Exhibit 4.1-A
DUKE CAPITAL CORPORATION
TO
JPMORGAN CHASE BANK
Trustee
_______________
Fourth Supplemental Indenture
Dated as of November 19, 2001
_______________
$750,000,000
4.32% Senior Notes due 2006
_______________
TABLE OF CONTENTS/1/
Page
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ARTICLE 1 4.32% SENIOR NOTES DUE 2006 .................................................. 1
Section 1.01 Establishment ...................................................... 1
Section 1.02 Definitions ........................................................ 2
Section 1.03 Stated Maturity; Payment of Principal and Interest ................. 4
Section 1.04 Form; Denominations ................................................ 5
Section 1.05 Global 2006 Notes .................................................. 5
Section 1.06 Defeasance; Covenant Defeasance .................................... 6
Section 1.07 Paying Agents; Transfer Agents; Place of Payment ................... 6
ARTICLE 2 REDEMPTION ................................................................... 6
Section 2.01 Tax Event Redemption ............................................... 6
Section 2.02 Redemption Procedures for 2006 Notes ............................... 7
Section 2.03 No Sinking Fund .................................................... 7
Section 2.04 No Conditional Redemption .......................................... 7
ARTICLE 3 REMARKETING .................................................................. 7
Section 3.01 Initial Remarketing Procedures ..................................... 7
Section 3.02 Second Remarketing Procedures ...................................... 10
Section 3.03 Third Remarketing Procedures ....................................... 12
Section 3.04 Final Remarketing Procedures ....................................... 14
ARTICLE 4 MISCELLANEOUS PROVISIONS ..................................................... 17
Section 4.01 Recitals by Corporation ............................................ 17
Section 4.02 Ratification and Incorporation of Original Indenture ............... 17
Section 4.03 Executed in Counterparts ........................................... 17
___________________
/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.
THIS FOURTH SUPPLEMENTAL INDENTURE is made as of the 19th day of
November 2001, by and between DUKE CAPITAL CORPORATION, a Delaware corporation,
having its principal office at 526 South Church Street, Charlotte, North
Carolina 28202 (the "Corporation"), and JPMORGAN CHASE BANK (formerly known as
The Chase Manhattan Bank), a New York banking corporation, as Trustee (herein
called the "Trustee").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Corporation has heretofore entered into a Senior
Indenture, dated as of April 1, 1998 (the "Original Indenture") with The Chase
Manhattan Bank, as Trustee;
WHEREAS, the Original Indenture is incorporated herein by this
reference and the Original Indenture, as amended and supplemented to the date
hereof, including by this Fourth 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 Fourth 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
4.32% SENIOR NOTES DUE 2006
Section 1.01 Establishment. There is hereby established a new series of
Securities to be issued under the Indenture, to be designated as the
Corporation's 4.32% Senior Notes due 2006 (the "2006 Notes").
There are to be authenticated and delivered $750,000,000 principal
amount of 2006 Notes (plus such additional principal amount of 2006 Notes, not
exceeding $112,500,000, if the over-allotment option referred to in the
Underwriting Agreement (as defined in Section 1.02(a)) is exercised in whole or
in part), and no further 2006 Notes shall be authenticated and delivered except
as provided by Section 304, 305, 306, 906 or 1106 of the Original Indenture. The
2006
Notes may be issued from time to time pursuant to a Company Order delivered to
the Trustee for the authentication and delivery of 2006 Notes pursuant to
Section 303 of the Original Indenture. The 2006 Notes shall be issued in fully
registered form without coupons.
The 2006 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 2006
Notes shall be in substantially the form set forth in Exhibit B hereto.
Each 2006 Note shall be dated the date of authentication thereof and
shall bear interest from the Original Issue Date 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.
(a) The following terms have the meanings given to them in the Purchase
Contract Agreement:
(i) Applicable Principal Amount; (ii) Authorized Newspaper;
(iii) Cash Settlement; (iv) Corporate Units; (v) Final
Remarketing; (vi) Final Remarketing Date; (vii) Initial
Remarketing; (viii) Initial Remarketing Date; (ix) Quotation
Agent; (x) Redemption Price; (xi) Reset Agent; (xii) Reset
Announcement Date; (xiii) Reset Rate; (xiv) Reset Spread; (xv)
Second Remarketing; (xvi) Second Remarketing Date; (xvii)
Successful Final Remarketing (xviii) Successful Initial
Remarketing; (xix) Successful Second Remarketing; (xx) Successful
Third Remarketing; (xxi) Tax Event; (xxii) Third Remarketing;
(xxiii) Third Remarketing Date; (xxiv) Treasury Portfolio; (xxv)
Treasury Portfolio Purchase Price; (xxvi) Treasury Units; (xxvii)
Two-Year Benchmark Treasury; (xxviii) Two and One-Quarter Year
Benchmark Treasury; and (xxix) Underwriting Agreement;
(b) The following terms have the meanings given to them in this Section
1.02(b):
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
Depositary with respect to the 2006 Notes and in whose name, or in the name of a
nominee of that organization, shall be registered a Global Security and which
shall undertake to effect book entry transfers and pledges of the 2006 Notes.
"Clearing Agency Participant" means broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Coupon Rate" shall have the meaning set forth in Section 1.03.
"Custodial Agent" shall have the meaning set forth in the Pledge
Agreement.
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"Duke Energy" means Duke Energy Corporation, a North Carolina
corporation.
"Failed Initial Remarketing" shall have the meaning set forth in
Section 3.01(g).
"Failed Second Remarketing" shall have the meaning set forth in Section
3.02(g).
"Failed Third Remarketing" shall have the meaning set forth in Section
3.03(g).
"Global 2006 Notes" shall have the meaning set forth in Section 1.05.
"Interest Payment Date" shall have the meaning set forth in Section
1.03(b).
"Original Issue Date" means November 19, 2001.
"Pledge Agreement" means the Pledge Agreement dated as of November 19,
2001 among Duke Energy, Bank One Trust Company, N.A., as collateral agent (the
"Collateral Agent"), custodial agent and securities intermediary, and JPMorgan
Chase Bank, as purchase contract agent and attorney-in-fact.
"Purchase Contract" shall have the meaning set forth in the Purchase
Contract Agreement.
"Purchase Contract Agent" means the "Agent" under the Purchase Contract
Agreement.
"Purchase Contract Agreement" means the Purchase Contract Agreement
dated as of November 19, 2001, between Duke Energy and JPMorgan Chase Bank, as
purchase contract agent.
"Purchase Contract Settlement Date" means November 16, 2004.
"Regular Record Date" means, with respect to any Interest Payment Date
for the 2006 Notes, the close of business on the first day of the month in which
such Interest Payment Date falls.
"Remarketing Agent" means Morgan Stanley & Co. Incorporated, as
remarketing agent under the Remarketing Agreement, or any successor remarketing
agent appointed in accordance therewith.
"Remarketing Agreement" means the Remarketing Agreement dated as of
November 19, 2001 among Duke Energy, the Corporation, Morgan Stanley & Co.
Incorporated, in its capacity as Remarketing Agent, and JPMorgan Chase Bank, as
purchase contract agent and attorney-in-fact, which term shall include any
supplemental remarketing agreement among such parties entered into in connection
therewith, or any replacement remarketing agreement entered into in accordance
with such Remarketing Agreement.
