Document:

exv10w1

Exhibit 10.1

FOURTH AMENDMENT TO FORBEARANCE AND AMENDMENT AGREEMENT

     THIS FOURTH AMENDMENT TO FORBEARANCE AND AMENDMENT AGREEMENT (the “Amendment”) is made
as of November 13, 2009, by and among THE MERIDIAN RESOURCE CORPORATION, a Texas corporation (the
“Borrower”), the undersigned Guarantors (the “Guarantors”), the several banks,
financial institutions and other entities from time to time parties to the Credit Agreement (as
defined below) (collectively, the “Lenders”), and FORTIS CAPITAL CORP. (“Fortis” or
the “Administrative Agent”), as administrative agent for the Lenders.

R E C I T A L S:

     WHEREAS, the Borrower, Fortis as Administrative Agent, and the Lenders have entered into an
Amended and Restated Credit Agreement dated as of December 23, 2004, as amended by that certain
First Amendment to Credit Agreement dated as of February 25, 2008, further amended by that certain
Second Amendment to Credit Agreement dated as of December 19, 2008, and further amended by the
Forbearance Agreement (defined below) (as so amended, the “Credit Agreement”);

     WHEREAS, the Borrower, the Guarantors, Fortis, as Administrative Agent, and the Lenders have
entered into that certain Forbearance and Amendment Agreement dated as of September 3, 2009 (as
amended, the “Forbearance Agreement”);

     WHEREAS, the Borrower has requested that the Administrative Agent and Lenders extend the time
for performance by the Borrower of certain conditions subsequent required under the Forbearance
Agreement and the Administrative Agent and Lenders have agreed to do so under the terms and
conditions set forth in this Amendment.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound, each of the Administrative Agent, the
Lenders, the Borrower and the Guarantors agree as follows:

     1. Definitions. Capitalized terms defined in the Recitals section of this Amendment
are incorporated herein by this reference and are used herein as so defined. Capitalized terms
used and not defined in this Amendment (including in the Recitals section of this Amendment) shall
have the meanings assigned to such terms in the Forbearance Agreement and the Credit Agreement.

     2. Amendments to the Forbearance Agreement. The Borrower, the Guarantors, the
Administrative Agent and the Lenders agree that the Forbearance Agreement will be amended as
follows:

     (a) Conditions Subsequent. Section 10(a) of the Forbearance Agreement
is amended to replace the date “November 15, 2009” contained therein with the date “November
23, 2009.”

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     (b) Conditions Subsequent. Section 10(b) of the Forbearance Agreement
is amended to replace the date “November 15, 2009” contained therein with the date “November
23, 2009.”

     3. Conditions to Amendments. The amendments contained in Section 2 hereof are
subject to the conditions set forth below. Failure to comply with these conditions will be deemed
to be a Forbearance Default under Section 11 of the Forbearance Agreement.

     (a) Immediately upon receipt thereof, the Borrower shall provide to the Administrative
Agent and the Lenders copies of all information provided by any third party acceptable to
the Lenders (an “Offering Party”) that proposes to enter into a Borrower Merger
Agreement, a Capital Infusion Agreement or a Purchase and Sale Agreement with the Borrower
(a “Proposed Transaction”) that is submitted to the Borrower to demonstrate to the
Borrower’s satisfaction such Offering Party’s ability to consummate a Proposed Transaction;

     (b) Immediately upon receipt thereof, the Borrower shall provide to the Administrative
Agent and the Lenders copies of any term sheet or other documents provided by any Offering
Party, which term sheet or other documents shall be subject to the approval of the
Administrative Agent and the Lenders, that contain preliminary terms and conditions
surrounding such Offering Party’s ability to raise equity and/or obtain financing in order
to consummate such Proposed Transaction and to accomplish a restructuring/refinancing of the
Credit Agreement.

     (c) On or before November 23, 2009, an Offering Party shall have presented to the
Administrative Agent and the Lenders a detailed restructuring/refinancing plan, subject to
the approval of the Administrative Agent and the Lenders, whereby the Proposed Transaction
contemplated by the Offering Party will result in the restructuring or refinancing of all of
the Borrower’s Obligations under the Credit Agreement, subject only to the closing of such
transaction. Such plan shall contain detailed information surrounding the Offering Party’s
ability to raise equity and/or obtain financing in order to consummate such Proposed
Transaction and detailed information surrounding the Borrower’s and the Offering Party’s
timetable and agenda for consummating such Proposed Transaction and for
restructuring/refinancing the Credit Agreement.

