
such Series A Notes are valid obligations of the Corporation;
provided, however, that in determining, during any period in which any Series A
Notes are owned by any Person other than the Corporation or any Affiliate
thereof, whether the Holders of the requisite principal amount of Outstanding
Series A Notes have given, made or taken any request, demand, authorization,
direction, notice, consent, waiver or other action hereunder as of any date,
Series A Notes owned, whether of record or beneficially, by the Corporation or
any Affiliate thereof (with the exception of the Securities Trust) shall be
disregarded and deemed not to be Outstanding. In determining whether the Trustee
shall be protected in relying upon such request, demand, authorization,
direction, notice, consent, waiver or other action, only Series A Notes that the
Trustee knows to be so owned by the Corporation or an Affiliate of the
Corporation (with the exception of the Securities Trust) in the above
circumstances shall be so disregarded. Series A Notes so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Series A Notes and that the pledgee is not the Corporation or any Affiliate
of the Corporation.
3
<PAGE>
"Preferred Securities" means the 7.20% Cumulative Quarterly Income
Preferred Securities issued by the Securities Trust.
"Property Trustee," when used with respect to the Series A Notes, means
the Person designated as such in the Trust Agreement.
"Regular Record Date" means, with respect to each Interest Payment Date,
the close of business on the 15th calendar day preceding such Interest Payment
Date.
"Securities Trust" means Duke Energy Capital Trust I, a statutory
business trust formed by the Corporation under Delaware law to issue the Trust
Securities, the proceeds of which will be used to purchase Series A Notes, or a
successor thereof.
"Special Event" means an Investment Company Act Event or Tax Event.
"Stated Maturity" means September 30, 2037.
"Tax Event" means that the Administrative Trustees and the Corporation
shall have received an Opinion of Counsel experienced in such matters to the
effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein or (b) any amendment to, or change in, an interpretation or application
of such laws or regulations, there is more than an insubstantial risk that (i)
the Securities Trust would be subject to United States federal income tax with
respect to income accrued or received on the Series A Notes, (ii) interest
payable on the Series A Notes would not be deductible by the Corporation for
United States federal income tax purposes, or (iii) the Securities Trust would
be subject to more than a de minimis amount of other taxes, duties or other
governmental charges, which change or amendment becomes effective on or after
the Original Issue Date.
"Trust Agreement" means the Amended and Restated Trust Agreement that
governs the affairs of the Securities Trust.
"Trust Securities" means the securities issued by the Securities Trust
evidencing the entire beneficial interest therein.
SECTION 103. Payment of Principal and Interest. The unpaid principal
---------------------------------
amount of the Series A Notes shall bear interest at the rate of 7.20% per annum
until paid or duly provided for, such interest to accrue from December 8, 1997
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for. Interest shall be paid quarterly in arrears on each Interest
Payment Date to the Person in whose name the Series A Notes are registered on
the Regular Record Date for such Interest Payment Date; provided that interest
payable at the Stated Maturity of principal or on a Redemption Date as provided
herein will be paid to the Person to whom principal is payable. So long as an
Extension Period is not occurring, any such interest that is not so punctually
paid or duly provided for will forthwith cease to be payable to the Holders on
such Regular Record Date and may either be paid to the Person or Persons in
whose name the Series A 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 A 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
4
<PAGE>
Series A 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 A Notes will include interest accrued
to but excluding the respective Interest Payment Dates. Interest payments for
the Series A 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 A Notes is not a Business Day, then payment of the interest payable
on such date will be made on the next succeeding day that is a Business Day (and
without any interest or payment in respect of any such delay), except that, if
such Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on the date the payment was originally payable.
Payment of the principal and interest (including Additional Interest, if
any) on the Series A Notes shall be made at the office of the Paying Agent in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts, with any such payment
that is due at the Stated Maturity or at earlier redemption of any Series A
Notes being made upon surrender of such Series A Notes to the Paying Agent.
Payments of interest (including interest on any Interest Payment Date) will be
made, subject to such surrender where applicable, at the option of the
Corporation, (i) by check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register or (ii) by wire transfer
at such place and to such account at a banking institution in the United States
as may be designated in writing to the Trustee at least sixteen (16) days prior
to the date for payment by the Person entitled thereto.
The Corporation shall pay, as additional interest on the Series A Notes,
when due to the United States or any other taxing authority, the amounts set
forth in clause (i) of the definition of Additional Interest.
SECTION 104. Deferral of Interest Payments. The Corporation has the
-----------------------------
right at any time and from time to time to extend the interest payment period
of the Series A Notes for up to twenty (20) consecutive quarters (each, an
"Extension Period"), during which Extension Period the Corporation shall have
the right to make partial payments of interest on any Interest Payment Date;
provided, however, that no such Extension Period may extend beyond the Stated
Maturity. Notwithstanding the foregoing, the Corporation has no right to extend
its obligation to pay such amounts as are defined in clause (i) of the
definition of Additional Interest. Prior to the termination of any such
Extension Period, the Corporation may further extend the interest payment
period; provided that such Extension Period, together with all such previous and
further extensions of that Extension Period, shall not exceed twenty (20)
consecutive quarters. Upon the termination of any such Extension Period and upon
the payment of all accrued and unpaid interest and any Additional Interest then
due, the Corporation may select a new Extension Period, subject to the above
limitations and requirements.
Upon the termination of any Extension Period, which termination shall be
on an Interest Payment Date, the Corporation shall pay all Deferred Interest on
the next succeeding Interest Payment Date to the Person or Persons in whose name
the Series A Notes are registered on the Regular Record Date for such Interest
Payment Date; provided that Deferred Interest payable at Stated Maturity or on
any Redemption Date will be paid to the Person or Persons to whom principal is
payable.
5
<PAGE>
The Corporation shall give the Holder or Holders of the Series A Notes
and the Trustee notice, as provided in Sections 105 and 106, respectively, of
the Original Indenture, of its selection or extension of an Extension Period at
least one Business Day prior to the earlier of (i) the Regular Record Date
relating to the Interest Payment Date on which the Extension Period is to
commence or relating to the Interest Payment Date on which an Extension Period
that is being extended would otherwise terminate, or (ii) the date the
Corporation or the Securities Trust is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization of the record
date or the date such distributions are payable. The Corporation shall cause the
Securities Trust to give notice of the Corporation's selection of such Extension
Period to Holders of the Trust Securities. The month in which any notice is
given pursuant to the immediately preceding sentence of this Section shall
constitute the first month of the first quarter of the twenty (20) consecutive
quarters which comprise the maximum Extension Period.
At any time any of the foregoing notices are given to the Trustee, the
Corporation shall give to the Paying Agent for the Series A Notes such
information as said Paying Agent shall reasonably require in order to fulfill
its tax reporting obligations with respect to such Series A Notes.
SECTION 105. Denominations. The Series A Notes may be issued in
-------------
denominations of $25, or any integral multiple thereof.
