Exhibit 1-B
$
DUKE ENERGY CORPORATION
SERIES % SENIOR NOTES DUE
UNDERWRITING AGREEMENT
Gentlemen:
1. Introductory. DUKE ENERGY CORPORATION, a North Carolina corporation
("Corporation"), proposes to issue and sell $ aggregate principal
amount of Series % Senior Notes Due ("Notes"), to be issued pursuant
to the provisions of a Senior Indenture, dated as of September 1, 1998, as the
same may be amended and supplemented by supplemental indentures to the date
hereof (including the supplemental indenture dated as of , ,
relating to the Notes), between the Corporation and The Chase Manhattan Bank
(the "Indenture"), and hereby agrees with the several Underwriters hereinafter
named ("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. 333-14209, which also constitutes a post-
effective amendment to a previous registration statement No. 333-02571),
including a prospectus, relating to the Notes has been filed with the
Securities and Exchange Commission ("Commission") under the Securities Act of
1933 (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 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 Notes, in the form first
filed pursuant to Rule 424(b) under the 1933 Act, 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 rules and
regulations thereunder ("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 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 or any information set forth in the
Prospectus under the caption "Description of the Series Senior Notes - Book-
Entry Only Issuance - The Depository Trust Company."
(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 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 are 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 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, 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; 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 Notes 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 Notes by the Underwriters.
(e) Each of Duke Capital Corporation, PanEnergy Corp, Texas Eastern
Transmission Corporation and Algonquin Gas Transmission Company, 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 Notes. 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 Notes, plus accrued interest from , , the
respective principal amount of Notes set forth opposite the names of the
Underwriters in Schedule A hereto plus the respective principal amount of
additional Notes which each such Underwriter may become obligated to purchase
pursuant to the provisions of Section 8 hereof.
Payment of the purchase price for the Notes to be purchased by the
Underwriters shall be made at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 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 not later than three full business days after
such date as shall be agreed upon by you and the Corporation (the "Closing
Date"). Payment shall be made to the Corporation by wire transfer in
immediately available funds, payable to the order of the
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Corporation against delivery of the Notes, in fully registered form, to you or
upon your order. The Notes shall be delivered in the form of one or more
global certificates in aggregate denomination equal to the aggregate principal
amount of the Notes upon original issuance and registered in the name of Cede
& Co., as nominee for The Depository Trust Company ("DTC").
4. Offering by the Underwriters. It is understood that the several
Underwriters propose to offer the Notes 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 any amendment or
supplementation of the Registration Statement or the Prospectus 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 Notes 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
Notes is required to be delivered under the 1933 Act, will file promptly
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 Notes 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 the
Blue Sky Survey, (ii) the issuance and delivery of the Notes as specified
herein, (iii) the
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fees and disbursements of counsel for the Underwriters in connection with
the qualification of the Notes 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 Notes, (vi) any fees and expenses in
connection with the listing of the Notes on the New York Stock Exchange,
(vii) any filing fee required by the National Association of Securities
Dealers, Inc. and (viii) the costs of any depository arrangements for the
Notes with DTC or any successor depositary.
6. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Notes 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 ▇▇▇▇▇'▇ 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 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.
(d) You shall have received an opinion of ▇▇▇▇▇ ▇. ▇▇▇▇, Esq., Vice
President and General Counsel, Corporate, Gas and Electric Operations, 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.
(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 Indenture has been duly authorized, executed and delivered
by the Corporation and, assuming the due authorization, execution and
delivery thereof by The Chase Manhattan Bank, as Trustee, constitutes a
valid and legally binding instrument of the Corporation, enforceable
against the Corporation in accordance with its terms, subject to the
qualifications that the enforceability of the Corporation's obligations
under the Indenture may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(iv) The Notes have been duly authorized and executed by the
Corporation and, when authenticated by The Chase Manhattan Bank, as
Trustee, in the manner provided in the Indenture and delivered against
payment therefor, will constitute valid and legally binding obligations
of the Corporation enforceable against the Corporation in accordance
with their terms, subject to the
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qualifications that the enforceability of the Corporation's obligations
under the Notes may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law), and are entitled to the benefits
afforded by the Indenture in accordance with the terms of the Indenture
and the Notes.