     (d) The Borrower shall have received a proposal from an Offering Party to enter into an
agreement for a Proposed Transaction by November 23, 2009 and such proposal shall not have
been withdrawn or terminated by such Offering Party.

     4. Limited Waiver Extension. The Administrative Agent agrees that the date “November
20, 2009” contained in Sections B(i) and B(ii) of that certain Limited Waiver, dated as of November
2, 2009, between the Borrower and the Administrative Agent is hereby replaced with the date
“November 23, 2009.”

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     5. Ratifications, Representations and Warranties.

     (a) Ratification of Loan Documents and Liens. Except as expressly modified and
superseded by this Amendment, the terms and provisions of the Loan Documents are ratified
and confirmed and shall continue in full force and effect. Each Credit Party, the
Administrative Agent and Lenders agree that the Loan Documents shall continue to be legal,
valid, binding and enforceable in accordance with their respective terms. Each Credit Party
further expressly acknowledges and agrees that the Lenders have a valid, non-avoidable,
enforceable and perfected security interest in and lien against each item of collateral
described in the Security Documents, and that such security interest and lien secures the
payment Obligations and the performance of all other obligations of the Borrower under the
Loan Documents.

     (b) General Representations and Warranties. Each Credit Party hereby jointly
and severally represents and warrants to the Administrative Agent and Lenders that (i) the
execution, delivery and performance of this Amendment has been duly authorized by all
requisite organizational action on the part of such Credit Party and will not violate the
constituent organizational documents of such Credit Party, contravene any contractual
restriction, any law, rule or regulation or court or administrative decree or order binding
on or affecting such Credit Party or result in, or require the creation or imposition of any
lien, security interest or encumbrance on any of the properties of such Credit Party; (ii)
this Amendment has been duly executed and delivered by each Credit Party and is the legal,
valid and binding obligation of each Credit Party, enforceable in accordance with its terms;
(iii) subject to the existence of the Designated Events of Default, the representations and
warranties contained in the Credit Agreement and any Loan Document are true and correct on
and as of the date hereof and on and as of the date of execution hereof as though made on
and as of each such date; (iv) except for the Designated Events of Default, no Default or
Event of Default under the Credit Agreement has occurred and is continuing; (v) except for
the Designated Events of Default, such Credit Party is in full compliance with all covenants
and agreements contained in the Loan Documents; and (vi) absent the effectiveness of this
Amendment, the Administrative Agent and Lenders are entitled to exercise immediately their
respective rights and remedies under the Loan Documents, including, but not limited to, the
right to accelerate the maturity of the Obligations and enforce their rights and remedies
under the Security Documents.

     (c) Ratification of Guarantees. Each of the Guarantors hereby acknowledges and
consents to all of the terms and conditions of this Amendment and hereby ratifies and
confirms its respective guarantee under the Guarantee dated as of December 23, 2004 (the
“Guarantee”) for the benefit of the Administrative Agent and Lenders. Each
Guarantor hereby represents and acknowledges that the execution and delivery of this
Amendment shall in no way change or modify its obligations as a guarantor under the
Guarantee and shall not constitute a waiver by either the Administrative Agent or Lenders of
any of either the Administrative Agent’s or Lenders’ rights against such Guarantor.

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     6. Conditions Precedent. This Amendment shall become effective (the “Effective
Date”) upon receipt by the Administrative Agent of a copy of this Amendment executed by the
Required Lenders.

     7. Miscellaneous Provisions.

     (a) Survival of Representations and Warranties. All representations and
warranties made in any Loan Document shall survive the execution and delivery of this
Amendment, and no investigation by the Administrative Agent or Lenders or any closing shall
affect the representations and warranties or the right of the Administrative Agent or
Lenders to rely upon them.

