Document:

exv4w1

Exhibit 4.1

Execution Copy

 

 

DUKE ENERGY CAROLINAS, LLC

TO

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

Trustee

NINETY-FIRST SUPPLEMENTAL INDENTURE

Dated as of June 7, 2010

 

CREATING A SERIES OF FIRST AND REFUNDING

MORTGAGE BONDS

$450,000,000 FIRST AND REFUNDING MORTGAGE BONDS, 4.30% SERIES DUE 2020

 

SUPPLEMENTAL TO

FIRST AND REFUNDING MORTGAGE

DATED AS OF DECEMBER 1, 1927

 

 

Drawn By and Return To Robinson, Bradshaw & Hinson, P.A.

101 N. Tryon Street, Suite 1900, Charlotte, NC 28246

 

 

     SUPPLEMENTAL INDENTURE, bearing date as of the 7th day of June, 2010, made and entered into by
and between Duke Energy Carolinas, LLC, a limited liability company duly organized and existing
under the laws of the State of North Carolina, hereinafter called the “Company”, party of the first
part, and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York
Trust Company, N.A.), a national banking association, having a corporate trust office at 900
Ashwood Parkway, Suite 425, Atlanta, Georgia 30338, hereinafter called the “Trustee”, as Trustee,
party of the second part. The Trustee is the successor to JPMorgan Chase Bank, N.A. (formerly known
as The Chase Manhattan Bank, formerly known as Chemical Bank (successor to Morgan Guaranty Trust
Company of New York)), as Trustee.

     WHEREAS the Company’s predecessor is Duke Energy Corporation (formerly known as Duke Power
Company), a corporation organized under the laws of the State of North Carolina, which converted
its form of organization on April 3, 2006 from a North Carolina corporation to a North Carolina
limited liability company named “Duke Power Company LLC,” which changed its name to Duke Energy
Carolinas, LLC on October 1, 2006; and

     WHEREAS Duke Power Company, a New Jersey corporation, hereinafter called the “New Jersey
Company”, duly executed and delivered its First and Refunding Mortgage, dated as of December 1,
1927, to Guaranty Trust Company of New York, as Trustee, to secure its First and Refunding Mortgage
Gold Bonds, to be issued from time to time in series as provided in said Mortgage, and has from
time to time duly executed and delivered supplemental indentures, including supplemental indentures
dated as of September 1, 1947 and February 1, 1949, to Guaranty Trust Company of New York (the
corporate name of which has been changed to Morgan Guaranty Trust Company of New York), as Trustee,
and a supplemental indenture dated as of February 1, 1960 to Morgan Guaranty Trust Company of New
York, as Trustee, supplementing and modifying said Mortgage (said Mortgage, as so supplemented and
modified by the supplemental indentures dated as of September 1, 1947, February 1, 1949 and
February 1, 1960, being hereinafter referred to as the “original indenture”); and

WHEREAS bonds of a series known as the “First and Refunding Mortgage Bonds, 2.65% Series Due 1977”
(herein called “bonds of the 2.65% Series”), bonds of a series known as the “First and Refunding
Mortgage Bonds, 2 7/8% Series Due 1979” (herein called “bonds of the 1979 Series”), bonds of a
series known as the “First and Refunding Mortgage Bonds, 6 3/8% Series Due 1998” (herein called
“bonds of the 1998 Series”), bonds of a series known as the “First and Refunding Mortgage Bonds,
Pollution Control Facilities Revenue Refunding Series Due 2014” (herein called “bonds of the 1990
Pollution Control Series”), bonds of a series known as the “First and Refunding Mortgage Bonds,
City of Greensboro Series Due 2027” (herein called “bonds of the 2027 City of Greensboro Series”),
bonds of a series known as the “First and Refunding Mortgage Bonds, Medium-Term Notes Series”
(herein called “bonds of the Medium-Term Notes Series”), bonds of a series known as the “First and
Refunding Mortgage Bonds, 6 5/8% Series B Due 2003” (herein called “bonds of the 2003 Series B”),
bonds of a series known as the “First and Refunding Mortgage Bonds, 6 3/8% Series Due 2008” (herein
called “bonds of the 2008 Series”), bonds of a series known as the “First and Refunding Mortgage
Bonds, 5 7/8% Series C Due 2003” (herein called “bonds of the 2003 Series C”), bonds of a series
known as the

 

 

“First and Refunding Mortgage Bonds, Pollution Control Facilities Revenue Refunding Series Due
2014” (herein called “bonds of the 1993 Pollution Control Series”), bonds of a series known as the
“First and Refunding Mortgage Bonds, 6 1/4% Series B 2004” (herein called “bonds of the 2004 Series
B”), bonds of a series known as the “First and Refunding Mortgage Bonds, 7% Series Due 2033”
(herein called “bonds of the 2033 Series”), bonds of a series known as the “First and Refunding
Mortgage Bonds, 6 7/8% Series B Due 2023” (herein called “bonds of the 2023 Series B”), bonds of a
series known as the “First and Refunding Mortgage Bonds, 6 3/4% Series Due 2025” (herein called
“bonds of the 2025 Series”), bonds of a series known as the “First and Refunding Mortgage Bonds, 7
7/8% Series Due 2024” (herein called “bonds of the 2024 Series”), bonds of a series known as the
“First and Refunding Mortgage Bonds, 7 1/2% Series B Due 2025” (herein called “bonds of the 2025
Series B”), bonds of a series known as the “First and Refunding Mortgage Bonds, 7 1/2% Series Due
1999” (herein called “bonds of the 1999 Series”), bonds of a series known as the “First and
Refunding Mortgage Bonds, 7% Series Due 2000” (herein called “bonds of the 2000 Series”), bonds of
a series known as the “First and Refunding Mortgage Bonds, 7% Series B Due 2000” (herein called
“bonds of the 2000 Series B”), bonds of a series known as the “First and Refunding Mortgage Bonds,
6.625% Series Due 2003” (herein called “bonds of the 2003 Series”), bonds of a series known as the
“First and Refunding Mortgage Bonds, 9 5/8% Series Due 2020” (herein called “bonds of the 9 5/8%
Series due 2020”), bonds of a series known as the “First and Refunding Mortgage Bonds, 8 3/4%
Series Due 2021” (herein called “bonds of the 2021 Series”), bonds of a series known as “First and
Refunding Mortgage Bonds, 7% Series Due 2005” (herein called “bonds of the 2005 Series”), bonds of
a series known as “First and Refunding Mortgage Bonds, 3.75% Series A Due 2008” (herein called
“bonds of the 3.75% Series A”), bonds of series known as “First and Refunding Mortgage Bonds, 3.75%
Series B Due 2008” (herein called “bonds of the 3.75% Series B,” and together with the bonds of the
3.75% Series A, the “bonds of the 3.75% Series”), bonds of a series known as “First and Refunding
Mortgage Bonds, 7 3/8% Series Due 2023” (herein called “bonds of the 7 3/8% Series”), bonds of a
series known as “First and Refunding Mortgage Bonds, 4 1/2% Series Due 2010” (herein called “bonds
of the 4 1/2% Series”), bonds of a series known as “First and Refunding Mortgage Bonds, 5.30%
Series Due 2015” (herein called “bonds of the 5.30% Series”), bonds of a series known as “First and
Refunding Mortgage Bonds, 5.25% Series Due 2018” (herein called “bonds of the 5.25% Series”), bonds
of a series known as “First and Refunding Mortgage Bonds, 6.00% Series Due 2038” (herein called
“bonds of the 6.00% Series”), bonds of a series known as “First and Refunding Mortgage Bonds, 2007A
Pledge Series Due 2040” (herein called “bonds of the 2007A Pledge Series”), bonds of a series known
as “First and Refunding Mortgage Bonds, 2007B Pledge Series Due 2040” (herein called “bonds of the
2007B Pledge Series”), bonds of a series known as “First and Refunding Mortgage Bonds, 5.10% Series
B Due 2018” (herein called “bonds of the 5.10% Series”), bonds of a series known as “First and
Refunding Mortgage Bonds, 6.05% Series B Due 2038” (herein called “bonds of the 6.05% Series”),
bonds of a series known as “First and Refunding Mortgage Bonds, 5.75% Series C Due 2013 (herein
called “bonds of the 2013 Series C”), bonds of a series known as “First and Refunding Mortgage
Bonds, 7.00% Series C Due 2018 (herein called “bonds of the 2018 Series C”), bonds of a series
known as “First and Refunding Mortgage Bonds, Pollution Control Facilities Revenue Refunding Series
Due 2017” (herein called “bonds of the 2009 Pollution Control Series”), bonds of a series known as
“First and Refunding Mortgage Bonds, 5.30% Series Due 2040” (herein called “bonds of the 2040
Series”), and such other bonds that have been issued have heretofore been issued and (except for
bonds of the 2.65% Series, bonds

