PREFERRED SECURITIES
DUKE ENERGY CAPITAL TRUST [ ]
% Trust Preferred Securities
(Liquidation Amount $25 Per Preferred Security)
UNDERWRITING AGREEMENT
, 199
Gentlemen:
1. Introductory. DUKE ENERGY CAPITAL TRUST [ ], a Delaware statutory
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business trust (the "Trust"), and DUKE ENERGY CORPORATION, a North Carolina
corporation (the "Corporation"), propose that the Trust issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") %
Trust Preferred Securities (liquidation amount $25 per preferred security),
representing preferred undivided beneficial interests in the assets of the Trust
(the "Preferred Securities"), guaranteed by the Corporation as to the payment of
distributions and payments upon liquidation or redemption, to the extent set
forth in the Guarantee Agreement between the Corporation and The Chase Manhattan
Bank, as trustee thereunder (the "Guarantee Trustee"), to be dated as of the
Closing Date (as defined in Section 3 hereof) (the "Guarantee") and the Trust
and the Corporation hereby agree with you as hereinafter set forth in this
Agreement.
The entire proceeds from the sale of the Preferred Securities will be
combined with the entire proceeds from the sale by the Trust to the Corporation
of its common securities, representing common undivided beneficial interests in
the assets of the Trust (the "Common
Securities"), and will be used by the Trust to purchase the Series [ ] % Junior
Subordinated Notes due , 20 (the "Notes") to be issued by the Corporation. The
Preferred Securities and the Common Securities will be issued pursuant to the
Amended and Restated Trust Agreement, dated as of , 199 (the "Trust
Agreement"), among the Corporation, as Depositor, and the trustees named
therein. The Notes will be issued pursuant to a Subordinated Indenture, dated as
of , 199 (the "Original Indenture"), between the Corporation and The Chase
Manhattan Bank, as Trustee, as supplemented by a Supplemental Indenture,
dated as of , 199 (the "Supplemental Indenture," and together with the
Original Indenture, the "Indenture"). The Trust Agreement, the Guarantee and the
Indenture are sometimes collectively referred to herein as the "Corporation
Agreements."
2. Representations and Warranties of the Trust and the Corporation. The
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Trust and the Corporation, jointly and severally, represent and warrant to, and
agree with, each of the Underwriters that:
(a) A registration statement (Nos. ), including a prospectus,
relating to the Preferred Securities, the Guarantee and the Notes has been
filed with the Securities and Exchange Commission ("Commission") under the
Securities Act of 1933 (the "1933 Act"). Such registration statement and
any post-effective amendment thereto, each in the form heretofore delivered
to you, and, excluding exhibits thereto but including all documents
incorporated by reference in the prospectus contained therein, to you for
each of the other Underwriters, have been declared effective by the
Commission in such form; no other document with respect to such
registration statement or document incorporated by reference therein has
heretofore been filed with the Commission which has not been delivered to
you; and no stop ordering suspending the effectiveness of such registration
statement has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary prospectus
included in such registration statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission
under the 1933 Act being hereinafter called a "Preliminary Prospectus;" the
various parts of such registration statement, including all exhibits
thereto and including the documents incorporated by reference in the
prospectus contained in the registration statement at the time such part of
the registration statement became effective, each as amended at the time
such part of the registration statement became effective, being hereinafter
called the "Registration Statement;" and such final prospectus, in the form
first filed pursuant to Rule 424(b) under the 1933 Act, being hereinafter
called the "Prospectus;" and any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, 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
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amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Corporation filed pursuant to Section
13(a) or 15(d) of the 1934 Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement).
(b) The Registration Statement conforms and the Prospectus will
conform in all material respects to the requirements of the 1933 Act and
the rules and regulations thereunder ("1933 Act Regulations"), and the
Registration Statement does not and the Prospectus will not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, except that the foregoing does not apply to statements or
omissions in any such document based upon written information furnished to
the Trust or the Corporation by the Underwriters through you specifically
for use therein.