     (b) Limitation on Relationship between Parties. The relationship of the
Administrative Agent and Lenders, on the one hand, and the Credit Parties, on the other
hand, has been and shall continue to be, at all times, that of creditor and debtor. Nothing
contained in this Amendment, any instrument, document or agreement delivered in connection
therewith or in the Loan Documents shall be deemed or construed to create a fiduciary
relationship between the parties.

     (c) Expenses of the Administrative Agent or Lenders. The Borrower agrees to
pay on demand all reasonable costs and out-of-pocket expenses incurred by the Administrative
Agent and Lenders in connection with the preparation, negotiation, execution and enforcement
of this Amendment and any and all amendments, modifications, and supplements thereto,
including, without limitation, the reasonable costs and fees of the Administrative Agent’s
and Lenders’ legal counsel, and all costs and expenses incurred by the Administrative Agent
and Lenders in connection with the enforcement or preservation of any rights under any Loan
Document.

     (d) 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.

     (e) Successors and Assigns; Third Party Beneficiaries. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns, except that no Credit Party may assign or transfer any of its rights or
obligations under this Amendment without the prior written consent of the Administrative
Agent, and no other Person shall have any right, benefit or interest under or because of the
existence of this Amendment.

     (f) Amendments; Interpretation. No amendment or modification of any provision
of this Amendment shall be effective without the written agreement of each Credit Party and
the Required Lenders, and no waiver of any provision of this Amendment or consent to any
departure by any Credit Party therefrom, shall in any event be effective without the written
concurrence of the Required Lenders. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.

4th Amendment to Forbearance Agreement [Meridian] 

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     (g) Counterparts. This Amendment may be executed by one or more of the parties
hereto in any number of separate counterparts, each of which when so executed shall be
deemed to be an original, but all of which when taken together shall constitute one and the
same instrument, and all signature pages transmitted by electronic transmission shall be
considered as original executed counterparts. Each party to this Amendment agrees that it
will be bound by its own facsimile or electronic signature and that it accepts the facsimile
or electronic signatures of each other party.

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

     (i) Further Assurances. Each Credit Party agrees to execute such other and
further documents and instruments as the Administrative Agent may request to implement the
provisions of this Amendment and to perfect and protect the liens and security interests
created by the Credit Agreement and the other Loan Documents.

     (j) Applicable Law. THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

     (k) Release. EACH CREDIT PARTY HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
RECOUPMENT, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL, OR ANY PART OF ITS LIABILITY TO
REPAY THE ANY OBLIGATIONS ARISING UNDER THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM THE ADMINISTRATIVE AGENT OR
LENDERS (OR ANY OF THEM). EACH CREDIT PARTY HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND
FOREVER DISCHARGES THE ADMINISTRATIVE AGENT AND LENDERS, THEIR RESPECTIVE PREDECESSORS,
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, ACCOUNTANTS, CONSULTANTS,
REPRESENTATIVES, OWNERS, AFFILIATES, SUCCESSORS, TRANSFEREES AND ASSIGNS (COLLECTIVELY, THE
“RELEASED PARTIES”), FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION,
DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR
UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN
EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED,
WHICH SUCH CREDIT PARTY MAY NOW OR HEREAFTER HAVE AGAINST ANY RELEASED PARTY, IF ANY, AND
IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR
REGULATIONS, OR OTHERWISE, AND ARISING FROM OR ARISING IN CONNECTION WITH ANY “LOANS”,
INCLUDING,