"Reset Effective Date" means (i) August 16, 2004 in case the interest
rate is reset on the Initial Remarketing Date, (ii) September 16, 2004 in case
the interest rate is reset on the Second Remarketing Date, (iii) October 16,
2004 in case the interest rate is reset on the Third
3
Remarketing Date, or (iv) the Purchase Contract Settlement Date, in case the
interest rate is reset on the Final Remarketing Date.
"Stated Maturity" shall have the meaning set forth in Section 1.03(a).
"2006 Notes" shall have the meaning specified in Section 1.01.
Section 1.03 Stated Maturity; Payment of Principal and Interest.
(a) The date upon which the principal of the 2006 Notes shall become
due and payable at final maturity, together with any accrued and unpaid
interest, is November 16, 2006 (the "Stated Maturity").
(b) Each 2006 Note will bear interest initially at the rate of 4.32%
per annum (the "Coupon Rate") from the Original Issue Date through and including
the day immediately preceding the Reset Effective Date and at the Reset Rate
thereafter until the principal thereof is paid or duly made available for
payment and shall bear interest, to the extent permitted by law, compounded
quarterly, on any overdue principal and premium, if any, and on any overdue
installment of interest at the Coupon Rate through and including the day
immediately preceding the Reset Effective Date and at the Reset Rate thereafter,
payable quarterly in arrears on February 16, May 16, August 16 and November 16
of each year (each, an "Interest Payment Date") commencing on February 16, 2002,
to the Person in whose name such 2006 Note, or any predecessor 2006 Note, is
registered at the close of business on the Regular Record Date for such interest
installment.
(c) The interest rate on the 2006 Notes will be reset on the Initial
Remarketing Date, the Second Remarketing Date, or the Third Remarketing Date, as
the case may be in connection with any successful remarketing on any such date,
to the applicable Reset Rate (which Reset Rate will be effective on and after
August 16, 2004, September 16, 2004, or October 16, 2004, as applicable). In the
event of a Failed Third Remarketing, the interest rate on the 2006 Notes will be
reset on the Final Remarketing Date (if the remarketing on such date is
successful) to the applicable Reset Rate (which Reset Rate will be effective on
and after the Purchase Contract Settlement Date). On the applicable Reset
Announcement Date, the applicable Reset Spread and the Two-Year Benchmark
Treasury, Two and One-Sixth Year Benchmark Treasury, Two and One-Twelfth Year
Benchmark Treasury or Two and One-Quarter Year Benchmark Treasury, as
applicable, will be announced by the Corporation, such announcement to be made
by a customary method, as determined by the Corporation. On the Business Day
immediately following such Reset Announcement Date, the Holders of 2006 Notes
will be notified of such Reset Spread and Two-Year Benchmark Treasury, Two and
One-Sixth Year Benchmark Treasury, Two and One-Twelfth Year Benchmark Treasury
or Two and One-Quarter Year Benchmark Treasury, as applicable, by the
Corporation. Such notice shall be sufficiently given to such Holders of 2006
Notes if published in an Authorized Newspaper.
(d) Not later than seven calendar days nor more than 15 calendar days
immediately preceding the applicable Reset Announcement Date, the Corporation
will request that the Clearing Agency or its nominee (or any successor Clearing
Agency or its nominee) notify the Holders of 2006 Notes of such Reset
Announcement Date and, in the case of a Final
4
Remarketing, the procedures to be followed by such holders of 2006 Notes wishing
to settle the related Purchase Contracts with separate cash on the fourth
Business Day immediately preceding the Purchase Contract Settlement Date.
(e) The amount of interest payable for any period will be computed on
the basis of a 360-day year consisting of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed will
be computed on the basis of the actual number of days elapsed in such a 90-day
period. In the event that any date on which interest is payable on the 2006
Notes is not a Business Day, then payment of the interest payable on such date
will be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
Payment of principal of, premium, if any, and interest on the 2006
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.
Principal of and premium, if any, and interest on the 2006 Notes will be
payable, at the office or agency of the Corporation maintained for such purpose
as described in Section 1.07 below; provided, however, that payment of interest
may be made 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 m the United States as may be designated in writing to the Trustee
at least 16 days prior to the date for payment by the Person entitled thereto.
Payments of principal of, premium, if any, and interest on Global 2006 Notes
shall be made by wire transfer of immediately available funds to the Holder of
such Global 2006 Notes; provided that, in the case of payments of principal and
premium, if any, such Global 2006 Notes are first surrendered to the Paying
Agent.
Section 1.04 Form; Denominations. Except as provided in Section 1.05,
the 2006 Notes shall be issued in fully registered definitive form without
interest coupons, bearing identical terms.
The 2006 Notes may be issued, in whole or in part, in global form and,
if issued in global form, the Depositary shall be The Depository Trust Company
or such other Depositary as the Corporation may from time to time designate.
The 2006 Notes shall be issuable in denominations of $25 and integral
multiples of $25 in excess thereof.
Section 1.05 Global 2006 Notes. Any 2006 Notes that are no longer part
of Corporate Units will be issued initially in the form of one or more Global
Securities (the "Global 2006 Notes") registered in the name of the Depositary or
its nominee. Unless and until they are exchanged for 2006 Notes in definitive
registered form, such Global 2006 Notes may be transferred, in whole but not in
part, only to the Clearing Agency or a nominee of the Clearing Agency, or to a
successor Clearing Agency selected or approved by the Corporation or to a
nominee of such successor Clearing Agency.
5
If at any time (i) the Clearing Agency notifies the Corporation that it
is unwilling or unable to continue as a Clearing Agency for the Global 2006
Notes and no successor Clearing Agency shall have been appointed within 90 days
after such notification, (ii) the Clearing Agency at any time ceases to be a
clearing agency registered under the Exchange Act at any time the Clearing
Agency is required to be so registered to act as such Clearing Agency and no
successor Clearing Agency shall have been appointed within 90 days after the
Corporation's becoming aware of the Clearing Agency's ceasing to be so
registered or (iii) the Corporation, in its sole discretion, determines that the
Global 2006 Notes shall be so exchangeable, the Corporation will execute, and
subject to Article Three of the Original Indenture, the Trustee, upon receipt of
a Company Order therefor, will authenticate and deliver the 2006 Notes in
definitive registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the principal amount of the Global 2006
Note or Notes in exchange for such Global 2006 Note or Notes. Upon exchange of
the Global 2006 Note or Notes for such 2006 Notes in definitive registered form
without coupons, in authorized denominations, the Global 2006 Note or Notes
shall be cancelled by the Trustee. Such 2006 Notes in definitive registered form
issued in exchange for the Global 2006 Note or Notes shall be registered in such
names and in such authorized denominations as the Clearing Agency, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the Clearing
Agency for delivery to the Persons in whose names such Securities are so
registered.
Section 1.06 Defeasance; Covenant Defeasance. Sections 1302 and 1303 of
the Original Indenture shall not apply to any of the 2006 Notes.
Section 1.07 Paying Agents; Transfer Agents; Place of Payment. The
Paying Agent for the 2006 Notes shall initially be the Trustee, and the Place of
Payment for the 2006 Notes shall initially be the Corporate Trust Office, which
as of the date hereof for such purpose is located at 55 Water Street, New York,
New York 10041. The Trustee shall also serve as Security Registrar for the
purpose of registering 2006 Notes and transfers or exchanges of 2006 Notes. The
Corporation may from time to time designate one or more additional offices or
agencies where 2006 Notes may be presented or surrendered for payment or may be
surrendered for registration of transfer or exchange in accordance with Section
1002 of the Original Indenture; provided that the Corporation shall at all times
maintain a Paying Agent and an office or agency where 2006 Notes may be
surrendered for registration of transfer or exchange, in each case in the
Borough of Manhattan, The City of New York.