SECTION 106. Global Securities. If the Series A Notes are distributed
-----------------
to holders of the Trust Securities in liquidation of such holders' interests
therein, the Series A Notes will be issued in the form of one or more Global
Securities registered in the name of the Depositary (which shall be The
Depository Trust Company) or its nominee. Except under the limited circumstances
described below, Series A Notes represented by such Global Security or Global
Securities will not be exchangeable for, and will not otherwise be issuable as,
Series A Notes in definitive form. The Global Securities described above may not
be transferred except by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary
or to a successor Depositary or its nominee.
Owners of beneficial interests in such a Global Security will not be
considered the Holders thereof for any purpose under the Indenture, and no
Global Security representing a Series A Note shall be exchangeable, except for
another Global Security of like denomination and tenor to be registered in the
name of the Depositary or its nominee or to a successor Depositary or its
nominee or except as described below. The rights of Holders of such Global
Security shall be exercised only through the Depositary.
A Global Security shall be exchangeable for Series A 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 A Notes registered in such names as the Depositary shall
direct.
6
<PAGE>
SECTION 107. Redemption. The Series A Notes shall be subject to
----------
redemption at the option of the Corporation, in whole or in part, without
premium or penalty, at any time or from time to time on or after December 31,
2002, at a Redemption Price equal to 100% of the principal amount to be redeemed
plus accrued but unpaid interest (including any Additional Interest) to the
Redemption Date; provided, however, that, if a redemption in part shall result
in the delisting of the Preferred Securities, the Corporation may redeem the
Series A Notes only in whole. In addition, upon the occurrence of a Special
Event, the Corporation may, within ninety (90) days following the occurrence
thereof and subject to the terms and conditions of the Indenture, redeem the
Series A Notes, in whole, at a price equal to 100 % of the principal amount to
be redeemed plus any accrued but unpaid interest (including Additional Interest,
if any) to the Redemption Date.
In the event of redemption of the Series A Notes in part only, a new
Series A Note or Notes for the unredeemed portion shall be issued in the name or
names of the Holders thereof upon the surrender thereof.
The Series A Notes shall not have a sinking fund.
Notice of redemption shall be given as provided in Section 1104 of the
Original Indenture. Notwithstanding the foregoing, no notice of redemption that
is given pursuant to such Section with respect to any Series A Notes shall,
while any Preferred Securities are outstanding, contain a condition that
provides that redemption of the Series A Notes, or the part thereof, specified
therein, shall be conditional upon receipt by the Trustee or the Paying Agent
for such Series A Notes, on or prior to the date fixed for such redemption, of
money sufficient to pay the principal of and any interest on such Series A
Notes. Any notice provided to the Trustee under Section 1102 of the Original
Indenture shall also be provided by the Corporation to the Property Trustee;
provided that the Corporation shall provide notice pursuant to such Section 1102
on a date less than 45 days prior to the Redemption Date only if such shorter
notice is satisfactory to both the Trustee and the Property Trustee.
Any redemption of less than all of the Series A Notes shall, with
respect to the principal thereof, be divisible by $25.
SECTION 108. Additional Interest. Whenever there is mentioned in
-------------------
the Indenture, in any context, the payment of the principal of, or any premium
or interest on, or in respect of, Securities of any series, such mention shall,
with respect to the Series A Notes, be deemed to include mention of the payment
of Additional Interest provided for by the terms of the Series A Notes to the
extent that, in such context, Additional Interest is, were or would be payable
in respect thereof pursuant to such terms, and express mention of the payment of
Additional Interest in any provisions of this First Supplemental Indenture shall
not be construed as excluding Additional Interest in those provisions of the
Original Indenture or this First Supplemental Indenture in which such express
mention is not made.
If, subsequent to the date that a satisfaction and discharge or
Defeasance is effected pursuant to Section 401 or 1302, respectively, of the
Original Indenture, Additional Interest (for purposes of this paragraph, as
defined in clause (i) of the definition thereof) (in excess of that established
as of the date that such discharge or Defeasance is effected) becomes payable in
respect of the Series A Notes so discharged or defeased, the Corporation shall
irrevocably deposit or cause to be irrevocably deposited in accordance with the
provisions of Section 401 or 1304 of the Original Indenture, as the case may be,
within ten Business Days prior
7
<PAGE>
to the date the first payment in respect of any portion of such excess
Additional Interest becomes due, such additional moneys or Government
Obligations as are necessary to satisfy the provisions of Section 401 or 1304 of
the Original Indenture, as the case may be, as if a discharge or Defeasance were
being effected as of the date of such subsequent deposit.
Except as otherwise provided in or pursuant to the Indenture, at least
10 days prior to the first Interest Payment Date upon which Additional Interest
(for purposes of this paragraph, as defined in clause (i) of the definition
thereof) shall be payable, and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the information set forth in the Officers' Certificate hereinafter mentioned,
the Corporation shall furnish the Trustee and any Paying Agent, if other than
the Trustee or the Corporation, with an Officers' Certificate stating the amount
of the Additional Interest payable per minimum authorized denomination of the
Series A Notes.
SECTION 109. Limitations on Dividend and Certain Other Payments. The
--------------------------------------------------
Corporation covenants, for the benefit of the Holders of the Series A Notes,
that, subject to the next succeeding sentence, (a) the Corporation shall not
declare or pay any dividend on, or make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock, and (b) the Corporation shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees other than the Guarantee) issued by the
Corporation which rank pari passu with or junior to the Series A Notes (i) if at
such time the Corporation shall have given notice of its election to extend an
interest payment period for the Series A Notes and such extension shall be
continuing or (ii) if at such time an Event of Default with respect to the
Series A Notes shall have occurred and be continuing. The preceding sentence,
however, shall not restrict (A) any of the actions described in the preceding
sentence resulting from any reclassification of the Corporation's capital stock
or the exchange or conversion of one class or series of the Corporation's
capital stock for another class or series of the Corporation's capital stock,
(B) the declaration and payment of a dividend or distribution or similar share
purchase rights in the future, (C) repurchases, redemptions or other
acquisitions of shares of the Corporation's capital stock in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of employees, officers or directors or a stock purchase and dividend
reinvestment plan, (D) acquisitions of shares of the Corporation's capital stock
in connection with the issuance of shares of the Corporation's capital stock (or
securities convertible into or exchangeable for shares of the Corporation's
capital stock) as consideration in an acquisition transaction that was entered
into prior to the commencement of the relevant Extension Period, (E) dividends
or distributions in capital stock of the Corporation, (F) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, or (G) mandatory sinking fund payments with
respect to any series of the Corporation's preferred stock or preferred stock A;
provided that the aggregate stated value of all such series outstanding at the
time of any such payment does not exceed 5% of the aggregate of (1) the total
principal amount of all bonds or other securities representing secured
indebtedness issued or assumed by the Corporation and then outstanding and (2)
the capital and surplus of the Corporation to be stated on the books of account
of the Corporation after giving effect to such payment; provided, however, that
any moneys deposited into any sinking fund and not in violation of this
provision may thereafter be applied to the purchase or redemption of such
preferred stock or preferred stock A in accordance with the terms of such
sinking fund without regard to the restrictions contained in this Section 109.