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WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR
RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY
RIGHTS AND REMEDIES UNDER THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND/OR
NEGOTIATION OF, OR EXECUTION OF, THIS AMENDMENT. IT IS AGREED THAT THE SCOPE OF THIS
RELEASE UNDER THIS PARAGRAPH SHALL INCLUDE ALL CLAIMS, DEMANDS OR CAUSES OF ACTION ARISING
IN WHOLE OR PART FROM THE NEGLIGENCE OR STRICT LIABLITY OF THE ADMINISTRATIVE AGENT,
ANY LENDER OR ANY OTHER RELEASED PARTY. EACH CREDIT PARTY HEREBY COVENANTS AND AGREES
NEVER TO INSTITUTE ANY ACTION OR SUIT AT LAW OR IN EQUITY, NOR INSTITUTE, PROSECUTE, OR IN
ANY WAY AID IN THE INSTITUTION OR PROSECUTION OF, ANY CLAIM, ACTION OR CAUSE OF ACTION,
RIGHTS TO RECOVER DEBTS OR DEMANDS OF ANY NATURE AGAINST ANY OF THE RELEASED PARTIES ARISING
OUT OF OR RELATED TO A RELEASED PARTY’S ACTIONS, OMISSIONS, STATEMENTS, REQUESTS OR DEMANDS
IN ADMINISTERING, ENFORCING, MONITORING, COLLECTING OR ATTEMPTING TO COLLECT, THE
OBLIGATIONS, INDEBTEDNESS AND OTHER OBLIGATIONS OF A CREDIT PARTY TO A RELEASED PARTY. EACH
CREDIT PARTY AGREES TO INDEMNIFY AND HOLD THE ADMINISTRATIVE AGENT AND EACH LENDER HARMLESS
FROM ANY AND ALL MATTERS RELEASED PURSUANT TO THIS PARAGRAPH. EACH CREDIT PARTY
ACKNOWLEDGES THAT THE AGREEMENTS IN THIS PARAGRAPH ARE INTENDED TO BE IN FULL SATISFACTION
OF ALL OR ANY ALLEGED INJURIES OR DAMAGES TO EACH CREDIT PARTY, ITS SUCCESSORS, AGENTS,
ATTORNEYS, OFFICERS, DIRECTORS, ASSIGNS AND PERSONAL AND LEGAL REPRESENTATIVES ARISING IN
CONNECTION WITH SUCH MATTERS RELEASED PURSUANT TO THE OTHER PROVISIONS OF THIS PARAGRAPH.
EACH CREDIT PARTY REPRESENTS AND WARRANTS TO LENDER THAT IT HAS NOT PURPORTED TO TRANSFER,
ASSIGN OR OTHERWISE CONVEY ANY RIGHT, TITLE OR INTEREST OF A CREDIT PARTY IN ANY RELEASED
MATTER TO ANY OTHER PERSON AND THAT THE FOREGOING CONSTITUTES A FULL AND COMPLETE RELEASE OF
EACH CREDIT PARTY’S CLAIMS WITH RESPECT TO ALL SUCH MATTERS. THE PROVISIONS OF THIS SECTION
5(k) AND THE REPRESENTATIONS, WARRANTIES, RELEASES, WAIVERS, REMISES, ACQUITTANCES,
DISCHARGES, COVENANTS, AGREEMENTS AND INDEMNIFICATIONS CONTAINED HEREIN (A) CONSTITUTE A
MATERIAL CONSIDERATION FOR AND INDUCEMENT TO THE ADMINISTRATIVE AGENT AND LENDERS ENTERING
INTO THIS AMENDMENT, (B) DO NOT CONSTITUTE AN ADMISSION OF OR BASIS FOR ESTABLISHING ANY
DUTY, OBLIGATION OR LIABILITY OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO A CREDIT PARTY OR
ANY OTHER PERSON, (C) DO NOT CONSTITUTE AN ADMISSION OF OR BASIS FOR ESTABLISHING ANY

4th Amendment to Forbearance Agreement [Meridian] 

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LIABILITY, WRONGDOING, OR VIOLATION OF ANY OBLIGATION, DUTY OR AGREEMENT OF THE
ADMINISTRATIVE AGENT OR A LENDER TO A CREDIT PARTY OR ANY OTHER PERSON, AND (D) SHALL NOT BE
USED AS EVIDENCE AGAINST THE ADMINISTRATIVE AGENT OR A LENDER BY A CREDIT PARTY OR ANY OTHER
PERSON FOR ANY PURPOSE.

     (l) Waiver of Jury Trial. EACH OF THE PARTIES HERETO KNOWINGLY AND VOLUNTARILY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE, BETWEEN THE ADMINISTRATIVE AGENT AND LENDERS AND ANY CREDIT
PARTY OR ANY OF THEIR RESPECTIVE AFFILIATES ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN THIS AMENDMENT. INSTEAD, ANY
DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

     (m) Submission to Jurisdiction. Each Credit Party agrees that all disputes
among them and the Administrative Agent or any Lender arising out of, connected with,
related to, or incidental to the relationship established between them in this Amendment,
whether arising in contract, tort, equity, or otherwise, shall be resolved only by the
courts of the State of Texas, the federal courts sitting therein, and appellate court from
any thereof. Each Credit Party waives in all disputes any objection that any of them may
have to the location of the court considering the dispute which court shall have been chosen
in accordance with the foregoing.

