Exhibit 1-A
$
DUKE ENERGY CORPORATION
SERIES % SENIOR NOTES DUE
UNDERWRITING AGREEMENT
,
Ladies and Gentlemen:
1. Introductory. DUKE ENERGY CORPORATION, a North Carolina corporation
("Corporation"), proposes, subject to the terms and conditions stated herein,
to issue and sell $ aggregate principal amount of 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 (including the supplemental indenture
to be 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 in Schedule A (the "Underwriters") as
follows:
2. Representations and Warranties of the Corporation. The Corporation
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. 333- , which also constitutes a post-
effective amendment to a previous registration statement No. 333-
52204), including a combined prospectus, relating to the Notes 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 Notes, 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 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, in the light of the circumstances under which they were made,
not misleading, and any documents deemed to be incorporated by
reference in the Prospectus will, when they are filed with the
Commission, comply in all material respects with the requirements of
the 1934 Act and the 1934 Act Regulations, and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, except that the Corporation makes no warranty or
representation to the Underwriters with respect to any statements or
omissions made in reliance upon and in conformity with written
information furnished to the Corporation by any Underwriter
specifically for use therein 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."
(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
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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 Notes, qualification under the
Trust Indenture Act of 1939 and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Notes by the Underwriters.
(e) This Agreement has been duly authorized, executed and delivered by the
Corporation.
(f) Each of Duke Capital Corporation, PanEnergy Corp, Duke Energy Natural
Gas Corporation and Texas Eastern Transmission Corporation, each a
Delaware corporation (and herein called a "Principal Subsidiary"), is a
direct or indirect wholly owned subsidiary of the Corporation.
3. Purchase, Sale and Delivery of 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, 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 Xxxxx Xxxxxxxxxx LLP, 1301 Avenue
of the Americas, New York, N.Y., or at such other place as shall be mutually
agreed upon by you and the Corporation, at 10:00 a.m., New York City time, on
, (unless postponed in accordance with the provisions of Section 8)
or such other time and date as shall be agreed upon in writing by you and the
Corporation (the "Closing Date"). Payment shall be made to the Corporation by
wire transfer in immediately available funds, payable to the order of the
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").
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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 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 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 timely file
all documents required to be filed with the Commission pursuant to
Section 13 or 14 of the 1934 Act.
(d) The Corporation will make generally available to its security holders,
in each case as soon as practicable but not later than 60 days after
the close of the period covered thereby, earnings statements (in form
complying with the provisions of Section 11(a) of the 1933 Act, which
need not be certified by independent certified public accountants
unless required by the 1933 Act) covering (i) a twelve-month period
beginning not later than the first day of the Corporation's fiscal
quarter next following the effective date of the Registration Statement
and (ii) a twelve-month period beginning not later than the first day
of the Corporation's fiscal quarter next following the date of this
Agreement.
(e) The Corporation will furnish to you, without charge, copies of the
Registration Statement ( of which will be signed and will include
all exhibits other than those incorporated by reference), the
Prospectus, and all amendments and supplements to such documents, in
each case as soon as available and in such quantities as you reasonably
request.
(f) The Corporation will arrange or cooperate in arrangements for the
qualification of the 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.
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(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 Notes as
specified herein, (iii) the 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., (viii) the costs of
any depository arrangements for the Notes with DTC or any successor
depositary and (ix) 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 Notes, including, without
limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of
the Corporation, travel and lodging expenses of and officers
of the Corporation and any such consultants, and the cost of any
aircraft chartered in connection with the road show; provided, however,
the Underwriters shall reimburse a portion of the costs and expenses
referred to in this clause (ix).
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 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 the Closing Date, there shall not have been
any material adverse change in the condition of the Corporation,
financial or otherwise, except as reflected in or contemplated by the
Prospectus, and, since such dates and up to the Closing Date, there
shall not have been any material transaction entered into by the
Corporation other than transactions contemplated by the Prospectus and
transactions in the ordinary course of business, the effect of which in
your reasonable judgment is so material and adverse as to make it
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impracticable or inadvisable to proceed with the public offering or the
delivery of the Notes 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 the Closing
Date, to the effect that:
(i) The Corporation has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
North Carolina, with power and authority (corporate and other) to
own its properties and conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement.
(ii) Each of the Corporation and the Principal Subsidiaries is duly
qualified to do business in each jurisdiction in which the
ownership or leasing of its property or the conduct of its
business requires such qualification, except where the failure to
so qualify, considering all such cases in the aggregate, does not
have a material adverse effect on the business, properties,
financial position or results of operations of the Corporation and
its subsidiaries taken as a whole.