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of the 1979 Series, bonds of the 1998 Series, bonds of the 1990 Pollution Control Series, bonds of
the Medium Term Notes Series, bonds of the 2003 Series B, bonds of the 2008 Series, bonds of the
2003 Series C, bonds of the 1993 Pollution Control Series, bonds of the 2004 Series B, bonds of the
2033 Series, bonds of the 2023 Series B, bonds of the 2025 Series, bonds of the 2024 Series, bonds
of the 2025 Series B, bonds of the 1999 Series, bonds of the 2000 Series, bonds of the 2000 Series
B, bonds of the 2003 Series, bonds of the 9 5/8% Series due 2020, bonds of the 2021 Series, bonds
of the 2005 Series, bonds of the 3.75% Series, bonds of the 7 3/8% Series, bonds of the 2007A
Pledge Series, bonds of the 2007B Pledge Series, bonds of the 4 1/2% Series and other such bonds
which have been redeemed or retired in their entirety) are the only bonds now outstanding under the
original indenture as heretofore supplemented; and

     WHEREAS the Company has duly executed and delivered a supplemental indenture, dated as of June
15, 1964, to Morgan Guaranty Trust Company of New York, as Trustee, for the purpose of evidencing
the succession by merger of the Company to the New Jersey Company and the assumption by the Company
of the covenants and conditions of the New Jersey Company in the original indenture and to enable
the Company to have and exercise the powers and rights of the New Jersey Company under the original
indenture in accordance with the terms thereof and whereby the Company assumed and agreed to pay
duly and punctually the principal of and interest on the bonds issued under the original indenture
in accordance with the provisions of said bonds and the coupons thereto appertaining and the
original indenture, and agreed to perform and fulfill all the terms, covenants and conditions of
the original indenture binding upon the New Jersey Company, and

     WHEREAS Morgan Guaranty Trust Company of New York resigned as Trustee under the original
indenture as heretofore supplemented and Chemical Bank was appointed successor Trustee, said
resignation and appointment having taken effect on August 30, 1994 pursuant to an Instrument of
Resignation, Appointment and Acceptance dated as of August 30, 1994 among the Company, Morgan
Guaranty Trust Company of New York, as Trustee, and Chemical Bank (now known as JPMorgan Chase
Bank, N.A.), as successor Trustee; and

     WHEREAS JPMorgan Chase Bank, N.A. resigned as Trustee and The Bank of New York Mellon Trust
Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.) was appointed successor
Trustee, said resignation and appointment having taken effect on September 24, 2007 pursuant to an
Instrument of Resignation, Appointment and Acceptance dated as of September 24, 2007 among the
Company, JPMorgan Chase Bank, N.A., as Trustee, and The Bank of New York Mellon Trust Company,
N.A., as successor Trustee; and

     WHEREAS the Company desires to create under the original indenture, as heretofore supplemented
and as to be supplemented by this supplemental indenture, a new series of bonds, to be known as its
“First and Refunding Mortgage Bonds, 4.30% Series due 2020”, and to determine the terms and
provisions and the form of the bonds of such series; and

     WHEREAS for the purposes hereinabove recited, and pursuant to due limited liability company
action, the Company has duly determined to execute and deliver to the Trustee a supplemental
indenture in the form hereof supplementing the original indenture (the original

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indenture, as previously supplemented by supplemental indentures and as hereby supplemented,
being sometimes hereinafter referred to as the “Indenture”); and

     WHEREAS all conditions and requirements necessary to make this supplemental indenture a valid,
legal and binding instrument in accordance with its terms have been done and performed, and the
execution and delivery hereof have been in all respects duly authorized:

     NOW, THEREFORE, THIS INDENTURE WITNESSETH:

     That in consideration of the premises and of the sum of one dollar duly paid by the Company to
the Trustee at or before the execution and delivery of these presents, the receipt whereof is
hereby acknowledged, the Company hereby covenants and agrees with the Trustee and its successors in
the trust under the Indenture as follows:

PART ONE.

BONDS OF THE 2020 SERIES

     SECTION 1. The Company hereby creates a new series of bonds to be issued under and secured by
the Indenture and known as its First and Refunding Mortgage Bonds, 4.30% Series due 2020 (herein
called “bonds of the 2020 Series”) and the Company hereby establishes, determines and fixes the
terms and provisions of the bonds of the 2020 Series as hereinafter in this Part One set forth.

     Each bond of the 2020 Series shall be dated the date of its authentication (except that if any
such bond shall be authenticated on any interest payment date, it shall be dated the following day)
and interest shall be payable on the principal represented thereby commencing December 15, 2010,
from the June 15 or December 15, as the case may be, next preceding the date thereof to which
interest has been paid, unless such date of authentication is prior to December 15, 2010, in which
case interest shall be payable from June 7, 2010; provided, however, that interest
shall be payable on each bond of the 2020 Series authenticated after the record date (as defined in
the next succeeding paragraph of this Section 1) with respect to any interest payment date and
prior to such interest payment date, only from such interest payment date.

     Interest on any bond of the 2020 Series shall be paid to the person who, according to the bond
register of the Company, is the registered holder of such bond of the 2020 Series at the close of
business on the applicable record date, and such interest payments shall be made by check mailed to
such registered holder at his last address shown on such bond register or, at the option of the
Company, by wire transfer at such place and to such account at a banking institution in the United
States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date
of payment by the Person entitled thereto (provided, that if the bonds of the 2020 Series
are represented by Global Securities held by the Depositary, payment may be made pursuant to the
procedures of the Depositary); provided, however, that, if the Company shall
default in the payment of the interest due on any interest payment date on any bond of the 2020
Series, such defaulted interest shall be paid to the registered holder of such bond (or any bond or
bonds of the 2020 Series issued upon transfer, exchange or substitution thereof) on the date of

5

 

subsequent payment of such defaulted interest or, at the election of the Company, to the
person in whose name such bond (or any bond or bonds of the 2020 Series issued upon transfer,
exchange or substitution thereof) is registered on a subsequent record date established by notice
given by mail by or on behalf of the Company to the holders of all bonds of the 2020 Series not
less than ten (10) days preceding such subsequent record date. The term “record date” as used in
this Section 1 shall mean, with respect to any semi-annual interest payment date, the close of
business on the June 1 or December 1, whether or not a business day, next preceding such interest
payment date or, in the case of a payment of defaulted interest, the close of business on any
subsequent record date established as provided above.

     SECTION 2. All bonds of the 2020 Series shall mature as to principal on June 15, 2020 and
shall bear interest at a rate of 4.30% per annum, payable semi-annually on the fifteenth day of
June and December in each year, commencing on the fifteenth day of December, 2010. Interest on the
bonds of the 2020 Series will be computed on the basis of a 360-day year consisting of twelve
30-day months.

     SECTION 3. The bonds of the 2020 Series shall be fully registered bonds, without coupons, in
denominations of two thousand dollars ($2,000) and integral multiples of one thousand dollars
($1,000) in excess thereof, all such bonds to be numbered, and shall be transferable and
exchangeable as provided in the form of bond set forth as Exhibit A to this supplemental indenture.
The provisions of §1.19 and any other provision in the Indenture in respect of coupon bonds or
reservation of coupon bond numbers shall be inapplicable to the bonds of the 2020 Series.