(c) The documents incorporated by reference in the Prospectus pursuant
to Item 12 of Form S-3 under the 1933 Act, at the time they were filed with
the Commission, conformed in all material respects to the requirements of
the 1934 Act and the rules and regulations of the Commission thereunder
(the "1934 Act Regulations"), and, when read together with the other
information in the Prospectus, do not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and any
documents deemed to be incorporated by reference in the Prospectus will,
when they are filed with the Commission, conform in all material respects
to the requirements of the 1934 Act and the 1934 Act Regulations, and will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they are
made, not misleading.
(d) The compliance by the Corporation with all of the provisions of
this Agreement and the consummation of the transactions herein contemplated
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Corporation is a party or by which the Corporation is bound or to
which any of the property or assets of the Corporation is subject, nor will
such action result in any violation of the provisions of the Restated
Articles of Incorporation or By-Laws of the Corporation or any statute or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Corporation or any of its properties; 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 the authorization by the North Carolina Utilities
Commission and The Public Service Commission of South Carolina, the
registration under the 1933 Act of the Preferred Securities, the Guarantee
and the Notes and such consents, approvals, authorizations, registrations
or qualifications as may be required under state
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securities or Blue Sky laws in connection with the purchase and
distribution of the Preferred Securities by the Underwriters.
3. Purchase, Sale and Delivery of Preferred Securities. Subject to the
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terms and conditions herein contained, the Trust agrees to sell to each of the
Underwriters and each of the Underwriters agrees, severally and not jointly, to
purchase from the Trust at a purchase price of $25.00 per Preferred Security,
the number of Preferred Securities set forth opposite the name of such
Underwriter in Schedule I hereto, plus any additional Preferred Securities which
such Underwriter may become obligated to purchase pursuant to the provisions of
Section 8 hereof.
As compensation to the Underwriters for their commitments hereunder, and in
view of the fact that the proceeds of the sale of the Preferred Securities will
be used by the Trust to purchase the Notes of the Corporation, the Corporation
hereby agrees to pay at the Closing Date (as defined below) to ,
for the accounts of the several Underwriters, a commission equal to $
per share for the Preferred Securities.
The Preferred Securities to be purchased by the Underwriters hereunder will
be represented by a global certificate or certificates in book-entry form which
will be deposited by or on behalf of the Trust with The Depository Trust Company
("DTC") or its designated custodian and registered in the name of Cede & Co., as
nominee of DTC. The Trust will deliver the Preferred Securities to ,
for the respective accounts of the Underwriters, against payment by or on
behalf of such Underwriters of the purchase price therefor by wire transfer of
immediately available funds to the Trust, by causing DTC to credit the Preferred
Securities to the account of at DTC. The time and date of
such delivery and payment (the "Closing Date") shall be 9:30 a.m., New York City
time, on , 199 , or at such other time and date as you, the Trust and
the Corporation may agree upon in writing at the office of Xxxxx Xxxxxxxxxx,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as
you, the Trust and the Corporation may determine. It is understood that each
Underwriter has authorized , for its account, to accept
delivery of, receipt for, and make payment of the purchase price, for the
Preferred Securities which it has agreed to purchase.
At the Closing Date, the Corporation will pay, or cause to be paid, the
compensation payable to the Underwriters under this Section 3 by wire transfer
of immediately available funds to , on behalf of the
Underwriters.
4. Offering by the Underwriters. It is understood that the Underwriters
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propose to offer the Preferred Securities for sale to the public as set forth in
the Prospectus.
5. Covenants of the Trust and the Corporation. The Trust and the
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Corporation, jointly and severally, covenant and agree with each of the
Underwriters that:
(a) The Trust and the Corporation will advise you promptly of any
amendment or supplementation of the Registration Statement or the
Prospectus and of the institution
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by the Commission of any stop order proceedings in respect of the
Registration Statement, and will use their 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 Preferred
Securities 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 Trust and 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 Trust and the Corporation, during the period when a prospectus
relating to the Preferred Securities is required to be delivered under the
1933 Act, will file promptly all documents required to be filed with the
Commission pursuant to Section 13 or 14 of the 1934 Act.
