Underwriting Agreement for First and Refunding Mortgage Bonds - Duke Energy Corp.


                              $

                            DUKE ENERGY CORPORATION

                      FIRST AND REFUNDING MORTGAGE BONDS,
                                 % SERIES DUE

                            UNDERWRITING AGREEMENT


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Ladies and Gentlemen:

1. Introductory. DUKE ENERGY CORPORATION, a North Carolina corporation 
("Corporation"), proposes, subject to the terms and conditions stated
herein, to issue and sell $      aggregate principal amount of First 
and Refunding Mortgage Bonds,   % Series Due    ("Bonds"), to be issued 
pursuant to the provisions of a First and Refunding Mortgage, dated as 
of December 1, 1927 ("Original Indenture"), from the Corporation to The 
Chase Manhattan Bank, successor Trustee, as amended and supplemented by 
various supplemental indentures, including the supplemental indenture 
to be dated as of           , (the Original Indenture, as so amended 
and supplemented, being hereinafter called the "Mortgage"), and hereby 
agrees with the several Underwriters hereinafter named in Schedule A 
(the "Underwriters") as follows:

2. Representations and Warranties of the Corporation. The Corporation
represents and warrants to, and agrees with, the several Underwriters 
that:
 
(a) A registration statement (No. 333-     , which also constitutes a 
post-effective amendment to a previous registration statement No. 
333-52204), including a combined prospectus, relating to the Bonds and 
certain other securities has been filed with the Securities and 
Exchange Commission ("Commission") under the Securities Act of 1933, 
as amended (the "1933 Act"). Such registration statement and any 
post-effective amendment thereto, each in the form heretofore 
delivered to you, and, excluding exhibits thereto but including all 
documents incorporated by reference in the prospectus contained
therein, for each of the other Underwriters, have been declared 
effective by the Commission in such form, and no stop order suspending 
the effectiveness of such registration statement has been issued and 
no proceeding for that purpose has been initiated or threatened by the 
Commission (any preliminary prospectus included in such registration 
statement or filed with the Commission pursuant to Rule 424(a) of the 
rules and regulations of the Commission under the 1933 Act ("1933 Act 
Regulations") being hereinafter called a "Preliminary Prospectus"; the 
various parts of such registration statement, including all exhibits 
thereto and including the documents incorporated by reference in the
prospectus contained in the registration statement at the time such 
part of the registration statement became effective, each as amended 
at the time such part of the registration statement became effective, 
being hereinafter called the "Registration Statement"; and the final 
prospectus relating to the Bonds, in the form first filed pursuant to 
Rule 424(b) under the 1933 Act Regulations, being hereinafter called 
the "Prospectus"; and any reference herein to any Preliminary 
Prospectus or the Prospectus shall be deemed to refer to and include 
the documents incorporated by reference therein, as of the date of such 
Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary Prospectus 
or Prospectus shall be deemed to refer to and include any documents 
filed after the date of such Preliminary Prospectus or Prospectus, as 
the case may be, under the Securities Exchange Act of 1934, as amended 
(the "1934 Act"), and incorporated by reference in such Preliminary 
Prospectus or Prospectus, as the case may be; and any reference to any 
amendment to the Registration Statement shall be deemed to refer to and 
include any annual report of the Corporation filed pursuant to Section 
13(a) or 15(d) of the 1934 Act after the effective date of the 
Registration Statement that is incorporated by reference in the
Registration Statement).
 
(b) The Registration Statement conforms and the Prospectus will conform
in all material respects to the requirements of the 1933 Act and the 
1933 Act Regulations, and the Registration Statement does not and the 
Prospectus will not include any untrue statement of a material fact or 
omit to state any material fact required to be stated therein or 
necessary to make the statements therein, in the light of the 
circumstances under which they were made, not misleading, except that 
the Corporation makes no warranty or representation to the Underwriters 
with respect to any statements or omissions made in reliance upon and 
in conformity with written information furnished to the Corporation by 
any Underwriter specifically for use therein.
 
(c) The documents incorporated by reference in the Prospectus, at the 
time they were filed with the Commission, complied in all material 
respects with the requirements of the 1934 Act and the rules and 
regulations of the Commission thereunder (the "1934 Act Regulations"), 
and, when read together with the other information in the Prospectus, 
do not contain an untrue statement of a material fact or omit to state 
a material fact required to be stated therein or necessary to make the 
statements therein, in the light of the circumstances under which they 
were made, not misleading, and any documents deemed to be incorporated 
by reference in the Prospectus will, when they are filed with the 
Commission, comply in all material respects with the requirements of 
the 1934 Act and the 1934 Act Regulations, and will not contain an 
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, 
not misleading, except that the Corporation makes no warranty or 
representation to the Underwriters with respect to any statements or 
omissions made in reliance upon and in conformity with written 
information furnished to the Corporation by any Underwriter 
specifically for use therein.
 