(v) 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.
(vi) This Agreement has been duly authorized, executed and delivered
by the Corporation.
(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 Notes 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 Notes 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 Notes pursuant to this Agreement.
(viii) The performance by the Corporation of this Agreement and the
Indenture will not contravene any of the provisions of the Restated Articles
of Incorporation or By-Laws of the Corporation.
(ix) 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.
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 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 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 ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇ 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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
LLP, counsel to the Corporation, dated the Closing Date, with respect to
the matters set forth in (i) and (iii) through (viii) of Section 6(d) and
to the further effect that:
(i) 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 Notes or the consummation by the
Corporation of the transactions contemplated by this Agreement or the
Indenture, except for authorization by the North Carolina Utilities
Commission and The Public Service Commission of South
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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 Notes by the Underwriters.
(ii) 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.
(iii) The Indenture is duly qualified under the Trust Indenture Act
of 1939.
(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 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 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 the Registration Statement and the Prospectus or as to the statement
of the eligibility and qualification of the Trustee.
(v) The statements made in the Prospectus under the captions
"Description of the New Debt Securities" and "Description of the Series
Senior Notes," 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.
In rendering the foregoing opinion or opinions, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇ ▇. ▇▇▇▇, Esq. as to matters of North Carolina law and on
the opinion of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇ 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 Notes, 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 ▇▇▇▇▇ ▇. ▇▇▇▇, Esq. as to matters of North Carolina law and on the opinion
of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇ 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 or Duke Energy Capital
Trust I 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 clause (g) in your judgment makes
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it impracticable or inadvisable to proceed with the public offering or the
delivery of the Notes being delivered at the Closing Date 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 for the
expenses to be borne by the Corporation as provided in Section 5(h) hereof.
(h) You shall have received a certificate of the Chairman of the Board,
the President or any Vice President and a principal 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 letters 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.
(j) At the Closing Date you shall have received from the Corporation's
independent public accountants letters, dated the Closing Date, to the
effect that such accountants reaffirm the statements made in the letters
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.
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) above.
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
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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 Notes.
(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.
8. Default by One or More of the Underwriters. (a) If any Underwriter shall
default in its obligation to purchase the Notes 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 Notes 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 Notes, 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 Notes 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 Notes, or the Corporation notifies you that it has so
arranged for the purchase of such Notes, 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 Notes.
(b) If, after giving effect to any arrangements for the purchase of the
Notes of a defaulting Underwriter or Underwriters by you or the Corporation as
provided in subsection (a) above, the aggregate amount of such Notes
8
which remains unpurchased does not exceed one-eleventh of the aggregate amount
of all the Notes 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 Notes 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 Notes which such
Underwriter agreed to purchase hereunder) of the Notes 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
Notes of a defaulting Underwriter or Underwriters by you or the Corporation as
provided in subsection (a) above, the aggregate amount of such Notes which
remains unpurchased exceeds one-eleventh of the aggregate amount of all the
Notes 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 Notes 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(h) hereof and the
indemnity 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 Notes.
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, delivered or telecopied and confirmed to
as your representative in care of at
, , ,
telephone number ( ) , or, if sent to the Corporation, will be
mailed, delivered or telecopied and confirmed to it at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, telephone number (▇▇▇) ▇▇▇-▇▇▇▇, attention of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive Vice President and Chief Financial Officer;
provided, however, that any notice to an Underwriter pursuant to Section 7
hereof shall be delivered or 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 Notes from any Underwriter shall be deemed to be a successor
or assign by reason merely of such purchase.
9
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.
If the foregoing is in accordance with your understanding, kindly sign and
return to us two counterparts hereof, and upon acceptance by
on behalf of each of the Underwriters, this letter and such 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 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: _________________________________
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
By: ________________________________
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SCHEDULE A
Principal Amount
of Notes to be
Underwriter Purchased
----------- ----------------
$
------------
Total.......................................................... $
============
11