8
<PAGE>
SECTION 110. Covenants Regarding Securities Trust. For so long as the
------------------------------------
Trust Securities remain outstanding, the Corporation covenants (i) directly or
indirectly to maintain 100% ownership of the Common Securities (as defined in
the Trust Agreement) of the Securities Trust; provided, however, that any
permitted successor of the Corporation under the Indenture may succeed to the
Corporation's ownership of such Common Securities, and (ii) to use its
reasonable efforts to cause the Securities Trust (a) to remain a statutory
business trust, except in connection with the distribution of Series A Notes to
the holders of Trust Securities in liquidation of the Securities Trust, the
redemption of all of the Trust Securities, or certain mergers, consolidations or
amalgamations, each as permitted under the Trust Agreement, and (b) to otherwise
continue to be classified as a grantor trust for United States federal income
tax purposes. The Corporation shall deliver to the Trustee, no later than the
Business Day on which the event occurs, written notice of the liquidation,
dissolution or winding-up of the Securities Trust if such liquidation,
dissolution or winding-up would occur earlier than the Stated Maturity of the
Series A Notes owned by such Securities Trust.
SECTION 111. No Fiduciary Duty of Trustee to Holders of Trust
------------------------------------------------
Securities. The Trustee shall not be deemed to owe any fiduciary duty to the
- ----------
holders of Trust Securities and shall be entitled to rely on the delivery to it
of a written notice by a Person representing himself to be a holder of a Trust
Security to establish that such Person is such a holder.
SECTION 112. Listing of Series A Notes. If the Series A Notes are to
-------------------------
be issued as a Global Security in connection with the distribution of the Series
A Notes to the holders of the Preferred Securities, the Corporation shall use
its best efforts to list such Series A Notes on the New York Stock Exchange or
any other exchange on which such Preferred Securities are then listed. The
Corporation shall notify the Trustee if and when the Series A Notes become
admitted to trading on the New York Stock Exchange or any other national
securities exchange.
SECTION 113. Covenant Defeasance. Section 1303 of the Original
-------------------
Indenture shall not apply to any of the Series A Notes.
SECTION 114. Set-Off. Notwithstanding anything to the contrary in the
-------
Indenture or in any Series A Note, prior to the dissolution of the Securities
Trust, the Corporation shall have the right to set-off and apply against any
payment it is otherwise required to make hereunder or thereunder with respect to
the principal of or interest (including any Additional Interest) on the Series A
Notes with and to the extent the Corporation has theretofore made, or is
concurrently on the date of such payment making, a payment with respect to the
Preferred Securities under the Guarantee. Contemporaneously with, or as promptly
as practicable after, any such payment under the Guarantee, the Corporation
shall deliver to the Trustee an Officers' Certificate (upon which the Trustee
shall be entitled to rely conclusively without any requirement to investigate
the facts contained therein) to the effect that such payment has been made and
that, as a result of such payment, the corresponding payment under the Series A
Notes has been set-off in accordance with this Section 114.
SECTION 115. Subordination. The indebtedness evidenced by the Series
-------------
A 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 A Notes, and the Series A Notes shall rank
9
<PAGE>
pari passu in right of payment with each other series of Securities issued under
the Indenture, with the exception of any series of Securities which by its terms
provides otherwise.
SECTION 116. Paying Agent. The Trustee shall initially serve as Paying
------------
Agent with respect to the Series A Notes, with the Place of Payment initially
being the Corporate Trust Office of the Trustee.
ARTICLE 2
Miscellaneous Provisions
SECTION 201. Recitals by Corporation. The recitals in this First
-----------------------
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 A Notes and of this First 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 First Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
SECTION 203. Executed in Counterparts. This First Supplemental
------------------------
Indenture may be executed in several counterparts, each of which shall be deemed
to be an original, and such counterparts shall together constitute but one and
the same instrument.
SECTION 204. Assignment. The Corporation shall have the right at all
----------
times to assign any of its rights or obligations under this Indenture with
respect to the Series A Notes to a direct or indirect wholly-owned subsidiary of
the Corporation; provided that, in the event of any such assignment, the
Corporation shall remain primarily liable for the performance of all such
obligations. The Indenture may also be assigned by the Corporation in connection
with a transaction described in Article Eight of the Original Indenture.
SECTION 205. Enforcement by Holders of Preferred Securities of Right
-------------------------------------------------------
of Holders to Receive Principal and Interest. So long as the Series A Notes are
- --------------------------------------------
held by the Property Trustee on behalf of the Securities Trust, a registered
holder of Preferred Securities may institute a legal proceeding directly against
the Corporation, without first instituting a legal proceeding directly against
or requesting or directing that action be taken by the Property Trustee or any
other Person, for enforcement of payment to such registered holder of principal
of or interest on Series A Notes having a principal amount equal to the
aggregate stated liquidation amount of such Preferred Securities of such
registered holder on or after the due dates therefor specified or provided for
in the Series A Notes. This Section 205 and Section 109 of this First
Supplemental Indenture are for the benefit of the registered holders of
Preferred Securities and, prior to the dissolution of the Securities Trust, may
be enforced by such holders. A holder of a Preferred Security shall not have the
right, as such holder, to enforce any other provision of the Indenture.
10
<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: /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/
- ----------------------------------
11
<PAGE>
EXHIBIT A
FORM OF
SERIES A 7.20% JUNIOR SUBORDINATED NOTE
DUE SEPTEMBER 30, 2037
No. 1 CUSIP NO. 264 399 DH6
THE INDEBTEDNESS EVIDENCED BY THIS SECURITY IS, TO THE EXTENT PROVIDED IN THE
INDENTURE, SUBORDINATE AND SUBJECT IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN
FULL OF ALL SENIOR INDEBTEDNESS AND THIS SECURITY IS ISSUED SUBJECT TO THE
PROVISIONS OF THE INDENTURE WITH RESPECT THERETO.
