EXHIBIT 4.81
Conformed Copy
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DUKE ENERGY CORPORATION
TO
JPMORGAN CHASE BANK,
Trustee
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EIGHTY-FIRST SUPPLEMENTAL INDENTURE
Dated as of February 25, 2003
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CREATING AN ISSUE OF FIRST AND REFUNDING
MORTGAGE BONDS, 3.75% SERIES A DUE 2008
AND 3.75% SERIES B DUE 2008
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SUPPLEMENTAL TO
FIRST AND REFUNDING MORTGAGE
DATED AS OF DECEMBER 1, 1927
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SUPPLEMENTAL INDENTURE, bearing date as of the 25th day of February,
2003, 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 JPMorgan Chase Bank (formerly known as The Chase
Manhattan Bank, formerly known as Chemical Bank (successor to Xxxxxx 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 Xxxxxx Guaranty Trust Company of New York), as Trustee, and a supplemental
indenture dated as of February 1, 1960 to Xxxxxx 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, Pollution Control Facilities Revenue Refunding Series Due 2014"
(herein called "bonds of the 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, 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, 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, 7 1/2%
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Series B Due 2025" (herein called "bonds of the 2025 Series B"), bonds of a
series known as the "First and Refunding Mortgage Bonds, 7 1/2% Series Due 1999"
(herein called "bonds of the 1999 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, 6.625%
Series due 2003" (herein called "bonds of the 2003 Series"), bonds of a series
known as the "First and Refunding Mortgage Bonds, 9 5/8% Series due 2020"
(herein called "bonds of the 2020 Series"), bonds of a series known as the
"First and Refunding Mortgage Bonds, 8 3/4% Series due 2021" (herein called
"bonds of the 2021 Series"), bonds of a series known as "First and Refunding
Mortgage Bonds, 7% Series due 2005" (herein called "bonds of the 2005 Series")
and such other bonds that have been issued have heretofore been issued and
(except for bonds of the 2.65% Series, bonds of the 1979 Series, bonds of the
1998 Series, bonds of the 1999 Series, bonds of the 2000 Series, bonds of the
2000 Series B, bonds of the 2003 Series, bonds of the 2020 Series, bonds of the
2021 Series, bonds of the 2005 Series, bonds of the 2025 Series B and other such
bonds which have been redeemed or 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 Xxxxxx 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 Xxxxxx 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, Xxxxxx
Guaranty Trust Company of New York, as Trustee, and Chemical Bank (now known as
JPMorgan Chase 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, 3.75% Series A due 2008" and "First and Refunding Mortgage
Bonds, 3.75% Series B due 2008" and to determine the terms and provisions and
the forms 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
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supplemented by the aforesaid supplemental indenture dated as of June 15, 1964,
by supplemental indentures dated as of February 1, 1968, March 1, 1990, May 15,
1990, July 1, 1991, February 1, 1993, March 1, 1993, April 1, 1993, May 1, 1993,
July 1, 1993, August 1, 1993, August 20, 1993, May 1, 1994 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 3.75% SERIES A DUE 2008 AND
BONDS OF THE 3.75% SERIES B DUE 2008.
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, 3.75% Series A due 2008 (herein called "Series A Mortgage
Bonds") and its First and Refunding Mortgage Bonds, 3.75% Series B due 2008
(herein called "Series B Mortgage Bonds", and together with the Series A
Mortgage Bonds, the "bonds of the 3.75% Series"), and the Corporation hereby
establishes, determines and fixes the terms and provisions of the bonds of the
3.75% Series as hereinafter in this Part One set forth.
Each bond of the 3.75% 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 September 5, 2003,
from the September 5 or March 5, as the case may be, next preceding the date
thereof to which interest has been paid, unless such date of authentication is
prior to September 5, 2003, in which case interest shall be payable from
February 25, 2003; provided, however, that interest shall be payable on each
bond of the 3.75% 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. In addition, a special interest premium may accrue on the bonds of
the 3.75% Series in the circumstances described in the Registration Rights
Agreement.