(d) The Corporation will make generally available to its security
holders, in each case as soon as practicable but not later than 60 days
after the close of the period covered thereby, earnings statements (in form
complying with the provisions of Section 11(a) of the 1933 Act, which need
not be certified by independent certified public accountants unless
required by the 1933 Act) covering (i) a twelve-month period beginning not
later than the first day of the Corporation's fiscal quarter next following
the effective date of the Registration Statement and (ii) a twelve-month
period beginning not later than the first day of the Corporation's fiscal
quarter next following the date of this Agreement.
(e) The Trust and the Corporation will furnish to you 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 Trust and the Corporation will arrange or cooperate in
arrangements for the qualification of the Preferred Securities, and to the
extent required or advisable, the Guarantee and 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 neither the Trust nor the Corporation shall 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 not, during the period beginning from the
date hereof and continuing to and including the date [ ] days after the
date hereof, sell, offer to sell, grant any option for the sale of, or
otherwise dispose of any Preferred Securities, any security convertible
into or exchangeable for the Preferred Securities or the Notes or any debt
security substantially similar to the Notes or equity securities
substantially similar to the Preferred Securities (except for the Notes and
the Preferred Securities issued pursuant to this Agreement), without your
prior written consent.
(h) The Corporation will pay all expenses incident to the performance
of the obligations of the Trust and the Corporation under this Agreement
including (i) the printing and filing of the Registration Statement and the
printing of this Agreement and the Blue Sky Survey, (ii) the issuance and
delivery of the Preferred Securities, the Guarantee and the Notes as
specified herein, (iii) the fees and disbursements of counsel for the
Underwriters in connection with the qualification of the Preferred
Securities, the Guarantee and 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 Preferred Securities, (vi) any filing fee
required by the National Association of Securities Dealers, Inc., (vii) the
costs and charges of the transfer agent or registrar, (viii) the costs of
any depositary arrangements for the Preferred Securities with DTC or any
successor depositary, (ix) all fees and expenses of the Trustees, including
the Indenture Trustee, Property Trustee, Guarantee Trustee and Delaware
Trustee and any agent thereof, and the fees and disbursements of their
counsel, and (x) all fees and expenses in connection with the listing of
the Preferred Securities and, if applicable, the Notes on the New York
Stock Exchange and the cost of registering the Preferred Securities under
Section 12 of the 1934 Act.
6. Conditions of the Obligations of the Underwriters. The obligations of
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the Underwriters to purchase and pay for the Preferred Securities will be
subject to the accuracy of the representations and warranties on the part of the
Trust or the Corporation herein, to the accuracy of the statements of trustees
or representatives of the Trust and Corporation officers made pursuant to the
provisions hereof, to the performance by the Trust and the Corporation of their
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 Trust, the Corporation or you, shall be threatened by the
Commission.
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(b) Prior to the Closing Date, the rating assigned by Xxxxx'x
Investors Service, Inc. or Standard & Poor's Ratings Services to any debt
securities or preferred stock of the Corporation 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 Trust or the
Corporation, financial or otherwise, except as reflected in or contemplated
by the Prospectus, and, since such dates and up to the Closing Date, there
shall not have been any material transaction entered into by the
Corporation other than transactions contemplated by the Prospectus and
transactions in the ordinary course of business.
(d) You shall have received an opinion of Xxxxx X. Xxxx, Esq., Deputy
General Counsel to the Corporation, dated the Closing Date, to the effect
that:
(i) The Corporation has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of North Carolina, with power and authority (corporate and
other) to own its properties and conduct its business as described
in the Prospectus.
(ii) The Corporation is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in
which it owns or leases substantial properties or in which the
conduct of its business requires such qualification.
