exv10w1






Exhibit 10.1




Executed Version




$200,000,000




CREDIT AGREEMENT



dated as of

April 7, 2010



among



Duke Energy Corporation

and

Duke Energy Carolinas, LLC,

as Borrowers,



The Banks Listed Herein,



Branch Banking and Trust Company,

as Administrative Agent,



Regions Bank,

as Syndication Agent



and



First Tennessee Bank N.A.

and

RBC Bank (USA),

as Co-Documentation Agents



 





BB&T Capital Markets and

Regions Capital Markets,

Co-Lead Arrangers and

Joint Bookrunners









 









 









TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1 
	 	 	 	 
	Definitions 
	 	 	 	 
	 
	 	 	 	 
	Section 1.01. Definitions
	 	 	1	 
	Section 1.02. Accounting Terms and Determinations
	 	 	12	 
	Section 1.03. Types of Borrowings
	 	 	12	 
	 
	 	 	 	 
	ARTICLE 2 
	 	 	 	 
	The Credits 
	 	 	 	 
	 
	 	 	 	 
	Section 2.01. Commitments to Lend
	 	 	13	 
	Section 2.02. Notice of Borrowings
	 	 	13	 
	Section 2.03. Notice to Banks; Funding of Loans
	 	 	13	 
	Section 2.04. Registry; Notes
	 	 	14	 
	Section 2.05. Maturity of Loans
	 	 	15	 
	Section 2.06. Interest Rates
	 	 	15	 
	Section 2.07. Fees
	 	 	16	 
	Section 2.08. Optional Termination or Reduction of Commitments
	 	 	16	 
	Section 2.09. Method of Electing Interest Rates
	 	 	17	 
	Section 2.10. Mandatory Termination of Commitments
	 	 	18	 
	Section 2.11. Optional Prepayments
	 	 	18	 
	Section 2.12. General Provisions as to Payments
	 	 	18	 
	Section 2.13. Funding Losses
	 	 	19	 
	Section 2.14. Computation of Interest and Fees
	 	 	19	 
	Section 2.15. Regulation D Compensation
	 	 	20	 
	Section 2.16. Increase in Commitments; Additional Banks
	 	 	20	 
	 
	 	 	 	 
	ARTICLE 3 
	 	 	 	 
	Conditions 
	 	 	 	 
	 
	 	 	 	 
	Section 3.01. Effectiveness
	 	 	21	 
	Section 3.02. Borrowings
	 	 	22	 
	 
	 	 	 	 
	ARTICLE 4 
	 	 	 	 
	Representations and Warranties 
	 	 	 	 
	 
	 	 	 	 
	Section 4.01. Organization and Power
	 	 	23	 
	Section 4.02. Corporate and Governmental Authorization; No Contravention
	 	 	23	 
	Section 4.03. Binding Effect
	 	 	23	 
	Section 4.04. Financial Information
	 	 	23	 






i









 








	 	 	 	 	 
	 	 	Page	 
	Section 4.05. Regulation U
	 	 	24	 
	Section 4.06. Litigation
	 	 	24	 
	Section 4.07. Compliance with Laws
	 	 	24	 
	Section 4.08. Taxes
	 	 	24	 
	 
	 	 	 	 
	ARTICLE 5 
	 	 	 	 
	Covenants 
	 	 	 	 
	 
	 	 	 	 
	Section 5.01. Information
	 	 	25	 
	Section 5.02. Payment of Taxes
	 	 	27	 
	Section 5.03. Maintenance of Property; Insurance
	 	 	27	 
	Section 5.04. Maintenance of Existence
	 	 	27	 
	Section 5.05. Compliance with Laws
	 	 	28	 
	Section 5.06. Books and Records
	 	 	28	 
	Section 5.07. Negative Pledge
	 	 	28	 
	Section 5.08. Consolidations, Mergers and Sales of Assets
	 	 	30	 
	Section 5.09. Use of Proceeds
	 	 	30	 
	Section 5.10. Indebtedness/Capitalization Ratio
	 	 	30	 
	 
	 	 	 	 
	ARTICLE 6 
	 	 	 	 
	Defaults 
	 	 	 	 
	 
	 	 	 	 
	Section 6.01. Events of Default
	 	 	31	 
	Section 6.02. Notice of Default
	 	 	33	 
	 
	 	 	 	 
	ARTICLE 7 
	 	 	 	 
	The Administrative Agent 
	 	 	 	 
	 
	 	 	 	 
	Section 7.01. Appointment and Authorization
	 	 	33	 
	Section 7.02. Administrative Agent and Affiliates
	 	 	33	 
	Section 7.03. Action by Administrative Agent
	 	 	34	 
	Section 7.04. Consultation with Experts
	 	 	34	 
	Section 7.05. Liability of Administrative Agent
	 	 	34	 
	Section 7.06. Indemnification
	 	 	34	 
	Section 7.07. Credit Decision
	 	 	35	 
	Section 7.08. Successor Administrative Agent
	 	 	35	 
	Section 7.09. Administrative Agent’s Fee
	 	 	35	 
	Section 7.10. Other Agents
	 	 	35	 
	 
	 	 	 	 
	ARTICLE 8 
	 	 	 	 
	Change in Circumstances 
	 	 	 	 
	 
	 	 	 	 
	Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair
	 	 	36	 
	Section 8.02. Illegality
	 	 	36	 
	Section 8.03. Increased Cost and Reduced Return
	 	 	37	 






ii









 







	 	 	 	 	 
	 	 	Page	 
	Section 8.04. Taxes
	 	 	38	 
	Section 8.05. Base Rate Loans Substituted for Affected Euro-Dollar Loans
	 	 	40	 
	Section 8.06. Substitution of Bank; Termination Option
	 	 	41	 
	 
	 	 	 	 
	ARTICLE 9 
	 	 	 	 
	Miscellaneous 
	 	 	 	 
	 
	 	 	 	 
	Section 9.01. Notices
	 	 	42	 
	Section 9.02. No Waivers
	 	 	42	 
	Section 9.03. Expenses; Indemnification
	 	 	42	 
	Section 9.04. Sharing of Set-offs
	 	 	43	 
	Section 9.05. Amendments and Waivers; Conforming Changes
	 	 	43	 
	Section 9.06. Successors and Assigns
	 	 	44	 
	Section 9.07. Collateral
	 	 	46	 
	Section 9.08. Confidentiality
	 	 	46	 
	Section 9.09. Governing Law; Submission to Jurisdiction
	 	 	47	 
	Section 9.10. Counterparts; Integration
	 	 	47	 
	Section 9.11. WAIVER OF JURY TRIAL
	 	 	47	 
	Section 9.12. USA Patriot Act
	 	 	47	 
	 
	 	 	 	 
	COMMITMENT SCHEDULE


PRICING SCHEDULE
	 	 	 	 






EXHIBIT A —  Note

EXHIBIT B-1 —  Opinion of Internal Counsel of the Borrower

EXHIBIT B-2 —  Opinion of Special Counsel for the Borrower

EXHIBIT C —  Opinion of Davis Polk & Wardwell, Special Counsel for the Agents

EXHIBIT D —  Assignment and Assumption Agreement









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CREDIT AGREEMENT




     AGREEMENT dated as of April 7, 2010 among DUKE ENERGY CORPORATION and DUKE ENERGY CAROLINAS,
LLC, as Borrowers, the BANKS listed on the signature pages hereof, BRANCH BANKING AND TRUST
COMPANY, as Administrative Agent, REGIONS BANK, as Syndication Agent, and FIRST TENNESSEE BANK N.A.
and RBC BANK (USA), as Co-Documentation Agents.



     The parties hereto agree as follows:



ARTICLE 1

Definitions




     Section 1.01. Definitions. The following terms, as used herein, have the following
meanings:



     “Additional Bank” means any financial institution that becomes a Bank for purposes hereof
pursuant to Section 2.16 or 8.06.



     “Administrative Agent” means BB&T in its capacity as administrative agent for the Banks
hereunder, and its successors in such capacity.



     “Administrative Questionnaire” means, with respect to each Bank, the administrative
questionnaire in the form submitted to such Bank by the Administrative Agent and submitted to the
Administrative Agent (with a copy to each Borrower) duly completed by such Bank.



     “Affected Bank” means any Bank, as reasonably determined by the Administrative Agent or if the
Administrative Agent is the Affected Bank, by the Required Banks, that (a) has defaulted in its
obligation to fund any Loan and such failure to fund continues for three Domestic Business Days
after the date of Borrowing, (b) has notified either Borrower, the Administrative Agent, or any
Bank in writing of its intention not to fund any Loan, (c) has otherwise failed to pay over to the
Administrative Agent or any other Bank any other amount required to be paid by it hereunder within
three Domestic Business Days of the date when due, unless the subject of a good faith dispute, (d)
has failed, within three Domestic Business Days after written request by the Administrative Agent,
or if the Administrative Agent is the Affected Bank, by the Required Banks, or either Borrower to
confirm that it will comply with the terms hereunder relating to its obligations to fund
prospective Loans or (e) shall (or whose parent company shall) generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts generally, or shall make
a general assignment for the benefit of creditors; or shall have had any proceeding instituted by
or against such Bank (or its parent company) seeking to adjudicate it as bankrupt or



 









 




insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee, administrator, assignee for the benefit of creditors or
similar person charged with reorganization or liquidation of its business or custodian for it or
for any substantial part of its property and, in the case of any such proceeding instituted against
it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a
period of 30 days, or any of the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a receiver, trustee, administrator,
assignee for the benefit of creditors or similar person charged with reorganization or liquidation
of its business or custodian for, it or for any substantial part of its property) shall occur, or
shall take (or whose parent company shall take) any corporate action to authorize any of the
actions set forth above in this subsection (e), provided that a Bank shall not be deemed to be an
Affected Bank solely by virtue of the ownership or acquisition of any equity interest in any Bank
or any person that directly or indirectly controls such Bank by a governmental authority or an
instrumentality thereof.




     “Affiliate” means, as to any Person (the “specified Person”), (i) any other Person that
directly, or indirectly through one or more intermediaries, controls the specified Person (a “Controlling Person”) or (ii) any Person (other than the specified Person) which is controlled by
or is under common control with a Controlling Person. As used herein, the term “control” means
possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities, by contract or
otherwise.



     “Agent” means any of the Administrative Agent, the Syndication Agent or the Co-Documentation
Agents.



     “Agreement” means this Agreement as the same may be amended from time to time.



     “Applicable Lending Office” means, with respect to any Bank, (i) in the case of its Base Rate
Loans, its Domestic Lending Office and (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar
Lending Office.



     “Applicable Margin” means, with respect to Euro-Dollar Loans or Base Rate Loans to either
Borrower, the applicable rate per annum for such Borrower determined in accordance with the Pricing
Schedule.



     “Appropriate Share” has the meaning set forth in Section 8.03(d).



2









 





     “Approved Fund” means any Fund that is administered or managed by (i) a Bank, (ii) an
Affiliate of a Bank or (iii) an entity or an Affiliate of an entity that administers or manages a
Bank.



     “Approved Officer” means the president, the chief financial officer, a vice president, the
treasurer, an assistant treasurer or the controller of the Borrower or such other representative of
the Borrower as may be designated by any one of the foregoing with the consent of the
Administrative Agent.



     “Assignee” has the meaning set forth in Section 9.06(c).



     “Availability Percentage” means, with respect to each Borrower at any time, the percentage
equivalent to a fraction (a) the numerator of which is such Borrower’s Unused Sublimit and (b) the
denominator of which is the sum of such Borrower’s Unused Sublimit plus the other Borrower’s Unused
Sublimit.



     “Bank” means each bank or other financial institution listed on the signature pages hereof,
each Additional Bank, each Assignee which becomes a Bank pursuant to Section 9.06(c), and their
respective successors.



     “Base Rate” means, for any day for which the same is to be calculated, the higher of (a) the
Prime Rate and (b) the Federal Funds Rate for such day plus 1/2 of 1%. Each change in the Base
Rate shall take effect simultaneously with the corresponding change in the rates described in
clause (a) or clause (b) above, as the case may be.



     “Base Rate Loan” means (i) a Loan which bears interest at the Base Rate pursuant to the
applicable Notice of Borrowing or Notice of Interest Rate Election or the provisions of Article 8
or (ii) an overdue amount which was a Base Rate Loan immediately before it became overdue.



     “BB&T” means Branch Banking and Trust Company.



     “Borrower” means each of Duke Energy Carolinas and the Company. References herein to “the
Borrower” in connection with any Loan or Group of Loans hereunder are to the particular Borrower to
which such Loan or Loans are made or proposed to be made.



     “Borrower Exposure” means, with respect to any Bank and either Borrower at any time, an amount
equal to the product of such Bank’s Percentage and such Borrower’s Sublimit (whether used or
unused) at such time.



     “Borrowing” has the meaning set forth in Section 1.03.



     “Change” has the meaning set forth in Section 9.05(b).



3









 





     “Co-Documentation Agent” means each of First Tennessee Bank N.A. and RBC Bank (USA) in its
capacity as documentation agent in respect of this Agreement.



     “Commitment” means (i) with respect to any Bank listed on the signature pages hereof, the
amount set forth opposite its name on the Commitment Schedule as its Commitment and (ii) with
respect to each Additional Bank or Assignee which becomes a bank pursuant to Sections 2.16, 8.06
and 9.06(c), the amount of the Commitment thereby assumed by it, in each case as such amount may
from time to time be reduced pursuant to Sections 2.08, 2.10, 8.06 or 9.06(c) or increased pursuant
to Sections 2.16, 8.06 or 9.06(c).



     “Commitment Schedule” means the Commitment Schedule attached hereto.



     “Commitment Termination Date” means April 7, 2014.



     “Company” means Duke Energy Corporation, a Delaware corporation.



     “Consolidated Capitalization” means, with respect to either Borrower, the sum, without
duplication, of (i) Consolidated Indebtedness of such Borrower, (ii) consolidated common
equityholders’ equity as would appear on a consolidated balance sheet of such Borrower and its
Consolidated Subsidiaries prepared in accordance with generally accepted accounting principles,
(iii) the aggregate liquidation preference of preferred or priority equity interests (other than
preferred or priority equity interests subject to mandatory redemption or repurchase) of such
Borrower and its Consolidated Subsidiaries upon involuntary liquidation, (iv) the aggregate
outstanding amount of all Equity Preferred Securities of such Borrower and (v) minority interests
as would appear on a consolidated balance sheet of such Borrower and its Consolidated Subsidiaries
prepared in accordance with generally accepted accounting principles.



     “Consolidated Indebtedness” means, at any date, with respect to either Borrower, all
Indebtedness of such Borrower and its Consolidated Subsidiaries determined on a consolidated basis
in accordance with generally accepted accounting principles; provided that Consolidated
Indebtedness shall exclude, to the extent otherwise reflected therein, Equity Preferred Securities
of such Borrower and its Consolidated Subsidiaries up to a maximum excluded amount equal to 15% of
Consolidated Capitalization of such Borrower.



     “Consolidated Subsidiary” means, for any Person, at any date any Subsidiary or other entity
the accounts of which would be consolidated with those of such Person in its consolidated financial
statements if such statements were prepared as of such date.



4









 





     “Default” means any condition or event which constitutes an Event of Default or which with the
giving of notice or lapse of time or both would, unless cured or waived, become an Event of
Default.



     “Domestic Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in New York City or in the State of North Carolina are authorized by law to close.



     “Domestic Lending Office” means, as to each Bank, its office located at its address set forth
in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its
Domestic Lending Office) or such other office as such Bank may hereafter designate as its Domestic
Lending Office by notice to the Borrowers and the Administrative Agent.



     “Duke Energy Carolinas” means Duke Energy Carolinas, LLC, a North Carolina limited liability
company.



     “Duke Energy Carolinas Mortgage” means the First and Refunding Mortgage between Duke Energy
Carolinas and The Bank of New York Mellon Trust Company, N.A., as successor trustee, dated as of
December 1, 1927 as amended or supplemented from time to time.



     “Effective Date” means the date this Agreement becomes effective in accordance with Section
3.01.



     “Endowment” means the Duke Endowment, a charitable common law trust established by James B.
Duke by Indenture dated December 11, 1924.



