Exhibit 1-D
DUKE ENERGY CORPORATION
UNDERWRITING AGREEMENT
For Purchase of Shares of
Common Stock of the Corporation
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 to the Underwriters named in Schedule A hereto (the
"Underwriters") an aggregate of shares (the "Firm Shares") and, at the
election of the Underwriters, up to additional shares (the "Optional
Shares") of Common Stock ("Stock") of the Corporation (the Firm Shares and the
Optional Shares that the Underwriters elect to purchase pursuant to Section 3
hereof being collectively called the "Shares"). (" ") and
(" ") are the representatives (the "Representatives") of the Underwriters.
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 Shares 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
Shares, 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
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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 Shares 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 Shares by the Underwriters.
(e) This Agreement has been duly authorized, executed and delivered by the
Corporation.
(f) The Shares have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered
by the Corporation pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued, fully paid and
nonassessable; no holder of the Shares will be subject to personal
liability by reason of being such a holder; and the issuance of the
Shares is not subject to the preemptive or other similar rights of any
security holder of the Corporation.
(g) 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 and Sale. On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth (a) the Corporation agrees to issue and sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to purchase
from the Corporation, at a purchase price per share of $ , the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule A hereto and
(b) in the event and to the extent that the Underwriters shall exercise the
election to purchase Optional Shares as provided below, the Corporation agrees
to issue and sell to each of the Underwriters, and each of the
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Underwriters agrees, severally and not jointly, to purchase from the
Corporation, at the purchase price per share set forth in this Section 3, that
portion of the number of Optional Shares as to which such election shall have
been exercised (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying such number of Optional Shares by a fraction, the
numerator of which is the maximum number of Optional Shares which such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule A hereto and the denominator of which is the maximum
number of Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
The Corporation hereby grants to the Underwriters the right to purchase at
their election up to Optional Shares, at the purchase price per share set
forth in the paragraph above, for the purpose of covering sales of shares in
excess of the number of Firm Shares. Any such election to purchase Optional
Shares may be exercised only by written notice from you to the Corporation,
given within a period of 30 calendar days after the date of this Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you
but in no event earlier than the First Time of Delivery (as defined in Section
5 hereof) or, unless you and the Corporation otherwise agree in writing,
earlier than two or later than ten business days after the date of such notice.
4. Offering by the Underwriters. It is understood that the several
Underwriters propose to offer the Shares for sale to the public as set forth in
the Prospectus.
5. Payment and Delivery.
(a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered
in such names as the Representatives may request upon at least forty-
eight hours' prior notice to the Corporation, shall be delivered by or
on behalf of the Corporation to , through the facilities of The
Depository Trust Company ("DTC"), for the account of such Underwriter,
against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Corporation to the Representatives at least
forty-eight hours in advance. The Corporation will cause the
certificates representing the Shares to be made available for checking
and packaging at least twenty-four hours prior to the Time of Delivery
(as defined below) with respect thereto at the office of ,
(the "Designated Office"). The time and date of such delivery
and payment shall be, with respect to the Firm Shares, 10:00 a.m., New
York time, on or such other time and date as the Representatives
and the Corporation may agree upon in writing, and, with respect to
the Optional Shares, 10:00 a.m., New York time, on the date specified
by the Representatives in the written notice given by the
Representatives of the Underwriters' election to purchase such
Optional Shares, or such other time and date as the Representatives
and the Corporation may agree upon in writing. Such time and date for
delivery of the Firm Shares is herein called the "First Time of
Delivery," such time and date for delivery of the Optional Shares, if
not the First Time of Delivery, is herein called the "Second Time of
Delivery," and each such time and date for delivery is herein called a
"Time of Delivery."
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to subsections (d), (e), (f), (h) and
(j) of Section 7 hereof, including the
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cross receipt for the Shares and any additional documents requested by
the Underwriters pursuant to the last sentence of such Section 7, will be
delivered at the offices of Xxxxx Xxxxxxxxxx LLP, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and the Shares will be delivered at
the Designated Office, all at such Time of Delivery. A meeting will be
held at said offices of Xxxxx Xxxxxxxxxx LLP at 3:00 p.m., New York time,
on the Business Day immediately preceding such Time of Delivery, at which
meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto.