(iii) The Trust Agreement has been duly authorized, executed and
delivered by the Corporation, and, assuming 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 Trust Agreement may be
limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights
generally, and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity
or at law).
(iv) The Guarantee Agreement has been duly authorized, executed
and delivered by the Corporation and 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 Guarantee Agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and by
general
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principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(v) 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).
(vi) 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).
(vii) 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.
(viii) This Agreement has been duly authorized, executed and
delivered by the Corporation.
(ix) The North Carolina Utilities Commission and The Public
Service Commission of South Carolina have issued appropriate orders
with respect to the issuance of the Notes and the Guarantee, and, to
the best of the knowledge of such counsel, such orders are still in
effect; the issuance of the Notes and the Guarantee are in
conformity with the terms of such orders; and no other
authorization, approval or consent of any other governmental body is
legally required for the issuance of the Notes and the Guarantee.
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(x) The performance by the Corporation of this Agreement and the
Corporation Agreements will not contravene any of the provisions of
the Restated Articles of Incorporation or By-Laws of the
Corporation.
(xi) The descriptions in the Registration Statement and
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 other legal or governmental proceedings
required to be described in the Registration Statement or Prospectus
which are not described as required.
In rendering such opinion, such counsel may state that he expresses no
opinion as to the laws of any jurisdiction other than North Carolina and
may rely on the opinion of South Carolina counsel satisfactory to you as to
matters of the laws of South Carolina.
(e) You shall have received an opinion or opinions of Xxxxx
Xxxxxxxxxx, counsel to the Corporation, dated the Closing Date, with
respect to the matters set forth in (i) and (iii) through (x) of Section
6(d) and to the further effect that:
(i) 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 (in each case,
other than the financial statements and other financial information
included therein, as to which no opinion need be rendered) complied
as to form in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations; the Corporation Agreements
have each been qualified under the Trust Indenture Act of 1939; 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.
(ii) The statements made in the Prospectus under the captions
"Description of the Preferred Securities," "Description of the
Guarantee" and "Description of the Series [ ] Junior Subordinated
Notes," insofar as they purport to constitute summaries of the terms
of the Preferred Securities, the Guarantee and the Notes, and the
statements as to matters of law and legal
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conclusions contained in the Prospectus under the caption "Certain
Federal Income Tax Considerations," are correct in all material
respects.
In giving their opinion Xxxxx Xxxxxxxxxx may rely on the opinion of
Xxxxx X. Xxxx, Esq. as to matters of the laws of North Carolina and may
rely on the opinion of South Carolina counsel satisfactory to you as to
matters of the laws of South Carolina.
(f) You shall have received the opinion of Xxxxxxxx, Xxxxxx & Xxxxxx,
special Delaware counsel to the Trust, dated the Closing Date, to the
effect that:
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Business Trust Act of
the State of Delaware (the "Delaware Business Trust Act"), and all
filings required under the laws of the State of Delaware with
respect to the creation and valid existence of the Trust as a
business trust have been made.
(ii) Under the Delaware Business Trust Act and the Trust
Agreement, the Trust has the business trust power and authority to
own property and conduct its business as described in the
Prospectus.
(iii) Under the Delaware Business Trust Act and the Trust
Agreement, the Trust has the business trust power and authority (a)
to execute and deliver this Agreement, (b) to perform its
obligations under this Agreement and (c) to issue and perform its
obligations under the Preferred Securities and the Common
Securities.
(iv) Under the Delaware Business Trust Act and the Trust
Agreement, the execution and delivery by the Trust of this Agreement
and the performance by the Trust of its obligations hereunder and
under the Trust Agreement, have been duly authorized by all
necessary business trust action on the part of the Trust.