ARTICLE 2
REDEMPTION
Section 2.01 Tax Event Redemption. If a Tax Event shall occur and be
continuing, the Corporation may, at its option, redeem the 2006 Notes in whole
(but not in part) at any time at a price per 2006 Note equal to the Redemption
Price. Installments of interest on 2006 Notes which are due and payable on or
prior to the Redemption Date with respect to the 2006 Notes (the "Tax Event
Redemption Date") will be payable to the Holders of the 2006 Notes registered as
such at the close of business on the Regular Record Date. If, following the
occurrence of a Tax Event prior to the Purchase Contract Settlement Date, the
Corporation exercises its option to redeem
6
the 2006 Notes, the Corporation shall appoint the Quotation Agent to assemble
the Treasury Portfolio in consultation with the Corporation. Notice of any
redemption will be mailed at least 30 days but not more than 60 days before the
Tax Event Redemption Date to each Holder of the 2006 Notes to be redeemed at its
address appearing in the Security Register. Unless the Corporation defaults in
payment of the Redemption Price, on and after the Tax Event Redemption Date
interest shall cease to accrue on the 2006 Notes. The 2006 Notes are not
redeemable otherwise than in this Section 2.01 provided. The Corporation will
notify the Trustee of the Redemption Price promptly after the calculation
thereof, and the Trustee shall have no responsibility for such calculation.
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.
Section 2.02 Redemption Procedures for 2006 Notes. Payment of the
Redemption Price to each Holder of 2006 Notes shall be made by the Corporation,
no later than 12:00 noon, New York City time, on the Tax Event Redemption Date,
by check or wire transfer in immediately available funds at such place and to
such account as may be designated by each such Holder of 2006 Notes, including
the Purchase Contract Agent or the Collateral Agent, as the case may be. If the
Trustee holds immediately available funds sufficient to pay the Redemption Price
of the 2006 Notes, then, on such Tax Event Redemption Date, such 2006 Notes will
cease to be outstanding and interest thereon will cease to accrue, whether or
not such 2006 Notes have been received by the Corporation, and all other rights
of the Holders in respect of the 2006 Notes shall terminate and lapse (other
than the right to receive the Redemption Price upon delivery of such 2006 Notes
but without interest on such Redemption Price).
Section 2.03 No Sinking Fund. The 2006 Notes are not entitled to the
benefit of any sinking fund.
Section 2.04 No Conditional Redemption. The provisions of Section 1104
of the Original Indenture that relate to redemptions conditional upon the
receipt by the Trustee of funds sufficient to pay the principal, premium (if
any) and interest on the Securities to be redeemed shall not be applicable to
the 2006 Notes.
ARTICLE 3
REMARKETING
Section 3.01 Initial Remarketing Procedures. (a) The Corporation will
request, not later than seven nor more than 15 calendar days prior to the
Initial Remarketing Date that the Clearing Agency notify the Holders of the 2006
Notes of the Initial Remarketing.
(b) Not later than 5:00 p.m., New York City time, on the second
Business Day immediately preceding the Initial Remarketing Date, but no earlier
than the Interest Payment Date immediately preceding August 16, 2004, each
Holder of the 2006 Notes not constituting components of Corporate Units may
elect to have 2006 Notes held by such Holder remarketed. Holders of 2006 Notes
that are not components of Corporate Units shall give notice of their election
to have such 2006 Notes remarketed to the Custodial Agent pursuant to the Pledge
Agreement. Any such notice shall be irrevocable after 5:00 p.m. New York City
time, on the
7
second Business Day immediately preceding the Initial Remarketing Date and may
not be conditioned upon the level at which the Reset Rate is established.
Pursuant to Section 5.3A of the Purchase Contract Agreement, the Purchase
Contract Agent shall notify, by 11:00 a.m., New York City time, on the Business
Day immediately preceding the Initial Remarketing Date, the Remarketing Agent,
the Corporation and Duke Energy of the aggregate principal amount of 2006 Notes
(that are components of Corporate Units) to be remarketed. Pursuant to Section
4.6(c) of the Pledge Agreement, the Custodial Agent shall notify the Remarketing
Agent of the aggregate principal amount of 2006 Notes (that are not components
of Corporate Units) to be remarketed. Under Section 5.3A of the Purchase
Contract Agreement, 2006 Notes that constitute components of Corporate Units
will be remarketed as provided therein and in this Section 3.01. The 2006 Notes
constituting components of Corporate Units shall be deemed tendered,
notwithstanding any failure by the Holder of such Corporate Units to deliver or
properly deliver such 2006 Notes to the Remarketing Agent for purchase.
(c) The right of each Holder to have 2006 Notes tendered for purchase
shall be limited to the extent that (i) the Remarketing Agent conducts an
Initial Remarketing pursuant to the terms of the Purchase Contract Agreement,
(ii) 2006 Notes tendered have not been called for redemption, (iii) the
Remarketing Agent is able to find a purchaser or purchasers for tendered 2006
Notes at a price per 2006 Note such that the aggregate price for the Applicable
Principal Amount of 2006 Notes is not less than 100% of the Treasury Portfolio
Purchase Price and (iv) such purchaser or purchasers deliver the purchase price
therefor to the Remarketing Agent as and when required. The Holders of 2006
Notes that are remarketed in a Successful Initial Remarketing agree that the
remarketing fee specified in Section 5.3A of the Purchase Contract Agreement
shall be deducted from the proceeds of the remarketing.
(d) On the Initial Remarketing Date, the Remarketing Agent shall use
reasonable efforts to remarket, at a price per 2006 Note such that the aggregate
price for the Applicable Principal Amount of 2006 Notes is equal to
approximately 100.5% of the Treasury Portfolio Purchase Price, 2006 Notes
tendered or deemed tendered for purchase.
(e) If there are no Corporate Units outstanding and none of the Holders
elect to have 2006 Notes held by them remarketed, the Reset Rate shall be the
rate determined by the Reset Agent, subject to the terms of the Remarketing
Agreement, as the rate that would have been established had a remarketing been
held on the Initial Remarketing Date.
(f) If the Remarketing Agent has determined that it will be able to
remarket all 2006 Notes tendered or deemed tendered prior to 4:00 p.m., New York
City time, on the Initial Remarketing Date, the Reset Agent, subject to the
terms of the Remarketing Agreement, shall determine the Reset Rate.
(g) If, by 4:00 p.m., New York City time, on the Initial Remarketing
Date, (x) the Remarketing Agent is unable to remarket all 2006 Notes tendered or
deemed tendered for purchase, at a price per 2006 Note such that the aggregate
price for the Applicable Principal Amount of 2006 Notes is equal to at least
100% of the Treasury Portfolio Purchase Price, or (y) if the Initial Remarketing
shall not have occurred because a condition precedent to the Initial Remarketing
shall not have been fulfilled, a failed remarketing (each, a "Failed Initial
Remarketing") shall be deemed to have occurred and the Remarketing Agent shall
so advise by
8
telephone the Collateral Agent, the Purchase Contract Agent, the Corporation,
the Trustee, and the Clearing Agency.