(d) The compliance by the Corporation with all of the provisions of 
this Agreement has been duly authorized by all necessary corporate 
action and the consummation of the transactions herein contemplated 
will not conflict with or result in a breach or violation of any of 
the terms or provisions of, or constitute a default under, any 
indenture, mortgage, deed of trust, loan agreement or other agreement 
or instrument to which the Corporation or any of its Principal 
Subsidiaries (as hereinafter defined) is a party or by which any of 
them or their respective property is bound or to which any of their
property or assets is subject that would have a material adverse 
effect on the business, financial condition or results of operations 
of the Corporation and its subsidiaries, taken as a whole, nor will 
such action result in any violation of the provisions of the Restated 
Articles of Incorporation or By-Laws of the Corporation or any statute 
or any order, rule or regulation of any court or governmental agency 
or body having jurisdiction over the Corporation or its Principal 
Subsidiaries or any of their respective property that would have a 
material adverse effect on the business, financial condition or results
of operations of the Corporation and its subsidiaries, taken as a whole; 
and no consent, approval, authorization, order, registration or 
qualification of or with any such court or governmental agency or body 
is required for the consummation by the Corporation of the transactions 
contemplated by this Agreement, except for authorization by the North 
Carolina Utilities Commission and The Public Service Commission of 
South Carolina and the registration under the 1933 Act of the Bonds, 
qualification under the Trust Indenture Act of 1939 and such consents, 
approvals, authorizations, registrations or qualifications as may be 
required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Bonds by the Underwriters.
  
(e) This Agreement has been duly authorized, executed and delivered by 
the Corporation.

(f) Each of Duke Capital Corporation, PanEnergy Corp, Duke Energy 
Natural Gas Corporation and Texas Eastern Transmission Corporation, 
each a Delaware corporation (and herein called a "Principal 
Subsidiary"), is a direct or indirect wholly owned subsidiary of the 
Corporation.
  

 

  3. Purchase, Sale and Delivery of Bonds. On the basis of the representations,
 warranties and agreements herein contained, but subject to the terms and
 conditions herein set forth, the Corporation agrees to sell to the
 Underwriters, and the Underwriters agree, severally and not jointly, to
 purchase from the Corporation, at a purchase price of      % of the principal 
 amount of the Bonds, the respective principal amount of Bonds set forth
 opposite the names of the Underwriters in Schedule A hereto plus the respective
 principal amount of additional Bonds which each such Underwriter may become
 obligated to purchase pursuant to the provisions of Section 8 hereof.
 
  Payment of the purchase price for the Bonds to be purchased by the
Underwriters shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue
of the Americas, New York, N.Y., or at such other place as shall be mutually
agreed upon by you and the Corporation, at 10:00 a.m., New York City time, on 
       ,     (unless postponed in accordance with the provisions of Section 8)
or such other time and date as shall be agreed upon in writing by you and the
Corporation (the "Closing Date"). Payment shall be made to the Corporation by
certified or official bank check or checks in New York Clearing House or similar
next day funds, payable to the order of the Corporation, against delivery to you
of the Bonds. The Bonds shall be in such denominations and registered in such
names as you may request in writing at least two full business days before the
Closing Date.

  4. Offering by the Underwriters. It is understood that the several
Underwriters propose to offer the Bonds for sale to the public as set forth in
the Prospectus.
 
  5. Covenants of the Corporation. The Corporation covenants and agrees with
the several Underwriters that:
 
    (a) The Corporation will advise you promptly of the filing of any amendment
  (and effectiveness thereof) or supplementation of the Registration Statement
  or the Prospectus, of the filing of any Rule 462(b) registration statement and
  of the institution by the Commission of any stop order proceedings in respect
  of the Registration Statement, and will use its best efforts to prevent the
  issuance of any such stop order and to obtain as soon as possible its lifting,
  if issued.
 
    (b) If at any time when a prospectus relating to the Bonds is required to
  be delivered under the 1933 Act any event occurs as a result of which the
  Prospectus as then amended or supplemented would include an untrue
  statement of a material fact, or omit to state any material fact necessary
  to make the statements therein, in the light of the circumstances under
  which they were made, not misleading, or if it is necessary at any time to
  amend the Prospectus to comply with the 1933 Act, the Corporation promptly
  will prepare and file with the Commission an amendment, supplement or an
  appropriate document pursuant to Section 13 or 14 of the 1934 Act which
  will correct such statement or omission or which will effect such
  compliance.
 
    (c) The Corporation, during the period when a prospectus relating to the
  Bonds is required to be delivered under the 1933 Act, will timely file 
  all documents required to be filed with the Commission pursuant to Section
  13 or 14 of the 1934 Act.
 
    (d) The Corporation will make generally available to its security
  holders, in each case as soon as practicable but not later than 60 days
  after the close of the period covered thereby, earnings statements (in form
  complying with the provisions of Section 11(a) of the 1933 Act, which need
  not be certified by independent certified public accountants unless
  required by the 1933 Act) covering (i) a twelve-month period beginning not
  later than the first day of the Corporation's fiscal quarter next following
  the effective date of the Registration Statement and (ii) a twelve-month
  period beginning not later than the first day of the Corporation's fiscal
  quarter next following the date of this Agreement.
 
    (e) The Corporation will furnish to you, without charge, copies of the
  Registration Statement (    of which will be signed and will include all
  exhibits other than those incorporated by reference), the Prospectus, and
  all amendments and supplements to such documents, in each case as soon as
  available and in such quantities as you reasonably request.
 
    (f) The Corporation will arrange or cooperate in arrangements for the
  qualification of the Bonds for sale under the laws of such jurisdictions as
  you designate and will continue such qualifications in effect so long as
  required for the distribution; provided, however, that the Corporation
  shall not be required to qualify as a foreign corporation or to file any
  general consents to service of process under the laws of any state where it
  is not now so subject.
 
