-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SlSkfQByt+2X558qVxIhLWLiszcDdKrCc1YdNB/QPUUW53j03csfak9lqW9qC5uv 9UQq8EKlUjbT5ONeWHbvPA== 0000950130-01-500656.txt : 20010416 0000950130-01-500656.hdr.sgml : 20010416 ACCESSION NUMBER: 0000950130-01-500656 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 32 FILED AS OF DATE: 20010412 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DUKE ENERGY CORP CENTRAL INDEX KEY: 0000030371 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 560205520 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-58820 FILM NUMBER: 1601572 BUSINESS ADDRESS: STREET 1: 526 SOUTH CHURCH STREET CITY: CHARLOTTE STATE: NC ZIP: 28201-1006 BUSINESS PHONE: 7045946200 MAIL ADDRESS: STREET 1: 422 S CHURCH ST CITY: CHARLOTTE STATE: NC ZIP: 28242 FORMER COMPANY: FORMER CONFORMED NAME: DUKE POWER CO /NC/ DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DUKE ENERGY CAPITAL TRUST IV CENTRAL INDEX KEY: 0001086672 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-58820-01 FILM NUMBER: 1601573 BUSINESS ADDRESS: STREET 1: 1201 MARKET STREET CITY: WILMINGTON STATE: DE ZIP: 19801 BUSINESS PHONE: 7043828152 MAIL ADDRESS: STREET 1: C/O CHASE MANHATTAN BANK, DELAWARE STREET 2: 1201 MARKET STREET CITY: WILMINGTON STATE: DE ZIP: 19801 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DUKE ENERGY CAPITAL TRUST III CENTRAL INDEX KEY: 0001086673 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-58820-02 FILM NUMBER: 1601574 BUSINESS ADDRESS: STREET 1: 1201 MARKET STREET CITY: WILMINGTON STATE: DE ZIP: 19801 BUSINESS PHONE: 7043828152 MAIL ADDRESS: STREET 1: C/O CHASE MANHATTAN BANK, DELAWARE STREET 2: 1201 MARKET STREET CITY: WILMINGTON STATE: DE ZIP: 19801 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DUKE ENERGY CAPITAL TRUST V CENTRAL INDEX KEY: 0001130268 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-58820-03 FILM NUMBER: 1601575 BUSINESS ADDRESS: STREET 1: C/O CHASE MANHATTAN BANK DELAWARE STREET 2: 1201 MARKET STREET CITY: WILMINGTON STATE: DE ZIP: 19801 BUSINESS PHONE: 7043828152 MAIL ADDRESS: STREET 1: C/O CHASE MANHATTAN BANK DELAWARE STREET 2: 1201 MARKET STREET CITY: WILMINGTON STATE: DE ZIP: 19801 S-3 1 ds3.txt FORM S-3 As filed with the Securities and Exchange Commission on April 12, 2001 Subject to Amendment Registration Nos. 333- 333- 333- 333- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------- Duke Energy Corporation North Carolina 56-0205520 Duke Energy Capital Trust III Delaware 52-2171524 Duke Energy Capital Trust IV Delaware 52-2171526 Duke Energy Capital Trust V Delaware 56-6575443 (Exact name of each registrant (State or other jurisdiction of (I.R.S. Employer Identification Nos.) as specified in its charter) incorporation or organization)
526 South Church Street Charlotte, North Carolina 28202 704-594-6200 (Address, including zip code, and telephone number, including area code, of each registrant's principal executive offices)
-------------- ROBERT P. BRACE JOHN SPUCHES Executive Vice President and Dewey Ballantine LLP Chief Financial Officer 1301 Avenue of the Americas 526 South Church Street New York, New York 10019 Charlotte, North Carolina 28202 Telephone No. 212-259-7700 Telephone No. 704-382-3400 (Names, addresses, including zip codes, and telephone numbers, including area codes, of agents for service of each registrant) -------------- Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement as determined by market conditions and other factors. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] ---- If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] ---- If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] -------------- CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
Proposed Maximum Amount Offering Price Proposed Maximum Title of Each Class of to be Per Aggregate Offering Amount of Securities to be Registered Registered(1) Unit(1)(2)(3) Price(1)(2)(3)(4) Registration Fee(1)(4) - ---------------------------------------------------------------------------------------------------------------- Duke Energy Corporation Senior Notes............................... - ---------------------------------------------------------------------------------------------------------------- Duke Energy Corporation Junior Subordinated Notes.................. - ---------------------------------------------------------------------------------------------------------------- Duke Energy Corporation First and Refunding Mortgage Bonds............ - ---------------------------------------------------------------------------------------------------------------- Duke Energy Corporation Common Stock, without par value(5)................ - ---------------------------------------------------------------------------------------------------------------- Duke Energy Corporation Stock Purchase Contracts.................. - ---------------------------------------------------------------------------------------------------------------- Duke Energy Corporation Stock Purchase Units...................... - ---------------------------------------------------------------------------------------------------------------- Duke Energy Capital Trust III Trust Preferred Securities................ - ---------------------------------------------------------------------------------------------------------------- Duke Energy Capital Trust IV Trust Preferred Securities................ - ---------------------------------------------------------------------------------------------------------------- Duke Energy Capital Trust V Trust Preferred Securities................ - ---------------------------------------------------------------------------------------------------------------- Duke Energy Corporation Guarantees with respect to Trust Preferred Securities of Duke Energy Capital Trust III, Duke Energy Capital Trust IV and Duke Energy Capital Trust V(6)(7)....................... - ---------------------------------------------------------------------------------------------------------------- Total................................ $2,000,000,000 100% $2,000,000,000 $498,858
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (1) There are being registered hereunder such presently indeterminate number or principal amount of Senior Notes, Junior Subordinated Notes, First and Refunding Mortgage Bonds, shares of Common Stock, Stock Purchase Contracts and Stock Purchase Units of Duke Energy Corporation and such presently indeterminate number of Trust Preferred Securities of Duke Energy Capital Trust III, Duke Energy Capital Trust IV and Duke Energy Capital Trust V with an aggregate initial offering price not to exceed $2,000,000,000. Duke Energy Corporation Junior Subordinated Notes also may be issued to Duke Energy Capital Trust III, Duke Energy Capital Trust IV or Duke Energy Capital Trust V and later distributed upon dissolution and distribution of the assets thereof, which would include such Junior Subordinated Notes for which no separate consideration will be received. An indeterminate number of shares of Common Stock may also be issued by Duke Energy Corporation upon settlement of the Stock Purchase Contracts or Stock Purchase Units of Duke Energy Corporation. Pursuant to Rule 457(o) under the Securities Act of 1933, which permits the registration fee to be calculated on the basis of the maximum offering price of all the securities listed, the table does not specify by each class information as to the amount to be registered, proposed maximum offering price per unit or proposed maximum aggregate offering price. (2) Estimated solely for the purpose of determining the registration fee. (3) Exclusive of accrued interest and distributions, if any. (4) As permitted by Rule 429 under the Securities Act of 1933, the prospectus included herein is a combined prospectus which also relates to Registration Statement No. 333-52204 previously filed by Duke Energy Corporation as to which securities having an aggregate offering price of $4,325,000 remain unsold. The registration fee of $1,142 associated with such securities was previously paid. Accordingly, the registration fee consists of $498,858 paid herewith and the $1,142 previously paid. This registration statement constitutes Post-Effective Amendment No. 1 to Registration Statement No. 333-52204, which shall become effective concurrently with this registration statement in accordance with Section 8(c) of the Securities Act of 1933. (5) Includes Duke Energy Corporation Preference Stock Purchase Rights. Prior to the occurrence of certain events, purchase rights for Duke Energy Corporation Series A Participating Preference Stock will not be evidenced separately from the Duke Energy Corporation Common Stock. (6) No separate consideration will be received for the Duke Energy Corporation Guarantees. Pursuant to Rule 457(n) under the Securities Act of 1933, no separate fee is payable in respect of the Duke Energy Corporation Guarantees. (7) Includes the obligations of Duke Energy Corporation under the respective Trust Agreements, the Subordinated Indenture, the related series of Junior Subordinated Notes, the respective Guarantees and the respective Agreements as to Expenses and Liabilities, which include the Corporation's covenant to pay any indebtedness, expenses or liabilities of the Trusts (other than obligations pursuant to the terms of the Trust Preferred Securities or other similar interests), all as described in this registration statement. -------------- The registrants hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the registrants shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- EXPLANATORY NOTE This registration statement includes a prospectus and two forms of prospectus supplement. The first is a form of prospectus supplement that may be used in connection with issuances from time to time of Trust Preferred Securities. The second is a form of prospectus supplement that may be used in connection with issuances from time to time of Senior Notes. ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +Information contained in this preliminary prospectus supplement is subject to + +completion or amendment. These securities may not be sold nor may offers to + +buy be accepted prior to the time that a final prospectus supplement is + +delivered. Neither this preliminary prospectus supplement nor the + +accompanying prospectus shall constitute an offer to sell or the solicitation + +of an offer to buy nor shall there be any sale of these securities in any + +state in which such offer, solicitation or sale would be unlawful prior to + +registration or qualification under the securities laws of any such state. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ PROSPECTUS SUPPLEMENT (To prospectus dated , ) Subject to completion dated April 12, 2001 [ ] Preferred Securities Duke Energy Capital Trust [ ] % Trust Preferred Securities (Liquidation amount $ per Preferred Security) Guaranteed, to the extent described herein, by Duke Energy Corporation ----------- A brief description of the % Trust Preferred Securities can be found under "Summary of Offering" in this prospectus supplement. You should carefully read "Risk Factors" beginning on page S-9 to learn about specific risks associated with the Preferred Securities, as well as the other information in this prospectus supplement and the accompanying prospectus, before you make your investment decision. Duke Energy intends to list the Preferred Securities on the New York Stock Exchange under the symbol " " and expects trading in the Preferred Securities to begin on the New York Stock Exchange within 30 days after the original issue date. -----------
Per Preferred Security Total ----------------------- ------- Initial Public Offering Price................... Underwriting Discounts and Commissions.......... (1) (1) Proceeds, before expenses, to the Trust.........
- ----- (1)Underwriting commissions of $ per Preferred Security (or $ in the aggregate) will be paid by Duke Energy. ----------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense. The underwriters expect to deliver the Preferred Securities on or about , . ----------- [names of underwriters] ----------- This prospectus supplement is dated , . You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus. None of Duke Energy, the Trust or the underwriters has authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. If this prospectus supplement is inconsistent with the accompanying prospectus, you should rely on this prospectus supplement. None of Duke Energy, the Trust or the underwriters is making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information in this prospectus supplement and the accompanying prospectus is accurate only as of the respective dates on the front of those documents or earlier dates specified therein. Duke Energy's business, financial condition, results of operations and prospects may have changed since those dates. TABLE OF CONTENTS Prospectus Supplement
Page ---- Forward-Looking Statements................................................ S-3 Summary of Offering....................................................... S-4 Risk Factors.............................................................. S-9 Duke Energy Capital Trust [ ]............................................. S-13 Description of the Preferred Securities................................... S-14 Description of the Series Junior Subordinated Notes..................... S-27 Relationship Among the Preferred Securities, the Series Junior Subordinated Notes and the Guarantee..................................... S-31 Material Federal Income Tax Considerations................................ S-33 Underwriting.............................................................. S-35 Validity of the Securities................................................ S-36 Prospectus About this Prospectus..................................................... 2 Duke Energy Corporation................................................... 2 Use of Proceeds........................................................... 4 The Trusts................................................................ 4 Accounting Treatment...................................................... 5 Description of the Senior Notes........................................... 5 Description of the Junior Subordinated Notes.............................. 15 Description of the First and Refunding Mortgage Bonds..................... 24 Description of the Common Stock........................................... 28 Description of the Stock Purchase Contracts and the Stock Purchase Units.. 31 Description of the Preferred Securities................................... 32 Description of the Guarantees............................................. 33 Plan of Distribution...................................................... 36 Experts................................................................... 38 Validity of the Securities................................................ 38 Where You Can Find More Information....................................... 38
S-2 FORWARD-LOOKING STATEMENTS Duke Energy has included certain information in this document which is "forward-looking information" as defined by the Private Securities Litigation Reform Act of 1995. Examples include discussions as to its expectations, beliefs, plans, goals, objectives and future financial or other performance or assumptions concerning matters discussed in this document. This information, by its nature, involves estimates, projections, forecasts and uncertainties that could cause actual results or outcomes to differ substantially from those expressed. Duke Energy's business is influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond Duke Energy's ability to control. Duke Energy has identified a number of these factors in its filings with the SEC, and you are referred to those filings for further information. These factors include: . state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an impact on rate structures and affect the speed at and degree to which competition enters the electric and natural gas industries; . industrial, commercial and residential growth in Duke Energy's service territories and the service territories of its subsidiaries; . the weather and other natural phenomena; . the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; . changes in environmental and other laws and regulations to which Duke Energy and its subsidiaries are subject or other external factors over which Duke Energy has no control; . the results of financing efforts, including Duke Energy's ability to obtain financing on favorable terms, which can be affected by various factors, including its credit ratings and general economic conditions; . growth in opportunities for Duke Energy's business units; and . the effect of accounting policies issued periodically by accounting standard-setting bodies. In light of these risks, uncertainties and assumptions, the forward- looking events referred to in this prospectus supplement and the accompanying prospectus might not occur. Neither Duke Energy nor the underwriters undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. S-3 SUMMARY OF OFFERING This summary highlights information appearing elsewhere in this prospectus supplement and in the accompanying prospectus. This summary does not contain all the information you should consider before investing in the Preferred Securities. You should pay special attention to the "Risk Factors" section of this prospectus supplement to determine whether an investment in the Preferred Securities is appropriate for you. Duke Energy Corporation............. Duke Energy, together with its subsidiaries, is an integrated energy and energy services provider with the ability to offer physical delivery and management of both electricity and natural gas throughout the United States and abroad. Duke Energy, directly or through its subsidiaries, provides these and other services through seven business segments: Franchised Electric, Natural Gas Transmission, Field Services, North American Wholesale Energy, International Energy, Other Energy Services and Duke Ventures. The principal executive offices of Duke Energy are located at 526 South Church Street, Charlotte, NC 28202 (telephone (704) 594-6200). The Trust........................... Duke Energy Capital Trust [ ] is a statutory business trust created solely for the purposes of (1) issuing the Preferred Securities to the public, (2) issuing the Common Securities to Duke Energy and (3) using the proceeds from the issuance of the Preferred Securities and the Common Securities to purchase Duke Energy's Series Junior Subordinated Notes due , . Preferred Securities Offered........ % Trust Preferred Securities. Distributions; Distribution Dates... Holders of the Preferred Securities are entitled to receive cumulative cash distributions at a yearly rate of % of the liquidation amount of those Preferred Securities. Distributions will accrue from the original issue date. Distributions will be payable quarterly, except during extension periods, on March 31, June 30, September 30 and December 31 of each year, commencing on , . S-4 The distribution dates will correspond to the interest payment dates on the Series Junior Subordinated Notes and the rate at which distributions will be paid on the Preferred Securities will correspond to the interest rate on the Series Junior Subordinated Notes. If Duke Energy does not pay principal or interest on the Series Junior Subordinated Notes, no amounts will be paid on the Preferred Securities. Record Dates........................ The close of business on the 15th calendar day before the relevant distribution date. Series Junior Subordinated Notes............................... Duke Energy will issue $ of Series Junior Subordinated Notes under its Subordinated Indenture. The Trust will use the proceeds from the sale of the Preferred Securities to purchase $ of Series Junior Subordinated Notes, and the Trust will use the proceeds from the sale of the Common Securities to purchase $ of Series Junior Subordinated Notes. The Series Junior Subordinated Notes will be unsecured subordinated obligations of Duke Energy. Deferral of Distributions; Extension Periods................... Duke Energy has the right to defer payments of interest on the Series Junior Subordinated Notes by extending the interest payment period on the Series Junior Subordinated Notes, at any time and as often as it wishes, for up to consecutive quarters (each, an "extension period") but not beyond the maturity date of the Series Junior Subordinated Notes. If Duke Energy defers payments of interest on the Series Junior Subordinated Notes, distributions on the Preferred Securities will also be deferred. Deferred interest will bear interest at a yearly rate of %, compounded quarterly, to the date of payment, to the extent legally permitted. Payments of deferred interest, and any interest on deferred interest, on the Series Junior Subordinated Notes will be passed through to the holders of the Preferred Securities. S-5 The only restrictions on Duke Energy's ability to defer payments of interest are that during an extension period Duke Energy may not, with certain exceptions, (1) pay dividends on, or redeem or otherwise purchase, any of its capital stock or (2) pay principal or interest on, or redeem or otherwise purchase, any of its debt securities ranking equal in priority with or subordinate to the Series Junior Subordinated Notes. During an extension period, holders of Preferred Securities will recognize interest income for United States federal income tax purposes before the receipt of the cash payments of those deferred distributions even if the holder is a cash basis taxpayer. Redemption; Special Event Redemption.......................... The Trust will redeem the Preferred Securities when Duke Energy repays the Series Junior Subordinated Notes at maturity or upon earlier redemption. Duke Energy will have the right to redeem the Series Junior Subordinated Notes at any time, in whole or in part, on or after , . Duke Energy also will have the right to redeem the Series Junior Subordinated Notes at any time, in whole but not in part, during the 90 days after the occurrence of a Special Event (see below). Redemption Price.................... If the Preferred Securities are redeemed or the Trust is terminated without distribution of the Series Junior Subordinated Notes, each holder of a Preferred Security will be entitled to receive a liquidation amount of $ per Preferred Security plus accrued and unpaid distributions (including any interest on those distributions) to the date of payment. Special Event....................... A "Special Event" means a Tax Event or an Investment Company Act Event. A "Tax Event" means that because of changes in certain tax laws or regulations, or in how S-6 they are interpreted or applied, there is more than an insubstantial risk that (1) the Trust would be subject to United States federal income tax with respect to income accrued or received on the Series Junior Subordinated Notes, (2) interest payable on the Series Junior Subordinated Notes would not be deductible by Duke Energy for United States federal income tax purposes or (3) the Trust would be subject to more than a de minimis amount of other taxes, duties or other governmental charges. An "Investment Company Act Event" means that because of changes in certain laws or regulations, or in how they are interpreted or applied, there is more than an insubstantial risk that the Trust is or will be considered an "investment company" under the Investment Company Act of 1940. Termination of Trust................ Duke Energy will have the right to terminate the Trust at any time and cause the Property Trustee to distribute $ of the Series Junior Subordinated Notes pro rata to the holders of the Preferred Securities in exchange for their Preferred Securities. This right is optional and wholly in Duke Energy's discretion. Ranking of Series Junior Subordinated Notes.................. The Series Junior Subordinated Notes will be subordinate and junior in right of payment to all indebtedness for borrowed money and other obligations of Duke Energy included in the definition of Senior Indebtedness. See "Description of the Junior Subordinated Notes-- Subordination" in the accompanying prospectus for a description of Senior Indebtedness. Guarantee........................... Duke Energy will irrevocably and unconditionally guarantee the payment of distributions and other payments by the Trust on the Preferred S-7 Securities, but only to the extent that the Trust has funds legally and immediately available to make those distributions and payments. Ranking of Guarantee................ Duke Energy's obligations under the Guarantee will be subordinate and junior in right of payment to all of Duke Energy's other liabilities, other than liabilities that rank equal in priority or subordinate by their terms. The Guarantee will rank equal in priority with Duke Energy's Preferred Stock and Preferred Stock A and with similar guarantees. Book-Entry Issuance................. The Preferred Securities will be represented by a global certificate or certificates deposited with and registered in the name of The Depository Trust Company, New York, New York or its nominee. This means that investors will not receive certificates for their Preferred Securities. Listing ............................ Duke Energy intends to list the Preferred Securities on the New York Stock Exchange under the symbol " " and expects that trading in the Preferred Securities on the New York Stock Exchange will begin within 30 days after the original issue date. The Trustees........................ The Chase Manhattan Bank will act as Property Trustee of the Trust. Two of Duke Energy's officers will act as the Administrative Trustees of the Trust. Chase Manhattan Bank Delaware will be the Delaware Trustee of the Trust. The Chase Manhattan Bank also serves as the Indenture Trustee--the trustee under Duke Energy's Subordinated Indenture under which the Series Junior Subordinated Notes will be issued--and will act as the Guarantee Trustee--the trustee under the Guarantee. The Chase Manhattan Bank is also the Trustee under Duke Energy's First and Refunding Mortgage and its Senior Indenture. The Property Trustee, Delaware Trustee and Administrative Trustees together are sometimes referred to as the "Securities Trustees" in this prospectus supplement. S-8 RISK FACTORS An investment in the Preferred Securities involves a number of risks. Some of the risks relate to the terms of the Preferred Securities and the Series Junior Subordinated Notes. Other risks relate to Duke Energy or the Trust. You should carefully read and consider the following risk factors, as well as the other information contained in this prospectus supplement and the accompanying prospectus, before you buy any Preferred Securities. Payments on the Preferred Securities Depend upon Payments on the Series Junior Subordinated Notes by Duke Energy The only source of funds for payments on the Preferred Securities will be the payments that Duke Energy makes on the Series Junior Subordinated Notes. If Duke Energy fails to make timely payments on the Series Junior Subordinated Notes, the Trust will not have sufficient funds for distributions or other payments on the Preferred Securities. Rights under the Guarantee Are Limited If the Trust does not have sufficient funds legally and immediately available to pay distributions or other payments on the Preferred Securities, the holders of the Preferred Securities will not be able to rely upon the Guarantee for payment of those distributions or other payments. The Guarantee Ranks Subordinate to Many of Duke Energy's Other Obligations Duke Energy's obligations under the Guarantee will rank: . subordinate and junior in right of payment to all of Duke Energy's other liabilities, other than obligations or liabilities that rank equal in priority or subordinate by their terms; . equal in priority with Duke Energy's Preferred Stock and Preferred Stock A and similar guarantees; and . senior to Duke Energy's Common Stock. The Series Junior Subordinated Notes Rank Subordinate to Many ofDuke Energy's Other Obligations Duke Energy's obligations under the Series Junior Subordinated Notes will rank subordinate and junior in right of payment to all of Duke Energy's Senior Indebtedness. As of , , Duke Energy's Senior Indebtedness totaled approximately $ . For a description of Duke Energy's Senior Indebtedness, see "Description of the Junior Subordinated Notes--Subordination" in the accompanying prospectus. The Preferred Securities, the Series Junior Subordinated Notes and the Guarantee do not limit Duke Energy's ability to incur additional Senior Indebtedness or other indebtedness. The Series Junior Subordinated Notes Are Subject to Structural Subordination Duke Energy conducts its non-electric operations, and certain of its electric operations outside its service area in the Carolinas, through subsidiaries. Accordingly, Duke Energy's ability to S-9 meet its obligations under the Series Junior Subordinated Notes is partly dependent on the earnings and cash flows of those subsidiaries and the ability of those subsidiaries to pay dividends or to advance or repay funds to Duke Energy. In addition, the rights that Duke Energy and its creditors would have to participate in the assets of any such subsidiary upon the subsidiary's liquidation or recapitalization will be subject to the prior claims of the subsidiary's creditors. Certain of Duke Energy's subsidiaries have incurred substantial amounts of debt in the expansion of their businesses, and Duke Energy anticipates that certain of its subsidiaries will do so in the future. Duke Energy Has the Option to Defer Interest Payments on the Series Junior Subordinated Notes Which Would Cause a Deferral of Distributions on the Preferred Securities--During an Extension Period Interest and Distributions Would Accrue but They Would Not be Paid to Holders of the Series Junior Subordinated Notes or the Preferred Securities Duke Energy will have the right, at any time and from time to time, to defer interest payments on the Series Junior Subordinated Notes for up to consecutive quarters, but not beyond the maturity date of the Series Junior Subordinated Notes. Any such deferral period is called an "extension period" in this prospectus supplement. During an extension period distributions on the Preferred Securities will also be deferred. Duke Energy will pay interest on any deferred interest on the Series Junior Subordinated Notes at a yearly rate of %, compounded quarterly, to the date of payment, to the extent legally permitted. Payments of deferred interest, together with any interest on those payments, will be passed through to the holders of the Preferred Securities. If Duke Energy defers interest payments, each holder of Preferred Securities, or of Series Junior Subordinated Notes, will recognize income as original issue discount for United States federal income tax purposes before the holder is paid deferred distributions. This will be so even if the holder is a cash basis taxpayer. A holder of Preferred Securities, or of Series Junior Subordinated Notes, will not receive cash related to that income if the holder disposes of the Preferred Securities, or the Series Junior Subordinated Notes, before the record date for the payment of such amounts. Investors should consult their own tax advisors with respect to these and other tax consequences of an investment in the Preferred Securities. Duke Energy Has the Option to Redeem the Series Junior Subordinated Notes if a Special Event Occurs Duke Energy will have the option to redeem the Series Junior Subordinated Notes in whole at any time during the 90 days after the occurrence of a Special Event. If Duke Energy redeems the Series Junior Subordinated Notes after the occurrence of a Special Event, the Trust will redeem the Preferred Securities. Duke Energy Has the Option to Terminate the Trust and Distribute the Series Junior Subordinated Notes Duke Energy will have the right to terminate the Trust at any time and cause the Series Junior Subordinated Notes to be distributed to the holders of the Preferred Securities in liquidation of the Trust. S-10 There can be no assurance as to the market price for the Series Junior Subordinated Notes if a termination and liquidation of the Trust occurs and Series Junior Subordinated Notes are distributed in exchange for Preferred Securities. The Series Junior Subordinated Notes that the investor would receive may trade at less than the price that the investor paid to purchase the Preferred Securities and/or less than the market price of the Preferred Securities before the exchange. Holders of Preferred Securities Will Have Limited Voting Rights Holders of Preferred Securities will have limited voting rights. See "Description of the Preferred Securities--Voting Rights" for additional information. In general, holders of Preferred Securities will not be entitled to vote to appoint, remove or replace any of the Securities Trustees. Duke Energy, as the holder of the Common Securities, generally has that right. However, the holders of the Preferred Securities will have the right to appoint a substitute Property Trustee or Delaware Trustee if an event of default with respect to the Series Junior Subordinated Notes occurs and is continuing. Trading Characteristics of Preferred Securities; Certain Tax Consequences; No Previous Public Market for the Preferred Securities Duke Energy expects to list the Preferred Securities on the New York Stock Exchange. The Preferred Securities are expected to trade at a price that takes into account the value, if any, of accrued but unpaid distributions. Accordingly, purchasers will not pay and sellers will not receive accrued and unpaid distributions with respect to Preferred Securities that are not included in the trading price of the Preferred Securities. If a holder disposes of Preferred Securities prior to the occurrence of an extension period, any portion of the amount received that is attributable to accrued interest will be treated as interest income for tax purposes and will not be treated as part of the amount realized for purposes of determining gain or loss on the disposition of the Preferred Securities. If an extension period occurs, interest on the Series Junior Subordinated Notes will be included in the income of holders of Preferred Securities as it accrues rather than when it is paid. If an extension period occurs, a holder that disposes of its Preferred Securities between record dates for payments of distributions will be required to include in income as original issue discount accrued but unpaid interest on the Series Junior Subordinated Notes through the date of disposition and to add that amount to the holder's adjusted tax basis in the related Series Junior Subordinated Notes that are regarded as having been disposed of by that holder. A holder generally will recognize a capital loss to the extent the selling price is less than the holder's adjusted tax basis. Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income for federal income tax purposes. No public market for the Preferred Securities existed before this offering. There can be no assurance that an active public market for the Preferred Securities will develop. If an active trading market for the Preferred Securities does develop, there can be no assurance that it will be sustained after this offering. S-11 An Investment in the Trust Involves Risks Parallel to Those of an Investment in Duke Energy An investment in the Trust, like an investment in Duke Energy, will involve risks associated with Duke Energy's operating conditions and will be affected by the competitive factors, economic conditions, industry conditions and equity market conditions to which Duke Energy is subject. Consequences of a Highly Leveraged Transaction The Subordinated Indenture does not contain provisions that will protect holders of the Series Junior Subordinated Notes if Duke Energy engages in a highly leveraged transaction. The Trust Agreement does not contain provisions that will protect holders of Preferred Securities under those circumstances. S-12 DUKE ENERGY CAPITAL TRUST [ ] Duke Energy created the Trust as a statutory business trust under Delaware law. The Trust's business is defined in a trust agreement executed by Duke Energy, as depositor, and the Delaware Trustee. That trust agreement will be amended when the Preferred Securities are issued. The amended trust agreement will be in substantially the form filed as an exhibit to the registration statement, of which this prospectus supplement and the accompanying prospectus are a part. The amended trust agreement is called the "Trust Agreement" in this prospectus supplement. The Trust exists for the purposes of (1) issuing the Preferred Securities to the public, (2) issuing the Common Securities to Duke Energy and (3) using the proceeds from the issuance of the Preferred Securities and the Common Securities to purchase the Series Junior Subordinated Notes. The Trust may engage in only those other activities as are necessary, appropriate, convenient or incidental to those purposes. The Preferred Securities and the Common Securities together are sometimes called the "Trust Securities" in this prospectus supplement. The Trust has a term of approximately years from its creation, but may terminate earlier as provided in the Trust Agreement. The Securities Trustees--the Administrative Trustees, the Property Trustee and the Delaware Trustee--will conduct the Trust's business and affairs. Duke Energy, as the holder of the Common Securities, will appoint the Securities Trustees. Two of Duke Energy's officers initially will serve as Administrative Trustees. The Chase Manhattan Bank will serve as Property Trustee. Chase Manhattan Bank Delaware will serve as Delaware Trustee. Duke Energy, as the holder of all the Common Securities, will have the right to appoint, remove or replace any of the Securities Trustees, subject to the right of the holders of a majority of the Preferred Securities to appoint a substitute Property Trustee and Delaware Trustee if an event of default with respect to the Series Junior Subordinated Notes occurs. The Property Trustee will hold legal title to the Series Junior Subordinated Notes for the benefit of the Trust and the holders of the Trust Securities. The Property Trustee will have the power, with certain exceptions, to exercise all rights, powers and privileges under the Subordinated Indenture as the holder of the Series Junior Subordinated Notes. The Series Junior Subordinated Notes will constitute substantially all the assets of the Trust. Other assets that may constitute "Trust Property" include any cash on deposit in, or owing to, the payment account established under the Trust Agreement. Trust Property will also include any other property or assets that the Property Trustee holds under the Trust Agreement. The Trust may from time to time receive cash from Duke Energy under the Agreement as to Expenses and Liabilities between Duke Energy and the Trust. The Trust's office address in the State of Delaware is c/o Chase Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801. The principal place of business of the Trust will be c/o Duke Energy Corporation, 526 South Church Street, Charlotte, North Carolina 28202 (telephone (704) 594- 6200). S-13 DESCRIPTION OF THE PREFERRED SECURITIES The following description of the Preferred Securities is only a summary and is not intended to be comprehensive. For additional information you should refer to the Trust Agreement. The form of the Trust Agreement is an exhibit to the registration statement, of which this prospectus supplement and the accompanying prospectus are a part. General The Trust Agreement authorizes the Administrative Trustees to issue the Preferred Securities and the Common Securities on behalf of the Trust. The Preferred Securities represent preferred undivided beneficial interests in the assets of the Trust. The Common Securities represent common undivided beneficial interests in the assets of the Trust. The Trust Agreement does not permit the Trust to issue any other securities or to incur any indebtedness for borrowed money. The Preferred Securities will have an aggregate liquidation amount equal to approximately 97% of the total capital of the Trust. The Common Securities will have an aggregate liquidation amount equal to approximately 3% of the total capital of the Trust. Duke Energy will own all the Common Securities. In general, the Preferred Securities will rank equal in priority with the Common Securities, and the Trust will make payments on the Preferred Securities on a pro rata basis with the Common Securities. The rights of the holders of the Preferred Securities to receive distributions and liquidation, redemption and other payments will be senior to the rights of the holder of the Common Securities if an event of default occurs under the Subordinated Indenture with respect to the Series Junior Subordinated Notes. Duke Energy has guaranteed, on a subordinated basis, certain payments with respect to the Preferred Securities. Those payments are payments of distributions and payments if the Preferred Securities are redeemed or the Trust is liquidated, in each case to the extent set forth in the Guarantee. The Guarantee does not cover those payments when the Trust does not have sufficient funds legally and immediately available to make the payments. In that event, the holders of a majority of the Preferred Securities may direct the Property Trustee to enforce its rights under the Series Junior Subordinated Notes. In addition, a holder of Preferred Securities may institute a legal proceeding directly against Duke Energy, without first instituting a legal proceeding against the Property Trustee or any other person or entity, to enforce payment to that holder of principal or interest on Series Junior Subordinated Notes having a principal amount equal to the liquidation amount of that holder's Preferred Securities on or after the due dates specified or provided for in the Series Junior Subordinated Notes. These mechanisms and obligations, together with Duke Energy's obligations under the Agreement as to Expenses and Liabilities, provide a full and unconditional guarantee by Duke Energy of the payments due on the Preferred Securities, subject to certain subordination provisions. Distributions Distributions on the Preferred Securities will be fixed at a yearly rate of % and will accrue from the original issue date of the Preferred Securities. S-14 Distributions on the Preferred Securities will be payable quarterly in arrears on the following distribution dates: March 31, June 30, September 30 and December 31 of each year, commencing on , , except if an extension period occurs. Distributions payable on a date that is not a Business Day will be paid on the next day that is a Business Day (without any interest or other payment due to the delay), except that if that Business Day falls in the next calendar year, the payment will be made on the immediately preceding Business Day. In each such case, payment will be made with the same effect as if made on the date the payment was originally payable. "Business Day" means any day other than a Saturday or Sunday, a day on which banks in New York City are authorized or obligated by law or executive order to remain closed or a day on which the principal corporate trust office of the Property Trustee or the Indenture Trustee is closed for business. Distributions on the Preferred Securities will be payable to holders of record at the close of business on the 15th calendar day before the relevant distribution date. Each payment of a distribution will be made as described under the caption "--Book-Entry Issuance--The Depository Trust Company" in this prospectus supplement while the Preferred Securities are in book-entry only form. Distributions will be computed on the basis of a 360-day year of twelve 30-day months. Duke Energy has the right to defer interest payments on the Series Junior Subordinated Notes by extending the interest payment period from time to time on the Series Junior Subordinated Notes. If Duke Energy exercises that right, distributions on the Preferred Securities will be deferred during the extension period. Deferred interest installments on the Series Junior Subordinated Notes will bear interest at a yearly rate of %, compounded quarterly, to the payment date, to the extent legally permitted. Duke Energy will have the right to make partial payments of interest on any interest payment date during an extension period. If distributions are deferred, the deferred distributions and accrued interest on those distributions will be paid, if funds are legally available for those payments, to holders of record of the Preferred Securities on the record date immediately after the extension period ends. The Trust will pay distributions on the Preferred Securities on the distribution dates to the extent that it has funds legally and immediately available. Those funds will be limited to payments that Duke Energy makes on the Series Junior Subordinated Notes. Redemption The Trust will redeem the Preferred Securities when Duke Energy repays the Series Junior Subordinated Notes at maturity or upon redemption. The Series Junior Subordinated Notes will mature on , . Duke Energy may redeem the Series Junior Subordinated Notes, in whole or in part, at its option at any time on or after , . Duke Energy may also redeem the Series Junior Subordinated Notes, in whole but not in part, at any time during the 90 days after the occurrence of a Special Event. In each case the redemption price will be equal to 100% of the principal amount of the Series Junior Subordinated Notes to be redeemed plus accrued but unpaid interest (including any Additional Interest as defined below) to the redemption date. Duke Energy shall redeem the Series Junior Subordinated Notes in whole but not in part if a partial redemption of the Series Junior Subordinated Notes would cause the Preferred Securities to be delisted. S-15 Any Preferred Securities that are to be redeemed will be redeemed upon at least 30 but not more than 60 days' notice at a redemption price for each Preferred Security equal to the liquidation amount of $ plus any accrued and unpaid distributions on the Preferred Security to the date of payment. Any Preferred Securities that are to be redeemed will be redeemed with the proceeds from the redemption of an equivalent amount of Series Junior Subordinated Notes. The redemption price of the Preferred Securities will be deemed payable on each redemption date only to the extent that the Trust has funds legally and immediately available for payment of that redemption price. If fewer than all the outstanding Preferred Securities are to be redeemed and the Preferred Securities are in book-entry form, DTC will reduce the amount of the interest of each of its participants in the Preferred Securities in accordance with its procedures. If the Preferred Securities are no longer in book-entry form, the Property Trustee will redeem the Preferred Securities to be redeemed in any manner that it deems fair and appropriate. Special Event Redemption or Distribution Duke Energy may at its option redeem all the Series Junior Subordinated Notes at any time during the 90 days after the occurrence of a Special Event. In that event, the Preferred Securities will also be redeemed. A Special Event is either a Tax Event or an Investment Company Act Event. A "Tax Event" means that the Administrative Trustees and Duke Energy have received an opinion of counsel experienced in such matters to the effect that, as a result of: . any amendment to, or change (including any announced prospective change) in, the laws (or any regulations under those laws) of the United States or any political subdivision or taxing authority of or in the United States; or . any amendment to, or change in, an interpretation or application of such laws or regulations, there is more than an insubstantial risk that: . the Trust would be subject to United States federal income tax with respect to income accrued or received on the Series Junior Subordinated Notes; . interest payable on the Series Junior Subordinated Notes would not be deductible by Duke Energy for United States federal income tax purposes; or . the Trust would be subject to more than a de minimis amount of other taxes, duties or other governmental charges, which amendment or change becomes effective on or after the original issue date of the Preferred Securities. An "Investment Company Act Event" means that the Administrative Trustees and Duke Energy have received an opinion of counsel experienced in such matters to the effect that, as a result of the occurrence of a change in law or regulation or a written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority on or after the original issue date of the Preferred Securities, there is more than an insubstantial risk that S-16 the Trust is or will be considered an "investment company" under the Investment Company Act of 1940, which change becomes effective on or after the original issue date of the Preferred Securities. Distribution of Series Junior Subordinated Notes upon Termination of Trust Duke Energy will have the right to terminate the Trust at any time and, after the Trust satisfies its liabilities to creditors, cause the Series Junior Subordinated Notes to be distributed to the holders of the Preferred Securities in liquidation of the Trust. That right is optional and wholly within Duke Energy's discretion. Circumstances under which Duke Energy may decide to exercise its right to terminate the Trust could include: . the occurrence of an Investment Company Act Event or a Tax Event; . adverse tax consequences to Duke Energy or the Trust that the definition of a Tax Event does not cover because those consequences do not result from an amendment or change described in that definition; and . changes in the accounting applicable to the Preferred Securities. See "Accounting Treatment" in the accompanying prospectus. If Series Junior Subordinated Notes are distributed to the holders of the Preferred Securities, Duke Energy will use its best efforts to have the Series Junior Subordinated Notes listed on the New York Stock Exchange or other exchange on which the Preferred Securities are then listed. After the date for any distribution of Series Junior Subordinated Notes upon termination of the Trust: . the Preferred Securities and the Guarantee will no longer be considered outstanding; . the securities depositary or its nominee, as the record holder of the Preferred Securities, will receive a registered global certificate or certificates representing the Series Junior Subordinated Notes delivered upon the distribution; and . any certificates representing Preferred Securities not held by the securities depositary or its nominee will be deemed to represent Series Junior Subordinated Notes. Those Series Junior Subordinated Notes will have: . an aggregate principal amount equal to the aggregate liquidation amount of those Preferred Securities; . an interest rate identical to the rate at which cumulative cash distributions are payable on those Preferred Securities; and . accrued and unpaid interest equal to the accrued and unpaid distributions on those Preferred Securities, until the certificates are presented to Duke Energy or its agent for transfer or reissuance. S-17 There can be no assurance as to the market prices for either the Preferred Securities or the Series Junior Subordinated Notes that may be distributed in exchange for the Preferred Securities if a termination and liquidation of the Trust occurs. Accordingly, the Preferred Securities that an investor may purchase, or the Series Junior Subordinated Notes that the investor may receive if the Trust is terminated or liquidated, may trade at a price less than the price paid by the investor to purchase the Preferred Securities and/or less than the market price of the Preferred Securities before the exchange. Redemption Procedures If the Trust has the funds required for the redemption and the Preferred Securities are in book-entry form, then the Property Trustee will irrevocably deposit sufficient funds with the securities depositary on the redemption date to pay the redemption price. If the Trust has the funds required for the redemption and the Preferred Securities are not in book-entry form, the Property Trustee will irrevocably deposit sufficient funds with the paying agent to pay the redemption price and will instruct the paying agent to pay the redemption price to the holders of the Preferred Securities upon surrender of their Preferred Securities certificates. Immediately before the close of business on the deposit date, distributions will cease to accrue and all rights of holders of Preferred Securities called for redemption will cease, except the right of those holders to receive the redemption price, without interest on it. If the redemption date is not a Business Day, the redemption price payable on that date will be paid on the next day that is a Business Day (without any interest or other payment due to the delay), except that if that Business Day falls in the next calendar year, the payment will be made on the immediately preceding Business Day. If fewer than all the Trust Securities are to be redeemed, the liquidation amount of the Trust Securities to be redeemed will be allocated 97% to the Preferred Securities and 3% to the Common Securities. If the Trust does not pay the redemption price and Duke Energy does not pay the redemption price under the Guarantee, distributions on the Preferred Securities to be redeemed will continue to accrue at the applicable rate from the redemption date originally established for those Preferred Securities to the date the redemption price is actually paid. Book-Entry Issuance--The Depository Trust Company The Preferred Securities will be book-entry securities. Upon issuance, all book-entry securities will be represented by one or more fully registered global certificates. Each global certificate will be deposited with, or on behalf of, The Depository Trust Company ("DTC"), a securities depositary, and will be registered in the name of DTC or a nominee of DTC. DTC or its nominee will thus be the only registered holder of those Preferred Securities and will be considered the sole owner of the Preferred Securities for purposes of the Trust Agreement. Purchasers of Preferred Securities may only hold interests in the global securities through DTC if they are participants in the DTC system. Purchasers may also hold interests through a securities intermediary--banks, brokerage houses and other institutions that maintain securities accounts for S-18 customers--that has an account with DTC. DTC will maintain accounts showing the Preferred Security holdings of its participants, and those participants will in turn maintain accounts showing the Preferred Security holdings of their customers. Some of those customers may themselves be securities intermediaries holding Preferred Securities for their customers. Thus, each beneficial owner of a book-entry Preferred Security will hold that Preferred Security indirectly through a hierarchy of intermediaries, with DTC at the "top" and the beneficial owner's own securities intermediary at the "bottom." The Preferred Securities of each beneficial owner of a book-entry security will be evidenced solely by entries on the books of the beneficial owner's securities intermediary. The actual purchaser of the Preferred Securities will generally not be entitled to have the Preferred Securities represented by the global securities registered in its name and will not be considered the owner under the Trust Agreement. In most cases, a beneficial owner will also not be able to obtain a paper certificate evidencing the holder's ownership of Preferred Securities. The book-entry system for holding Preferred Securities eliminates the need for physical movement of certificates and is the system through which most publicly traded common stock is held in the United States. However, the laws of some jurisdictions require some purchasers of securities to take physical delivery of their securities in definitive form. These laws may impair the ability to transfer book-entry securities. A beneficial owner of book-entry Preferred Securities represented by a global security will receive definitive (paper) Preferred Securities only if: . DTC is unwilling or unable to continue as depositary for such global security and Duke Energy is unable to find a qualified replacement for DTC within 90 days; or . Duke Energy in its sole discretion decides to terminate the book-entry system with respect to the Preferred Securities. Definitive Preferred Securities in registered form will have the same terms as and be in an equal aggregate principal amount to the equivalent book- entry Preferred Securities, and will be in denominations of $ or integral multiples of $ . Definitive Preferred Securities will be registered in the name or names of the person or persons that DTC specifies in a written instruction to the registrar of the Preferred Securities. DTC may base its written instruction upon directions it receives from its participants. In this prospectus supplement, for book-entry Preferred Securities, references to actions taken by holders of Preferred Securities will mean actions taken by DTC upon instructions from its participants, and references to payments and notices of redemption to holders of Preferred Securities will mean payments and notices of redemption to DTC or its nominee as the registered holder of the Preferred Securities for distribution to participants in accordance with DTC's procedures. DTC is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered under section 17A of the Securities Exchange Act of 1934. The rules applicable to DTC and its participants are on file with the SEC. S-19 The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that Duke Energy and the Trust believe to be reliable, but neither Duke Energy nor the Trust takes any responsibility for its accuracy. Duke Energy and the Trust have no responsibility for the performance by DTC or its participants of their respective obligations, including obligations that they have under the rules and procedures that govern their operations. Liquidation Distribution upon Dissolution The Trust will terminate on , , or earlier if: . one of certain bankruptcy, insolvency or reorganization events occurs with respect to Duke Energy, Duke Energy is dissolved or liquidated, or the Trust is dissolved by judicial decree; . Duke Energy directs the Property Trustee to terminate the Trust and to distribute the Series Junior Subordinated Notes to the holders of the Trust Securities in liquidation of the Trust; or . Duke Energy repays all the Series Junior Subordinated Notes at maturity or upon redemption and the Trust Securities are paid in full as a result. If an early termination occurs as described in the first and second instances listed above, the Trust will be liquidated and the Property Trustee will distribute an equivalent amount of Series Junior Subordinated Notes to each holder of Trust Securities after the Trust satisfies its liabilities to creditors. If the Administrative Trustees determine that the distribution of Series Junior Subordinated Notes is not practical in the case of the first instance listed above, those holders instead will receive an amount equal to the liquidation amount of $ per Trust Security plus accrued and unpaid distributions to the date of payment out of the assets of the Trust that are available for distribution, after satisfaction of the Trust's liabilities to creditors. That amount is called the "liquidation distribution" in this prospectus supplement. If the Trust does not have sufficient assets available to pay the total liquidation distribution on the Trust Securities, then, except as described in the next sentence, the Trust will make the payment to the holders of the Preferred Securities and the holder of the Common Securities on a pro rata basis. If an event of default under the Subordinated Indenture has occurred and is continuing with respect to the Series Junior Subordinated Notes, however, the Preferred Securities will have a preference over the Common Securities with respect to the payment. Events of Default The following are events of default under the Trust Agreement: . the occurrence of an event of default under the Subordinated Indenture with respect to the Series Junior Subordinated Notes; . the Trust's failure to pay any distribution, when due, that continues for 30 days; . the Trust's failure to pay the redemption price of any Preferred Security or Common Security when due; S-20 . failure to perform, or breach of, any covenant or warranty of the Securities Trustees in the Trust Agreement that continues for a period of 60 days after the holders of at least 25% of the outstanding Preferred Securities give written notice of the failure or breach, requiring it to be remedied; or . the occurrence of certain bankruptcy or insolvency events with respect to the Trust. In the case of the fourth event of default listed above, the holders of at least the same percentage of Preferred Securities as had given the default notice may extend the grace period prior to its expiration. The grace period will be deemed automatically extended if the Securities Trustees have initiated and are diligently pursuing corrective action. The Property Trustee will notify the holders of Trust Securities, the Administrative Trustees and Duke Energy of any default known to it within 90 days after the default occurs, unless the default has been cured or waived. For this purpose, the term "default" means any event which is an event of default or which would become an event of default after notice has been given or a grace period has expired or both, as the case may be. If an event of default under the Subordinated Indenture with respect to the Series Junior Subordinated Notes occurs and is continuing: . the holders of Preferred Securities will rely on the Property Trustee, as the holder of the Series Junior Subordinated Notes, to enforce its rights against Duke Energy; and . the holders of a majority of the Preferred Securities will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee or the exercise of any power of the Property Trustee under the Trust Agreement, including the right to direct the Property Trustee to exercise the remedies available to it as the holder of the Series Junior Subordinated Notes. If the Property Trustee fails to enforce its rights under the Series Junior Subordinated Notes, a holder of Preferred Securities may, to the extent permitted by law and the Trust Agreement, institute a legal proceeding against Duke Energy to enforce the Property Trustee's rights under the Trust Agreement. The holder would not need to first institute a legal proceeding against the Property Trustee, the Trust or any other person or entity. A holder of Preferred Securities may also institute a legal proceeding directly against Duke Energy to enforce payment to that holder of principal or interest on Series Junior Subordinated Notes that are equal in principal amount to the liquidation amount of the holder's Preferred Securities on or after the due dates of the Series Junior Subordinated Notes. The holder would not need to first institute a legal proceeding against the Property Trustee or any other person or entity. Duke Energy, as the holder of the Common Securities, may remove or replace the Securities Trustees at any time unless an event of default under the Subordinated Indenture has occurred and is continuing with respect to the Series Junior Subordinated Notes. If such an event of default has occurred and is continuing, the holders of a majority of the Preferred Securities may remove the Property Trustee and the Delaware Trustee. Removal of the Property Trustee or the Delaware Trustee will become effective when the successor trustee accepts its appointment. S-21 If an event of default under the Subordinated Indenture with respect to the Series Junior Subordinated Notes has occurred and is continuing, the holders of Preferred Securities will have a preference over the holders of Common Securities if the Trust is dissolved. The Property Trustee will notify the holders of the Preferred Securities of any notice of default that it receives from the Indenture Trustee with respect to the Series Junior Subordinated Notes. Voting Rights So long as the Property Trustee holds any Series Junior Subordinated Notes, the Securities Trustees will not: . direct the time, method and place of conducting any proceeding for any remedy available to the Indenture Trustee, or exercising any power of the Indenture Trustee with respect to the Series Junior Subordinated Notes; . consent to waive any past default under the Subordinated Indenture; . exercise any right to rescind or annul a declaration that the principal of all the Series Junior Subordinated Notes will be due and payable; or . consent to any amendment, modification or termination of the Subordinated Indenture or the Series Junior Subordinated Notes, if that consent is required, or to any other action, as the holder of the Series Junior Subordinated Notes, under the Subordinated Indenture, without obtaining the prior approval of the holders of at least 66 2/3% of the outstanding Preferred Securities. When the Subordinated Indenture requires the consent of each holder of Series Junior Subordinated Notes affected, the Securities Trustees will not give that consent without the prior consent of each holder of outstanding Preferred Securities. The Securities Trustees may not revoke any action that the holders of the Preferred Securities have authorized or approved. If any proposed amendment to the Trust Agreement provides for any of the following or the Securities Trustees propose to effect: . any action that would adversely affect the powers, preferences or special rights of the Preferred Securities; or . the dissolution, winding-up or termination of the Trust, other than pursuant to the Trust Agreement, then the holders of outstanding Preferred Securities will have the right to vote as a class on that amendment or proposal. The amendment or proposal will be effective only if at least 66 2/3% of the outstanding Preferred Securities approve it. Holders of Preferred Securities may provide their approval at a meeting convened for that purpose or by written consent. Any Preferred Securities that Duke Energy, the Administrative Trustees, or any affiliate of Duke Energy or an Administrative Trustee owns, whether of record or beneficially, will be treated as not outstanding for purposes of a vote or consent. S-22 The holders of the Preferred Securities will have no other voting rights except those described under the caption "--Amendment of the Trust Agreement" in this prospectus supplement and those described under the captions "Amendments and Assignment" and "Events of Default" in "Description of the Guarantees" in the accompanying prospectus and any other voting rights otherwise required by law or by the Trust Agreement. Co-Property Trustees and Separate Property Trustees Duke Energy, as the holder of the Common Securities, and the Property Trustee will have the power to appoint one or more co-property trustees or separate property trustees for all or part of the Trust Property for the purpose of meeting certain legal requirements, including the legal requirements of any jurisdiction in which part of the Trust Property is located. The Property Trustee will have the power to make the appointment alone if Duke Energy, as depositor, does not join in the appointment within 15 days after it receives a request to do so, or in case an event of default under the Subordinated Indenture with respect to the Series Junior Subordinated Notes has occurred and is continuing. Amendment of the Trust Agreement Duke Energy and the Securities Trustees may amend the Trust Agreement without the consent of the holders of the Trust Securities: . to cure any ambiguity or to make any corrections or additions that are not inconsistent with the other provisions of the Trust Agreement that do not adversely affect the interests of any holder of Trust Securities in any material respect; or . to modify, eliminate or add to any provisions of the Trust Agreement to the extent necessary to ensure that the Trust will not be classified as other than a grantor trust for United States federal income tax purposes. The Trust or the Securities Trustees may make other amendments to the Trust Agreement if: . the holders of at least 66 2/3% of the outstanding Trust Securities approve the amendment; and . the Securities Trustees receive an opinion of counsel to the effect that the amendment will not affect the Trust's status as a grantor trust or the Trust's exemption from the Investment Company Act of 1940. The consent of each affected holder of Trust Securities will be required to amend the Trust Agreement to: . change the amount or timing of any distribution or any payment upon redemption, or otherwise adversely affect the amount of any distribution or any payment upon redemption required to be made on the Trust Securities as of a specified date; . restrict the right of a holder of Trust Securities to sue to enforce any of those payments on or after that date; . change the purpose of the Trust; S-23 . authorize the issuance of any additional beneficial interests in the Trust; or . change the consent required to amend the Trust Agreement. Mergers, Consolidations, Replacements, Transfers The Trust may not consolidate, amalgamate, merge with or into or be replaced by any corporation or other entity, or convey, transfer or lease substantially all of its properties and assets to any corporation or other entity, except as described below. At Duke Energy's request but without the consent of the holders of the Trust Securities, the Trust may consolidate, amalgamate, merge with or into, or be replaced by a trust organized under the laws of any state, if: . the successor entity either: . expressly assumes all the Trust's obligations with respect to the Trust Securities; or . substitutes other securities having substantially the same terms as the Trust Securities for the Preferred Securities and the Common Securities so long as those other securities--called "Successor Securities" in this prospectus supplement--rank equal in priority with the Trust Securities with respect to distributions and payments upon liquidation, redemption and otherwise; . Duke Energy expressly appoints a trustee of the successor entity, possessing