     SECTION 4. The bonds of the 2020 Series may be redeemed at the option of the Company, in whole
or in part at any time and from time to time, at a redemption price equal to the greater of (1)
100% of the principal amount of the bonds of the 2020 Series to be redeemed and (2) the sum of the
present values of the remaining scheduled payments of principal and interest on such bonds of the
2020 Series being redeemed (exclusive of interest accrued to the redemption date) discounted to the
redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate plus 20 basis points, plus, in either case, accrued and unpaid interest on the
principal amount being redeemed to such redemption date. The Company shall notify the Trustee of
the redemption price with respect to any redemption pursuant to this paragraph promptly after the
calculation thereof. The Trustee shall not be responsible for calculating said redemption price.

     The bonds of the 2020 Series are also subject to redemption through the operation of the
Replacement Fund provided in Part Two of this supplemental indenture or through the application of
moneys paid to the Trustee pursuant to the provisions of §5.05 of the Indenture, at any time or
from time to time prior to maturity, upon prior notice as hereinafter provided, at the redemption
prices specified in the fourth paragraph of the reverse side of the form of bond set forth as
Exhibit A to this supplemental indenture, together with interest accrued thereon to the date fixed
for redemption thereof.

     In the event that any redemption date is not a Business Day, the Company shall pay the
redemption price on the next Business Day without any interest or other payment due to the delay.

6

 

     All such redemptions of bonds of the 2020 Series shall be effected as provided in Article 3 of
the Indenture except that, in case a part only of the bonds of the 2020 Series is to be paid and
redeemed, the particular bonds or part thereof shall be selected by the Trustee in such manner as
the Trustee in its uncontrolled discretion shall determine to be fair and in any case where several
bonds are registered in the same name, the Trustee may treat the aggregate principal amount so
registered as if it were represented by one bond and except that when bonds are redeemed in part
only the notice given to any particular holder need state only the principal amount of the bonds of
that holder which is to be redeemed and except that notice to the holders of bonds to be redeemed
shall be given by mailing to such holders a notice of such redemption, first class mail postage
prepaid, not later than the thirtieth day, and not earlier than the sixtieth day, before the date
fixed for redemption, at their last addresses as they shall appear upon the bond register of the
Company. Any notice which is mailed in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the holder receives such notice; and failure duly to give such
notice by mail, or any defect in such notice, to the holder of any bond designated for redemption
as a whole or in part shall not affect the validity of the proceedings for the redemption of any
other bond. No publication of notice of such redemption shall be required.

     SECTION 5. The limit upon the aggregate principal amount of the bonds of the 2020 Series which
may be authenticated and delivered pursuant to this Ninety-First Supplemental Indenture shall be
$450,000,000.

     SECTION 6. The place or places of payment (as to principal and premium, if any, and interest),
redemption, transfer, exchange and registration of the bonds of the 2020 Series shall be the office
or offices or the agency or agencies of the Company in the Borough of Manhattan, The City of New
York, designated from time to time by the Board of Directors of the Company (provided, that
if the bonds of the 2020 Series are represented by Global Securities held by or on behalf of the
Depositary, the procedures of the Depositary may be followed for any action under this Section 6 of
Part One).

     SECTION 7. The form of the bonds of the 2020 Series and the certificate of the Trustee to be
endorsed on such bonds, respectively, shall be in substantially the form set forth in Exhibit A
hereto.

PART TWO.

REPLACEMENT
FUND.

     SECTION 1. So long as any of the bonds of the 2020 Series are outstanding, the Company will
continue to maintain the Replacement Fund set forth in, and in accordance with the applicable terms
and conditions now contained in, Part Two of the supplemental indenture dated as of February 1,
1949, and the covenants on the part of the Company contained in such Part Two shall continue and
remain in full force and effect, whether or not bonds of the 1979 Series are outstanding and to the
same extent as though the words “or any bonds of the 2020 Series” were inserted after the word
“Series” appearing in the second line of Section 1 and the

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second line of Section 4 of said Part Two of said supplemental indenture dated as of February
1, 1949.

     SECTION 2. If at any time (a) any of the bonds of the 2020 Series are outstanding and (b) no
Outstanding Mortgage Bonds (as defined in Section 1 of Part Three of this supplemental indenture)
entitled to the benefit of the Replacement Fund are outstanding and (c) cash which shall have been
deposited with the Trustee pursuant to such Replacement Fund shall not within five years from the
date of deposit thereof have been paid out, or used or set aside by the Trustee for the payment,
purchase or redemption of bonds, pursuant to such Replacement Fund, such cash shall, if in excess
of fifty thousand dollars ($50,000), be applied to the redemption of bonds of the 2020 Series in an
aggregate principal amount sufficient to exhaust as nearly as possible the full amount of such
cash. Anything in Section 5 of Part Two of the aforesaid supplemental indenture dated as of
February 1, 1949, in Section 3 of Part Two of the supplemental indentures dated as of May 1, 1993,
July 1, 1993, August 1, 1993, August 20, 1993, May 1, 1994, February 25, 2003, March 21, 2003 and
September 23, 2003, in Section 3 of Part Three of the supplemental indenture dated as of March 1,
1990 and in Section 5 of Part Four of the supplemental indenture dated as of March 1, 1993 to the
contrary notwithstanding, no cash shall be paid over to the Company thereunder if at the time any
bonds of the 2020 Series are then outstanding, and such cash shall in such event be applied as in
this Part Two set forth.

     SECTION 3. Whenever all of the bonds of the 2020 Series and all of the Outstanding Mortgage
Bonds entitled to the benefit of the Replacement Fund shall have been paid, purchased or redeemed,
the Trustee shall, upon application of the Company, pay to or upon the order of the Company all
cash theretofore deposited with the Trustee pursuant to the provisions of the Replacement Fund and
not previously disposed of pursuant to the provisions of the Replacement Fund, and shall deliver to
the Company any bonds which shall theretofore have been deposited with the Trustee pursuant to the
provisions of the Replacement Fund or paid, purchased or redeemed pursuant to the provisions of the
Replacement Fund.

PART THREE.

ADDITIONAL COVENANTS OF THE COMPANY

     SECTION 1. Whether or not the covenants on the part of the Company contained in Part Three of
the supplemental indenture dated as of February 1, 1949 are modified with the consent of the
holders of bonds of the 2027 City of Greensboro Series, the 5.30% Series, the 5.25% Series, the
6.00% Series, the 5.10% Series, the 6.05% Series, the 2013 Series C, the 2018 Series C, the 2009
Pollution Control Series or the bonds of the 2040 Series (collectively, the “Outstanding Mortgage
Bonds”), such covenants on the part of the Company contained in said Part Three shall continue and
remain in full force and effect so long as any of the bonds of the 2020 Series are outstanding and
to the same extent as though the words “or so long as any bonds of the 2020 Series are outstanding”
were inserted after the words “so long as any of the bonds of the 1979 Series or any bonds of the
2.65% Series are outstanding” wherever such words appear in said Part Three of the supplemental
indenture dated as of February 1, 1949.

8

 

     SECTION 2. Whether or not the second sentence of paragraph (a) of §2.08 of the original
indenture (making certain provisions for the definition of the term “net amount” applicable while
bonds of the 2.65% Series were outstanding and which was originally set forth in Section 4 of
Article One of the supplemental indenture dated as of September 1, 1947 and which is corrected and
clarified by Section 2 of Part Four of the supplemental indenture dated as of February 1, 1968) is
modified with the consent of the holders of any of the Outstanding Mortgage Bonds, said sentence
shall continue and remain in full force and effect so long as any bonds of the 2020 Series are
outstanding, and with the same force and effect as though said sentence had stated that such
provisions were to be applicable so long as any of the bonds of the 2020 Series are outstanding.

PART FOUR.