Interest on any bond of the 3.75% 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 3.75% 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 or, at the
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option of the Corporation, 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 of payment by the
Person entitled thereto (provided, that if the bonds of the 3.75% Series are
represented by Global Securities held by the Depositary, payment may be made
pursuant to the procedures of the Depositary); 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 3.75% Series, such defaulted interest shall be
paid to the registered holder of such bond (or any bond or bonds of the 3.75%
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
3.75% 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 3.75% 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 15th calendar day 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 3.75% Series shall mature as to principal
on March 5, 2008, and shall bear interest at a rate of 3.75% per annum, payable
semi-annually on the fifth day of March and September in each year.
SECTION 3. The bonds of the 3.75% 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 Section 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
3.75% Series.
SECTION 4. The Bonds may be redeemed at the option of the Corporation,
in whole or in part at any time and from time to time, at a redemption price
equal to the greater of (1) 100% of the principal amount of the Bonds to be
redeemed and (2) the sum of the present values of the remaining scheduled
payments of principal and interest on such Bonds (exclusive of interest accrued
to the redemption date) discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate plus 15 basis points, plus, in either case, accrued and unpaid interest on
the principal amount being redeemed to such redemption date.
The bonds of the 3.75% Series are also subject to redemption 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 Section 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.
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All such redemptions of bonds of the 3.75% Series shall be effected as
provided in Article 3 of the Indenture except that, in case a part only of the
bonds of the 3.75% 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 limit upon the aggregate principal amount of the Series
A Mortgage Bonds which may be authenticated and delivered pursuant to this
Eighty-First Supplemental Indenture shall be $500,000,000; the limit upon the
aggregate principal amount of the Series B Mortgage Bonds which may be
authenticated and delivered pursuant to this Eighty-First Supplemental Indenture
shall be $500,000,000; and at all times, the limit of the aggregate principal
amount of Series A Mortgage Bonds plus Series B Mortgage Bonds shall be
$500,000,000.
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 3.75% 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
(provided, that if the bonds of the 3.75% Series are represented by Global
Securities held by or on behalf of the Depositary, the procedures of the
Depositary may be followed for any action under this Section 6 of Part One).
SECTION 7. The form of the Series A Mortgage Bonds and the certificate
of the Trustee to be endorsed on such bonds, respectively, shall be in
substantially the form set forth in Exhibit A hereto. The form of the Series B
Mortgage Bonds and the certificate of the Trustee to be endorsed on such bonds,
respectively, shall be in substantially the form set forth in Exhibit B hereto.
PART TWO.
REPLACEMENT FUND.
SECTION 1. So long as any of the bonds of the 3.75% Series are
outstanding, the Corporation will continue to maintain the Replacement Fund set
forth in, and in accordance with
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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 3.75% 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 3.75% Series are outstanding
and (b) no bonds of the Medium-Term Notes Series, of the 2003 Series B, of the
2008 Series, of the 2003 Series C, of the 2004 Series B, of the 2033 Series, of
the 2023 Series B, of the 2025 Series or of the 2024 Series are outstanding and
(c) cash which shall have been deposited with the Trustee 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 3.75% 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 February 1, 1993, May 1, 1993, July 1, 1993, August 1, 1993, August
20, 1993 and May 1, 1994, 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 3.75% 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 3.75% Series, the
Medium-Term Notes Series, the 2003 Series B, the 2008 Series, the 2003 Series C,
the 2004 Series B, the 2033 Series, the 2023 Series B, the 2025 Series and the
2024 Series 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 1990 Pollution
Control Series, the 2027 City of Greensboro Series, the Medium-Term Notes
Series, the 2003 Series B, the 2008 Series, the 2003 Series C, the 1993
Pollution Control Series, the 2004 Series B, the 2033 Series, the 2023 Series B,
the 2025 Series or the 2024 Series and whether or not the bonds of the 1990
Pollution Control Series, the 2027 City of Greensboro Series, the Medium-Term
Notes Series, the 2003 Series B,
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the 2008 Series, the 2003 Series C, the 1993 Pollution Control Series, the 2004
Series B, the 2033 Series, the 2023 Series B, the 2025 Series or the 2024 Series
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 3.75% Series are outstanding and to the same extent as though
the words "or so long as any bonds of the 3.75% 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
Section 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 1990 Pollution Control Series, the 2027 City of Greensboro Series,
Medium-Term Notes Series, the 2003 Series B, the 2008 Series, the 2003 Series C,
the 1993 Pollution Control Series, the 2004 Series B, the 2033 Series, the 2023
Series B, the 2025 Series or the 2024 Series and whether or not bonds of the
1990 Pollution Control Series, the 2027 City of Greensboro Series, the
Medium-Term Notes Series, the 2003 Series B, the 2008 Series, the 2003 Series C,
the 1993 Pollution Control Series, the 2004 Series B, the 2033 Series, the 2023
Series B, the 2025 Series or the 2024 Series are outstanding, said sentence
shall continue and remain in full force and effect so long as any bonds of the
3.75% 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 3.75% Series are outstanding.