For the purposes of this Section 5, "Business Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in New York, New York or Charlotte, North
Carolina are generally authorized or obligated by law or executive order
to close.
6. 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 Shares 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
Shares 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.
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(f) The Corporation will arrange or cooperate in arrangements for the
qualification of the Shares 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 Shares as specified herein (other than any transfer taxes), (iii)
the fees and disbursements of counsel for the Underwriters in
connection with the qualification of the Shares under the securities
laws of any jurisdiction in accordance with the provisions of Section
6(f) and in connection with the preparation of any 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 and
expenses in connection with the listing of the Shares on the New York
Stock Exchange, (vi) any filing fee required by the National
Association of Securities Dealers, Inc., (vii) the costs of any
depository arrangements for the Shares with DTC or any successor
depositary 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 Shares,
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 the
Representatives 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).
(h) During a period of 90 days from the date of the Prospectus, the
Corporation will not, without the prior written consent of the
Representatives, offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend or
otherwise transfer, dispose of, directly or indirectly, any Shares or
any securities convertible into or exercisable or exchangeable for
Shares or enter into any swap or other agreement that transfers, in
whole or in part, the economic consequence of ownership of any Shares,
whether any such swap or transaction is to be settled by delivery of
Shares or other securities, in cash or otherwise; provided, however,
that the foregoing shall not apply to any securities or options to
purchase any securities granted or sold pursuant to any employee or
director compensation plans of the Corporation or employee or other
investment plans of the Corporation in effect on the date of this
Agreement.
(i) The Corporation will use its best efforts to maintain the listing of
the Shares on the New York Stock Exchange.
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7. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Shares will be subject at each
Time of Delivery 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 such Time of Delivery, 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 such Time of Delivery, the rating assigned by Xxxxx'x
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 such Time of Delivery, 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 such
Time of Delivery, 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 Shares on the terms and in the
manner contemplated by the Prospectus.
(d) You shall have received an opinion of Xxxxx X. Xxxx, Esq., Senior Vice
President and General Counsel of the Corporation, dated such Time of
Delivery, 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 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.
(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 Shares 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 Shares 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 Shares pursuant to this Agreement.
(viii) The Shares have been duly authorized; the Shares, when issued
and delivered by the Corporation to the Underwriters against
payment therefor as described in the Prospectus, will be
validly issued, fully paid and nonassessable; none of the
Shares are subject to preemptive rights of any security holder
of the Corporation; and the Shares conform as to legal matters
in all material respects to the description thereof in the
Prospectus under the caption "Description of the Common Stock."
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 such Time of Delivery, 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,
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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.
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 Xxxxxx, Xxxxx & Xxxxxx 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 Xxxxx Xxxxxxxxxx
LLP, counsel to the Corporation, dated such Time of Delivery, with
respect to the matters set forth in (i), (iii), (v) through (viii) of
Section 7(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 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 such Time of Delivery 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
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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.
(v) The statements made in the Prospectus under the caption
"Description of the Common Stock," 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.
(vi) 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 Shares or 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 such as have been obtained under the 1933 Act 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 Shares by the Underwriters.
In rendering the foregoing opinion or opinions, Xxxxx Xxxxxxxxxx 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 Xxxxx X.
Xxxx, Esq. as to matters of North Carolina law and on the opinion of Xxxxxx,
Xxxxx & Xxxxxx 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 such Time of Delivery, with respect to the
incorporation of the Corporation, the validity of the Shares, 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 enabling them to pass upon such matters. In giving their
opinion, may rely on the opinion of Xxxxx X. Xxxx, Esq. as to
matters of North Carolina law and on the opinion of Xxxxxx, Xxxxx &
Xxxxxx 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 Shares 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 8 hereof and except for the expenses to
be borne by the Corporation as provided in Section 6(g) hereof.
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(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 such
Time of Delivery, 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 such Time of Delivery, 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 Time of Delivery, that
the conditions specified in Section 7(b) and Section 7(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 such Time of Delivery you shall have received from the
Corporation's independent public accountants a letter, dated such Time
of Delivery, to the effect that such accountants reaffirm the
statements made in the letter furnished pursuant to subsection (i) of
this Section 7, except that the specified date referred to shall be a
date not more than three business days prior to such Time of Delivery.