     “Environmental Laws” means any and all federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental restrictions relating to the environment or
to emissions, discharges, releases of pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes into the environment including, without limitation, ambient air,
surface water, ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.



     “Equity Preferred Securities” means, with respect to either Borrower, any trust preferred
securities or deferrable interest subordinated debt securities issued by such Borrower or any
Subsidiary or other financing vehicle of such Borrower that (i) have an original maturity of at
least twenty years and (ii) require no repayments or prepayments and no mandatory redemptions or
repurchases, in each case, prior to the first anniversary of the Maturity Date.



5









 





     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.



     “ERISA Group” means, with respect to either Borrower, such Borrower and all other members of a
controlled group of corporations and all trades or businesses (whether or not incorporated) under
common control which, together with such Borrower, are treated as a single employer under Section
414 of the Internal Revenue Code.



     “Euro-Dollar Business Day” means any Domestic Business Day on which commercial banks are open
for international business (including dealings in dollar deposits) in London.



     “Euro-Dollar Lending Office” means, as to each Bank, its office, branch or affiliate located
at its address set forth in its Administrative Questionnaire (or identified in its Administrative
Questionnaire as its Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice to the Borrowers and
the Administrative Agent.



     “Euro-Dollar Loan” means (i) a Loan which bears interest at a Euro-Dollar Rate pursuant to the
applicable Notice of Borrowing or Notice of Interest Rate Election or (ii) an overdue amount which
was a Euro-Dollar Loan immediately before it became overdue.



     “Euro-Dollar Rate” means a rate of interest determined pursuant to Section 2.06(b) on the
basis of a London Interbank Offered Rate.



     “Euro-Dollar Reserve Percentage” has the meaning set forth in Section 2.15.



     “Event of Default” has the meaning set forth in Section 6.01.



     “Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic Business Day next
succeeding such day; provided that (i) if such day is not a Domestic Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the next preceding Domestic
Business Day as so published on the next succeeding Domestic Business Day and (ii) if no such rate
is so published on such next succeeding Domestic Business Day, the Federal Funds Rate for such day
shall be the average rate quoted to BB&T on such day on such transactions as determined by the
Administrative Agent.



6









 





     “Fund” means any Person (other than a natural Person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in
the ordinary course of its business.



     “Group of Loans” means at any time a group of Loans consisting of (i) all Loans to the same
Borrower which are Base Rate Loans at such time or (ii) all Euro-Dollar Loans to the same Borrower
having the same Interest Period at such time; provided that, if a Loan of any particular Bank is
converted to or made as a Base Rate Loan pursuant to Article 8, such Loan shall be included in the
same Group or Groups of Loans from time to time as it would have been if it had not been so
converted or made.



     “Hedging Agreement” means for any Person, any and all agreements, devices or arrangements
designed to protect such Person or any of its Subsidiaries from the fluctuations of interest rates,
exchange rates applicable to such party’s assets, liabilities or exchange transactions, including,
but not limited to, dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements, commodity swap
agreements, forward rate currency or interest rate options, puts and warrants. Notwithstanding
anything herein to the contrary, “Hedging Agreements” shall also include fixed-for-floating
interest rate swap agreements and similar instruments.



     “Increased Commitments” has the meaning set forth in Section 2.16.



     “Indebtedness” of any Person means at any date, without duplication, (i) all obligations of
such Person for borrowed money, (ii) all indebtedness of such Person for the deferred purchase
price of property or services purchased (excluding current accounts payable incurred in the
ordinary course of business), (iii) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired, (iv) all indebtedness under
leases which shall have been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases in respect of which such Person is liable as lessee, (v) the
face amount of all outstanding letters of credit issued for the account of such Person (other than
letters of credit relating to indebtedness included in Indebtedness of such Person pursuant to
another clause of this definition) and, without duplication, the unreimbursed amount of all drafts
drawn thereunder, (vi) indebtedness secured by any Lien on property or assets of such Person,
whether or not assumed (but in any event not exceeding the fair market value of the property or
asset), (vii) all direct guarantees of Indebtedness referred to above of another Person, (viii) all
amounts payable in connection with mandatory redemptions or repurchases of preferred stock or
member interests or other preferred or priority equity interests and (ix) any obligations of such
Person



7









 




(in the nature of principal or interest) in respect of acceptances or similar obligations
issued or created for the account of such Person.




     “Interest Period” means, with respect to each Euro-Dollar Loan, the period commencing on the
date of borrowing specified in the applicable Notice of Borrowing or on the date specified in an
applicable Notice of Interest Rate Election and ending one, two, three or six, or, if deposits of a
corresponding maturity are generally available in the London interbank market, nine months
thereafter, as the Borrower may elect in such notice; provided that:




     (a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar Business Day; and




     (b) any Interest Period which begins on the last Euro-Dollar Business Day of a
calendar month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last Euro-Dollar
Business Day of a calendar month;


provided further that: no Interest Period applicable to any Loan of any Bank may end after the
Maturity Date.




     “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended, or any successor
statute.



     “Investment Grade Status” exists as to any Person at any date if all senior long-term
unsecured debt securities of such Person outstanding at such date which had been rated by S&P or
Moody’s are rated BBB- or higher by S&P or Baa3 or higher by Moody’s, as the case may be, or if
such Person does not have a rating of its long-term unsecured debt securities, then if the
corporate credit rating of such Person, if any exists, from S&P is BBB- or higher or the issuer
rating of such Person, if any exists, from Moody’s is Baa3 or higher.



     “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset. For the purposes of this Agreement, either
Borrower or any of its Subsidiaries shall be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such asset.



     “Loan” means a loan made or to be made by a Bank pursuant to Section 2.01; provided that, if
any such loan or loans (or portions thereof) are combined or



8









 




subdivided pursuant to a Notice of Interest Rate Election, the term “Loan” shall refer to the
combined principal amount resulting from such combination or to each of the separate principal
amounts resulting from such subdivision, as the case may be.




     “London Interbank Offered Rate” has the meaning set forth in Section 2.06(b).



     “Master Credit Facility” means the Amended and Restated Credit Agreement dated as of June 28,
2007, as amended by Amendment No. 1 dated as of March 10, 2008, among the Company, Duke Energy
Carolinas, Duke Energy Ohio, Inc., Duke Energy Indiana, Inc. and Duke Energy Kentucky, Inc., as
Borrowers, the banks listed therein, Wachovia Bank, National Association, as Administrative Agent,
and the other parties party thereto, as the same may be amended, amended and restated, modified,
supplemented, refinanced or replaced from time to time after the date hereof.



     “Material Debt” means, with respect to either Borrower, Indebtedness of such Borrower or any
of its Material Subsidiaries in an aggregate principal amount exceeding $150,000,000.



     “Material Plan” has the meaning set forth in Section 6.01(i).



     “Material Subsidiary” means at any time, with respect to either Borrower, any Subsidiary of
such Borrower that is a “significant subsidiary” (as such term is defined on the Effective Date in
Regulation S-X of the Securities and Exchange Commission (17 CFR 210.1-02(w)), but treating all
references therein to the “registrant” as references to such Borrower).



     “Maturity Date” means the earlier of (i) the Commitment Termination Date and (ii) solely with
respect to any Loan to Duke Energy Carolinas, 365 days from the date of the Borrowing of such Loan;
provided that if Duke Energy Carolinas designates such Borrowing as long-term in its Notice of
Borrowing, then this clause (ii) shall not be applicable thereto.



     “Moody’s” means Moody’s Investors Service, Inc.



     “Mortgage Indenture” means the Duke Energy Carolinas Mortgage.



     “Notes” means promissory notes of a Borrower, in the form required by Section 2.04, evidencing
the obligation of such Borrower to repay the Loans made to it, and “Note” means any one of such
promissory notes issued hereunder.



     “Notice of Borrowing” has the meaning set forth in Section 2.02.



9









 





     “Notice of Interest Rate Election” has the meaning set forth in Section 2.09.



     “Parent” means, with respect to any Bank, any Person controlling such Bank.



     “Participant” has the meaning set forth in Section 9.06(b).



     “PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all
of its functions under ERISA.



     “Percentage” means, with respect to any Bank at any time, the percentage which the amount of
its Commitment at such time represents of the aggregate amount of all the Commitments at such time.



     “Person” means an individual, a corporation, a partnership, a limited liability company, an
association, a trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.



     “Plan” means at any time an employee pension benefit plan which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code
and is either (i) maintained by a member of the ERISA Group for employees of a member of the ERISA
Group or (ii) maintained pursuant to a collective bargaining agreement or any other arrangement
under which more than one employer makes contributions and to which a member of the ERISA Group is
then making or accruing an obligation to make contributions or has within the preceding five plan
years made contributions.



     “Pricing Schedule” means the Pricing Schedule attached hereto.



     “Prime Rate” means the per annum rate of interest established from time to time by the
Administrative Agent at its principal office in Charlotte, North Carolina as its Prime Rate. Any
change in the interest rate resulting from a change in the Prime Rate shall become effective as of
12:01 a.m. of the Domestic Business Day on which each change in the Prime Rate is announced by the
Administrative Agent. The Prime Rate is a reference rate used by the Administrative Agent in
determining interest rates on certain loans and is not intended to be the lowest rate of interest
charged on any extension of credit to any debtor.



     “Quarterly Payment Date” means the first Domestic Business Day of each January, April, July
and October.



10









 





     “Regions” means Regions Bank.



     “Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System, as
in effect from time to time.



     “Required Banks” means, at any time, Banks having at least 51% in aggregate amount of the
Commitments at such time (or if the Commitments shall have terminated in their entirety, having at
least 51% in aggregate outstanding principal amount of the Loans at such time), excluding, in each
case, any Commitments (or any Loans) of Affected Banks, provided that if there are three or more
Banks party hereto at such time, then such percentage must be held by three or more Banks.



     “Revolving Credit Period” means the period from and including the Effective Date to but not
including the Commitment Termination Date.



     “S&P” means Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc.



     “Sublimit” means, with respect to each Borrower, at any time, an amount equal to (i) the
aggregate amount of the Commitments at such time multiplied by (ii) the percentage set forth
opposite its name in the table below:



	 	 	 	 	 
	Borrower	 	Sublimit	 
	Company
	 	 	50	%
	 
	 	 	 	 
	Duke Energy Carolinas
	 	 	100	%






     The Borrowers may, by joint notice to such effect to the Administrative Agent, specify a
different percentage of the Commitments (but in no event more than 50%) to be used for purposes of
determining the Sublimit of the Company hereunder.



     “Subsidiary” means, as to any Person, any corporation or other entity of which securities or
other ownership interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time directly or indirectly
owned by such Person; unless otherwise specified, “Subsidiary” means a Subsidiary of a Borrower.



     “Substantial Assets” means, with respect to either Borrower, assets sold or otherwise disposed
of in a single transaction or a series of related transactions representing 25% or more of the
consolidated assets of such Borrower and its Consolidated Subsidiaries, taken as a whole.



11









 






     “Syndication Agent” means Regions in its capacity as syndication agent in respect of this
Agreement.



     “Trust” means The Doris Duke Trust, a trust established by James B. Duke by Indenture dated
December 11, 1924 for the benefit of certain relatives.



     “Unfunded Vested Liabilities” means, with respect to any Plan at any time, the amount (if any)
by which (i) the present value of all benefits under such Plan exceeds (ii) the fair market value
of all Plan assets allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a potential liability of a
member of the ERISA Group to the PBGC or the Plan under Title IV of ERISA.



     “United States” means the United States of America, including the States and the District of
Columbia, but excluding its territories and possessions.



     “Unused Sublimit” means, with respect to either Borrower at any time, the maximum additional
amount available for borrowing hereunder by such Borrower at such time within the Utilization
Limits.



     “Utilization Limits” means the requirements that (i) for any Bank, the aggregate outstanding
principal amount of its Loans to all Borrowers hereunder shall at no time exceed the amount of its
Commitment, (ii) for either Borrower, the aggregate outstanding principal amount of Loans to such
Borrower shall at no time exceed its Sublimit and (iii) for both Borrowers, the aggregate
outstanding principal amount of all Loans shall at no time exceed the aggregate amount of the
Commitments.



     Section 1.02. Accounting Terms and Determinations. Unless otherwise specified herein, all
accounting terms used in determining compliance with Section 5.10 shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements required to be
delivered hereunder shall be prepared in accordance with generally accepted accounting principles
as in effect from time to time, applied on a basis consistent (except for immaterial changes) with
the most recent audited consolidated financial statements of such Borrower and its Consolidated
Subsidiaries delivered to the Banks.



     Section 1.03. Types of Borrowings. The term “Borrowing” denotes the aggregation of Loans of
one or more Banks to be made to a single Borrower pursuant to Article 2 on a single date and for a
single Interest Period. Borrowings are classified for purposes of this Agreement by reference to
the pricing of Loans comprising such Borrowing (a “Euro-Dollar Borrowing” is a Borrowing comprised
of Euro Dollar Loans and a “Base Rate Borrowing” is a Borrowing comprised of Base Rate Loans).



12









 






ARTICLE 2

The Credits




     Section 2.01. Commitments to Lend. During the Revolving Credit Period, each Bank severally
agrees, on the terms and conditions set forth in this Agreement, to make loans to each Borrower
pursuant to this Section from time to time; provided that, immediately after each such loan is
made, the Utilization Limits are not exceeded. Each Borrowing shall be in an aggregate principal
amount of $5,000,000 or any larger multiple of $1,000,000 and shall be made from the several Banks
ratably in proportion to their respective Commitments in effect on the date of Borrowing. Within
the foregoing limits, the Borrowers may borrow under this Section, or to the extent permitted by
Section 2.11, prepay Loans and reborrow at any time during the Revolving Credit Period under this
Section.



     Section 2.02. Notice of Borrowings. The Borrower shall give the Administrative Agent notice
(a “Notice of Borrowing”) not later than 11:00 A.M. (Eastern time) on (x) the date of each Base
Rate Borrowing and (y) the third Euro-Dollar Business Day before each Euro-Dollar Borrowing,
specifying:



     (a) the date of such Borrowing, which shall be a Domestic Business Day in the case of a Base
Rate Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing;



     (b) the aggregate amount of such Borrowing;



     (c) whether the Loans comprising such Borrowing are to bear interest initially at the Base
Rate or a Euro-Dollar Rate;



     (d) in the case of a Euro-Dollar Borrowing, the duration of the initial Interest Period
applicable thereto, subject to the provisions of the definition of Interest Period; and



     (e) if applicable, the designation contemplated by the definition of Maturity Date.



     Section 2.03. Notice to Banks; Funding of Loans. (a) Upon receipt (or deemed receipt) of a
Notice of Borrowing, the Administrative Agent shall promptly notify each Bank of the contents
thereof and of such Bank’s share (if any) of such Borrowing and such Notice of Borrowing shall not
thereafter be revocable by the Borrower.



     (b) Not later than 1:00 P.M. (Eastern time) on the date of each Borrowing, each Bank shall
(except as provided in subsection (c) of this Section) make available its share of such Borrowing,
in Federal or other immediately



13









 






available funds, to the Administrative Agent at its address specified in or pursuant to
Section 9.01. Unless the Administrative Agent determines that any applicable condition specified
in Article 3 has not been satisfied, the Administrative Agent will make the funds so received from
the Banks available to the Borrower by 2:00 P.M. (Eastern time) at the Administrative Agent’s
aforesaid address.




     (c) Unless the Administrative Agent shall have received notice from a Bank prior to 1:00 P.M.
(Eastern time) on the date of any Borrowing that such Bank will not make available to the
Administrative Agent such Bank’s share of such Borrowing, the Administrative Agent may assume that
such Bank has made such share available to the Administrative Agent on the date of such Borrowing
in accordance with subsection (b) of this Section 2.03 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such share available to the
Administrative Agent, such Bank and, if such Bank shall not have made such payment within two
Domestic Business Days of demand therefor, the Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until the date such amount
is repaid to the Administrative Agent, at (i) in the case of the Borrower, a rate per annum equal
to the higher of the Federal Funds Rate and the interest rate applicable thereto pursuant to
Section 2.06 and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank shall repay
to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such
Bank’s Loan included in such Borrowing for purposes of this Agreement.