PART FOUR.
GLOBAL SECURITIES; TRANSFER AND EXCHANGE.
SECTION 1. Global Securities. The bonds of the 3.75% Series 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,
bonds of the 3.75% Series represented by such Global Security or Global
Securities shall not be exchangeable for, and shall not otherwise be issuable
as, bonds of the 3.75% Series in definitive form. The Global Securities
described in this Part Four 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.
None of the Corporation, the Trustee nor any agent of the Corporation
or the Trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Global Security or maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
A Global Security shall be exchangeable for bonds of the 3.75% Series
registered in the names of persons other than the Depositary or its nominee only
if (i) the Depositary notifies the
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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 bonds of the 3.75% Series
registered in such names as the Depositary shall direct.
The bonds of the 3.75% Series will be resold by the initial purchasers
only to QIBs in reliance on Rule 144A. Such bonds of the 3.75% Series may
thereafter be transferred only to QIBs in accordance with the procedure
described herein.
Rule 144A Bonds shall be issued in the form of a permanent Global
Security, without interest coupons, substantially in the form of Exhibit A,
which is hereby incorporated by reference and made a part of this Eighty-First
Supplemental Indenture, including the legends set forth in Section 2 of this
Part Four below, deposited with the Trustee, as custodian for the Depositary.
The Rule 144A Global Bond may be represented by more than one certificate if so
required by the Depositary's rules regarding the maximum principal amount to be
represented by a single certificate.
SECTION 2. Restrictive Legends. (a) Unless and until (i) a bond of the
3.75% Series is sold under an effective registration statement or (ii) a Series
A Mortgage Bond is exchanged for a Series B Mortgage Bond in connection with an
effective registration statement, each Rule 144A Global Bond (and all Series A
Mortgage Bonds issued in exchange therefor or in substitution thereof) shall
bear the following legend, in each case pursuant to the Registration Rights
Agreement (the "Restricted Securities Legend"), subject to removal on or after
the Resale Restriction Termination Date referred to in Section 3 of this Part
Four (each defined term in the legend being defined as such for purposes of the
legend only):
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, ON ITS OWN
BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR
INTEREST OR PARTICIPATION THEREIN, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") THAT IS TWO YEARS (OR SUCH PERIOD AS MAY
BE REQUIRED BY ANY
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SUBSEQUENT CHANGE IN APPLICABLE LAW) AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF AND THE LAST DATE ON WHICH DUKE ENERGY CORPORATION
(THE "CORPORATION") OR ANY AFFILIATE OF THE CORPORATION WAS THE OWNER
OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE
CORPORATION, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, OR (D) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE CORPORATION'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE."
(b) Each of the Global Securities shall bear the following legend (the
"Depository Legend") on the face thereof:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW
YORK, NEW YORK, TO THE CORPORATION OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE
HEREOF."