     (n) Loan Documents. This Amendment shall constitute a Loan Document.

     (o) Final Agreement. THE CREDIT AGREEMENT AND THE LOAN DOCUMENTS REPRESENT THE
ENTIRE EXPRESSION OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS
AMENDMENT IS EXECUTED. THE CREDIT AGREEMENT AND THE LOAN DOCUMENTS MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO MODIFICATION, RESCISSION, WAIVER,
RELEASE OR AMENDMENT OF ANY PROVISION OF THIS AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN
AGREEMENT SIGNED BY EACH CREDIT PARTY, THE ADMINISTRATIVE AGENT AND LENDERS.

[Signature Pages Follow]

4th Amendment to Forbearance Agreement [Meridian] 

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of
the day and year first written above.

	 	 	 	 	 
	 	THE CREDIT PARTIES

BORROWER:

THE MERIDIAN RESOURCE CORPORATION

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 

4th
Amendment to Forbearance Agreement [Meridian]

 

 

	 	 	 	 	 
	 	GUARANTORS:

CAIRN ENERGY USA, INC.

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 
	 	THE MERIDIAN RESOURCE & EXPLORATION LLC

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 
	 	THE MERIDIAN PRODUCTION CORPORATION

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 
	 	THE MERIDIAN RESOURCE CORPORATION

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 
	 	FBB ANADARKO CORP.

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 
	 	TE TMR CORP.

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 

4th
Amendment to Forbearance Agreement [Meridian]

 

 

	 	 	 	 	 
	 	SUNDANCE ACQUISITION CORPORATION

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 
	 	LOUISIANA ONSHORE PROPERTIES LLC

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 
	 	TMR DRILLING CORPORATION

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 
	 	TMR EQUIPMENT CORPORATION

 	 
	 	By:  	/s/ Steven G. Ives
 	 
	 	 	Name:  	Steven G. Ives 	 
	 	 	Title:  	Vice President 	 
	 

4th
Amendment to Forbearance Agreement [Meridian]

 

 

	 	 	 	 	 
	 	ADMINISTRATIVE AGENT:

FORTIS CAPITAL CORP.,

as Administrative Agent, Co-Lead Arranger, Bookrunner,

Issuing Lender, and a Lender

 	 
	 	By:  	/s/ Harry T. Nullet
 	 
	 	 	Name:  	Harry T. Nullet 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	                      /s/ John W. Benton
 	 
	 	 	Name:  	John W. Benton 	 
	 	 	Title:  	Senior Managing Director 	 
	 

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Amendment to Forbearance Agreement [Meridian]

 

 

	 	 	 	 	 
	 	THE LENDERS:

THE BANK OF NOVA SCOTIA,

as Co-Lead Arranger, Syndication Agent, and a Lender

 	 
	 	By:  	/s/ James Forward
 	 
	 	 	Name:  	James Forward 	 
	 	 	Title:  	Managing Director 	 
	 

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Amendment to Forbearance Agreement [Meridian]

 

 

	 	 	 	 	 
	 	COMERICA BANK,

as a Lender

 	 
	 	By:  	/s/ Matt Turner
 	 
	 	 	Name:  	Matt Turner 	 
	 	 	Title:  	Assistant Vice President 	 
	 

4th
Amendment to Forbearance Agreement [Meridian]

 

 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION,

as a Lender

 	 
	 	By:  	/s/ Justin M. Alexander
 	 
	 	 	Name:  	Justin M. Alexander 	 
	 	 	Title:  	Vice President 	 
	 

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Amendment to Forbearance Agreement [Meridian]

 

 