     (d) The failure of any Bank to make the Loan to be made by it as part of any Borrowing shall
not relieve any other Bank of its obligation, if any, hereunder to make a Loan on the date of such
Borrowing, but no Bank shall be responsible for the failure of any other Bank to make a Loan to be
made by such other Bank.



     Section 2.04. Registry; Notes. (a) The Administrative Agent shall maintain a register (the
“Register”) on which it will record the Commitment of each Bank, each Loan made by such Bank and
each repayment of any Loan made by such Bank. Any such recordation by the Administrative Agent on
the Register shall be conclusive, absent manifest error. Failure to make any such recordation, or
any error in such recordation, shall not affect the Borrowers’ obligations hereunder.



     (b) Each Borrower hereby agrees that, promptly upon the request of any Bank at any time, such
Borrower shall deliver to such Bank a duly executed Note, in substantially the form of Exhibit A
hereto, payable to the order of such Bank and representing the obligation of such Borrower to pay
the unpaid principal



14









 






amount of the Loans made to such Borrower by such Bank, with interest as provided herein on
the unpaid principal amount from time to time outstanding.




     (c) Each Bank shall record the date, amount and maturity of each Loan made by it and the date
and amount of each payment of principal made by the Borrower with respect thereto, and each Bank
receiving a Note pursuant to this Section, if such Bank so elects in connection with any transfer
or enforcement of its Note, may endorse on the schedule forming a part thereof appropriate
notations to evidence the foregoing information with respect to each such Loan then outstanding;
provided that the failure of such Bank to make any such recordation or endorsement shall not affect
the obligations of either Borrower hereunder or under the Notes. Such Bank is hereby irrevocably
authorized by each Borrower so to endorse its Note and to attach to and make a part of its Note a
continuation of any such schedule as and when required.



     Section 2.05. Maturity of Loans. Each Loan made by any Bank shall mature, and the principal
amount thereof shall be due and payable together with accrued interest thereon, on the Maturity
Date applicable to such Loan.



     Section 2.06. Interest Rates. (a) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until it becomes due, at a
rate per annum equal to the sum of the Applicable Margin for such day plus the Base Rate for such
day. Such interest shall be payable quarterly in arrears on each Quarterly Payment Date, at
maturity and on the date of termination of the Commitments in their entirety. Any overdue
principal of or overdue interest on any Base Rate Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 1% plus the Base Rate for such day.



     (b) Each Euro-Dollar Loan shall bear interest on the outstanding principal amount thereof, for
each day during each Interest Period applicable thereto, at a rate per annum equal to the sum of
the Applicable Margin for such day plus the London Interbank Offered Rate applicable to such
Interest Period. Such interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, at intervals of three months after the
first day thereof.



     The “London Interbank Offered Rate” applicable to any Interest Period means the rate appearing
on Reuters’ Page LIBOR-01 (or on any successor or substitute page of such service, or any successor
to or substitute for such service, providing rate quotations comparable to those currently provided
on such page of Reuters, as may be nominated by the Administrative Agent in consultation with the
Borrowers for such purpose) as of 11:00 A.M. (London time) two Euro-Dollar Business Days prior to
the commencement of such Interest Period, as the rate for



15









 






U.S. dollar deposits with a maturity comparable to such Interest Period. In the event that no
such rate is available at such time for any reason, then the provisions of Section 8.01 shall
apply.




     (c) Any overdue principal of or overdue interest on any Euro-Dollar Loan shall bear interest,
payable on demand, for each day from and including the date payment thereof was due to but
excluding the date of actual payment, at a rate per annum equal to the sum of 1% plus the higher of
(i) the sum of the Applicable Margin for such day plus the London Interbank Offered Rate applicable
to such Loan at the date such payment was due and (ii) the Base Rate for such day.



     (d) The Administrative Agent shall determine each interest rate applicable to the Loans
hereunder. The Administrative Agent shall give prompt notice to the Borrower and the Banks by
telecopy, telex or cable of each rate of interest so determined, and its determination thereof
shall be conclusive in the absence of manifest error unless the Borrower raises an objection
thereto within five Domestic Business Days after receipt of such notice.



     Section 2.07. Fees. (a) Unused Commitment Fees. The Borrowers shall pay to the
Administrative Agent, for the account of the Banks (but not for the account of any Affected Bank),
ratably, an unused commitment fee on the daily average amount by which the aggregate amount of the
Commitments exceeds the aggregate outstanding principal amount of the Loans, accruing at the
applicable rate per annum specified in the Pricing Schedule; provided that the Company shall pay
the unused commitment fee on an amount equal to its Unused Sublimit and Duke Energy Carolinas shall
pay the balance of such fee. Such unused commitment fee shall accrue for each day from and
including the Effective Date but excluding the day on which the related Borrower Exposures are
reduced to zero.



     (b) Payments. Accrued fees under this Section for the account of any Bank shall be payable
quarterly in arrears on each Quarterly Payment Date and upon the Commitment Termination Date (and,
if earlier, the date the Borrower Exposure of such Bank in respect of either Borrower is reduced to
zero).



     Section 2.08. Optional Termination or Reduction of Commitments. The Company may, upon not
less than three Domestic Business Days’ notice to the Administrative Agent, terminate at any time,
or reduce from time to time in minimum amounts of $10,000,000 or incremental multiples of
$5,000,000, the aggregate unused amount of the Commitments. Each such reduction shall be applied
ratably to the Commitments of the several Banks. The Administrative Agent shall promptly notify the
Banks of any termination or reduction of the Commitments pursuant to this Section.



16









 







     Section 2.09. Method of Electing Interest Rates. (a) The Loans included in each Borrowing
shall bear interest initially at the type of rate specified by the Borrower in the applicable
Notice of Borrowing. Thereafter, the Borrower may from time to time elect to change or continue the
type of interest rate borne by each Group of Loans (subject in each case to the provisions of
Article 8 and the last sentence of this subsection (a)), as follows:




     (i) if such Loans are Base Rate Loans, the Borrower may elect to convert such Loans
to Euro-Dollar Loans as of any Euro-Dollar Business Day; and




     (ii) if such Loans are Euro-Dollar Loans, the Borrower may elect to convert such
Loans to Base Rate Loans or elect to continue such Loans as Euro-Dollar Loans for an
additional Interest Period, subject to Section 2.13 in the case of any such conversion or
continuation effective on any day other than the last day of the then current Interest
Period applicable to such Loans.


Each such election shall be made by delivering a notice (a “Notice of Interest Rate Election”) to
the Administrative Agent not later than 11:00 A.M. (Eastern time) on the third Euro-Dollar Business
Day before the conversion or continuation selected in such notice is to be effective. A Notice of
Interest Rate Election may, if it so specifies, apply to only a portion of the aggregate principal
amount of the relevant Group of Loans; provided that (i) such portion is allocated ratably among
the Loans comprising such Group and (ii) the portion to which such notice applies, and the
remaining portion to which it does not apply, are each $5,000,000 or any larger multiple of
$1,000,000.




     (b) Each Notice of Interest Rate Election shall specify:




     (i) the Group of Loans (or portion thereof) to which such notice applies;




     (ii) the date on which the conversion or continuation selected in such notice is to
be effective, which shall comply with the applicable clause of subsection 2.09(a) above;




     (iii) if the Loans comprising such Group are to be converted, the new type of Loans
and, if the Loans being converted are to be Euro-Dollar Loans, the duration of the next
succeeding Interest Period applicable thereto; and




     (iv) if such Loans are to be continued as Euro-Dollar Loans for an additional
Interest Period, the duration of such additional Interest Period.



17









 





Each Interest Period specified in a Notice of Interest Rate Election shall comply with the
provisions of the definition of the term “Interest Period”.




     (c) Promptly after receiving a Notice of Interest Rate Election from the Borrower pursuant to
subsection 2.09(a) above, the Administrative Agent shall notify each Bank of the contents thereof
and such notice shall not thereafter be revocable by the Borrower. If no Notice of Interest Rate
Election is timely received prior to the end of an Interest Period for any Group of Loans, the
Borrower shall be deemed to have elected that such Group of Loans be converted to Base Rate Loans
as of the last day of such Interest Period.



     (d) An election by the Borrower to change or continue the rate of interest applicable to any
Group of Loans pursuant to this Section shall not constitute a “Borrowing” subject to the
provisions of Section 3.02.



     Section 2.10. Mandatory Termination of Commitments. The Commitment of each Bank shall
terminate on the Commitment Termination Date.



     Section 2.11. Optional Prepayments. (a) The Borrower may (i) upon notice to the
Administrative Agent not later than 11:00 A.M. (Eastern time) on any Domestic Business Day prepay
on such Domestic Business Day any Group of Base Rate Loans and (ii) upon at least three Euro-Dollar
Business Days’ notice to the Administrative Agent not later than 11:00 A.M. (Eastern time) prepay
any Group of Euro-Dollar Loans, in each case in whole at any time, or from time to time in part in
amounts aggregating $5,000,000 or any larger multiple of $1,000,000, by paying the principal amount
to be prepaid together with accrued interest thereon to the date of prepayment and together with
any additional amounts payable pursuant to Section 2.13. Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Banks included in such Group or Borrowing.



     (b) Upon receipt of a notice of prepayment pursuant to this Section, the Administrative Agent
shall promptly notify each Bank of the contents thereof and of such Bank’s share (if any) of such
prepayment and such notice shall not thereafter be revocable by the Borrower.



     Section 2.12. General Provisions as to Payments. (a) The Borrower shall make each payment
of principal of, and interest on, the Loans and of fees hereunder, not later than 1:00 P.M.
(Eastern time) on the date when due, in Federal or other funds immediately available in New York
City, to the Administrative Agent at its address referred to in Section 9.01 and without reduction
by reason of any set-off, counterclaim or deduction of any kind. The Administrative Agent will
promptly distribute to each Bank in like funds its ratable share of each such payment received by
the Administrative Agent for the



18









 






account of the Banks. Whenever any payment of principal of, or interest on, the Base Rate
Loans or of fees shall be due on a day which is not a Domestic Business Day, the date for payment
thereof shall be extended to the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding Euro-Dollar Business Day. If
the date for any payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.




     (b) Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Banks hereunder that the Borrower will not make such
payment in full, the Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon
such assumption, cause to be distributed to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent that the Borrower shall not have so made such
payment, each Bank shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the Administrative Agent,
at the Federal Funds Rate.



     Section 2.13. Funding Losses. If the Borrower makes any payment of principal with respect
to any Euro-Dollar Loan or any Euro-Dollar Loan is converted to a Base Rate Loan or continued as a
Euro-Dollar Loan for a new Interest Period (pursuant to Article 2, 6 or 8 or otherwise) on any day
other than the last day of an Interest Period applicable thereto, or if the Borrower fails to
borrow, prepay, convert or continue any Euro-Dollar Loans after notice has been given to any Bank
in accordance with Section 2.03(a), 2.09(c) or 2.11(b), the Borrower shall reimburse each Bank
within 15 days after demand for any resulting loss or expense incurred by it (or by an existing or
prospective Participant in the related Loan), including (without limitation) any loss incurred in
obtaining, liquidating or employing deposits from third parties, but excluding loss of Applicable
Margin for the period after any such payment or conversion or failure to borrow, prepay, convert or
continue; provided that such Bank shall have delivered to the Borrower a certificate setting forth
in reasonable detail the calculation of the amount of such loss or expense, which certificate shall
be conclusive in the absence of manifest error.



     Section 2.14. Computation of Interest and Fees. Interest based on the Base Rate and unused
commitment fees hereunder shall be computed on the basis



19









 





of a year of 365 days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day). Interest based on the Euro-Dollar
Rate shall be computed on the basis of a year of 360 days and paid for the actual number of days
elapsed (including the first day but excluding the last day).




     Section 2.15. Regulation D Compensation. In the event that a Bank is required to maintain
reserves of the type contemplated by the definition of “Euro-Dollar Reserve Percentage”, such Bank
may require the Borrower to pay, contemporaneously with each payment of interest on the Euro-Dollar
Loans, additional interest on the related Euro-Dollar Loan of such Bank at a rate per annum
determined by such Bank up to but not exceeding the excess of (i) (A) the applicable London
Interbank Offered Rate divided by (B) one minus the Euro-Dollar Reserve Percentage over (ii) the
applicable London Interbank Offered Rate. Any Bank wishing to require payment of such additional
interest (x) shall so notify the Borrower and the Administrative Agent, in which case such
additional interest on the Euro-Dollar Loans of such Bank shall be payable to such Bank at the
place indicated in such notice with respect to each Interest Period commencing at least three
Euro-Dollar Business Days after the giving of such notice and (y) shall notify the Borrower at
least three Euro-Dollar Business Days prior to each date on which interest is payable on the
Euro-Dollar Loans of the amount then due it under this Section. Each such notification shall be
accompanied by such information as the Borrower may reasonably request.



     “Euro-Dollar Reserve Percentage” means for any day that percentage (expressed as a decimal)
which is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve requirement for a member bank of the
Federal Reserve System in New York City with deposits exceeding five billion dollars in respect of “Eurocurrency liabilities” (or in respect of any other category of liabilities which includes
deposits by reference to which the interest rate on Euro-Dollar Loans is determined or any category
of extensions of credit or other assets which includes loans by a non-United States office of any
Bank to United States residents).



     Section 2.16. Increase in Commitments; Additional Banks. (a) Subsequent to the Effective
Date, the Company may increase the aggregate amount of the Commitments in minimum increments of
$1,000,000 up to five times by (i) designating a financial institution not theretofore a Bank to
become a an Additional Bank (such designation to be effective only with the prior written consent
of the Administrative Agent, which consent will not be unreasonably withheld or delayed) or (ii) by
agreeing with an existing Bank that such Bank’s Commitment shall be increased, provided that after
giving effect to any such



20









 




increase, the total Commitments shall not exceed $300,000,000 (the amount of any such
increase, the “Increased Commitments”).




     (b) An increase in the aggregate amount of the Commitments pursuant to this Section 2.16 shall
become effective upon the receipt by the Administrative Agent of an agreement in form and substance
satisfactory to the Administrative Agent signed by the Borrowers, by each Additional Bank and by
each other Bank whose Commitment is to be increased, setting forth the new Commitments of such
Banks and setting forth the agreement of each Additional Bank to become a party to this Agreement
and to be bound by all the terms and provisions hereof, together with such evidence of appropriate
corporate authorization on the part of the Borrowers with respect to the Increased Commitments and
such opinions of counsel for the Borrowers with respect to the Increased Commitments as the
Administrative Agent may reasonably request.


Upon any increase in the aggregate amount of the Commitments pursuant to this Section 2.16 within
five Domestic Business Days, in the case of any Group of Base Rate Loans then outstanding, and at
the end of the then current Interest Period with respect thereto, in the case of any Group of
Euro-Dollar Loans then outstanding, the Borrower shall prepay such Group of Loans in its entirety
and, to the extent the Borrower elects to do so and subject to the conditions specified in Article
3, the Borrower shall reborrow Loans from the Banks in proportion to their respective Commitments
after giving effect to such increase, until such time as all outstanding Loans are held by the
Banks in such proportion.




ARTICLE 3

Conditions




     Section 3.01 . Effectiveness. This Agreement shall become effective on the date that each of
the following conditions shall have been satisfied (or waived in accordance with Section 9.05(a)).



     (a) receipt by the Administrative Agent of counterparts hereof signed by each of the parties
hereto (or, in the case of any party as to which an executed counterpart shall not have been
received, receipt by the Administrative Agent in form satisfactory to it of telegraphic, telecopy,
telex or other written confirmation from such party of execution of a counterpart hereof by such
party);



     (b) receipt by the Administrative Agent of (i) an opinion of internal counsel of each
Borrower, substantially in the form of Exhibit B-1 hereto and (ii) an opinion of Robinson, Bradshaw
& Hinson, P.A., special counsel for the Borrowers, substantially in the form of Exhibit B-2 hereto,
and, in each case,



21









 





covering such additional matters relating to the transactions contemplated hereby as the
Required Banks may reasonably request;




     (c) receipt by the Administrative Agent of an opinion of Davis Polk & Wardwell, special
counsel for the Agents, substantially in the form of Exhibit C hereto and covering such additional
matters relating to the transactions contemplated hereby as the Required Banks may reasonably
request;



     (d) receipt by the Administrative Agent of a certificate signed by a Vice President, the
Treasurer, an Assistant Treasurer or the Controller of each Borrower, dated the Effective Date, to
the effect set forth in clauses (b) and (c) of Section 3.02;



     (e) receipt by the Administrative Agent of all documents it may have reasonably requested
prior to the date hereof relating to the existence of the Borrowers, the corporate authority for
and the validity of this Agreement and the Notes, and any other matters relevant hereto, all in
form and substance satisfactory to the Administrative Agent; and



     (f) receipt by the Administrative Agent for the account of the Banks of participation fees as
heretofore mutually agreed by the Borrowers and the Administrative Agent;


provided that this Agreement shall not become effective or be binding on any party hereto unless
all of the foregoing conditions are satisfied not later than April 30, 2010. The Administrative
Agent shall promptly notify the Borrowers and the Banks of the Effective Date, and such notice
shall be conclusive and binding on all parties hereto.