(iii) The Registration Statement has become effective under the 1933 Act,
and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
are pending or threatened under the 1933 Act.
(iv) The descriptions in the Registration Statement and the
Prospectus of legal or governmental proceedings are accurate
and fairly present the information required to be shown, and
such counsel does not know of any litigation or any legal or
governmental proceeding instituted or threatened against the
Corporation or any of its subsidiaries or any of their
respective properties that would be required to be disclosed in
the Prospectus and is not so disclosed.
(v) This Agreement has been duly authorized, executed and delivered
by the Corporation.
(vi) The performance by the Corporation of this Agreement and the
Indenture will not contravene any of the provisions of the Restated
Articles of Incorporation or By-Laws of the Corporation or any
statute or any order, rule or regulation of which such counsel is
aware of any court or governmental agency or body having
jurisdiction over the Corporation or any of its Principal
Subsidiaries or any of their respective property, nor will such
action conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the
Corporation or any of its Principal Subsidiaries is a party or by
which any of them or their respective property is bound or to which
any of their property or assets is subject which affects in a
material way the Corporation's ability to perform its obligations
under this Agreement and the Indenture.
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(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 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).
(ix) 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 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.
Such counsel shall also state that nothing has come to her attention that
has caused her to believe that the Registration Statement as of the date of
effectiveness under the 1933 Act and the Prospectus as of the date it was
filed with, or transmitted for filing to, the Commission, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus as of the date it was filed with, or
transmitted for filing to, the Commission and at the Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Such counsel may also state that, except as otherwise expressly
provided in such opinion, she does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in or
incorporated by reference into the Registration Statement and the
Prospectus and does not express any opinion or belief as to the financial
statements or other financial data contained in or incorporated by
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reference into the Registration Statement and the Prospectus, the statement
of the eligibility and qualification of the Trustee or as to the
information set forth in the Prospectus under the caption "Description of
the Series Senior Notes--Book-Entry Only Issuance--The Depository Trust
Company."
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 the Closing Date, with respect to the
matters set forth in (i), (iii), (v) through (ix) of Section 6(d) and
to the further effect that:
(i) Each of the Principal Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus.
(ii) The Corporation is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended.
(iii) The Corporation is not a holding company under the Public Utility
Holding Company Act of 1935, as amended.
(iv) The Indenture is duly qualified under the Trust Indenture Act of
1939.
(v) The Registration Statement as of the date of effectiveness under
the 1933 Act and the Prospectus as of the date it was filed with,
or transmitted for filing to, the Commission complied as to form
in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations; and nothing has come to their
attention that would lead them to believe that the Registration
Statement as of the date of effectiveness under the 1933 Act (or
if an amendment to such Registration Statement or an annual
report on Form 10-K has been filed by the Corporation with the
Commission subsequent to the effectiveness of the Registration
Statement, then at the time of the most recent such filing)
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that the
Prospectus as of the date it was filed with, or transmitted for
filing to, the Commission and at the Closing Date contained or
contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. Such opinion may state that such
counsel do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in or
incorporated by reference into the Registration Statement and
Prospectus except as otherwise
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expressly provided in such opinion and do not express any opinion
or belief as to the financial statements or other financial data
contained in or incorporated by reference into the Registration
Statement and the Prospectus, the statement of the eligibility and
qualification of the Trustee or as to the information set forth in
the Prospectus under the caption "Description of the Series
Senior Notes--Book-Entry Only Issuance--The Depository Trust
Company."
(vi) The statements made in the Prospectus under the captions
"Description of the Senior Notes" 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.
(vii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or
body is required for the issue and sale of the 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 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.
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 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 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
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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
Notes on the terms and in the manner contemplated in the Prospectus. In
such event there shall be no liability on the part of any party to any
other party except as otherwise provided in Section 7 hereof and except
for the expenses to be borne by the Corporation as provided in Section
5(g) hereof.
(h) You shall have received a certificate of the Chairman of the Board, the
President, any Vice President, the Secretary or an Assistant Secretary
and any financial or accounting officer of the Corporation, dated the
Closing Date, in which such officers, to the best of their knowledge
after reasonable investigation, shall state that the representations
and warranties of the Corporation in this Agreement are true and
correct as of the Closing Date, that the Corporation has complied with
all agreements and satisfied all conditions on its part to be performed
or satisfied at or prior to the Closing Date, that the conditions
specified in Section 6(b) and Section 6(c) have been satisfied, and
that no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are threatened by the Commission.
(i) On the date of this Agreement, you shall have received a letter dated
the date hereof, in form and substance satisfactory to you, from the
Corporation's independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in or incorporated by reference
into the Prospectus as of a specified date not more than three business
days prior to the date of this Agreement.