DUKE ENERGY CORPORATION
SERIES A 7.20% JUNIOR SUBORDINATED NOTE
DUE SEPTEMBER 30, 2037
Principal Amount: $
Regular Record Date: 15th calendar day prior to Interest Payment Date
Original Issue Date: December 8, 1997
Stated Maturity: September 30, 2037
Interest Payment Dates: March 31, June 30, September 30, December 31
Interest Rate: 7.20% per annum
Authorized Denomination: $25
Initial Redemption Date: December 31, 2002
Duke Energy Corporation, a North Carolina corporation (the
"Corporation," which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to , or registered assigns, the principal sum of
DOLLARS ($ ) on the Stated Maturity shown above (or upon earlier
redemption), and to pay interest thereon from the Original Issue Date shown
above, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, quarterly in arrears on each Interest Payment Date as
specified above, commencing on the Interest Payment Date next succeeding the
Original Issue Date shown above and on the Stated Maturity (or upon earlier
redemption) at the rate per annum shown above (the "Interest Rate") until the
principal hereof is paid or made available for payment and on any overdue
principal and on any overdue installment of interest. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date (other
than an Interest Payment Date that is the Stated Maturity or on a Redemption
Date) will, as provided in such Indenture, be paid to the Person in whose name
this Series A 7.20% Junior Subordinated Note
A-1
<PAGE>
(this "Security") is registered at the close of business on the Regular Record
Date as specified above next preceding such Interest Payment Date; provided that
any interest payable at Stated Maturity or on any Redemption Date will be paid
to the Person to whom principal is payable. Except as otherwise provided in the
Indenture, any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange, if any, on which the Securities of
this series shall be listed, and upon such notice as may be required by any
such exchange, all as more fully provided in said Indenture.
Payments of interest on this Security will include interest accrued to
but excluding the respective Interest Payment Dates. Interest payments for this
Security shall be computed and paid on the basis of a 360-day year of twelve 30-
day months. In the event that any date on which interest is payable on this
Security is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, payment shall be made on
the immediately preceding Business Day, in each case with the same force and
effect as if made on the date the payment was originally payable. "Business Day"
means a day other than (i) a Saturday or a Sunday, (ii) a day on which banks in
New York, New York are authorized or obligated by law or executive order to
remain closed or (iii) a day on which the Corporate Trust Office or the
principal corporate trust office of the Property Trustee is closed for business.
The Corporation shall have the right at any time and from time to time
during the term of this Security to extend the interest payment period of such
Security for up to 20 consecutive quarters (each, an "Extension Period"), but
not beyond the Stated Maturity of this Security, during which Extension Periods
interest shall accrue on unpaid installments of interest at the Interest
Rate, compounded quarterly, to the date of payment to the extent permitted by
applicable law (such unpaid interest plus such interest thereon being called
"Deferred Interest"); provided, however, that the Corporation shall have the
right to make partial payments of interest on any Interest Payment Date during
any Extension Period. Upon the termination of each Extension Period, which shall
be an Interest Payment Date, the Corporation shall pay all Deferred Interest on
the next succeeding Interest Payment Date to the Person in whose name this
Security is registered at the close of business on the Regular Record Date for
such Interest Payment Date; provided that any Deferred Interest payable at
Stated Maturity or on any Redemption Date will be paid to the Person to whom
principal is payable. Prior to the termination of any such Extension Period, the
Corporation may further extend the interest payment period; provided that such
Extension Period together with all such previous and further extensions thereof
shall not exceed twenty (20) consecutive quarters. Upon the termination of any
such Extension Period, and the payment of all accrued and unpaid interest
(including any Additional Interest) then due, the Corporation may select a new
Extension Period, subject to the above requirements. The Corporation shall not
(i) declare or pay any dividend or distribution on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of its capital stock, and
(ii) make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees other than the
Guarantee) issued by the Corporation that rank pari passu with or junior to this
Security if the Corporation shall have given notice of its election to extend an
interest payment per period for this Security and such
A-2
<PAGE>
extension shall be continuing or if at such time an Event of Default with
respect to the series of which this Security is a part shall have occurred and
be continuing. The preceding sentence, however, shall not restrict (A) any of
the actions described in the preceding sentence resulting from any
reclassification of the Corporation's capital stock or the exchange or
conversion of one class or series of the Corporation's capital stock for another
class or series of the Corporation's capital stock, (B) the declaration and
payment of a dividend or distribution or similar share purchase rights in the
future, (C) repurchases, redemptions or other acquisitions of shares of the
Corporation's capital stock in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of employees, officers
or directors or a stock purchase and dividend reinvestment plan, (D)
acquisitions of shares of the Corporation's capital stock in connection with the
issuance of shares of the Corporation's capital stock (or securities convertible
into or exchangeable for shares of the Corporation's capital stock) as
consideration in an acquisition transaction that was entered into prior to the
commencement of the relevant Extension Period, (E) dividends or distributions on
capital stock of the Corporation, (F) the purchase of fractional interests in
shares of the Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
or (G) mandatory sinking fund payments with respect to any series of the
Corporation's preferred stock or preferred stock A; provided that the aggregate
stated value of all such series outstanding at the time of any such payment does
not exceed 5% of the aggregate of (1) the total principal amount of all bonds
or other securities representing secured indebtedness issued or assumed by the
Corporation and then outstanding and (2) the capital and surplus of the
Corporation to be stated on the books of account of the Corporation after giving
effect to such payment; provided, however, that any moneys deposited into any
sinking fund and not in violation of this provision may thereafter be applied to
the purchase or redemption of such preferred stock or preferred stock A in
accordance with the terms of such sinking fund without regard to the
restrictions contained in this provision. The Corporation shall give the Holder
of this Security and the Trustee notice of its selection or extension of an
Extension Period at least one Business Day prior to the earlier of (i) the
Regular Record Date relating to the Interest Payment Date on which the Extension
Period is to commence or relating to the Interest Payment Date on which an
Extension Period that is being extended would otherwise terminate or (ii) the
date the Corporation or the Securities Trust is required to give notice to the
New York Stock Exchange or other applicable self-regulatory organization of the
record date or the date such distributions are payable.
The Corporation also shall be obligated to pay when due and without
extension all additional amounts as may be required so that the net amount
received and retained by the Holder of this Security (if the Holder is the
Securities Trust) after paying taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed by the United
States or any other taxing authority will not be less than the amounts such
Holder would have received had no such taxes, duties, assessments, or other
governmental charges been imposed.
Payment of the principal of and interest (including Additional Interest,
if any) due at the Stated Maturity or earlier redemption of this Security shall
be made upon surrender of this Security, at the Corporate Trust Office of the
Trustee, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts. Payment of
interest (including interest on an Interest Payment Date) will be made, subject
to such surrender where applicable, at the option of the Corporation, (i) by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer at such place and to
such account at a banking institution in the United States
A-3
<PAGE>
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.
A-4
<PAGE>
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:
------------------------------
Authorized Officer
A-5
<PAGE>
(Reverse Side of Security)
This Security is one of a duly authorized issue of Securities of the
Corporation (the "Securities"), issued and issuable in one or more series under
a Subordinated Indenture, dated as of 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 A 7.20% Junior Subordinated Notes due
September 30, 2037 (the "Series A Notes") in the aggregate principal amount of
up to $360,824,750. Capitalized terms used herein for which no definition is
provided herein shall have the meanings set forth in the Indenture.