(k) The Shares to be sold at such Time of Delivery shall have been duly
listed for trading on the New York Stock Exchange subject to official
notice of issuance.
(l) At the First Time of Delivery, each of the executive officers of the
Corporation shall have entered into an agreement substantially in the
form of Exhibit 1 hereto.
The Corporation will furnish you with such conformed copies of such opinions,
certificates, letters and documents as you reasonably request.
8. 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
11
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 8.
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, 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 Shares.
(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
12
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 8 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 Shares. 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,
including proceeds from and compensation received with respect to the
sale of any Optional Shares. 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
13
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 Shares 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 0000 Xxx) 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.
9. Substitution of Underwriters.
(a) If any Underwriter under this Agreement shall fail or refuse (whether
for some reason sufficient to justify, in accordance with the terms
hereof, the termination of its obligations to purchase or otherwise)
to purchase the Shares which it has agreed to purchase, the
Corporation shall immediately notify the remaining Underwriters and
the remaining Underwriters may, within 24 hours of receipt of such
notice, procure some other responsible party or parties satisfactory
to the Corporation, who may include one or more of the remaining
Underwriters, to purchase or agree to purchase such Shares on the
terms herein set forth; and, if the remaining Underwriters shall fail
to procure a satisfactory party or parties to purchase or agree to
purchase such Shares on such terms within such period after the
receipt of such notice, then the Corporation shall be entitled to an
additional period of 24 hours within which to procure another party or
parties to purchase or agree to purchase such Shares on the terms
herein set forth. In any such case, either the remaining Underwriters
or the Corporation shall have the right to postpone the Time of
Delivery for a period not to exceed five business days from the date
set forth in Section 5 hereof, in order that the necessary changes to
the Prospectus and any other documents and arrangements may be
effected. 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 Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the
Corporation as provided in subsection (a) above, the aggregate number
of such Shares which remains unpurchased does not exceed one-tenth of
the aggregate number of all the Shares to be purchased at such Time of
14
Delivery, then the Corporation shall have the right to require each non-
defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and,
in addition, to require each non-defaulting Underwriter to purchase its
pro rata share (based on the number of Shares which such Underwriter
agreed to purchase hereunder at such Time of Delivery) of the Shares 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
Shares of a defaulting Underwriter or Underwriters by you and the
Corporation as provided in subsection (a) above, the aggregate number
of such Shares which remains unpurchased exceeds one-tenth of the
aggregate number of all the Shares to be purchased at such Time of
Delivery, or if the Corporation shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this
Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Corporation to
sell the Optional Shares) 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 6(g) hereof and the indemnity and contribution agreement in
Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. 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 Shares.
11. Reliance on Your Acts. In all dealings hereunder, the Representatives
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 the Representatives.
12. 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 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxx, X.X. 00000, facsimile
number (000) 000-0000, attention of Xxxxx X. Xxxxxx, Senior Vice President and
Treasurer; provided, however, that any notice to an Underwriter pursuant to
Section 8 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 the Representatives. Any such communications
shall take effect upon receipt thereof.
15
13. 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.
14. 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, officers
and directors referred to in Section 8 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 Shares from
any Underwriter shall be deemed to be a successor or assign by reason merely of
such purchase.
15. 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.
16. 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.
16
If the foregoing is in accordance with your understanding, kindly sign and
return to us two counterparts hereof, and upon confirmation and acceptance by
the Representatives 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 the Representatives 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
17
SCHEDULE A
Underwriters
Number of Shares to be
Purchased if Maximum
Total Number of Shares to Option to Purchase
Underwriter be Purchased Exercised
----------- ------------------------- ----------------------
----- -----
Total Shares
===== =====
18
Exhibit 1
Duke Energy Corporation
Lock-Up Agreement
,
Re: Duke Energy Corporation--Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that you, as representatives (the
"Representatives"), propose to enter into an Underwriting Agreement on behalf
of the several Underwriters named in Schedule A to such agreement
(collectively, the "Underwriters") with Duke Energy Corporation, a North
Carolina corporation (the "Corporation"), providing for a public offering (the
"Public Offering") of shares of the common stock (the "Common Stock") of the
Corporation (the "Shares") pursuant to a Registration Statement on Form S-3
filed with the Securities and Exchange Commission (the "SEC").