     Section 3.02. Borrowings. The obligation of any Bank to make a Loan on the occasion of any
Borrowing by either Borrower is subject to the satisfaction of the following conditions:



     (a) receipt by the Administrative Agent of a Notice of Borrowing as required by Section 2.02;



     (b) the fact that, immediately after such Borrowing, no Default with respect to the Borrower
shall have occurred and be continuing; and



     (c) the fact that the representations and warranties of the Borrower contained in this
Agreement (except the representations and warranties set forth in Sections 4.04(b) and 4.06) shall
be true on and as of the date of such Borrowing.



22









 





Each Borrowing hereunder shall be deemed to be a representation and warranty by the Borrower on the
date of such Borrowing as to the facts specified in clauses (b) and (c) of this Section.




ARTICLE 4

Representations and Warranties




     Each Borrower, severally but not jointly, represents and warrants that:



     Section 4.01. Organization and Power. Such Borrower is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization and has all requisite
powers and all material governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted and is duly qualified to do business in each jurisdiction
where such qualification is required, except where the failure so to qualify would not have a
material adverse effect on the business, financial position or results of operations of such
Borrower and its Consolidated Subsidiaries, considered as a whole.



     Section 4.02. Corporate and Governmental Authorization; No Contravention. The execution,
delivery and performance by such Borrower of this Agreement and the Notes are within such
Borrower’s powers, have been duly authorized by all necessary company action, require no action by
or in respect of, or filing with, any governmental body, agency or official (except for consents,
authorizations or filings which have been obtained or made, as the case may be, and are in full
force and effect) and do not contravene, or constitute a default under, any provision of applicable
law or regulation or of the articles of incorporation, by-laws, certificate of formation or the
limited liability company agreement of such Borrower or of any agreement, judgment, injunction,
order, decree or other instrument binding upon such Borrower or result in the creation or
imposition of any Lien on any asset of such Borrower or any of its Material Subsidiaries.



     Section 4.03. Binding Effect. This Agreement constitutes a valid and binding agreement of
such Borrower and each Note, if and when executed and delivered by it in accordance with this
Agreement, will constitute a valid and binding obligation of such Borrower, in each case
enforceable in accordance with its terms, except as the same may be limited by bankruptcy,
insolvency or similar laws affecting creditors’ rights generally and by general principles of
equity.



     Section 4.04. Financial Information. (a) The consolidated balance sheet of such Borrower
and its Consolidated Subsidiaries as of December 31, 2009 and the related consolidated statements
of income, cash flows, capitalization and retained earnings for the fiscal year then ended,
reported on by Deloitte &



23









 






Touche, copies of which have been delivered to each of the Banks by using such Borrower’s
IntraLinks site or otherwise made available, fairly present, in conformity with generally accepted
accounting principles, the consolidated financial position of such Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and cash flows for such
fiscal year.




     (b) Since December 31, 2009, there has been no material adverse change in the business,
financial position or results of operations of such Borrower and its Consolidated Subsidiaries,
considered as a whole.



     Section 4.05. Regulation U. Such Borrower and its Material Subsidiaries are not engaged in
the business of extending credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the Board of Governors of the Federal Reserve System) and no
proceeds of any Borrowing by such Borrower will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin stock. Not more than
25% of the value of the assets of such Borrower and its Material Subsidiaries is represented by
margin stock.



     Section 4.06. Litigation. Except as disclosed in the Borrower’s annual report on Form 10-K
for the fiscal year ended December 31, 2009, there is no action, suit or proceeding pending
against, or to the knowledge of such Borrower threatened against or affecting, such Borrower or any
of its Subsidiaries before any court or arbitrator or any governmental body, agency or official
which would be likely to be decided adversely to such Borrower or such Subsidiary and, as a result,
have a material adverse effect upon the business, consolidated financial position or results of
operations of such Borrower and its Consolidated Subsidiaries, considered as a whole, or which in
any manner draws into question the validity of this Agreement or any Note.



     Section 4.07. Compliance with Laws. Such Borrower and each of its Material Subsidiaries is
in compliance in all material respects with all applicable laws, ordinances, rules, regulations and
requirements of governmental authorities (including, without limitation, ERISA and Environmental
Laws) except where (i) non-compliance would not have a material adverse effect on the business,
financial position or results of operations of such Borrower and its Consolidated Subsidiaries,
considered as a whole, or (ii) the necessity of compliance therewith is contested in good faith by
appropriate proceedings.



     Section 4.08. Taxes. Such Borrower and its Material Subsidiaries have filed all United
States Federal income tax returns and all other material tax returns which are required to be filed
by them and have paid all taxes due pursuant to such returns or pursuant to any assessment received
by such Borrower or any such



24









 






Material Subsidiary except (i) where nonpayment would not have a material adverse effect on
the business, financial position or results of operations of such Borrower and its Consolidated
Subsidiaries, considered as a whole, or (ii) where the same are contested in good faith by
appropriate proceedings. The charges, accruals and reserves on the books of such Borrower and its
Material Subsidiaries in respect of taxes or other governmental charges are, in the opinion of such
Borrower, adequate.




ARTICLE 5

Covenants




     Each Borrower, severally but not jointly, agrees that, so long as any Bank has any Commitment
hereunder with respect to such Borrower or any amount payable hereunder remains unpaid by such
Borrower:



     Section 5.01. Information. Such Borrower will deliver to each of the Banks:



     (a) as soon as available and in any event within 120 days after the end of each fiscal year of
such Borrower, a consolidated balance sheet of such Borrower and its Consolidated Subsidiaries as
of the end of such fiscal year and the related consolidated statements of income, cash flows,
capitalization and retained earnings for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on in a manner consistent
with past practice (except for immaterial changes) and with applicable requirements of the
Securities and Exchange Commission by Deloitte & Touche or other independent public accountants of
nationally recognized standing;



     (b) as soon as available and in any event within 60 days after the end of each of the first
three quarters of each fiscal year of such Borrower, a consolidated balance sheet of such Borrower
and its Consolidated Subsidiaries as of the end of such quarter and the related consolidated
statements of income and cash flows for such quarter and for the portion of such Borrower’s fiscal
year ended at the end of such quarter, setting forth in each case in comparative form the figures
for the corresponding quarter and the corresponding portion of such Borrower’s previous fiscal
year, all certified (subject to normal year-end adjustments) as to fairness of presentation,
generally accepted accounting principles and consistency (except for immaterial changes) by an
Approved Officer of such Borrower;



     (c) within the maximum time period specified for the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of an Approved Officer of such
Borrower (i) setting forth in reasonable detail the



25









 




calculations required to establish whether such Borrower was in compliance with the
requirements of Section 5.10 on the date of such financial statements and (ii) stating whether any
Default exists on the date of such certificate and, if any Default then exists, setting forth the
details thereof and the action which such Borrower is taking or proposes to take with respect
thereto;




     (d) within five days after any officer of such Borrower with responsibility relating thereto
obtains knowledge of any Default, if such Default is then continuing, a certificate of an Approved
Officer of such Borrower setting forth the details thereof and the action which such Borrower is
taking or proposes to take with respect thereto;



     (e) promptly upon the filing thereof, copies of all registration statements (other than the
exhibits thereto and any registration statements on Form S-8 or its equivalent) and reports on
Forms 10-K, 10-Q and 8-K (or their equivalents) which such Borrower shall have filed with the
Securities and Exchange Commission;



     (f) if and when any member of such Borrower’s ERISA Group (i) gives or is required to give
notice to the PBGC of any “reportable event” (as defined in Section 4043 of ERISA) with respect to
any Material Plan which might constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Material Plan has given or is required to give
notice of any such reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial withdrawal liability
under Title IV of ERISA or notice that any Material Plan is in reorganization, is insolvent or has
been terminated, a copy of such notice; (iii) receives notice from the PBGC under Title IV of ERISA
of an intent to terminate, impose material liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of such notice; (iv)
applies for a waiver of the minimum funding standard under Section 412 of the Internal Revenue
Code, a copy of such application; (v) gives notice of intent to terminate any Material Plan under
Section 4041(c) of ERISA, a copy of such notice and other information filed with the PBGC; (vi)
gives notice of withdrawal from any Material Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Material Plan or makes any
amendment to any Material Plan which has resulted or could result in the imposition of a Lien or
the posting of a bond or other security, a certificate of the chief financial officer or the chief
accounting officer of such Borrower setting forth details as to such occurrence and action, if any,
which such Borrower or applicable member of the ERISA Group is required or proposes to take;



     (g) promptly, notice of any change in the ratings of such Borrower referred to in the Pricing
Schedule; and



26









 






     (h) from time to time such additional information regarding the financial position or business
of such Borrower and its Consolidated Subsidiaries as the Administrative Agent, at the request of
any Bank, may reasonably request.



     Information required to be delivered pursuant to these Sections 5.01(a), 5.01(b) and 5.01(e)
shall be deemed to have been delivered on the date on which such information has been posted on the
Securities and Exchange Commission website on the Internet at sec.gov/edaux/searches.htm, on such
Borrower’s IntraLinks or Syndtrak site or at another website identified in a notice from such
Borrower to the Banks and accessible by the Banks without charge; provided that (i) a certificate
delivered pursuant to Section 5.01(c) shall also be deemed to have been delivered upon being posted
to such Borrower’s IntraLinks or Syndtrak site and (ii) such Borrower shall deliver paper copies of
the information referred to in Sections 5.01(a), 5.01(b) and 5.01(e) to any Bank which requests
such delivery.



     Section 5.02. Payment of Taxes. Such Borrower will pay and discharge, and will cause each
of its Material Subsidiaries to pay and discharge, at or before maturity, all their tax
liabilities, except where (i) nonpayment would not have a material adverse effect on the business,
financial position or results of operations of such Borrower and its Consolidated Subsidiaries,
considered as a whole, or (ii) the same may be contested in good faith by appropriate proceedings,
and will maintain, and will cause each of its Material Subsidiaries to maintain, in accordance with
generally accepted accounting principles, appropriate reserves for the accrual of any of the same.



     Section 5.03. Maintenance of Property; Insurance. (a) Such Borrower will keep, and will
cause each of its Material Subsidiaries to keep, all property useful and necessary in its business
in good working order and condition, ordinary wear and tear excepted.



     (b) Such Borrower will, and will cause each of its Material Subsidiaries to, maintain (either
in the name of such Borrower or in such Subsidiary’s own name) with financially sound and
responsible insurance companies, insurance on all their respective properties in at least such
amounts and against at least such risks (and with such risk retention) as are usually insured
against by companies of established repute engaged in the same or a similar business; provided that
self-insurance by such Borrower or any such Material Subsidiary, shall not be deemed a violation of
this covenant to the extent that companies engaged in similar businesses and owning similar
properties self-insure; and will furnish to the Banks, upon request from the Administrative Agent,
information presented in reasonable detail as to the insurance so carried.



     Section 5.04. Maintenance of Existence. Such Borrower will preserve, renew and keep in full
force and effect, and will cause each of its Material



27









 






Subsidiaries to preserve, renew and keep in full force and effect their respective corporate
or other legal existence and their respective rights, privileges and franchises material to the
normal conduct of their respective businesses; provided that nothing in this Section 5.04 shall
prohibit the termination of any right, privilege or franchise of such Borrower or any such Material
Subsidiary or of the corporate or other legal existence of any such Material Subsidiary, or the
change in form of organization of such Borrower or any such Material Subsidiary, if such Borrower
in good faith determines that such termination or change is in the best interest of such Borrower,
is not materially disadvantageous to the Banks and, in the case of a change in the form of
organization of such Borrower, the Administrative Agent has consented thereto.




     Section 5.05. Compliance with Laws. Such Borrower will comply, and cause each of its
Material Subsidiaries to comply, in all material respects with all applicable laws, ordinances,
rules, regulations, and requirements of governmental authorities (including, without limitation,
ERISA and Environmental Laws) except where (i) noncompliance would not have a material adverse
effect on the business, financial position or results of operations of such Borrower and its
Consolidated Subsidiaries, considered as a whole, or (ii) the necessity of compliance therewith is
contested in good faith by appropriate proceedings.



     Section 5.06. Books and Records. Such Borrower will keep, and will cause each of its
Material Subsidiaries to keep, proper books of record and account in which full, true and correct
entries shall be made of all financial transactions in relation to its business and activities in
accordance with its customary practices; and will permit, and will cause each such Material
Subsidiary to permit, representatives of any Bank at such Bank’s expense (accompanied by a
representative of such Borrower, if such Borrower so desires) to visit any of their respective
properties, to examine any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers, employees and independent public
accountants, all upon such reasonable notice, at such reasonable times and as often as may
reasonably be desired.



     Section 5.07. Negative Pledge. Such Borrower will not create, assume or suffer to exist any
Lien on any asset now owned or hereafter acquired by it, except:



     (a) Liens granted by such Borrower existing as of the Effective Date securing Indebtedness
outstanding on the date of this Agreement in an aggregate principal amount not exceeding
$100,000,000;



     (b) the Lien of such Borrower’s Mortgage Indenture (if any) securing Indebtedness outstanding
on the Effective Date or issued hereafter;



28









 





     (c) any Lien on any asset of any Person existing at the time such Person is merged or
consolidated with or into such Borrower and not created in contemplation of such event;



     (d) any Lien existing on any asset prior to the acquisition thereof by such Borrower and not
created in contemplation of such acquisition;



     (e) any Lien on any asset securing Indebtedness incurred or assumed for the purpose of
financing all or any part of the cost of acquiring such asset; provided that such Lien attaches to
such asset concurrently with or within 180 days after the acquisition thereof;



     (f) any Lien arising out of the refinancing, extension, renewal or refunding of any
Indebtedness secured by any Lien permitted by any of the foregoing clauses of this Section;
provided that such Indebtedness is not increased and is not secured by any additional assets;



     (g) Liens for taxes, assessments or other governmental charges or levies not yet due or which
are being contested in good faith by appropriate proceedings and with respect to which adequate
reserves or other appropriate provisions are being maintained in accordance with generally accepted
accounting principles;



     (h) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen
and other Liens imposed by law, created in the ordinary course of business and for amounts not past
due for more than 60 days or which are being contested in good faith by appropriate proceedings
which are sufficient to prevent imminent foreclosure of such Liens, are promptly instituted and
diligently conducted and with respect to which adequate reserves or other appropriate provisions
are being maintained in accordance with generally accepted accounting principles;



     (i) Liens incurred or deposits made in the ordinary course of business (including, without
limitation, surety bonds and appeal bonds) in connection with workers’ compensation, unemployment
insurance and other types of social security benefits or to secure the performance of tenders,
bids, leases, contracts (other than for the repayment of Indebtedness), statutory obligations and
other similar obligations or arising as a result of progress payments under government contracts;



     (j) easements (including, without limitation, reciprocal easement agreements and utility
agreements), rights-of-way, covenants, consents, reservations, encroachments, variations and other
restrictions, charges or encumbrances (whether or not recorded) affecting the use of real property;



29









 






     (k) Liens with respect to judgments and attachments which do not result in an Event of
Default;



     (l) Liens, deposits or pledges to secure the performance of bids, tenders, contracts (other
than contracts for the payment of money), leases (permitted under the terms of this Agreement),
public or statutory obligations, surety, stay, appeal, indemnity, performance or other obligations
arising in the ordinary course of business;



     (m) other Liens including Liens imposed by Environmental Laws arising in the ordinary course
of its business which (i) do not secure Indebtedness, (ii) do not secure any obligation in an
amount exceeding $100,000,000 at any time at which Investment Grade Status does not exist as to
such Borrower and (iii) do not in the aggregate materially detract from the value of its assets or
materially impair the use thereof in the operation of its business;



     (n) Liens securing obligations under Hedging Agreements entered into to protect against
fluctuations in interest rates or exchange rates or commodity prices and not for speculative
purposes, provided that such Liens run in favor of a Bank hereunder or under the Master Credit
Facility or a Person who was, at the time of issuance, such a Bank; and



     (o) Liens not otherwise permitted by the foregoing clauses of this Section on assets of such
Borrower securing obligations in an aggregate principal or face amount at any date not to exceed
$500,000,000 for each Borrower.