(h) By approximately 4:30 p.m., New York City time, on the Initial
Remarketing Date, provided that there has not been a Failed Initial Remarketing,
the Remarketing Agent shall advise, by telephone (i) the Trustee, the Collateral
Agent, the Purchase Contract Agent, the Corporation and the Clearing Agency of
the Reset Rate determined in the Initial Remarketing and the aggregate principal
amount of 2006 Notes sold in the Initial Remarketing, (ii) each purchaser (or
the Clearing Agency Participant thereof) of the Reset Rate and the aggregate
principal amount of 2006 Notes such purchaser is to purchase and (iii) each
purchaser to give instructions to its Clearing Agency Participant to pay the
purchase price on August 16, 2004 in same day funds against delivery of the 2006
Notes purchased through the facilities of the Clearing Agency.
(i) In accordance with the Clearing Agency's normal procedures, on August
16, 2004, the transactions described above with respect to each 2006 Note
tendered for purchase and sold in the Initial Remarketing shall be executed
through the Clearing Agency, and the accounts of the respective Clearing Agency
Participants shall be debited and credited and such 2006 Notes delivered by book
entry as necessary to effect purchases and sales of such 2006 Notes. The
Clearing Agency shall make payment in accordance with its normal procedures.
(j) If any Holder selling 2006 Notes in the Initial Remarketing fails to
deliver such 2006 Notes, the Clearing Agency Participant of such selling Holder
and of any other Person that was to have purchased 2006 Notes in the Initial
Remarketing may deliver to any such other Person an aggregate principal amount
of 2006 Notes that is less than the aggregate principal amount of 2006 Notes
that otherwise was to be purchased by such Person. In such event, the aggregate
principal amount of 2006 Notes to be so delivered shall be determined by such
Clearing Agency Participant, and delivery of such lesser aggregate principal
amount of 2006 Notes shall constitute good delivery.
(k) The Remarketing Agent is not obligated to purchase any 2006 Notes in
the Initial Remarketing or otherwise. Neither the Trustee, the Purchase Contract
Agent, the Corporation, Duke Energy nor the Remarketing Agent shall be obligated
in any case to provide funds to make payment upon tender of 2006 Notes for
remarketing.
(l) The tender and settlement procedures set in this Section 3.01,
including provisions for payment by purchasers of 2006 Notes in the Initial
Remarketing, shall be subject to modification, notwithstanding any provision to
the contrary set forth herein, to the extent required by the Clearing Agency or
if the book-entry system is no longer available for the 2006 Notes at the time
of the Initial Remarketing, to facilitate the tendering and remarketing of 2006
Notes in certificated form. In addition, the Remarketing Agent may,
notwithstanding any provision to the contrary set forth herein, modify the
settlement procedures set forth herein in order to facilitate the settlement
process.
(m) Anything herein to the contrary notwithstanding, the Reset Rate shall
in no event exceed the maximum rate, if any, permitted by applicable law and, as
provided in the Remarketing Agreement, neither the Remarketing Agent nor the
Reset Agent shall have any
9
obligation to determine whether there is any limitation under applicable law
on the Reset Rate or, if there is any such limitation, the maximum permissible
Reset Rate on the 2006 Notes and they shall rely solely upon written notice from
the Corporation (which the Corporation agrees to provide prior to the tenth
Business Day before August 16, 2004) as to whether or not there is any such
limitation and, if so, the maximum permissible Reset Rate.
Section 3.02 Second Remarketing Procedures. (a) The Corporation will
request, not later than seven nor more than 15 calendar days prior to the Second
Remarketing Date that the Clearing Agency notify the Holders of the 2006 Notes
of the Second Remarketing.
(b) Not later than 5:00 p.m., New York City time, on the second Business
Day immediately preceding the Second Remarketing Date, but no earlier than the
Interest Payment Date immediately preceding September 16, 2004, each Holder of
the 2006 Notes not constituting components of Corporate Units may elect to have
2006 Notes held by such Holder remarketed. Holders of 2006 Notes that are not
components of Corporate Units shall give notice of their election to have such
2006 Notes remarketed to the Custodial Agent pursuant to the Pledge Agreement.
Any such notice shall be irrevocable after 5:00 p.m. New York City time, on the
second Business Day immediately preceding the Second Remarketing Date and may
not be conditioned upon the level at which the Reset Rate is established.
Pursuant to Section 5.3B of the Purchase Contract Agreement, the Purchase
Contract Agent shall notify, by 11:00 a.m., New York City time, on the Business
Day immediately preceding the Second Remarketing Date, the Remarketing Agent,
the Corporation and Duke Energy of the aggregate principal amount of 2006 Notes
(that are components of Corporate Units) to be remarketed. Pursuant to Section
4.6(c) of the Pledge Agreement, the Custodial Agent shall notify the Remarketing
Agent of the aggregate principal amount of 2006 Notes (that are not components
of Corporate Units) to be remarketed. Under Section 5.3B of the Purchase
Contract Agreement, 2006 Notes that constitute components of Corporate Units
will be remarketed as provided therein and in this Section 3.02. The 2006 Notes
constituting components of Corporate Units shall be deemed tendered,
notwithstanding any failure by the Holder of such Corporate Units to deliver or
properly deliver such 2006 Notes to the Remarketing Agent for purchase.
(c) The right of each Holder to have 2006 Notes tendered for purchase shall
be limited to the extent that (i) the Remarketing Agent conducts a Second
Remarketing pursuant to the terms of the Purchase Contract Agreement, (ii) 2006
Notes tendered have not been called for redemption, (iii) the Remarketing Agent
is able to find a purchaser or purchasers for tendered 2006 Notes at a price per
2006 Note such that the aggregate price for the Applicable Principal Amount of
2006 Notes is not less than 100% of the Treasury Portfolio Purchase Price and
(iv) such purchaser or purchasers deliver the purchase price therefor to the
Remarketing Agent as and when required. The Holders of 2006 Notes that are
remarketed in a Successful Second Remarketing agree that the remarketing fee
specified in Section 5.3B of the Purchase Contract Agreement shall be deducted
from the proceeds of the remarketing.
(d) On the Second Remarketing Date, the Remarketing Agent shall use
reasonable efforts to remarket, at a price per 2006 Note such that the aggregate
price for the Applicable Principal Amount of 2006 Notes is equal to
approximately 100.5% of the Treasury Portfolio Purchase Price, 2006 Notes
tendered or deemed tendered for purchase.
10
(e) If there are no Corporate Units outstanding and none of the Holders
elect to have 2006 Notes held by them remarketed, the Reset Rate shall be the
rate determined by the Reset Agent, subject to the terms of the Remarketing
Agreement, as the rate that would have been established had a remarketing been
held on the Initial Remarketing Date.
(f) If the Remarketing Agent has determined that it will be able to
remarket all 2006 Notes tendered or deemed tendered prior to 4:00 p.m., New York
City time, on the Second Remarketing Date, the Reset Agent, subject to the terms
of the Remarketing Agreement, shall determine the Reset Rate.
(g) If, by 4:00 p.m., New York City time, on the Second Remarketing Date,
(x) the Remarketing Agent is unable to remarket all 2006 Notes tendered or
deemed tendered for purchase, at a price per 2006 Note such that the aggregate
price for the Applicable Principal Amount of 2006 Notes is equal to at least
100% of the Treasury Portfolio Purchase Price, or (y) if the Second Remarketing
shall not have occurred because a condition precedent to the Second Remarketing
shall not have been fulfilled, a failed remarketing (each, a "Failed Second
Remarketing") shall be deemed to have occurred and the Remarketing Agent shall
so advise by telephone the Collateral Agent, the Purchase Contract Agent, the
Corporation, the Trustee, and the Clearing Agency.