The Corporation shall have the right, subject to the terms and
conditions of the Indenture, to redeem this Security at any time on or after
December 31, 2002 at the option of the Corporation, without premium or penalty,
in whole or in part, at a Redemption Price equal to 100% of the principal amount
to be redeemed plus accrued but unpaid interest (including any Additional
Interest) to the Redemption Date. Upon the occurrence of a Special Event (as
defined below), the Corporation may, within 90 days following the occurrence
thereof and subject to the terms and conditions of the Indenture, redeem this
Security without premium or penalty, in whole, at a Redemption Price equal to
100% of the principal amount thereof plus accrued but unpaid interest (including
any Additional Interest) to the Redemption Date. A Special Event may be a Tax
Event or an Investment Company Act Event. "Tax Event" means that the
Administrative Trustees and the Corporation shall have received an Opinion of
Counsel experienced in such matters to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to, or
change in, an interpretation or application of such laws or regulations, there
is more than an insubstantial risk that (i) the Securities Trust would be
subject to United States federal income tax with respect to income accrued or
received on the Series A Notes, (ii) interest payable on the Series A Notes
would not be deductible by the Corporation for United States federal income tax
purposes, or (iii) the Securities Trust would be subject to more than a de
minimus amount of other taxes, duties or other governmental charges, which
change or amendment becomes effective on or after the Original Issue Date.
"Investment Company Act Event" means that the Administrative Trustees and the
Corporation shall have received an Opinion of Counsel experienced in such
matters to the effect that, as a result of the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that the Securities Trust is
or will be considered an "investment company" that is required to be registered
under the Investment Company Act of 1946, as amended, which change becomes
effective on or after the Original Issue Date.
In the event of redemption of this Security in part only, a new Security
or Securities of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the surrender hereof. The Securities of this
series will not have a sinking fund.
A-6
<PAGE>
If an Event of Default with respect to the Securities of this series
shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner, with the effect and subject to
the conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Corporation and the rights of the Holders of the Securities of all series
affected under the Indenture at any time by the Corporation and the Trustee with
the consent of the Holders of not less than a majority in principal amount of
the Outstanding Securities of all series affected thereby (voting as one class).
The Indenture contains provisions permitting the Holders of not less than a
majority in principal amount of the Outstanding Securities of all series with
respect to which a default under the Indenture shall have occurred and be
continuing (voting as one class), on behalf of the Holders of the Securities of
all such series, to waive, with certain exceptions, such default under the
Indenture and its consequences. The Indenture also permits the Holders of not
less than a majority in principal amount of the Securities of each series at the
time Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Corporation with certain provisions of the Indenture
affecting such series. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Corporation,
which is absolute and unconditional, to pay the principal of and interest on
this Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Corporation for such purpose, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Corporation and the Security Registrar and duly executed by, the Holder hereof
or his attorney duly authorized in writing, and thereupon one or more new
Securities of this series, of authorized denominations and of like tenor and for
the same aggregate principal amount, will be issued to the designated transferee
or transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than a majority in principal
amount of the Securities of this series at the time Outstanding shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee reasonable indemnity, and the
Trustee shall not have received from the Holders of a majority in principal
amount of Securities of this series at the time Outstanding a direction
inconsistent with such request and shall have failed to institute any such
proceeding for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any
A-7
<PAGE>
suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof or any interest hereon on or after the respective
due dates expressed herein.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of the Securities of this series upon compliance with
certain conditions set forth in the Indenture.
Prior to due presentment of this Security for registration of transfer,
the Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue, and neither the
Corporation, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Securities of this series are issuable only in registered form
without coupons in denominations of $25 and any integral multiple thereof. As
provided in the Indenture and subject to the limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same upon surrender of the Security or
Securities to be exchanged at the office or agency of the Corporation.
This Security shall be governed by, and construed in accordance with,
the internal laws of the State of New York.
A-8
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
-----------------
(Cust)
TEN ENT - as tenants by the entireties Custodian
-----------------
(Minor)
JT TEN - as joint tenants with rights under Uniform Gifts
of survivorship and not as to Minors Act
tenants in common -----------------
(State)
Additional abbreviations may also be used though not on the above list.
----------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
(please insert Social Security or other
- ----------------------------
identifying number of assignee).
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer said Security on the books of the Corporation, with full
power of substitution in the premises.
Dated:
------------------------ ---------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the within instrument in every
particular without alteration or enlargement,
or any change whatever.
A-9
<PAGE>
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
---------------------------------
Authorized Officer
B-1
<PAGE>
Exhibit 4-D-2(B)
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 526 South Church Street, Charlotte, North Carolina 28202
(the "Corporation"), and THE CHASE MANHATTAN BANK, a New York banking
corporation, as Trustee (herein called the "Trustee").
W I T N E S S E T H:
WHEREAS, the Corporation has heretofore entered into a Subordinated
Indenture, dated as of 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 , commencing , .
"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 $ 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 $ .
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 , commencing , .
Interest Rate: % per annum
Authorized Denomination: $ 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
$ . 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 $ .
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>
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of the Securities of this series and for covenant defeasance at
any time of certain covenants in the Indenture upon compliance with certain
conditions set forth in the Indenture.
Prior to due presentment of this Security for registration of transfer, the
Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue, and neither the
Corporation, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Securities of this series are issuable only in registered form without
coupons in denominations of $ and any integral multiple thereof. As
provided in the Indenture and subject to the limitations 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 5
March 31, 1999
Duke Energy Corporation
526 South Church Street
Charlotte, North Carolina 28202
Dear Sirs:
With reference to the filing by Duke Energy Corporation (the Corporation) of
Post-Effective Amendment No. 2 to the Registration Statement (No. 333-14209) of
the Corporation on Form S-3 with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, relating to the proposed issuance and
sale by the Corporation of $1,300,000,000 principal amount of First and
Refunding Mortgage Bonds (the New Bonds) and/or Senior Notes or Subordinated
Notes (the New Debt Securities), I hereby advise you as follows:
As General Counsel, Corporate, Gas and Electric Operations, of the
Corporation, I am familiar with the Articles of Incorporation and the By-Laws of
the Corporation, both as amended to date, the form of supplemental indenture
relating to the New Bonds (the New Bonds Supplemental Indenture) supplementing
the First and Refunding Mortgage, dated as of December 1, 1927, from the
Corporation to The Chase Manhattan Bank, as successor Trustee, as heretofore
supplemented and amended (the First and Refunding Mortgage), the form of
supplemental indenture relating to the Senior Notes (the Senior Notes
Supplemental Indenture) supplementing the Senior Indenture dated as of September
1, 1998 from the Corporation to The Chase Manhattan Bank, as Trustee, as
heretofore supplemented (the Senior Indenture) and the form of supplemental
indenture relating to the Subordinated Notes (the Subordinated Notes
Supplemental Indenture) supplementing the Subordinated Indenture dated as of
December 1, 1997 from the Corporation to The Chase Manhattan Bank, as Trustee,
as heretofore supplemented (the Subordinated Indenture) and have made such
examination of corporate records and proceedings and other documents and
questions of law as I have considered necessary for the purposes of this
opinion.