the same powers and duties as the Property Trustee as the holder of the Series Junior Subordinated Notes; . the Preferred Securities or any Successor Securities are listed on any national securities exchange or other organization on which the Preferred Securities are then listed, or any Successor Securities will be so listed upon notification of issuance; . the consolidation, amalgamation, merger or replacement does not cause the Preferred Securities, including any Successor Securities, to be downgraded by any nationally recognized statistical rating organization; . the consolidation, amalgamation, merger or replacement does not adversely affect the rights, preferences and privileges of the holders of the Trust Securities, including any Successor Securities, in any material respect; . the successor entity has a purpose substantially identical to that of the Trust; . prior to the consolidation, amalgamation, merger or replacement, Duke Energy and the Property Trustee have received an opinion of counsel to the effect that: . the transaction does not adversely affect the rights, preferences and privileges of the holders of the Trust Securities, including any Successor Securities, in any material respect; and . following the transaction, neither the Trust nor the successor entity will be required to register as an "investment company" under the Investment Company Act of 1940; and . Duke Energy owns all the common securities of the successor entity and guarantees the obligations of the successor relating to the Successor Securities at least to the extent provided by the Guarantee. S-24 However, the Trust may not enter into any of the mergers, consolidations or other transactions mentioned above if that transaction would cause the Trust or its successor entity to be classified as other than a grantor trust for United States federal income tax purposes except with the consent of the holders of all the Trust Securities. Payments, Paying Agent So long as DTC is the securities depositary for the Preferred Securities, payments on the Preferred Securities will be made to DTC or its nominee and DTC will credit the relevant accounts at DTC on the applicable distribution dates. If DTC or its nominee no longer holds the Preferred Securities, the paying agent will make payments on the Preferred Securities by check mailed to the address of the holder entitled to the payment as that address appears in the security register for the Preferred Securities. The paying agent will initially be the Property Trustee. The paying agent will be permitted to resign as paying agent if it gives 30 days' written notice to the Administrative Trustees and Duke Energy. The Administrative Trustees will appoint a successor paying agent in the event of any such resignation. Transfers, Exchanges, Registrar and Transfer Agent There will be no service charge for registration of transfers or exchanges of any Preferred Securities. However, payment of any tax or other governmental charge may be required in connection with a transfer or exchange. The registrar and transfer agent for the Preferred Securities will not be required to register any transfer or exchange of Preferred Securities that have been called for redemption. Duke Energy and the Trust anticipate that the Property Trustee or one of its affiliates will act as registrar and transfer agent for the Preferred Securities. Information Concerning the Property Trustee Before an event of default occurs under the Trust Agreement, the Property Trustee will perform only those duties that are expressly specified in the Trust Agreement. After any default, the Property Trustee will exercise the same degree of care as a prudent person would exercise in the conduct of his or her own affairs. Subject to these provisions, the Property Trustee is under no obligation to exercise any of the powers vested in it by the Trust Agreement at the request of any holder of Preferred Securities, unless that holder offers the Property Trustee reasonable indemnity against the costs, expenses and liabilities that the Property Trustee might incur as a result. The Chase Manhattan Bank is the Property Trustee. The Chase Manhattan Bank is also the Indenture Trustee and the Guarantee Trustee and serves as trustee under Duke Energy's First and Refunding Mortgage and its Senior Indenture. Duke Energy and certain of its affiliates maintain deposit accounts and banking relationships with The Chase Manhattan Bank. The Chase Manhattan Bank also serves as trustee or agent under other indentures and agreements pursuant to which securities of Duke Energy and certain of its affiliates are outstanding. S-25 Miscellaneous The Trust Agreement directs the Administrative Trustees to operate the Trust so that the Trust will not be: . deemed to be an "investment company" that is required to be registered under the Investment Company Act of 1940; or . taxed as other than a grantor trust for United States federal income tax purposes. The Trust Agreement also directs the Administrative Trustees to operate the Trust so that the Series Junior Subordinated Notes will be treated as indebtedness of Duke Energy for United States federal income tax purposes. The Trust Agreement authorizes the Administrative Trustees and Duke Energy to take any action not inconsistent with applicable law, the Trust's certificate of trust or the Trust Agreement that they determine to be necessary or desirable for those purposes. No such action may, however, materially and adversely affect the interests of the holders of the Preferred Securities. Duke Energy and its affiliates may purchase outstanding Preferred Securities by tender, in the open market or by private agreement, to the extent legally permitted. S-26 DESCRIPTION OF THE SERIES JUNIOR SUBORDINATED NOTES The following description of the Series Junior Subordinated Notes is only a summary and is not intended to be comprehensive. The description should be read together with the description of the general terms and provisions of the Junior Subordinated Notes provided under the caption "Description of the Junior Subordinated Notes" in the accompanying prospectus. General Duke Energy will issue the Series Junior Subordinated Notes as a series of Subordinated Notes under the Subordinated Indenture. The Series Junior Subordinated Notes will be limited in principal amount to $ , which is the liquidation amount of the Trust Securities. The Series Junior Subordinated Notes will mature and become due and payable, together with any accrued and unpaid interest, including any Additional Interest (as defined below), on , . The Series Junior Subordinated Notes will rank equal in priority with any other series of Junior Subordinated Notes issued under the Subordinated Indenture. The Series Junior Subordinated Notes will not have a sinking fund. Optional Redemption Duke Energy will have the right to redeem the Series Junior Subordinated Notes: . from time to time, in whole or in part, on or after , ; or . at any time, in whole but not in part, during the 90 days after the occurrence of a Special Event. Duke Energy may redeem the Series Junior Subordinated Notes upon not less than 30 nor more than 60 days' notice at a redemption price equal to the principal amount to be redeemed plus any accrued and unpaid interest, including any Additional Interest, to the redemption date. If a partial redemption of the Series Junior Subordinated Notes would cause the Preferred Securities to be delisted, Duke Energy will be required to redeem all of the Series Junior Subordinated Notes. Interest The Series Junior Subordinated Notes will bear interest at a yearly rate of % from the original issue date. Interest on the Series Junior Subordinated Notes will be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing on , , unless the applicable interest period is extended. Interest will be payable to the person or persons in whose name the Series Junior Subordinated Notes are registered at the close of business on the 15th calendar day (whether or not a Business Day) before the relevant interest payment date, except that interest payable on the maturity date or on a redemption date will be paid to the person to whom principal is payable. Interest will be computed on the basis of a 360- day year of twelve 30-day months. S-27 If any date on which interest is payable on the Series Junior Subordinated Notes is not a Business Day, the interest payable on that date will be paid on the next day that is a Business Day (without any interest or other payment due to the delay), except that if that Business Day falls in the next calendar year, interest will be paid on the immediately preceding Business Day. Option to Extend Interest Payment Period Duke Energy will have the right, at any time and from time to time, to defer interest payments on the Series Junior Subordinated Notes by extending the interest payment period for up to consecutive quarters, but not beyond the maturity date. When the extension period has ended, Duke Energy will pay all accrued and unpaid interest, including any Additional Interest, on the next interest payment date. Before any extension period ends, Duke Energy may further defer interest payments by extending the interest payment period. However, an extension period, together with any previous and further extensions, may not exceed consecutive quarters. During an extension period, Duke Energy will have the right to make partial payments of interest on any interest payment date. After an extension period terminates and all amounts due are paid, Duke Energy may select a new extension period, subject to the previously mentioned requirements. Duke Energy has no present intention of exercising its right to defer payments by extending the interest payment period on the Series Junior Subordinated Notes. Duke Energy will notify the holder or holders of the Series Junior Subordinated Notes and the Indenture Trustee of its selection or extension of an extension period at least one Business Day before the earlier of: . the record date for the interest payment date on which the extension period is to begin or the record date for the interest payment date on which the extension period that is being extended would otherwise terminate; or . the date that Duke Energy or the Trust is required to give notice to the New York Stock Exchange or other self-regulatory organization of the record date or the date those distributions are payable. Additional Interest "Additional Interest" means: . those additional amounts as may be required so that the net amounts that a holder of Series Junior Subordinated Notes (if the holder is the Trust or the Property Trustee on behalf of the Trust) receives and retains after paying taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United States or any other taxing authority will not be less than the amounts the holder would have received had no such taxes, duties, assessments or other governmental charges been imposed; and . interest on interest due but not paid on an interest payment date for the Series Junior Subordinated Notes, accruing at a yearly rate of % from the applicable interest payment date to the date of payment, compounded quarterly, on each interest payment date, to the extent legally permitted. S-28 Certain Covenants Duke Energy will covenant, for the benefit of the holders of Series Junior Subordinated Notes and the holders of the Preferred Securities, that: . if it has given notice of its election to extend an interest payment period for the Series Junior Subordinated Notes and the extension is continuing; or . if an event of default under the Subordinated Indenture with respect to the Series Junior Subordinated Notes has occurred and is continuing, then it will not: . declare or pay any dividend or make any distributions with respect to any of its capital stock, or redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock; or . make any payment of interest, principal or premium on any debt securities, including guarantees other than the Guarantee, issued by it which rank equal in priority with or junior to the Series Junior Subordinated Notes, or repay, repurchase or redeem any such debt securities. However, those covenants will not restrict: . any action described in the preceding sentence that results from a reclassification of Duke Energy's capital stock or the exchange or conversion of one class or series of Duke Energy's capital stock for another class or series; . the declaration and payment of a dividend or distribution or similar share purchase rights in the future; . repurchases, redemptions or other acquisitions of shares of Duke Energy's capital stock in connection with an employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers or directors, or a stock purchase and dividend reinvestment plan; . acquisitions of shares of Duke Energy's capital stock in connection with the issuance of shares of Duke Energy's capital stock (or securities convertible into or exchangeable for shares of Duke Energy's capital stock) as consideration in an acquisition transaction entered into before the beginning of the relevant extension period; . dividends or distributions in Duke Energy's capital stock; . the purchase of fractional interests in shares of Duke Energy's capital stock under the conversion or exchange provisions of that capital stock or the security being converted or exchanged; or . mandatory sinking fund payments with respect to any series of Duke Energy's Preferred Stock or Preferred Stock A, if the aggregate stated value of all such series outstanding at the time of the payment does not exceed 5% of the sum of: . the principal amount of all bonds or other securities representing secured indebtedness issued or assumed by Duke Energy and then outstanding; and S-29 . Duke Energy's capital and surplus to be stated on its books of account after giving effect to that payment. Any money deposited into any sinking fund that is not in violation of this provision may thereafter be applied to the purchase or redemption of that Preferred Stock or Preferred Stock A in accordance with the terms of that sinking fund without regard to the foregoing restrictions. Duke Energy will also covenant that, for so long as the Trust Securities are outstanding, it will: . continue to own all the Common Securities directly or indirectly; and . use its reasonable efforts to cause the Trust: . to remain a statutory business trust, except in connection with the distribution of Series Junior Subordinated Notes in liquidation of the Trust, the redemption of all the Trust Securities, or certain mergers, consolidations or amalgamations; and . to otherwise continue to be classified as a grantor trust for United States federal income tax purposes. Any successor of Duke Energy may, however, succeed to Duke Energy's ownership of the Common Securities without Duke Energy's violating this covenant if the successor is permitted under the Subordinated Indenture. Book-Entry Issuance Duke Energy expects that the Series Junior Subordinated Notes will be issued in the form of one or more global securities registered in the name of the securities depositary or its nominee if the Series Junior Subordinated Notes are distributed to holders of Trust Securities in connection with the voluntary or involuntary dissolution, winding-up or liquidation of the Trust. The procedures applicable to the transfer and payment of the Series Junior Subordinated Notes are expected to be substantially similar to those applicable to the transfer and payment of the Preferred Securities. Denominations The Series Junior Subordinated Notes will be issuable in denominations of $ and integral multiples of $ . Defeasance The Series Junior Subordinated Notes will be subject to defeasance but not to covenant defeasance, as each is described in the Subordinated Indenture. See "Description of the Junior Subordinated Notes--Defeasance and Covenant Defeasance" in the accompanying prospectus. Miscellaneous Duke Energy will have the right to assign any of its rights or obligations under the Subordinated Indenture with respect to the Series Junior Subordinated Notes to one of its direct or indirect wholly owned subsidiaries. Duke Energy will remain primarily liable for the performance of those obligations in the event of an assignment. S-30 RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE SERIES JUNIOR SUBORDINATED NOTES AND THE GUARANTEE As long as Duke Energy makes interest and other payments on the Series Junior Subordinated Notes when due, those payments will be sufficient to cover distributions and payments due on the Preferred Securities and the Common Securities. This is the case primarily because: . the total principal amount of the Series Junior Subordinated Notes will be equal to the total liquidation amount of the Trust Securities; . the interest rate and interest and other payment dates on the Series Junior Subordinated Notes will correspond to the distribution rate and distribution and other payment dates for the Preferred Securities; . the Agreement as to Expenses and Liabilities between Duke Energy and the Trust provides that Duke Energy will pay all costs and expenses of the Trust; and . the Trust Agreement provides that the Securities Trustees will not permit the Trust to engage in any activity that is inconsistent with the purposes of the Trust. If Duke Energy does not make the required payments on the Series Junior Subordinated Notes, it is expected that the Trust will not have sufficient funds to make the related distributions on the Preferred Securities. Duke Energy will guarantee payments of distributions and other payments due on the Preferred Securities but only to the extent that the Trust has funds legally and immediately available for the payment of those distributions and other payments. If an event of default under the Subordinated Indenture with respect to the Series Junior Subordinated Notes occurs and is continuing, then: . the holders of Preferred Securities will rely on the Property Trustee, as the holder of the Series Junior Subordinated Notes, to enforce its rights against Duke Energy; and . the holders of a majority of the Preferred Securities will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee or to direct the exercise of any power of the Property Trustee under the Trust Agreement, including the right to direct the Property Trustee to exercise the remedies available to it as a holder of the Series Junior Subordinated Notes. If the Property Trustee fails to enforce its rights under the Series Junior Subordinated Notes, a holder of Preferred Securities may, to the extent legally permitted, institute a legal proceeding against Duke Energy to enforce its rights under the Trust Agreement without first instituting a legal proceeding against the Property Trustee, the Trust or any other person or entity. Moreover, a holder of Preferred Securities may institute a legal proceeding directly against Duke Energy to enforce payment to that holder of principal or interest on Series Junior Subordinated Notes having a principal amount equal to the liquidation amount of the Preferred Securities of that holder on or after the due dates specified in the Series Junior Subordinated Notes. The Trust Agreement also provides a mechanism whereby the holders of Preferred Securities may appoint a substitute Property Trustee if an event of default under the Subordinated Indenture with respect to the Series Junior Subordinated Notes occurs and is continuing. S-31 The Guarantee provides a mechanism whereby the holders of the Preferred Securities may direct the Guarantee Trustee to enforce its rights under the Guarantee if Duke Energy fails to make payments under the Guarantee. In addition, any holder of Preferred Securities may institute a legal proceeding directly against Duke Energy to enforce the Guarantee Trustee's rights under the Guarantee without first instituting a legal proceeding against the Guarantee Trustee or any other person or entity. The Guarantee, the Subordinated Indenture, the Series Junior Subordinated Notes, the Trust Agreement and the Agreement as to Expenses and Liabilities provide a full and unconditional guarantee, subject to certain subordination provisions, by Duke Energy of the payments due on the Preferred Securities. The holders of Preferred Securities will be entitled to receive the liquidation distribution with respect to those Preferred Securities in cash, out of assets legally available for distribution to those holders, upon any voluntary or involuntary dissolution, winding-up or termination of the Trust unless the Series Junior Subordinated Notes are distributed in connection with those events. Upon any voluntary or involuntary liquidation or bankruptcy of Duke Energy, the Property Trustee, as holder of the Series Junior Subordinated Notes, would be a subordinated creditor of Duke Energy, subordinated in right of payment to all Senior Indebtedness, but entitled to receive payment in full of principal and interest before Duke Energy's shareholders receive payments or distributions. Because Duke Energy is guarantor under the Guarantee and has agreed to pay all costs, expenses and liabilities of the Trust under the Agreement as to Expenses and Liabilities, other than the Trust's obligations to holders of the Preferred Securities, the positions of a holder of Preferred Securities and a holder of Series Junior Subordinated Notes relative to other creditors and Duke Energy's shareholders would be substantially the same in the event of the liquidation or bankruptcy of Duke Energy. A default or event of default under any Senior Indebtedness is not a default or an event of default under the Subordinated Indenture. However, if a default occurs with respect to Senior Indebtedness or if Senior Indebtedness is accelerated, the subordination provisions of the Series Junior Subordinated Notes provide that no payments may be made in respect of the Series Junior Subordinated Notes: . until that Senior Indebtedness has been paid in full, in the case of any payment by, or distribution of assets of, Duke Energy to creditors upon a dissolution, winding-up, liquidation or reorganization of Duke Energy; or . until all amounts due on that Senior Indebtedness have been paid, in the case of a payment default beyond any grace period under that Senior Indebtedness or the acceleration of that Senior Indebtedness because of a default with respect to that Senior Indebtedness. S-32 MATERIAL FEDERAL INCOME TAX CONSIDERATIONS Following is the opinion of Dewey Ballantine LLP, counsel to Duke Energy and the Trust, as to the material United States federal income tax consequences of the purchase, ownership and disposition of Preferred Securities by holders that acquire Preferred Securities on their original issue at the initial offering price and that hold the Preferred Securities as capital assets. The opinion does not address all tax consequences that may be important to a holder in light of the holder's peculiar circumstances or to holders subject to special rules, such as financial institutions, foreign persons, real estate investment trusts, regulated investment companies, insurance companies, tax- exempt organizations, dealers in securities or currencies, traders in securities that elect to mark to market, individual retirement and other tax- deferred accounts, and persons engaging in straddles or hedges relating to Preferred Securities. This discussion is based on legal authorities that are subject to change at any time in a manner that could adversely affect holders. Prospective investors in Preferred Securities should consult their own tax advisors with regard to the application of the tax considerations discussed below to their own situations as well as the application of any state, local or other tax laws. The Trust will be disregarded for United States federal income tax purposes and each holder of Preferred Securities will be treated as the owner of a proportionate amount of the Series Junior Subordinated Notes held by the Trust. Accordingly, a holder will include in income the holder's share of the income from the Series Junior Subordinated Notes. Duke Energy believes that the likelihood of the occurrence of an extension period is remote and accordingly that under income tax regulations applicable to "contingent" payments the Series Junior Subordinated Notes should not be treated as issued with original issue discount. These regulations have not been addressed in any rulings or other interpretations by the Internal Revenue Service and it is possible that the Internal Revenue Service will take a contrary position. If, however, Duke Energy exercises its option to defer payments of interest, the Series Junior Subordinated Notes would at that time be treated as issued with original issue discount and all the stated interest on the Series Junior Subordinated Notes would thereafter be treated as original issue discount. As a result, holders would be required to accrue original issue discount income on an economic accrual basis, even if the holder uses the cash method of accounting for tax purposes and even though holders will not receive any payments during the extension period. Because income on the Preferred Securities will constitute interest or original issue discount, corporate holders will not be entitled to a dividends-received deduction with respect to any income from the Preferred Securities. Upon a sale, retirement or other taxable disposition of Preferred Securities, a holder will recognize gain or loss equal to the difference between the amount realized on the sale, retirement or other disposition and the holder's adjusted tax basis in the Preferred Securities. If the holder disposes of Preferred Securities prior to the occurrence of an extension period, any portion of the amount received that is attributable to accrued interest will be treated as interest income to the holder and will not be treated as part of the amount realized for purposes of determining gain or loss on the disposition of the Preferred Securities. Any recognized gain or loss will be capital gain or loss and will be long-term capital gain or loss if the holding period for the Preferred Securities is more than one year at the time of sale, retirement or other disposition. The Series Junior Subordinated Notes will be subject to defeasance but not to covenant defeasance, as each is described in the Subordinated Indenture. See "Description of the Junior S-33 Subordinated Notes--Defeasance and Covenant Defeasance" in the accompanying prospectus. Under current United States federal income tax laws, a defeasance would be treated as an exchange of the relevant Series Junior Subordinated Notes in which holders of those Series Junior Subordinated Notes might recognize gain or loss. In addition, the amount, timing and character of amounts that holders would thereafter be required to include in income might be different from that which would be includible in the absence of that defeasance. Income on Preferred Securities will be reported to holders on Form 1099, which form should be mailed to holders of Preferred Securities by January 31 following each calendar year. A holder will generally be required to furnish a social security number or other taxpayer identification number in order to avoid "backup withholding" tax on distributions on the Preferred Securities and payment of the proceeds from the disposition of Preferred Securities. Any amount so withheld will be allowed as a refund or a credit against the holder's United States federal income tax liability, provided the required information is furnished to the Internal Revenue Service. The United States federal income tax discussion set forth above may not be applicable to a holder, depending upon the holder's particular situation, and therefore each holder should consult a tax advisor with respect to the tax consequences of the ownership and disposition of Preferred Securities, including the tax consequences under state, local, foreign and other tax laws and the possible effects of changes in federal or other tax law. S-34 UNDERWRITING Subject to the terms and conditions of an underwriting agreement, the Trust has agreed to sell to each of the underwriters named below, and each of those underwriters has severally agreed to purchase, the number of Preferred Securities specified opposite its name. In the underwriting agreement, the underwriters have agreed, subject to certain conditions, to purchase all of the Preferred Securities if any of the Preferred Securities are purchased. , and are acting as representatives for the underwriters in the offering.
Number of Underwriter Preferred Securities ----------- -------------------- ---- Total.................................................... ====
Since the proceeds of the sale of the Preferred Securities will be used to purchase Series Junior Subordinated Notes, the underwriting agreement provides that Duke Energy will pay as compensation to the underwriters $ per Preferred Security for the accounts of the several underwriters, or $ in the aggregate. The underwriters have advised Duke Energy and the Trust that they propose to offer the Preferred Securities: . in part directly to the public at the initial public offering price that is stated on the cover page of this prospectus supplement; and . in part to certain securities dealers at that price less a concession not in excess of $ per Preferred Security. The underwriters may allow, and those dealers may reallow, a concession not in excess of $ per Preferred Security to certain other dealers. The representatives may vary the initial public offering price and other selling terms from time to time after the Preferred Securities are released for sale to the public. The Preferred Securities are expected to be approved for listing on the New York Stock Exchange, subject to official notice of issuance. Trading of the Preferred Securities on the New York Stock Exchange is expected to begin within a 30-day period after the initial delivery of the Preferred Securities. The representatives have advised Duke Energy and the Trust that they intend to make a market in the Preferred Securities before trading on the New York Stock Exchange begins. The representatives will have no obligation to make a market in the Preferred Securities, however, and may cease market-making activities, if commenced, at any time. S-35 There has been no public market for the Preferred Securities before this offering. In order to meet one of the requirements for listing the Preferred Securities on the New York Stock Exchange, the underwriters will undertake to sell lots of 100 or more Preferred Securities to a minimum of 400 beneficial holders. The underwriters may purchase and sell the Preferred Securities in the open market in connection with the offering. Those transactions may include over-allotment and stabilizing transactions and purchases to cover syndicate short positions created in connection with the offering. Stabilizing transactions consist of certain bids or purchases for the purpose of preventing or retarding a decline in the market price of the Preferred Securities. Syndicate short positions involve the sale by the underwriters of a greater number of Preferred Securities than they are required to purchase from the Trust in the offering. The underwriters also may impose a penalty bid, by which selling concessions allowed to syndicate members or other broker-dealers with respect to the Preferred Securities sold for their account in the offering may be reclaimed by the syndicate if those Preferred Securities are repurchased by the syndicate in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the Preferred Securities, which may be higher than the price that might otherwise prevail in the open market. These activities, if commenced, may be discontinued at any time. These transactions may be effected on the New York Stock Exchange, in the over-the-counter market or otherwise. Duke Energy estimates that its expenses in connection with this offering, excluding underwriting discounts and commissions, will be approximately $ . Duke Energy and the Trust have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933. Certain of the underwriters and their affiliates engage in transactions with, and, from time to time, have performed services for Duke Energy or certain of its affiliates in the ordinary course of business and may do so in the future. VALIDITY OF THE SECURITIES Richards, Layton & Finger, P.A., special Delaware counsel to the Trust, will issue an opinion about the validity of the Preferred Securities on behalf of the Trust. Dewey Ballantine LLP will issue an opinion about the validity of the Series Junior Subordinated Notes, the Guarantee and certain related matters as well as certain matters relating to United States federal income tax considerations on behalf of Duke Energy and the Trust. Ellen T. Ruff, Esq., who is Duke Energy's Senior Vice President and General Counsel, will pass upon certain matters of North Carolina law on behalf of Duke Energy. will issue an opinion about the validity of the Series Junior Subordinated Notes and the Guarantee for the underwriters. In giving their respective opinions, Dewey Ballantine LLP and may rely as to matters of North Carolina law upon the opinion of Ms. Ruff. As of , Ms. Ruff owned shares of Duke Energy's Common Stock and options to purchase shares, of which were exercisable. S-36 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- [ ] Preferred Securities Duke Energy Capital Trust [ ] % Trust Preferred Securities (Liquidation amount $ per Preferred Security) Guaranteed, to the extent described herein, by Duke Energy Corporation ---------------- PROSPECTUS SUPPLEMENT ---------------- [names of underwriters] - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +Information contained in this preliminary prospectus supplement is subject to + +completion or amendment. These securities may not be sold nor may offers to + +buy be accepted prior to the time that a final prospectus supplement is + +delivered. Neither this preliminary prospectus supplement nor the + +accompanying prospectus shall constitute an offer to sell or the solicitation + +of an offer to buy nor shall there be any sale of these securities in any + +state in which such offer, solicitation or sale would be unlawful prior to + +registration or qualification under the securities laws of any such state. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ PROSPECTUS SUPPLEMENT (To prospectus dated , ) Subject to completion dated April 12, 2001 $[ ] Duke Energy Corporation Series % Senior Notes due ------------ We will pay interest on the Series Senior Notes on and of each year. The first interest payment will be made on , . The Series Senior Notes will mature on , and are redeemable at our option at any time at a redemption price determined by using the formula set forth under the caption "Description of the Series Senior Notes--Optional Redemption" in this prospectus supplement. The Series Senior Notes are unsecured and rank equally with all of our other unsecured and unsubordinated indebtedness. We will issue the Series Senior Notes in denominations of $ and integral multiples of $ .
Per Series Senior Note Total ------------ ----- Initial Public Offering Price................................ Underwriting Discounts and Commissions....................... Proceeds, before expenses, to us.............................