	 	 	 	 	 
	 	ALLIED IRISH BANKS plc,

as a Lender

 	 
	 	By:  	/s/ David O’Driscoll
 	 
	 	 	Name:  	David O’Driscoll 	 
	 	 	Title:  	Assistant Vice President 	 
	 
	 	 	 
	 	By:  	                      /s/ Edwin Holmes
 	 
	 	 	Name:  	Edwin Holmes 	 
	 	 	Title:  	Assistant Vice President 	 
	 

4th
Amendment to Forbearance Agreement [Meridian]exv4w1

Exhibit 4.1

Execution Version

DUKE ENERGY CAROLINAS, LLC

TO

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

Trustee

NINETIETH SUPPLEMENTAL INDENTURE

Dated as of November 19, 2009

 

CREATING A SERIES OF FIRST AND REFUNDING

MORTGAGE BONDS

$750,000,000 FIRST AND REFUNDING MORTGAGE BONDS, 5.30% SERIES DUE 2040

 

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 19th day of November, 2009, 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 2020 Series”), bonds of a series known
as the “First and Refunding Mortgage Bonds, 8 3/4% Series Due 2021” (herein called “bonds of the
2021 Series”), bonds of a series known as “First and Refunding Mortgage Bonds, 7% Series Due 2005”
(herein called “bonds of the 2005 Series”), 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”), and such other bonds that have been issued have
heretofore been issued and (except for bonds of the 2.65% Series, bonds of the 1979 Series, bonds
of the 1998 Series, bonds of the 1990 Pollution Control Series, bonds of the Medium Term Notes
Series,

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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 2020 Series, 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, 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, 5.30% Series due 2040”, 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 indenture, as
previously supplemented by supplemental indentures and as hereby supplemented, being sometimes
hereinafter referred to as the “Indenture”); and

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     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 2040 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, 5.30% Series due 2040 (herein
called “bonds of the 2040 Series”) and the Company hereby establishes, determines and fixes the
terms and provisions of the bonds of the 2040 Series as hereinafter in this Part One set forth.

     Each bond of the 2040 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 August 15, 2010, from
the February 15 or August 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 August 15, 2010, in which case
interest shall be payable from November 19, 2009; provided, however, that interest
shall be payable on each bond of the 2040 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 2040 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 2040 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 2040 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 2040
Series, such defaulted interest shall be paid to the registered holder of such bond (or any bond or
bonds of the 2040 Series issued upon transfer,

5

 

exchange or substitution thereof) on the date of 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 2040 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 2040 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
February 1 or August 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 2040 Series shall mature as to principal on February 15, 2040 and
shall bear interest at a rate of 5.30% per annum, payable semi-annually on the fifteenth day of
February and August in each year, commencing on the fifteenth day of August, 2010. Interest on the
bonds of the 2040 Series will be computed on the basis of a 360-day year consisting of twelve
30-day months.

     SECTION 3. The bonds of the 2040 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 2040 Series.

     SECTION 4. The bonds of the 2040 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 2040 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
2040 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 2040 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 2040 Series shall be effected as provided in Article 3 of
the Indenture except that, in case a part only of the bonds of the 2040 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 2040 Series which
may be authenticated and delivered pursuant to this Ninetieth Supplemental Indenture shall be
$750,000,000.

     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 2040 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 2040 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 2040 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 2040 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 2040 Series” were inserted after the word
“Series” appearing in the second line of Section 1 and the

7

 

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 2040 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 2040 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 2040 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 2040 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 4 1/2% 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 or the 2009 Pollution Control 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 2040 Series are outstanding and to the
same extent as though the words “or so long as any bonds of the 2040 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 2040 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 2040 Series are outstanding.

PART FOUR.

GLOBAL SECURITIES; TRANSFER AND EXCHANGE

     SECTION 1. The bonds of the 2040 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
2040 Series represented by such Global Security or Global Securities shall not be exchangeable for,
and shall not otherwise be issuable as, bonds of the 2040 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 2040 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 2040 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 2040 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 2040 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 2040 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 2040 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 2040 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 2040 Series.

10

 

     “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 2040 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 2040 Series in global form.

     “Holder” means a Person in whose name a bond of the 2040 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 Banc of America Securities LLC, Citigroup Global
Markets Inc. and Morgan Stanley & Co. Incorporated and a Primary Treasury Dealer (as defined
herein) selected by Wells Fargo Securities, LLC, plus one other financial institution 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.

