$
DUKE ENERGY CORPORATION
FIRST AND REFUNDING MORTGAGE BONDS,
% SERIES DUE
UNDERWRITING AGREEMENT
,
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.
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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................................................. ---------
$
=========
Underwriting Agreement for First and Refunding Mortgage Bonds - Duke Energy Corp.
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