     Section 5.08. Consolidations, Mergers and Sales of Assets. Such Borrower will not (i)
consolidate or merge with or into any other Person or (ii) sell, lease or otherwise transfer,
directly or indirectly, Substantial Assets to any Person (other than a Subsidiary of such
Borrower); provided that such Borrower may merge with another Person if such Borrower is the Person
surviving such merger and, after giving effect thereto, no Default shall have occurred and be
continuing.



     Section 5.09. Use of Proceeds. The proceeds of the Loans made under this Agreement will be
used by such Borrower for its general corporate purposes, including liquidity support for
outstanding commercial paper and acquisitions. None of such proceeds will be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of buying or carrying any
“margin stock” within the meaning of Regulation U.



     Section 5.10. Indebtedness/Capitalization Ratio. The ratio of Consolidated Indebtedness of
such Borrower to Consolidated Capitalization of such Borrower will at no time exceed 65%.



30









 





ARTICLE 6

Defaults




     Section 6.01. Events of Default. If one or more of the following events (“Events of
Default”) with respect to a particular Borrower shall have occurred and be continuing:



     (a) such Borrower shall fail to pay when due any principal of any Loan to it owed by it or
shall fail to pay, within five days of the due date thereof, any interest, fees or any other amount
payable by it hereunder;



     (b) such Borrower shall fail to observe or perform any covenant contained in Sections 5.04,
5.07, 5.08, 5.10 or the second sentence of 5.09, inclusive;



     (c) such Borrower shall fail to observe or perform any covenant or agreement contained in this
Agreement (other than those covered by clause (a) or (b) above) for 30 days after notice thereof
has been given to such Borrower by the Administrative Agent at the request of any Bank;



     (d) any representation, warranty, certification or statement made by such Borrower in this
Agreement or in any certificate, financial statement or other document delivered pursuant to this
Agreement shall prove to have been incorrect in any material respect when made (or deemed made);



     (e) such Borrower or any of its Material Subsidiaries shall fail to make any payment in
respect of Material Debt (other than Loans to such Borrower hereunder) when due or within any
applicable grace period;



     (f) any event or condition shall occur and shall continue beyond the applicable grace or cure
period, if any, provided with respect thereto so as to result in the acceleration of the maturity
of Material Debt;



     (g) such Borrower or any of its Material Subsidiaries shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other proceeding commenced against
it, or shall make a general assignment for the benefit of creditors, or shall admit in writing its
inability to, or shall fail generally to, pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;



31









 





     (h) an involuntary case or other proceeding shall be commenced against such Borrower or any of
its Material Subsidiaries seeking liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of
it or any substantial part of its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 90 days; or an order for relief shall be entered
against such Borrower or any of its Material Subsidiaries under the federal bankruptcy laws as now
or hereafter in effect;



     (i) any member of such Borrower’s ERISA Group shall fail to pay when due an amount or amounts
aggregating in excess of $25,000,000 which it shall have become liable to pay to the PBGC or to a
Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans of such ERISA Group
having aggregate Unfunded Vested Liabilities in excess of $50,000,000 (collectively, a “Material
Plan”) shall be filed under Title IV of ERISA by any member of such ERISA Group, any plan
administrator or any combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate or to cause a trustee to be appointed to administer any such
Material Plan or a proceeding shall be instituted by a fiduciary of any such Material Plan against
any member of such ERISA Group to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding
shall not have been dismissed within 90 days thereafter; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that any such Material Plan must
be terminated;



     (j) a judgment or other court order for the payment of money in excess of $50,000,000 shall be
rendered against such Borrower or any of its Material Subsidiaries and such judgment or order shall
continue without being vacated, discharged, satisfied or stayed or bonded pending appeal for a
period of 45 days;



     (k) any person or group of persons (within the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) other than trustees and participants in
employee benefit plans of the Company and its Subsidiaries or the Endowment or Trust, shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under the Exchange Act) of 50% or more of the outstanding shares of common
stock of the Company; during any period of twelve consecutive calendar months, individuals who were
directors of the Company on the first day of such period (together with any successors nominated or
appointed by such directors in the ordinary course) shall cease to constitute a majority of the
board of directors of the Company; or in the case of Duke Energy Carolinas, such Borrower shall
cease to be a Subsidiary of the Company; or



32









 





     (l) any “Event of Default” (as defined in the Master Credit Facility) with respect to such
Borrower under the Master Credit Facility;


then, and in every such event, the Administrative Agent shall (i) if requested by Banks having more
than 66-2/3% in aggregate amount of the Commitments, by notice to such Borrower terminate the
Commitments as to such Borrower and they shall thereupon terminate, and such Borrower shall no
longer be entitled to borrow hereunder, and the Sublimit of such Borrower shall be reduced to zero
and (ii) if requested by Banks holding more than 66-2/3% in aggregate principal amount of the Loans
of such Borrower, by notice to such Borrower declare such Loans (together with accrued interest
thereon) to be, and such Loans (together with accrued interest thereon) shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by each Borrower; provided that in the case of any of the Events of
Default specified in clause (g) or (h) above with respect to such Borrower, without any notice to
such Borrower or any other act by the Administrative Agent or the Banks, the Commitments shall
thereupon terminate with respect to such Borrower and the Loans of such Borrower (together with
accrued interest thereon) shall become immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each Borrower.




     Section 6.02. Notice of Default. The Administrative Agent shall give notice to a Borrower
under Section 6.01(c) promptly upon being requested to do so by any Bank and shall thereupon notify
all the Banks thereof.



ARTICLE 7

The Administrative Agent




     Section 7.01. Appointment and Authorization. Each Bank irrevocably appoints and authorizes
the Administrative Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement and the Notes as are delegated to the Administrative Agent by the terms hereof
or thereof, together with all such powers as are reasonably incidental thereto.



     Section 7.02. Administrative Agent and Affiliates. BB&T shall have the same rights and
powers under this Agreement as any other Bank and may exercise or refrain from exercising the same
as though it were not the Administrative Agent, and BB&T and its affiliates may accept deposits
from, lend money to, and generally engage in any kind of business with either Borrower or any
Subsidiary or affiliate of either Borrower as if it were not the Administrative Agent hereunder.



33









 





     Section 7.03. Action by Administrative Agent. The obligations of the Administrative Agent
hereunder are only those expressly set forth herein. Without limiting the generality of the
foregoing, the Administrative Agent shall not be required to take any action with respect to any
Default, except as expressly provided in Article 6.



     Section 7.04. Consultation with Experts. The Administrative Agent may consult with legal
counsel (who may be counsel for a Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.



     Section 7.05. Liability of Administrative Agent. Neither the Administrative Agent nor any
of its affiliates nor any of their respective directors, officers, agents or employees shall be
liable to any Bank for any action taken or not taken by it in connection herewith (i) with the
consent or at the request of the Required Banks or (ii) in the absence of its own gross negligence
or willful misconduct. Neither the Administrative Agent nor any of its affiliates nor any of their
respective directors, officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any statement, warranty or representation made in connection
with this Agreement or any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of either Borrower; (iii) the satisfaction of any condition specified in
Article 3, except receipt of items required to be delivered to the Administrative Agent; or (iv)
the validity, effectiveness or genuineness of this Agreement, the Notes or any other instrument or
writing furnished in connection herewith. The Administrative Agent shall not incur any liability
by acting in reliance upon any notice, consent, certificate, statement, or other writing (which may
be a bank wire, telex or similar writing) believed by it in good faith to be genuine or to be
signed by the proper party or parties. Without limiting the generality of the foregoing, the use
of the term “agent” in this Agreement with reference to the Administrative Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under agency doctrine of
any applicable law. Instead, such term is used merely as a matter of market custom and is intended
to create or reflect only an administrative relationship between independent contracting parties.



     Section 7.06. Indemnification. Each Bank shall, ratably in accordance with its Commitment,
indemnify the Administrative Agent, its affiliates and their respective directors, officers, agents
and employees (to the extent not reimbursed by the Borrowers) against any cost, expense (including
counsel fees and disbursements), claim, demand, action, loss, penalties or liability (except such
as result from such indemnitees’ gross negligence or willful misconduct) that such



34









 




indemnitees may suffer or incur in connection with this Agreement or any action taken or
omitted by such indemnitees thereunder.




     Section 7.07. Credit Decision. Each Bank acknowledges that it has, independently and
without reliance upon any Agent or any other Bank, and based on such documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.
Each Bank also acknowledges that it will, independently and without reliance upon any Agent or any
other Bank, and based on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking any action under this Agreement.



     Section 7.08. Successor Administrative Agent. The Administrative Agent may resign at any
time by giving notice thereof to the Banks and the Borrowers. Upon any such resignation, (i) the
Company, with the consent of the Required Banks (such consent not to be unreasonably withheld or
delayed), or (ii) if an Event of Default has occurred and is continuing, then the Required Banks,
shall have the right to appoint a successor Administrative Agent. If no successor Administrative
Agent shall have been so appointed, and shall have accepted such appointment, within 30 days after
the retiring Administrative Agent gives notice of resignation, then the retiring Administrative
Agent may, on behalf of the Banks, appoint a successor Administrative Agent, which shall be a
commercial bank organized or licensed under the laws of the United States of America or of any
State thereof and having a combined capital and surplus of at least $250,000,000. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all
the rights and duties of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder; provided that if such successor
Administrative Agent is appointed without the consent of the Company, such successor Administrative
Agent may be replaced by the Company with the consent of the Required Banks so long as no Event of
Default has occurred and is continuing at the time. After any retiring Administrative Agent’s
resignation hereunder as Administrative Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent.



     Section 7.09. Administrative Agent’s Fee. The Borrowers shall pay to the Administrative
Agent for its own account fees in the amounts and at the times previously agreed upon between the
Borrowers and the Administrative Agent.



     Section 7.10. Other Agents. None of the Syndication Agent or the Co-Documentation Agents, in
their respective capacities as such, shall have any duties or obligations of any kind under this
Agreement.



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ARTICLE 8

Change in Circumstances




     Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If on or prior to
the first day of any Interest Period for any Euro-Dollar Borrowing, Banks having 66-2/3% or more of
the aggregate amount of the affected Loans advise the Administrative Agent that the London
Interbank Offered Rate as determined by the Administrative Agent will not adequately and fairly
reflect the cost to such Banks of funding their Euro-Dollar Loans for such Interest Period, the
Administrative Agent shall forthwith give notice thereof to the Borrowers and the Banks, whereupon
until the Administrative Agent notifies the Borrowers that the circumstances giving rise to such
suspension no longer exist, (i) the obligations of the Banks to make Euro-Dollar Loans or to
continue or convert outstanding Loans as or into Euro-Dollar Loans shall be suspended and (ii) each
outstanding Euro-Dollar Loan shall be converted into a Base Rate Loan on the last day of the then
current Interest Period applicable thereto. Unless the Borrower notifies the Administrative Agent
at least one Domestic Business Day before the date of any Euro-Dollar Borrowing for which a Notice
of Borrowing has previously been given that it elects not to borrow on such date, such Borrowing
shall instead be made as a Base Rate Borrowing.



     Section 8.02. Illegality. If on or after the date of this Agreement, the adoption of any
applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental authority, central bank
or comparable agency charged with the interpretation or administration thereof, or compliance by
any Bank (or its Euro-Dollar Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency shall make it unlawful
or impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain or fund any of its
Euro-Dollar Loans and such Bank shall so notify the Administrative Agent, the Administrative Agent
shall forthwith give notice thereof to the other Banks and the Borrowers, whereupon until such Bank
notifies the Borrowers and the Administrative Agent that the circumstances giving rise to such
suspension no longer exist, the obligation of such Bank to make Euro-Dollar Loans, or to continue
or convert outstanding Loans as or into Euro-Dollar Loans, shall be suspended. Before giving any
notice to the Administrative Agent pursuant to this Section, such Bank shall designate a different
Euro-Dollar Lending Office if such designation will avoid the need for giving such notice and will
not be otherwise disadvantageous to such Bank in the good faith exercise of its discretion. If
such notice is given, each Euro-Dollar Loan of such Bank then outstanding shall be converted to a
Base Rate Loan either (a) on the last day of the then current Interest Period applicable to such
Euro-Dollar Loan if such Bank may lawfully continue to maintain and fund such Loan



36









 




to such day or (b) immediately if such Bank shall determine that it may not lawfully continue
to maintain and fund such Loan to such day.




     Section 8.03. Increased Cost and Reduced Return. (a) If on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any change in any applicable
law, rule or regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (the term “Bank” shall include, for purposes of
this Section 8.03, the holding company of any Bank) (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) issued on or after such date of any
such authority, central bank or comparable agency shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System, but excluding with
respect to any Euro-Dollar Loan any such requirement included in an applicable Euro-Dollar Reserve
Percentage) against assets of, deposits with or for the account of, or credit extended by, any Bank
(or its Applicable Lending Office) or shall impose on any Bank (or its Applicable Lending Office)
or on the London interbank market any other condition (other than in respect of Taxes or Other
Taxes) affecting its Euro-Dollar Loans, its Note or its obligation to make Euro-Dollar Loans and
the result of any of the foregoing is to increase the cost to such Bank (or its Applicable Lending
Office) of making or maintaining any Euro-Dollar Loan, or to reduce the amount of any sum received
or receivable by such Bank (or its Applicable Lending Office) under this Agreement or under its
Note with respect thereto, by an amount deemed by such Bank to be material, then, within 15 days
after demand by such Bank (with a copy to the Administrative Agent), each Borrower shall pay to
such Bank its Appropriate Share of such additional amount or amounts as will compensate such Bank
for such increased cost or reduction; provided that no such amount shall be payable with respect to
any period commencing more than 90 days prior to the date such Bank first notifies the Borrowers of
its intention to demand compensation therefor under this Section 8.03(a).



     (b) If any Bank shall have determined that, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation regarding capital adequacy, or any change in any
such law, rule or regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable agency given or made
after the date of this Agreement, has or would have the effect of reducing the rate of return on
capital of such Bank (or its Parent) as a consequence of such Bank’s obligations hereunder to a
level below



37









 




that which such Bank (or its Parent) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies with respect to capital adequacy) by
an amount deemed by such Bank to be material, then from time to time, within 15 days after demand
by such Bank (with a copy to the Administrative Agent), each Borrower shall pay to such Bank its
Appropriate Share of such additional amount or amounts as will compensate such Bank (or its Parent)
for such reduction; provided that no such amount shall be payable with respect to any period
commencing less than 30 days after the date such Bank first notifies the Borrowers of its intention
to demand compensation under this Section 8.03(b).




     (c) Each Bank will promptly notify the Borrowers and the Administrative Agent of any event of
which it has knowledge, occurring after the date hereof, which will entitle such Bank to
compensation pursuant to this Section and will designate a different Applicable Lending Office if
such designation will avoid the need for, or reduce the amount of, such compensation and will not,
in the judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this Section and setting forth the additional amount or amounts to be
paid to it hereunder shall be conclusive in the absence of manifest error. In determining such
amount, such Bank may use any reasonable averaging and attribution methods.



     (d) The “Appropriate Share” of a Borrower with respect to any amount payable hereunder is the
sum of (i) to the extent such amount is properly allocable to Loans outstanding hereunder, the
portion of such amount properly allocable to the Loans outstanding to or for the account of such
Borrower, and (ii) to the extent such amount is not properly allocable to Loans outstanding
hereunder, the Appropriate Share shall be the product of the Availability Percentage of such
Borrower and such amount.