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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
2040 Series. Such covenants and provisions shall remain in force and be applicable only so long as
any bonds of the 2040 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 2040 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 2040 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 2040 Series. Such covenants and provisions shall remain in force
and be applicable only so long as any bonds of the 2040 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 2040 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 2040 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.

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     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 2040 Series may be modified, amended or
supplemented by the Company and the Trustee, without the consent of the holders of the bonds of the
2040 Series, and if not inconsistent with the Indenture, to cure ambiguities in this supplemental
indenture or the bonds of the 2040 Series, or correct defects or inconsistencies in the provisions
of this supplemental indenture or the bonds of the 2040 Series or to provide for such appropriate
additional provisions in this supplemental indenture or the bonds of the 2040 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 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 Vice Presidents, all as of the day and year first above written.

	 	 	 	 	 
	 	DUKE ENERGY CAROLINAS, LLC

 	 
	 	By:  	/s/ David S. Maltz
 	 
	 	 	Name:  	David S. Maltz 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

	 	 	 	 	 
	 	ATTEST:

 	 
	 	/s/ Robert T. Lucas III
 	 
	 	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/ Jennie M. Raine
 	 
	 	Jennie M. Raine 	 
	 	 	 
	 

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/ Karen Z. Kelly
 	 
	 	Name:  	Karen Z. Kelly 	 
	 	Title:  	Vice President 	 
	 
	 	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 Karen Z. Kelly, a Vice President, 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 19th day of November, 2009.

 	 
	 	/s/ David Dawes	[SEAL]
	 	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 Karen Z. Kelly personally came before me this day and acknowledged that she is a Vice President 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 Vice
Presidents.

Witness may hand and official seal, this 19th day of November, 2009.

	 	 	 	 	 
	 	 	 
	 	/s/ David Dawes 	[SEAL]
	 	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
David S. Maltz executed the foregoing instrument, and that she, with Jennie M. Raine, witnessed the
execution thereof.

Witness my hand and official seal, this the 19th day of November, 2009.

	 	 	 	 	 
	 	 	 
	 	                                               /s/ Delcia S. Dunlap
 	 
	 	Delcia S. Dunlap 	 
	 

[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 Vice Presidents, sealed with its seal, and attested by himself as one of its Assistant
Secretaries.

Witness my hand and official seal, this the 19th day of November, 2009.

	 	 	 	 	 
	 	 	 
	 	                                               /s/ Patricia C. Ross
 	 
	 	Name:  	Patricia C. Ross 	 
	 	Notary Public 	 
	 

[SEAL]

My Commission Expires 10-17-2014

17

 

EXHIBIT A

FORM OF DUKE ENERGY CAROLINAS, LLC

FIRST AND REFUNDING MORTGAGE BOND, 5.30% SERIES DUE 2040

[FACE SIDE OF BOND]

[DEPOSITORY LEGEND, IF APPLICABLE]

DUKE ENERGY CAROLINAS, LLC

FIRST AND REFUNDING MORTGAGE BOND,

5.30% SERIES DUE 2040

	 	 	 	 	 	 	 
	No.

	 	 	 	 	$	 
	CUSIP No.

	 	26442CAH7	 	 	 	 
	ISIN

	 	US26442CAH79	 	 	 	 

     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 February 15, 2040 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 August 15, 2010, in which case from November 19, 2009, and
unless the date hereof is subsequent to a record date (as defined below) and prior to the next
succeeding February 15 or August 15, in which case from the next succeeding February 15 or August
15, as the case may be), at the rate of 5.30% per annum, in like coin or currency, semi-annually on
February 15 and August 15 in each year, commencing August 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 February 1 or August 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, 5.30% Series due 2040, 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 November 19,
2009 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 Banc of America Securities LLC, Citigroup Global
Markets Inc. and Morgan Stanley & Co. Incorporated and a Primary Treasury Dealer (as defined
herein) selected by Wells Fargo Securities, LLC, plus one other financial institution
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 November 19, 2009, 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.

A-4

 

     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.

     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:                                                            

 

 

SIGNATURE GUARANTEE

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

A-7

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