SECTION 3. Transfer and Exchange. (a) With respect to any proposed
transfer of a Rule 144A Bond prior to the date which is two years after the
later of the date of its original
10
issue (or such period as may be required by any subsequent change in applicable
law) and the last date on which the Corporation or any affiliate of the
Corporation was the owner of such Rule 144A Bonds (or any predecessor thereto)
(the "Resale Restriction Termination Date"), a transfer of a Rule 144A Bond to a
QIB shall be made upon the representation of the transferee in the form of
certificate as set forth on the reverse of the bonds of the 3.75% Series that it
is purchasing for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A, and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Corporation as the undersigned
has requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A.
(b) Restricted Securities Legend. Upon the transfer, exchange or
replacement of bonds of the 3.75% Series not bearing a Restricted Securities
Legend, the Trustee shall deliver bonds of the 3.75% Series that do not bear a
Restricted Securities Legend. Upon the transfer, exchange or replacement of
bonds of the 3.75% Series bearing a Restricted Securities Legend, the Trustee
shall deliver only bonds of the 3.75% Series that bear a Restricted Securities
Legend unless there is delivered to the Trustee an opinion of counsel,
certification and/or other information satisfactory to the Corporation and the
Trustee to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of the
Securities Act.
(c) Notwithstanding anything herein to the contrary, the Trustee shall
not have any responsibility to receive any letters, opinions or certifications,
nor any responsibility to monitor compliance with any transfer restrictions, in
connection with any transfer or exchange of any beneficial interest in a Global
Security for a beneficial interest in the same Global Security.
(d) If and when the Series A Mortgage Bonds may be exchanged for Series
B Mortgage Bonds as provided in the Registration Rights Agreement, the Holder
has the option of exchanging its Series A Mortgage Bonds for Series B Mortgage
Bonds of any authorized denominations and of like tenor and aggregate principal
amount, upon surrender of the Series A Mortgage Bonds to be exchanged. The
Series B Mortgage Bonds will have terms substantially identical in all material
respects to the Series A Mortgage Bonds (except that the Securities Act transfer
restrictions and the provision for an interest premium applicable to the Series
A Mortgage Bonds will not be applicable to the Series B Mortgage Bonds), and
will be treated, together with any outstanding Series A Mortgage Bonds, as a
single series of securities under the Indenture. Whenever Series A Mortgage
Bonds are so surrendered for exchange, the Corporation shall execute, and the
Trustee shall authenticate and deliver, the Series B Mortgage Bonds which the
Holder making the exchange is entitled to receive.
All Series B Mortgage Bonds issued upon any registration of transfer or
exchange of Series A Mortgage Bonds shall be the valid obligations of the
Corporation, evidencing the same debt, and entitled to the same benefits under
this Eighty-First Supplemental Indenture, as the Series A Mortgage Bonds
surrendered upon such registration of transfer or exchange.
11
Every Series A Mortgage Bond 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 Trustee duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of bonds of the 3.75% Series, 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 or transfer or exchange of bonds of
the 3.75% Series.
No Series B Mortgage Bond may be issued hereunder, except in exchange
for a Series A Mortgage Bond in accordance with the Registration Rights
Agreement.
SECTION 4. 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 Indenture.
"Business day" means any day other than a day on which banks in New
York City are required or authorized to be closed.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the bonds of the 3.75% 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 such bonds of the 3.75% Series.
"Comparable Treasury Price" means with respect to any redemption date
for bonds of the 3.75% Series, the average of three Reference Treasury Dealer
Quotations for such redemption date.
"Depositary" means a clearing agency registered under the Exchange Act
that is designated to act as Depositary for the bonds of the 3.75% Series, which
Depositary shall initially be The Depository Trust Company.
"Depository Legend" means a legend set forth in Section 2(b) of this
Part Four.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Global Security" means a bond of the 3.75% Series in global form.
"Holder" means a Person in whose name a bond of the 3.75% Series is
registered in the registration books maintained by the Trustee.
"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.
12
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Quotation Agent" means a Reference Treasury Dealer appointed by the
Corporation.