     Section 8.04. Taxes. (a) For purposes of this Section 8.04 the following terms have the
following meanings:



     “Taxes” means any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings with respect to any payment by a Borrower pursuant to this Agreement or any
Note, and all liabilities with respect thereto, excluding (i) in the case of each Bank and the
Administrative Agent, taxes imposed on its income, net worth or gross receipts and franchise or
similar taxes imposed on it by a jurisdiction under the laws of which such Bank or the
Administrative Agent (as the case may be) is organized or in which its principal executive office
is located or, in the case of each Bank, in which its Applicable Lending Office is located and (ii)
in the case of each Bank, any United States withholding tax imposed on such payments except to the
extent that such Bank is subject to United States withholding tax by reason of a U.S. Tax Law
Change.



38









 





     “Other Taxes” means any present or future stamp or documentary taxes and any other excise or
property taxes, or similar charges or levies, which arise from any payment made pursuant to this
Agreement or under any Note or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Note.



     “U.S. Tax Law Change” means with respect to any Bank or Participant the occurrence (x) in the
case of each Bank listed on the signature pages hereof, after the date of its execution and
delivery of this Agreement and (y) in the case of any other Bank, after the date such Bank shall
have become a Bank hereunder, and (z) in the case of each Participant, after the date such
Participant became a Participant hereunder, of the adoption of any applicable U.S. federal law,
U.S. federal rule or U.S. federal regulation relating to taxation, or any change therein, or the
entry into force, modification or revocation of any income tax convention or treaty to which the
United States is a party.



     (b) Any and all payments by either Borrower to or for the account of any Bank or the
Administrative Agent hereunder or under any Note shall be made without deduction for any Taxes or
Other Taxes; provided that, if either Borrower shall be required by law to deduct any Taxes or
Other Taxes from any such payments, (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to additional sums payable
under this Section 8.04) such Bank or the Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower
shall make such deductions, (iii) such Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law and (iv) such Borrower
shall furnish to the Administrative Agent, at its address referred to in Section 9.01, the original
or a certified copy of a receipt evidencing payment thereof.



     (c) Each Borrower agrees to indemnify each Bank and the Administrative Agent for its
Appropriate Share of the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section
8.04) paid by such Bank or the Administrative Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect thereto. This
indemnification shall be paid within 15 days after such Bank or the Administrative Agent (as the
case may be) makes demand therefor.



     (d) Each Bank organized under the laws of a jurisdiction outside the United States, on or
prior to the date of its execution and delivery of this Agreement in the case of each Bank listed
on the signature pages hereof and on or prior to the date on which it becomes a Bank in the case of
each other Bank, and



39









 




from time to time thereafter as required by law (but only so long as such Bank remains
lawfully able to do so), shall provide the Borrowers two completed and duly executed copies of
Internal Revenue Service form W-8BEN or W-8ECI, as appropriate, or any successor form prescribed by
the Internal Revenue Service, or other documentation reasonably requested by the Borrowers,
certifying that such Bank is entitled to benefits under an income tax treaty to which the United
States is a party which exempts the Bank from United States withholding tax or reduces the rate of
withholding tax on payments of interest for the account of such Bank or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct of a trade or
business in the United States.




     (e) For any period with respect to which a Bank has failed to provide the Borrowers with the
appropriate form pursuant to Section 8.04(d) (unless such failure is due to a U.S. Tax Law Change),
such Bank shall not be entitled to indemnification under Section 8.04(b) or 8.04(c) with respect to
any Taxes or Other Taxes which would not have been payable had such form been so provided; provided
that if a Bank, which is otherwise exempt from or subject to a reduced rate of withholding tax,
becomes subject to Taxes because of its failure to deliver a form required hereunder, the Borrowers
shall take such steps as such Bank shall reasonably request to assist such Bank to recover such
Taxes (it being understood, however, that the Borrowers shall have no liability to such Bank in
respect of such Taxes).



     (f) If either Borrower is required to pay additional amounts to or for the account of any Bank
pursuant to this Section 8.04, then such Bank will take such action (including changing the
jurisdiction of its Applicable Lending Office) as in the good faith judgment of such Bank (i) will
eliminate or reduce any such additional payment which may thereafter accrue and (ii) is not
otherwise disadvantageous to such Bank.



     (g) If any Bank or the Administrative Agent receives a refund (including a refund in the form
of a credit against taxes that are otherwise payable by the Bank or the Administrative Agent) of
any Taxes or Other Taxes for which either Borrower has made a payment under Section 8.04(b) or (c)
and such refund was received from the taxing authority which originally imposed such Taxes or Other
Taxes, such Bank or the Administrative Agent agrees to reimburse such Borrower to the extent of
such refund; provided that nothing contained in this paragraph (g) shall require any Bank or the
Administrative Agent to seek any such refund or make available its tax returns (or any other
information relating to its taxes which it deems to be confidential).



     Section 8.05. Base Rate Loans Substituted for Affected Euro-Dollar Loans. If (i) the
obligation of any Bank to make or to continue or convert outstanding Loans as or into Euro-Dollar
Loans has been suspended pursuant to



40









 




Section 8.02 or (ii) any Bank has demanded compensation under Section 8.03(a) or 8.04 with
respect to its Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar Business
Days’ prior notice to such Bank through the Administrative Agent, have elected that the provisions
of this Section shall apply to such Bank, then, unless and until such Bank notifies the Borrowers
that the circumstances giving rise to such suspension or demand for compensation no longer apply:




     (a) all Loans which would otherwise be made by such Bank as (or continued as or converted to)
Euro-Dollar Loans, as the case may be, shall instead be Base Rate Loans (on which interest and
principal shall be payable contemporaneously with the related Euro-Dollar Loans of the other
Banks), and



     (b) after each of its Euro-Dollar Loans has been repaid, all payments of principal which would
otherwise be applied to repay such Loans shall be applied to repay its Base Rate Loans instead.


If such Bank notifies the Borrowers that the circumstances giving rise to such suspension or demand
for compensation no longer exist, the principal amount of each such Base Rate Loan shall be
converted into a Euro-Dollar Loan on the first day of the next succeeding Interest Period
applicable to the related Euro-Dollar Loans of the other Banks.




     Section 8.06. Substitution of Bank; Termination Option. If (i) the obligation of any Bank
to make or to convert or continue outstanding Loans as or into Euro-Dollar Loans has been suspended
pursuant to Section 8.02, (ii) any Bank has demanded compensation under Section 8.03 or 8.04, (iii)
any Bank becomes an Affected Bank or (iv) Investment Grade Status ceases to exist as to any Bank
that is rated, then:



     (a) the Borrowers shall have the right, with the assistance of the Administrative Agent, to
designate a substitute bank or banks (which may be one or more of the Banks) mutually satisfactory
to the Borrowers and the Administrative Agent to purchase for cash, pursuant to an Assignment and
Assumption Agreement in substantially the form of Exhibit D hereto, the outstanding Loans of such
Bank and assume the Commitment of such Bank, without recourse to or warranty by, or expense to,
such Bank, for a purchase price equal to the principal amount of all of such Bank’s outstanding
Loans plus any accrued but unpaid interest thereon and the accrued but unpaid fees in respect of
such Bank’s Commitment hereunder and all other amounts payable by the Borrowers to such Bank
hereunder plus such amount, if any, as would be payable pursuant to Section 2.13 if the outstanding
Loans of such Bank were prepaid in their entirety on the date of consummation of such assignment;
and



41









 





     (b) if at the time Investment Grade Status exists as to the Borrowers, the Borrowers may elect
to terminate this Agreement as to such Bank; provided that (i) the Borrowers notify such Bank
through the Administrative Agent of such election at least three Euro-Dollar Business Days before
the effective date of such termination and (ii) the Borrowers repay or prepay the principal amount
of all outstanding Loans made by such Bank plus any accrued but unpaid interest thereon and the
accrued but unpaid fees in respect of such Bank’s Commitment hereunder plus all other amounts
payable by the Borrowers to such Bank hereunder, not later than the effective date of such
termination. Upon satisfaction of the foregoing conditions, the Commitment of such Bank shall
terminate on the effective date specified in such notice.



ARTICLE 9

Miscellaneous




     Section 9.01. Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including bank wire, telex, facsimile transmission or similar
writing) and shall be given to such party: (x) in the case of either Borrower or the
Administrative Agent, at its address or telecopy or telex number set forth on the signature pages
hereof, (y) in the case of any Bank, at its address or telecopy or telex number set forth in its
Administrative Questionnaire or (z) in the case of any party, such other address or telecopy or
telex number as such party may hereafter specify for the purpose by notice to the Administrative
Agent and the Borrowers. Each such notice, request or other communication shall be effective (i)
if given by telecopy or telex, when such telecopy or telex is transmitted to the telecopy or telex
number specified in this Section and the appropriate answerback or confirmation slip, as the case
may be, is received or (ii) if given by any other means, when delivered at the address specified in
this Section; provided that notices to the Administrative Agent under Article 2 or Article 8 shall
not be effective until delivered.



     Section 9.02. No Waivers. No failure or delay by the Administrative Agent or any Bank in
exercising any right, power or privilege hereunder or under any Note shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies provided by law.



     Section 9.03. Expenses; Indemnification. (a) Each Borrower shall pay (i) its Appropriate
Share of all reasonable out-of-pocket expenses of the Administrative Agent, including reasonable
fees and disbursements of special counsel for the Agents, in connection with the preparation of
this Agreement, any waiver or consent hereunder or any amendment hereof or any Default or alleged



42









 




Default with respect to such Borrower hereunder and (ii) if an Event of Default with respect
to such Borrower occurs, all reasonable out-of-pocket expenses incurred by the Administrative Agent
or any Bank, including reasonable fees and disbursements of counsel, in connection with such Event
of Default and collection and other enforcement proceedings resulting therefrom.




     (b) Each Borrower agrees to indemnify each Agent and each Bank, their respective affiliates
and the respective directors, officers, agents and employees of the foregoing (each an
“Indemnitee”) and hold each Indemnitee harmless from and against any and all liabilities, losses,
penalties, damages, costs and expenses of any kind, including, without limitation, the reasonable
fees and disbursements of counsel, which may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such Indemnitee shall be
designated a party thereto) relating to or arising out of this Agreement or any actual or proposed
use of proceeds of Loans hereunder, in each case to the extent of such Borrower’s Appropriate
Share; provided that no Indemnitee shall have the right to be indemnified hereunder for such
Indemnitee’s own gross negligence or willful misconduct as determined by a court of competent
jurisdiction.



     Section 9.04. Sharing of Set-offs. Each Bank agrees that if it shall, by exercising any
right of set-off or counterclaim or otherwise, receive payment of a proportion of the aggregate
amount then due with respect to the Loans held by it which is greater than the proportion received
by any other Bank in respect of the aggregate amount then due with respect to the Loans held by
such other Bank, the Bank receiving such proportionately greater payment shall purchase such
participations in the Loans held by the other Banks, and such other adjustments shall be made, as
may be required so that all such payments with respect to the Loans held by the Banks shall be
shared by the Banks pro rata; provided that nothing in this Section shall impair the right of any
Bank to exercise any right of set-off or counterclaim it may have and to apply the amount subject
to such exercise to the payment of indebtedness of a Borrower other than its indebtedness under
this Agreement.



     Section 9.05. Amendments and Waivers; Conforming Changes. (a) Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed by each Borrower and the Required Banks (and, if the rights or duties of any
Agent are affected thereby, by such Person); provided that no such amendment or waiver shall (x)
unless signed by each Bank affected thereby, (i) increase the Commitment of any Bank or subject any
Bank to any additional obligation, (ii) reduce the principal of or rate of interest on any Loan or
any interest thereon or any fees hereunder, (iii) postpone the date fixed for any payment of
principal of or interest on any Loan or interest thereon or any fees hereunder or for termination
of any Commitment or



43









 




(iv) impose a restriction on the ability of any Bank to assign its rights and obligations
hereunder or (y) unless signed by all Banks, (i) change the definition of Required Banks or the
provisions of this Section 9.05, (ii) change the provisions of Section 9.04 or (iii) change any
requirement for ratable application of payments, including, without limitation, under Sections 2.11
and 2.12 of this Agreement.




     (b) If any representation or warranty in Article 4 of the Master Credit Facility, any covenant
in Article 5 of the Master Credit Facility or any event of default in Article 6 of the Master
Credit Facility and, in each case, any related definitions in the Master Credit Facility, is
replaced, changed, amended, modified, supplemented or removed (any of the foregoing, a “Change”),
regardless of whether the Master Credit Facility is replaced, refinanced, amended and restated,
amended, modified or supplemented and regardless of whether any such Change occurs in the
corresponding article or definitions, such Change shall be incorporated automatically into this
Agreement upon the later of (i) the effectiveness of such Change in the Master Credit Facility and
(ii) the 30th day after the Administrative Agent’s receipt of notice from the Company of such
Change, provided that the Required Banks hereunder do not notify the Company through the
Administrative Agent within 30 days after the Administrative Agent’s receipt of such notice from
the Company of their election (which may be made in their discretion) that such Change shall not be
effective with respect to this Agreement.



     Section 9.06. Successors and Assigns. (a) The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns and each Indemnitee, except that no Borrower may assign or otherwise transfer any of its
rights under this Agreement without the prior written consent of all Banks.



     (b) Any Bank may, with the consent (unless an Event of Default then exists) of the Company
(such consent not to be unreasonably withheld or delayed), at any time grant to one or more banks
or other institutions (each a “Participant”) participating interests in its Commitment or any or
all of its Loans; provided that the Company shall be deemed to have consented to any such
participation unless it shall object thereto by written notice to the Administrative Agent within
five Domestic Business Days after delivery of notice thereof, and that any Bank may, without the
consent of either Borrower, at any time grant participating interests in its Commitment or any or
all of its Loans to another Bank, an Approved Fund or an Affiliate of such transferor Bank. In the
event of any such grant by a Bank of a participating interest to a Participant, whether or not upon
notice to the Administrative Agent, such Bank shall remain responsible for the performance of its
obligations hereunder, and the Borrowers and the Administrative Agent shall continue to deal solely
and directly with such Bank in



44









 




connection with such Bank’s rights and obligations under this Agreement. Any agreement
pursuant to which any Bank may grant such a participating interest shall provide that such Bank
shall retain the sole right and responsibility to enforce the obligations of the Borrowers
hereunder including, without limitation, the right to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such participation agreement may provide that
such Bank will not agree to any modification, amendment or waiver of this Agreement described in
clause (x) (i), (ii) or (iii) of Section 9.05(a) without the consent of the Participant. Each
Borrower agrees that each Participant shall, to the extent provided in its participation agreement,
be entitled to the benefits of Article 8 with respect to its participating interest, subject to the
performance by such Participant of the obligations of a Bank thereunder. An assignment or other
transfer which is not permitted by subsection (c) or (d) below shall be given effect for purposes
of this Agreement only to the extent of a participating interest granted in accordance with this
subsection (b).




     (c) Any Bank may at any time assign to one or more banks or other financial institutions
(except to either Borrower or to any Affected Bank) (each an “Assignee”) all, or a proportionate
part (equivalent to an initial Commitment of not less than $1,000,000 (unless the Company and the
Administrative Agent shall otherwise agree)) of all of its rights and obligations under this
Agreement and its Note (if any), and such Assignee shall assume such rights and obligations,
pursuant to an Assignment and Assumption Agreement in substantially the form of Exhibit D hereto
executed by such Assignee and such transferor Bank, with (and only with and subject to) the prior
written consent of the Administrative Agent (which shall not be unreasonably withheld or delayed)
and, so long as no Event of Default has occurred and is continuing, the Company (which shall not be
unreasonably withheld or delayed); provided that unless such assignment is of the entire right,
title and interest of the transferor Bank hereunder, after making any such assignment such
transferor Bank shall have a Commitment of at least $1,000,000 (unless the Company and the
Administrative Agent shall otherwise agree). Upon execution and delivery of such instrument of
assumption and payment by such Assignee to such transferor Bank of an amount equal to the purchase
price agreed between such transferor Bank and such Assignee, such Assignee shall be a Bank party to
this Agreement and shall have all the rights and obligations of a Bank with a Commitment as set
forth in such instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or action by any party
shall be required. Upon the consummation of any assignment pursuant to this subsection (c), the
transferor Bank, the Administrative Agent and the Borrowers shall make appropriate arrangements so
that, if required by the Assignee, a Note(s) is issued to the Assignee. If the Assignee is not
incorporated under the laws of the United States of America or a state thereof, it shall, prior to
the first date on which interest or fees are payable hereunder for its account, deliver to the



45









 




Borrowers and the Administrative Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with Section 8.04. All
assignments (other than assignments to Affiliates) shall be subject to a transaction fee in the
amount of $3,500 payable by the transferor Bank to the Administrative Agent for its own account.