(v) The Trust Agreement constitutes a valid and binding
obligation of the Corporation and the trustees named therein,
enforceable against the Corporation and the trustees named therein,
in accordance with its terms, subject, as to enforcement, to the
effect upon the Trust Agreement of (a) bankruptcy, insolvency,
moratorium, receivership, liquidation, fraudulent conveyance,
reorganization and other similar laws relating to or affecting the
remedies and rights of creditors generally, (b) principles of
equity, including applicable law relating to fiduciary duties
(regardless of whether considered or applied in a proceeding in
equity or at law) and (c) the effect of applicable public policy on
the enforceability of provisions relating to indemnification or
contribution.
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(vi) The Preferred Securities have been duly authorized by the
Trust Agreement and are duly and validly issued and, subject to the
qualifications set forth herein, fully paid and non-assessable
preferred undivided beneficial interests in the assets of the Trust;
the Holders of the Preferred Securities, as beneficial owners of the
Trust (the "Securityholders"), are entitled to the same limitation
of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law
of the State of Delaware; provided, however, that such counsel may
note that the Securityholders may be obligated, pursuant to the
Trust Agreement, to (a) provide indemnity and/or security in
connection with and pay a sum sufficient to cover any taxes or
governmental charges arising from transfers or exchanges of
Preferred Securities certificates and the issuance of replacement
Preferred Securities certificates and (b) provide security and/or
indemnity in connection with requests of or directions to the
Property Trustee (as defined in the Trust Agreement) to exercise its
rights and powers under the Trust Agreement; and under the Delaware
Business Trust Act and the Trust Agreement, the issuance of the
Preferred Securities is not subject to preemptive or other similar
rights.
(vii) The Common Securities have been duly authorized by the
Trust Agreement and are duly and validly issued and fully paid
undivided beneficial interests in the assets of the Trust; and under
the Delaware Business Trust Act and the Trust Agreement, the
issuance of the Common Securities is not subject to preemptive or
other similar rights.
(viii) The issuance and sale by the Trust of the Preferred
Securities and the Common Securities, the execution, delivery and
performance by the Trust of this Agreement, the performance by the
Trust of the Trust Agreement, the consummation by the Trust of the
transactions contemplated herein and therein and the compliance by
the Trust with its obligations hereunder do not violate (a) any of
the provisions of the Certificate of Trust of the Trust or the Trust
Agreement or (b) any applicable Delaware law or Delaware
administrative regulation.
(ix) Assuming that the Trust derives no income from or connected
with sources within the State of Delaware and has no assets,
activities (other than having a Delaware trustee as required by the
Delaware Business Trust Act and the filing of documents with the
Secretary of State of the State of Delaware) or employees in the
State of Delaware, no authorization, approval, consent or order of
any Delaware court or Delaware governmental authority or Delaware
agency is required to be obtained by the Trust solely as a result of
the issuance and sale of the Preferred Securities, the consummation
by the Trust of the transactions contemplated in this Agreement and
the Trust Agreement or the compliance by the Trust of its
obligations hereunder and thereunder.
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(x) Assuming that the Trust derives no income from or connected
with sources within the State of Delaware and has no assets,
activities (other than having a Delaware trustee as required by the
Delaware Business Trust Act and the filing of documents with the
Secretary of State of the State of Delaware) or employees in the
State of Delaware, and assuming that the Trust is treated as a
grantor trust for federal income tax purposes, the Securityholders
(other than those holders of the Preferred Securities who reside or
are domiciled in the State of Delaware) will have no liability for
income taxes imposed by the State of Delaware solely as a result of
their participation in the Trust, and the Trust will not be liable
for any income tax imposed by the State of Delaware.
In rendering the opinion expressed in this paragraph (f), such counsel need
express no opinion concerning the securities laws of the State of Delaware.
(g) You shall have received the opinion of Xxxxx & Wood llp, counsel
for the Underwriters, dated the Closing Date, with respect to the matters
set forth in (i) and (iii) through (x) of Section 6(d) and in (i) and (ii)
(except as to tax matters) of Section 6(e) and 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 Xxxxx & Xxxx llp may rely on the
opinion of Xxxxx X. Xxxx, Esq. as to matters of the laws of North Carolina
and on the opinion of South Carolina counsel satisfactory to you as to
matters of the laws of South Carolina.