"Reference Treasury Dealers" means Banc One Capital Markets, Inc.,
Deutsche Bank Securities Inc. and UBS Warburg LLC, and their respective
successors; provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer in the United States (a "Primary
Treasury Dealer"), the Corporation shall 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.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of February 25, 2003, among the Corporation and Banc One
Capital Markets, Inc., Deutsche Bank Securities Inc., UBS Warburg LLC, ABN AMRO
Incorporated, Barclays Capital Inc., CIBC World Markets Corp., Scotia Capital
(USA) Inc. and TD Securities (USA) Inc.
"Restricted Securities Legend" means a legend set forth in Section 2(a)
of this Part Four.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Bonds" means all bonds of the 3.75% Series offered and sold
to QIBs in reliance on Rule 144A.
"Rule 144A Global Bonds" means all bonds of the 3.75% Series in global
form offered and sold to QIBs in reliance on Rule 144A.
"Securities Act" means the Securities Act of 1933, as amended.
"Treasury Rate" means, with respect to any redemption date, (1) the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15 (519)" or any successor publication which is published weekly
by the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the maturity date of the bonds of the 3.75% Series to be
redeemed, yields for the two published maturities most closely corresponding to
the Comparable Treasury Issue shall be determined, and the Treasury Rate shall
be interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (2) if such release (or any successor release)
is not published during the week preceding the calculation date or does not
contain such yields, the rate per year equal to the semi-annual equivalent yield
to maturity of the Comparable Treasury Issue,
13
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date. The Treasury Rate will be calculated on the third business
day preceding the redemption date.
PART FIVE.
MISCELLANEOUS.
SECTION 1. (a) For the purposes of Section 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 3.75% Series. Such covenants and provisions shall
remain in force and be applicable only so long as any bonds of the 3.75% Series
shall be outstanding, and, subject to the provisions of paragraph (2) of
subdivision (c) of Section 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 3.75% 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 Section 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 3.75% Series. Such covenants
and provisions shall remain in force and be applicable only so long as any bonds
of the 3.75% Series shall be outstanding, and, subject to the provisions of
paragraph (2) of subdivision (c) of Section 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 3.75% 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.
14
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.
SECTION 6. In addition to the amendment provisions of the Indenture,
the terms and conditions of this supplemental indenture and the bonds of the
3.75% Series may be modified, amended or supplemented by the Corporation and the
Trustee, without the consent of the holders of the bonds of the 3.75% Series,
and if not inconsistent with the Indenture, to cure ambiguities in this
supplemental indenture or the bonds of the 3.75% Series, or correct defects or
inconsistencies in the provisions of this supplemental indenture or the bonds of
the 3.75% Series or to provide for such appropriate additional provisions in
this supplemental indenture or the bonds of the 3.75% Series as are necessary
for certificated bonds to be issued in lieu of Global Securities, to reflect
additional provisions related to the issuance of Global Securities (including
changes in the procedures of the Depositary) or to reflect restrictions on
transfer in addition to the restrictions on transfer contained herein or in the
bonds of the 3.75% Series in conformity with applicable law, including any
changes in applicable law.
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 JPMorgan Chase
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, all as of the day and year first above written.
DUKE ENERGY CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President, Corporate Finance
ATTEST:
/s/ Xxxxxx X. Xxxxx III
-----------------------
Name: Xxxxxx X. Xxxxx III
Title: Assistant Secretary
Signed, sealed, executed, acknowledged
and delivered by Duke Energy
Corporation, in the presence of:
/s/ Xxxxxx X. Xxxxxx
--------------------
/s/ Xxx X. Xxxxxxxxxx
---------------------
16
JPMORGAN CHASE BANK,
as Trustee
By: /s/ Xxxxx Xx
------------
Name: Xxxxx Xx
Title: Vice President
ATTEST:
/s/ Xxxxxxxx Xxxxxxxx
---------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Trust Officer
Signed, sealed, executed, acknowledged
and delivered by JPMorgan Chase Bank,
in the presence of:
/s/ Xxxxx X. Safer
------------------
Xxxxx X. Safer
/s/ Xxxxx Xxxxxxxxxxx
---------------------
Xxxxx Xxxxxxxxxxx
State of New York )
) ss.:
County of New York )
Personally appeared before me, Xxxxx X. Safer, and made oath that he saw Xxxxx
Xx, a Vice President, and Xxxxxxxx Xxxxxxxx, a Trust Officer, respectively, of
JPMorgan Chase Bank, sign, attest and affix hereto the corporate seal of said
JPMorgan Chase Bank, and, as the act and deed of said corporation, deliver the
within written and foregoing deed, and that he, with Xxxxx Xxxxxxxxxxx,
witnessed the execution thereof.