    (g) The Corporation will pay all expenses incident to the performance of
  its obligations under this Agreement including (i) the printing and filing
  of the Registration Statement and the printing of this Agreement and any
  Blue Sky Survey, (ii) the issuance and delivery of the Bonds as specified
  herein, (iii) the fees and disbursements of counsel for the Underwriters in
  connection with the qualification of the Bonds under the securities laws of
  any jurisdiction in accordance with the provisions of Section 5(f) and in
  connection with the preparation of the Blue Sky Survey, such fees not to
  exceed $5,000, (iv) the printing and delivery to the Underwriters, in
  quantities as hereinabove referred to, of copies of the Registration
  Statement and any amendments thereto, and of the Prospectus and any amendments
  or supplements thereto, (v) any fees charged by independent rating agencies
  for rating the Bonds, (vi) any fees and expenses in connection with the
  listing of the Bonds on the New York Stock Exchange,(vii) any filing fee
  required by the National Association of Securities Dealers, Inc. and (viii)
  the costs and expenses of the Corporation relating to investor presentations
  on any "road show" undertaken in connection with the marketing of the offering
  of the Bonds, including, without limitation, expenses associated with the
  production of road show slides and graphics, fees and expenses of any
  consultants engaged in connection with the road show presentations with the
  prior approval of the Corporation, travel and lodging expenses of 
                 and officers of the Corporation and any such consultants, and
  the cost of any aircraft chartered in connection with the road show; provided,
  however, the Underwriters shall reimburse a portion of the costs and expenses
  referred to in this clause (viii).


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   6. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Bonds will be subject to the
accuracy of the representations and warranties on the part of the Corporation
herein, to the accuracy of the statements of officers of the Corporation made
pursuant to the provisions hereof, to the performance by the Corporation of its
obligations hereunder and to the following additional conditions precedent:

     (a) Prior to the Closing Date, no stop order suspending the effectiveness
  of the Registration Statement shall have been issued and no proceedings for
  that purpose shall have been instituted or, to the knowledge of the
  Corporation or you, shall be threatened by the Commission.

     (b) Prior to the Closing Date, the rating assigned by Moody's Investors
  Service, Inc. or Standard & Poor's Ratings Services to (i) any debt securities
  or preferred stock of the Corporation or (ii) any trust preferred securities
  of Duke Energy Capital Trust I or Duke Energy Capital Trust II as of the date
  of this Agreement shall not have been lowered.

     (c) Since the respective most recent dates as of which information is given
  in the Prospectus and up to the Closing Date, there shall not have been any
  material adverse change in the condition of the Corporation, financial or
  otherwise, except as reflected in or contemplated by the Prospectus, and,
  since such dates and up to the Closing Date, there shall not have been any
  material transaction entered into by the Corporation other than transactions
  contemplated by the Prospectus and transactions in the ordinary course of
  business, the effect of which in your reasonable judgment is so material and
  adverse as to make it impracticable or inadvisable to proceed with the public
  offering or the delivery of the Bonds on the terms and in the manner
  contemplated by the Prospectus.

     (d) You shall have received an opinion of Ellen T. Ruff, Esq., Senior Vice
  President and General Counsel of the Corporation, dated the Closing Date, to
  the effect that:

       (i) The Corporation has been duly incorporated and is validly existing as
     a corporation in good standing under the laws of the State of North
     Carolina, with power and authority (corporate and other) to own its
     properties and conduct its business as described in the Prospectus and to 
     enter into and perform its obligations under this Agreement.

       (ii) Each of the Corporation and the Principal Subsidiaries is duly
     qualified to do business in each jurisdiction in which the ownership or
     leasing of its property or the conduct of its business requires such
     qualification, except where the failure to so qualify, considering all such
     cases in the aggregate, does not have a material adverse effect on the
     business, properties, financial position or results of operations of the
     Corporation and its subsidiaries taken as a whole.

       (iii) The Registration Statement has become effective under the 1933 
     Act, and, to the best of the knowledge of such counsel, no stop order
     suspending the effectiveness of the Registration Statement has been issued
     and no proceedings for that purpose have been instituted or are pending or
     threatened under the 1933 Act.


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          (iv)  The descriptions in the Registration Statement and the
     Prospectus of legal or governmental proceedings are accurate and fairly
     present the information required to be shown, and such counsel does not
     know of any litigation or any legal or governmental proceeding instituted
     or threatened against the Corporation or any of its subsidiaries or any of
     their respective properties that would be required to be disclosed in the
     Prospectus and is not so disclosed.

          (v)    This Agreement has been duly authorized, executed and delivered
     by the Corporation.

          (vi)  The performance by the Corporation of this Agreement and the
     Mortgage will not contravene any of the provisions of the Restated Articles
     of Incorporation or By-Laws of the Corporation or any statute or any order,
     rule or regulation of which such counsel is aware of any court or
     governmental agency or body having jurisdiction over the Corporation or any
     of its Principal Subsidiaries or any of their respective property, nor will
     such action conflict with or result in a breach or violation of any of the
     terms or provisions of, or constitute a default under any indenture,
     mortgage, deed of trust, loan agreement or other agreement or instrument
     known to such counsel to which the Corporation or any of its Principal
     Subsidiaries is a party or by which any of them or their respective
     property is bound or to which any of their property or assets is subject
     which affects in a material way the Corporation's ability to perform its
     obligations under this Agreement and the Mortgage.