(h) 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 Corporation's securities on the New York
Stock Exchange; or (ii) a general moratorium on commercial banking
activities in New York declared by either Federal or New York State
authorities; or (iii) the outbreak or material escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war if the effect of any such event specified in this
clause (iv) in your judgment makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Preferred
Securities being delivered at the Closing Date on the terms and in the
manner contemplated in the Prospectus.
(i) You shall have received a certificate of the Chairman of the
Board, the President or any Vice President and a principal financial or
accounting officer of the Corporation and a certificate of a trustee or
authorized representative of the Trust, each dated the Closing Date, in
which such officers or trustee or representative, as the case may be, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Corporation and the Trust in
this Agreement are true and correct, that the Corporation and the Trust
have complied with all agreements and satisfied all conditions on their
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
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Statement has been issued and no proceedings for that purpose have been
instituted or are threatened by the Commission.
(j) On the date of this Agreement, you shall have received from
Deloitte & Touche llp a letter dated the date hereof, in form and substance
satisfactory to you, to the effect that (i) they are independent certified
public accountants with respect to the Corporation within the meaning of
the 1933 Act and the applicable published 1933 Act Regulations; (ii) in
their opinion, the financial statements and supplemental schedules
incorporated by reference in the Registration Statement from the
Corporation's Form 10-K Annual Reports filed with the Commission under
Section 13 of the 1934 Act (such Form 10-K Annual Report for December 31 of
the most recent year in which the Corporation has filed an Annual Report on
Form 10-K, or if the Corporation has filed a Current Report on Form 8-K
including audited financial statements for a later year but has not
theretofore filed any Annual Report on Form 10-K for such year, such
Current Report on Form 8-K being hereinafter referred to as the "Form 10-
K") comply as to form in all material respects with the applicable
accounting requirements of the 1934 Act and the applicable published 1934
Act Regulations; (iii) they have read the unaudited consolidated balance
sheets of the Corporation as of the end of each quarter since the end of
the year covered by the Form 10-K and the related unaudited consolidated
statements of income, retained earnings and cash flows of the Corporation
for the interim periods ended as of the end of each of the quarters since
the end of the year covered by the Form 10-K and the corresponding interim
periods in the preceding year incorporated by reference in the Registration
Statement and included in the Corporation's Form 10-Q Quarterly Reports, if
any, filed with the Commission under Section 13 of the 1934 Act for the
quarters ended since the end of the year covered by the Form 10-K (the
"Form 10-Q's"); and on the basis of a reading of such unaudited
consolidated balance sheets and such unaudited consolidated statements of
income, retained earnings and cash flows and of the latest available
unaudited consolidated financial statements of the Corporation, the minutes
of the meetings of shareholders, the Board of Directors and the Management
Committee of the Board of Directors of the Corporation as set forth in the
minute books at a specified date not more than three business days prior to
the date of such letter, and inquiries of officers of the Corporation who
have responsibility for financial and accounting matters (it being
understood that the foregoing procedures do not constitute an examination
made in accordance with generally accepted auditing standards and that they
would not necessarily reveal matters of significance with respect to the
comments made in such letter, and, accordingly, that Deloitte & Touche llp
make no representation as to the sufficiency of such procedures for your
purposes), nothing has come to their attention which caused them to believe
that (A) any material modifications should be made to the unaudited
financial statements of the Corporation as at the end of each quarter since
the end of the year covered by the Form 10-K and for the interim periods
ended as of the end of each of the quarters since the end of the year
covered by the Form 10-K and the corresponding interim periods in the
preceding year included in the Form 10-Q's and incorporated by reference in
the Registration Statement for them to be in conformity with generally
accepted accounting principles, (B) such unaudited financial
13
statements do not comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the applicable
published 1934 Act Regulations or (C) at a specified date not more than
three business days prior to the date of such letter there was any change
in the capital stock (except for the issuance of common stock under the
Corporation's Retirement Savings Plan, Employees' Stock Ownership Plan,
Stock Purchase and Dividend Reinvestment Plan, Stock Incentive Plan or
Directors' Savings Plan) or long-term debt of the Corporation (except for
increases resulting from issuances of debt pursuant to the Corporation's
Medium-Term Notes Program or reductions resulting from redemptions,
purchases, payments of sinking fund obligations or scheduled maturities) or
any decrease in its net assets, in each case as compared with amounts shown
in the most recent balance sheet of the Corporation incorporated by
reference in the Prospectus except, with respect to clause (C), for changes
or decreases which the Prospectus discloses have occurred or may occur or
for changes or decreases which are occasioned by the declaration of
dividends; and (iv) they have carried out certain procedures and made
certain findings confirming certain other financial information contained
or incorporated by reference in the Registration Statement and Prospectus.