/s/ Xxxxx X. Safer
------------------
Xxxxx X. Safer
17
Sworn and subscribed before me
this 25th day of February, 2003.
/s/ Xxxxx Xxxxx
---------------
Xxxxx Xxxxx
Notary Public, State of New York
No. 01FA4737006
Qualified in Kings County
Certificate Filed in New York County
Commission Expires December 31, 0000
Xxxxx xx Xxx Xxxx )
) ss.:
County of New York )
I, Xxxxx Xxxxx, a Notary Public in and for the State and County aforesaid,
certify that Xxxxxxxx Xxxxxxxx personally came before me this day and
acknowledged that he is a Trust Officer of JPMorgan Chase 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 Trust Officers.
Witness may hand and official seal, this 25th day of February, 2003.
/s/ Xxxxx Xxxxx
---------------
Xxxxx Xxxxx
Notary Public, State of New York
No. 01FA4737006
Qualified in Kings County
Certificate Filed in New York County
Commission Expires December 31, 2005
18
State of North Carolina )
) ss.:
County of Mecklenburg )
Personally appeared before me Xxxxxx X. Xxxxxx and made oath that she saw
Xxxxx X. Xxxxxxxx, a Vice President, and Xxxxxx X. Xxxxx III, 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 Xxx X. Xxxxxxxxxx, witnessed the execution thereof.
/s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
Sworn and subscribed before me
this 25th day of February, 2003.
/s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
Notary Public
Mecklenburg County, N.C.
My Commission expires June 26, 0000
Xxxxx xx Xxxxx Xxxxxxxx )
) ss.:
County of Mecklenburg )
I, Xxxxxx X. Xxxxxxx, a Notary Public in and for the State and County
aforesaid, certify that Xxxxxx X. Xxxxx III 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 June 26, 2006
Witness my hand and official seal, this 25th day of February, 2003.
/s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
Notary Public
Mecklenburg County, N.C.
EXHIBIT A
FORM OF DUKE ENERGY CORPORATION
FIRST AND REFUNDING MORTGAGE BOND, 3.75% SERIES A DUE 2008
[FACE SIDE OF BOND]
[RESTRICTED SECURITIES LEGEND, IF APPLICABLE]
[DEPOSITORY LEGEND, IF APPLICABLE]
DUKE ENERGY CORPORATION
FIRST AND REFUNDING MORTGAGE BOND,
3.75% Series A due 2008
No. $
CUSIP No. 264399 EG 7
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 March 5, 2008, 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 September 5, 2003, in
which case from February 25, 2003, and unless the date hereof is subsequent to a
record date (as defined below) and prior to the next succeeding September 5 or
March 5, in which case from the next succeeding September 5 or March 5, as the
case may be), at the rate of 3.75% per cent per annum, in like coin or currency,
semi-annually on March 5 and September 5 in each year, commencing September 5,
2003, 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 15th calendar day preceding each
semi-annual interest payment date (a "record date") (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. A special interest
premium may accrue on the bonds of the 3.75% Series in the circumstances
described in the Registration Rights Agreement.
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.
A-1
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: _______________________________
Name:
Title:
ATTEST:
______________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This bond is one of the bonds, of the series designated therein,
described in the within-mentioned Indenture.