          (vii)  The North Carolina Utilities Commission and The Public Service 
     Commission of South Carolina have issued appropriate orders with respect to
     the issuance and sale of the Bonds in accordance with this Agreement, and,
     to the best of the knowledge of such counsel, such orders are still in
     effect; the issuance and sale of the Bonds to the Underwriters are in
     conformity with the terms of such orders; and no other authorization,
     approval or consent of any other governmental body (other than in
     connection or compliance with the provisions of the securities or Blue Sky
     laws of any jurisdiction) is legally required for the issuance and sale of
     the Bonds pursuant to this Agreement.
 
          (viii) The Mortgage has been duly authorized, executed and delivered
     by the Corporation and is a legal, valid and enforceable instrument in
     accordance with its terms, except (x) as the same may be limited by the
     laws of the States of North Carolina and South Carolina (in which States
     such counsel is advised all physical property of the Corporation subject to
     the Mortgage is located except for certain interconnection lines) with
     respect to or affecting the remedies to enforce the security provided by
     the Mortgage, which laws do not, in the opinion of such counsel, make
     inadequate the remedies necessary for the realization of the benefits of
     such security, and by bankruptcy, insolvency, reorganization or other laws
     affecting the enforcement of creditors' rights, and (y) that the provisions
     of the Mortgage subjecting to the lien thereof the revenues and income from
     the mortgaged property may not be effective prior to the delivery or taking
     of possession of such revenues or income or of the mortgaged property by or
     on behalf of the bondholders.



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       (ix) The Bonds have been duly authorized by all necessary corporate
    action and, when the same have been executed and authenticated as specified
    in the Mortgage and delivered to the Underwriters against payment of the
    consideration therefor specified in this Agreement, will be legal, valid and
    binding obligations of the Corporation enforceable in accordance with their
    terms, except, in each case, as the same may be limited by bankruptcy,
    insolvency, reorganization or other laws affecting the enforcement of
    creditors' rights, and are entitled to the benefits and security afforded by
    the Mortgage in accordance with the terms of the Mortgage and the Bonds,
    except as set forth in paragraph (viii) above.

       (x) The Corporation has good title to all properties owned by it, subject
    only (a) to the lien of the Mortgage, (b) to permitted encumbrances as
    defined in the Mortgage, (c) to minor exceptions and defects which do not,
    in the aggregate, in the opinion of such counsel, materially interfere with
    the use by the Corporation of such properties for the purposes for which
    they are held, materially detract from the value of said properties or in
    any material way impair the security afforded by the Mortgage, and (d) in
    the case of the Corporation's existing hydroelectric plants, to provisions
    of licenses issued by the Federal Power Commission or the Federal Energy
    Regulatory Commission and to the provisions of the Federal Power Act.

       (xi) The Mortgage complies as to form with all applicable laws of the
    States wherein the properties subjected or intended to be subjected to the
    lien of the Mortgage are located, including all applicable recording laws,
    and constitutes a valid, direct first mortgage lien on all properties and
    franchises purported to be owned by the Corporation, except such property as
    is specifically excepted from the lien thereof, subject only to the liens,
    charges and encumbrances stated in paragraph (x) above; all fixed electric
    properties hereafter acquired by the Corporation will, upon such
    acquisition, become subject to the lien of the Mortgage, subject, however,
    to liens or charges of the character permitted to exist by the Mortgage, and
    to liens, if any, existing or placed on such property at the time of the
    acquisition thereof by the Corporation, and the description of such property
    and franchises in the Mortgage is adequate to constitute the same a lien on
    such property and franchises of the Corporation except as aforesaid.

       (xii) The Corporation holds valid and subsisting franchises, licenses and
    permits in all communities wherein it operates its properties, which are
    free from unduly burdensome restrictions, are individually satisfactory and
    vest in the Corporation adequate authority to operate its public utility
    system therein, except that in a few municipalities the Corporation is
    operating either without franchises or with franchises the validity of which
    might possibly be called into question; in the opinion of such counsel,
    however, the Corporation's franchises, licenses and permits relating to its
    public utility business, as a system, are satisfactory for the adequate
    conduct of the business of the Corporation in the territory which it serves,
    the rights of the Corporation to maintain transmission lines through
    unincorporated communities and over public lands not located in incorporated
    communities and over private rights of way are, as a system, satisfactory
    for the adequate conduct of the business of the Corporation in the territory
    which it serves, and, as a public utility corporation operating under the
    laws of the States of North Carolina and South Carolina, the Corporation has
    adequate rights to operate its system.

       (xiii) The Original Indenture and the supplemental indentures thereto,
    other than the supplemental indenture dated as of       ,   , have been duly
    recorded or filed for recordation in all such offices as are necessary to
    perfect and to preserve and protect the lien of the Mortgage upon the
    property intended to be subjected to the lien thereof, and upon the filing
    and recording of the supplemental indenture dated as of       ,   , no other
    recording or any periodic or other refiling or rerecording of the Mortgage
    is or will be required in order to perfect and to preserve and protect the
    lien of the Mortgage upon such property, and there are no mortgage,
    recording or other taxes required to be paid in connection with such filing
    and recording or in connection with the issuance of the Bonds other than
    customary filing and recording fees.

