Exhibit 1-D
Preferred Securities
DUKE ENERGY CAPITAL TRUST [ ]
% Trust Preferred Securities
(Liquidation Amount $ per Preferred Security)
UNDERWRITING AGREEMENT
,
As representatives of the several Underwriters
named in Schedule A hereto
Gentlemen:
1. Introductory. Duke Energy Capital Trust [ ], a Delaware statutory
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 A hereto (the "Underwriters") % Trust
Preferred Securities (liquidation amount $ 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
, (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 , (the "Trust Agreement"),
among the Corporation, as Depositor, and the trustees named therein, including
The Chase Manhattan Bank, as property trustee (the "Property Trustee"), and
Chase Manhattan Bank Delaware, as Delaware trustee (the "Delaware Trustee").
The Notes will be issued pursuant to a Subordinated Indenture, dated as of
December 1, 1997 (the "Original Indenture"), between the Corporation and The
Chase Manhattan Bank, as Trustee (the "Indenture Trustee"), as
supplemented to the date hereof and as to be supplemented by a supplemental
indenture, dated as of , (the "Supplemental Indenture" and, together
with the Original Indenture as theretofore amended and supplemented, 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 Trust
and the Corporation, jointly and severally, represent and warrant to, and agree
with, the several Underwriters that:
(a) A registration statement (Nos. 333- and 333- -0 ), which
also constitutes a post-effective amendment to two previous registration
statements Nos. 333-14209 and 333-79065), including a combined prospectus,
relating to the Preferred Securities, the Guarantee and the Notes has been
filed with the Securities and Exchange Commission (the "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, to you for each of the other Underwriters, have been declared
effective by the Commission in such form, and no stop order suspending the
effectiveness of such registration statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) of the rules
and regulations of the Commission under the 1933 Act being hereinafter
called a "Preliminary Prospectus"; the various parts of such registration
statement, including all exhibits thereto and including the documents
incorporated by reference in the prospectus contained in the registration
statement at the time such part of the registration statement became
effective, each as amended at the time such part of the registration
statement became effective, being hereinafter called the "Registration
Statement"; and the final prospectus relating to the Preferred Securities,
the Guarantee and the Notes, in the form first filed pursuant to Rule
424(b) under the 1933 Act, being hereinafter called the "Prospectus"; and
any reference herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by reference
therein, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "1934 Act"), and incorporated by reference in such
Preliminary Prospectus or Prospectus, as the case may be; and any reference
to any amendment to the Registration Statement shall be deemed to refer to
and include any annual report of the Corporation filed pursuant to Section
13(a) or 15(d) of the 1934 Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement).
(b) The Registration Statement conforms and the Prospectus will conform
in all material respects to the requirements of the 1933 Act and the rules
and regulations thereunder ("1933 Act Regulations"), and the Registration
Statement does not and the Prospectus will not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, except
that the Corporation makes no warranty or representation to the
Underwriters with respect to any statements or
2
omissions made in reliance upon and in conformity with written information
furnished to the Trust or the Corporation by any Underwriter through you
specifically for use therein or any information set forth in the Prospectus
under the caption "Description of the Preferred Securities--Book-Entry
Issuance--The Depository Trust Company."
(c) The documents incorporated by reference in the Prospectus, 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,
in the light of the circumstances under which they were made, not
misleading, and any documents deemed to be incorporated by reference in the
Prospectus will, when they are filed with the Commission, comply in all
material respects with the requirements of the 1934 Act and the 1934 Act
Regulations, and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they are made, not misleading, except that the Corporation makes no
warranty or representation to the Underwriters with respect to any
statements or omissions made in reliance upon and in conformity with
written information furnished to the Trust or the Corporation by any
Underwriter through you specifically for use therein.
(d) The compliance by the Corporation and the Trust with all of the
provisions of this Agreement and the consummation of the transactions
herein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Corporation or any of its Principal
Subsidiaries is a party or by which any of them or their respective
property is bound or to which any of their property or assets is subject,
nor will such action result in any violation of the provisions of the
Restated Articles of Incorporation or By-Laws of the Corporation, the Trust
Agreement or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over (i) the Corporation or
its Principal Subsidiaries or any of their respective property or (ii) the
Trust; 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 or the Trust of the
transactions contemplated by this Agreement, except for 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 securities or Blue Sky laws in connection with the purchase and
distribution of the Preferred Securities by the Underwriters.