JPMorgan Chase Bank,
as Trustee
By: _______________________________
Authorized Officer
A-2
[REVERSE SIDE OF BOND]
This bond is one of the bonds of a series, designated specially as
First and Refunding Mortgage Bonds, 3.75% Series A due 2008, 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 Xxxxxx Guaranty Trust Company of New York), as Trustee
(JPMorgan Chase Bank, formerly known as 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, March 1, 1990, May 15, 1990, July 1, 1991, February 1, 1993,
March 1, 1993, April 1, 1993, May 1, 1993, July 1, 1993, August 1, 1993, August
20, 1993, May 1, 1994 and February 25, 2003, 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 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 may be redeemed at the option of the
Corporation, in whole or in part at any time and from time to time, at a
redemption price equal to the greater of (1) 100% of the principal amount of the
bonds of this series to be redeemed and (2) the sum of the present values of the
remaining scheduled payments of principal and interest on such bonds (exclusive
of interest accrued to the redemption date) discounted to the redemption date on
a semiannual basis
A-3
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate plus 15 basis points, plus, in either case, accrued and unpaid interest on
the principal amount being redeemed to such redemption date.
"Business day" means any day other than a day on which banks in New
York City are required or authorized to be closed.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the bonds 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 such bonds.
"Comparable Treasury Price" means with respect to any redemption date
for bonds of this series, the average of three Reference Treasury Dealer
Quotations for such redemption date.
"Quotation Agent" means a Reference Treasury Dealer appointed by the
Corporation.
"Reference Treasury Dealers" means Banc One Capital Markets, Inc.,
Deutsche Bank Securities Inc. and UBS Warburg LLC, and their respective
successors; provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer in the United States (a "Primary
Treasury Dealer"), the Corporation shall substitute therefor another Primary
Treasury Dealer.
"Reference Treasury Dealer Quotation" 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.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of February 25, 2003, among the Corporation and Banc One
Capital Markets, Inc., Deutsche Bank Securities Inc., UBS Warburg LLC, ABN AMRO
Incorporated, Barclays Capital Inc., CIBC World Markets Corp., Scotia Capital
(USA) Inc. and TD Securities (USA) Inc.
"Treasury Rate" means, with respect to any redemption date, (1) the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15 (519)" or any successor publication which is published weekly
by the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the maturity date of the Bonds to be redeemed, yields for
the two published maturities most closely corresponding to the Comparable
Treasury Issue shall be determined, and the Treasury Rate shall be interpolated
or extrapolated from such yields on a straight-line basis, rounding to the
nearest month) or (2) if such release (or any successor release) is not
published during the week
A-4
preceding the calculation date or does not contain such yields, the rate per
year 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 will be calculated on
the third business day preceding the redemption date.
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 February 25, 2003, 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 100% of their principal amount, in each case
together with accrued interest to the date fixed for redemption.
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 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]
A-5
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)
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with rights of under Uniform Gifts to
survivorship and not as tenants in common Minors Act ________________
(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 Bond and all rights thereunder, hereby irrevocably constituting and
appointing
agent to transfer said Bond 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: ____________________
A-6
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Trustee, 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 Trustee in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-7
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER RESTRICTED SECURITIES
This certificate relates to $_______ principal amount of First and Refunding
Mortgage Bonds, 3.75% Series A due 2008 held in (check applicable space) _____
book-entry or ___ definitive form by the undersigned.
The undersigned has requested the Trustee by written order to exchange or
register the transfer of a Bond or Bonds.
In connection with any transfer of any of the Bonds evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act, the undersigned confirms that such Bonds are
being transferred in accordance with its terms:
CHECK ONE BOX BELOW
1. [ ] to the Corporation; or
2. [ ] to the Trustee for the registration in the name of the Holder,
without transfer; or
3. [ ] inside the United States to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933) that purchases for
its own account or for the account of a qualified institutional buyer to whom
notice is given that such transfer is being made in reliance on Rule 144A, in
each case pursuant to and in compliance with Rule 144A under the Securities Act
of 1933.
___________________________
Your Signature
Signature Guarantee:
Date: ___________________________ ___________________________
Signature must be guaranteed by a Signature of Signature
participant in a recognized signature guaranty Guarantee
medallion program or other signature
guarantor acceptable to the Trustee
A-8
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing
this Bond for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Corporation
as the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided Rule 144A.