       Such counsel shall also state that nothing has come to her attention that
    has caused her to believe that the Registration Statement as of the date of
    effectiveness under the 1933 Act and the Prospectus as of the date it was
    filed with, or transmitted for filing to, the Commission, contained any
    untrue statement of a material fact or omitted to state a material fact
    required to be stated therein or necessary to make the statements therein
    not misleading, or that the Prospectus as of the date it was filed with, or
    transmitted for filing to, the Commission and at the Closing Date, contained
    or contains any untrue statement of a material fact or omitted or omits to
    state a material fact necessary in order to make the statements therein, in
    light of the circumstances under which they were made, not misleading. Such
    counsel may also state that, except as otherwise expressly provided in such
    opinion, she does not assume any responsibility for the accuracy,
    completeness or fairness of the statements contained in or incorporated by
    reference into the Registration Statement and the Prospectus and does not
    express any opinion or belief as to the financial statements or other
    financial data contained in or incorporated by reference into the
    Registration Statement and the Prospectus or as to the statement of the
    eligibility and qualification of the Trustee.

       In rendering the foregoing opinion, such counsel may state that she
    expresses no opinion as to the laws of any jurisdiction other than North
    Carolina and may rely on the opinion of Austin, Lewis & Rogers of Columbia,
    South Carolina as to matters of South Carolina law. Such counsel may also
    state that she has relied as to certain factual matters on information
    obtained from public officials, officers of the Corporation and other
    sources believed by her to be responsible.

      (e) You shall have received an opinion or opinions of Dewey Ballantine
    LLP, counsel to the Corporation, dated the Closing Date, with respect to the
    matters set forth in (i), (iii), (v) through (ix) of Section 6(d) and to the
    further effect that:

          (i) Each of the Principal Subsidiaries has been duly incorporated
     and is validly existing as a corporation in good standing under the laws of
     its jurisdiction of incorporation, with power and authority (corporate and
     other) to own its properties and conduct its business as described in the
     Prospectus.

          (ii) The Corporation is not an "investment company" or an entity 
     "controlled" by an "investment company," as such terms are defined in the 
     Investment Company Act of 1940, as amended.

          (iii) The Corporation is not a holding company under the Public 
     Utility Holding Company Act of 1935, as amended.

          (iv) The Mortgage is duly qualified under the Trust Indenture Act of
     1939.

          (v) The Registration Statement as of the date of effectiveness under
     the 1933 Act and the Prospectus as of the date it was filed with, or
     transmitted for filing to, the Commission complied as to form in all
     material respects with the requirements of the 1933 Act and the 1933 Act
     Regulations; and nothing has come to their attention that would lead them
     to believe that the Registration Statement as of the date of effectiveness
     under the 1933 Act (or if an amendment to such Registration Statement or an
     annual report on Form 10-K has been filed by the Corporation with the
     Commission subsequent to the effectiveness of the Registration Statement,
     then at the time of the most recent such filing) contained an untrue
     statement of a material fact or omitted to state a material fact required
     to be stated therein or necessary to make the statements therein not
     misleading or that the Prospectus as of the date it was filed with, or
     transmitted for filing to, the Commission and at the Closing Date contained
     or contains an untrue statement of a material fact or omitted or omits to
     state a material fact necessary in order to make the statements therein, in
     the light of the circumstances under which they were made, not misleading.
     Such opinion may state that such counsel do not assume any responsibility
     for the accuracy, completeness or fairness of the statements contained in
     or incorporated by reference into the Registration Statement and Prospectus
     except as otherwise expressly provided in such opinion and do not express
     any opinion or belief as to the financial statements or other financial
     data contained in or incorporated by reference into the Registration
     Statement and the Prospectus or as to the statement of the eligibility and
     qualification of the Trustee.

          (vi) The statements made in the Prospectus under the captions 
     "Description of the First and Refunding Mortgage Bonds" and "Certain Terms
     of the         Series Bonds," insofar as they purport to summarize
     provisions of documents specifically referred to therein, fairly present
     the information called for with respect thereto by Form S-3.

          (vii) No consent, approval, authorization, order, registration or
     qualification of or with any court or governmental agency or body is

     required for the issue and sale of the Bonds or the consummation by the
     Corporation of the transactions contemplated by this Agreement or the
     Mortgage, except for authorization by the North Carolina Utilities
     Commission and The Public Service Commission of South Carolina and such as
     have been obtained under the 1933 Act and the Trust Indenture Act of 1939
     and such consents, approvals, authorizations, orders, registrations or
     qualifications as may be required under state securities or Blue Sky laws
     in connection with the purchase and distribution of the Bonds by the
     Underwriters.

     In rendering the foregoing opinion or opinions, Dewey Ballantine LLP may
     state that such opinion or opinions are limited to the Federal laws of the
     United States, the laws of the State of New York and the General
     Corporation Law of the State of Delaware, and that they are relying on the
     opinion of Ellen T. Ruff, Esq. as to matters of North Carolina law and on
     the opinion of Austin, Lewis & Rogers of Columbia, South Carolina as to
     matters of South Carolina law. In addition, such counsel may state that
     they have relied as to certain factual matters on information obtained from
     public officials, officers of the Corporation and other sources believed by
     them to be responsible and that the signatures on all documents examined by
     them are genuine, assumptions which such counsel have not independently
     verified.