(j) At the Closing Date you shall have received from the Corporation's
independent public accountants a letter, dated the Closing Date, to the
effect that such accountants reaffirm the statements made in the letter
furnished pursuant to paragraph (i) of this Section 6, except that the
specified date referred to shall be a date not more than three business
days prior to the Closing Date.
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
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the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, unless such
statement or omission or such alleged statement or omission was made
in reliance upon and in conformity with written information furnished
to the Corporation by any Underwriter through you expressly for use in
the Registration Statement (or any amendment thereto) or such
Preliminary Prospectus, such prospectus, or the Prospectus (or any
amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in
settlement of any litigation, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission
or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the
Corporation; and
(iii) against any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not
paid under (i) or (ii) of this Section 7.
In no case shall the Corporation be liable under this indemnity agreement with
respect to any claim made against any Underwriter or any such controlling
person unless the Corporation shall be notified in writing of the nature of
the claim within a reasonable time after the assertion thereof, but failure so
to notify the Corporation shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. The Corporation
shall be entitled to participate at its own expense in the defense, or, if it
so elects, within a reasonable time after receipt of such notice, to assume
the defense of any suit brought to enforce any such claim, but if it so elects
to assume the defense, such defense shall be conducted by counsel chosen by it
and approved by the Underwriter or Underwriters or controlling person or
persons, or defendant or defendants in any suit so brought, which approval
shall not be unreasonably withheld. In any such suit, any Underwriter or any
such controlling person shall have the right to employ its own counsel, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the Corporation and such
Underwriter shall have mutually agreed to the employment of such counsel, or
(ii) the named parties to any such action (including any impleaded parties)
include both such Underwriter or such controlling person and the Corporation
and such Underwriter or such controlling person shall have been advised by
such counsel that a conflict of interest between the Corporation and such
Underwriter or such controlling person may arise and for this reason it is not
desirable for the same counsel to represent both the indemnifying party and
also the indemnified party (it being understood, however, that the Corporation
shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys for all such
Underwriters and all such controlling persons, which firm shall be designated
in writing by you). The Corporation agrees to notify you within a reasonable
time of the assertion of any claim against it, any of its officers or
directors or any person who controls the
11
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.
(c) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) If the indemnification provided for in this Section 7 is unavailable to or
insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages, liabilities or expenses (or actions in respect
thereof) that would otherwise have been indemnified under the terms of
such indemnity, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Corporation on the one hand and the Underwriters
on the other from the offering of the Notes. 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)
12
received by the Corporation bear to the total compensation received by
the Underwriters in respect of the underwriting discount as set forth in
the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Corporation on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Corporation and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section were determined by
pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
Section. The amount paid or payable by an indemnified party as a result
of the losses, claims, damages, liabilities or expenses (or actions in
respect thereof) referred to above in this Section shall be deemed to
include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Notes 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.
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 which remains unpurchased does not exceed one-
13
tenth 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-tenth 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(g) hereof and the
indemnity and contribution agreement in Section 7 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its
default.
9. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of
the Corporation or its officers and of the several Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made
by or on behalf of any Underwriter or the Corporation, or any of its officers
or directors or any controlling person, and will survive delivery of and
payment for the 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 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 7 hereof shall be sent by mail or telecopy to
such Underwriter at its address or telecopy number set forth in its
Underwriters' Questionnaire or telex constituting such Questionnaire, which
address or telecopy number will be supplied to the Corporation by
. Any such communications shall take effect upon receipt thereof.
12. Business Day. As used herein, the term "business day" shall mean any day
when the Commission's office in Washington, D.C. is open for business.
14
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, 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.
14. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
15. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to
the choice of law or conflict of law principles thereof.
15
If the foregoing is in accordance with your understanding, kindly sign and
return to us two counterparts hereof, and upon confirmation and acceptance
by on behalf of each of the Underwriters, this letter and such
confirmation and acceptance will become a binding agreement between the
Corporation, on the one hand, and each of the Underwriters, on the other hand,
in accordance with its terms. It is understood that confirmation and acceptance
of this letter by on behalf of each of the Underwriters is pursuant
to the authority set forth in a form of Agreement Among Underwriters, the form
of which shall be submitted to the Corporation for examination, but without
warranty on your part as to the authority of the signers thereof.
Very truly yours,
Duke Energy Corporation
By:__________________________________
Name:
Title:
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above written.
By:
By:_______________________________________
Name:
Title:
On behalf of each of the Underwriters
16
SCHEDULE A
Principal Amount
of Notes to be
Underwriter Purchased
----------- ----------------
$
-----
Total........................................................ $
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