In consideration of the agreement by the Underwriters to offer and sell
the Shares, the undersigned agrees that, during the period beginning from the
date of the definitive prospectus supplement covering the public offering of
the Shares and continuing to and including the date (the "Cut-off Date") 90
days after the date of such definitive prospectus supplement, the undersigned
will not (i) directly or indirectly offer or sell (or grant any option or
warrant to offer to sell), (ii) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of ownership of the Subject Shares (as hereinafter
defined), whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery
19
of Subject Shares or such other securities, in cash or otherwise, or any
options or warrants to purchase any Subject Shares, or any securities
convertible into, exchangeable for or that represent the right to receive
Subject Shares.
The foregoing restriction is expressly agreed to preclude the undersigned
from engaging in any hedging or other transaction which is designed to or which
reasonably could be expected to lead to or result in a sale or disposition of
the undersigned's Subject Shares even if such Subject Shares would be disposed
of by someone other than the undersigned. Such prohibited hedging or other
transactions would include without limitation any short sale or any purchase,
sale or grant of any right (including without limitation any put or call
option) with respect to any of the undersigned's Subject Shares or with respect
to any security that includes, relates to, or derives any significant part of
its value from such Subject Shares.
The term "Subject Shares" means (i) the shares of Common Stock, whether now
owned or hereafter acquired, owned directly by the undersigned (including
holding as a custodian) or with respect to which the undersigned has beneficial
ownership within the rules and regulations of the SEC and (ii) shares of Common
Stock acquired prior to the Cut-Off Date pursuant to any employee or director
compensation plan of the Corporation or pursuant to any employee or shareholder
investment plan of the Corporation.
Notwithstanding the foregoing, the undersigned may transfer the Subject
Shares (i) as a gift or gifts, provided that the donee or donees thereof
agree(s) to be bound in writing by the restrictions set forth herein, (ii) to
any member of the immediate family of the undersigned provided that the
transferee or transferees agree(s) to be bound in writing by the restrictions
set forth herein, (iii) to any trust or foundation, provided that the trustee
of the trust or foundation agrees to be bound in writing by the restrictions
set forth herein, and provided further that any such transfer shall not involve
a disposition for value, (iv) to an entity controlled by the undersigned
provided the transferee or transferees agree(s) to be bound in writing by the
restrictions set forth herein, (v) pursuant to the laws of testamentary or
intestate descent, provided that the transferee or transferees agree(s) to be
bound in writing by the restrictions set forth herein or (vi) with the prior
written consent of the Representatives on behalf of the Underwriters. For
purposes of this Lock-Up Agreement, "immediate family" shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin.
The undersigned will have at the time the undersigned acquires each of the
Subject Shares, and, except as contemplated by clause (i), (ii), (iii), (iv),
(v) or (vi) above, for the duration of this Lock-Up Agreement will have, good
and marketable title to such Subject Shares, free and clear of all liens,
encumbrances and claims whatsoever created by the undersigned. The undersigned
also agrees and consents to the entry of stop transfer instructions with the
Corporation in its capacity as transfer agent and registrar against the
transfer of the Subject Shares except in compliance with the foregoing
restrictions.
Notwithstanding the foregoing, the undersigned may not make any transfer of
the Shares under clauses (i), (ii), (iii) or (iv) above if any filing by any
party (donor, donee, transferor or transferee) under Section 16(a) of the
Securities Exchange Act of 1934, as amended, shall be required (or be made
voluntarily) in connection with such transfer or distribution (other than a
filing on a Form 5 made after the expiration of the 90-day period referred to
above).
20
The undersigned understands that the Corporation and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
offering. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors, and assigns.
Very truly yours,
_____________________________________
Exact Name of Shareholder
_____________________________________
Authorized Signature
_____________________________________
Title
21