GLOBAL SECURITIES; TRANSFER AND EXCHANGE

     SECTION 1. The bonds of the 2020 Series shall initially be issued in the form of one or more
Global Securities registered in the name of the Depositary (which initially shall be The Depository
Trust Company) or its nominee. Except under the limited circumstances described below, bonds of the
2020 Series represented by such Global Security or Global Securities shall not be exchangeable for,
and shall not otherwise be issuable as, bonds of the 2020 Series in definitive form. The Global
Securities described in this Part Four may not be transferred except by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or to a successor Depositary or its nominee.

     None of the Company, the Trustee nor any agent of the Company or the Trustee will have any
responsibility or liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of a Global Security or maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.

     A Global Security shall be exchangeable for bonds of the 2020 Series registered in the names
of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Company
that it is unwilling or unable to continue as a Depositary for such Global Security and no
successor Depositary shall have been appointed by the Company within 90 days of receipt by the
Company of such notification, or if at any time the Depositary ceases to be a clearing agency
registered under the Exchange Act at a time when the Depositary is required to be so registered to
act as such Depositary and no successor Depositary shall have been appointed by the Company within
90 days after it becomes aware of such cessation, (ii) an Event of Default has occurred and is
continuing with respect to the 2020 Series or (iii) the Company in its sole discretion, and subject
to the procedures of the Depositary, determines that such Global Security shall be so exchangeable.
Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable
for bonds of the 2020 Series registered in such names as the Depositary shall direct.

     SECTION 2. Depository Legend. Each of the Global Securities shall bear the following
legend (the “Depository Legend”) on the face thereof:

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	 	 	“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.

	 
	 	 	TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.”

     SECTION 3. Transfer and Exchange.

     (a) Every bond of the 2020 Series presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Company and the Trustee duly
executed, by the Holder thereof or his attorney duly authorized in writing.

     (b) No service charge shall be made for any registration of transfer or exchange of bonds of
the 2020 Series, but the Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration or transfer or exchange
of bonds of the 2020 Series.

     SECTION 4. Definitions. The following defined terms used herein shall, unless the
context otherwise requires, have the meanings specified below. Capitalized terms used herein for
which no definition is provided herein shall have the meanings set forth in the Indenture.

     “Business day” means any day other than a day on which banks in New York City are required or
authorized to be closed.

     “Comparable Treasury Issue” means the United States Treasury security or securities selected
by the Quotation Agent as having an actual or interpolated maturity comparable to the remaining
term of the bonds of the 2020 Series to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new issues of corporate
debt securities of a comparable maturity to the remaining term of such bonds of the 2020 Series.

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     “Comparable Treasury Price” means, with respect to any redemption date, (A) the average of the
Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and
lowest such Reference Treasury Dealer Quotations, or (B) if the Quotation Agent obtains fewer than
four such Reference Treasury Dealer Quotations, the average of all such quotations.

     “Depositary” means a clearing agency registered under the Exchange Act that is designated to
act as Depositary for the bonds of the 2020 Series, which Depositary shall initially be The
Depository Trust Company.

     “Depository Legend” means a legend set forth in Section 2 of this Part Four.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Global Security” means a bond of the 2020 Series in global form.

     “Holder” means a Person in whose name a bond of the 2020 Series is registered in the
registration books maintained by the Trustee.

     “Person” means any individual, corporation, partnership, limited liability company or
corporation, joint venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.

     “Quotation Agent” means one of the Reference Treasury Dealers appointed by the Company.

     “Reference Treasury Dealer” means each of Barclays Capital Inc. and J.P. Morgan Securities
Inc., plus three other financial institutions appointed by the Company at the time of any
redemption or their respective affiliates or successors which are primary U.S. Government
securities dealers; provided, however, that if any of the foregoing or their affiliates or
successors shall cease to be a primary U.S. Government securities dealer in the United States (a
“Primary Treasury Dealer”), the Company shall substitute therefor another Primary Treasury Dealer.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Quotation Agent, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third business day preceding such redemption date.

     “Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the
semi-annual equivalent yield to maturity or interpolated (on a day count basis) of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such redemption date.

11

 

PART FIVE.

MISCELLANEOUS.

     SECTION 1.

     (a) For the purposes of §2.10 of the Indenture and for the purposes of any modification of the
provisions of the Replacement Fund referred to in Part Two of this supplemental indenture, the
covenants and provisions on the part of the Company which are set forth or incorporated in Part Two
of this supplemental indenture shall be for the benefit only of the holders of the bonds of the
2020 Series. Such covenants and provisions shall remain in force and be applicable only so long as
any bonds of the 2020 Series shall be outstanding, and, subject to the provisions of paragraph (2)
of subdivision (c) of §10.01 of the Indenture, any such covenants and provisions may be modified
with respect to the bonds of the 2020 Series with the consent, in writing or by vote at a
bondholders’ meeting of the holders of sixty-six and two-thirds per cent (66 2/3%) of the principal
amount of the bonds of the 2020 Series, as the case may be, at the time outstanding and without the
consent of the holders of any other bonds then outstanding under the Indenture; provided
that no such consent shall be effective to waive any past default under such covenants and
provisions, and its consequences, unless the consent of the holders of at least a majority in
principal amount of all bonds then outstanding under the Indenture is obtained. Such covenants
shall be deemed to be additional covenants and none of them shall affect or derogate from, or
relieve the Company from, its obligation to comply with any of the other covenants, conditions,
requirements or provisions of the Indenture or any other supplemental indenture.

     (b) For the purposes of §2.10 of the Indenture and for the purposes of any modification of the
provisions of Part Three of this supplemental indenture, the covenants and provisions on the part
of the Company which are set forth or incorporated in said Part Three shall be for the benefit only
of the holders of the bonds of the 2020 Series. Such covenants and provisions shall remain in force
and be applicable only so long as any bonds of the 2020 Series shall be outstanding, and, subject
to the provisions of paragraph (2) of subdivision (c) of §10.01 of the Indenture, any such
covenants and provisions may be modified with respect to the bonds of the 2020 Series with the
consent, in writing or by vote at a bondholders’ meeting of the holders of sixty-six and two-thirds
per cent (66 2/3 %) of the principal amount of the bonds of the 2020 Series, at the time
outstanding and without the consent of the holders of any other bonds then outstanding under the
Indenture; provided that no such consent shall be effective to waive any past default under
such covenants and provisions, and its consequences, unless the consent of the holders of at least
a majority in principal amount of all bonds then outstanding under the Indenture is obtained. Such
covenants shall be deemed to be additional covenants and none of them shall affect or derogate
from, or relieve the Company from, its obligation to comply with any of the other covenants,
conditions, requirements or provisions of the Indenture or any other supplemental indenture.

     SECTION 2. All terms contained in this supplemental indenture shall, except as specifically
provided herein or except as the context may otherwise require, have the meanings given to such
terms in the Indenture.

12

 

     SECTION 3. In case any one or more of the provisions contained in this supplemental indenture
should be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision contained in this supplemental indenture,
and, to the extent, but only to the extent, that such provision is invalid, illegal or
unenforceable, this supplemental indenture shall be construed as if such provision had never been
contained herein.

     SECTION 4. The Trustee hereby accepts the trusts herein declared and provided upon the terms
and conditions in the Indenture set forth.

     SECTION 5. This supplemental indenture may be executed in several counterparts, each of which
shall be an original, and all collectively but one instrument.

     SECTION 6. In addition to the amendment provisions of the Indenture, the terms and conditions
of this supplemental indenture and the bonds of the 2020 Series may be modified, amended or
supplemented by the Company and the Trustee, without the consent of the holders of the bonds of the
2020 Series, and if not inconsistent with the Indenture, to cure ambiguities in this supplemental
indenture or the bonds of the 2020 Series, or correct defects or inconsistencies in the provisions
of this supplemental indenture or the bonds of the 2020 Series or to provide for such appropriate
additional provisions in this supplemental indenture or the bonds of the 2020 Series as are
necessary for certificated bonds to be issued in lieu of Global Securities or to reflect additional
provisions related to the issuance of Global Securities (including changes in the procedures of the
Depositary).