(h) By approximately 4:30 p.m., New York City time, on the Second
Remarketing Date, provided that there has not been a Failed Second Remarketing,
the Remarketing Agent shall advise, by telephone (i) the Trustee, the Collateral
Agent, the Purchase Contract Agent, the Corporation and the Clearing Agency of
the Reset Rate determined in the Second Remarketing and the aggregate principal
amount of 2006 Notes sold in the Second Remarketing, (ii) each purchaser (or the
Clearing Agency Participant thereof) of the Reset Rate and the aggregate
principal amount of 2006 Notes such purchaser is to purchase and (iii) each
purchaser to give instructions to its Clearing Agency Participant to pay the
purchase price on September 16, 2004 in same day funds against delivery of the
2006 Notes purchased through the facilities of the Clearing Agency.
(i) In accordance with the Clearing Agency's normal procedures, on
September 16, 2004, the transactions described above with respect to each 2006
Note tendered for purchase and sold in the Second Remarketing shall be executed
through the Clearing Agency, and the accounts of the respective Clearing Agency
Participants shall be debited and credited and such 2006 Notes delivered by book
entry as necessary to effect purchases and sales of such 2006 Notes. The
Clearing Agency shall make payment in accordance with its normal procedures.
(j) If any Holder selling 2006 Notes in the Second Remarketing fails to
deliver such 2006 Notes, the Clearing Agency Participant of such selling Holder
and of any other Person that was to have purchased 2006 Notes in the Second
Remarketing may deliver to any such other Person an aggregate principal amount
of 2006 Notes that is less than the aggregate principal amount of 2006 Notes
that otherwise was to be purchased by such Person. In such event, the aggregate
principal amount of 2006 Notes to be so delivered shall be determined by such
Clearing Agency Participant, and delivery of such lesser aggregate principal
amount of 2006 Notes shall constitute good delivery.
11
(k) The Remarketing Agent is not obligated to purchase any 2006 Notes in
the Second Remarketing or otherwise. Neither the Trustee, the Purchase Contract
Agent, the Corporation, Duke Energy nor the Remarketing Agent shall be obligated
in any case to provide funds to make payment upon tender of 2006 Notes for
remarketing.
(l) The tender and settlement procedures set in this Section 3.02,
including provisions for payment by purchasers of 2006 Notes in the Second
Remarketing, shall be subject to modification, notwithstanding any provision to
the contrary set forth herein, to the extent required by the Clearing Agency or
if the book-entry system is no longer available for the 2006 Notes at the time
of the Second Remarketing, to facilitate the tendering and remarketing of 2006
Notes in certificated form. In addition, the Remarketing Agent may,
notwithstanding any provision to the contrary set forth herein, modify the
settlement procedures set forth herein in order to facilitate the settlement
process.
(m) Anything herein to the contrary notwithstanding, the Reset Rate shall
in no event exceed the maximum rate, if any, permitted by applicable law and, as
provided in the Remarketing Agreement, neither the Remarketing Agent nor the
Reset Agent shall have any obligation to determine whether there is any
limitation under applicable law on the Reset Rate or, if there is any such
limitation, the maximum permissible Reset Rate on the 2006 Notes and they shall
rely solely upon written notice from the Corporation (which the Corporation
agrees to provide prior to the tenth Business Day before September 16, 2004) as
to whether or not there is any such limitation and, if so, the maximum
permissible Reset Rate.
Section 3.03 Third Remarketing Procedures. (a) The Corporation will
request, not later than seven nor more than 15 calendar days prior to the
Initial Remarketing Date that the Clearing Agency notify the Holders of the 2006
Notes of the Initial Remarketing.
(b) Not later than 5:00 p.m., New York City time, on the second Business
Day immediately preceding the Third Remarketing Date, but no earlier than the
Interest Payment Date immediately preceding October 16, 2004, each Holder of the
2006 Notes not constituting components of Corporate Units may elect to have 2006
Notes held by such Holder remarketed. Holders of 2006 Notes that are not
components of Corporate Units shall give notice of their election to have such
2006 Notes remarketed to the Custodial Agent pursuant to the Pledge Agreement.
Any such notice shall be irrevocable after 5:00 p.m. New York City time, on the
second Business Day immediately preceding the Third Remarketing Date and may not
be conditioned upon the level at which the Reset Rate is established. Pursuant
to Section 5.3C of the Purchase Contract Agreement, the Purchase Contract Agent
shall notify, by 11:00 a.m., New York City time, on the Business Day immediately
preceding the Third Remarketing Date, the Remarketing Agent, the Corporation and
Duke Energy of the aggregate principal amount of 2006 Notes (that are components
of Corporate Units) to be remarketed. Pursuant to Section 4.6(c) of the Pledge
Agreement, the Custodial Agent shall notify the Remarketing Agent of the
aggregate principal amount of 2006 Notes (that are not components of Corporate
Units) to be remarketed. Under Section 5.3C of the Purchase Contract Agreement,
2006 Notes that constitute components of Corporate Units will be remarketed as
provided therein and in this Section 3.03. The 2006 Notes constituting
components of Corporate Units shall be deemed tendered, notwithstanding any
failure by the Holder of such Corporate Units to deliver or properly deliver
such 2006 Notes to the Remarketing Agent for purchase.
12
(c) The right of each Holder to have 2006 Notes tendered for purchase shall
be limited to the extent that (i) the Remarketing Agent conducts a Third
Remarketing pursuant to the terms of the Purchase Contract Agreement, (ii) 2006
Notes tendered have not been called for redemption, (iii) the Remarketing Agent
is able to find a purchaser or purchasers for tendered 2006 Notes at a price per
2006 Note such that the aggregate price for the Applicable Principal Amount of
2006 Notes is not less than 100% of the Treasury Portfolio Purchase Price and
(iv) such purchaser or purchasers deliver the purchase price therefor to the
Remarketing Agent as and when required. The Holders of 2006 Notes that are
remarketed in a Successful Third Remarketing agree that the remarketing fee
specified in Section 5.3C of the Purchase Contract Agreement shall be deducted
from the proceeds of the remarketing.
(d) On the Third Remarketing Date, the Remarketing Agent shall use
reasonable efforts to remarket, at a price per 2006 Note such that the aggregate
price for the Applicable Principal Amount of 2006 Notes is equal to
approximately 100.5% of the Treasury Portfolio Purchase Price, 2006 Notes
tendered or deemed tendered for purchase.
(e) If there are no Corporate Units outstanding and none of the Holders
elect to have 2006 Notes held by them remarketed, the Reset Rate shall be the
rate determined by the Reset Agent, subject to the terms of the Remarketing
Agreement, as the rate that would have been established had a remarketing been
held on the Third Remarketing Date.
(f) If the Remarketing Agent has determined that it will be able to
remarket all 2006 Notes tendered or deemed tendered prior to 4:00 p.m., New York
City time, on the Third Remarketing Date, the Reset Agent, subject to the terms
of the Remarketing Agreement, shall determine the Reset Rate.