Dated: ___________________________ ________________________________
NOTICE: To be executed by an
executive officer
A-9
EXHIBIT B
FORM OF DUKE ENERGY CORPORATION
FIRST AND REFUNDING MORTGAGE BOND, 3.75% SERIES B DUE 2008
[FACE SIDE OF BOND]
[DEPOSITORY LEGEND, IF APPLICABLE]
DUKE ENERGY CORPORATION
FIRST AND REFUNDING MORTGAGE BOND,
3.75% Series B due 2008
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 March 5, 2008, 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 September 5, 2003, in
which case from February 25, 2003, and unless the date hereof is subsequent to a
record date (as defined below) and prior to the next succeeding September 5 or
March 5, in which case from the next succeeding September 5 or March 5, as the
case may be), at the rate of 3.75% per cent per annum, in like coin or currency,
semi-annually on March 5 and September 5 in each year, commencing September 5,
2003, 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 15th calendar day preceding each
semi-annual interest payment date (a "record date") (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.
B-1
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: _______________________________
Name:
Title:
ATTEST:
___________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This bond is one of the bonds, of the series designated therein,
described in the within-mentioned Indenture.
JPMorgan Chase Bank,
as Trustee
By: ___________________________
Authorized Officer
B-2
[REVERSE SIDE OF BOND]
This bond is one of the bonds of a series, designated specially as
First and Refunding Mortgage Bonds, 3.75% Series B due 2008, 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 Xxxxxx Guaranty Trust Company of New York), as Trustee
(JPMorgan Chase Bank, formerly known as 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, March 1, 1990, May 15, 1990, July 1, 1991, February 1, 1993,
March 1, 1993, April 1, 1993, May 1, 1993, July 1, 1993, August 1, 1993, August
20, 1993, May 1, 1994 and February 25, 2003, 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 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 may be redeemed at the option of the
Corporation, in whole or in part at any time and from time to time, at a
redemption price equal to the greater of (1) 100% of the principal amount of the
bonds of this series to be redeemed and (2) the sum of the present values of the
remaining scheduled payments of principal and interest on such bonds (exclusive
of interest accrued to the redemption date) discounted to the redemption date on
a semiannual basis
B-3
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate plus 15 basis points, plus, in either case, accrued and unpaid interest on
the principal amount being redeemed to such redemption date.
"Business day" means any day other than a day on which banks in New
York City are required or authorized to be closed.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the bonds 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 such bonds.
"Comparable Treasury Price" means with respect to any redemption date
for bonds of this series, the average of three Reference Treasury Dealer
Quotations for such redemption date.
"Quotation Agent" means a Reference Treasury Dealer appointed by the
Corporation.
"Reference Treasury Dealers" means Banc One Capital Markets, Inc.,
Deutsche Bank Securities Inc. and UBS Warburg LLC, and their respective
successors; provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer in the United States (a "Primary
Treasury Dealer"), the Corporation shall substitute therefor another Primary
Treasury Dealer.
"Reference Treasury Dealer Quotation" 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.
"Treasury Rate" means, with respect to any redemption date, (1) the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15 (519)" or any successor publication which is published weekly
by the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the maturity date of the Bonds to be redeemed, yields for
the two published maturities most closely corresponding to the Comparable
Treasury Issue shall be determined, and the Treasury Rate shall be interpolated
or extrapolated from such yields on a straight-line basis, rounding to the
nearest month) or (2) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per year equal to the 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 will be calculated on the third business day preceding the redemption date.
B-4
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 February 25, 2003, 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 100% of their principal amount, in each case
together with accrued interest to the date fixed for redemption.
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 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]
B-5
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)
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with rights of under Uniform Gifts to
survivorship and not as tenants in common Minors Act ________________
(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 Bond and all rights thereunder, hereby irrevocably constituting and
appointing
agent to transfer said Bond 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: ____________________
B-6
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Trustee, 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 Trustee in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B-7