(k) On the date of this Agreement, but only if such date is prior to
the filing of the Corporation's Form 10-K for 1997, you shall have received
from KPMG Peat Marwick llp a letter dated the date hereof, in form and
substance satisfactory to you, to the effect set forth in Annex I hereto.
14
(l) At the Closing Date you shall have received from Deloitte & Touche
llp a letter, dated the Closing Date, to the effect that such accountants
reaffirm the statements made in the letter furnished pursuant to paragraph
(j) 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 Trust and the Corporation, jointly and
---------------
severally, agree 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 Trust or 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
Trust and the Corporation; and
15
(iii) against any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above.
In no case shall the Trust or the Corporation be liable under this
indemnity agreement with respect to any claim made against any Underwriter or
any such controlling person unless the Trust and 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 Trust or the Corporation
shall not relieve either of them from any liability which either of them may
have otherwise than on account of this indemnity agreement. The Trust and the
Corporation shall be entitled to participate at their own expense in the
defense, or, if they so elect, within a reasonable time after receipt of such
notice, to assume the defense of any suit brought to enforce any such claim, but
if they so elect to assume the defense, such defense shall be conducted by
counsel chosen by them 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 Trust and
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 Trust or the Corporation and such Underwriter or such
controlling person shall have been advised by such counsel that a conflict of
interest between the Trust or 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 Trust and 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 Trust and the Corporation agree to notify you within a reasonable
time of the assertion of any claim against them, any of their officers,
directors or trustees or any person who controls the Trust or the Corporation
within the meaning of Section 15 of the 1933 Act, in connection with the sale of
the Preferred Securities.
(b) Each Underwriter severally agrees that it will indemnify and hold
harmless the Trust and the Corporation, their directors, trustees,
representatives and each of the officers of the Corporation who signed the
Registration Statement and each person, if any, who controls them 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 Trust or the Corporation by such
16
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 Trust or 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
Trust and the Corporation, and the Trust and the Corporation and each person so
indemnified shall have the rights and duties given to the Underwriters, by the
provisions of subsection (a) of this Section.
8. Default by One or More of the Underwriters. (a) If any Underwriter
------------------------------------------
shall default in its obligation to purchase the Preferred Securities 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 Preferred
Securities 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 Preferred
Securities, then the Trust and 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 Preferred Securities on such terms.