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense. The underwriters expect to deliver the Series Senior Notes on or about , . ------------ [names of underwriters] ------------ This prospectus supplement is dated , . You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. If this prospectus supplement is inconsistent with the accompanying prospectus, you should rely on this prospectus supplement. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information in this prospectus supplement and the accompanying prospectus is accurate only as of the respective dates on the front of those documents or earlier dates specified therein. Our business, financial condition, results of operations and prospects may have changed since those dates. TABLE OF CONTENTS Prospectus Supplement
Page ---- Forward-Looking Statements................................................ S-3 Description of the Series Senior Notes.................................. S-4 Underwriting.............................................................. S-9 Validity of the Securities................................................ S-10 Prospectus About this Prospectus..................................................... 2 Duke Energy Corporation................................................... 2 Use of Proceeds........................................................... 4 The Trusts................................................................ 4 Accounting Treatment...................................................... 5 Description of the Senior Notes........................................... 5 Description of the Junior Subordinated Notes.............................. 15 Description of the First and Refunding Mortgage Bonds..................... 24 Description of the Common Stock........................................... 28 Description of the Stock Purchase Contracts and Stock Purchase Units...... 31 Description of the Preferred Securities................................... 32 Description of the Guarantees............................................. 33 Plan of Distribution...................................................... 36 Experts................................................................... 38 Validity of the Securities................................................ 38 Where You Can Find More Information....................................... 38
S-2 FORWARD-LOOKING STATEMENTS We have included certain information in this document which is "forward- looking information" as defined by the Private Securities Litigation Reform Act of 1995. Examples include discussions as to our expectations, beliefs, plans, goals, objectives and future financial or other performance or assumptions concerning matters discussed in this document. This information, by its nature, involves estimates, projections, forecasts and uncertainties that could cause actual results or outcomes to differ substantially from those expressed. Our business is influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond our ability to control. We have identified a number of these factors in our filings with the SEC, and we refer you to those filings for further information. These factors include: . state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an impact on rate structures and affect the speed at and degree to which competition enters the electric and natural gas industries; . industrial, commercial and residential growth in our service territories and the service territories of our subsidiaries; . the weather and other natural phenomena; . the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; . changes in environmental and other laws and regulations to which we and our subsidiaries are subject or other external factors over which we have no control; . the results of financing efforts, including our ability to obtain financing on favorable terms, which can be affected by various factors, including our credit ratings and general economic conditions; . growth in opportunities for our business units; and . the effect of accounting policies issued periodically by accounting standard-setting bodies. In light of these risks, uncertainties and assumptions, the forward- looking events referred to in this prospectus supplement and the accompanying prospectus might not occur. Neither we nor the underwriters undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. S-3 DESCRIPTION OF THE SERIES SENIOR NOTES The following description of the Series Senior Notes is only a summary and is not intended to be comprehensive. The description should be read together with the description of the general terms and provisions of Senior Notes provided under the caption "Description of the Senior Notes" in the accompanying prospectus. General The Series Senior Notes will be limited in principal amount to $ and will be issued as a series of Senior Notes under our Senior Indenture. The entire principal amount of the Series Senior Notes will mature and become due and payable, together with any accrued and unpaid interest, on , . The Series Senior Notes will not have a sinking fund. Interest Each Series Senior Note will bear interest at the rate of % per year from the date of original issuance. We will pay interest semiannually on and of each year, beginning , , to the person in whose name the Series Senior Note is registered at the close of business on the fifteenth calendar day (whether or not a Business Day) before the relevant interest payment date, except that we will pay interest payable at the maturity date of the Series Senior Notes or on a redemption date to the person or persons to whom principal is payable. The amount of interest payable will be computed on the basis of a 360-day year of twelve 30-day months. If any date on which interest is payable is not a Business Day, we will pay that interest on the next Business Day without any interest or other payment due to the delay. Optional Redemption We will have the right to redeem the Series Senior Notes, in whole or in part, at any time at a redemption price equal to the greater of (1) 100% of the principal amount of the Series Senior Notes to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on such Series Senior Notes (exclusive of interest accrued to the redemption date) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus basis points, plus, in either case, accrued and unpaid interest on the principal amount being redeemed to such redemption date. "Treasury Rate" means, with respect to any redemption date, (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the maturity date of the Series Senior S-4 Notes, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined, and the Treasury Rate will be interpolated or extrapolated from such yields on a straight-line basis, rounding to the nearest month) or (2) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. The Treasury Rate will be calculated on the third Business Day preceding the redemption date. "Comparable Treasury Issue" means the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable to the remaining term of the Series Senior Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Series Senior Notes. "Independent Investment Banker" means and any successor firm or, if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Senior Indenture Trustee after consultation with us. "Comparable Treasury Price" means, with respect to any redemption date for the Series Senior Notes, (1) the average of Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (2) if the Senior Indenture Trustee obtains fewer than such Reference Treasury Dealer Quotations, the average of all such quotations. "Reference Treasury Dealer" means each of , , , and and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), we will substitute therefor another Primary Treasury Dealer. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Senior Indenture Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Senior Indenture Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such redemption date. Redemption Procedures We will mail notice of redemption not less than 30 nor more than 60 days before the redemption date to each registered holder of the Series Senior Notes to be redeemed. If the redemption notice is given and funds deposited as required, then interest will cease to accrue on and after the redemption date on the Series Senior Notes or portions of Series Senior Notes called for redemption. In the event that any redemption date is not a Business Day, we will pay the redemption price on the next Business Day without any interest or other payment due to the delay. S-5 Ranking The Series Senior Notes will be our direct, unsecured and unsubordinated obligations. The Series Senior Notes will rank equal in priority with all of our other unsecured and unsubordinated indebtedness and senior in right of payment to all of our existing and future subordinated debt. At , , we had outstanding approximately $ of unsecured and unsubordinated indebtedness and approximately $ of secured indebtedness. The Senior Indenture contains no restrictions on the amount of additional indebtedness that we may issue under it. Denominations The Series Senior Notes will be issuable in denominations of $ and integral multiples of $ . Defeasance and Covenant Defeasance The Series Senior Notes will be subject to defeasance and covenant defeasance as described in the Senior Indenture. See "Description of the Senior Notes--Defeasance and Covenant Defeasance" in the accompanying prospectus. Under current United States federal income tax law, a defeasance would be treated as an exchange of the relevant Series Senior Notes in which holders of such Series Senior Notes might recognize gain or loss. In addition, the amount, timing and character of amounts that holders would thereafter be required to include in income might be different from that which would be includible in the absence of that defeasance. We urge investors to consult their own tax advisors as to the specific consequences of a defeasance, including the applicability and effect of tax laws other than United States federal income tax laws. Under current United States federal income tax law, unless accompanied by other changes in the terms of the Series Senior Notes, covenant defeasance should not be treated as a taxable exchange. Book-Entry Only Issuance--The Depository Trust Company The Depository Trust Company ("DTC") will act as the initial securities depositary for the Series Senior Notes. The Series Senior Notes will be issued only as fully registered securities registered in the name of Cede & Co., DTC's nominee. One or more fully registered global certificates for the Series Senior Notes will be issued, representing in the aggregate the total principal amount of Series Senior Notes, and will be deposited with DTC or its custodian. The following is based on information furnished to us by DTC: DTC is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC was created to hold securities of its participants ("participants") and to facilitate the clearance S-6 and settlement of securities transactions among its participants in these securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. DTC's participants include securities brokers and dealers (including the underwriters), banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own DTC. Persons who are not participants may beneficially own securities held by DTC only through participants. DTC is owned by a number of its direct participants and by the New York Stock Exchange, Inc., the American Stock Exchange LLC and the National Association of Securities Dealers, Inc. Access to DTC's system is also available to others including securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly ("indirect participants"). The rules applicable to DTC and its participants are on file with the SEC. Purchases of Series Senior Notes within the DTC system must be made by or through direct participants, which will receive a credit for the Series Senior Notes on DTC's records. The ownership interest of each actual purchaser of Series Senior Notes ("beneficial owner") is in turn to be recorded on the direct and indirect participants' records. Beneficial owners will not receive written confirmation from DTC of their purchases, but beneficial owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the direct or indirect participants through which the beneficial owners purchased Series Senior Notes. Transfers of ownership interests in the Series Senior Notes are to be accomplished by entries made on the books of participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in Series Senior Notes, except in the event that use of the book-entry system for the Series Senior Notes is discontinued. DTC has no knowledge of the actual beneficial owners of the Series Senior Notes. DTC's records reflect only the identity of the direct participants to whose accounts the Series Senior Notes are credited, which may or may not be the beneficial owners. The participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants, and by direct participants and indirect participants to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Although voting with respect to the Series Senior Notes is limited, in those cases where a vote is required, neither DTC nor Cede & Co. will itself consent or vote with respect to Series Senior Notes. Under its usual procedures, DTC would mail an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to those direct participants to whose accounts the Notes are credited on the record date (identified in a listing attached to the omnibus proxy). S-7 Payments on the Series Senior Notes will be made to DTC in immediately available funds. DTC's practice is to credit direct participants' accounts on the relevant payment date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payments on the relevant payment date. Payments by participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities held for the account of customers in bearer form or registered in "street name," and will be the responsibility of the participant and not our responsibility or the responsibility of DTC, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment to DTC is our responsibility, disbursement of the payments to direct participants is the responsibility of DTC, and disbursement of the payments to the beneficial owners is the responsibility of direct and indirect participants. Except as provided in this prospectus supplement, a beneficial owner of Series Senior Notes will not be entitled to receive physical delivery of Series Senior Notes. Accordingly, each beneficial owner must rely on the procedures of DTC to exercise any rights under the Series Senior Notes. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of securities in definitive form. These laws may impair the ability to transfer beneficial interests in a global Series Senior Note. DTC may discontinue providing its services as securities depositary with respect to the Series Senior Notes at any time by giving reasonable notice to us. Under those circumstances, in the event that a successor securities depositary is not obtained, Series Senior Note certificates will be printed and delivered to the holders of record. Additionally, we may decide to discontinue use of the system of book- entry transfers through DTC (or a successor depositary) with respect to the Series Senior Notes. In that event, certificates for the Series Senior Notes will be printed and delivered to the holders of record. We have no responsibility for the performance by DTC or its participants of their respective obligations as described in this prospectus supplement or under the rules and procedures governing their respective operations. S-8 UNDERWRITING We are selling the Series Senior Notes under an underwriting agreement dated , to the underwriters named below (for whom , , , , , and are acting as representatives), and each of the underwriters has severally agreed to purchase from us the principal amount of Series Senior Notes set forth opposite its name below:
Principal Amount of Series Underwriter Senior Notes ----------- ---------------- ----- Total.................................................... $ =====
In the underwriting agreement, the underwriters have agreed, subject to certain conditions, to purchase all of the Series Senior Notes if any of the Series Senior Notes are purchased. The underwriters propose initially to offer the Series Senior Notes to the public at the initial public offering price set forth on the cover page of this prospectus supplement, and to certain dealers at that price less a concession not in excess of $ per Series Senior Note. The underwriters may allow, and those dealers may reallow, a discount not in excess of $ per Series Senior Note to certain other dealers. The initial public offering price, selling concession and discount may be changed after the initial public offering. The Series Senior Notes are a new issue of securities with no established trading market. The underwriters have advised us that they intend to make a market in the Series Senior Notes but are not obligated to do so and may discontinue market-making at any time without notice. Neither we nor the underwriters can provide any assurances as to the liquidity of the trading market for the Series Senior Notes. The underwriters may purchase and sell the Series Senior Notes in the open market in connection with the offering. These transactions may include over-allotment and stabilizing transactions and purchases to cover syndicate short positions created in connection with the offering. Stabilizing transactions consist of certain bids or purchases for the purpose of preventing or retarding a decline in the market price of the Series Senior Notes. Syndicate short positions involve the sale by the underwriters of a greater number of Series Senior Notes than they are required to purchase S-9 from us in the offering. The underwriters also may impose a penalty bid, by which selling concessions allowed to syndicate members or other broker dealers with respect to the securities sold in the offering for their account may be reclaimed by the syndicate if those Series Senior Notes are repurchased by the syndicate in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the Series Senior Notes, which may be higher than the price that might otherwise prevail in the open market. These activities, if commenced, may be discontinued at any time. We estimate that our expenses in connection with this offering, excluding underwriting discounts and commissions, will be approximately $ . We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933. Certain of the underwriters and their affiliates engage in transactions with, and, from time to time, have performed services for us or for certain of our affiliates in the ordinary course of business and may do so in the future. VALIDITY OF THE SECURITIES Ellen T. Ruff, Esq., who is our Senior Vice President and General Counsel, and Dewey Ballantine LLP will issue opinions about the validity of the Series Senior Notes and certain related matters on our behalf. will issue an opinion about the validity of the Series Senior Notes for the underwriters. In giving their respective opinions, Dewey Ballantine LLP and may rely as to matters of North Carolina law upon the opinion of Ms. Ruff. As of , Ms. Ruff owned shares of our Common Stock and options to purchase shares, of which were exercisable. S-10 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- $[ ] Duke Energy Corporation Series % Senior Notes due --------------------- PROSPECTUS SUPPLEMENT --------------------- [names of underwriters] - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +The information in this prospectus is not complete and may be changed. We may + +not sell these securities until the registration statement filed with the + +Securities and Exchange Commission is effective. This prospectus is not an + +offer to sell these securities and it is not soliciting an offer to buy these + +securities in any state where the offer or sale of these securities is not + +permitted. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subject to completion dated April 12, 2001 PROSPECTUS $2,000,000,000 Duke Energy Corporation Senior Notes Junior Subordinated Notes First and Refunding Mortgage Bonds Common Stock Stock Purchase Contracts Stock Purchase Units ----------- Duke Energy Capital Trust III Duke Energy Capital Trust IV Duke Energy Capital Trust V Trust Preferred Securities Guaranteed, to the extent described herein, by Duke Energy Corporation ----------- This prospectus contains summaries of the general terms of these securities. You will find the specific terms of these securities, and the manner in which they are being offered, in supplements to this prospectus. You should read this prospectus and the applicable prospectus supplement carefully before you invest. The Common Stock of Duke Energy is listed on the New York Stock Exchange under the symbol "DUK." Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. This prospectus is dated , . ABOUT THIS PROSPECTUS This prospectus is part of a registration statement that Duke Energy, Duke Energy Capital Trust III, Duke Energy Capital Trust IV and Duke Energy Capital Trust V filed with the SEC utilizing a "shelf" registration process. Under the shelf registration process, Duke Energy may issue Senior Notes, Junior Subordinated Notes, First and Refunding Mortgage Bonds, Common Stock, Stock Purchase Contracts and Stock Purchase Units and the Trusts may issue Preferred Securities in one or more offerings up to a total dollar amount of $2,000,000,000. This prospectus provides general descriptions of the securities Duke Energy and the Trusts may offer. Each time securities are sold, a prospectus supplement will provide specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. The registration statement filed with the SEC includes exhibits that provide more details about the matters discussed in this prospectus. You should read this prospectus, the related exhibits filed with the SEC and any prospectus supplement, together with the additional information described under the caption "Where You Can Find More Information." DUKE ENERGY CORPORATION Duke Energy, together with its subsidiaries, is an integrated energy and energy services provider with the ability to offer physical delivery and management of both electricity and natural gas throughout the United States and abroad. Duke Energy, directly or through its subsidiaries, provides these and other services through seven business segments: . Franchised Electric . Natural Gas Transmission . Field Services . North American Wholesale Energy . International Energy . Other Energy Services . Duke Ventures Franchised Electric generates, transmits, distributes and sells electric energy in central and western North Carolina and the western portion of South Carolina. Its operations are conducted primarily through Duke Power and Nantahala Power and Light. Natural Gas Transmission provides interstate transportation and storage of natural gas for customers primarily in the Mid-Atlantic, New England and southeastern states. Its operations are conducted primarily through Duke Energy Gas Transmission Corporation. Field Services gathers, processes, transports, markets and stores natural gas and produces, transports, markets and stores natural gas liquids. Its operations are conducted primarily through Duke Energy Field Services, LLC, a limited liability company that is approximately 30% owned by Phillips Petroleum Company. Field Services operates gathering systems in western Canada and eleven contiguous states that serve major natural gas-producing regions in the Rocky Mountains, Permian Basin, Mid-Continent, East Texas-Austin Chalk-North Louisiana areas and onshore and offshore Gulf Coast areas. 2 North American Wholesale Energy's activities include asset development, operation and management of electric power generation facilities, primarily through Duke Energy North America, LLC, and commodity sales and services related to natural gas and electricity, primarily through Duke Energy Trading and Marketing, LLC, a limited liability company that is approximately 40% owned by Exxon Mobil Corporation. This segment also includes Duke Energy Merchants, which develops new business lines in the evolving energy commodity markets. North American Wholesale Energy conducts its business throughout the United States and Canada. International Energy conducts its operations through Duke Energy International, LLC. International Energy's activities include asset development, operation and management of natural gas and electric power generation facilities and energy trading and marketing of natural gas and electricity. These activities are focused on the Latin American, Asia Pacific and European regions. Other Energy Services is a combination of businesses that provide engineering, consulting, construction and integrated energy solutions worldwide, primarily through Duke Engineering & Services, Inc., Duke/Fluor Daniel and DukeSolutions, Inc. Duke/Fluor Daniel is a 50/50 partnership between Duke Energy and Fluor Enterprises, Inc. Duke Ventures is comprised of other diverse businesses, primarily operating through Crescent Resources, Inc., DukeNet Communications, LLC and Duke Capital Partners. Crescent Resources develops high quality commercial, residential and multi-family real estate projects and manages land holdings primarily in the southeastern United States. DukeNet Communications provides fiber optic networks for industrial, commercial and residential customers. Duke Capital Partners, a wholly owned merchant finance company, provides financing, investment banking and asset management services to wholesale and commercial energy markets. The foregoing information about Duke Energy and its business segments is only a general summary and is not intended to be comprehensive. For additional information about Duke Energy and its business segments you should refer to the information described under the caption "Where You Can Find More Information." Duke Energy's principal executive offices are located at 526 South Church Street, Charlotte, North Carolina 28202 (telephone (704) 594-6200). Ratio of Earnings to Fixed Charges (unaudited)
Year Ended December 31, ------------------------------ 2000 1999 1998 1997(1) 1996(1) ---- ---- ---- ------- ------- Ratio of Earnings to Fixed Charges............... 3.8 2.9 4.7 4.1 4.3
For purposes of this ratio (a) earnings consist of income from continuing operations before income taxes and fixed charges, and (b) fixed charges consist of all interest deductions and the interest component of rentals. - -------- (1) Data reflects accounting for the stock-for-stock merger of Duke Energy and PanEnergy Corp on June 18, 1997 as a pooling of interests. As a result, the data gives effect to the merger as if it had occurred as of January 1, 1996. 3 USE OF PROCEEDS Unless Duke Energy states otherwise in the accompanying prospectus supplement, Duke Energy intends to use the net proceeds from the sale of any offered securities: . to redeem or purchase from time to time presently outstanding securities when it anticipates those transactions will result in an overall cost savings; . to repay maturing securities; . to finance its ongoing construction program; or . for general corporate purposes. The proceeds from the sale of Preferred Securities by a Trust will be invested in Junior Subordinated Notes issued by Duke Energy. Except as Duke Energy may otherwise describe in the related prospectus supplement, Duke Energy expects to use the net proceeds from the sale of such Junior Subordinated Notes to the applicable Trust for the above purposes. THE TRUSTS Duke Energy formed each Trust as a statutory business trust under Delaware law. Each Trust's business is defined in a trust agreement executed by Duke Energy, as depositor, and Chase Manhattan Bank Delaware. Each trust agreement will be amended when Preferred Securities are issued under it and will be in substantially the form filed as an exhibit to the registration statement, of which this prospectus is a part. An amended trust agreement is called a "Trust Agreement" in this prospectus. The Preferred Securities and the Common Securities of each Trust represent undivided beneficial interests in the assets of that Trust. The Preferred Securities and the Common Securities together are sometimes called the "Trust Securities" in this prospectus. The trustees of each Trust will conduct that Trust's business and affairs. Duke Energy, as the holder of the Common Securities of each Trust, will appoint the trustees of that Trust. The trustees of each Trust will consist of: . two officers of Duke Energy as Administrative Trustees; . The Chase Manhattan Bank as Property Trustee; and . Chase Manhattan Bank Delaware as Delaware Trustee. The prospectus supplement relating to the Preferred Securities of a Trust will provide further information concerning that Trust. No separate financial statements of any Trust are included in this prospectus. Duke Energy considers that such statements would not be material to holders of the Preferred Securities because no Trust has any independent operations and the sole purpose of each Trust is investing the proceeds of the sale of its Trust Securities in Junior Subordinated Notes. Duke Energy does not expect that any of the Trusts will be filing annual, quarterly or special reports with the SEC. The principal place of business of each Trust will be c/o Duke Energy Corporation, 526 South Church Street, Charlotte, North Carolina 28202, telephone (704) 594-6200. 4 ACCOUNTING TREATMENT Each Trust will be treated as a subsidiary of Duke Energy for financial reporting purposes. Accordingly, Duke Energy's consolidated financial statements will include the accounts of each Trust. The Preferred Securities, along with other trust preferred securities that Duke Energy guarantees on an equivalent basis, will be presented as a separate line item in Duke Energy's consolidated balance sheets, entitled "Guaranteed Preferred Beneficial Interests in Subordinated Notes of Duke Energy Corporation or Subsidiaries." Duke Energy will record distributions that each Trust pays on the Preferred Securities as an expense in its consolidated statement of income. DESCRIPTION OF THE SENIOR NOTES Duke Energy will issue the Senior Notes in one or more series under its Senior Indenture dated as of September 1, 1998 between Duke Energy and The Chase Manhattan Bank, as Trustee, as supplemented from time to time. The Senior Indenture is an exhibit to the registration statement, of which this prospectus is a part. The Senior Notes are unsecured and unsubordinated obligations and will rank equally with all of Duke Energy's other unsecured and unsubordinated indebtedness. The First and Refunding Mortgage Bonds are effectively senior to the Senior Notes to the extent of the value of the properties securing them. As of March 31, 2001, there were approximately $1,568,000,000 of First and Refunding Mortgage Bonds outstanding. Duke Energy conducts its non-electric operations, and certain of its electric operations outside its service area in the Carolinas, through subsidiaries. Accordingly, its ability to meet its obligations under the Senior Notes is partly dependent on the earnings and cash flows of those subsidiaries and the ability of those subsidiaries to pay dividends or to advance or repay funds to Duke Energy. In addition, the rights that Duke Energy and its creditors would have to participate in the assets of any such subsidiary upon the subsidiary's liquidation or recapitalization will be subject to the prior claims of the subsidiary's creditors. Certain of Duke Energy's subsidiaries have incurred substantial amounts of debt in the expansion of their businesses and Duke Energy anticipates that certain of its subsidiaries will do so in the future. The following description of the Senior Notes is only a summary and is not intended to be comprehensive. For additional information you should refer to the Senior Indenture. General The Senior Indenture does not limit the amount of Senior Notes that Duke Energy may issue under it. Duke Energy may issue Senior Notes from time to time under the Senior Indenture in one or more series by entering into supplemental indentures or by its Board of Directors or a duly authorized committee authorizing the issuance. The form of supplemental indenture to the Senior Indenture is an exhibit to the registration statement, of which this prospectus is a part. The Senior Notes of a series need not be issued at the same time, bear interest at the same rate or mature on the same date. The Senior Indenture does not protect the holders of Senior Notes if Duke Energy engages in a highly leveraged transaction. 5 Provisions Applicable to Particular Series The prospectus supplement for a particular series of Senior Notes being offered will disclose the specific terms related to the offering, including the price or prices at which the Senior Notes to be offered will be issued. Those terms may include some or all of the following: . the title of the series; . the total principal amount of the Senior Notes of the series; . the date or dates on which principal is payable or the method for determining the date or dates, and any right that Duke Energy has to change the date on which principal is payable; . the interest rate or rates, if any, or the method for determining the rate or rates, and the date or dates from which interest will accrue; . any interest payment dates and the regular record date for the interest payable on each interest payment date, if any; . whether Duke Energy may extend the interest payment periods and, if so, the terms of the extension; . the place or places where payments will be made; . whether Duke Energy has the option to redeem the Senior Notes and, if so, the terms of its redemption option; . any obligation that Duke Energy has to redeem the Senior Notes through a sinking fund or to purchase the Senior Notes through a purchase fund or at the option of the holder; . whether the provisions described under "Defeasance and Covenant Defeasance" will not apply to the Senior Notes; . the currency in which payments will be made if other than U.S. dollars, and the manner of determining the equivalent of those amounts in U.S. dollars; . if payments may be made, at Duke Energy's election or at the holder's election, in a currency other than that in which the Senior Notes are stated to be payable, then the currency in which those payments may be made, the terms and conditions of the election and the manner of determining those amounts; . the portion of the principal payable upon acceleration of maturity, if other than the entire principal; . whether the Senior Notes will be issuable as global securities and, if so, the securities depositary; . any changes in the events of default or covenants with respect to the Senior Notes; . any index or formula used for determining principal, premium or interest; . if the principal payable on the maturity date will not be determinable on one or more dates prior to the maturity date, the amount which will be deemed to be such principal amount or the manner of determining it; and . any other terms. 6 Unless Duke Energy states otherwise in the applicable prospectus supplement, Duke Energy will issue the Senior Notes only in fully registered form without coupons, and there will be no service charge for any registration of transfer or exchange of the Senior Notes. Duke Energy may, however, require payment to cover any tax or other governmental charge payable in connection with any transfer or exchange. Subject to the terms of the Senior Indenture and the limitations applicable to global securities, transfers and exchanges of the Senior Notes may be made at The Chase Manhattan Bank, 55 Water Street, New York, New York 10041 or at any other office or agency maintained by Duke Energy for such purpose. The Senior Notes will be issuable in denominations of $1,000 and any integral multiples of $1,000, unless Duke Energy states otherwise in the applicable prospectus supplement. Duke Energy may offer and sell the Senior Notes, including original issue discount Senior Notes, at a substantial discount below their principal amount. The applicable prospectus supplement will describe special United States federal income tax and any other considerations applicable to those securities. In addition, the applicable prospectus supplement may describe certain special United States federal income tax or other considerations, if any, applicable to any Senior Notes that are denominated in a currency other than U.S. dollars. Global Securities Duke Energy may issue some or all of the Senior Notes as book-entry securities. Any such book-entry securities will be represented by one or more fully registered global securities. Duke Energy will register each global security with, or on behalf of, a securities depositary identified in the applicable prospectus supplement. Each global security will be deposited with the securities depositary or its nominee or a custodian for the securities depositary. As long as the securities depositary or its nominee is the registered holder of a global security representing Senior Notes, that person will be considered the sole owner and holder of the global security and the Senior Notes it represents for all purposes. Except in limited circumstances, owners of beneficial interests in a global security: . may not have the global security or any Senior Notes it represents registered in their names; . may not receive or be entitled to receive physical delivery of certificated Senior Notes in exchange for the global security; and . will not be considered the owners or holders of the global security or any Senior Notes it represents for any purposes under the Senior Notes or the Senior Indenture. Duke Energy will make all payments of principal and any premium and interest on a global security to the securities depositary or its nominee as the holder of the global security. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of securities in definitive form. These laws may impair the ability to transfer beneficial interests in a global security. Ownership of beneficial interests in a global security will be limited to institutions having accounts with the securities depositary or its nominee, which are called "participants" in this discussion, and to persons that hold beneficial interests through participants. When a global security representing Senior Notes is issued, the securities depositary will credit on its book entry, registration 7 and transfer system the principal amounts of Senior Notes the global security represents to the accounts of its participants. Ownership of beneficial interests in a global security will be shown only on, and the transfer of those ownership interests will be effected only through, records maintained by: . the securities depositary, with respect to participants' interests; and . any participant, with respect to interests the participant holds on behalf of other persons. Payments participants make to owners of beneficial interests held through those participants will be the responsibility of those participants. The securities depositary may from time to time adopt various policies and procedures governing payments, transfers, exchanges and other matters relating to beneficial interests in a global security. None of the following will have any responsibility or liability for any aspect of the securities depositary's or any participant's records relating to beneficial interests in a global security representing Senior Notes, for payments made on account of those beneficial interests or for maintaining, supervising or reviewing any records relating to those beneficial interests: . Duke Energy; . the Senior Indenture Trustee; or . an agent of either of them. Redemption Provisions relating to the redemption of Senior Notes will be set forth in the applicable prospectus supplement. Unless Duke Energy states otherwise in the applicable prospectus supplement, Duke Energy may redeem Senior Notes only upon notice mailed at least 30 but not more than 60 days before the date fixed for redemption. Unless Duke Energy states otherwise in the applicable prospectus supplement, that notice may state that the redemption will be conditional upon the Senior Indenture Trustee, or the applicable paying agent, receiving sufficient funds to pay the principal, premium and interest on those Senior Notes on the date fixed for redemption and that if the Senior Indenture Trustee or the applicable paying agent does not receive those funds, the redemption notice will not apply, and Duke Energy will not be required to redeem those Senior Notes. Duke Energy will not be required to: . issue, register the transfer of, or exchange any Senior Notes of a series during the period beginning 15 days before the date the notice is mailed identifying the Senior Notes of that series that have been selected for redemption; or . register the transfer of or exchange any Senior Note of that series selected for redemption except the unredeemed portion of a Senior Note being partially redeemed. Consolidation, Merger, Conveyance or Transfer The Senior Indenture provides that Duke Energy may consolidate or merge with or into, or convey or transfer all or substantially all of its properties and assets to, another corporation or other entity. Any successor must, however, assume Duke Energy's obligations under the Senior Indenture and the Senior Notes issued under it, and Duke Energy must deliver to the Senior Indenture Trustee a statement by certain of its officers and an opinion of counsel that affirm compliance with all 8 conditions in the Senior Indenture relating to the transaction. When those conditions are satisfied, the successor will succeed to and be substituted for Duke Energy under the Senior Indenture, and Duke Energy will be relieved of its obligations under the Senior Indenture and the Senior Notes. Modification; Waiver Duke Energy may modify the Senior Indenture with the consent of the holders of a majority in principal amount of the outstanding Senior Notes of all series of Senior Notes that are affected by the modification, voting as one class. The consent of the holder of each outstanding Senior Note affected is, however, required to: . change the maturity date of the principal or any installment of principal or interest on that Senior Note; . reduce the principal amount, the interest rate or any premium payable upon redemption on that Senior Note; . reduce the amount of principal due and payable upon acceleration of maturity; . change the currency of payment of principal, premium or interest on that Senior Note; . impair the right to institute suit to enforce any such payment on or after the maturity date or redemption date; . reduce the percentage in principal amount of Senior Notes of any series required to modify the Senior Indenture, waive compliance with certain restrictive provisions of the Senior Indenture or waive certain defaults; or . with certain exceptions, modify the provisions of the Senior Indenture governing modifications of the Senior Indenture or governing waiver of covenants or past defaults. In addition, Duke Energy may modify the Senior Indenture for certain other purposes, without the consent of any holders of Senior Notes. The holders of a majority in principal amount of the outstanding Senior Notes of any series may waive, for that series, Duke Energy's compliance with certain restrictive provisions of the Senior Indenture, including the covenant described under "Negative Pledge." The holders of a majority in principal amount of the outstanding Senior Notes of all series under the Senior Indenture with respect to which a default has occurred and is continuing, voting as one class, may waive that default for all those series, except a default in the payment of principal or any premium or interest on any Senior Note or a default with respect to a covenant or provision which cannot be modified without the consent of the holder of each outstanding Senior Note of the series affected. Events of Default The following are events of default under the Senior Indenture with respect to any series of Senior Notes, unless Duke Energy states otherwise in the applicable prospectus supplement: . failure to pay principal of or any premium on any Senior Note of that series when due; . failure to pay when due any interest on any Senior Note of that series that continues for 60 days; for this purpose, the date on which interest is due is the date on which Duke Energy is required to make payment following any deferral of interest payments by it under the terms of Senior Notes that permit such deferrals; 9 . failure to make any sinking fund payment when required for any Senior Note of that series that continues for 60 days; . failure to perform any covenant in the Senior Indenture (other than a covenant expressly included solely for the benefit of other series) that continues for 90 days after the Senior Indenture Trustee or the holders of at least 33% of the outstanding Senior Notes of that series give Duke Energy written notice of the default; and . certain bankruptcy, insolvency or reorganization events with respect to Duke Energy. In the case of the fourth event of default listed above, the Senior Indenture Trustee may extend the grace period. In addition, if holders of a particular series have given a notice of default, then holders of at least the same percentage of Senior Notes of that series, together with the Senior Indenture Trustee, may also extend the grace period. The grace period will be automatically extended if Duke Energy has initiated and is diligently pursuing corrective action. Duke Energy may establish additional events of default for a particular series and, if established, any such events of default will be described in the applicable prospectus supplement. If an event of default with respect to Senior Notes of a series occurs and is continuing, then the Senior Indenture Trustee or the holders of at least 33% in principal amount of the outstanding Senior Notes of that series may declare the principal amount of all Senior Notes of that series to be immediately due and payable. However, that event of default will be considered waived at any time after the declaration but before a judgment for payment of the money due has been obtained if: . Duke Energy has paid or deposited with the Senior Indenture Trustee all overdue interest, the principal and any premium due otherwise than by the declaration and any interest on such amounts, and any interest on overdue interest, to the extent legally permitted, in each case with respect to that series, and all amounts due to the Senior Indenture Trustee; and . all events of default with respect to that series, other than the nonpayment of the principal that became due solely by virtue of the declaration, have been cured or waived. The Senior Indenture Trustee is under no obligation to exercise any of its rights or powers at the request or direction of any holders of Senior Notes unless those holders have offered the Senior Indenture Trustee security or indemnity against the costs, expenses and liabilities which it might incur as a result. The holders of a majority in principal amount of the outstanding Senior Notes of any series have, with certain exceptions, the right to direct the time, method and place of conducting any proceedings for any remedy available to the Senior Indenture Trustee or the exercise of any power of the Senior Indenture Trustee with respect to those Senior Notes. The Senior Indenture Trustee may withhold notice of any default, except a default in the payment of principal or interest, from the holders of any series if the Senior Indenture Trustee in good faith considers it in the interest of the holders to do so. The holder of any Senior Note will have an absolute and unconditional right to receive payment of the principal, any premium and, within certain limitations, any interest on that Senior Note on its maturity date or redemption date and to enforce those payments. 