Based upon the foregoing, I am of the opinion that:
(1) 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.
(2) Upon (a) the above-mentioned Post-Effective Amendment No. 2 to such
Registration Statement under the Securities Act of 1933, as amended, becoming
effective; (b) the First and Refunding Mortgage, as to be supplemented by the
New Bonds Supplemental Indenture, having qualified under the Trust Indenture
Act of 1939, as amended; (c) the execution and delivery of the New Bonds
Supplemental Indenture; (d) the execution, authentication and delivery of the
New Bonds in accordance with resolutions to be adopted by the Management
Committee of the Board of Directors of the Corporation, and in accordance
with the provisions of the First and Refunding Mortgage as to be supplemented
by the New Bonds Supplemental Indenture; and (e) the issuance and sale of the
New Bonds in accordance with the provisions of an appropriate order of the
North Carolina Utilities Commission and an appropriate order of The Public
Service Commission of South Carolina relating thereto, the New Bonds will be
valid, binding and legal obligations of the Corporation in accordance with
their terms, except as limited by bankruptcy, insolvency or other laws
affecting the enforcement of mortgagees' and other creditors' rights.
(3) Upon (a) the above-mentioned Post-Effective Amendment No. 2 to such
Registration Statement under the Securities Act of 1933, as amended, becoming
effective; (b) the Senior Indenture, as to be supplemented by the Senior
Notes Supplemental Indenture, having qualified under the Trust Indenture Act
of 1939, as amended; (c) the execution and delivery of the Senior Notes
Supplemental Indenture; (d) the execution, authentication and delivery of the
Senior Notes in accordance with resolutions to be adopted by the Management
Committee of the Board of Directors of the Corporation, and in accordance
with the provisions of the Senior Indenture as to be supplemented by the
Senior Notes Supplemental Indenture; and (e) the issuance and sale of the
Senior Notes in accordance with the provisions of an appropriate order of the
North Carolina Utilities Commission and an appropriate order of The Public
Service Commission of South Carolina relating thereto, the Senior Notes will
be valid, binding and legal obligations of the Corporation in accordance with
their terms, except as limited by bankruptcy, insolvency or other laws
affecting the enforcement of creditors' rights.
<PAGE>
(4) Upon (a) the above-mentioned Post-Effective Amendment No. 2 to such
Registration Statement under the Securities Act of 1933, as amended, becoming
effective; (b) the Subordinated Indenture, as to be supplemented by the
Subordinated Notes Subordinated Indenture, having qualified under the Trust
Indenture Act of 1939, as amended; (c) the execution and delivery of the
Subordinated Notes Supplemental Indenture; (d) the execution, authentication
and delivery of the Subordinated Notes in accordance with resolutions to be
adopted by the Management Committee of the Board of Directors of the
Corporation, and in accordance with the provisions of the Subordinated
Indenture as to be supplemented by the Subordinated Notes Supplemental
Indenture; and (e) the issuance and sale of the Subordinated Notes in
accordance with the provisions of an appropriate order of the North Carolina
Utilities Commission and an appropriate order of The Public Service
Commission of South Carolina relating thereto, the Subordinated Notes will be
valid, binding and legal obligations of the Corporation in accordance with
their terms, except as limited by bankruptcy, insolvency or other laws
affecting the enforcement of creditors' rights.
Further, I am of the opinion, except as stated above, and other than in
connection with or in compliance with the provisions of the securities or blue
sky laws of any jurisdiction of the United States or Canadian Province, that no
consent of any governmental authority is necessary for the issuance and sale by
the Corporation of the New Bonds and the New Debt Securities.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an Exhibit to the Registration Statement in connection
with the issuance of the New Bonds and the New Debt Securities, and I also
consent to the use of my name and the reference made to me under the caption
"Legal Matters" in the Prospectus constituting a part of the Registration
Statement.
Very truly yours,
Ellen T. Ruff
2
<PAGE>
Exhibit 12
DUKE ENERGY CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------
1998 1997(a) 1996(a) 1995(a) 1994(a)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Earnings Before Income Taxes..... $2,037.6 $1,613.3 $1,788.8 $1,682.3 $1,422.5
Fixed Charges.................... 555.1 519.8 540.2 556.2 537.7
-------- -------- -------- -------- --------
Total........................ $2,592.7 $2,133.1 $2,329.0 $2,238.5 $1,960.2
======== ======== ======== ======== ========
Fixed Charges
Interest on debt............... $ 533.0 $ 496.7 $ 513.6 $ 535.7 $ 519.8
Interest component of rentals.. 22.1 23.1 26.6 20.5 17.9
-------- -------- -------- -------- --------
Fixed Charges................ $ 555.1 $ 519.8 $ 540.2 $ 556.2 $ 537.7
======== ======== ======== ======== ========
Ratio of Earnings to Fixed
Charges......................... 4.7 4.1 4.3 4.0 3.6
</TABLE>
- --------
(a) Financial information reflects accounting for the combination with
PanEnergy Corp on June 18, 1997 as a pooling of interests. As a result, the
financial information gives effect to the combination as if it had occurred
on January 1, 1994.
<PAGE>
Exhibit 23(A)-1
CONSENT OF DELOITTE & TOUCHE LLP
We consent to the incorporation by reference in this Post-Effective
Amendment No. 2 to Registration Statement No. 333-14209 on Form S-3 of Duke
Energy Corporation and the incorporation by reference in Post-Effective
Amendment No. 4 to Registration Statement No. 333-02571 on Form S-3 of Duke
Energy Corporation of our report dated February 12, 1999 appearing in the
annual report on Form 10-K of Duke Energy Corporation for the year ended
December 31, 1998 filed with the Securities and Exchange Commission, and to the
reference to us under the heading "Experts" in the Prospectus which is a part
of this Registration Statement.
/s/ Deloitte & Touche LLP
- -------------------------
Deloitte & Touche LLP
Charlotte, North Carolina
March 31, 1999
<PAGE>
Exhibit 23(A)-2
CONSENT OF KPMG LLP
We consent to the incorporation by reference in this Post-Effective
Amendment No. 2 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 year ended December 31, 1996 appearing in the annual report on
Form 10-K of PanEnergy Corp for the year ended December 31, 1996 and to the
reference to our firm under the heading "Experts" in the Prospectus.
/s/ KPMG LLP
- ---------------
KPMG LLP
Houston, Texas
March 31, 1999
<PAGE>
EXHIBIT 23(A)-3
CONSENT OF COUNSEL
The consent of Ellen T. Ruff, Esq. is contained in her opinion filed as
Exhibit 5 to this Registration Statement.