(e) Each of Duke Capital Corporation, PanEnergy Corp, Duke Energy Natural
Gas Corporation and Texas Eastern Transmission Corporation, each a Delaware
corporation (and hereinafter called a "Principal Subsidiary"), is a direct
or indirect wholly-owned subsidiary of the Corporation.
3. Purchase, Sale and Delivery of Preferred Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth,
3
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 $ per Preferred Security, the number of Preferred
Securities set forth opposite the name of such Underwriter in Schedule A
hereto, plus any additional Preferred Securities which each 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
Preferred Security.
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 10:00 a.m., New York
City time, on , (unless postponed in accordance with the provisions of
Section 8), or at such other time and date as you, the Trust and the
Corporation may agree upon in writing, at the office of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 , as representative of and on behalf
of the Underwriters.
4. Offering by the Underwriters. It is understood that the several
Underwriters 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 Corporation,
jointly and severally, covenant and agree with the several Underwriters that:
(a) The Trust and the Corporation will advise you promptly of any
amendment (and effectiveness thereof) or supplementation of the
Registration Statement or the Prospectus and of the institution by the
Commission of any stop order proceedings in respect of the Registration
Statement, and will use their best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if issued.
4
(b) If at any time when a prospectus relating to the Preferred
Securities, the Guarantee or 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 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, the Guarantee or the Notes is
required to be delivered under the 1933 Act, will file promptly all
documents required to be filed with the Commission pursuant to Section 13
or 14 of the 1934 Act.
(d) The Corporation will make generally available to its security
holders, in each case as soon as practicable but not later than 60 days
after the close of the period covered thereby, earnings statements (in form
complying with the provisions of Section 11(a) of the 1933 Act, which need
not be certified by independent certified public accountants unless
required by the 1933 Act) covering (i) a twelve-month period beginning not
later than the first day of the Corporation's fiscal quarter next following
the effective date of the Registration Statement and (ii) a twelve-month
period beginning not later than the first day of the Corporation's fiscal
quarter next following the date of this Agreement.
(e) The Trust and 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 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.
(g) 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 Prospectus and any amendments thereto, (v) any fees charged
by independent rating agencies for rating the Preferred Securities, (vi)
all fees and expenses of the
5
Trustees, including the Indenture Trustee, Property Trustee, Guarantee
Trustee and Delaware Trustee, and the fees and disbursements of their
counsel, (vii) any 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, (viii) any filing fee required by the National
Association of Securities Dealers, Inc. and (ix) the costs of any
depositary arrangements for the Preferred Securities with DTC or any
successor depositary.
6. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the 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 officers of the Corporation 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.
(b) Prior to the Closing Date, the rating assigned by ▇▇▇▇▇'▇ Investors
Service, Inc. or Standard & Poor's Ratings Group to (i) any preferred
securities or any debt securities 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 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 ▇▇▇▇▇ ▇. ▇▇▇▇, Esq., Vice
President and General Counsel, Corporate and Electric Operations, dated the
Closing Date, to the effect that:
(i) The Corporation has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of North Carolina, with power and authority (corporate and other) to
own its properties and conduct its business as described in the
Prospectus.
(ii) Each of the Corporation and the Principal Subsidiaries is duly
qualified to do business in each jurisdiction in which the ownership or
leasing of its property or the conduct of its business requires such
qualification, except where the failure to so qualify, considering all
such cases in the aggregate, does not have a material adverse effect on
the business, properties, financial position or results of operations
of the Corporation and its subsidiaries taken as a whole.
(iii) The 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 Property Trustee,
constitutes a valid and legally binding instrument of
6
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, assuming due authorization, execution
and delivery thereof by The Chase Manhattan Bank, as Guarantee 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 Guarantee 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).
(v) The Indenture has been duly authorized, executed and delivered by
the Corporation and, assuming due authorization, execution and delivery
thereof by The Chase Manhattan Bank, as Indenture 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
Indenture 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 is in conformity with the
terms of
7
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.
(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 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 Corporation Agreements.
(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.
Such counsel shall also state that nothing has come to her attention that
has caused her to believe that the Registration Statement as of the date of
effectiveness under the 1933 Act and the Prospectus as of the date it was
filed with, or transmitted for filing to, the Commission, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus as of the date it was filed with, or
transmitted for filing to, the Commission and at the Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Such counsel may also state that, except as otherwise expressly
provided in such opinion, she does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus and does not express any opinion
or belief as to the financial statements or other financial data contained
in or incorporated by reference into the Registration Statement and the
Prospectus, the statement of the eligibility and qualification of each of
the Indenture Trustee, Property Trustee and Guarantee Trustee or as to the
information set forth in the Prospectus under the caption "Description of
the Preferred Securities--Book-Entry 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 ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇ of Columbia,
South Carolina as to matters of South Carolina law. Such counsel may also
state that she has relied as to certain factual matters on information
obtained from public officials, officers of the Corporation and other
sources believed by her to be responsible.