13

 

     IN WITNESS WHEREOF, Duke Energy Carolinas, LLC, the party of the first part hereto, has caused
this supplemental indenture to be signed in its name by one of its Senior Vice Presidents and its
company seal to be hereunto affixed, and the same to be attested by one of its Assistant
Secretaries, and The Bank of New York Mellon Trust Company, N.A., the party of the second part
hereto, in token of its acceptance of the trust hereby created, has caused this supplemental
indenture to be signed in its name by one of its Vice Presidents and its corporate seal to be
hereunto affixed, and the same to be attested by one of its Senior Associates, all as of the day
and year first above written.

	 	 	 	 	 	 	 
	 

	 	 	 	DUKE ENERGY CAROLINAS, LLC
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Stephen G. De May
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Stephen G. De May
	 

	 	 	 	 	 	Title:   Senior Vice President, Investor Relations

            and Treasurer
	 
	 	 	 	 	 	 
	ATTEST:	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Robert T. Lucas	 	 	 	 
	 	 	 	 	 
	Name:

	 	Robert T. Lucas III	 	 	 	 
	Title:

	 	Assistant Secretary	 	 	 	 
	 
	 	 	 	 	 	 
	Signed, sealed,
executed, acknowledged

and delivered by Duke Energy

Carolinas, LLC, in the presence of:	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Delcia S. Dunlap	 	 	 	 
	 	 	 	 	 
	Delcia S. Dunlap	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Selene Hendricks	 	 	 	 
	 	 	 	 	 
	Selene Hendricks	 	 	 	 

14

 

	 	 	 	 	 	 	 
	 

	 	 	 	The Bank of New York Mellon Trust Company, N.A.,

as Trustee
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Van K. Brown
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Van K. Brown
	 

	 	 	 	 	 	Title:   Vice President
	 
	 	 	 	 	 	 
	ATTEST:	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Lee Ann Willis	 	 	 	 
	 	 	 	 	 
	Name: Lee Ann Willis	 	 	 	 
	Title:   Senior Associate	 	 	 	 
	 
	 	 	 	 	 	 
	Signed, sealed,
executed, acknowledged

and delivered by The Bank of New York

Mellon Trust Company, N.A.,

in the presence of:	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Sabrina Jones	 	 	 	 
	 	 	 	 	 
	Sabrina Jones	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Daya Jayaraj	 	 	 	 
	 	 	 	 	 
	Daya Jayaraj	 	 	 	 

15

 

	 	 	 	 
	State of Georgia

	 	)	 
	 

	 	) ss.:

	County of Dekalb

	 	)	 

Personally appeared before me, Sabrina Jones, and made oath that she saw Van K. Brown, a Vice
President, and Lee Ann Willis, a Senior Associate, respectively, of The Bank of New York Mellon
Trust Company, N.A., sign, attest and affix hereto the corporate seal of said The Bank of New York
Mellon Trust Company, N.A., and, as the act and deed of said corporation, deliver the within
written and foregoing deed, and that she, with Daya Jayaraj, witnessed the execution thereof.

	 	 	 
	 

	 	/s/ Sabrina Jones
	 

	 	 
	 

	 	Sabrina Jones
	 
	 	 
	 

	 	Sworn and subscribed before me

this 7th day of June, 2010.
	 
	 	 
	[Notarial
Seal]

	 	/s/ David Dawes
	 

	 	 
	 

	 	David Dawes

Notary Public

Commission Expires August 22, 2010

	 	 	 	 
	State of Georgia

	 	)	 
	 

	 	) ss.:

	County of Dekalb

	 	)	 

I, David Dawes, a Notary Public in and for the State and County aforesaid, certify that Lee Ann
Willis personally came before me this day and acknowledged that she is a Senior Associate of The
Bank of New York Mellon Trust Company, N.A., a national banking association, and that, by authority
duly given and as the act of the corporation, the foregoing instrument was signed in its name by
one of its Vice Presidents, sealed with its corporate seal, and attested by herself as one of its
Senior Associates.

Witness
may hand and official seal, this 7th day of June, 2010.

	 	 	 
	[Notarial
Seal]

	 	/s/ David Dawes
	 

	 	 
	 

	 	David Dawes

Notary Public

Commission Expires August 22, 2010

16

 

	 	 	 	 
	State of North Carolina

	 	)	 
	 

	 	) ss.:

	County of Mecklenburg

	 	)	 

I, Patricia C. Ross, a notary public of Mecklenburg County, North Carolina, certify that Delcia S.
Dunlap personally appeared before me this day, and being duly sworn, stated that in her presence
Stephen G. De May executed the foregoing instrument, and that she, with Selene Hendricks, witnessed
the execution thereof.

Witness
my hand and official seal, this the 7th day of June, 2010.

	 	 	 
	 

	 	/s/ Delcia S. Dunlap
	 

	 	 
	 

	 	Delcia S. Dunlap
	 
	 	 
	[Notarial
Seal]

	 	/s/ Patricia C. Ross
	 

	 	 
	 

	 	Name: Patricia C. Ross

Notary Public
	 
	 	 
	 

	 	My Commission Expires 10-17-2014

	 	 	 	 
	State of North Carolina

	 	)	 
	 

	 	) ss.:

	County of Mecklenburg

	 	)	 

I, Patricia C. Ross, a Notary Public in and for the State and County aforesaid, certify that Robert
T. Lucas III personally came before me this day and acknowledged that he is an Assistant Secretary
of Duke Energy Carolinas, LLC, a North Carolina limited liability company, and that, by authority
duly given and as the act of the company, the foregoing instrument was signed in its name by one of
its Senior Vice Presidents, sealed with its seal, and attested by himself as one of its Assistant
Secretaries.

Witness
my hand and official seal, this the 7th day of June, 2010.

	 	 	 
	[Notarial
Seal]

	 	/s/ Patricia C. Ross
	 

	 	 
	 

	 	Name: Patricia C. Ross

Notary Public
	 
	 	 
	 

	 	My Commission Expires 10-17-2014

17

 

EXHIBIT A

FORM OF DUKE ENERGY CAROLINAS, LLC

FIRST AND REFUNDING MORTGAGE BOND, 4.30% SERIES DUE 2020

[FACE SIDE OF BOND]

[DEPOSITORY LEGEND, IF APPLICABLE]

DUKE ENERGY CAROLINAS, LLC

FIRST AND REFUNDING MORTGAGE BOND,

4.30% SERIES DUE 2020

	 	 	 	 	 
	No.

	 	 	 	$
	CUSIP No.

	 	26442CAJ3	 	 
	ISIN

	 	US26442CAJ36	 	 

     Duke Energy Carolinas, LLC, a North Carolina limited liability company (hereinafter called the
“Company”), for value received, hereby promises to pay to
____________ or registered assigns,
the principal sum of
____________ Dollars on June 15, 2020 in any coin or currency of the United
States of America which at the time of payment shall be legal tender for the payment of public and
private debts, at the office or agency of the Company in the Borough of Manhattan, The City of New
York, and to pay interest thereon at said office or agency from the interest payment date next
preceding the date hereof to which interest on outstanding bonds of this series has been paid
(unless the date hereof is prior to December 15, 2010, in which case from June 7, 2010, and unless
the date hereof is subsequent to a record date (as defined below) and prior to the next succeeding
June 15 or December 15, in which case from the next succeeding June 15 or December 15, as the case
may be), at the rate of 4.30% per annum, in like coin or currency, semi-annually on June 15 and
December 15 in each year, commencing December 15, 2010, until the principal hereof shall become due
and payable. Such interest payments shall be made to the person in whose name this bond is
registered at the close of business on the June 1 or December 1, whether or not a business day,
preceding each semi-annual interest payment date (a “record date”) (subject to certain exceptions
provided in the Indenture hereinafter mentioned), at his last address as it shall appear upon the
bond register of the Company.

     The provisions of this bond are continued on the reverse hereof and such continued provisions
shall for all purposes have the same effect as though fully set forth in this place.

     This bond shall not become or be valid or obligatory for any purpose until the Trustee shall
have signed the form of certificate endorsed hereon.