(g) If, by 4:00 p.m., New York City time, on the Third Remarketing Date,
(x) the Remarketing Agent is unable to remarket all 2006 Notes tendered or
deemed tendered for purchase, at a price per 2006 Note such that the aggregate
price for the Applicable Principal Amount of 2006 Notes is equal to at least
100% of the Treasury Portfolio Purchase Price, or (y) if the Third Remarketing
shall not have occurred because a condition precedent to the Third Remarketing
shall not have been fulfilled, a failed remarketing (each, a "Failed Third
Remarketing") shall be deemed to have occurred and the Remarketing Agent shall
so advise by telephone the Collateral Agent, the Purchase Contract Agent, the
Corporation, the Trustee, and the Clearing Agency.
(h) By approximately 4:30 p.m., New York City time, on the Third
Remarketing Date, provided that there has not been a Failed Third Remarketing,
the Remarketing Agent shall advise, by telephone (i) the Trustee, the Collateral
Agent, the Purchase Contract Agent, the Corporation and the Clearing Agency of
the Reset Rate determined in the Third Remarketing and the aggregate principal
amount of 2006 Notes sold in the Third Remarketing, (ii) each purchaser (or the
Clearing Agency Participant thereof) of the Reset Rate and the aggregate
principal amount of 2006 Notes such purchaser is to purchase and (iii) each
purchaser to give instructions to its Clearing Agency Participant to pay the
purchase price on October 16, 2004 in same day funds against delivery of the
2006 Notes purchased through the facilities of the Clearing Agency.
13
(i) In accordance with the Clearing Agency's normal procedures, on October
16, 2004, the transactions described above with respect to each 2006 Note
tendered for purchase and sold in the Third Remarketing shall be executed
through the Clearing Agency, and the accounts of the respective Clearing Agency
Participants shall be debited and credited and such 2006 Notes delivered by book
entry as necessary to effect purchases and sales of such 2006 Notes. The
Clearing Agency shall make payment in accordance with its normal procedures.
(j) If any Holder selling 2006 Notes in the Third Remarketing fails to
deliver such 2006 Notes, the Clearing Agency Participant of such selling Holder
and of any other Person that was to have purchased 2006 Notes in the Third
Remarketing may deliver to any such other Person an aggregate principal amount
of 2006 Notes that is less than the aggregate principal amount of 2006 Notes
that otherwise was to be purchased by such Person. In such event, the aggregate
principal amount of 2006 Notes to be so delivered shall be determined by such
Clearing Agency Participant, and delivery of such lesser aggregate principal
amount of 2006 Notes shall constitute good delivery.
(k) The Remarketing Agent is not obligated to purchase any 2006 Notes in
the Third Remarketing or otherwise. Neither the Trustee, the Purchase Contract
Agent, the Corporation, Duke Energy nor the Remarketing Agent shall be obligated
in any case to provide funds to make payment upon tender of 2006 Notes for
remarketing.
(l) The tender and settlement procedures set in this Section 3.03,
including provisions for payment by purchasers of 2006 Notes in the Third
Remarketing, shall be subject to modification, notwithstanding any provision to
the contrary set forth herein, to the extent required by the Clearing Agency or
if the book-entry system is no longer available for the 2006 Notes at the time
of the Third Remarketing, to facilitate the tendering and remarketing of 2006
Notes in certificated form. In addition, the Remarketing Agent may,
notwithstanding any provision to the contrary set forth herein, modify the
settlement procedures set forth herein in order to facilitate the settlement
process.
(m) Anything herein to the contrary notwithstanding, the Reset Rate shall
in no event exceed the maximum rate, if any, permitted by applicable law and, as
provided in the Remarketing Agreement, neither the Remarketing Agent nor the
Reset Agent shall have any obligation to determine whether there is any
limitation under applicable law on the Reset Rate or, if there is any such
limitation, the maximum permissible Reset Rate on the 2006 Notes and they shall
rely solely upon written notice from the Corporation (which the Corporation
agrees to provide prior to the tenth Business Day before October 16, 2004) as to
whether or not there is any such limitation and, if so, the maximum permissible
Reset Rate.
Section 3.04 Final Remarketing Procedures.
(a) If a Failed Third Remarketing has occurred, the Corporation will
request, not later than seven nor more than 15 calendar days prior to the Final
Remarketing Date that the Clearing Agency notify the Holders of the 2006 Notes
of the Final Remarketing.
(b) If a Failed Third Remarketing has occurred, then, not later than 5:00
p.m., New York City time on the second Business Day immediately preceding the
Final Remarketing Date, but
14
no earlier than the Interest Payment Date immediately preceding November 16,
2004, each Holder of 2006 Notes may elect to have 2006 Notes held by such Holder
remarketed. Under Section 5.4 of the Purchase Contract Agreement, Holders of
Corporate Units that do not give notice of intention to make a Cash Settlement
of their related Purchase Contracts shall be deemed to have consented to the
disposition of the 2006 Notes constituting a component of such Corporate Units.
Holders of 2006 Notes that are not components of Corporate Units shall give
notice of their election to have such 2006 Notes remarketed to the Custodial
Agent pursuant to the Pledge Agreement. Any such notice shall be irrevocable
after 5:00 p.m., New York City time, on the second Business Day immediately
preceding the Final Remarketing Date and may not be conditioned upon the level
at which the Reset Rate is established. Pursuant to Section 5.4 of the Purchase
Contract Agreement, the Purchase Contract Agent shall notify, by 11:00 a.m., New
York City time, on the Business Day immediately preceding the Final Remarketing
Date, the Remarketing Agent, the Corporation and Duke Energy of the aggregate
principal amount of 2006 Notes (that are components of Corporate Units) to be
remarketed. Pursuant to Section 4.6(c) of the Pledge Agreement, the Custodial
Agent shall notify the Remarketing Agent of the aggregate principal amount of
2006 Notes (that are components of Corporate Units) to be remarketed.
(c) If any Holder of Corporate Units does not give a notice of its
intention to make a Cash Settlement or gives a notice of election to tender 2006
Notes as described in Section 3.04(b), the 2006 Notes of such Holder shall be
deemed tendered, notwithstanding any failure by such Holder to deliver or
properly deliver such 2006 Notes to the Remarketing Agent for purchase.
(d) The right of each Holder to have 2006 Notes tendered for purchase shall
be limited to the extent that (i) the Remarketing Agent conducts a Final
Remarketing pursuant to the terms of the Purchase Contract Agreement, (ii) 2006
Notes tendered have not been called for redemption, (iii) the Remarketing Agent
is able to find a purchaser or purchasers for tendered 2006 Notes at a price of
not less than 100% of the principal amount thereof, and (iv) such purchaser or
purchasers deliver the purchase price therefor to the Remarketing Agent as and
when required. The Holders of 2006 Notes that are remarketed in a Successful
Final Remarketing agree that the remarketing fee specified in Section 5.4 of the
Purchase Contract Agreement shall be deducted from the proceeds of the
remarketing.
(e) On the Final Remarketing Date, the Remarketing Agent shall use
reasonable efforts to remarket, at a price equal to approximately 100.5% of the
aggregate principal amount thereof, 2006 Notes tendered or deemed tendered for
purchase.
(f) If none of the Holders elect or are deemed to have elected to have 2006
Notes held by them remarketed, the Reset Rate shall be the rate determined by
the Reset Agent, subject to the terms of the Remarketing Agreement, as the rate
that would have been established had a remarketing been held on the Final
Remarketing Date.