     (d) Any Bank may at any time assign all or any portion of its rights under this Agreement and
its Note (if any) to a Federal Reserve Bank. No such assignment shall release the transferor Bank
from its obligations hereunder or modify any such obligations.



     (e) No Assignee, Participant or other transferee of any Bank’s rights (including any
Applicable Lending Office other than such Bank’s initial Applicable Lending Office) shall be
entitled to receive any greater payment under Section 8.03 or 8.04 than such Bank would have been
entitled to receive with respect to the rights transferred, unless such transfer is made by reason
of the provisions of Section 8.02, 8.03 or 8.04 requiring such Bank to designate a different
Applicable Lending Office under certain circumstances or at a time when the circumstances giving
rise to such greater payment did not exist.



     Section 9.07. Collateral. Each of the Banks represents to the Administrative Agent and each
of the other Banks that it in good faith is not relying upon any “margin stock” (as defined in
Regulation U) as collateral in the extension or maintenance of the credit provided for in this
Agreement.



     Section 9.08. Confidentiality. Each Agent and each Bank agrees to keep any information
delivered or made available by either Borrower pursuant to this Agreement confidential from anyone
other than persons employed or retained by such Bank and its affiliates who are engaged in
evaluating, approving, structuring or administering the credit facility contemplated hereby;
provided that nothing herein shall prevent any Bank from disclosing such information (a) to any
other Bank or any Agent, (b) to any other Person if reasonably incidental to the administration of
the credit facility contemplated hereby, (c) upon the order of any court or administrative agency,
(d) upon the request or demand of any regulatory agency or authority, (e) which had been publicly
disclosed other than as a result of a disclosure by any Agent or any Bank prohibited by this
Agreement, (f) in connection with any litigation to which any Agent, any Bank or its subsidiaries
or Parent may be a party, (g) to the extent necessary in connection with the exercise of any remedy
hereunder, (h) to such Bank’s or any Agent’s legal counsel and independent auditors, (i) subject to
provisions substantially similar to those contained in this Section 9.08, to any actual or proposed
Participant or Assignee and (j) to any direct, indirect, actual or prospective counterparty (and
its advisor) to any swap, derivative or securitization transaction related to the obligations under
this Agreement.



46









 





     Section 9.09. Governing Law; Submission to Jurisdiction. This Agreement and each Note (if
any) shall be construed in accordance with and governed by the law of the State of New York. Each
Borrower hereby submits to the nonexclusive jurisdiction of the United States District Court for
the Southern District of New York and of any New York State court sitting in New York City for
purposes of all legal proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each Borrower irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum.



     Section 9.10. Counterparts; Integration. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.



     Section 9.11. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE AGENTS AND THE BANKS, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.



     Section 9.12. USA Patriot Act. Each Bank hereby notifies each Borrower that pursuant to the
requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001)
(the “Act”), it is required to obtain, verify and record information that identifies such Borrower,
which information includes the name and address of such Borrower and other information that will
allow such Bank to identify such Borrower in accordance with the Act.



47









 





     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.



	 	 	 	 	 	 	 	 	 

	 	 	DUKE ENERGY CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Stephen De May	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Stephen De May	 	 
	 

	 	 	 	Title:
	 	Senior Vice President, 

Investor Relations
and Treasurer	 	 
	 

	 	 	 	Address:
	 	526 South Church Street	 	 
	 

	 	 	 	 	 	Charlotte, NC 28202-1904	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Telecopy number:	 	 
	 

	 	 	 	Taxpayer ID:
	 	20-2777218	 	 






	 	 	 	 	 	 	 	 	 

	 	 	DUKE ENERGY CAROLINAS, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Stephen De May	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Stephen De May	 	 
	 

	 	 	 	Title:
	 	Senior Vice President and Treasurer	 	 
	 

	 	 	 	Address:
	 	526 South Church Street	 	 
	 

	 	 	 	 	 	Charlotte, NC 28202-1904	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Telecopy number:	 	 
	 

	 	 	 	Taxpayer ID:
	 	56-0205520	 	 






48









 






	 	 	 	 	 	 	 	 	 

	 	 	BRANCH BANKING AND TRUST COMPANY, as 

     Administrative Agent and as a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Michael Skorich	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Michael Skorich	 	 
	 

	 	 	 	Title:
	 	Senior Vice President	 	 
	 

	 	 	 	Address:
	 	200 West Second Street	 	 
	 

	 	 	 	 	 	Winston-Salem, NC 27101	 	 






49









 






	 	 	 	 	 	 	 	 	 	 	 

	 	 	REGIONS BANK, as Syndication Agent and
as a Bank	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Anthony LeTrent	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Anthony LeTrent
	 	 
	 

	 	 	 	Title:
	 	Senior Vice President
	 	 
	 

	 	 	 	Address:
	 	6805 Morrison Boulevard
	 	 
	 

	 	 	 	 	 	Suite 100,
Charlotte, NC 28211
	 	 
	 

	 	 	 	 	 		 	 	 	 






50









 






	 	 	 	 	 	 	 	 	 	 	 

	 	 	FIRST TENNESSEE BANK N.A., as 

     Co-Documentation Agent and as a Bank	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Jill Hamilton	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	Name:	 	Jill Hamilton	 	 	 	 
	 
	 	 	 	Title:	 	Vice President	 	 	 	 
	 
	 	 	 	Address:	 	5821 Fairview Rd	 	 	 	 
	 
	 	 	 	 	 	Suite 302	 	 	 	 
	 
	 	 	 	 	 	Charlotte, NC  28209	 	 	 	 






51









 






	 	 	 	 	 	 	 	 	 

	 	 	RBC BANK (USA), as Co-Documentation
Agent and as a Bank	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Richard E. Anglin III	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Richard E. Anglin III	 	 
	 

	 	 	 	Title:
	 	Bank Officer	 	 
	 

	 	 	 	Address:
	 	200 Providence Road	 	 
	 

	 	 	 	 	 	Suite 300	 	 
	 

	 	 	 	 	 	Charlotte, NC 28207	 	 






52









 






	 	 	 	 	 
	 	NCBT, a division of SCBT, N.A., as a Bank

 	 
	 	By:  	/s/ Andrew B. Griffin
 	 
	 	 	Name:  	Andrew B. Griffin 	 
	 	 	Title:  	Senior Vice President 	 


					
	 	Address: 	 6525 Morrison Boulevard

Charlotte, NC 28211

 	 
	 	 	 
	 	 	 
	 	 	 



53









 






	 	 	 	 	 
	 	FIRST NATIONAL BANK OF SHELBY, as a Bank

 	 
	 	By:  	/s/ Earl H. Lutz, Jr.
 	 
	 	 	Name:  	  Earl H. Lutz, Jr. 	 
	 	 	Title:  	  Executive Vice President 	 



					
	 	Address:	  PO Box 168, Shelby, NC 28151

 	 
	 	 	 
	 	 	 
	 	 	 




54









 





	 	 	 	 	 
	 	MECHANICS AND FARMERS BANK, as a Bank

 	 
	 	By:  	/s/ James E. Sansom
 	 
	 	 	Name:  	  James E. Sansom 	 
	 	 	Title:  	  Senior Vice President 	 



					
	 	Address: 	  2634 Durham Chapel Hill Blvd.

  Durham, NC 27707

 	 
	 	 	 
	 	 	 
	 	 	 



55









 







	 	 	 	 	 
	 	PARK STERLING BANK, as a Bank

 	 
	 	By:  	/s/ Fred H. Bumgardner, Jr.
 	 
	 	 	Name:  	  Fred H. Bumgardner, Jr. 	 
	 	 	Title:  	  Senior Vice President 	 



					
	 	Address: 	  1043 East Morehead St.

  Charlotte, NC 28204

 	 
	 	 	 
	 	 	 
	 	 	 
	 




56









 





COMMITMENT SCHEDULE




	 	 	 	 	 
	Bank	 	Commitment	 
	Branch Banking and Trust Company
	 	$	52,500,000.00	 
	Regions Bank
	 	$	52,500,000.00	 
	First Tennessee Bank N.A.
	 	$	30,000,000.00	 
	RBC Bank (USA)
	 	$	30,000,000.00	 
	NCBT, a division of SCBT, N.A.
	 	$	20,000,000.00	 
	First National Bank of Shelby
	 	$	5,000,000.00	 
	Mechanics and Farmers Bank
	 	$	5,000,000.00	 
	Park Sterling Bank
	 	$	5,000,000.00	 
	 
	 	 	 	 
	 
	 	 	 
	Total
	 	$	200,000,000.00	 
	 
	 	 	 











57









 








Pricing Schedule




     Each of “Applicable Margin” and “Unused Commitment Fee Rate” means, for any date, the rate set
forth below in the applicable row and column corresponding to the credit rating, as determined in
the paragraph below, of the applicable Borrower (or, in the case of the unused commitment fee, of
the higher-rated Borrower) that exists on such date:



(basis points per annum)




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	at least	 	at least	 	at least	 	 
	 	 	at least A	 	at least A-	 	BBB+ by	 	BBB by	 	BBB- by	 	less than BBB-
	 	 	by S&P or	 	by S&P or	 	S&P or	 	S&P or	 	S&P or	 	by S&P and
	Borrower’s Credit	 	A2 by	 	A3 by	 	Baa1 by	 	Baa2 by	 	Baa3 by	 	less than Baa3
	Rating	 	Moody’s	 	Moody’s	 	Moody’s	 	Moody’s	 	Moody’s	 	by Moody’s
	Unused Commitment Fee Rate
	 	 	25.0	 	 	 	25.0	 	 	 	37.5	 	 	 	37.5	 	 	 	50.0	 	 	 	50.0	 
	Applicable Margin
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Euro-Dollar Loans
	 	 	150.0	 	 	 	175.0	 	 	 	187.5	 	 	 	200.0	 	 	 	212.5	 	 	 	225.0	 
	Base Rate Loans
	 	 	50.0	 	 	 	75.0	 	 	 	87.5	 	 	 	100.0	 	 	 	112.5	 	 	 	125.0	 






     Each Borrower’s credit rating will be determined based upon the rating assigned to its
outstanding senior unsecured long-term debt securities by Standard & Poor’s, a division of the
McGraw-Hill Companies, together with its successors (“S&P”) and Moody’s Investors Service
(“Moody’s”), or, if such a credit rating is not available for either Borrower, then such Borrower’s
credit rating will be determined based upon its corporate credit rating from S&P or its issuer
rating from Moody’s. Each Borrower will maintain the ratings contemplated above from at least one
of S&P and Moody’s. If the applicable rating is available from only one of such rating agencies,
the applicable pricing will be based on that rating. The ratings in effect for any day are those in
effect at the close of business on such day. A change in credit rating will result in an immediate
change in the applicable pricing. In the case of split ratings from S&P and Moody’s, the rating to
be used to determine the applicable pricing will be the higher of the two; provided that if the
rating differential is more than one notch, the applicable pricing will be based on a rating one
notch lower than the higher of the two.



 









 





EXHIBIT A




NOTE




New York, New York

           __, 20__




     For value received, [Duke Energy Corporation, a Delaware corporation] [Duke Energy Carolinas,
LLC, a North Carolina limited liability company] (the “Borrower”), promises to pay to the order of
(the “Bank”), for the account of its Applicable Lending Office, the unpaid principal amount of each
Loan made by the Bank to the Borrower pursuant to the Credit
Agreement referred to below on the date specified in the Credit Agreement. The Borrower promises
to pay interest on the unpaid principal amount of each such Loan on the dates and at the rate or
rates provided for in the Credit Agreement. All such payments of principal and interest shall be
made in lawful money of the United States in Federal or other immediately available funds at the
office of Branch Banking and Trust Company, 200 West 2nd Street, 16th floor,
Winston-Salem, North Carolina 27101.



     All Loans made by the Bank, the respective types and maturities thereof and all repayments of
the principal thereof shall be recorded by the Bank, and the Bank, if the Bank so elects in
connection with any transfer or enforcement of its Note, may endorse on the schedule attached
hereto appropriate notations to evidence the foregoing information with respect to the Loans then
outstanding; provided that the failure of the Bank to make any such recordation or endorsement
shall not affect the obligations of the Borrower hereunder or under the Credit Agreement.



     This note is one of the Notes referred to in the Credit Agreement dated as of April 7, 2010
among Duke Energy Corporation, Duke Energy Carolinas, LLC, the banks listed on the signature pages
thereof, Branch Banking and Trust Company, as Administrative Agent, and the other Agents party
thereto (as the same may be amended from time to time, the “Credit Agreement”). Terms defined in
the Credit Agreement are used herein with the same meanings. Reference is made to the Credit
Agreement for provisions for the prepayment hereof and the acceleration of the maturity hereof.



A-1 









 





	 	 	 	 	 
	 	[DUKE ENERGY CORPORATION]


[DUKE ENERGY CAROLINAS, LLC]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 



A-2 









 







	 	 	 	 	 



Note (cont’d)




LOANS AND PAYMENTS OF PRINCIPAL



	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Amount of	 	 	 	 
	 	 	Amount	 	Type	 	Principal	 	Maturity	 	Notation
	Date	 	of Loan	 	of Loan	 	Repaid	 	Date	 	Made By
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 





A-3 









 





EXHIBIT B-1




OPINION OF INTERNAL COUNSEL OF THE BORROWER




[Effective Date]




To the Banks and the Administrative Agent

  Referred to Below




c/o Branch Banking and Trust Company

   as Administrative Agent

200 West 2nd Street, 16th Floor

Winston-Salem, NC 27101

Attn: Loan Syndications




Ladies and Gentlemen:




     I am [title of internal counsel] of Duke Energy Corporation (the “Company”) and Duke Energy
Carolinas, LLC (“Duke Energy Carolinas” and, together with the Company, the “Borrowers”) and have
acted as their counsel in connection with the Credit Agreement (the “Credit Agreement”), dated as
of April 7, 2010, among the Borrowers, the banks listed on the signature pages thereof, Branch
Banking and Trust Company, as Administrative Agent, and the other Agents party thereto.
Capitalized terms defined in the Credit Agreement are used herein as therein defined. This opinion
letter is being delivered pursuant to Section 3.01(b) of the Credit Agreement.



     In such capacity, I or attorneys under my direct supervision have examined originals or
copies, certified or otherwise identified to my satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such other investigations
of fact and law as I have deemed necessary or advisable for purposes of this opinion.



     Upon the basis of the foregoing, I am of the opinion that:



     1. The Company is a Delaware corporation validly existing and in good standing under the laws
of Delaware. Duke Energy Carolinas is a North Carolina limited liability company validly existing
and in good standing under the laws of North Carolina.



     2. The execution, delivery and performance by each Borrower of the Credit Agreement and any
Notes are within such Borrower’s corporate or limited
liability company powers, as the case may be, have been duly authorized by all



B-1-1 









 




necessary
corporate or limited liability company action, as the case may be, require no action by or in
respect of, or filing with, any governmental body, agency or official (except for [list
exceptions], which have been obtained or made, as the case may be, and are in full force and
effect) and do not contravene, or constitute a default under, any provision of applicable law or
regulation or of the articles of incorporation, by-laws, articles of organization or limited
liability company agreement, as the case may be, of such Borrower or, to my knowledge, of any
agreement, judgment, injunction, order, decree or other instrument binding upon such Borrower or,
to my knowledge, result in the creation or imposition of any Lien on any asset of such Borrower or
any of its Material Subsidiaries.




     3. The Credit Agreement and any Notes executed and delivered as of the date hereof have been
duly executed and delivered by each Borrower.