A-1

 

     IN WITNESS WHEREOF, the Company has caused this instrument to be signed in its name by its
President or one of its Vice Presidents, manually or by facsimile signature, and its company seal
to be hereto affixed, or a facsimile thereof to be hereon engraved, lithographed or printed, and to
be attested by the manual or facsimile signature of its Secretary or one of its Assistant
Secretaries.

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	DUKE ENERGY CAROLINAS, LLC
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:

Title:
	 
	 	 	 	 	 	 
	ATTEST:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	Name:
	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 

CERTIFICATE OF AUTHENTICATION

     This bond is one of the bonds, of the series designated therein, described in the
within-mentioned Indenture.

	 	 	 	 	 
	 

	 	The Bank of New York Mellon Trust Company, N.A.,

as Trustee
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Signatory

A-2

 

[REVERSE SIDE OF BOND]

     This bond is one of the bonds of a series, designated specially as First and Refunding
Mortgage Bonds, 4.30% Series due 2020, of an authorized issue of bonds of the Company, without
limit as to aggregate principal amount, designated generally as First and Refunding Mortgage Bonds,
all issued and to be issued under and equally and ratably secured by a First and Refunding Mortgage
dated as of December 1, 1927, duly executed by Duke Power Company, a New Jersey corporation
(hereinafter called the “New Jersey Company”), to Guaranty Trust Company of New York, as Trustee
(The Bank of New York Mellon Trust Company, N.A., as successor trustee), as supplemented and
modified by indentures supplemental thereto, including a supplemental indenture dated June 7, 2010
providing for said series (said First and Refunding Mortgage as so supplemented and modified being
hereinafter referred to as the “Indenture”), to which Indenture reference is made for a description
of the property mortgaged, the nature and extent of the security, the rights of the holders of the
bonds in respect thereof, the terms and conditions upon which the bonds are secured and the
restrictions subject to which additional bonds secured thereby may be issued. To the extent
permitted by, and as provided in, the Indenture, modifications or alterations of the Indenture, or
of any indenture supplemental thereto, and of the rights and obligations of the Company and of the
holders of the bonds, may be made with the consent of the Company by the affirmative vote, or with
the written consent, of the holders of not less than 66 2/3% in principal amount of the bonds then
outstanding, and by the affirmative vote, or with the written consent, of the holders of not less
than 66 2/3% in principal amount of the bonds of any series then outstanding and affected by such
modification or alteration, in case one or more but less than all of the series of bonds then
outstanding under the Indenture are so affected, evidenced, in each case, as provided in the
Indenture; provided that any supplemental indenture may be modified in accordance with the
provisions contained therein for its modification; and provided, further, that no such modification
or alteration shall be made which will affect the terms of payment of the principal of, or interest
or premium on, this bond, or the right of any bondholder to institute suit for the enforcement of
any such payment on or after the respective due dates expressed in this bond, or reduce the
percentage required for the taking of any such action. Any such affirmative vote of, or written
consent given by, any holder of this bond is binding upon all subsequent holders hereof as provided
in the Indenture.

     In case an event of default as defined in the Indenture shall occur, the principal of all the
bonds outstanding thereunder may become or be declared due and payable at the time, in the manner
and with the effect provided in the Indenture.

     The bonds of this series may be redeemed at the option of the Company, in whole or in part at
any time and from time to time, at a redemption price equal to the greater of (1) 100% of the
principal amount of the bonds of this series to be redeemed and (2) the sum of the present values
of the remaining scheduled payments of principal and interest on such bonds (exclusive of interest
accrued to the redemption date), discounted to the redemption date on a semiannual basis (assuming
a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 20 basis points, plus,
in either case, accrued and unpaid interest on the principal amount being redeemed to such
redemption date.

	 	 	“Business day” means any day other than a day on which banks in New York City are required
or authorized to be closed.

A-3

 

	 	 	“Comparable Treasury Issue” means the United States Treasury security or securities selected
by the Quotation Agent as having an actual or interpolated maturity comparable to the
remaining term of the bonds of this series to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in pricing new issues
of corporate debt securities of a comparable maturity to the remaining term of such bonds.

	 
	 	 	“Comparable Treasury Price” means, with respect to any redemption date, (A) the average of
the Reference Treasury Dealer Quotations for such redemption date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations, or (B) if the Quotation Agent
obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such
quotations.

	 
	 	 	“Quotation Agent” means one of the Reference Treasury Dealers appointed by the Company.

	 
	 	 	“Reference Treasury Dealer” means each of Barclays Capital Inc. and J.P. Morgan Securities
Inc., plus three other financial institutions appointed by the Company at the time of any
redemption or their respective affiliates or successors which are primary U.S. Government
securities dealers; provided, however, that if any of the foregoing or their affiliates or
successors shall cease to be a primary U.S. Government securities dealer in the United
States (a “Primary Treasury Dealer”), the Company shall substitute therefor another Primary
Treasury Dealer.

	 
	 	 	“Reference Treasury Dealer Quotation” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Quotation Agent, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third business day preceding such redemption
date.

	 
	 	 	“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the
semi-annual equivalent yield to maturity or interpolated (on a day count basis) of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for such
redemption date.

     The bonds of this series are also subject to redemption for the Replacement Fund for bonds of
this series provided for in the supplemental indenture dated as of June 7, 2010, providing for this
series, or upon application of moneys arising from a taking of any of the mortgaged property by
eminent domain or similar action, at any time or from time to time prior to maturity, at 100% of
their principal amount, in each case together with accrued interest up to, but not including, the
date fixed for redemption.

     Redemption is in every case to be effected at the office or agency of the Company in the
Borough of Manhattan, The City of New York, upon at least thirty, but not more than sixty, days’
prior notice, given by mail as more fully provided in the Indenture.

A-4

 

     If this bond or any portion hereof ($2,000 and integral multiples of $1,000 in excess thereof)
is called for redemption and payment is duly provided, this bond or such portion thereof shall
cease to bear interest from and after the date fixed for such redemption.

     This bond is transferable, as provided in the Indenture, by the registered owner hereof in
person or by duly authorized attorney, at the office or agency of the Company in the Borough of
Manhattan, The City of New York, upon surrender and cancellation of this bond, and thereupon a new
bond of the same series and of like aggregate principal amount will be issued to the transferee in
exchange herefor as provided in the Indenture; or the registered owner of this bond, at his option,
may surrender the same for cancellation at said office or agency of the Company and receive in
exchange herefor the same aggregate principal amount of bonds of the same series of authorized
denominations; all subject to the terms of the Indenture but without payment of any charges other
than a sum sufficient to reimburse the Company for any stamp taxes or other governmental charges
incident thereto.

     This bond is a company obligation only and no recourse whatsoever, either directly or through
the Company or any trustee, receiver, assignee or any other person, shall be had for the payment of
the principal of or premium, if any, or interest on this bond, or for the enforcement of any claim
based hereon, or otherwise in respect hereof or of the Indenture, against any promoter, subscriber
to the capital stock, incorporator, or any past, present or future stockholder, member, officer or
director of the Company as such, or of any successor or predecessor corporation or entity, whether
by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any
assessment, penalty, subscription or otherwise, any and all such liability of promoters,
subscribers, incorporators, stockholders, members, officers and directors being waived and released
by each successive holder hereof by the acceptance of this bond, and as a part of the consideration
for the issue hereof, and being likewise waived and released by the terms of the Indenture.

[END OF BOND FORM]

A-5

 

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be
construed as though they were written out in full according to applicable laws or regulations:

	 	 	 
	TEN COM—as tenants in common

	 	UNIF GIFT MIN
ACT-_________ Custodian _________
	 

	 	(Cust)
                       
(Minor)   
	 
	 	 
	TEN ENT —as tenants by the entireties
	 	 
	 
	 	 
	JT TEN—as joint tenants with rights of

	 	under Uniform Gifts to
	survivorship and not as tenants in common

	 	Minors Act ____________
	 

	 	          (State)       

Additional abbreviations may also be used though not on the above list.

FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto (please insert Social
Security or other identifying number of assignee)

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE

the within bond and all rights thereunder, hereby irrevocably constituting and appointing

agent to transfer said bond on the books of the Company, with full power of substitution in the
premises.