(g) On the Final Remarketing Date, the Reset Agent shall, pursuant to the
terms of the Remarketing Agreement, determine the Reset Rate.
15
(h) If, by 4:00 p.m., New York City time, on the Final Remarketing Date,
the Remarketing Agent is unable to remarket all 2006 Notes tendered or deemed
tendered for purchase or if the Final Remarketing shall not have occurred
because a condition precedent to the Final Remarketing shall not have been
fulfilled, a failed remarketing ("Failed Final Remarketing") shall be deemed to
have occurred and the Remarketing Agent shall so advise by telephone the
Trustee, the Collateral Agent, the Purchase Contract Agent, the Corporation and
the Clearing Agency.
(i) By approximately 4:30 p.m., New York City time, on the Final
Remarketing Date provided that there has not been a Failed Final Remarketing,
the Remarketing Agent shall advise by telephone (i) the Trustee, the Collateral
Agent, the Purchase Contract Agent, the Corporation, and the Clearing Agency of
the Reset Rate determined in the Final Remarketing and the aggregate principal
amount of 2006 Notes sold in the Final Remarketing, (ii) each purchaser (or the
Clearing Agency Participant thereof) of the Reset Rate and the aggregate
principal amount of 2006 Notes such purchaser is to purchase and (iii) each
purchaser to give instructions to its Clearing Agency Participant to pay the
purchase price on the Purchase Contract Settlement Date in same day funds
against delivery of the 2006 Notes purchased through the facilities of the
Clearing Agency.
(j) In accordance with the Clearing Agency's normal procedures, on the
Purchase Contract Settlement Date, the transactions described above with respect
to each 2006 Note tendered for purchase and sold in the Final Remarketing shall
be executed through the Clearing Agency, and the accounts of the respective
Clearing Agency Participants shall be debited and credited and such 2006 Notes
delivered by book entry as necessary to effect purchases and sales of such 2006
Notes. The Clearing Agency shall make payment in accordance with its normal
procedures.
(k) If any Holder selling 2006 Notes in the Final Remarketing fails to
deliver such 2006 Notes, the Clearing Agency Participant of such selling Holder
and of any other Person that was to have purchased 2006 Notes in the Final
Remarketing may deliver to any such other Person an aggregate principal amount
of 2006 Notes that is less than the aggregate principal amount of 2006 Notes
that otherwise was to be purchased by such Person. In such event, the aggregate
principal amount of 2006 Notes to be so delivered shall be determined by such
Clearing Agency Participant, and delivery of such lesser aggregate principal
amount of 2006 Notes shall constitute good delivery.
(l) The Remarketing Agent is not obligated to purchase any 2006 Notes in
the Final Remarketing or otherwise. Neither the Trustee, the Purchase Contract
Agent, the Corporation, Duke Energy nor the Remarketing Agent shall be obligated
in any case to provide funds to make payment upon tender of 2006 Notes for
remarketing.
(m) The tender and settlement procedures set in this Section 3.04,
including provisions for payment by purchasers of 2006 Notes in the Final
Remarketing, shall be subject to modification, notwithstanding any provision to
the contrary set forth herein, to the extent required by the Clearing Agency or
if the book-entry system is no longer available for the 2006 Notes at the time
of the Final Remarketing, to facilitate the tendering and remarketing of 2006
Notes in certificated form. In addition, the Remarketing Agent may,
notwithstanding any provision to the
16
contrary set forth herein, modify the settlement procedures set forth herein in
order to facilitate the settlement process.
(n) Anything herein to the contrary notwithstanding, the Reset Rate shall
in no event exceed the maximum rate, if any, permitted by applicable law and, as
provided in the Remarketing Agreement, neither the Remarketing Agent nor the
Reset Agent shall have any obligation to determine whether there is any
limitation under applicable law on the Reset Rate or, if there is any such
limitation, the maximum permissible Reset Rate on the 2006 Notes and they shall
rely solely upon written notice from the Corporation (which the Corporation
agrees to provide prior to the tenth Business Day before the Purchase Contract
Settlement Date) as to whether or not there is any such limitation and, if so,
the maximum permissible Reset Rate.
ARTICLE 4
MISCELLANEOUS PROVISIONS
Section 4.01 Recitals by Corporation. The recitals in this Fourth
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 2006 Notes and this Fourth Supplemental Indenture
as fully and with like effect as if set forth herein full.
Section 4.02 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 Fourth Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
Section 4.03 Executed in Counterparts. This Fourth 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.
ARTICLE 5
TAX TREATMENT
Section 5.01 Agreements. The Corporation agrees, and by purchasing a
beneficial ownership interest in the 2006 Notes each Holder of the 2006 Notes
will be deemed to have agreed, for United States federal income tax purposes (a)
to treat the acquisition of a Corporate Unit as the acquisition of a unit
consisting of a stock purchase contract and a note issued by the Corporation and
to treat the 2006 Notes as indebtedness that is subject to Treas. Reg. Sec.
1.1275-4 (the "Contingent Payment Regulations") and (b) to be bound by the
Corporation's determination of the "comparable yield" and "projected payment
schedule," within the meaning of the Contingent Payment Regulations, with
respect to the 2006 Notes. The Corporation has determined that the comparable
yield is an annual rate of 5.04%, compounded quarterly. Based on the comparable
yield, the projected payment schedule per 2006 Note is $0.2670 for the period
ending on February 16, 2002, $0.2700 for each subsequent quarter ending on or
prior to the
17
Initial Remarketing Date, $0.3780 for each quarter ending after the Initial
Remarketing Date and $25.3696 at maturity.
IN WITNESS WHEREOF, each party hereto has caused this instrument to be
signed in its name and behalf by its duly authorized officers, all as of the day
and year first above written.
Duke Capital Corporation
By:______________________________
Attest:
___________________________________
JPMORGAN CHASE BANK, as Trustee
By:______________________________
Attest:
___________________________________
18
EXHIBIT A
(Form of Face of 2006 Note)
If the 2006 Note is to be a Global 2006 Note, insert: THIS 2006 NOTE IS
A GLOBAL 2006 NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE OF THE
CLEARING AGENCY. THIS 2006 NOTE IS EXCHANGEABLE FOR 2006 NOTES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS 2006
NOTE (OTHER THAN A TRANSFER OF THIS 2006 NOTE AS A WHOLE BY THE CLEARING AGENCY
TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE CLEARING AGENCY TO
THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING AGENCY OR TO A SUCCESSOR
CLEARING AGENCY OR TO A NOMINEE OF SUCH SUCCESSOR) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.
UNLESS THIS 2006 NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY 2006 NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
CUSIP No.
$
No.
DUKE CAPITAL CORPORATION
4.32% SENIOR NOTE
DUE 2006
Duke Capital Corporation, a Delaware corporation (the "Corporation,"
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received, hereby promises to pay to , or
registered assigns, the principal sum of DOLLARS ($ ) [, or
such other principal amount as shall be set forth in the Schedule of Increases
or Decreases attached hereto]* on November 16, 2006 (such date is hereinafter
referred to as the "Stated Maturity"), and to pay interest on said principal sum
_______________________
* Insert in Global Securities and Pledged 2006 Notes.