10 Duke Energy is required to furnish each year to the Senior Indenture Trustee a statement by certain of its officers to the effect that it is not in default under the Senior Indenture or, if there has been a default, specifying the default and its status. Payments; Paying Agent The paying agent will pay the principal of any Senior Notes only if those Senior Notes are surrendered to it. The paying agent will pay interest on Senior Notes issued as global securities by wire transfer to the holder of those global securities. Unless Duke Energy states otherwise in the applicable prospectus supplement, the paying agent will pay interest on Senior Notes that are not in global form at its office or, at Duke Energy's option: . by wire transfer to an account at a banking institution in the United States that is designated in writing to the Senior Indenture Trustee at least 16 days prior to the date of payment by the person entitled to that interest; or . by check mailed to the address of the person entitled to that interest as that address appears in the security register for those Senior Notes. Unless Duke Energy states otherwise in the applicable prospectus supplement, the Senior Indenture Trustee will act as paying agent for that series of Senior Notes, and the principal corporate trust office of the Senior Indenture Trustee will be the office through which the paying agent acts. Duke Energy may, however, change or add paying agents or approve a change in the office through which a paying agent acts. Any money that Duke Energy has paid to a paying agent for principal or interest on any Senior Notes which remains unclaimed at the end of two years after that principal or interest has become due will be repaid to Duke Energy at its request. After repayment to Duke Energy, holders should look only to Duke Energy for those payments. Negative Pledge While any of the Senior Notes remain outstanding, Duke Energy will not create, or permit to be created or to exist, any mortgage, lien, pledge, security interest or other encumbrance upon any of its property, whether owned on or acquired after the date of the Senior Indenture, to secure any indebtedness for borrowed money of Duke Energy, unless the Senior Notes then outstanding are equally and ratably secured for so long as any such indebtedness is so secured. The foregoing restriction does not apply with respect to, among other things: . purchase money mortgages, or other purchase money liens, pledges, security interests or encumbrances upon property that Duke Energy acquired after the date of the Senior Indenture; . mortgages, liens, pledges, security interests or other encumbrances existing on any property at the time Duke Energy acquired it, including those which exist on any property of an entity with which Duke Energy is consolidated or merged or which transfers or leases all or substantially all of its properties to Duke Energy; . mortgages, liens, pledges, security interests or other encumbrances upon any property of Duke Energy that existed on the date of the initial issuance of the Senior Notes; 11 . pledges or deposits to secure performance in connection with bids, tenders, contracts (other than contracts for the payment of money) or leases to which Duke Energy is a party; . liens created by or resulting from any litigation or proceeding which at the time is being contested in good faith by appropriate proceedings; . liens incurred in connection with the issuance of bankers' acceptances and lines of credit, bankers' liens or rights of offset and any security given in the ordinary course of business to banks or others to secure any indebtedness payable on demand or maturing within 12 months of the date that such indebtedness is originally incurred; . liens incurred in connection with repurchase, swap or other similar agreements (including commodity price, currency exchange and interest rate protection agreements); . liens securing industrial revenue or pollution control bonds; . liens, pledges, security interests or other encumbrances on any property arising in connection with any defeasance, covenant defeasance or in-substance defeasance of indebtedness of Duke Energy; . liens created in connection with, and created to secure, a non- recourse obligation; . Bonds issued or to be issued from time to time under Duke Energy's First and Refunding Mortgage, and the "permitted liens" specified in Duke Energy's First and Refunding Mortgage; . indebtedness which Duke Energy may issue in connection with its consolidation or merger with or into any other entity, which may be its affiliate, in exchange for or otherwise in substitution for secured indebtedness of that entity ("Third Party Debt") which by its terms (1) is secured by a mortgage on all or a portion of the property of that entity, (2) prohibits that entity from incurring secured indebtedness, unless the Third Party Debt is secured equally and ratably with such secured indebtedness or (3) prohibits that entity from incurring secured indebtedness; . indebtedness of any entity which Duke Energy is required to assume in connection with a consolidation or merger of that entity, with respect to which any property of Duke Energy is subjected to a mortgage, lien, pledge, security interest or other encumbrance; . mortgages, liens, pledges, security interests or other encumbrances upon any property that Duke Energy acquired, constructed, developed or improved after the date of the Senior Indenture which are created before, at the time of, or within 18 months after such acquisition--or in the case of property constructed, developed or improved, after the completion of the construction, development or improvement and commencement of full commercial operation of that property, whichever is later--to secure or provide for the payment of any part of its purchase price or cost; provided that, in the case of such construction, development or improvement, the mortgages, liens, pledges, security interests or other encumbrances shall not apply to any property that Duke Energy owns other than real property that is unimproved up to that time; and . the replacement, extension or renewal of any mortgage, lien, pledge, security interest or other encumbrance described above; or the replacement, extension or renewal (not exceeding the principal amount of indebtedness so secured together with any premium, 12 interest, fee or expense payable in connection with any such replacement, extension or renewal) of the indebtedness so secured; provided that such replacement, extension or renewal is limited to all or a part of the same property that secured the mortgage, lien, pledge, security interest or other encumbrance replaced, extended or renewed, plus improvements on it or additions or accessions to it. In addition, Duke Energy may create or assume any other mortgage, lien, pledge, security interest or other encumbrance not excepted in the Senior Indenture without equally and ratably securing the Senior Notes, if immediately after that creation or assumption, the principal amount of indebtedness for borrowed money of Duke Energy that all such other mortgages, liens, pledges, security interests and other encumbrances secure does not exceed an amount equal to 10% of Duke Energy's common stockholders' equity as shown on its consolidated balance sheet for the accounting period occurring immediately before the creation or assumption of that mortgage, lien, pledge, security interest or other encumbrance. Defeasance and Covenant Defeasance The Senior Indenture provides that Duke Energy may be: . discharged from its obligations, with certain limited exceptions, with respect to any series of Senior Notes, as described in the Senior Indenture, such a discharge being called a "defeasance" in this prospectus; and . released from its obligations under certain restrictive covenants especially established with respect to any series of Senior Notes, including the covenant described under "Negative Pledge," as described in the Senior Indenture, such a release being called a "covenant defeasance" in this prospectus. Duke Energy must satisfy certain conditions to effect a defeasance or covenant defeasance. Those conditions include the irrevocable deposit with the Senior Indenture Trustee, in trust, of money or government obligations which through their scheduled payments of principal and interest would provide sufficient money to pay the principal and any premium and interest on those Senior Notes on the maturity dates of those payments or upon redemption. Following a defeasance, payment of the Senior Notes defeased may not be accelerated because of an event of default under the Senior Indenture. Following a covenant defeasance, the payment of Senior Notes may not be accelerated by reference to the covenants from which Duke Energy has been released. A defeasance may occur after a covenant defeasance. Under current United States federal income tax laws, a defeasance would be treated as an exchange of the relevant Senior Notes in which holders of those Senior Notes might recognize gain or loss. In addition, the amount, timing and character of amounts that holders would thereafter be required to include in income might be different from that which would be includible in the absence of that defeasance. Duke Energy urges investors to consult their own tax advisors as to the specific consequences of a defeasance, including the applicability and effect of tax laws other than United States federal income tax laws. Under current United States federal income tax law, unless accompanied by other changes in the terms of the Senior Notes, a covenant defeasance should not be treated as a taxable exchange. 13 Concerning the Senior Indenture Trustee The Chase Manhattan Bank is the Senior Indenture Trustee and is also the trustee under Duke Energy's Subordinated Indenture and the trustee under Duke Energy's First and Refunding Mortgage. Duke Energy and certain of its affiliates maintain deposit accounts and banking relationships with The Chase Manhattan Bank. The Chase Manhattan Bank also serves as trustee or agent under other indentures and agreements pursuant to which securities of Duke Energy and of certain of its affiliates are outstanding. The Senior Indenture Trustee will perform only those duties that are specifically set forth in the Senior Indenture unless an event of default under the Senior Indenture occurs and is continuing. In case an event of default occurs and is continuing, the Senior Indenture Trustee will exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. 14 DESCRIPTION OF THE JUNIOR SUBORDINATED NOTES Duke Energy will issue the Junior Subordinated Notes in one or more series under its Subordinated Indenture dated as of December 1, 1997 between Duke Energy and The Chase Manhattan Bank, as Trustee, as supplemented from time to time. The Subordinated Indenture is an exhibit to the registration statement, of which this prospectus is a part. The Junior Subordinated Notes are unsecured obligations of Duke Energy and are junior in right of payment to "Senior Indebtedness" of Duke Energy. You may find a description of the subordination provisions of the Junior Subordinated Notes, including a description of Senior Indebtedness of Duke Energy, under "Subordination." Duke Energy conducts its non-electric operations, and certain of its electric operations outside its service area in the Carolinas, through subsidiaries. Accordingly, its ability to meet its obligations under the Junior Subordinated Notes is partly dependent on the earnings and cash flows of those subsidiaries and the ability of those subsidiaries to pay dividends or to advance or repay funds to Duke Energy. In addition, the rights that Duke Energy and its creditors would have to participate in the assets of any such subsidiary upon the subsidiary's liquidation or recapitalization will be subject to the prior claims of the subsidiary's creditors. Certain of Duke Energy's subsidiaries have incurred substantial amounts of debt in the expansion of their businesses and Duke Energy anticipates that certain of its subsidiaries will do so in the future. The following description of the Junior Subordinated Notes is only a summary and is not intended to be comprehensive. For additional information you should refer to the Subordinated Indenture. General The Subordinated Indenture does not limit the amount of Subordinated Notes, including Junior Subordinated Notes, that Duke Energy may issue under it. Duke Energy may issue Subordinated Notes, including Junior Subordinated Notes, from time to time under the Subordinated Indenture in one or more series by entering into supplemental indentures or by its Board of Directors or a duly authorized committee authorizing the issuance. Two forms of supplemental indenture to the Subordinated Indenture (one with respect to Junior Subordinated Notes initially issued to a Trust and the other with respect to Junior Subordinated Notes initially issued to the public) are exhibits to the registration statement, of which this prospectus is a part. The Junior Subordinated Notes of a series need not be issued at the same time, bear interest at the same rate or mature on the same date. The Subordinated Indenture does not protect the holders of Junior Subordinated Notes if Duke Energy engages in a highly leveraged transaction. Provisions Applicable to Particular Series The prospectus supplement for a particular series of Junior Subordinated Notes being offered will disclose the specific terms related to the offering, including the price or prices at which the Junior Subordinated Notes to be offered will be issued. Those terms may include some or all of the following: . the title of the series; 15 . the total principal amount of the Junior Subordinated Notes of the series; . the date or dates on which principal is payable or the method for determining the date or dates, and any right that Duke Energy has to change the date on which principal is payable; . the interest rate or rates, if any, or the method for determining the rate or rates, and the date or dates from which interest will accrue; . any interest payment dates and the regular record date for the interest payable on each interest payment date, if any; . whether Duke Energy may extend the interest payment periods and, if so, the terms of the extension; . the place or places where payments will be made; . whether Duke Energy has the option to redeem the Junior Subordinated Notes and, if so, the terms of its redemption option; . any obligation that Duke Energy has to redeem the Junior Subordinated Notes through a sinking fund or to purchase the Junior Subordinated Notes through a purchase fund or at the option of the holder; . whether the provisions described under "Defeasance and Covenant Defeasance" will not apply to the Junior Subordinated Notes; . the currency in which payments will be made if other than U.S. dollars, and the manner of determining the equivalent of those amounts in U.S. dollars; . if payments may be made, at Duke Energy's election or at the holder's election, in a currency other than that in which the Junior Subordinated Notes are stated to be payable, then the currency in which those payments may be made, the terms and conditions of the election and the manner of determining those amounts; . the portion of the principal payable upon acceleration of maturity, if other than the entire principal; . whether the Junior Subordinated Notes will be issuable as global securities and, if so, the securities depositary; . any changes in the events of default or covenants with respect to the Junior Subordinated Notes; . any index or formula used for determining principal, premium or interest; . if the principal payable on the maturity date will not be determinable on one or more dates prior to the maturity date, the amount which will be deemed to be such principal amount or the manner of determining it; . the subordination of the Junior Subordinated Notes to any other of Duke Energy's indebtedness, including other series of Subordinated Notes; and . any other terms. The interest rate and interest and other payment dates of each series of Junior Subordinated Notes issued to a Trust will correspond to the rate at which distributions will be paid and the distribution and other payment dates of the Preferred Securities of that Trust. Unless Duke Energy states otherwise in the applicable prospectus supplement, Duke Energy will issue the Junior Subordinated Notes only in fully registered form without coupons, and there will 16 be no service charge for any registration of transfer or exchange of the Junior Subordinated Notes. Duke Energy may, however, require payment to cover any tax or other governmental charge payable in connection with any transfer or exchange. Subject to the terms of the Subordinated Indenture and the Limitations applicable to global securities, transfers and exchanges of the Junior Subordinated Notes may be made at The Chase Manhattan Bank, 55 Water Street, New York, New York 10041 or at any other office maintained by Duke Energy for such purpose. The Junior Subordinated Notes will be issuable in denominations of $1,000 and any integral multiples of $1,000, unless Duke Energy states otherwise in the applicable prospectus supplement. Duke Energy may offer and sell the Junior Subordinated Notes, including original issue discount Junior Subordinated Notes, at a substantial discount below their principal amount. The applicable prospectus supplement will describe special United States federal income tax and any other considerations applicable to those securities. In addition, the applicable prospectus supplement may describe certain special United States federal income tax or other considerations, if any, applicable to any Junior Subordinated Notes that are denominated in a currency other than U.S. dollars. Global Securities Duke Energy may issue some or all of the Junior Subordinated Notes as book-entry securities. Any such book-entry securities will be represented by one or more fully registered global securities. Duke Energy will register each global security with or on behalf of a securities depositary identified in the applicable prospectus supplement. Each global security will be deposited with the securities depositary or its nominee or a custodian for the securities depositary. As long as the securities depositary or its nominee is the registered holder of a global security representing Junior Subordinated Notes, that person will be considered the sole owner and holder of the global security and the Junior Subordinated Notes it represents for all purposes. Except in limited circumstances, owners of beneficial interests in a global security: . may not have the global security or any Junior Subordinated Notes it represents registered in their names; . may not receive or be entitled to receive physical delivery of certificated Junior Subordinated Notes in exchange for the global security; and . will not be considered the owners or holders of the global security or any Junior Subordinated Notes it represents for any purposes under the Junior Subordinated Notes or the Subordinated Indenture. Duke Energy will make all payments of principal and any premium and interest on a global security to the securities depositary or its nominee as the holder of the global security. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of securities in definitive form. These laws may impair the ability to transfer beneficial interests in a global security. Ownership of beneficial interests in a global security will be limited to institutions having accounts with the securities depositary or its nominee, which are called "participants" in this discussion, and to persons that hold beneficial interests through participants. When a global security representing 17 Junior Subordinated Notes is issued, the securities depositary will credit on its book-entry, registration and transfer system the principal amounts of Junior Subordinated Notes the global security represents to the accounts of its participants. Ownership of beneficial interests in a global security will be shown only on, and the transfer of those ownership interests will be effected only through, records maintained by: . the securities depositary, with respect to participants' interests; and . any participant, with respect to interests the participant holds on behalf of other persons. Payments participants make to owners of beneficial interests held through those participants will be the responsibility of those participants. The securities depositary may from time to time adopt various policies and procedures governing payments, transfers, exchanges and other matters relating to beneficial interests in a global security. None of the following will have any responsibility or liability for any aspect of the securities depositary's or any participant's records relating to beneficial interests in a global security representing Junior Subordinated Notes, for payments made on account of those beneficial interests or for maintaining, supervising or reviewing any records relating to those beneficial interests: . Duke Energy; . the Subordinated Indenture Trustee; . the Trust (if the Junior Subordinated Notes are issued to a Trust); or . any agent of any of them. Redemption Provisions relating to the redemption of Junior Subordinated Notes will be set forth in the applicable prospectus supplement. Unless Duke Energy states otherwise in the applicable prospectus supplement, Duke Energy may redeem Junior Subordinated Notes only upon notice mailed at least 30 but not more than 60 days before the date fixed for redemption. Duke Energy will not be required to: . issue, register the transfer of, or exchange any Junior Subordinated Notes of a series during the period beginning 15 days before the date the notice is mailed identifying the Junior Subordinated Notes of that series that have been selected for redemption; or . register the transfer of or exchange any Junior Subordinated Note of that series selected for redemption except the unredeemed portion of a Junior Subordinated Note being partially redeemed. Consolidation, Merger, Conveyance or Transfer The Subordinated Indenture provides that Duke Energy may consolidate or merge with or into, or convey or transfer all or substantially all of its properties and assets to, another corporation or other entity. Any successor must, however, assume Duke Energy's obligations under the Subordinated Indenture and the Subordinated Notes, including the Junior Subordinated Notes, and Duke Energy must deliver to the Subordinated Indenture Trustee a statement by certain of its officers and an opinion of counsel that affirm compliance with all conditions in the Subordinated Indenture relating to the transaction. When those conditions are satisfied, the successor will succeed to and be 18 substituted for Duke Energy under the Subordinated Indenture, and Duke Energy will be relieved of its obligations under the Subordinated Indenture and any Subordinated Notes, including the Junior Subordinated Notes. Modification; Waiver Duke Energy may modify the Subordinated Indenture with the consent of the holders of a majority in principal amount of the outstanding Subordinated Notes of all series that are affected by the modification, voting as one class. The consent of the holder of each outstanding Subordinated Note affected is, however, required to: . change the maturity date of the principal or any installment of principal or interest on that Subordinated Note; . reduce the principal amount, the interest rate or any premium payable upon redemption on that Subordinated Note; . reduce the amount of principal due and payable upon acceleration of maturity; . change the currency of payment of principal, premium or interest on that Subordinated Note; . impair the right to institute suit to enforce any such payment on or after the maturity date or redemption date; . reduce the percentage in principal amount of Subordinated Notes of any series required to modify the Subordinated Indenture, waive compliance with certain restrictive provisions of the Subordinated Indenture or waive certain defaults; or . with certain exceptions, modify the provisions of the Subordinated Indenture governing modifications of the Subordinated Indenture or governing waiver of covenants or past defaults. In addition, Duke Energy may modify the Subordinated Indenture for certain other purposes, without the consent of any holders of Subordinated Notes, including Junior Subordinated Notes. The holders of a majority in principal amount of the outstanding Junior Subordinated Notes of any series may waive, for that series, Duke Energy's compliance with certain restrictive provisions of the Subordinated Indenture. The holders of a majority in principal amount of the outstanding Subordinated Notes of all series under the Subordinated Indenture with respect to which a default has occurred and is continuing, voting as one class, may waive that default for all those series, except a default in the payment of principal or any premium or interest on any Subordinated Note or a default with respect to a covenant or provision which cannot be modified without the consent of the holder of each outstanding Subordinated Note of the series affected. Duke Energy may not amend the Subordinated Indenture to change the subordination of any outstanding Junior Subordinated Notes without the consent of each holder of Senior Indebtedness that the amendment would adversely affect. 19 Events of Default The following are events of default under the Subordinated Indenture with respect to any series of Junior Subordinated Notes, unless Duke Energy states otherwise in the applicable prospectus supplement: . failure to pay principal of or any premium on any Junior Subordinated Note of that series when due; . failure to pay when due any interest on any Junior Subordinated Note of that series that continues for 60 days; for this purpose, the date on which interest is due is the date on which Duke Energy is required to make payment following any deferral of interest payments by it under the terms of Junior Subordinated Notes that permit such deferrals; . failure to make any sinking fund payment when required for any Junior Subordinated Note of that series that continues for 60 days; . failure to perform any covenant in the Subordinated Indenture (other than a covenant expressly included solely for the benefit of other series) that continues for 90 days after the Subordinated Indenture Trustee or the holders of at least 33% of the outstanding Junior Subordinated Notes of that series give Duke Energy written notice of the default; and . certain bankruptcy, insolvency or reorganization events with respect to Duke Energy. In the case of the fourth event of default listed above, the Subordinated Indenture Trustee may extend the grace period. In addition, if holders of a particular series have given a notice of default, then holders of at least the same percentage of Junior Subordinated Notes of that series, together with the Subordinated Indenture Trustee, may also extend the grace period. The grace period will be automatically extended if Duke Energy has initiated and is diligently pursuing corrective action. Duke Energy may establish additional events of default for a particular series and, if established, any such events of default will be described in the applicable prospectus supplement. If an event of default with respect to Junior Subordinated Notes of a series occurs and is continuing, then the Subordinated Indenture Trustee or the holders of at least 33% in principal amount of the outstanding Junior Subordinated Notes of that series may declare the principal amount of all Junior Subordinated Notes of that series to be immediately due and payable. However, that event of default will be considered waived at any time after the declaration but before a judgment for payment of the money due has been obtained if: . Duke Energy has paid or deposited with the Subordinated Indenture Trustee all overdue interest, the principal and any premium due otherwise than by the declaration and any interest on such amounts, and any interest on overdue interest, to the extent legally permitted, in each case with respect to that series, and all amounts due to the Subordinated Indenture Trustee; and . all events of default with respect to that series, other than the nonpayment of the principal that became due solely by virtue of the declaration, have been cured or waived. In the case of Junior Subordinated Notes issued to a Trust, a holder of Preferred Securities may institute a legal proceeding directly against Duke Energy, without first instituting a legal 20 proceeding against the Property Trustee of the Trust by which those Preferred Securities were issued or any other person or entity, for enforcement of payment to that holder of principal or interest on an equivalent amount of Junior Subordinated Notes of the related series on or after the due dates specified in those Junior Subordinated Notes. The Subordinated Indenture Trustee is under no obligation to exercise any of its rights or powers at the request or direction of any holders of Junior Subordinated Notes unless those holders have offered the Subordinated Indenture Trustee security or indemnity against the costs, expenses and liabilities which it might incur as a result. The holders of a majority in principal amount of the outstanding Junior Subordinated Notes of any series have, with certain exceptions, the right to direct the time, method and place of conducting any proceedings for any remedy available to the Subordinated Indenture Trustee or the exercise of any power of the Subordinated Indenture Trustee with respect to those Junior Subordinated Notes. The Subordinated Indenture Trustee may withhold notice of any default, except a default in the payment of principal or interest, from the holders of any series if the Subordinated Indenture Trustee in good faith considers it in the interest of the holders to do so. The holder of any Junior Subordinated Note will have an absolute and unconditional right to receive payment of the principal, any premium and, within certain limitations, any interest on that Junior Subordinated Note on its maturity date or redemption date and to enforce those payments. Duke Energy is required to furnish each year to the Subordinated Indenture Trustee a statement by certain of its officers to the effect that it is not in default under the Subordinated Indenture or, if there has been a default, specifying the default and its status. Payments; Paying Agent The paying agent will pay the principal of any Junior Subordinated Notes only if those Junior Subordinated Notes are surrendered to it. The paying agent will pay interest on Junior Subordinated Notes issued as global securities by wire transfer to the holder of those global securities. Unless Duke Energy states otherwise in the applicable prospectus supplement, the paying agent will pay interest on Junior Subordinated Notes that are not in global form at its office or, at Duke Energy's option: . by wire transfer to an account at a banking institution in the United States that is designated in writing to the Subordinated Indenture Trustee at least 16 days prior to the date of payment by the person entitled to that interest; or . by check mailed to the address of the person entitled to that interest as that address appears in the security register for those Junior Subordinated Notes. Unless Duke Energy states otherwise in the applicable prospectus supplement, the Subordinated Indenture Trustee will act as paying agent for that series of Junior Subordinated Notes, and the principal corporate trust office of the Subordinated Indenture Trustee will be the office through which the paying agent acts. Duke Energy may, however, change or add paying agents or approve a change in the office through which a paying agent acts. Any money that Duke Energy has paid to a paying agent for principal or interest on any Junior Subordinated Notes which remains unclaimed at the end of two years after that principal or 21 interest has become due will be repaid to Duke Energy at its request. After repayment to Duke Energy, holders should look only to Duke Energy for those payments. Defeasance and Covenant Defeasance The Subordinated Indenture provides that Duke Energy may be: . discharged from its obligations, with certain limited exceptions, with respect to any series of Junior Subordinated Notes, as described in the Subordinated Indenture, such a discharge being called a "defeasance" in this prospectus; and . released from its obligations under certain restrictive covenants especially established with respect to a series of Junior Subordinated Notes, as described in the Subordinated Indenture, such a release being called a "covenant defeasance" in this prospectus. Duke Energy must satisfy certain conditions to effect a defeasance or covenant defeasance. Those conditions include the irrevocable deposit with the Subordinated Indenture Trustee, in trust, of money or government obligations which through their scheduled payments of principal and interest would provide sufficient money to pay the principal and any premium and interest on those Junior Subordinated Notes on the maturity dates of those payments or upon redemption. Following a defeasance, payment of the Junior Subordinated Notes defeased may not be accelerated because of an event of default under the Subordinated Indenture. Under current United States federal income tax laws, a defeasance would be treated as an exchange of the relevant Junior Subordinated Notes in which holders of those Junior Subordinated Notes might recognize gain or loss. In addition, the amount, timing and character of amounts that holders would thereafter be required to include in income might be different from that which would be includible in the absence of that defeasance. Duke Energy urges investors to consult their own tax advisors as to the specific consequences of a defeasance, including the applicability and effect of tax laws other than United States federal income tax laws. Junior Subordinated Notes issued to a Trust will not be subject to covenant defeasance. Subordination Each series of Junior Subordinated Notes will be subordinate and junior in right of payment, to the extent set forth in the Subordinated Indenture, to all Senior Indebtedness as defined below. If: . Duke Energy makes a payment or distribution of any of its assets to creditors upon its dissolution, winding-up, liquidation or reorganization, whether in bankruptcy, insolvency or otherwise; . a default beyond any grace period has occurred and is continuing with respect to the payment of principal, interest or any other monetary amounts due and payable on any Senior Indebtedness; or . the maturity of any Senior Indebtedness has been accelerated because of a default on that Senior Indebtedness, then the holders of Senior Indebtedness generally will have the right to receive payment, in the case of the first instance, of all amounts due or to become due upon that Senior Indebtedness, and, in the 22 case of the second and third instances, of all amounts due on that Senior Indebtedness, or Duke Energy will make provision for those payments, before the holders of any Junior Subordinated Notes have the right to receive any payments of principal or interest on their Junior Subordinated Notes. "Senior Indebtedness" means, with respect to any series of Junior Subordinated Notes, the principal, premium, interest and any other payment in respect of any of the following: . all of Duke Energy's indebtedness that is evidenced by notes, debentures, bonds or other securities Duke Energy sells for money or other obligations for money borrowed; . all indebtedness of others of the kinds described in the preceding category which Duke Energy has assumed or guaranteed or which Duke Energy has in effect guaranteed through an agreement to purchase, contingent or otherwise; and . all renewals, extensions or refundings of indebtedness of the kinds described in either of the preceding two categories. Any such indebtedness, renewal, extension or refunding, however, will not be Senior Indebtedness if the instrument creating or evidencing it or the assumption or guarantee of it provides that it is not superior in right of payment to or is equal in right of payment with those Junior Subordinated Notes. Senior Indebtedness will be entitled to the benefits of the subordination provisions in the Subordinated Indenture irrespective of the amendment, modification or waiver of any term of the Senior Indebtedness. Future series of Subordinated Notes which are not Junior Subordinated Notes may rank senior to outstanding series of Junior Subordinated Notes and would constitute Senior Indebtedness with respect to those series. The Subordinated Indenture does not limit the amount of Senior Indebtedness that Duke Energy may issue. As of March 31, 2001, Duke Energy's Senior Indebtedness totaled approximately $4,000,000,000. Concerning the Subordinated Indenture Trustee The Chase Manhattan Bank is the Subordinated Indenture Trustee and is also the Senior Indenture Trustee and the trustee under Duke Energy's First and Refunding Mortgage. Duke Energy and certain of its affiliates maintain deposit accounts and banking relationships with The Chase Manhattan Bank. The Chase Manhattan Bank also serves as trustee or agent under other indentures and agreements pursuant to which securities of Duke Energy and of certain of its affiliates are outstanding. The Subordinated Indenture Trustee will perform only those duties that are specifically set forth in the Subordinated Indenture unless an event of default under the Subordinated Indenture occurs and is continuing. In case an event of default occurs and is continuing, the Subordinated Indenture Trustee will exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. 