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	NOTICE: The signature to this assignment must correspond with
the name as written upon the face of the within instrument in
every particular without alteration or enlargement, or any
change whatever.
	 
	 	 	 	 	 	 
	 

	 	 	 	Signature Guarantee:	 	 
	 

	 	 	 	 	 	 

A-6

 

SIGNATURE GUARANTEE

     Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements
of the Trustee, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Trustee in addition to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.

A-7Exhibit 10.1

Exhibit 10.1

FOURTH AMENDMENT TO CREDIT AGREEMENT

This Fourth Amendment to Credit Agreement (the “Amendment”), dated as of June 1, 2010,
is among UNITED STATES LIME & MINERALS, INC., a Texas corporation (the “Borrower”), the
financial institutions and other lenders listed on the signature pages hereof (such financial
institutions and lenders, together with their respective successors and assigns, are referred to
hereinafter each individually as a “Lender” and collectively as “Lenders”), and
WELLS FARGO BANK, N.A., as administrative agent for the Lenders (the “Administrative
Agent”).

RECITALS:

A. The Borrower, certain of the Lenders and the Administrative Agent entered into that certain
Credit Agreement dated as of August 25, 2004, as amended by First Amendment to Credit Agreement
dated as of August 31, 2005, by Second Amendment to Credit Agreement dated as of October 19, 2005,
and by the Third Amendment to Credit Agreement dated as of March 31, 2007 (said Credit Agreement as
amended, extended, renewed or restated from time to time, the “Agreement”).

B. The Borrower has requested certain amendments to the Agreement to, among other things, (a)
extend the Revolving Maturity Date and (b) modify certain covenants.

C. The Lenders, the Administrative Agent and the Swing Line Lender hereby agree to amend the
Agreement on and subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

ARTICLE I

Definitions

1.1 Definitions. Capitalized terms used in this Amendment, to the extent not
otherwise defined herein, shall have the same meanings as in the Agreement as amended hereby, and
all references to “Sections,” “clauses,” “Articles,” “Exhibits,” and “Schedules” are references to
the Agreement’s sections, clauses, articles, exhibits and schedules.

ARTICLE II

Amendment

2.1 Amendments to Section 1.01. Section 1.01 is amended as follows:

 

FOURTH AMENDMENT TO CREDIT AGREEMENT – Page 1

 

(a) The following definitions are added to Section 1.01 in appropriate alphabetical
order:

“Fourth Amendment” means the Fourth Amendment to Credit Agreement dated as of
June 1, 2010.

“Fourth Amendment Closing Date” means June 1, 2010.

(b) The pricing grid found in the definition of “Applicable Rate” is amended
and restated in its entirety to read as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Revolving	 	 	 	 	 	 	 
	 	 	 	 	 	 	Commitment	 	 	 	 	 	 	 
	 	 	 	 	 	 	Fee and	 	 	 	 	 	 	 
	 	 	 	 	 	 	Multiple	 	 	LIBOR for	 	 	 	 
	Pricing	 	 	 	 	Advance Term	 	 	Loans and	 	 	Base Rate	 
	Level	 	 	Cash Flow Leverage Ratio	 	Commitment Fee	 	 	Letters of Credit	 	 	for Loans	 
	I	 	Less than 1.50 to 1.00
	 	 	0.250	%	 	 	1.750	%	 	 	0.000	%
	II	 	Greater than or equal to 1.50 to
1.00 but less than 2.00 to 1.00
	 	 	0.250	%	 	 	2.000	%	 	 	0.250	%
	III	 	Greater than or equal to 2.00 to
1.00 but less than 2.50 to 1.00
	 	 	0.300	%	 	 	2.250	%	 	 	0.500	%
	IV	 	Greater than or equal to 2.50 to
1.00 but less than 3.00 to 1.00
	 	 	0.300	%	 	 	2.500	%	 	 	0.750	%
	V	 	Greater than or equal to 3.00 to 1.00
	 	 	0.400	%	 	 	2.750	%	 	 	1.000	%

(c) Clause (b) of the definition of “Cash Flow Leverage Ratio” is amended and
restated in its entirety to read as follows:

	 	(b)	 	Consolidated EBITDA plus, in a manner
as mutually agreed-to in writing by the Borrower and the Administrative
Agent, pro-forma EBITDA from any acquired businesses for the period of
four consecutive Fiscal Quarters ending on such date.

(d) The definition of “Excess Cash Flow” is amended by deleting therefrom the
number “5,000,000” and inserting in lieu thereof the number “7,500,000”.

(e) Clause (b) of the definition of “Fixed Charge Coverage Ratio” is amended
and restated in its entirety to read as follows:

	 	(b)	 	the sum of (i) Consolidated Interest Charges
for the period of four Fiscal Quarters ended on such date of
determination, (ii) scheduled principal payments on Consolidated Senior
Funded Indebtedness (including Attributable Indebtedness but excluding
principal payments due and payable on the Revolving Maturity Date or
the Term Maturity Date), and (iii) any dividends during the period of
four Fiscal Quarters following such date of determination.

 

FOURTH AMENDMENT TO CREDIT AGREEMENT – Page 2

 

(f) The definition of “Permitted Acquisitions” is amended and restated in its
entirety to read as follows:

“Permitted Acquisition” means the acquisition of all of the Equity Interests or
(in one transaction or a series of transactions) the assets of another Person that
constitute a business unit, provided (i) there is at least $5,000,000 available under the
Revolving Credit Commitment after giving effect to such Investment, (ii) immediately before
and after giving effect to such proposed acquisition, no Default or Event of Default exists
or would exist after giving effect to such Investment, (iii) if such acquisition results in
a Domestic Subsidiary, (A) such Subsidiary shall execute a Guaranty, a Security Agreement,
and if applicable, Mortgages, together with any related collateral documents reasonably
required by the Administrative Agent, (B) 100% of such Subsidiary’s Equity Interests shall
be pledged to secure the Obligations and (C) the Administrative Agent, on behalf of the
Lenders, shall have received such board resolutions, officer’s certificates, opinions of
counsel and Organization Documents with respect to such Subsidiary as the Administrative
Agent shall reasonably request in connection with the actions described in clauses (A) and
(B) above, and (iv) if such acquisition results in a Foreign Subsidiary, (A) 65% of such
Subsidiary’s Equity Interests shall be pledged to secure the Obligations and (B) the
Administrative Agent, on behalf of the Lenders, shall have received such board resolutions,
officer’s certificates, opinions of counsel and Organization Documents with respect to such
Subsidiary as the Administrative Agent shall reasonably request in connection with the
actions described in clause (A) above.

(g) The definition of “Revolving Maturity Date” is amended by deleting
therefrom the date “April 2, 2012” and inserting in lieu thereof the date “June 1, 2015”.

2.2 Amendment to Section 7.07. Clauses (c) and (d) of Section 7.07 are
amended and restated in their entirety to read as follows:

	 	(c)	 	the Borrower and each Subsidiary may purchase,
redeem or otherwise acquire shares of its common stock or warrants or
options to acquire any such shares so long as pro forma leverage is
less than 3.00 to 1.00 and no Default or Event of Default exists or
would exist after giving effect to such stock repurchase; and

	 	(d)	 	the Borrower may declare or pay any dividends
or make any other payment or distribution on account of its capital
stock during any Fiscal Year so long as there is pro forma compliance
with the Fixed Charge Coverage Ratio and no Default or Event of Default
exists or would exist after giving effect to such dividends, payment or
distribution.

2.3 Amendment to Section 7.11. Section 7.11 is deleted in its entirety and is
replaced by the following provision: “Section 7.11 [Reserved]”.

2.4 Amendment to Section 7.14. Clause (b) of Section 7.14 is amended by
deleting the existing table therefrom and substituting therefor the following table:

 

FOURTH AMENDMENT TO CREDIT AGREEMENT – Page 3

 

	 	 	 	 	 
	 	 	Maximum Cash Flow	 
	Fiscal Quarters Ending	 	Leverage Ratio	 
	Fourth Amendment Closing
Date and each Fiscal Quarter and thereafter
	 	 	3.25 to 1.00	 

ARTICLE III

Conditions Precedent

3.1 Conditions. The effectiveness of this Amendment is subject to satisfaction of the
following conditions precedent:

(a) The Administrative Agent shall have received executed counterparts of this
Amendment from each party hereto.