A-1
from November 19, 2001 or from the next most recent date to which interest has
been paid or duly provided for, quarterly in arrears on February 16, May 16,
August 16 and November 16 of each year (each such date, an "Interest Payment
Date"), commencing on February 16, 2002 initially at the rate of 4.32% per annum
through and including the day immediately preceding the Reset Effective Date and
at the Reset Rate thereafter until the principal hereof shall have been paid or
duly made available for payment and, to the extent permitted by law, to pay
interest, compounded quarterly, on any overdue principal and premium, if any,
and on any overdue installment of interest at the rate per annum of 4.32%
through and including the day immediately preceding the Reset Effective Date and
at the Reset Rate thereafter. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year consisting of
twelve 30-day months and, except as provided in the Indenture (as defined
below), the amount of interest payable for any period shorter than a full
quarterly period for which interest is computed will be computed on the basis of
the actual number of days elapsed in such 90-day period. In the event that any
date on which interest is payable on this 2006 Note is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such Interest
Payment Date. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this 2006 Note (or one or more predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest installment which shall be the close of business on the first
day of the month in which such Interest Payment Date falls. Any such interest
installment not punctually paid or duly provided for on any Interest Payment
Date shall forthwith cease to be payable to the Holders at the close of business
on such Regular Record Date and may be paid to the Person in whose name this
2006 Note is registered at the close of business on a Special Record Date to be
fixed by the Trustee for the payment of such Defaulted Interest, notice whereof
shall be given to the Holders of the 2006 Notes not less than 10 days prior to
such Special Record Date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange, if any, on
which the 2006 Notes shall be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture. The principal of
(and premium, if any) and the interest on this 2006 Note shall be payable at the
office or agency of the Corporation maintained for that purpose in the Borough
of Manhattan, The City of New York, in any coin or currency of the United States
of America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Corporation (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register or (ii)
by wire transfer at such place and to such account at a banking institution in
the United States as may be designated in writing to the Trustee at least
sixteen (16) days prior to the date for payment by the Person entitled thereto.
The indebtedness evidenced by this 2006 Note is, to the extent provided
in the Indenture, senior and unsecured and will rank in right of payment on
parity with all other senior unsecured obligations of the Corporation.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS 2006 NOTE
SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS
A-2
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 2006 Note shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Corporation has caused this instrument to be
duly executed under its corporate seal.
Dated:
DUKE CAPITAL CORPORATION
By:_________________________________
Attest:
__________________________________
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
JPMORGAN CHASE BANK, as Trustee
By:____________________________
Authorized Officer
Dated:
A-3
(Form of Reverse of 2006 Note)
This 2006 Note is one of a duly authorized issue of Securities of the
Corporation (the "Securities") issued and issuable in one or more series under a
Senior Indenture, dated as of April 1, 1998, as supplemented (the "Indenture"),
between the Corporation and JPMorgan Chase Bank (formerly known as 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 4.32% Senior
Notes due 2006 (the "2006 Notes"). Such series is limited in aggregate principal
amount to $750,000,000 (or $862,500,000 if the over-allotment option referred to
in the Underwriting Agreement is exercised in full). Capitalized terms used
herein for which no definition is provided herein shall have the meanings set
forth in the Indenture.
If a Tax Event shall occur and be continuing, the Corporation may, at
its option, redeem the 2006 Notes in whole (but not in part) at any time at a
price per 2006 Note equal to the Redemption Price. The Redemption Price shall be
paid to each Holder of the 2006 Notes by the Corporation, no later than 12:00
noon, New York City time, on the Tax Event Redemption Date, by check or wire
transfer in immediately available funds, at such place and to such account as
may be designated by each such Holder.
The 2006 Notes are not entitled to the benefit of any sinking fund.
If an Event of Default with respect to the 2006 Notes shall occur and
be continuing, the principal of the 2006 Notes 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 2006
Note shall be conclusive and binding upon such Holder and upon all future
Holders of this 2006 Note and of any 2006 Note 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 2006 Note.
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No reference herein to the Indenture and no provision of this 2006 Note
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 2006 Note 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 2006 Note is registrable in the Security
Register, upon surrender of this 2006 Note 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 2006
Notes, 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 2006 Note 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
2006 Notes, the Holders of not less than a majority in principal amount of the
2006 Notes 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 2006 Notes 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 2006 Note 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 provisions for defeasance and covenant defeasance in the Indenture
shall not apply to the 2006 Notes.
Prior to due presentment of this 2006 Note 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 2006 Note is registered as the
owner hereof for all purposes, whether or not this 2006 Note be overdue, and
neither the Corporation, the Trustee nor any such agent shall be affected by
notice to the contrary.
No recourse shall be had for the payment of the principal of or any
premium or the interest on this 2006 Note, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, shareholder, officer or director, as such, past, present or
future, of the Corporation or of 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, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
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The 2006 Notes 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, 2006 Notes are
exchangeable for a like aggregate principal amount of 2006 Notes of a different
authorized denomination, as requested by the Holder surrendering the same upon
surrender of the 2006 Note or Notes to be exchanged at the office or agency of
the Corporation.
The Corporation agrees, and by purchasing a beneficial ownership
interest in the 2006 Notes each Holder of the 2006 Notes will be deemed to have
agreed, for United States federal income tax purposes (a) to treat the
acquisition of a Corporate Unit as the acquisition of a unit consisting of a
stock purchase contract and a note issued by the Corporation and to treat the
2006 Notes as indebtedness that is subject to Treas. Reg. Sec. 1.1275-4 (the
"Contingent Payment Regulations") and (b) to be bound by the Corporation's
determination of the "comparable yield" and "projected payment schedule," within
the meaning of the Contingent Payment Regulations, with respect to the 2006
Notes. The Corporation has determined that the comparable yield is an annual
rate of 5.04%, compounded quarterly. Based on the comparable yield, the
projected payment schedule per 2006 Note is $0.2670 for the period ending on
February 16, 2002, $0.2700 for each subsequent quarter ending on or prior to the
Initial Remarketing Date, $0.3780 for each quarter ending after the Initial
Remarketing Date and $25.3696 at maturity.
This 2006 Note shall be governed by, and construed in accordance with,
the internal laws of the State of New York.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the fact
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)
TEN ENT -- as tenants by the entireties Under Uniform Gifts to Minors Act _____________
(State)
JT TEN -- as joint tenants with rights of
survivorship and not as tenants
in common
Additional abbreviations may also be used though not on the above list.
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
__________ (please insert Social Security or other identifying number of
assignee)
________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
________________________________________________________________________________
________________________________________________________________________________
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
________________________________________________________________________________
Agent to transfer said Security on the books of the Corporation, with full power
of substitution in the premises.
Dated: ________________ ______________________________________________
______________________________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the within instrument in every
particular without alteration or enlargement,
or any change whatever.
Signature Guarantee: _________________________
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Security Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Security Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
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[TO BE ATTACHED TO GLOBAL CERTIFICATES
AND PLEDGED 2006 NOTES
SCHEDULE OF INCREASES OR DECREASES
The following increases or decreases in this [Global Certificate]
[Pledged 2006 Note] have been made:
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Principal amount of 2006
Amount of decrease in Amount of increase in Note evidenced by the
principal amount of 2006 principal amount of 2006 [Global Certificate] Signature of
Note evidenced by the Note evidenced by the [Pledged 2006 Note] authorized officer of
[Global Certificate] [Global Certificate] following such decrease Trustee or Custodial
Date [Pledged 2006 Note] [Pledged 2006 Note] or increase Agent
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EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
JPMORGAN Chase Bank, as Trustee
By: _______________________________
Authorized Officer
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