     (f) You shall have received an opinion of                  ,
   counsel for the Underwriters, dated the Closing Date, with respect to the
   incorporation of the Corporation, the validity of the Bonds, the Registration
   Statement and the Prospectus, as amended or supplemented, and such other
   related matters as you may require, and the Corporation shall have furnished
   to such counsel such documents as they request for the purpose of


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  enabling them to pass upon such matters. In giving their opinion, 
             may rely on the opinion of Ellen T. Ruff, Esq. as to matters of
  North Carolina law and on the opinion of Austin, Lewis & Rogers of Columbia,
  South Carolina as to matters of South Carolina law.

    (g) On or after the date hereof, there shall not have occurred any of the
  following: (i) a suspension or material limitation in trading in securities
  generally or of the securities of the Corporation, Duke Energy Capital Trust I
  or Duke Energy Capital Trust II on the New York Stock Exchange; or (ii) a
  general moratorium on commercial banking activities in New York declared by
  either Federal or New York State authorities; or (iii) the outbreak or
  material escalation of hostilities involving the United States or the
  declaration by the United States of a national emergency or war if the effect
  of any such event specified in this subsection (g) in your reasonable
  judgment makes it impracticable or inadvisable to proceed with the public
  offering or the delivery of the Bonds on the terms and in the manner
  contemplated in the Prospectus. In such event there shall be no liability on
  the part of any party to any other party except as otherwise provided in
  Section 7 hereof and except for the expenses to be borne by the Corporation as
  provided in Section 5(g) hereof.

    (h) You shall have received a certificate of the Chairman of the Board, the
  President, any Vice President, the Secretary or an Assistant Secretary and any
  financial or accounting officer of the Corporation, dated the Closing Date, in
  which such officers, to the best of their knowledge after reasonable
  investigation, shall state that the representations and warranties of the
  Corporation in this Agreement are true and correct as of the Closing Date,
  that the Corporation has complied with all agreements and satisfied all
  conditions on its part to be performed or satisfied at or prior to the Closing
  Date, that the conditions specified in Section 6(b) and Section 6(c) have been
  satisfied, and that no stop order suspending the effectiveness of the
  Registration Statement has been issued and no proceedings for that purpose
  have been instituted or are threatened by the Commission.

    (i) On the date of this Agreement, you shall have received a letter dated 
  the date hereof, in form and substance satisfactory to you, from the
  Corporation's independent public accountants, containing statements and
  information of the type ordinarily included in accountants' "comfort letters"
  to underwriters with respect to the financial statements and certain financial
  information contained in or incorporated by reference into the Prospectus as
  of a specified date not more than three business days prior to the date of
  this Agreement.

     (j) At the Closing Date you shall have received from the Corporation's
  independent public accountants a letter, dated the Closing Date, to the effect
  that such accountants reaffirm the statements made in the letter furnished
  pursuant to paragraph (i) of this Section 6, except that the specified date
  referred to shall be a date not more than three business days prior to the
  Closing Date.

                                       6
 
 

 

 

  The Corporation will furnish you with such conformed copies of such opinions,
certificates, letters and documents as you reasonably request.

 
  7. Indemnification. (a) The Corporation agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act, as follows:
 
    (i) against any and all loss, liability, claim, damage and expense
  whatsoever arising out of any untrue statement or alleged untrue statement
  of a material fact contained in the Registration Statement (or any
  amendment thereto), or the omission or alleged omission therefrom of a
  material fact required to be stated therein or necessary to make the
  statements therein not misleading or arising out of any untrue statement or
  alleged untrue statement of a material fact contained in any Preliminary
  Prospectus, the prospectus constituting a part of the Registration
  Statement in the form in which it became effective or the Prospectus (or
  any amendment or supplement thereto) or the omission or alleged omission
  therefrom of a material fact necessary in order to make the statements
  therein, in the light of the circumstances under which they were made, not
  misleading, unless such statement or omission or such alleged statement or
  omission was made in reliance upon and in conformity with written
  information furnished to the Corporation by any Underwriter through you
  expressly for use in the Registration Statement (or any amendment thereto)
  or such Preliminary Prospectus, such prospectus, or the Prospectus (or any
  amendment or supplement thereto);
 
    (ii) against any and all loss, liability, claim, damage and expense
  whatsoever to the extent of the aggregate amount paid in settlement of any
  litigation, commenced or threatened, or of any claim whatsoever based upon
  any such untrue statement or omission or any such alleged untrue statement
  or omission, if such settlement is effected with the written consent of the
  Corporation; and
 
    (iii) against any and all expense whatsoever reasonably incurred in
  investigating, preparing or defending against any litigation, commenced or
  threatened, or any claim whatsoever based upon any such untrue statement or
  omission, or any such alleged untrue statement or omission, to the extent
  that any such expense is not paid under (i) or (ii) of this Section 7.
 