(b) The representations and warranties contained herein and in all other Loan
Documents, as amended hereby, other than those that relate to a specific date and were true
and correct on such date, shall be true and correct as of the date hereof as if made on the
date hereof.

(c) No Default or Event of Default shall have occurred and be continuing.

(d) The Administrative Agent shall have received executed counterparts of a Deed of
Trust from U.S. Lime O & G Partners, LP and each other party thereto, as applicable.

(e) The Administrative Agent shall have received executed counterparts of a Guaranty
Supplement and a Security Agreement Supplement from each Subsidiary of the Borrower that has
not previously executed and delivered the same, together with a certified copy from each
such Subsidiary of resolutions authorizing the execution and delivery such supplements.

(f) The Administrative Agent shall have received a certified resolution of the Board of
Directors of the Borrower authorizing the execution, delivery and performance of this
Amendment.

(g) The Administrative Agent shall have received a certified resolution of the General
Partner of U.S. Lime O & G Partners, LP authorizing the execution, delivery and performance
of the documents required by this Amendment.

(h) The Administrative Agent shall have received the fees provided for in the Fee
Letter.

(i) The Administrative Agent shall have received, in form and substance satisfactory to
the Administrative Agent and its counsel, such other documents, opinions, certificates and
instruments as the Administrative Agent shall reasonably require.

 

FOURTH AMENDMENT TO CREDIT AGREEMENT – Page 4

 

ARTICLE IV

Ratifications, Representations and Warranties

4.1 Ratifications. The terms and provisions set forth in this Amendment shall modify
and supersede all inconsistent terms and provisions set forth in the Agreement and except as
expressly modified and superseded by this Amendment, the terms and provisions of the Agreement are
ratified and confirmed and shall continue in full force and effect. The Borrower, the Lenders and
the Administrative Agent agree that the Agreement as amended hereby shall continue to be legal,
valid, binding and enforceable in accordance with its terms.

4.2 Representations and Warranties. The Borrower hereby represents and warrants to
the Administrative Agent and the Lenders that (i) the execution, delivery and performance of this
Amendment and any and all other Loan Documents executed and/or delivered in connection herewith
have been authorized by all requisite corporate action on the part of the Borrower and will not
violate the articles of incorporation or bylaws of the Borrower, (ii) the representations and
warranties contained in the Agreement, as amended hereby, and any other Loan Document are true and
correct on and as of the date hereof as though made on and as of the date hereof (excluding,
however, representations and warranties that relate to a specific date and were true and correct on
such date), (iii) no Default or Event of Default has occurred and is continuing, and (iv) the
Borrower is in full compliance with all covenants and agreements contained in the Agreement as
amended hereby.

ARTICLE V

Miscellaneous

5.1 Survival of Representations and Warranties. All representations and warranties
made in this Amendment or any other Loan Document including any Loan Document furnished in
connection with this Amendment shall survive the execution and delivery of this Amendment and the
other Loan Documents, and no investigation by the Agent or the Lenders or any closing shall affect
the representations and warranties or the right of the Agent and the Lenders to rely upon them.

5.2 Reference to Agreement. Each of the Loan Documents, including the Agreement and
any and all other agreements, documents, or instruments now or hereafter executed and delivered
pursuant to the terms hereof or pursuant to the terms of the Agreement as amended hereby, are
hereby amended so that any reference in such Loan Documents to the Agreement shall mean a reference
to the Agreement as amended hereby.

5.3 Severability. Any provision of this Amendment held by a court of competent
jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this
Amendment and the effect thereof shall be confined to the provision so held to be invalid or
unenforceable.

5.4 Successors and Assigns. This Amendment is binding upon and shall inure to the
benefit of each Lender, the Administrative Agent and the Borrower and their respective
successors and assigns, except the Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of the Administrative Agent and each
Lender.
 

FOURTH AMENDMENT TO CREDIT AGREEMENT – Page 5

 

5.5 Effect of Waiver. No consent or waiver, express or implied, by the Administrative
Agent or any Bank to or for any breach of or deviation from any covenant, condition or duty by the
Borrower shall be deemed a consent or waiver to or of any other breach of the same or any other
covenant, condition or duty.

5.6 Headings. The headings, captions, and arrangements used in this Amendment are for
convenience only and shall not affect the interpretation of this Amendment.

5.7 Costs, Expenses and Taxes. The Borrower agrees to pay on demand all costs and
expenses of the Administrative Agent in connection with the preparation, reproduction, execution
and delivery of this Amendment and the other instruments and documents to be delivered hereunder
(including the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent
with respect thereto).

5.8 Guarantor’s Acknowledgment. By signing below, each Guarantor (a) acknowledges,
consents and agrees to the execution, delivery and performance by the Borrower of this Amendment,
(b) acknowledges and agrees that its obligations in respect of its Guaranty are not released,
diminished, waived, modified, impaired or affected in any manner by this Amendment or any of the
provisions contemplated herein, (c) ratifies and confirms its obligations under its Guaranty, and
(d) acknowledges and agrees that it has no claims or offsets against, or defenses or counterclaims
to, its Guaranty.

5.9 Execution in Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which when taken together shall
constitute but one and the same instrument. For purposes of this Amendment, a counterpart hereof
(or signature page thereto) signed and transmitted by any Person party hereto to the Administrative
Agent (or its counsel) by facsimile machine, telecopier or electronic mail is to be treated as an
original. The signature of such Person thereon, for purposes hereof, is to be considered as an
original signature, and the counterpart (or signature page thereto) so transmitted is to be
considered to have the same binding effect as an original signature on an original document.

5.10 Governing Law; Binding Effect. This Amendment shall be governed by and construed
in accordance with the laws of the State of Texas applicable to agreements made and to be performed
entirely within such state, provided that each party shall retain all rights arising under federal
law, and shall be binding upon the parties hereto and their respective successors and assigns.

 

FOURTH AMENDMENT TO CREDIT AGREEMENT – Page 6

 

5.11 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS, DOCUMENTS AND
AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
ORAL AGREEMENTS AMONG THE PARTIES HERETO.

[Remainder of Page Intentionally Left Blank. Signature Pages Follow.]

 

FOURTH AMENDMENT TO CREDIT AGREEMENT – Page 7

 

Executed as of the date first written above.

	 	 	 	 	 
	 	BORROWER:

UNITED STATES LIME & MINERALS, INC.

 	 
	 	By:  	 	 
	 	 	M. Michael Owens 	 
	 	 	Vice President and Chief Financial Officer 	 
	 
	 	WELLS FARGO BANK, N.A., as Administrative

Agent and a Lender

 	 
	 	By:  	 	 
	 	 	Thomas P. Floyd 	 
	 	 	Vice President 	 
	 

 

FOURTH AMENDMENT TO CREDIT AGREEMENT – Signature Page

 

ACKNOWLEDGED AND AGREED TO:

	 	 	 	 	 
	 	ARKANSAS LIME COMPANY

 	 
	 	By:  	 	 
	 	 	M. Michael Owens 	 
	 	 	Vice President and Chief Financial Officer 	 
	 
	 	COLORADO LIME COMPANY

 	 
	 	By:  	 	 
	 	 	M. Michael Owens 	 
	 	 	Vice President and Chief Financial Officer 	 
	 
	 	TEXAS LIME COMPANY

 	 
	 	By:  	 	 
	 	 	M. Michael Owens 	 
	 	 	Vice President and Chief Financial Officer 	 
	 
	 	U.S. LIME COMPANY (formerly named

U.S. LIME COMPANY — HOUSTON)

 	 
	 	By:  	 	 
	 	 	M. Michael Owens 	 
	 	 	Vice President and Chief Financial Officer 	 
	 

 

FOURTH AMENDMENT TO CREDIT AGREEMENT – Signature Page

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