(e) You shall have received an opinion or opinions of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
LLP, counsel to the Corporation, dated the Closing Date, with respect to
the matters set forth in (i) and (iii) through (ix) of Section 6(d) and to
the further effect that:
8
(i) 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.
(ii) Each of the Principal Subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus.
(iii) The 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 Trust Agreement, the Guarantee Agreement and
the Indenture 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. Such opinion may state that such
counsel do not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement
and Prospectus except as otherwise expressly provided in such opinion
and do not express any opinion or belief as to the financial statements
or other financial data contained in or incorporated by reference into
the Registration Statement and the Prospectus, the statement of the
eligibility and qualification of each of the Indenture Trustee,
Property Trustee and Guarantee Trustee or as to the information set
forth in the Prospectus under the caption "Description of the Preferred
Securities--Book Entry Issuance--The Depository Trust Company."
(iv) The statements made in the Prospectus under the captions
"Description of the Preferred Securities," "Description of the
Guarantees," "Description of the Series Junior Subordinated Notes"
and "Description of the 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 conclusions contained in the Prospectus under
the caption "Material Federal Income Tax Considerations," are correct
in all material respects.
In rendering the foregoing opinion or opinions, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP may
state that such opinion or opinions are limited to the Federal laws of the
United States, the laws of the State of New York and the General
Corporation Law of the State of Delaware, and that they are relying
9
on the opinion of ▇▇▇▇▇ ▇. ▇▇▇▇, Esq. as to matters of North Carolina law
and on the opinion of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇ of Columbia, South Carolina as
to matters of South Carolina law. In addition, such counsel may state that
they have relied as to certain factual matters on information obtained from
public officials, officers of the Corporation and other sources believed by
them to be responsible and that the signatures on all documents examined by
them are genuine, assumptions which such counsel have not independently
verified.
(f) You shall have received the opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A.,
special Delaware counsel to the Trust and the Corporation, 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, all 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 or transfer, 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.
(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
10
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 common
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.
(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 or opinions of , counsel for
the Underwriters, dated the Closing Date, with respect to the incorporation
of the Corporation, the validity of the Notes, the Registration Statement
and the Prospectus, as amended or supplemented, and such other related
matters as you may require, and the Corporation shall have furnished to
such counsel such documents as they request for the purpose of enabling
them to pass upon such matters. In giving their opinion, may rely on
the opinion of ▇▇▇▇▇ ▇. ▇▇▇▇, Esq. as to matters of North Carolina law and
on the opinion of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇ of Columbia, South Carolina as to
matters of South Carolina law.
(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 securities of the Corporation, Duke Energy Capital
Trust I or Duke Energy Capital Trust II on the New York
11
Stock Exchange; (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
(iii) 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. 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.
(i) You shall have received a certificate of the Chairman of the Board
and President, any Vice President, the Secretary or any Assistant Secretary
and any 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 as of the Closing Date, 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
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 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.
(k) At the Closing Date you shall have received from the Corporation's
independent public accountants a letter, dated the Closing Date, to the
effect that such accountants reaffirm the statements made in the letter
furnished pursuant to paragraph (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
12
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
(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.
13
(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
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.
14
(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 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(g) 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 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, telephone number (▇▇▇) ▇▇▇-▇▇▇▇, attention of
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President and Treasurer; provided, however, that
any notice to an Underwriter pursuant to Section 7 hereof shall be delivered or
sent by mail or telecopy to such Underwriter at its address or telecopy number
set forth in its Underwriters' Questionnaire or telex constituting such
Questionnaire, which address or telecopy number will be supplied to the 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,
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 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
15
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 internal laws of the State of New York.
If the foregoing is in accordance with your understanding, kindly sign and
return to us two counterparts hereof, and upon 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 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
as Depositor
By: _________________________________
Name:
Title:
Duke Energy Corporation
By: _________________________________
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
By:
By: ____________________________
Name:
Title:
On behalf of each of the Underwriters
16
SCHEDULE A
Number of
Underwriter Preferred Securities
----------- ---------------------
----
Total.................................................
====