  In no case shall the Corporation be liable under this indemnity agreement
with respect to any claim made against any Underwriter or any such controlling
person unless the Corporation shall be notified in writing of the nature of
the claim within a reasonable time after the assertion thereof, but failure so
to notify the Corporation shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. The Corporation
shall be entitled to participate at its own expense in the defense, or, if it
so elects, within a reasonable time after receipt of such notice, to assume
the defense of any suit brought to enforce any such claim, but if it so elects
to assume the defense, such defense shall be conducted by counsel chosen by it
and approved by the Underwriter or Underwriters or controlling person or

persons, or defendant or defendants in any suit so brought, which approval
shall not be unreasonably withheld. In any such suit, any Underwriter or any
such controlling person shall have the right to employ its own counsel, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the Corporation and such
Underwriter shall have mutually agreed to the employment of such counsel, or
(ii) the named parties to any such action (including any impleaded parties)
include both such Underwriter or such controlling person and the Corporation
and such Underwriter or such controlling person shall have been advised by
such counsel that a conflict of interest between the Corporation and such
Underwriter or such controlling person may arise and for this reason it is not
desirable for the same counsel to represent both the indemnifying party and
also the indemnified party (it being understood, however, that the Corporation
shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys for all such
Underwriters and all such controlling persons, which firm shall be designated
in writing by you). The Corporation agrees to notify you within a reasonable
time of the assertion of any claim against it, any of its officers or
directors or any person who controls the Corporation within the meaning of
Section 15 of the 1933 Act, in connection with the sale of the Bonds.
 
  (b) Each Underwriter severally agrees that it will indemnify and hold
harmless the Corporation, its directors and each of the officers of the
Corporation who signed the Registration Statement and each person, if any, who
controls the Corporation within the meaning of Section 15 of the 1933 Act to
the same extent as the indemnity contained in subsection (a) of this Section,
but only with respect to statements or omissions made in the Registration
Statement (or any amendment thereto) or any Preliminary Prospectus, such
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Corporation by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), such Preliminary Prospectus,
such prospectus or the Prospectus (or any amendment or supplement thereto). In
case any action shall be brought against the Corporation or any person so
indemnified based on the Registration Statement (or any amendment thereto) or
such Preliminary Prospectus, such prospectus or the Prospectus (or any amendment
or supplement thereto) and in respect of which indemnity may be sought against
any Underwriter, such Underwriter shall have the rights and duties given to the
Corporation, and the Corporation and each person so indemnified shall have the
rights and duties given to the Underwriters, by the provisions of subsection (a)
of this Section.

(c) No indemnifying party shall, without the prior written consent of the 
    indemnified party, effect any settlement of any pending or threatened 
    proceeding in respect of which any indemnified party is or could have been 
    a party and indemnity could have been sought hereunder by such indemnified 
    party, unless such settlement includes an unconditional release of such 
    indemnified party from all liability on claims that are the subject matter 
    of such proceeding. 
 
(d) If the indemnification provided for in this Section 7 is unavailable to or 
    insufficient to hold harmless an indemnified party in respect of any 
    losses, claims, damages, liabilities or expenses (or actions in respect 
    thereof) that would otherwise have been indemnified under the terms of such 
    indemnity, then each indemnifying party shall contribute to the amount paid 
    or payable by such indemnified party as a result of such losses, claims, 
    damages, liabilities or expenses (or actions in respect thereof) in such 
    proportion as is appropriate to reflect the relative benefits received by 
    the Corporation on the one hand and the Underwriters on the other from the 
    offering of the Bonds. If, however, the allocation provided by the 
    immediately preceding sentence is not permitted by applicable law or if the 
    indemnified party failed to give the notice required above, then each 
    indemnifying party shall contribute to such amount paid or payable by such 
    indemnified party in such proportion as is appropriate to reflect not only 
    such relative benefits but also the relative fault of the Corporation on 
    the one hand and the Underwriters on the other in connection with the 
    statements or omissions which resulted in such losses, claims, damages, 
    liabilities or expenses (or actions in respect thereof), as well as any 
    other relevant equity considerations. The relative benefits received by the 
    Corporation on the one hand and the Underwriters on the other shall be 
    deemed to be in the same proportion as the total net proceeds from the 
    offering (before deducting expenses) received by the Corporation bear to 
    the total compensation received by the Underwriters in respect of the 
    underwriting discount as set forth in the table on the cover page of the 
    Prospectus. The relative fault shall be determined by reference to, among 
    other things, whether the untrue or alleged untrue statement of a material 
    fact or the omission or alleged omission to state a material fact relates 
    to information supplied by the Corporation on the one hand or the 
    Underwriters on the other and the parties' relative intent, knowledge,
    access to information and opportunity to correct or prevent such statement
    or omission. The Corporation and the Underwriters agree that it would not be
    just and equitable if contributions pursuant to this Section were determined
    by pro rata allocation (even if the Underwriters were treated as one entity
    for such purpose) or by any other method of allocation which does not take
    account of the equitable considerations referred to above in this Section.
    The amount paid or payable by an indemnified party as a result of the
    losses, claims, damages, liabilities or expenses (or actions in respect
    thereof) referred to above in this Section shall be deemed to include any
    legal or other expenses reasonably incurred by such indemnified party in
    connection with investigating or defending any such action or claim.
    Notwithstanding the provisions of this Section, no Underwriter shall be
    required to contribute any amount in excess of the amount by which the total
    price at which the Bonds underwritten by it and distributed to the public
    were offered to the public exceeds the amount of any damages which such
    Underwriter has otherwise been required to pay by reason of such untrue or
    alleged untrue statement or omission or alleged omission. No person guilty
    of fraudulent misrepresentation (within the meaning of Section 11(f) of the
    1933 Act) shall be entitled to contribution from any person who was not
    guilty of such fraudulent misrepresentation. The Underwriters' obligations
    to contribute are several in proportion to their respective underwriting
    obligations and not joint. 