23 DESCRIPTION OF THE FIRST AND REFUNDING MORTGAGE BONDS Duke Energy will issue the First and Refunding Mortgage Bonds in one or more series under its First and Refunding Mortgage, dated as of December 1, 1927, to The Chase Manhattan Bank, as Trustee, as supplemented and amended. The First and Refunding Mortgage is sometimes called the "Mortgage" and the First and Refunding Mortgage Bonds are sometimes called the "Bonds" in this prospectus. The trustee under the Mortgage is sometimes called the "Bond Trustee" in this prospectus. The Mortgage is an exhibit to the registration statement, of which this prospectus is a part. The following description of the Bonds is only a summary and is not intended to be comprehensive. For additional information you should refer to the Mortgage. General The amount of Bonds which Duke Energy may issue under the Mortgage is unlimited. Duke Energy's Board of Directors will determine the terms of each series of Bonds, including denominations, maturity, interest rate and payment terms and whether the series will have redemption or sinking fund provisions. Unless Duke Energy states otherwise in the applicable prospectus supplement, Duke Energy will issue the Bonds only in fully registered form without coupons and there will be no service charge for any transfers and exchanges of the Bonds. Duke Energy may, however, require payment to cover any stamp tax or other governmental charge payable in connection with any transfer or exchange. Transfers and exchanges of the Bonds may be made at The Chase Manhattan Bank, 55 Water Street, New York, New York 10041 or at any other office maintained by Duke Energy for such purpose. The Bonds will be issuable in denominations of $1,000 and multiples of $1,000, unless Duke Energy states otherwise in the applicable prospectus supplement. The Bonds will be exchangeable for an equivalent principal amount of Bonds of other authorized denominations of the same series. The prospectus supplement for a particular series of Bonds will describe the maturity, interest rate and payment terms of those Bonds and any relevant redemption or sinking fund provisions. Security The Mortgage creates a continuing lien to secure the payment of principal and interest on the Bonds. All the Bonds are equally and ratably secured without preference, priority or distinction. The lien of the Mortgage covers substantially all of Duke Energy's properties, real, personal and mixed, and Duke Energy's franchises, including properties acquired after the date of the Mortgage, with certain exceptions. Those exceptions include cash, accounts receivable, inventories of materials and supplies, merchandise held for sale, securities that Duke Energy holds, certain after-acquired property not useful in Duke Energy's electric business, certain after-acquired franchises and certain after-acquired non-electric properties. The lien of the Mortgage is subject to certain permitted liens and to liens that exist upon properties that Duke Energy acquired after it entered into the Mortgage to the extent of the amounts of prior lien bonds secured by those properties (not, however, exceeding 75% of the cost or value of those properties) and additions to those properties. "Prior lien bonds" are bonds or other 24 indebtedness that are secured at the time of acquisition by a lien upon property that Duke Energy acquires after the date of the Mortgage that becomes subject to the lien of the Mortgage. Issuance of Additional Bonds If Duke Energy satisfies the conditions in the Mortgage, the Bond Trustee may authenticate and deliver additional Bonds in an aggregate principal amount not exceeding: . the amount of cash that Duke Energy has deposited with the Bond Trustee for that purpose; . the amount of previously authenticated and delivered Bonds or refundable prior lien bonds that have been or are to be retired which, with certain exceptions, Duke Energy has deposited with the Bond Trustee for that purpose; or . 66 2/3% of the aggregate of the net amounts of additional property (electric) certified to the Bond Trustee after February 18, 1949. The Bond Trustee may not authenticate and deliver any additional Bonds under the Mortgage, other than certain types of refunding Bonds, unless Duke Energy's available net earnings for twelve consecutive calendar months within the immediately preceding fifteen calendar months have been at least twice the amount of the annual interest charges on all Bonds outstanding under the Mortgage, including the Bonds proposed to be issued, and on all outstanding prior lien bonds that the Bond Trustee does not hold under the Mortgage. Duke Energy may not apply to the Bond Trustee to authenticate and deliver any Bonds (1) in an aggregate principal amount exceeding $26,000,000 on the basis of additional property (electric) that Duke Energy acquired or constructed prior to January 1, 1949 or (2) on the basis of Bonds or prior lien bonds paid, purchased or redeemed prior to February 1, 1949. Duke Energy may not certify any additional property (electric) which is subject to the lien of any prior lien bonds for the purpose of establishing those prior lien bonds as refundable if the aggregate principal amount of those prior lien bonds exceeds 66 2/3% of the net amount of the additional property that is subject to the lien of such prior lien bonds. Release Provisions The Mortgage permits Duke Energy to dispose of certain property and to take other actions without the Bond Trustee releasing that property. The Mortgage also permits the release of mortgaged property if Duke Energy deposits cash or other consideration equal to the value of the mortgaged property to be released. In certain events and within certain limitations, the Bond Trustee is required to pay out cash that the Bond Trustee receives--other than for the Replacement Fund or as the basis for issuing Bonds--upon Duke Energy's application. Duke Energy may withdraw cash that it deposited with the Bond Trustee as the basis for issuing Bonds in an amount equal to the principal amount of any Bonds that it is entitled to have authenticated and delivered on the basis of additional property (electric), on the basis of Bonds previously authenticated and delivered or on the basis of refundable prior lien bonds. 25 Replacement Fund The Mortgage requires Duke Energy to deposit with the Bond Trustee annually, for the Replacement Fund established under the Mortgage, the sum of the "replacement requirements" for all years beginning with 1949 and ending with the last calendar year preceding the deposit date, less certain deductions. Those deductions are (1) the aggregate original cost of all fixed property (electric) retired during that time period, not exceeding the aggregate of the gross amounts of additional property (electric) that Duke Energy acquired or constructed during the same period, and (2) the aggregate amount of cash that Duke Energy deposited with the Bond Trustee up to that time, or that Duke Energy would have been required to deposit except for permitted reductions, under the Replacement Fund. The "replacement requirement" for any year is 2 1/2% of the average "amount of depreciable fixed property" (electric) owned by Duke Energy at the beginning and end of that year, not exceeding, however, the amount Duke Energy is permitted to charge as an operating expense for depreciation or retirement by any governmental authority, or the amount deductible as depreciation or similar expense for federal income tax purposes. The "amount of depreciable fixed property" (electric) is the amount by which the sum of $192,913,385 plus the aggregate gross amount of all depreciable additional property (electric) that Duke Energy acquired or constructed from January 1, 1949 to the date as of which such amount is determined exceeds the original cost of all of Duke Energy's depreciable fixed property (electric) retired during that period or released from the lien of the Mortgage. Duke Energy may reduce the amount of cash at any time required to be deposited in the Replacement Fund and may withdraw any cash that it previously deposited that is held in the Replacement Fund: . in an amount equal to 150% of the principal amount of Bonds previously authenticated and delivered under the Mortgage, or refundable prior lien bonds, deposited with the Bond Trustee and on the basis of which Duke Energy would otherwise have been entitled to have additional Bonds authenticated and delivered; and . in an amount equal to 150% of the principal amount of Bonds which Duke Energy would otherwise be entitled to have authenticated and delivered on the basis of additional property (electric). Upon Duke Energy's application, the Bond Trustee will apply cash that Duke Energy deposited in the Replacement Fund and has not previously withdrawn to the payment, purchase or redemption of Bonds issued under the Mortgage or to the purchase of refundable prior lien bonds. Duke Energy has never deposited any cash with the Bond Trustee for the Replacement Fund. If Duke Energy deposits any cash in the future, it has agreed not to apply that cash to the redemption of the Bonds as long as any Bonds then outstanding remain outstanding. Amendments of the Mortgage Duke Energy may amend the Mortgage with the consent of the holders of 66 2/3% in principal amount of the Bonds, except that no such amendment may: . affect the terms of payment of principal at maturity or of interest or premium on any Bond; 26 . affect the rights of Bondholders to sue to enforce any such payment at maturity; or . reduce the percentage of Bonds required to consent to an amendment. No amendment may affect the rights under the Mortgage of the holders of less than all of the series of Bonds outstanding unless the holders of 66 2/3% in principal amount of the Bonds of each series affected consent to the amendment. The covenants included in the supplemental indenture for any series of Bonds to be issued will be solely for the benefit of the holders of those Bonds. Duke Energy may modify any such covenant only with the consent of the holders of 66 2/3% in principal amount of those Bonds outstanding, without the consent of Bondholders of any other series. Events of Default The Bond Trustee may, and at the written request of the holders of a majority in principal amount of the outstanding Bonds will, declare the principal of all outstanding Bonds due when any event of default under the Mortgage occurs. The holders of a majority in principal amount of the outstanding Bonds may, however, waive the default and rescind the declaration if Duke Energy cures the default. Events of default under the Mortgage include: . default in the payment of principal; . default for 60 days in the payment of interest; . default in the performance of any other covenant in the Mortgage continuing for 60 days after the Bond Trustee or the holders of not less than 10% in principal amount of the Bonds then outstanding give notice of the default; and . certain bankruptcy or insolvency events with respect to Duke Energy. Duke Energy provides a statement by certain of its officers each year to the Bond Trustee stating whether it has complied with the covenants of the Mortgage. Concerning the Bond Trustee The Chase Manhattan Bank is the Bond Trustee and is also the Senior Indenture Trustee and the Subordinated Indenture Trustee. Duke Energy and certain of its affiliates maintain deposit accounts and banking relationships with The Chase Manhattan Bank. The Chase Manhattan Bank also serves as trustee or agent under other indentures and agreements pursuant to which securities of Duke Energy and of certain of its affiliates are outstanding. The Bond Trustee is under no obligation to exercise any of its powers at the request of any of the holders of the Bonds unless those Bondholders have offered to the Bond Trustee security or indemnity satisfactory to it against the cost, expenses and liabilities it might incur as a result. The holders of a majority in principal amount of the Bonds outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Bond Trustee, or the exercise of any trust or power of the Bond Trustee. The Bond Trustee will not be liable for any action that it takes or omits to take in good faith in accordance with any such direction. 27 DESCRIPTION OF THE COMMON STOCK The following description of Duke Energy's Common Stock is only a summary and is not intended to be comprehensive. For additional information you should refer to the applicable provisions of the North Carolina Business Corporation Act and Duke Energy's Restated Articles of Incorporation (Articles) and By- Laws. The Articles and By-Laws are exhibits to the registration statement, of which this prospectus is a part. General Duke Energy is authorized to issue up to 1,000,000,000 shares of Common Stock. At March 31, 2001, 771,274,516 shares of Common Stock were outstanding. Duke Energy is also authorized to issue up to 12,500,000 shares of Preferred Stock, 10,000,000 shares of Preferred Stock A and 1,500,000 shares of Preference Stock. At March 31, 2001, 2,284,984 shares of Preferred Stock, 2,057,185 shares of Preferred Stock A and no shares of Preference Stock were outstanding. The Preferred Stock, Preferred Stock A and Preference Stock together are sometimes called the "Preferred Stocks." Dividends Holders of Common Stock are entitled to such dividends as may be declared from time to time by the Board of Directors from legally available funds but only if full dividends on all outstanding series of the Preferred Stocks for the then current and all prior dividend periods and any required sinking fund payments with respect to any outstanding series of such securities have been paid or provided for. Voting Rights Subject to the rights, if any, of the holders of the Preferred Stocks which may be outstanding or as otherwise provided by law, the holders of Common Stock have exclusive voting rights, each share being entitled to one vote. Holders of Common Stock have noncumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of directors can elect 100% of the directors and the holders of the remaining shares voting for the election of directors will not be able to elect any directors. Whenever dividends on any part of any outstanding Preferred Stock or Preferred Stock A are in arrears in an amount equivalent to the total dividends required to be paid on that Preferred Stock or Preferred Stock A in any period of 12 calendar months, the holders of the Preferred Stock as a class have the exclusive right to elect a majority of the authorized number of directors and the holders of the Preferred Stock A as a class have the exclusive right to elect two directors. Those rights cease whenever Duke Energy pays all accrued and unpaid dividends in full. Whenever six quarterly dividends on any outstanding series of the Preference Stock are in arrears or any required sinking fund payments are in default, the holders of the Preference Stock as a class have the exclusive right to elect two directors. This right ceases whenever all dividends and required sinking fund obligations in default have been paid in full or provided for. In addition, the consent of the holders of specified percentages of any outstanding Preferred Stock, Preferred Stock A or Preference Stock, or some or all of the holders of such classes, is required in connection with certain increases in authorized amounts of or changes in stock senior to the Common Stock or in connection with any sale of substantially all of Duke Energy's assets or certain mergers. 28 Rights Upon Liquidation The holders of Common Stock are entitled in liquidation to share ratably in the assets of Duke Energy after payment of all debts and liabilities and after required preferential payments to the holders of outstanding Preferred Stocks. Miscellaneous The outstanding shares of Common Stock are, and the shares of Common Stock sold hereunder will be, upon payment for them, fully paid and nonassessable. Holders of Common Stock have no preemptive rights and no conversion rights. The Common Stock is not subject to redemption and is not entitled to the benefit of any sinking fund provisions. Transfer Agent and Registrar Duke Energy acts as transfer agent and registrar for the Common Stock. Preference Stock Purchase Rights Each share of Common Stock has attached to it a Preference Stock Purchase Right. The Rights initially are represented only by the certificates for the shares of Common Stock and will not trade separately from those shares unless and until: . ten days after it is publicly announced that a person or group (with certain exceptions) has acquired, or has obtained the right to acquire, the beneficial ownership of 15% or more of the outstanding Common Stock (an "acquiring person"); or . ten business days (or a later date determined by Duke Energy's Board of Directors) after the date a person or group commences, or public announcement is made that the person or group intends to commence, a tender or exchange offer that would result in the person or group becoming an acquiring person. If and when the Rights separate, each Right will entitle the holder to purchase 1/10,000 of a share of Duke Energy's Series A Participating Preference Stock for an exercise price that is presently $190. In the event that a person or group becomes an acquiring person, each Right (except for Rights beneficially owned by the acquiring person or its transferees, which Rights become void) will entitle its holder to purchase, for the exercise price, a number of shares of Common Stock having a market value of twice the exercise price. Also, if, after ten days following the date of the announcement that a person or group has become an acquiring person: . Duke Energy is involved in a merger or similar form of business combination in which Duke Energy is not the surviving corporation or in which Duke Energy is the surviving corporation but the Common Stock is changed or exchanged; or . more than 50% of Duke Energy's assets or earning power is sold or transferred; then each Right (except for voided Rights) will entitle its holder to purchase, for the exercise price, a number of shares of common stock of the acquiring company having a value of twice the exercise 29 price. If any person or group acquires from 15% to but excluding 50% of the outstanding Common Stock, Duke Energy's Board of Directors may, at its option, exchange each outstanding Right (except for those held by an acquiring person or its transferees) for one share of Common Stock or 1/10,000 of a share of Series A Participating Preference Stock. Duke Energy's Board of Directors may redeem the Rights for $0.01 per Right prior to ten business days after the date of the public announcement that a person or group has become an acquiring person. The Rights will not prevent a takeover of Duke Energy. However, the existence of the Rights may cause substantial dilution to a person or group that acquires 15% or more of the Common Stock unless the Board of Directors first redeems those Rights. Certain Anti-Takeover Matters Duke Energy's Articles and By-Laws include a number of provisions that may have the effect of encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with the Board of Directors rather than pursue non-negotiated takeover attempts. Those provisions include: Classified Board of Directors; Removal of Directors; Vacancies Duke Energy's Articles provide for a Board of Directors divided into three classes, with one class being elected each year to serve for a three-year term. As a result, at least two annual meetings of shareholders may be required for shareholders to change a majority of the Board of Directors. Duke Energy's shareholders may remove directors only for cause. Vacancies and newly created directorships on the Board of Directors may be filled only by the affirmative vote of a majority of the directors remaining in office, and no decrease in the number of directors may shorten the term of an incumbent director. The classification of directors and the inability of shareholders to remove directors without cause and to fill vacancies and newly created directorships on the Board of Directors will make it more difficult to change the composition of the Board of Directors, but will promote continuity of existing management. Advance Notice Requirements Duke Energy's By-Laws establish advance notice procedures with regard to shareholder proposals relating to the nomination of persons for election as directors or new business to be brought before annual meetings of shareholders. These procedures provide that shareholders must give timely notice of such proposals in writing to the Secretary of Duke Energy. Generally, to be timely with respect to an annual meeting of shareholders, notice must be received at Duke Energy's principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary date of the annual meeting for the preceding year. The notice must contain certain information specified in the By-Laws. Special Meetings of Shareholders Neither the Articles nor the By-Laws of Duke Energy give shareholders the right to call a special meeting of shareholders. The By-Laws provide that special meetings of shareholders may be called only by the Board of Directors or the Chairman of the Board. 30 Amendment of Certain Charter Provisions Duke Energy's Articles require the approval of not less than 80% of the voting power of all outstanding shares of Common Stock to amend provisions relating to the minimum and maximum size of the Board of Directors, the classification of the Board of Directors, the removal of directors, the filling of vacancies and newly created directorships on the Board of Directors and the requirement that a decrease in the number of directors constituting the Board of Directors may not shorten the term of any incumbent director. This amendment provision will make it more difficult to dilute the anti-takeover effects of Duke Energy's Articles and By-Laws. DESCRIPTION OF THE STOCK PURCHASE CONTRACTS AND THE STOCK PURCHASE UNITS Duke Energy may issue stock purchase contracts representing contracts obligating holders to purchase from Duke Energy, and Duke Energy to sell to the holders, a specified number of shares of Common Stock (or a range of numbers of shares pursuant to a predetermined formula) at a future date or dates. The price per share of Common Stock may be fixed at the time the stock purchase contracts are issued or may be determined by reference to a specific formula set forth in the stock purchase contracts. The stock purchase contracts may be issued separately or as a part of units, often known as stock purchase units, consisting of a stock purchase contract and either: . Senior Notes, Junior Subordinated Notes or other debt securities of Duke Energy or one of its subsidiaries; . debt obligations of third parties, including U.S. Treasury securities; or . Preferred Securities or trust preferred securities issued by trusts, all of whose common securities are owned by Duke Energy or by subsidiaries of Duke Energy, securing the holder's obligations to purchase the Common Stock under the stock purchase contracts. The stock purchase contracts may require Duke Energy to make periodic payments to the holders of the stock purchase units or vice versa, and such payments may be unsecured or prefunded on some basis. The stock purchase contracts may require holders to secure their obligations in a specified manner and in certain circumstances Duke Energy may deliver newly issued prepaid stock purchase contracts, often known as prepaid securities, upon release to a holder of any collateral securing such holder's obligations under the original stock purchase contract. The applicable prospectus supplement will describe the terms of any stock purchase contracts or stock purchase units and, if applicable, prepaid securities. The description in the applicable prospectus supplement will not contain all of the information that you may find useful. For more information, you should review the stock purchase contracts, the collateral arrangements and depositary arrangements, if applicable, relating to such stock purchase contracts or stock purchase units and, if applicable, the prepaid securities and the document pursuant to which the prepaid securities will be issued. These documents will be filed with the SEC promptly after the offering of such stock purchase contracts or stock purchase units and, if applicable, prepaid securities. 31 DESCRIPTION OF THE PREFERRED SECURITIES Each Trust may issue only one series of Preferred Securities. The Trust Agreement of each Trust will authorize the Administrative Trustees to issue the Preferred Securities of that Trust on behalf of that Trust. For additional information you should refer to the applicable Trust Agreement. The form of Trust Agreement is an exhibit to the registration statement, of which this prospectus is a part. The prospectus supplement for a particular series of Preferred Securities being offered will disclose the specific terms related to the offering, including the price or prices at which the Preferred Securities to be offered will be issued. Those terms will include some or all of the following: . the title of the series; . the number of Preferred Securities of the series; . the yearly distribution rate, or the method of determining that rate, and the date or dates on which distributions will be payable; . the date or dates, or method of determining the date or dates, from which distributions will be cumulative; . the amount that will be paid out of the assets of the Trust to the holders of the Preferred Securities upon the voluntary or involuntary dissolution, winding-up or termination of the Trust; . any obligation that the Trust has to purchase or redeem the Preferred Securities, and the price at which, the period within which, and the terms and conditions upon which the Trust will purchase or redeem them; . any voting rights of the Preferred Securities that are in addition to those legally required, including any right that the holders of the Preferred Securities have to approve certain actions under or amendments to the Trust Agreement; . any right that the Trust has to defer distributions on the Preferred Securities in the event that Duke Energy extends the interest payment period on the related Junior Subordinated Notes; and . any other rights, preferences, privileges, limitations or restrictions upon the Preferred Securities of the series. Duke Energy will guarantee each series of Preferred Securities to the extent described below under the caption "Description of the Guarantees." The applicable prospectus supplement will describe any material United States federal income tax considerations that apply to the Preferred Securities. 32 DESCRIPTION OF THE GUARANTEES Duke Energy will execute the Guarantees from time to time for the benefit of the holders of the Preferred Securities of the respective Trusts. The Chase Manhattan Bank will act as Guarantee Trustee under each Guarantee. The Guarantee Trustee will hold each Guarantee for the benefit of the holders of the Preferred Securities to which it relates. The following description of the Guarantees is only a summary and is not intended to be comprehensive. The form of Guarantee is an exhibit to the registration statement, of which this prospectus is a part. General Duke Energy will irrevocably and unconditionally agree under each Guarantee to pay the Guarantee Payments that are defined below, to the extent specified in that Guarantee, to the holders of the Preferred Securities to which the Guarantee relates, to the extent that the Guarantee Payments are not paid by or on behalf of the related Trust. Duke Energy is required to pay the Guarantee Payments to the extent specified in the relevant Guarantee regardless of any defense, right of set-off or counterclaim that Duke Energy may have or may assert against any person. The following payments and distributions on the Preferred Securities of a Trust are Guarantee Payments: . any accrued and unpaid distributions required to be paid on the Preferred Securities of the Trust, but only to the extent that the Trust has funds legally and immediately available for those distributions; . the redemption price for any Preferred Securities that the Trust calls for redemption, including all accrued and unpaid distributions to the redemption date, but only to the extent that the Trust has funds legally and immediately available for the payment; and . upon a dissolution, winding-up or termination of the Trust, other than in connection with the distribution of Junior Subordinated Notes to the holders of Trust Securities of the Trust or the redemption of all the Preferred Securities of the Trust, the lesser of: . the sum of the liquidation amount and all accrued and unpaid distributions on the Preferred Securities of the Trust to the payment date, to the extent that the Trust has funds legally and immediately available for the payment; and . the amount of assets of the Trust remaining available for distribution to holders of the Preferred Securities of the Trust in liquidation of the Trust. Duke Energy may satisfy its obligation to make a Guarantee Payment by making that payment directly to the holders of the related Preferred Securities or by causing the Trust to make the payment to those holders. Each Guarantee will be a full and unconditional guarantee, subject to certain subordination provisions, of the Guarantee Payments with respect to the related Preferred Securities from the time of issuance of those Preferred Securities, except that the Guarantee will only apply to the payment of distributions and other payments on the Preferred Securities when the Trust has sufficient funds legally and immediately available to make those distributions or other payments. 33 If Duke Energy does not make the required payments on the Junior Subordinated Notes that the Property Trustee holds under a Trust, that Trust will not make the related payments on its Preferred Securities. Subordination Duke Energy's obligations under each Guarantee will be unsecured obligations of Duke Energy. Those obligations will rank: . subordinate and junior in right of payment to all of Duke Energy's other liabilities, other than obligations or liabilities that rank equal in priority or subordinate by their terms; . equal in priority with Duke Energy's Preferred Stock and Preferred Stock A and similar guarantees; and . senior to Duke Energy's Common Stock. Duke Energy has Preferred Stock and Preferred Stock A outstanding that will rank equal in priority with the Guarantees and has Common Stock outstanding that will rank junior to the Guarantees. Each Guarantee will be a guarantee of payment and not of collection. This means that the guaranteed party may institute a legal proceeding directly against Duke Energy, as guarantor, to enforce its rights under the Guarantee without first instituting a legal proceeding against any other person or entity. The terms of the Preferred Securities will provide that each holder of the Preferred Securities, by accepting those Preferred Securities, agrees to the subordination provisions and other terms of the related Guarantee. Amendments and Assignment Duke Energy may amend each Guarantee without the consent of any holder of the Preferred Securities to which that Guarantee relates if the amendment does not materially and adversely affect the rights of those holders. Duke Energy may otherwise amend each Guarantee with the approval of the holders of at least 66 2/3% of the outstanding Preferred Securities to which that Guarantee relates. Termination Each Guarantee will terminate and be of no further effect when: . the redemption price of the Preferred Securities to which the Guarantee relates is fully paid; . Duke Energy distributes the related Junior Subordinated Notes to the holders of those Preferred Securities; or . the amounts payable upon liquidation of the related Trust are fully paid. Each Guarantee will remain in effect or will be reinstated if at any time any holder of the related Preferred Securities must restore payment of any sums paid to that holder with respect to those Preferred Securities or under that Guarantee. 34 Events of Default An event of default will occur under any Guarantee if Duke Energy fails to perform any of its payment obligations under that Guarantee. The holders of a majority of the Preferred Securities of any series may waive any such event of default and its consequences on behalf of all of the holders of the Preferred Securities of that series. The Guarantee Trustee is obligated to enforce the Guarantee for the benefit of the holders of the Preferred Securities of a series if an event of default occurs under the related Guarantee. The holders of a majority of the Preferred Securities to which a Guarantee relates have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee with respect to that Guarantee or to direct the exercise of any trust or power that the Guarantee Trustee holds under that Guarantee. Any holder of the related Preferred Securities may institute a legal proceeding directly against Duke Energy to enforce that holder's rights under the Guarantee without first instituting a legal proceeding against the Guarantee Trustee or any other person or entity. Concerning the Guarantee Trustee The Chase Manhattan Bank is the Guarantee Trustee. It is also the Property Trustee, the Subordinated Indenture Trustee, the Senior Indenture Trustee and the Bond Trustee. Duke Energy and certain of its affiliates maintain deposit accounts and banking relationships with The Chase Manhattan Bank. The Chase Manhattan Bank also serves as trustee or agent under other indentures and agreements pursuant to which securities of Duke Energy and certain of its affiliates are outstanding. The Guarantee Trustee will perform only those duties that are specifically set forth in each Guarantee unless an event of default under the Guarantee occurs and is continuing. In case an event of default occurs and is continuing, the Guarantee Trustee will exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. Subject to those provisions, the Guarantee Trustee is under no obligation to exercise any of its powers under any Guarantee at the request of any holder of the related Preferred Securities unless that holder offers reasonable indemnity to the Guarantee Trustee against the costs, expenses and liabilities which it might incur as a result. Agreements as to Expenses and Liabilities Duke Energy will enter into an Agreement as to Expenses and Liabilities under each Trust Agreement. Each Agreement as to Expenses and Liabilities will provide that Duke Energy will, with certain exceptions, irrevocably and unconditionally guarantee the full payment of any indebtedness, expenses or liabilities of the related Trust to each person or entity to whom that Trust becomes indebted or liable. The exceptions are the obligations of the Trust to pay to the holders of the related Preferred Securities or other similar interests in that Trust the amounts due to the holders under the terms of those Preferred Securities or those similar interests. 35 PLAN OF DISTRIBUTION Duke Energy and the Trusts may sell securities to one or more underwriters or dealers for public offering and sale by them, or it may sell the securities to investors directly or through agents. The prospectus supplement relating to the securities being offered will set forth the terms of the offering and the method of distribution and will identify any firms acting as underwriters, dealers or agents in connection with the offering, including: . the name or names of any underwriters; . the purchase price of the securities and the proceeds to Duke Energy or the Trusts from the sale; . any underwriting discounts and other items constituting underwriters' compensation; . any public offering price; . any discounts or concessions allowed or reallowed or paid to dealers; and . any securities exchange or market on which the securities may be listed. Only those underwriters identified in the prospectus supplement are deemed to be underwriters in connection with the securities offered in the prospectus supplement. Duke Energy and the Trusts may distribute the securities from time to time in one or more transactions at a fixed price or prices, which may be changed, or at prices determined as the prospectus supplement specifies. Duke Energy may sell securities through forward contracts or similar arrangements. In connection with the sale of securities, underwriters, dealers or agents may be deemed to have received compensation from Duke Energy in the form of underwriting discounts or commissions and also may receive commissions from securities purchasers for whom they may act as agent. Underwriters may sell the securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters or commissions from the purchasers for whom they may act as agent. Duke Energy may sell the securities directly or through agents it designates from time to time. Any agent involved in the offer or sale of the securities covered by this prospectus, other than at the market offerings of common stock, will be named in a prospectus supplement relating to such securities. At the market offerings of common stock may be made by agents. Commissions payable by Duke Energy to agents will be set forth in a prospectus supplement relating to the securities being offered. Unless otherwise indicated in a prospectus supplement, any such agents will be acting on a best-efforts basis for the period of their appointment. Some of the underwriters, dealers or agents and some of their affiliates who participate in the securities distribution may engage in other transactions with, and perform other services for, Duke Energy and its subsidiaries or affiliates in the ordinary course of business. Any underwriting or other compensation which Duke Energy pays to underwriters or agents in connection with the securities offering, and any discounts, concessions or commissions which underwriters allow to dealers, will be set forth in the applicable prospectus supplement. Underwriters, 36 dealers and agents participating in the securities distribution may be deemed to be underwriters, and any discounts and commissions they receive and any profit they realize on the resale of the securities may be deemed to be underwriting discounts and commissions under the Securities Act of 1933. Underwriters, and their controlling persons, and agents may be entitled, under agreements entered into with Duke Energy and the Trusts, to indemnification against certain civil liabilities, including liabilities under the Securities Act of 1933. 37 EXPERTS The consolidated financial statements and the related financial statement schedule of Duke Energy incorporated in this prospectus by reference from Duke Energy's annual report on Form 10-K for the year ended December 31, 2000 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. VALIDITY OF THE SECURITIES Ellen T. Ruff, Esq., who is Duke Energy's Senior Vice President and General Counsel, and Dewey Ballantine LLP will issue opinions about the validity of the securities offered by Duke Energy in the applicable prospectus supplement for Duke Energy. Richards, Layton & Finger, P.A., special Delaware counsel, will issue opinions about the validity of the Preferred Securities offered in the applicable prospectus supplement for the Trusts. Counsel named in the applicable prospectus supplement will issue opinions about the validity of the securities offered by Duke Energy for any underwriters. WHERE YOU CAN FIND MORE INFORMATION Duke Energy files annual, quarterly and current reports and other information with the SEC. You may read and copy any documents that are filed at any of the following: . SEC Public Reference Room 450 Fifth Street, N.W. Washington, D.C. 20549; . Citicorp Center 500 West Madison Street Suite 1400 Chicago, Illinois 60661-2411; or . Seven World Trade Center Suite 1300 New York, New York 10048. You may also obtain copies of these documents at prescribed rates from the Public Reference Section of the SEC at its Washington address. Please call the SEC at 1-800-SEC-0330 for further information. Duke Energy's filings are also available to the public through: . The SEC web site at http://www.sec.gov; and . The New York Stock Exchange 20 Broad Street New York, New York 10005. 38 Information about Duke Energy is also available on its web site at http://www.duke-energy.com. Such web site is not a part of this prospectus. The SEC allows Duke Energy to "incorporate by reference" the information Duke Energy files with it, which information incorporated by reference is considered to be part of this prospectus and any accompanying prospectus supplement, and later information that Duke Energy files with the SEC will automatically update and supersede that information as well as the information included in this prospectus and any accompanying prospectus supplement. Duke Energy incorporates by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 filed prior to the termination of this offering: . Duke Energy's annual report on Form 10-K for the year ended December 31, 2000; and . Duke Energy's current report on Form 8-K dated March 2, 2001. Duke Energy will provide without charge a copy of these filings, other than any exhibits unless the exhibits are specifically incorporated by reference into this prospectus. You may request your copy by writing Duke Energy at the following address or telephoning one of the following numbers: Investor Relations Department Duke Energy Corporation P.O. Box 1005 Charlotte, North Carolina 28201 (704) 382-3853 or (800) 488-3853 (toll-free) 39 PART II. INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution (Estimated): The estimated expenses of issuance and distribution, other than underwriting discounts and commissions, to be borne by Duke Energy Corporation are as follows: SEC Filing Fee............................................... $ 498,858* Trustee Fees and Expenses.................................... 50,000 Listing Fees................................................. 200,000 Printing Costs............................................... 165,000 Legal Fees and Expenses...................................... 190,000 Accounting Fees.............................................. 25,000 Blue Sky Fees and Expenses................................... 20,000 Rating Agency Fees........................................... 270,000 NASD Fee..................................................... 30,000 Miscellaneous................................................ 8,000 ---------- Total........................................................ $1,456,858 ==========
-------- *Actual Item 15. Indemnification of Directors and Officers. Sections 55-8-50 through 55-8-58 of the North Carolina Business Corporation Act and the By-Laws of Duke Energy Corporation permit indemnification of its directors and officers in a variety of circumstances, which may include liabilities under the Securities Act of 1933 ("Act"). In addition, Duke Energy Corporation has purchased insurance permitted by the law of North Carolina on behalf of directors, officers, employees or agents which may cover liabilities under the Act. The Restated Articles of Incorporation of Duke Energy Corporation provide that a director shall not be personally liable for monetary damages for breach of fiduciary duty as a director except to the extent such exemption from liability or limitation thereof is not permitted under the North Carolina Business Corporation Act. Item 16. Exhibits.
Exhibit Number ------- 1-A --Form of Underwriting Agreement relating to Senior Notes. 1-B --Form of Underwriting Agreement relating to Junior Subordinated Notes. 1-C --Form of Underwriting Agreement relating to Bonds. 1-D --Form of Underwriting Agreement relating to Common Stock. 1-E --Form of Underwriting Agreement relating to Trust Preferred Securities. 1-F --Form of Calculation Agent Agreement relating to Senior Notes. 4-A-1* --Restated Articles of Incorporation of Duke Energy Corporation, dated June 18, 1997 (filed with Form S-8, File No. 333-29563, effective June 19, 1997, as Exhibit 4(G)).