II-12
<PAGE>
EXHIBIT 23(A)-4
We hereby consent to the reference to our firm under the heading "Legal
Matters" in the Prospectus forming a part of this Registration Statement. In
giving such consent we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933
and the rules and regulations of the Securities and Exchange Commission
thereunder.
Dewey Ballantine LLP
- --------------------
Dewey Ballantine LLP
New York, New York
March 31, 1999
II-13
<PAGE>
EXHIBIT 24(A)
DUKE ENERGY CORPORATION
POWER OF ATTORNEY
-----------------
A maximum of $1,000,000,000 principal amount
of Debt Securities and First and Refunding Mortgage Bonds
(Securities)
The undersigned DUKE ENERGY CORPORATION, a North Carolina corporation, and
certain of its officers and/or directors, do each hereby constitute and appoint
Richard B. Priory, Richard J. Osborne, David L. Hauser and Ellen T. Ruff, and
each of them, to act as attorneys-in-fact for and in the respective names,
places and stead of the undersigned, to execute, seal, sign, and file with the
Securities and Exchange Commission a Registration Statement or Registration
Statements of said 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 attorneys-in-fact, and each of
them, full power and authority to do and perform all and every act and thing
whatsoever requisite, necessary, or proper to be done in and about the premises,
as fully to all intents and purposes as the undersigned, or any of them, might
or could do if personally present, hereby ratifying and approving the acts of
said attorneys-in-fact.
Executed the 17th day of February, 1999.
DUKE ENERGY CORPORATION
By /s/ R. B. Priory
----------------------------
Chairman, President
and Chief Executive Officer
(Corporate Seal)
ATTEST:
/s/ Robert T. Lucas III
- -----------------------
Assistant Secretary
<PAGE>
/s/ R. B. PRIORY Chairman, President and Chief Executive Officer
------------------------ (Principal Executive Officer and Director)
R. B. Priory
/s/ R. J. OSBORNE Executive Vice President and Chief Financial
------------------------ Officer (Principal Financial Officer)
Richard J. Osborne
/s/ J. L. BOYER Vice President and Corporate Controller
------------------------ (Principal Accounting Officer)
Jeffrey L. Boyer
/s/ G. ALEX BERNHARDT (Director)
------------------------
G. Alex Bernhardt
/s/ ROBERT J. BROWN (Director)
------------------------
Robert J. Brown
/s/ WILLIAM A. COLEY (Director)
------------------------
William A. Coley
/s/ WILLIAM T. ESREY (Director)
------------------------
William T. Esrey
/s/ ANN M. GRAY (Director)
------------------------
Ann M. Gray
/s/ DENNIS R. HENDRIX (Director)
------------------------
Dennis R. Hendrix
/s/ HAROLD S. HOOK (Director)
------------------------
Harold S. Hook
/s/ GEORGE DEAN JOHNSON, JR. (Director)
------------------------
George Dean Johnson, Jr.
/s/ MAX LENNON (Director)
------------------------
Max Lennon
/s/ LEO E. LINBECK, JR. (Director)
------------------------
Leo E. Linbeck, Jr.
/s/ JAMES G. MARTIN (Director)
------------------------
James G. Martin
/s/ RUSSELL M. ROBINSON, II (Director)
------------------------
Russell M. Robinson, II
<PAGE>
EXHIBIT 24(B)
DUKE ENERGY CORPORATION
CERTIFICATE
The undersigned officer of DUKE ENERGY CORPORATION, a North Carolina
corporation (the "Corporation"), does hereby certify that attached hereto is a
true and complete copy of a resolution adopted by the Board of Directors of the
Corporation with respect to the Registration Statement, which resolution is
presently in full force and effect.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and affixed
the seal of the Corporation this 31st day of March, 1999.
/s/ Robert T. Lucas III
----------------------------
Robert T. Lucas III
Assistant Secretary
(Corporate Seal)
FURTHER RESOLVED, that each officer and director who may be required to
execute such Registration Statement or Registration Statements or any amendments
thereto (whether on behalf of the Corporation or as an officer or director
thereof or by attesting the seal of the Corporation or otherwise) be and hereby
is authorized to execute a power of attorney appointing Richard B. Priory,
Richard J. Osborne, David L. Hauser and Ellen T. Ruff, and each of them, as true
and lawful attorneys and agents to execute in his or her name, place and stead
(in any such capacity) such Registration Statement and any and all amendments
thereto and all instruments necessary or advisable in connection therewith, to
attest the seal of the Company thereon and to file the same with the Securities
and Exchange Commission, each of said attorneys and agents to have power to act
with or without the others and to have full power and authority to do and
perform in the name and on behalf of each of such officers and directors, or
both, as the case may be, every act whatsoever necessary or advisable to be done
in the premises as fully and to all intents and purposes as any such officer or
director might or could do in person;
<PAGE>
EXHIBIT 25(A)
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
___________________________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
________________________________________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
____________________________________________
DUKE ENERGY CORPORATION
(Exact name of obligor as specified in its charter)
NORTH CAROLINA 56-0205520
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
422 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28242
(Address of principal executive offices) (Zip Code)
------------------------------------------------
FIRST AND REFUNDING MORTGAGE BONDS
(Title of the indenture securities)
------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
New York State Banking Department, State House, Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C.
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
50010, which is incorporated by reference. On July 14, 1996, in connection with
the merger of Chemical Bank and The Chase Manhattan Bank (National Association),
Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 15th day of March, 1999.
THE CHASE MANHATTAN BANK
By /s/ P. Kelly
--------------------
P. Kelly
Vice President
-3-
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin............................................ $ 11,951
Interest-bearing balances.................................... 4,551
Securities:
Held to maturity securities.................................... 1,740
Available for sale securities.................................. 48,537
Federal funds sold and securities purchased under
agreements to resell......................................... 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income.....$127,379
Less: Allowance for loan and lease losses.... 2,719
Less: Allocated transfer risk reserve........ 0
--------
Loans and leases, net of unearned income,
allowance and reserve........................................ 124,660
Trading assets................................................. 51,549
Premises and fixed assets (including capitalized...............