  8. Default by One or More of the Underwriters. (a) If any Underwriter shall
default in its obligation to purchase the Bonds which it has agreed to
purchase hereunder on the Closing Date, you may in your discretion arrange for
you or another party or other parties to purchase such Bonds on the terms
contained herein. If within thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such Bonds, then the
Corporation shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties satisfactory to you to
purchase such Bonds on such terms. In the event that, within the respective
prescribed periods, you notify the Corporation that you have so arranged for
the purchase of such Bonds, or the Corporation notifies you that it has so
arranged for the purchase of such Bonds, you or the Corporation shall have the
right to postpone such Closing Date for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Corporation agrees to file promptly any amendments to
the Registration Statement or the Prospectus which may be required. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Bonds.
 
  (b) If, after giving effect to any arrangements for the purchase of the Bonds
of a defaulting Underwriter or Underwriters by you or the Corporation as
provided in subsection (a) above, the aggregate amount of such Bonds which
remains unpurchased does not exceed one-tenth of the aggregate amount of all the
Bonds to be purchased at such Closing Date, then the Corporation shall have the
right to require each non-defaulting Underwriter to purchase the amount of Bonds
which such Underwriter agreed to purchase hereunder at such Closing Date and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the amount of Bonds which such Underwriter agreed to purchase
hereunder) of the Bonds of such defaulting Underwriter or Underwriters for which
such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
 
  (c) If, after giving effect to any arrangements for the purchase of the Bonds
of a defaulting Underwriter or Underwriters by you or the Corporation as
provided in subsection (a) above, the aggregate amount of such Bonds which
remains unpurchased exceeds one-tenth of the aggregate amount of all the Bonds
to be purchased at such Closing Date, or if the Corporation shall not exercise
the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Bonds of a defaulting Underwriter or Underwriters, then
this Agreement shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Corporation, except for the expenses to be
borne by the Corporation as provided in Section 5(g) hereof and the indemnity
and contribution agreement in Section 7 hereof; but nothing herein shall relieve
a defaulting Underwriter from liability for its default.
 
  9. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of
the Corporation or its officers and of the several Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made
by or on behalf of any Underwriter or the Corporation, or any of its officers
or directors or any controlling person, and will survive delivery of and
payment for the Bonds.
 

                                       7



 
  10. Reliance on Your Acts. In all dealings hereunder,     shall act on behalf
of each of the Underwriters, and the Corporation shall be entitled to act and
rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by      .
 
  11. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters, will be mailed or telecopied and confirmed to the Underwriters
in care of                  Attn:            ,            ,         , facsimile 
number (     )   -     , or, if sent to the Corporation, will be mailed
or telecopied and confirmed to it at 526 South Church Street,  Charlotte, N.C. 
28202, facsimile number (704) 382-1452, attention of David L. Hauser, Senior
Vice President and Treasurer; provided, however, that any notice to an
Underwriter pursuant to Section 7 hereof shall be sent by mail or telecopy to
such Underwriter at its address or telecopy number set forth in its
Underwriters' Questionnaire or telex constituting such Questionnaire, which
address or telecopy number will be supplied to the Corporation by          . Any
such communications shall take effect upon receipt thereof.
 
  12. Business Day. As used herein, the term "business day" shall mean any day
when the Commission's office in Washington, D.C. is open for business.
 
  13. Successors. This Agreement shall inure to the benefit of and be binding
upon the Underwriters and the Corporation and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the parties
hereto and their respective successors and the controlling persons and the
officers and directors referred to in Section 7, and their respective
successors, heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective successors and said controlling persons, officers
and directors and their respective successors, heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Bonds from any Underwriter shall be deemed to be a successor
or assign by reason merely of such purchase.
 
  14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
 
  15. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to the
choice of law or conflict of law principles thereof.
 
  If the foregoing is in accordance with your understanding, kindly sign and
return to us two counterparts hereof, and upon confirmation and acceptance
by           on behalf of each of the Underwriters, this letter and such 
confirmation and acceptance will become a binding agreement between the
Corporation, on the one hand, and each of the Underwriters, on the other hand,
in accordance with its terms. It is understood that confirmation and 
acceptance of this letter by         on behalf of each of the Underwriters is 
pursuant to the authority set forth in a form of Agreement Among Underwriters, 
the form of which shall be submitted to the Corporation for examination, but
without warranty on your part as to the authority of the signers thereof.

                                
                                     Very truly yours,

                                     Duke Energy Corporation
                        
                                     By:____________________    
                                        Name:                   
                                        Title:                  


The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.

By:____________________   

By:____________________   
   Name:                  
   Title:                  

On behalf of each of the Underwriters



                                       8


                                  SCHEDULE A
                                                        Principal Amount 
                                                         of Bonds to be 
Underwriter                                                Purchased
-----------                                                ---------
                                                           $     




Total.................................................     ---------
                                                           $

                                                           =========