In the event that, within the respective prescribed periods, you notify the
Trust and the Corporation that you have so arranged for the purchase of such
Preferred Securities, or the Trust or the Corporation notifies you that it has
so arranged for the purchase of such Preferred Securities, you, the Trust 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 Trust and the Corporation agree 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 Preferred
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Preferred Securities of a defaulting Underwriter or Underwriters by you, the
Trust or the Corporation as provided in subsection (a) above, the aggregate
number of such Preferred Securities which remains unpurchased does not exceed
one-eleventh of the aggregate number of all the Preferred Securities to be
purchased at such Closing Date, then the Trust and the Corporation shall have
the right to require each non-defaulting Underwriter to purchase the number of
Preferred Securities 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 number of Preferred Securities which
such Underwriter agreed to purchase hereunder) of the Preferred Securities 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
Preferred Securities of a defaulting Underwriter or Underwriters by you, the
Trust or the Corporation as
17
provided in subsection (a) above, the aggregate number of such Preferred
Securities which remains unpurchased exceeds one-eleventh of the aggregate
number of all the Preferred Securities to be purchased at such Closing Date, or
if the Trust or the Corporation shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase
Preferred Securities of a defaulting Underwriter or Underwriters, then this
Agreement shall thereupon terminate, without liability on the part of any non-
defaulting Underwriter, the Trust or the Corporation, except for the expenses to
be borne by the Corporation as provided in Section 5(h) hereof and the indemnity
agreement in Section 7 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
9. Representations and Indemnities to Survive Delivery. The respective
---------------------------------------------------
indemnities, agreements, representations, warranties and other statements of the
Trust and the Corporation or their officers and of the 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 the Underwriters or the Trust and the Corporation, or any of
their officers, directors, trustees, representatives or any controlling person,
and will survive delivery of and payment for the Preferred Securities.
10. Reliance on Your Acts. In all dealings hereunder, you shall act on
---------------------
behalf of each of the Underwriters, and the parties hereto shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by you jointly or by on behalf of
you as the representatives.
11. Notices. All communications hereunder will be in writing and, if sent
-------
to the Underwriters, will be mailed, delivered, or telecopied and confirmed to
you as the representatives in care of at ,
, attention of or, if sent to the Trust or the
Corporation, will be mailed, delivered, or telecopied and confirmed to them at
000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxx, X.X. 00000, telephone number (000) 000-0000,
attention of Xxxxxxx X. Xxxxxxx, Executive Vice President and Chief Financial
Officer; provided, however, that any notice to an Underwriter pursuant to
Section 7(a) hereof shall be delivered or sent by mail or telecopy to such
Underwriter at its address or telecopy number set forth in its Underwriters'
Questionnaire or telex constituting such Questionnaire, which address or
telecopy number will be supplied to the Trust and the Corporation by you. 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, the Trust and the Corporation and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the controlling
persons and the officers, directors, trustees and representatives referred to in
Section 7, and their respective successors, heirs and legal representatives any
legal or equitable right, remedy or
18
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, directors,
trustees and representatives and their respective successors, heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Preferred Securities 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.
19
If the foregoing is in accordance with your understanding, kindly sign and
return to us two counterparts hereof, and upon your acceptance on behalf of each
of the Underwriters, this letter and such acceptance will become a binding
agreement between the Trust and the Corporation, on the one hand, and the each
of the Underwriters, on the other hand, in accordance with its terms. It is
understood that your acceptance of this letter 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 Trust and the
Corporation for examination, but without warranty on your part as to the
authority of the signers thereof.
Very truly yours,
DUKE ENERGY CAPITAL TRUST [ ]
By: ______________________________
DUKE ENERGY CORPORATION
By: ______________________________
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above
written.
By: ________________________________
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SCHEDULE I
Number of
Preferred
Securities to
Underwriter be Purchased
----------- -------------
-----------
Total...........................................
===========
21
ANNEX I
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Pursuant to Section 6(k) of the Underwriting Agreement, if applicable, the
Underwriters shall receive the letter of KPMG Peat Marwick LLP to the effect
that:
(i) they are independent certified public accountants with respect to
PanEnergy Corp within the meaning of the 1933 Act and the applicable published
rules and regulations thereunder.
(ii) In their opinion, the consolidated financial statements audited by them
and incorporated by reference in the Registration Statement comply as to form in
all material respects with the applicable accounting requirements of the 1933
Act and the 1934 Act and the related published rules and regulations.
22