leases)...................................................... 3,009
Other real estate owned........................................ 272
Investments in unconsolidated subsidiaries and
associated companies......................................... 300
Customers' liability to this bank on acceptances
outstanding.................................................. 1,329
Intangible assets.............................................. 1,429
Other assets................................................... 13,563
--------
TOTAL ASSETS................................................... $292,620
========
</TABLE>
-4-
<PAGE>
LIABILITIES
<TABLE>
<CAPTION>
Deposits
<S> <C>
In domestic offices...................................... $ 98,760
Noninterest-bearing......................$39,071
Interest-bearing......................... 59,689
-------
In foreign offices, Edge and Agreement,
subsidiaries and IBF's................................... 75,403
Noninterest-bearing .....................$ 3,877
Interest-bearing......................... 71,526
Federal funds purchased and securities sold under
agreements to repurchase.................................. 34,471
Demand notes issued to the U.S. Treasury................... 1,000
Trading liabilities........................................ 41,589
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less............ 3,781
With a remaining maturity of more than one year
through three years................................. 213
With a remaining maturity of more than three
years............................................... 104
Bank's liability on acceptances executed and outstanding 1,329
Subordinated notes and debentures.......................... 5,408
Other liabilities.......................................... 12,041
TOTAL LIABILITIES.......................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus.............. 0
Common stock............................................... 1,211
Surplus (exclude all surplus related to preferred stock).. 10,441
Undivided profits and capital reserves..................... 6,287
Net unrealized holding gains (losses)
on available-for-sale securities......................... 566
Cumulative foreign currency translation adjustments........ 16
TOTAL EQUITY CAPITAL....................................... 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL....................... $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
-5-
<PAGE>
EXHIBIT 25(B)
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
________________________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
________________________________________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
____________________________________________
DUKE ENERGY CORPORATION
(Exact name of obligor as specified in its charter)
NORTH CAROLINA 56-0205520
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
422 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28242
(Address of principal executive offices) (Zip Code)
--------------------------------------------------
SENIOR DEBT
(Title of the indenture securities)
--------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
New York State Banking Department, State House, Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C.
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
50010, which is incorporated by reference. On July 14, 1996, in connection with
the merger of Chemical Bank and The Chase Manhattan Bank (National Association),
Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 15th day of March, 1999.
THE CHASE MANHATTAN BANK
By /s/ P. Kelly
-----------------------
P. Kelly
Vice President
-3-
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin.................................................... $ 11,951
Interest-bearing balances............................................ 4,551
Securities:
Held to maturity securities............................................ 1,740
Available for sale securities.......................................... 48,537
Federal funds sold and securities purchased under
agreements to resell................................................. 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income........$127,379
Less: Allowance for loan and lease losses....... 2,719
Less: Allocated transfer risk reserve........... 0
--------
Loans and leases, net of unearned income,
allowance and reserve................................................ 124,660
Trading assets......................................................... 51,549
Premises and fixed assets (including capitalized
leases).............................................................. 3,009
Other real estate owned................................................ 272
Investments in unconsolidated subsidiaries and
associated companies................................................. 300
Customers' liability to this bank on acceptances
outstanding.......................................................... 1,329
Intangible assets...................................................... 1,429
Other assets........................................................... 13,563
--------
TOTAL ASSETS........................................................... $292,620
========
</TABLE>
-4-
<PAGE>
LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
Deposits
In domestic offices............................................ $ 98,760
Noninterest-bearing........................$39,071
Interest-bearing........................... 59,689
------
In foreign offices, Edge and Agreement,
subsidiaries and IBF's......................................... 75,403
Noninterest-bearing .......................$ 3,877
Interest-bearing .......................... 71,526
Federal funds purchased and securities sold under
agreements to repurchase....................................... 34,471
Demand notes issued to the U.S. Treasury......................... 1,000
Trading liabilities.............................................. 41,589
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less.................. 3,781
With a remaining maturity of more than one year
through three years....................................... 213
With a remaining maturity of more than three years............. 104
Bank's liability on acceptances executed and outstanding ........ 1,329
Subordinated notes and debentures................................ 5,408
Other liabilities................................................ 12,041
TOTAL LIABILITIES................................................ 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock..................................................... 1,211
Surplus (exclude all surplus related to preferred stock)........ 10,441
Undivided profits and capital reserves........................... 6,287
Net unrealized holding gains (losses)
on available-for-sale securities............................... 566
Cumulative foreign currency translation adjustments.............. 16
TOTAL EQUITY CAPITAL............................................. 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL............................. $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the in-structions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
-5-
<PAGE>
EXHIBIT 25(C)
---------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
------------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
DUKE ENERGY CORPORATION
(Exact name of obligor as specified in its charter)
NORTH CAROLINA 56-0205520
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
422 SOUTH CHURCH STREET
CHARLOTTE, NORTH CAROLINA 28242
(Address of principal executive offices) (Zip Code)
------------------------------------------------
SUBORDINATED DEBT
(Title of the indenture securities)
----------------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C. 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
50010, which is incorporated by reference. On July 14, 1996, in connection with
the merger of Chemical Bank and The Chase Manhattan Bank (National Association),
Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 15th day of March, 1999.
THE CHASE MANHATTAN BANK
By /s/ P. Kelly
-----------------------------
P. Kelly
Vice President
-3-
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1998, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin.............................. $ 11,951
Interest-bearing balances........................ 4,551
Securities:
Held to maturity securities........................ 1,740
Available for sale securities...................... 48,537
Federal funds sold and securities purchased under
agreements to resell............................. 29,730
Loans and lease financing receivables:
Loans and leases, net of unearned income $127,379
Less: Allowance for loan and lease losses 2,719
Less: Allocated transfer risk reserve..... 0
--------
Loans and leases, net of unearned income,
allowance and reserve........................... 124,660
Trading assets..................................... 51,549
Premises and fixed assets (including capitalized
leases).......................................... 3,009
Other real estate owned............................ 272
Investments in unconsolidated subsidiaries and
associated companies............................. 300
Customers' liability to this bank on acceptances
outstanding...................................... 1,329
Intangible assets.................................. 1,429
Other assets....................................... 13,563
--------
TOTAL ASSETS....................................... $292,620
========
</TABLE>
-4-
<PAGE>
LIABILITIES
<TABLE>
<S> <C>
Deposits
In domestic offices....................................... $ 98,760
Noninterest-bearing ........................$39,071
Interest-bearing............................ 59,689
-------
In foreign offices, Edge and Agreement,
subsidiaries and IBF's.................................. 75,403
Noninterest-bearing ........................$ 3,877
Interest-bearing............................ 71,526
Federal funds purchased and securities sold under agree-
ments to repurchase....................................... 34,471
Demand notes issued to the U.S. Treasury.................... 1,000
Trading liabilities......................................... 41,589
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less............. 3,781
With a remaining maturity of more than one year...........
through three years.................................. 213
With a remaining maturity of more than three
years................................................ 104
Bank's liability on acceptances executed and outstanding.... 1,329
Subordinated notes and debentures........................... 5,408
Other liabilities........................................... 12,041
TOTAL LIABILITIES........................................... 274,099
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock................................................ 1,211
Surplus (exclude all surplus related to preferred stock)... 10,441
Undivided profits and capital reserves...................... 6,287
Net unrealized holding gains (losses)
on available-for-sale securities.......................... 566
Cumulative foreign currency translation adjustments......... 16
TOTAL EQUITY CAPITAL........................................ 18,521
--------
TOTAL LIABILITIES AND EQUITY CAPITAL........................ $292,620
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the in-structions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE )DIRECTORS
WILLIAM B. HARRISON, JR.)
-5-
