Exhibit 1-B
$
DUKE ENERGY CORPORATION
SERIES % JUNIOR SUBORDINATED 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 % Junior
Subordinated Notes due ("Notes"), to be issued pursuant to the provisions of a
Subordinated Indenture, dated as of December 1, 1997, 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 Junior
Subordinated 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 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 Junior
Subordinated 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 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.
(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
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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 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.
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(iv) The descriptions in the Registration Statement and the Prospectus of
legal or governmental proceedings are accurate and fairly present the
information required to be shown, and such counsel does not know of any
litigation or any legal or governmental proceeding instituted or threatened
against the Corporation or any of its subsidiaries or any of their respective
properties that would be required to be disclosed in the Prospectus and is not
so disclosed.
(v) This Agreement has been duly authorized, executed and delivered
by the Corporation.
(vi) The performance by the Corporation of this Agreement and the
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.
(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
Prospectus and does not express any opinion or belief as to the financial
statements or other financial data contained in or incorporated by reference
into the Registration Statement and the Prospectus, 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 Junior
Subordinated 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
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 Junior
Subordinated Notes--Book-Entry Only Issuance--The Depository Trust Company."
(vi) The statements made in the Prospectus under the captions
"Description of the Junior Subordinated Notes" and "Description of the Series
Junior Subordinated 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 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.
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(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 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
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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) of this Section 7.
In no case shall the Corporation be liable under this indemnity agreement
with respect to any claim made against any Underwriter or any such controlling
person unless the Corporation shall be notified in writing of the nature of
the claim within a reasonable time after the assertion thereof, but failure so
to notify the Corporation shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. The Corporation
shall be entitled to participate at its own expense in the defense, or, if it
so elects, within a reasonable time after receipt of such notice, to assume
the defense of any suit brought to enforce any such claim, but if it so elects
to assume the defense, such defense shall be conducted by counsel chosen by it
and approved by the Underwriter or Underwriters or controlling person or
persons, or defendant or defendants in any suit so brought, which approval
shall not be unreasonably withheld. In any such suit, any Underwriter or any
such controlling person shall have the right to employ its own counsel, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the Corporation and such
Underwriter shall have mutually agreed to the employment of such counsel, or
(ii) the named parties to any such action (including any impleaded parties)
include both such Underwriter or such controlling person and the Corporation
and such Underwriter or such controlling person shall have been advised by
such counsel that a conflict of interest between the Corporation and such
Underwriter or such controlling person may arise and for this reason it is not
desirable for the same counsel to represent both the indemnifying party and
also the indemnified party (it being understood, however, that the Corporation
shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys for all such
Underwriters and all such controlling persons, which firm shall be designated
in writing by you). The Corporation agrees to notify you within a reasonable
time of the assertion of any claim against it, any of its officers or
directors or any person who controls the Corporation within the meaning of
Section 15 of the 1933 Act, in connection with the sale of the Notes.
7
(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) 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-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
8
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.
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.
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
9
SCHEDULE A
Principal Amount
of Notes to be
Underwriter Purchased
----------- ----------------
-----
Total.......................................................... $
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