     4. Except as disclosed in the Company’s annual report on Form 10-K for the fiscal year ended
December 31, 2009, to my knowledge (but without independent investigation), there is no action,
suit or proceeding pending or threatened against or affecting either Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or official, which
would be likely to be decided adversely to such Borrower or such Subsidiary and, as a result, to
have a material adverse effect upon the business, consolidated financial position or consolidated
results of operations of such Borrower and its Consolidated Subsidiaries, considered as a whole, or
which in any manner draws into question the validity of the Credit Agreement or any Notes.



     The phrase “to my knowledge”, as used in the foregoing opinion, refers to my actual knowledge
without any independent investigation as to any such matters.



     I am a member of the Bar of the State of North Carolina and do not express any opinion herein
concerning any law other than the law of the State of North Carolina, the federal law of the United
States of America and the General Corporation Law of the State of Delaware.



     The opinions expressed herein are limited to the matters expressly stated herein, and no
opinion is to be inferred or may be implied beyond the matters expressly so stated. This opinion
is rendered to you in connection with the above-referenced matter and may not be relied upon by you
for any other purpose, or relied upon by, or furnished to, any other Person, firm or corporation
without my prior written consent, except for Additional Banks and Assignees. My opinions expressed
herein are as of the date hereof, and I undertake no obligation to advise you of any changes of
applicable law or any other matters that may come to my attention after the date hereof that may
affect my opinions expressed herein.



Very truly yours,




B-1-2 









 





EXHIBIT B-2




OPINION OF

ROBINSON, BRADSHAW & HINSON, P.A.,

SPECIAL COUNSEL FOR THE BORROWER




[Effective Date]




To the Banks and the Administrative Agent

   Referred to Below




c/o Branch Banking and Trust Company

   as Administrative Agent

200 West 2nd Street, 16th Floor

Winston-Salem, NC 27101

Attn: Loan Syndications




Ladies and Gentlemen:




     We have acted as counsel to [Duke Energy Corporation., a Delaware corporation], [Duke Energy
Carolinas, LLC, a North Carolina limited liability company] (the “Borrower”), in connection with
the Credit Agreement (the “Credit Agreement”), dated as of April 7, 2010, among Duke Energy
Corporation and Duke Energy Carolinas, LLC (the “Borrowers”), the banks listed on the signature
pages thereof, Branch Banking and Trust Company, as Administrative Agent, and the other Agents
party thereto. Capitalized terms used herein and not defined shall have the meanings given to them
in the Credit Agreement. This opinion letter is being delivered pursuant to Section 3.01(b) of the
Credit Agreement.



     In connection with this opinion, we also examined originals, or copies identified to our
satisfaction, of such other documents and considered such matters of law and fact as we, in our
professional judgment, have deemed appropriate to render the opinions contained herein. Where we
have considered it appropriate, as to certain facts we have relied, without investigation or
analysis of any underlying data contained therein, upon certificates or other comparable documents
of public officials and officers or other appropriate representatives of the Borrower.



     In rendering the opinions contained herein, we have assumed, among other things, that the
Credit Agreement and any Notes to be executed (i) are within the Borrower’s corporate powers, (ii)
have been duly authorized by all necessary corporate action, (iii) have been duly executed and
delivered, (iv) require no



B-2-1 









 




action by or in respect of, or filing with, any governmental body, agency of official and (v)
do not contravene, or constitute a default under, any provision of applicable law or regulation or
of the Borrower’s certificate of incorporation or by-laws or any agreement, judgment, injunction,
order, decree or other instrument binding upon the Borrower or result in the creation or imposition
of any Lien on any asset of the Borrower. In addition, we have assumed that the Credit Agreement
fully states the agreement between the Borrower and the Banks with respect to the matters addressed
therein, and that the Credit Agreement constitutes a legal, valid and binding obligation of each
Bank, enforceable in accordance with its respective terms.




     The opinions set forth herein are limited to matters governed by the laws of the State of
North Carolina and the federal laws of the United States, and no opinion is expressed herein as to
the laws of any other jurisdiction. For purposes of our opinions, we have disregarded the choice
of law provisions in the Credit Agreement and, instead, have assumed with your permission that the
Credit Agreement and the Notes are governed exclusively by the internal, substantive laws and
judicial interpretations of the State of North Carolina. We express no opinion concerning any
matter respecting or affected by any laws other than laws that a lawyer in North Carolina
exercising customary professional diligence would reasonably recognize as being directly applicable
to the Borrower, the Loans, or any of them.



     Based upon and subject to the foregoing and the further limitations and qualifications
hereinafter expressed, it is our opinion that the Credit Agreement constitutes the legal, valid and
binding obligation of the Borrower and the Notes, if and when issued, will constitute legal, valid
and binding obligations of the Borrower, in each case, enforceable against the Borrower in
accordance with its terms.



     The opinions expressed above are subject to the following qualifications and limitations:



     1. Enforcement of the Credit Agreement and the Notes is subject to the effect of applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and similar laws
affecting the enforcement of creditors’ rights generally.



     2. Enforcement of the Credit Agreement and the Notes is subject to the effect of general
principles of equity (regardless of whether considered in a proceeding in equity or at law) by
which a court with proper jurisdiction may deny rights of specific performance, injunction,
self-help, possessory remedies or other remedies.



B-2-2 









 





     3. We do not express any opinion as to the enforceability of any provisions contained in the
Credit Agreement or any Note that (i) purport to excuse a party for liability for its own acts,
(ii) purport to make void any act done in contravention thereof, (iii) purport to authorize a party
to act in its sole discretion, (iv) require waivers or amendments to be made only in writing, (v)
purport to effect waivers of constitutional, statutory or equitable rights or the effect of
applicable laws, (vi) impose liquidated damages, penalties or forfeiture, or (vii) purport to
indemnify a party for its own negligence or willful misconduct. Indemnification provisions in the
Credit Agreement are subject to and may be rendered unenforceable by applicable law or public
policy, including applicable securities law.



     4. We do not express any opinion as to the enforceability of any provisions contained in the
Credit Agreement or the Notes purporting to require a party thereto to pay or reimburse attorneys’
fees incurred by another party, or to indemnify another party therefor, which may be limited by
applicable statutes and decisions relating to the collection and award of attorneys’ fees,
including but not limited to North Carolina General Statutes § 6-21.2.



     5. We do not express any opinion as to the enforceability of any provisions contained in the
Credit Agreement purporting to waive the right of jury trial. Under North Carolina General
Statutes § 22B-10, a provision for the waiver of the right to a jury trial is unconscionable and
unenforceable.



     6. We do not express any opinion as to the enforceability of any provisions contained in the
Credit Agreement concerning choice of forum or consent to the jurisdiction of courts, venue of
actions or means of service of process.



     7. It is likely that North Carolina courts will enforce the provisions of the Credit Agreement
providing for interest at a higher rate resulting from a Default or Event of Default (a “Default
Rate”) which rate is higher than the rate otherwise stipulated in the Credit Agreement. The law,
however, disfavors penalties, and it is possible that interest at the Default Rate may be held to
be an unenforceable penalty, to the extent such rate exceeds the rate applicable prior to a default
under the Credit Agreement. Also, since North Carolina General Statutes § 24-10.1 expressly
provides for late charges, it is possible that North Carolina courts, when faced specifically with
the issue, might rule that this statutory late charge preempts any other charge (such as default
interest) by a bank for delinquent payments. The only North Carolina case which we have found that
addresses this issue is a 1978 Court of Appeals decision, which in our opinion is of limited
precedential value, North Carolina National Bank v. Burnette, 38 N.C. App. 120, 247 S.E.2d 648
(1978), rev’d on other grounds, 297 N.C. 524, 256 S.E.2d 388 (1979). While the court in that case
did allow interest



B-2-3 









 




after default (commencing with the date requested in the complaint) at a rate six percent in
excess of pre-default interest, we are unable to determine from the opinion that any question was
raised as to this being penal in nature, nor does the court address the possible question of the
statutory late charge preempting a default interest surcharge. Therefore, since the North Carolina
Supreme Court has not ruled in a properly presented case raising issues of its possible penal
nature and those of North Carolina General Statutes § 24-10.1, we are unwilling to express an
unqualified opinion that the Default Rate of interest prescribed in the Credit Agreement is
enforceable.




     8. We do not express any opinion as to the enforceability of any provisions contained in the
Credit Agreement relating to evidentiary standards or other standards by which the Credit Agreement
are to be construed.



     This opinion letter is delivered solely for your benefit in connection with the Credit
Agreement and, except for any Additional Bank or any Assignee which becomes a Bank pursuant to
Section 2.16 or 9.06(c) of the Credit Agreement, may not be used or relied upon by any other Person
or for any other purpose without our prior written consent in each instance. Our opinions
expressed herein are as of the date hereof, and we undertake no obligation to advise you of any
changes of applicable law or any other matters that may come to our attention after the date hereof
that may affect our opinions expressed herein.



Very truly yours,









B-2-4 









 








EXHIBIT C




OPINION OF

DAVIS POLK & WARDWELL, SPECIAL COUNSEL

FOR THE AGENTS




[Effective Date]




To the Banks and the Administrative Agent

  Referred to Below




c/o Branch Banking and Trust Company

  as Administrative Agent




200 West 2nd Street, 16th Floor

Winston-Salem, NC 27101

Attn: Loan Syndications




Dear Sirs:




     We have participated in the preparation of the Credit Agreement (the “Credit Agreement”) dated
as of April 7, 2010, among Duke Energy Corporation, a Delaware corporation and Duke Energy
Carolinas, LLC, a North Carolina limited liability company (the “Borrowers”, each individually, a
“Borrower”), the banks listed on the signature pages thereof (the “Banks”), Branch Banking and
Trust Company, as Administrative Agent (the “Administrative Agent”), and the other Agents party
thereto, and have acted as special counsel for the Agents for the purpose of rendering this opinion
pursuant to Section 3.01(c) of the Credit Agreement. Terms defined in the Credit Agreement are
used herein as therein defined.



     We have examined originals or copies, certified or otherwise identified to our satisfaction,
of such documents, corporate records, certificates of public officials and other instruments and
have conducted such other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.



     In rendering the opinion contained herein, we have assumed, among other things, that the
Credit Agreement and any Notes to be executed (i) are within each Borrower’s corporate powers, (ii)
have been duly authorized by all necessary corporate action, (iii) have been duly executed and
delivered, (iv) require no action by or in respect of, or filing with, any governmental body,
agency of



C-1 









 




official and (v) do not contravene, or constitute a default under, any provision of applicable
law or regulation or of either Borrower’s certificate of incorporation or by-laws or any agreement,
judgment, injunction, order, decree or other instrument binding upon either Borrower or result in
the creation or imposition of any Lien on any asset of either Borrower.




     Upon the basis of the foregoing, we are of the opinion that the Credit Agreement constitutes a
valid and binding agreement of each Borrower and the Notes, if and when issued by a Borrower,
constitute valid and binding obligations of such Borrower enforceable in accordance with their
respective terms, except as the same may be limited by bankruptcy, insolvency or similar laws
affecting creditors’ rights generally and by general principles of equity.



     In giving the foregoing opinion, we express no opinion as to the effect (if any) of any law of
any jurisdiction (except the State of New York) in which any Bank is located which limits the rate
of interest that such Bank may charge or collect.



     This opinion is rendered solely to you in connection with the above matter. This opinion may
not be relied upon by you for any other purpose or relied upon by or furnished to any other person,
firm or corporation without our prior written consent, except for Additional Banks and all
Participants.



Very truly yours,









C-2 









 









EXHIBIT D




ASSIGNMENT AND ASSUMPTION AGREEMENT




     AGREEMENT dated as of                     , 20___among [ASSIGNOR] (the “Assignor”), [ASSIGNEE] (the
“Assignee”), [DUKE ENERGY CORPORATION] and BRANCH BANKING AND TRUST COMPANY, as Administrative
Agent (the “Administrative Agent”).



W I
T N E S S E T H




     WHEREAS, this Assignment and Assumption Agreement (the “Agreement”) relates to the Credit
Agreement dated as of April 7, 2010, among Duke Energy Corporation and Duke Energy Carolinas, LLC
(the “Borrowers”, each individually, a “Borrower”), the Assignor and the other Banks party thereto,
as Banks, the Administrative Agent and the other Agents party thereto (the “Credit Agreement”);



     WHEREAS, as provided under the Credit Agreement, the Assignor has a Commitment to make Loans
to the Borrowers in an aggregate principal amount at any time outstanding not to exceed
$                    ;1



     WHEREAS, Loans made to the Borrowers by the Assignor under the Credit Agreement in the
aggregate principal amount of $                     are outstanding at the date hereof; and



     WHEREAS, the Assignor proposes to assign to the Assignee all of the rights of the Assignor
under the Credit Agreement in respect of a portion of its Commitment thereunder in an amount equal
to $                     (the “Assigned Amount”), together with a corresponding portion of its outstanding
Loans and the Assignee proposes to accept assignment of such rights and assume the corresponding
obligations from the Assignor on such terms;*



     NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein,
the parties hereto agree as follows:



     Section 1. Definitions. All capitalized terms not otherwise defined herein shall
have the respective meanings set forth in the Credit Agreement.





 




			
	1	 	The asterisked provisions shall be
appropriately revised in the event of an assignment after the Maturity Date.




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     Section 2. Assignment. The Assignor hereby assigns and sells to the Assignee all of
the rights of the Assignor under the Credit Agreement to the extent of the Assigned Amount, and the
Assignee hereby accepts such assignment from the Assignor and assumes all of the obligations of the
Assignor under the Credit Agreement to the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the principal amount of the Loans made by, the
Assignor outstanding at the date hereof. Upon the execution and delivery hereof by the Assignor,
the Assignee [, Duke Energy Corporation] and the Administrative Agent, the payment of the amounts
specified in Section 3 required to be paid on the date hereof (i) the Assignee shall, as of the
date hereof, succeed to the rights and be obligated to perform the obligations of a Bank under the
Credit Agreement with a Commitment in an amount equal to the Assigned Amount and (ii) the
Commitment of the Assignor shall, as of the date hereof, be reduced by a like amount and the
Assignor released from its obligations under the Credit Agreement to the extent such obligations
have been assumed by the Assignee. The assignment provided for herein shall be without recourse to
the Assignor.



     Section 3. Payments. As consideration for the assignment and sale contemplated in
Section 2 hereof, the Assignee shall pay to the Assignor on the date hereof in Federal funds the
amount heretofore agreed between them.2 It is understood that unused commitment fees
accrued to the date hereof in respect of the Assigned Amount are for the account of the Assignor
and such fees accruing from and including the date hereof are for the account of the Assignee.
Each of the Assignor and the Assignee hereby agrees that if it receives any amount under the Credit
Agreement which is for the account of the other party hereto, it shall receive the same for the
account of such other party to the extent of such other party’s interest therein and shall promptly
pay the same to such other party.



     Section 4. Consent to Assignment. This Agreement is conditioned upon the consent of
[Duke Energy Corporation] and the Administrative Agent pursuant to Section 9.06(c) of the Credit
Agreement. The execution of this Agreement by [Duke Energy Corporation] and the Administrative
Agent is evidence of this consent. Pursuant to Section 9.06(c) each Borrower agrees to execute and
deliver a Note, if required by the Assignee, payable to the order of the Assignee to evidence the
assignment and assumption provided for herein.



     Section 5. Non-reliance on Assignor. The Assignor makes no representation or
warranty in connection with, and shall have no responsibility





 




			
	2	 	Amount should combine principal together with
accrued interest and breakage compensation, if any, to be paid by the Assignee.
It may be preferable in an appropriate case to specify these amounts
generically or by formula rather than as a fixed sum.




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with respect to, the solvency, financial condition, or statements of either Borrower, or the
validity and enforceability of the obligations of either Borrower in respect of the Credit
Agreement or any Note. The Assignee acknowledges that it has, independently and without reliance
on the Assignor, and based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement and will continue to be responsible
for making its own independent appraisal of the business, affairs and financial condition of each
Borrower.




     Section 6. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.



     Section 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.



     Section 8. Administrative Questionnaire. Attached is an Administrative
Questionnaire duly completed by the Assignee.



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     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by
their duly authorized officers as of the date first above written.



	 	 	 	 	 
	 	[ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 
	 	[ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 
	 	[DUKE ENERGY CORPORATION]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 
	 	BRANCH BANKING AND TRUST
COMPANY, as

Administrative Agent

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 




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