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Exhibit Number ------- 4-A-2* --Articles of Amendment of Duke Energy Corporation, dated April 28, 1999 (filed with Form S-3, File No. 333-81573, effective October 8, 1999, as Exhibit 4(B)). 4-B* --By-Laws of Duke Energy Corporation, as amended (filed with Form S-3, File No. 333-52204, effective December 26, 2000, as Exhibit 4-B). 4-C* --Rights Agreement between Duke Energy Corporation and The Bank of New York, as Rights Agent, dated as of December 17, 1998 (filed with Form 8-K, dated February 11, 1999, of Duke Energy Corporation, as Exhibit 4.1). 4-D-1* --Senior Indenture between Duke Energy Corporation and The Chase Manhattan Bank, as Trustee, dated as of September 1, 1998 (filed with Form S-3, File No. 333-14209, effective April 7, 1999, as Exhibit 4-D-1). 4-D-2* --First Supplemental Indenture dated as of December 4, 1998 supplementing said Senior Indenture (filed with Form S-3, File No. 333-14209, effective April 7, 1999, as Exhibit 4-D-1(A)). 4-D-3* --Second Supplemental Indenture dated as of January 12, 1999 supplementing said Senior Indenture (filed with Form S-3, File No. 333-14209, effective April 7, 1999, as Exhibit 4-D-1(B)). 4-D-4* --Third Supplemental Indenture dated as of March 11, 1999 supplementing said Senior Indenture (filed with Form S-3, File No. 333-14209, effective April 7, 1999, as Exhibit 4-D-1(C)). 4-D-5* --Fourth Supplemental Indenture dated as of March 10, 2000 supplementing said Senior Indenture (filed with Form S-3, File No. 333-52204, effective December 26, 2000, as Exhibit 4-D-5). 4-D-6* --Fifth Supplemental Indenture dated as of September 12, 2000 supplementing said Senior Indenture (filed with Form S-3, File No. 333-52204, effective December 26, 2000, as Exhibit 4-D-6). 4-D-7 --Form of Supplemental Indenture to Senior Indenture relating to Senior Notes. 4-E-1* --Subordinated Indenture between Duke Energy Corporation and The Chase Manhattan Bank, as Trustee, dated as of December 1, 1997 (filed with Form S-3, File No. 333-14209, effective September 3, 1998, as Exhibit 4-D-2). 4-E-2* --First Supplemental Indenture dated as of December 8, 1997 supplementing said Subordinated Indenture (filed with Form S-3, File No. 333-14209, effective April 7, 1999 as Exhibit 4-D-2(A)). 4-E-3* --Second Supplemental Indenture dated as of June 14, 1999 supplementing said Subordinated Indenture (filed with Form S-3, File No. 333-52204, effective December 26, 2000, as Exhibit 4-E-3). 4-E-4 --Form of Supplemental Indenture to Subordinated Indenture relating to Junior Subordinated Notes. 4-E-5 --Form of Supplemental Indenture to Subordinated Indenture relating to Junior Subordinated Notes issued in connection with Trust Preferred Securities. 4-F-1* --First and Refunding Mortgage from Duke Energy Corporation to Guaranty Trust Company of New York, as Trustee, dated as of December 1, 1927 (filed with Form S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(a)). 4-F-2* --Supplemental Indenture, dated as of March 12, 1930, supplementing said Mortgage (filed with Form S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(b)). 4-F-3* --Supplemental Indenture, dated as of July 1, 1935, supplementing said Mortgage (filed with Form S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(c)). 4-F-4* --Supplemental Indenture, dated as of December 1, 1935, supplementing said Mortgage (filed with Form S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(d)). 4-F-5* --Supplemental Indenture, dated as of September 1, 1936, supplementing said Mortgage (filed with Form S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(e)).
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Exhibit Number ------- 4-F-6* --Supplemental Indenture, dated as of January 1, 1941, supplementing said Mortgage (filed with Form S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(f)). 4-F-7* --Supplemental Indenture, dated as of April 1, 1944, supplementing said Mortgage (filed with Form S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(g)). 4-F-8* --Supplemental Indenture, dated as of September 1, 1947, supplementing said Mortgage (filed with Form S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(h)). 4-F-9* --Supplemental Indenture, dated as of September 8, 1947, supplementing said Mortgage (filed with Form S-1, File No. 2-10401, effective August 21, 1953, as Exhibit 4-B-9). 4-F-10* --Supplemental Indenture, dated as of February 1, 1949, supplementing said Mortgage (filed with Form S-1, File No. 2-7808, effective February 3, 1949, as Exhibit 7(j)). 4-F-11* --Supplemental Indenture, dated as of March 1, 1949, supplementing said Mortgage (filed with Form S-1, File No. 2-8877, effective April 6, 1951, as Exhibit 7(k)). 4-F-12* --Supplemental Indenture, dated as of April 1, 1951, supplementing said Mortgage (filed with Form S-1, File No. 2-8877, effective April 6, 1951, as Exhibit 7(l)). 4-F-13* --Supplemental Indenture, dated as of September 1, 1953, supplementing said Mortgage (filed with Form S-1, File No. 2-10401, effective August 21, 1953, as Exhibit 4-B-13). 4-F-14* --Supplemental Indenture, dated as of October 1, 1954, supplementing said Mortgage (filed with Form S-9, File No. 2-11297, effective December 30, 1954, as Exhibit 2-B-14). 4-F-15* --Supplemental Indenture, dated as of January 1, 1955, supplementing said Mortgage (filed with Form S-9, File No. 2-11297, effective December 30, 1954, as Exhibit 2-B-15). 4-F-16* --Supplemental Indenture, dated as of May 1, 1956, supplementing said Mortgage (filed with Form S-9, File No. 2-12402, effective April 26, 1956, as Exhibit 2-B-16). 4-F-17* --Supplemental Indenture, dated as of January 1, 1960, supplementing said Mortgage (filed with Form 10, effective June 29, 1961, as Exhibit 3-B-18). 4-F-18* --Supplemental Indenture, dated as of February 1, 1960, supplementing said Mortgage (filed with Form 10, effective June 29, 1961, as Exhibit 3-B-19). 4-F-19* --Supplemental Indenture, dated as of February 1, 1962, supplementing said Mortgage (filed with Form S-9, File No. 2-20577, effective August 16, 1962, as Exhibit 2-B-20). 4-F-20* --Supplemental Indenture, dated as of August 1, 1962, supplementing said Mortgage (filed with Form S-1, File No. 2-25367, effective August 23, 1966, as Exhibit 4-B-19). 4-F-21* --Supplemental Indenture, dated as of June 15, 1964, supplementing said Mortgage (filed with Form S-1, File No. 2-25367, effective August 23, 1966, as Exhibit 4-B-20). 4-F-22* --Supplemental Indenture, dated as of February 1, 1965, supplementing said Mortgage (filed with Form S-1, File No. 2-25367, effective August 23, 1966, as Exhibit 4-B-21). 4-F-23* --Supplemental Indenture, dated as of April 1, 1967, supplementing said Mortgage (filed with Form S-9, File No. 2-28023, effective February 15, 1968, as Exhibit 2-B-25). 4-F-24* --Supplemental Indenture, dated as of February 1, 1968, supplementing said Mortgage (filed with Form S-9, File No. 2-31304, effective January 21, 1969, as Exhibit 2-B-26). 4-F-25* --Supplemental Indenture, dated as of February 1, 1969, supplementing said Mortgage (filed with Form S-7, File No. 2-34289, effective August 27, 1969, as Exhibit 2-B-27). 4-F-26* --Supplemental Indenture, dated as of September 1, 1969, supplementing said Mortgage (filed with Form S-7, File No. 2-36095, effective February 16, 1970, as Exhibit 2-B-39). 4-F-27* --Supplemental Indenture, dated as of March 1, 1970, supplementing said Mortgage (filed with Form S-7, File No. 2-37953, effective July 28, 1970, as Exhibit 2-B-42).
II-3
Exhibit Number ------- 4-F-28* --Supplemental Indenture, dated as of August 1, 1970, supplementing said Mortgage (filed with Form S-7, File No. 2-39451, effective March 4, 1971, as Exhibit 2-B-28). 4-F-29* --Supplemental Indenture, dated as of March 1, 1971, supplementing said Mortgage (filed with Form S-7, File No. 2-42404, effective December 7, 1971, as Exhibit 2-B-29). 4-F-30* --Supplemental Indenture, dated as of December 1, 1971, supplementing said Mortgage (filed with Form S-7, File No. 2-43122, effective March 7, 1972, as Exhibit 2-B-30). 4-F-31* --Supplemental Indenture, dated as of April 1, 1972, supplementing said Mortgage (filed with Form S-7, File No. 2-46208, effective November 20, 1972, as Exhibit 2-B-31). 4-F-32* --Supplemental Indenture, dated as of December 1, 1972, supplementing said Mortgage (filed with Form S-7, File No. 2-48058, effective June 5, 1973, as Exhibit 2-B-32). 4-F-33* --Supplemental Indenture, dated as of June 1, 1973, supplementing said Mortgage (filed with Form S-7, File No. 2-49333, effective November 5, 1973, as Exhibit 2-B-33). 4-F-34* --Supplemental Indenture, dated as of November 1, 1973, supplementing said Mortgage (filed with Form S-7, File No. 2-50493, effective April 25, 1974, as Exhibit 2-B-34). 4-F-35* --Supplemental Indenture, dated as of May 1, 1974, supplementing said Mortgage (filed with Form S-7, File No. 2-52669, effective February 11, 1975, as Exhibit 2-B-35). 4-F-36* --Supplemental Indenture, dated as of February 1, 1975, supplementing said Mortgage (filed with Form S-7, File No. 2-57118, effective October 5, 1976, as Exhibit 2-B-36). 4-F-37* --Supplemental Indenture, dated as of July 1, 1975, supplementing said Mortgage (filed with Form S-7, File No. 2-57118, effective October 5, 1976, as Exhibit 2-B-37). 4-F-38* --Supplemental Indenture, dated as of October 1, 1976, supplementing said Mortgage (filed with Form S-7, File No. 2-59494, effective August 10, 1977, as Exhibit 2-B-38). 4-F-39* --Supplemental Indenture, dated as of September 1, 1977, supplementing said Mortgage (filed with Form S-7, File No. 2-61995, effective July 26, 1978, as Exhibit 2-B-39). 4-F-40* --Supplemental Indenture, dated as of August 1, 1978, supplementing said Mortgage (filed with Form S-7, File No. 2-64541, effective June 7, 1979, as Exhibit 2-B-40). 4-F-41* --Supplemental Indenture, dated as of June 1, 1979, supplementing said Mortgage (filed with Form S-7, File No. 2-65371, effective October 2, 1979, as Exhibit 2-B-41). 4-F-42* --Supplemental Indenture, dated as of October 1, 1979, supplementing said Mortgage (filed with Form S-7, File No. 2-66659, effective March 12, 1980, as Exhibit 2-B-42). 4-F-43* --Supplemental Indenture, dated as of March 1, 1980, supplementing said Mortgage (filed with Form S-16, File No. 2-68571, effective August 19, 1980, as Exhibit 2-B-43). 4-F-44* --Supplemental Indenture, dated as of August 1, 1980, supplementing said Mortgage (filed with Form S-16, File No. 2-75951, effective February 23, 1982, as Exhibit 2-B-44). 4-F-45* --Supplemental Indenture, dated as of March 1, 1982, supplementing said Mortgage (filed with Form S-3, File No. 2-78882, effective August 30, 1982, as Exhibit 4-B-45). 4-F-46* --Supplemental Indenture, dated as of September 1, 1982, supplementing said Mortgage (filed with Form S-3, File No. 2-95931, effective April 1, 1985, as Exhibit 4-B-46). 4-F-47* --Supplemental Indenture, dated as of May 1, 1983, supplementing said Mortgage (filed with Form S-3, File No. 2-95931, effective April 1, 1985, as Exhibit 4-B-47). 4-F-48* --Supplemental Indenture, dated as of September 1, 1983, supplementing said Mortgage (filed with Form S-3, File No. 2-95931, effective April 1, 1985, as Exhibit 4-B-48). 4-F-49* --Supplemental Indenture, dated as of September 1, 1984, supplementing said Mortgage (filed with Form S-3, File No. 2-95931, effective April 1, 1985, as Exhibit 4-B-49).
II-4
Exhibit Number ------- 4-F-50* --Supplemental Indenture, dated as of March 1, 1985, supplementing said Mortgage (filed with Form S-3, File No. 2-95931, effective April 1, 1985, as Exhibit 4-B-50). 4-F-51* --Supplemental Indenture, dated as of December 1, 1985, supplementing said Mortgage (filed with Form S-3, File No. 33-5163, effective May 2, 1986, as Exhibit 4-B-51). 4-F-52* --Supplemental Indenture, dated as of April 1, 1986, supplementing said Mortgage (filed with Form S-3, File No. 33-5163, effective May 2, 1986, as Exhibit 4-B-52). 4-F-53* --Supplemental Indenture, dated as of May 1, 1986, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1986, File No. 1-4928, as Exhibit 4-B-53). 4-F-54* --Supplemental Indenture, dated as of June 1, 1986, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1986, File No. 1-4928, as Exhibit 4-B-54). 4-F-55* --Supplemental Indenture, dated as of February 1, 1987, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1986, File No. 1-4928, as Exhibit 4-B-55). 4-F-56* --Supplemental Indenture, dated as of February 15, 1987, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1986, File No. 1-4928, as Exhibit 4-B-56). 4-F-57* --Supplemental Indenture, dated as of March 1, 1987, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1986, File No. 1-4928, as Exhibit 4-B-57). 4-F-58* --Supplemental Indenture, dated as of October 1, 1987, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1987, File No. 1-4928, as Exhibit 4-B-58). 4-F-59* --Supplemental Indenture, dated as of February 1, 1990, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1989, File No. 1-4928, as Exhibit 4-B-59). 4-F-60* --Supplemental Indenture, dated as of March 1, 1990, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1990, File No. 1-4928, as Exhibit 4-B-60). 4-F-61* --Supplemental Indenture, dated as of May 1, 1990, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1990, File No. 1-4928, as Exhibit 4-B-61). 4-F-62* --Supplemental Indenture, dated as of May 15, 1990, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1990, File No. 1-4928, as Exhibit 4-B-62). 4-F-63* --Supplemental Indenture, dated as of March 1, 1991, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1990, File No. 1-4928, as Exhibit 4-B-63). 4-F-64* --Supplemental Indenture, dated as of July 1, 1991, supplementing said Mortgage (filed with Form S-3, File No. 33-45501, effective February 13, 1992, as Exhibit 4-B-64). 4-F-65* --Supplemental Indenture, dated as of December 1, 1991, supplementing said Mortgage (filed with Form S-3, File No. 33-44501, effective February 13, 1992, as Exhibit 4-B-65). 4-F-66* --Supplemental Indenture, dated as of March 1, 1992, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1991, File No. 1-4928, as Exhibit 4-B-66). 4-F-67* --Supplemental Indenture, dated as of June 1, 1992, supplementing said Mortgage (filed with Form S-3, File No. 33-50592, effective August 11, 1992, as Exhibit 4-B-67). 4-F-68* --Supplemental Indenture, dated as of July 1, 1992, supplementing said Mortgage (filed with Form S-3, File No. 33-50592, effective August 11, 1992, as Exhibit 4-B-68). 4-F-69* --Supplemental Indenture, dated as of September 1, 1992, supplementing said Mortgage (filed with Form S-3, File No. 33-53308, effective November 24, 1992, as Exhibit 4-B-69). 4-F-70* --Supplemental Indenture, dated as of February 1, 1993, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1992, File No. 1-4928, as Exhibit 4-B-70).
II-5
Exhibit Number ------- 4-F-71* --Supplemental Indenture, dated as of March 1, 1993, supplementing said Mortgage (filed with Form S-3, No. 33-59448, effective March 17, 1993, as Exhibit 4-B-71). 4-F-72* --Supplemental Indenture, dated as of April 1, 1993, supplementing said Mortgage (filed with Form S-3, File No. 33-50543, effective October 20, 1993, as Exhibit 4-B-72). 4-F-73* --Supplemental Indenture, dated as of May 1, 1993, supplementing said Mortgage (filed with Form S-3, File No. 33-50543, effective October 20, 1993, as Exhibit 4-B-73). 4-F-74* --Supplemental Indenture, dated as of June 1, 1993, supplementing said Mortgage (filed with Form S-3, File No. 33-50543, effective October 20, 1993, as Exhibit 4-B-74). 4-F-75* --Supplemental Indenture, dated as of July 1, 1993, supplementing said Mortgage (filed with Form S-3, File No. 33-50543, effective October 20, 1993, as Exhibit 4-B-75). 4-F-76* --Supplemental Indenture, dated as of August 1, 1993, supplementing said Mortgage (filed with Form S-3, File No. 33-50543, effective October 20, 1993, as Exhibit 4-B-76). 4-F-77* --Supplemental Indenture, dated as of August 20, 1993, supplementing said Mortgage (filed with Form S-3, File No. 33-50543, effective October 20, 1993, as Exhibit 4-B-77). 4-F-78* --Supplemental Indenture, dated as of May 1, 1994, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1994, File No. 1-4928, as Exhibit 4-B-78). 4-F-79* --Supplemental Indenture, dated as of November 1, 1994, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1994, File No. 1-4928, as Exhibit 4-B-79). 4-F-80* --Supplemental Indenture, dated as of August 1, 1995, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1995, File No. 1-4928, as Exhibit 4-B-80). 4-F-81 --Form of Supplemental Indenture relating to Bonds. 4-F-82* --Instrument of Resignation, Appointment and Acceptance among Duke Energy Corporation, Morgan Guaranty Trust Company of New York, as Trustee, and Chemical Bank (now The Chase Manhattan Bank), as Successor Trustee, dated as of August 30, 1994 (filed with Form 10- K for the year ended December 31, 1994, File No. 1-4928, as Exhibit 4-C). 4-G-1* --Certificate of Trust of Duke Energy Capital Trust III (filed with Form S-3, File No. 333-79065, effective June 4, 1999, as Exhibit 4.3-B). 4-G-2* --Certificate of Trust of Duke Energy Capital Trust IV (filed with Form S-3, File No. 333-79065, effective June 4, 1999, as Exhibit 4.3-C). 4-G-3* --Certificate of Trust of Duke Energy Capital Trust V (filed with Form S-3, File No. 333-52204, effective December 26, 2000, as Exhibit 4-G-3). 4-H-1* --Trust Agreement of Duke Energy Capital Trust III (filed with Form S-3, File No. 333-79065, effective June 4, 1999, as Exhibit 4.4-B). 4-H-2* --Trust Agreement of Duke Energy Capital Trust IV (filed with Form S- 3, File No. 333-79065, effective June 4, 1999, as Exhibit 4.4-C). 4-H-3* --Trust Agreement of Duke Energy Capital Trust V (filed with Form S- 3, File No. 333-52204, effective December 26, 2000, as Exhibit 4-H- 3). 4-I --Form of Amended and Restated Trust Agreement (Agreements for Duke Energy Capital Trust III, Duke Energy Capital Trust IV and Duke Energy Capital Trust V will be substantially identical except for names and dates).
II-6
Exhibit Number ------- 4-J --Form of Senior Note (included in Exhibit 4-D-7 above). 4-K --Form of Junior Subordinated Note (included in Exhibits 4-E-4 and 4- E-5 above). 4-L --Form of Bond (included in Exhibit 4-F-81 above). 4-M --Form of Trust Preferred Security for Duke Energy Capital Trust III, Duke Energy Capital Trust IV and Duke Energy Capital Trust V (included in Exhibit 4-I above). 4-N --Form of Guarantee Agreement (Agreements for Duke Energy Capital Trust III, Duke Energy Capital Trust IV and Duke Energy Capital Trust V will be substantially identical except for names and dates). 4-O --Form of Agreement as to Expenses and Liabilities (included in Exhibit 4-I above). 5-A --Opinion of Ellen T. Ruff, Esq. 5-B --Opinion of Dewey Ballantine LLP. 5-C-1 --Opinion of Richards, Layton & Finger, P.A. relating to Duke Energy Capital Trust III. 5-C-2 --Opinion of Richards, Layton & Finger, P.A. relating to Duke Energy Capital Trust IV. 5-C-3 --Opinion of Richards, Layton & Finger, P.A. relating to Duke Energy Capital Trust V. 8 --Tax Opinion of Dewey Ballantine LLP. 12 --Computation of ratio of earnings to fixed charges. 23-A --Independent Auditors' Consent. 23-B --Consent of Ellen T. Ruff, Esq. (included in Exhibit 5-A above). 23-C-1 --Consent of Dewey Ballantine LLP (included in Exhibit 5-B above). 23-C-2 --Consent of Dewey Ballantine LLP (included in Exhibit 8 above). 23-D --Consent of Richards, Layton & Finger, P.A. (included in Exhibits 5- C-1, 5-C-2 and 5-C-3 above). 24-A --Power of Attorney of certain officers and directors of Duke Energy Corporation. 24-B --Resolution of Duke Energy Corporation regarding Power of Attorney. 25-A --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Senior Indenture Trustee. 25-B --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Subordinated Indenture Trustee. 25-C --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Bond Trustee. 25-D-1 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Property Trustee under Duke Energy Capital Trust III. 25-D-2 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Property Trustee under Duke Energy Capital Trust IV. 25-D-3 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Property Trustee under Duke Energy Capital Trust V. 25-E-1 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Guarantee Trustee with respect to Duke Energy Capital Trust III. 25-E-2 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Guarantee Trustee with respect to Duke Energy Capital Trust IV.
II-7
Exhibit Number ------- 25-E-3 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Guarantee Trustee with respect to Duke Energy Capital Trust V.
- -------- * previously filed The total amount of securities of Duke Energy Corporation or its subsidiaries authorized under any instrument with respect to long-term debt not filed as an exhibit does not exceed 10% of the total assets of Duke Energy Corporation and its subsidiaries on a consolidated basis. Duke Energy Corporation agrees, upon request of the Securities and Exchange Commission, to furnish copies of any or all of such instruments. Item 17. Undertakings. (a) Undertaking related to Rule 415 offering: The undersigned registrants hereby undertake: (1) To file, during any period in which offers or sales are being made of the securities registered hereby, a post-effective amendment to this registration statement: (i) To include any prospectus required by the Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3, S-8 or F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrants pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-8 (b) Undertaking related to filings incorporating subsequent Securities Exchange Act of 1934 documents by reference: The undersigned registrants hereby undertake that, for purposes of determining any liability under the Act, each filing of Duke Energy Corporation's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Undertaking related to acceleration of effectiveness: Insofar as indemnification for liabilities arising under the Act may be permitted to directors, officers and controlling persons of each undersigned registrant pursuant to the indemnification provisions described in Item 15 above or in contractual arrangements pursuant thereto, or otherwise, each registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by each undersigned registrant of expenses incurred or paid by a director, officer or controlling person of each registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, each registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (d) The undersigned registrants hereby undertake that: (1) For purposes of determining any liability under the Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or 497(h) under the Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Act, each post- effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-9 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant, Duke Energy Corporation, certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement or amendment thereto to be signed on its behalf by the undersigned, thereunto duly authorized, in Charlotte, North Carolina, on the 12th day of April, 2001. Duke Energy Corporation R. B. Priory By:__________________________________ Chairman of the Board, President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this registration statement or amendment thereto has been signed by the following directors and officers of Duke Energy Corporation in the capacities and on the date indicated.
Signature Title Date --------- ----- ---- R. B. Priory Chairman of the Board, April 12, 2001 President and Chief Executive Officer (Principal Executive Officer) Robert P. Brace Executive Vice President and April 12, 2001 Chief Financial Officer (Principal Financial Officer) Sandra P. Meyer Senior Vice President and April 12, 2001 Corporate Controller (Principal Accounting Officer) G. Alex Bernhardt, Sr. William A. Coley William T. Esrey Ann M. Gray Dennis R. Hendrix Harold S. Hook A majority of the Directors April 12, 2001 George D. Johnson, Jr. Max Lennon Leo E. Linbeck, Jr. James G. Martin R. B. Priory
Myron L. Caldwell, by signing his name hereto, does hereby sign this document on behalf of Duke Energy Corporation and on behalf of each of the above-named persons pursuant to a power of attorney duly executed by Duke Energy Corporation and such persons, filed with the Securities and Exchange Commission as an exhibit hereto. /s/ Myron L. Caldwell _____________________________________ Myron L. Caldwell Attorney-in-fact II-10 Pursuant to the requirements of the Securities Act of 1933, Duke Energy Capital Trust III certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement or amendment thereto to be signed on its behalf by the undersigned, thereunto duly authorized, in Charlotte, North Carolina, on the 12th day of April, 2001. DUKE ENERGY CAPITAL TRUST III By: Duke Energy Corporation, Depositor /s/ Robert T. Lucas III By: _________________________________ Robert T. Lucas III Assistant Secretary Pursuant to the requirements of the Securities Act of 1933, Duke Energy Capital Trust IV certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement or amendment thereto to be signed on its behalf by the undersigned, thereunto duly authorized, in Charlotte, North Carolina, on the 12th day of April, 2001. DUKE ENERGY CAPITAL TRUST IV By: Duke Energy Corporation, Depositor /s/ Robert T. Lucas III By: _________________________________ Robert T. Lucas III Assistant Secretary II-11 Pursuant to the requirements of the Securities Act of 1933, Duke Energy Capital Trust V certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement or amendment thereto to be signed on its behalf by the undersigned, thereunto duly authorized, in Charlotte, North Carolina, on the 12th day of April, 2001. DUKE ENERGY CAPITAL TRUST V By: Duke Energy Corporation, Depositor /s/ Robert T. Lucas III By: _________________________________ Robert T. Lucas III Assistant Secretary II-12 EXHIBIT INDEX
Exhibit Number Exhibit ------- ------- 1-A --Form of Underwriting Agreement relating to Senior Notes. 1-B --Form of Underwriting Agreement relating to Junior Subordinated Notes. 1-C --Form of Underwriting Agreement relating to Bonds. 1-D --Form of Underwriting Agreement relating to Common Stock. 1-E --Form of Underwriting Agreement relating to Trust Preferred Securities. 1-F --Form of Calculation Agent Agreement relating to Senior Notes. 4-A-1* --Restated Articles of Incorporation of Duke Energy Corporation, dated June 18, 1997 (filed with Form S-8, File No. 333-29563, effective June 19, 1997, as Exhibit 4(G)). 4-A-2* --Articles of Amendment of Duke Energy Corporation, dated April 28, 1999 (filed with Form S-3, File No. 333-81573, effective October 8, 1999, as Exhibit 4(B). 4-B* --By-Laws of Duke Energy Corporation, as amended (filed with Form S-3, File No. 333-52204, effective December 26, 2000, as Exhibit 4-B). 4-C* --Rights Agreement between Duke Energy Corporation and The Bank of New York, as Rights Agent, dated as of December 17, 1998 (filed with Form 8-K, dated February 11, 1999, of Duke Energy Corporation, as Exhibit 4.1). 4-D-1* --Senior Indenture between Duke Energy Corporation and The Chase Manhattan Bank, as Trustee, dated as of September 1, 1998 (filed with Form S-3, File No. 333-14209, effective April 7, 1999, as Exhibit 4- D-1). 4-D-2* --First Supplemental Indenture dated as of December 4, 1998 supplementing said Senior Indenture (filed with Form S-3, File No. 333-14209, effective April 7, 1999, as Exhibit 4-D-1(A)). 4-D-3* --Second Supplemental Indenture dated as of January 12, 1999 supplementing said Senior Indenture (filed with Form S-3, File No. 333-14209, effective April 7, 1999, as Exhibit 4-D-1(B)). 4-D-4* --Third Supplemental Indenture dated as of March 11, 1999 supplementing said Senior Indenture (filed with Form S-3, File No. 333-14209, effective April 7, 1999, as Exhibit 4-D-1(C)). 4-D-5* --Fourth Supplemental Indenture dated as of March 10, 2000 supplementing said Senior Indenture (filed with Form S-3, File No. 333-52204, effective December 26, 2000, as Exhibit 4-D-5). 4-D-6* --Fifth Supplemental Indenture dated as of September 12, 2000 supplementing said Senior Indenture (filed with Form S-3, File No. 333-52204, effective December 26, 2000, as Exhibit 4-D-6). 4-D-7 --Form of Supplemental Indenture to Senior Indenture relating to Senior Notes. 4-E-1* --Subordinated Indenture between Duke Energy Corporation and The Chase Manhattan Bank, as Trustee, dated as of December 1, 1997 (filed with Form S-3, File No. 333-14209, effective September 3, 1998, as Exhibit 4-D-2). 4-E-2* --First Supplemental Indenture dated as of December 8, 1997 supplementing said Subordinated Indenture (filed with Form S-3, File No. 333-14209, effective April 7, 1999 as Exhibit 4-D-2(A)). 4-E-3* --Second Supplemental Indenture dated as of June 14, 1999 supplementing said Subordinated Indenture (filed with Form S-3, File No. 333-52204, effective December 26, 2000, as Exhibit 4-E-3). 4-E-4 --Form of Supplemental Indenture to Subordinated Indenture relating to Junior Subordinated Notes. 4-E-5 --Form of Supplemental Indenture to Subordinated Indenture relating to Junior Subordinated Notes issued in connection with Trust Preferred Securities.
Exhibit Number Exhibit ------- ------- 4-F-1* --First and Refunding Mortgage from Duke Energy Corporation to Guaranty Trust Company of New York, as Trustee, dated as of December 1, 1927 (filed with Form S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(a)). 4-F-2* --Supplemental Indenture, dated as of March 12, 1930, supplementing said Mortgage (filed with Form S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(b)). 4-F-3* --Supplemental Indenture, dated as of July 1, 1935, supplementing said Mortgage (filed with Form S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(c)). 4-F-4* --Supplemental Indenture, dated as of December 1, 1935, supplementing said Mortgage (filed with Form S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(d)). 4-F-5* --Supplemental Indenture, dated as of September 1, 1936, supplementing said Mortgage (filed with Form S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(e)). 4-F-6* --Supplemental Indenture, dated as of January 1, 1941, supplementing said Mortgage (filed with Form S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(f)). 4-F-7* --Supplemental Indenture, dated as of April 1, 1944, supplementing said Mortgage (filed with Form S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(g)). 4-F-8* --Supplemental Indenture, dated as of September 1, 1947, supplementing said Mortgage (filed with Form S-1, File No. 2-7224, effective October 15, 1947, as Exhibit 7(h)). 4-F-9* --Supplemental Indenture, dated as of September 8, 1947, supplementing said Mortgage (filed with Form S-1, File No. 2-10401, effective August 21, 1953, as Exhibit 4-B-9). 4-F-10* --Supplemental Indenture, dated as of February 1, 1949, supplementing said Mortgage (filed with Form S-1, File No. 2-7808, effective February 3, 1949, as Exhibit 7(j)). 4-F-11* --Supplemental Indenture, dated as of March 1, 1949, supplementing said Mortgage (filed with Form S-1, File No. 2-8877, effective April 6, 1951, as Exhibit 7(k)). 4-F-12* --Supplemental Indenture, dated as of April 1, 1951, supplementing said Mortgage (filed with Form S-1, File No. 2-8877, effective April 6, 1951, as Exhibit 7(l)). 4-F-13* --Supplemental Indenture, dated as of September 1, 1953, supplementing said Mortgage (filed with Form S-1, File No. 2-10401, effective August 21, 1953, as Exhibit 4-B-13). 4-F-14* --Supplemental Indenture, dated as of October 1, 1954, supplementing said Mortgage (filed with Form S-9, File No. 2-11297, effective December 30, 1954, as Exhibit 2-B-14). 4-F-15* --Supplemental Indenture, dated as of January 1, 1955, supplementing said Mortgage (filed with Form S-9, File No. 2-11297, effective December 30, 1954, as Exhibit 2-B-15). 4-F-16* --Supplemental Indenture, dated as of May 1, 1956, supplementing said Mortgage (filed with Form S-9, File No. 2-12402, effective April 26, 1956, as Exhibit 2-B-16). 4-F-17* --Supplemental Indenture, dated as of January 1, 1960, supplementing said Mortgage (filed with Form 10, effective June 29, 1961, as Exhibit 3-B-18). 4-F-18* --Supplemental Indenture, dated as of February 1, 1960, supplementing said Mortgage (filed with Form 10, effective June 29, 1961, as Exhibit 3-B-19). 4-F-19* --Supplemental Indenture, dated as of February 1, 1962, supplementing said Mortgage (filed with Form S-9, File No. 2-20577, effective August 16, 1962, as Exhibit 2-B-20). 4-F-20* --Supplemental Indenture, dated as of August 1, 1962, supplementing said Mortgage (filed with Form S-1, File No. 2-25367, effective August 23, 1966, as Exhibit 4-B-19). 4-F-21* --Supplemental Indenture, dated as of June 15, 1964, supplementing said Mortgage (filed with Form S-1, File No. 2-25367, effective August 23, 1966, as Exhibit 4-B-20).
Exhibit Number Exhibit ------- ------- 4-F-22* --Supplemental Indenture, dated as of February 1, 1965, supplementing said Mortgage (filed with Form S-1, File No. 2-25367, effective August 23, 1966, as Exhibit 4-B-21). 4-F-23* --Supplemental Indenture, dated as of April 1, 1967, supplementing said Mortgage (filed with Form S-9, File No. 2-28023, effective February 15, 1968, as Exhibit 2-B-25). 4-F-24* --Supplemental Indenture, dated as of February 1, 1968, supplementing said Mortgage (filed with Form S-9, File No. 2-31304, effective January 21, 1969, as Exhibit 2-B-26). 4-F-25* --Supplemental Indenture, dated as of February 1, 1969, supplementing said Mortgage (filed with Form S-7, File No. 2-34289, effective August 27, 1969, as Exhibit 2-B-27). 4-F-26* --Supplemental Indenture, dated as of September 1, 1969, supplementing said Mortgage (filed with Form S-7, File No. 2-36095, effective February 16, 1970, as Exhibit 2-B-39). 4-F-27* --Supplemental Indenture, dated as of March 1, 1970, supplementing said Mortgage (filed with Form S-7, File No. 2-37953, effective July 28, 1970, as Exhibit 2-B-42). 4-F-28* --Supplemental Indenture, dated as of August 1, 1970, supplementing said Mortgage (filed with Form S-7, File No. 2-39451, effective March 4, 1971, as Exhibit 2-B-28). 4-F-29* --Supplemental Indenture, dated as of March 1, 1971, supplementing said Mortgage (filed with Form S-7, File No. 2-42404, effective December 7, 1971, as Exhibit 2-B-29). 4-F-30* --Supplemental Indenture, dated as of December 1, 1971, supplementing said Mortgage (filed with Form S-7, File No. 2-43122, effective March 7, 1972, as Exhibit 2-B-30). 4-F-31* --Supplemental Indenture, dated as of April 1, 1972, supplementing said Mortgage (filed with Form S-7, File No. 2-46208, effective November 20, 1972, as Exhibit 2-B-31). 4-F-32* --Supplemental Indenture, dated as of December 1, 1972, supplementing said Mortgage (filed with Form S-7, File No. 2-48058, effective June 5, 1973, as Exhibit 2-B-32). 4-F-33* --Supplemental Indenture, dated as of June 1, 1973, supplementing said Mortgage (filed with Form S-7, File No. 2-49333, effective November 5, 1973, as Exhibit 2-B-33). 4-F-34* --Supplemental Indenture, dated as of November 1, 1973, supplementing said Mortgage (filed with Form S-7, File No. 2-50493, effective April 25, 1974, as Exhibit 2-B-34). 4-F-35* --Supplemental Indenture, dated as of May 1, 1974, supplementing said Mortgage (filed with Form S-7, File No. 2-52669, effective February 11, 1975, as Exhibit 2-B-35). 4-F-36* --Supplemental Indenture, dated as of February 1, 1975, supplementing said Mortgage (filed with Form S-7, File No. 2-57118, effective October 5, 1976, as Exhibit 2-B-36). 4-F-37* --Supplemental Indenture, dated as of July 1, 1975, supplementing said Mortgage (filed with Form S-7, File No. 2-57118, effective October 5, 1976, as Exhibit 2-B-37). 4-F-38* --Supplemental Indenture, dated as of October 1, 1976, supplementing said Mortgage (filed with Form S-7, File No. 2-59494, effective August 10, 1977, as Exhibit 2-B-38). 4-F-39* --Supplemental Indenture, dated as of September 1, 1977, supplementing said Mortgage (filed with Form S-7, File No. 2-61995, effective July 26, 1978, as Exhibit 2-B-39). 4-F-40* --Supplemental Indenture, dated as of August 1, 1978, supplementing said Mortgage (filed with Form S-7, File No. 2-64541, effective June 7, 1979, as Exhibit 2-B-40). 4-F-41* --Supplemental Indenture, dated as of June 1, 1979, supplementing said Mortgage (filed with Form S-7, File No. 2-65371, effective October 2, 1979, as Exhibit 2-B-41). 4-F-42* --Supplemental Indenture, dated as of October 1, 1979, supplementing said Mortgage (filed with Form S-7, File No. 2-66659, effective March 12, 1980, as Exhibit 2-B-42).
Exhibit Number Exhibit ------- ------- 4-F-43* --Supplemental Indenture, dated as of March 1, 1980, supplementing said Mortgage (filed with Form S-16, File No. 2-68571, effective August 19, 1980, as Exhibit 2-B-43). 4-F-44* --Supplemental Indenture, dated as of August 1, 1980, supplementing said Mortgage (filed with Form S-16, File No. 2-75951, effective February 23, 1982, as Exhibit 2-B-44). 4-F-45* --Supplemental Indenture, dated as of March 1, 1982, supplementing said Mortgage (filed with Form S-3, File No. 2-78882, effective August 30, 1982, as Exhibit 4-B-45). 4-F-46* --Supplemental Indenture, dated as of September 1, 1982, supplementing said Mortgage (filed with Form S-3, File No. 2-95931, effective April 1, 1985, as Exhibit 4-B-46). 4-F-47* --Supplemental Indenture, dated as of May 1, 1983, supplementing said Mortgage (filed with Form S-3, File No. 2-95931, effective April 1, 1985, as Exhibit 4-B-47). 4-F-48* --Supplemental Indenture, dated as of September 1, 1983, supplementing said Mortgage (filed with Form S-3, File No. 2-95931, effective April 1, 1985, as Exhibit 4-B-48). 4-F-49* --Supplemental Indenture, dated as of September 1, 1984, supplementing said Mortgage (filed with Form S-3, File No. 2-95931, effective April 1, 1985, as Exhibit 4-B-49). 4-F-50* --Supplemental Indenture, dated as of March 1, 1985, supplementing said Mortgage (filed with Form S-3, File No. 2-95931, effective April 1, 1985, as Exhibit 4-B-50). 4-F-51* --Supplemental Indenture, dated as of December 1, 1985, supplementing said Mortgage (filed with Form S-3, File No. 33-5163, effective May 2, 1986, as Exhibit 4-B-51). 4-F-52* --Supplemental Indenture, dated as of April 1, 1986, supplementing said Mortgage (filed with Form S-3, File No. 33-5163, effective May 2, 1986, as Exhibit 4-B-52). 4-F-53* --Supplemental Indenture, dated as of May 1, 1986, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1986, File No. 1-4928, as Exhibit 4-B-53). 4-F-54* --Supplemental Indenture, dated as of June 1, 1986, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1986, File No. 1-4928, as Exhibit 4-B-54). 4-F-55* --Supplemental Indenture, dated as of February 1, 1987, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1986, File No. 1-4928, as Exhibit 4-B-55). 4-F-56* --Supplemental Indenture, dated as of February 15, 1987, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1986, File No. 1-4928, as Exhibit 4-B-56). 4-F-57* --Supplemental Indenture, dated as of March 1, 1987, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1986, File No. 1-4928, as Exhibit 4-B-57). 4-F-58* --Supplemental Indenture, dated as of October 1, 1987, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1987, File No. 1-4928, as Exhibit 4-B-58). 4-F-59* --Supplemental Indenture, dated as of February 1, 1990, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1989, File No. 1-4928, as Exhibit 4-B-59). 4-F-60* --Supplemental Indenture, dated as of March 1, 1990, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1990, File No. 1-4928, as Exhibit 4-B-60). 4-F-61* --Supplemental Indenture, dated as of May 1, 1990, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1990, File No. 1-4928, as Exhibit 4-B-61). 4-F-62* --Supplemental Indenture, dated as of May 15, 1990, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1990, File No. 1-4928, as Exhibit 4-B-62). 4-F-63* --Supplemental Indenture, dated as of March 1, 1991, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1990, File No. 1-4928, as Exhibit 4-B-63).
Exhibit Number Exhibit ------- ------- 4-F-64* --Supplemental Indenture, dated as of July 1, 1991, supplementing said Mortgage (filed with Form S-3, File No. 33-45501, effective February 13, 1992, as Exhibit 4-B-64). 4-F-65* --Supplemental Indenture, dated as of December 1, 1991, supplementing said Mortgage (filed with Form S-3, File No. 33-44501, effective February 13, 1992, as Exhibit 4-B-65). 4-F-66* --Supplemental Indenture, dated as of March 1, 1992, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1991, File No. 1-4928, as Exhibit 4-B-66). 4-F-67* --Supplemental Indenture, dated as of June 1, 1992, supplementing said Mortgage (filed with Form S-3, File No. 33-50592, effective August 11, 1992, as Exhibit 4-B-67). 4-F-68* --Supplemental Indenture, dated as of July 1, 1992, supplementing said Mortgage (filed with Form S-3, File No. 33-50592, effective August 11, 1992, as Exhibit 4-B-68). 4-F-69* --Supplemental Indenture, dated as of September 1, 1992, supplementing said Mortgage (filed with Form S-3, File No. 33-53308, effective November 24, 1992, as Exhibit 4-B-69). 4-F-70* --Supplemental Indenture, dated as of February 1, 1993, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1992, File No. 1-4928, as Exhibit 4-B-70). 4-F-71* --Supplemental Indenture, dated as of March 1, 1993, supplementing said Mortgage (filed with Form S-3, No. 33-59448, effective March 17, 1993, as Exhibit 4-B-71). 4-F-72* --Supplemental Indenture, dated as of April 1, 1993, supplementing said Mortgage (filed with Form S-3, File No. 33-50543, effective October 20, 1993, as Exhibit 4-B-72). 4-F-73* --Supplemental Indenture, dated as of May 1, 1993, supplementing said Mortgage (filed with Form S-3, File No. 33-50543, effective October 20, 1993, as Exhibit 4-B-73). 4-F-74* --Supplemental Indenture, dated as of June 1, 1993, supplementing said Mortgage (filed with Form S-3, File No. 33-50543, effective October 20, 1993, as Exhibit 4-B-74). 4-F-75* --Supplemental Indenture, dated as of July 1, 1993, supplementing said Mortgage (filed with Form S-3, File No. 33-50543, effective October 20, 1993, as Exhibit 4-B-75). 4-F-76* --Supplemental Indenture, dated as of August 1, 1993, supplementing said Mortgage (filed with Form S-3, File No. 33-50543, effective October 20, 1993, as Exhibit 4-B-76). 4-F-77* --Supplemental Indenture, dated as of August 20, 1993, supplementing said Mortgage (filed with Form S-3, File No. 33-50543, effective October 20, 1993, as Exhibit 4-B-77). 4-F-78* --Supplemental Indenture, dated as of May 1, 1994, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1994, File No. 1-4928, as Exhibit 4-B-78). 4-F-79* --Supplemental Indenture, dated as of November 1, 1994, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1994, File No. 1-4928, as Exhibit 4-B-79). 4-F-80* --Supplemental Indenture, dated as of August 1, 1995, supplementing said Mortgage (filed with Form 10-K for the year ended December 31, 1995, File No. 1-4928, as Exhibit 4-B-80). 4-F-81 --Form of Supplemental Indenture relating to Bonds. 4-F-82* --Instrument of Resignation, Appointment and Acceptance among Duke Energy Corporation, Morgan Guaranty Trust Company of New York, as Trustee, and Chemical Bank (now The Chase Manhattan Bank), as Successor Trustee, dated as of August 30, 1994 (filed with Form 10-K for the year ended December 31, 1994, File No. 1-4928, as Exhibit 4- C). 4-G-1* --Certificate of Trust of Duke Energy Capital Trust III (filed with Form S-3, File No. 333-79065, effective June 4, 1999, as Exhibit 4.3-B). 4-G-2* --Certificate of Trust of Duke Energy Capital Trust IV (filed with Form S-3, File No. 333-79065, effective June 4, 1999, as Exhibit 4.3-C).
Exhibit Number Exhibit ------- ------- 4-G-3* --Certificate of Trust of Duke Energy Capital Trust V (filed with Form S-3, File No. 333-52204, effective December 26, 2000, as Exhibit 4-G- 3). 4-H-1* --Trust Agreement of Duke Energy Capital Trust III (filed with Form S- 3, File No. 333-79065, effective June 4, 1999, as Exhibit 4.4-B). 4-H-2* --Trust Agreement of Duke Energy Capital Trust IV (filed with Form S- 3, File No. 333-79065, effective June 4, 1999, as Exhibit 4.4-C). 4-H-3* --Trust Agreement of Duke Energy Capital Trust V (filed with Form S-3, File No. 333-52204, effective December 26, 2000, as Exhibit 4-H-3). 4-I --Form of Amended and Restated Trust Agreement (Agreements for Duke Energy Capital Trust III, Duke Energy Capital Trust IV and Duke Energy Capital Trust V will be substantially identical except for names and dates). 4-J --Form of Senior Note (included in Exhibit 4-D-7 above). 4-K --Form of Junior Subordinated Note (included in Exhibits 4-E-4 and 4- E-5 above). 4-L --Form of Bond (included in Exhibit 4-F-81 above). 4-M --Form of Trust Preferred Security for Duke Energy Capital Trust III, Duke Energy Capital Trust IV and Duke Energy Capital Trust V (included in Exhibit 4-I above). 4-N --Form of Guarantee Agreement (Agreements for Duke Energy Capital Trust III, Duke Energy Capital Trust IV and Duke Energy Capital Trust V will be substantially identical except for names and dates). 4-O --Form of Agreement as to Expenses and Liabilities (included in Exhibit 4-I above). 5-A --Opinion of Ellen T. Ruff, Esq. 5-B --Opinion of Dewey Ballantine LLP. 5-C-1 --Opinion of Richards, Layton & Finger, P.A. relating to Duke Energy Capital Trust III. 5-C-2 --Opinion of Richards, Layton & Finger, P.A. relating to Duke Energy Capital Trust IV. 5-C-3 --Opinion of Richards, Layton & Finger, P.A. relating to Duke Energy Capital Trust V. 8 --Tax Opinion of Dewey Ballantine LLP. 12 --Computation of ratio of earnings to fixed charges. 23-A --Independent Auditors' Consent. 23-B --Consent of Ellen T. Ruff, Esq. (included in Exhibit 5-A above). 23-C-1 --Consent of Dewey Ballantine LLP (included in Exhibit 5-B above). 23-C-2 --Consent of Dewey Ballantine LLP (included in Exhibit 8 above). 23-D --Consent of Richards, Layton & Finger, P.A. (included in Exhibits 5- C-1, 5-C-2 and 5-C-3 above). 24-A --Power of Attorney of certain officers and directors of Duke Energy Corporation. 24-B --Resolution of Duke Energy Corporation regarding Power of Attorney. 25-A --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Senior Indenture Trustee. 25-B --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Subordinated Indenture Trustee. 25-C --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Bond Trustee.
Exhibit Number Exhibit ------- ------- 25-D-1 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Property Trustee under Duke Energy Capital Trust III. 25-D-2 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Property Trustee under Duke Energy Capital Trust IV. 25-D-3 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Property Trustee under Duke Energy Capital Trust V. 25-E-1 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Guarantee Trustee with respect to Duke Energy Capital Trust III. 25-E-2 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Guarantee Trustee with respect to Duke Energy Capital Trust IV. 25-E-3 --Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank, as Guarantee Trustee with respect to Duke Energy Capital Trust V.
- -------- * previously filed EX-1.A 2 dex1a.txt UNDERWRITING AGREEMENT, SENIOR NOTES Exhibit 1-A $ DUKE ENERGY CORPORATION SERIES % SENIOR NOTES DUE UNDERWRITING AGREEMENT , Ladies and Gentlemen: 1. Introductory. DUKE ENERGY CORPORATION, a North Carolina corporation ("Corporation"), proposes, subject to the terms and conditions stated herein, to issue and sell $ aggregate principal amount of Series % Senior Notes due ("Notes"), to be issued pursuant to the provisions of a Senior Indenture, dated as of September 1, 1998, as the same may be amended and supplemented by supplemental indentures (including the supplemental indenture to be dated as of , , relating to the Notes), between the Corporation and The Chase Manhattan Bank (the "Indenture"), and hereby agrees with the several Underwriters hereinafter named in Schedule A (the "Underwriters") as follows: 2. Representations and Warranties of the Corporation. The Corporation represents and warrants to, and agrees with, the several Underwriters that: (a) A registration statement (No. 333- , which also constitutes a post- effective amendment to a previous registration statement No. 333- 52204), including a combined prospectus, relating to the Notes and certain other securities has been filed with the Securities and Exchange Commission ("Commission") under the Securities Act of 1933, as amended (the "1933 Act"). Such registration statement and any post- effective amendment thereto, each in the form heretofore delivered to you, and, excluding exhibits thereto but including all documents incorporated by reference in the prospectus contained therein, for each of the other Underwriters, have been declared effective by the Commission in such form, and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in such registration statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the 1933 Act ("1933 Act Regulations") being hereinafter called a "Preliminary Prospectus"; the various parts of such registration statement, including all exhibits thereto and including the documents incorporated by reference in the prospectus contained in the registration statement at the time such part of the registration statement became effective, each as amended at the time such part of the registration statement became effective, being hereinafter called the "Registration Statement"; and the final prospectus relating to the Notes, in the form first filed pursuant to Rule 424(b) under the 1933 Act Regulations, being hereinafter called the "Prospectus"; and any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; and any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Corporation filed pursuant to Section 13(a) or 15(d) of the 1934 Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement). (b) The Registration Statement conforms and the Prospectus will conform in all material respects to the requirements of the 1933 Act and the 1933 Act Regulations, and the Registration Statement does not and the Prospectus will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the Corporation makes no warranty or representation to the Underwriters with respect to any statements or omissions made in reliance upon and in conformity with written information furnished to the Corporation by any Underwriter specifically for use therein or any information set forth in the Prospectus under the caption "Description of the Series Senior Notes--Book-Entry Only Issuance--The Depository Trust Company." (c) The documents incorporated by reference in the Prospectus, at the time they were filed with the Commission, complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the "1934 Act Regulations"), and, when read together with the other information in the Prospectus, do not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and any documents deemed to be incorporated by reference in the Prospectus will, when they are filed with the Commission, comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations, and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the Corporation makes no warranty or representation to the Underwriters with respect to any statements or omissions made in reliance upon and in conformity with written information furnished to the Corporation by any Underwriter specifically for use therein or any information set forth in the Prospectus under the caption "Description of the Series Senior Notes--Book-Entry Only Issuance--The Depository Trust Company." (d) The compliance by the Corporation with all of the provisions of this Agreement has been duly authorized by all necessary corporate action and the consummation of the transactions herein contemplated will not conflict with or result in a breach or violation of any of the 2 terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Corporation or any of its Principal Subsidiaries (as hereinafter defined) is a party or by which any of them or their respective property is bound or to which any of their property or assets is subject that would have a material adverse effect on the business, financial condition or results of operations of the Corporation and its subsidiaries, taken as a whole, nor will such action result in any violation of the provisions of the Restated Articles of Incorporation or By-Laws of the Corporation or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Corporation or its Principal Subsidiaries or any of their respective property that would have a material adverse effect on the business, financial condition or results of operations of the Corporation and its subsidiaries, taken as a whole; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the consummation by the Corporation of the transactions contemplated by this Agreement, except for authorization by the North Carolina Utilities Commission and The Public Service Commission of South Carolina and the registration under the 1933 Act of the Notes, qualification under the Trust Indenture Act of 1939 and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Notes by the Underwriters. (e) This Agreement has been duly authorized, executed and delivered by the Corporation. (f) Each of Duke Capital Corporation, PanEnergy Corp, Duke Energy Natural Gas Corporation and Texas Eastern Transmission Corporation, each a Delaware corporation (and herein called a "Principal Subsidiary"), is a direct or indirect wholly owned subsidiary of the Corporation. 3. Purchase, Sale and Delivery of Notes. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Corporation agrees to sell to the Underwriters, and the Underwriters agree, severally and not jointly, to purchase from the Corporation, at a purchase price of % of the principal amount of the Notes, the respective principal amount of Notes set forth opposite the names of the Underwriters in Schedule A hereto plus the respective principal amount of additional Notes which each such Underwriter may become obligated to purchase pursuant to the provisions of Section 8 hereof. Payment of the purchase price for the Notes to be purchased by the Underwriters shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue of the Americas, New York, N.Y., or at such other place as shall be mutually agreed upon by you and the Corporation, at 10:00 a.m., New York City time, on , (unless postponed in accordance with the provisions of Section 8) or such other time and date as shall be agreed upon in writing by you and the Corporation (the "Closing Date"). Payment shall be made to the Corporation by wire transfer in immediately available funds, payable to the order of the Corporation against delivery of the Notes, in fully registered form, to you or upon your order. The Notes shall be delivered in the form of one or more global certificates in aggregate denomination equal to the aggregate principal amount of the Notes upon original issuance and registered in the name of Cede & Co., as nominee for The Depository Trust Company ("DTC"). 3 4. Offering by the Underwriters. It is understood that the several Underwriters propose to offer the Notes for sale to the public as set forth in the Prospectus. 5. Covenants of the Corporation. The Corporation covenants and agrees with the several Underwriters that: (a) The Corporation will advise you promptly of the filing of any amendment (and effectiveness thereof) or supplementation of the Registration Statement or the Prospectus, of the filing of any Rule 462(b) registration statement and of the institution by the Commission of any stop order proceedings in respect of the Registration Statement, and will use its best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued. (b) If at any time when a prospectus relating to the Notes is required to be delivered under the 1933 Act any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the 1933 Act, the Corporation promptly will prepare and file with the Commission an amendment, supplement or an appropriate document pursuant to Section 13 or 14 of the 1934 Act which will correct such statement or omission or which will effect such compliance. (c) The Corporation, during the period when a prospectus relating to the Notes is required to be delivered under the 1933 Act, will timely file all documents required to be filed with the Commission pursuant to Section 13 or 14 of the 1934 Act. (d) The Corporation will make generally available to its security holders, in each case as soon as practicable but not later than 60 days after the close of the period covered thereby, earnings statements (in form complying with the provisions of Section 11(a) of the 1933 Act, which need not be certified by independent certified public accountants unless required by the 1933 Act) covering (i) a twelve-month period beginning not later than the first day of the Corporation's fiscal quarter next following the effective date of the Registration Statement and (ii) a twelve-month period beginning not later than the first day of the Corporation's fiscal quarter next following the date of this Agreement. (e) The Corporation will furnish to you, without charge, copies of the Registration Statement ( of which will be signed and will include all exhibits other than those incorporated by reference), the Prospectus, and all amendments and supplements to such documents, in each case as soon as available and in such quantities as you reasonably request. (f) The Corporation will arrange or cooperate in arrangements for the qualification of the Notes for sale under the laws of such jurisdictions as you designate and will continue such qualifications in effect so long as required for the distribution; provided, however, that the Corporation shall not be required to qualify as a foreign corporation or to file any general consents to service of process under the laws of any state where it is not now so subject. 4 (g) The Corporation will pay all expenses incident to the performance of its obligations under this Agreement including (i) the printing and filing of the Registration Statement and the printing of this Agreement and any Blue Sky Survey, (ii) the issuance and delivery of the Notes as specified herein, (iii) the fees and disbursements of counsel for the Underwriters in connection with the qualification of the Notes under the securities laws of any jurisdiction in accordance with the provisions of Section 5(f) and in connection with the preparation of the Blue Sky Survey, such fees not to exceed $5,000, (iv) the printing and delivery to the Underwriters, in quantities as hereinabove referred to, of copies of the Registration Statement and any amendments thereto, and of the Prospectus and any amendments or supplements thereto, (v) any fees charged by independent rating agencies for rating the Notes, (vi) any fees and expenses in connection with the listing of the Notes on the New York Stock Exchange, (vii) any filing fee required by the National Association of Securities Dealers, Inc., (viii) the costs of any depository arrangements for the Notes with DTC or any successor depositary and (ix) the costs and expenses of the Corporation relating to investor presentations on any "road show" undertaken in connection with the marketing of the offering of the Notes, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Corporation, travel and lodging expenses of and officers of the Corporation and any such consultants, and the cost of any aircraft chartered in connection with the road show; provided, however, the Underwriters shall reimburse a portion of the costs and expenses referred to in this clause (ix). 6. Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Notes will be subject to the accuracy of the representations and warranties on the part of the Corporation herein, to the accuracy of the statements of officers of the Corporation made pursuant to the provisions hereof, to the performance by the Corporation of its obligations hereunder and to the following additional conditions precedent: (a) Prior to the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Corporation or you, shall be threatened by the Commission. (b) Prior to the Closing Date, the rating assigned by Moody's Investors Service, Inc. or Standard & Poor's Ratings Services to (i) any debt securities or preferred stock of the Corporation or (ii) any trust preferred securities of Duke Energy Capital Trust I or Duke Energy Capital Trust II as of the date of this Agreement shall not have been lowered. (c) Since the respective most recent dates as of which information is given in the Prospectus and up to the Closing Date, there shall not have been any material adverse change in the condition of the Corporation, financial or otherwise, except as reflected in or contemplated by the Prospectus, and, since such dates and up to the Closing Date, there shall not have been any material transaction entered into by the Corporation other than transactions contemplated by the Prospectus and transactions in the ordinary course of business, the effect of which in your reasonable judgment is so material and adverse as to make it 5 impracticable or inadvisable to proceed with the public offering or the delivery of the Notes on the terms and in the manner contemplated by the Prospectus. (d) You shall have received an opinion of Ellen T. Ruff, Esq., Senior Vice President and General Counsel of the Corporation, dated the Closing Date, to the effect that: (i) The Corporation has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of North Carolina, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement. (ii) Each of the Corporation and the Principal Subsidiaries is duly qualified to do business in each jurisdiction in which the ownership or leasing of its property or the conduct of its business requires such qualification, except where the failure to so qualify, considering all such cases in the aggregate, does not have a material adverse effect on the business, properties, financial position or results of operations of the Corporation and its subsidiaries taken as a whole. (iii) The Registration Statement has become effective under the 1933 Act, and, to the best of the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or threatened under the 1933 Act. (iv) The descriptions in the Registration Statement and the Prospectus of legal or governmental proceedings are accurate and fairly present the information required to be shown, and such counsel does not know of any litigation or any legal or governmental proceeding instituted or threatened against the Corporation or any of its subsidiaries or any of their respective properties that would be required to be disclosed in the Prospectus and is not so disclosed. (v) This Agreement has been duly authorized, executed and delivered by the Corporation. (vi) The performance by the Corporation of this Agreement and the Indenture will not contravene any of the provisions of the Restated Articles of Incorporation or By-Laws of the Corporation or any statute or any order, rule or regulation of which such counsel is aware of any court or governmental agency or body having jurisdiction over the Corporation or any of its Principal Subsidiaries or any of their respective property, nor will such action conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which the Corporation or any of its Principal Subsidiaries is a party or by which any of them or their respective property is bound or to which any of their property or assets is subject which affects in a material way the Corporation's ability to perform its obligations under this Agreement and the Indenture. 6 (vii) The North Carolina Utilities Commission and The Public Service Commission of South Carolina have issued appropriate orders with respect to the issuance and sale of the Notes in accordance with this Agreement, and, to the best of the knowledge of such counsel, such orders are still in effect; the issuance and sale of the Notes to the Underwriters are in conformity with the terms of such orders; and no other authorization, approval or consent of any other governmental body (other than in connection or compliance with the provisions of the securities or Blue Sky laws of any jurisdiction) is legally required for the issuance and sale of the Notes pursuant to this Agreement. (viii) The Indenture has been duly authorized, executed and delivered by the Corporation and, assuming the due authorization, execution and delivery thereof by The Chase Manhattan Bank, as Trustee, constitutes a valid and legally binding instrument of the Corporation, enforceable against the Corporation in accordance with its terms, subject to the qualifications that the enforceability of the Corporation's obligations under the Indenture may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). (ix) The Notes have been duly authorized and executed by the Corporation and, when authenticated by The Chase Manhattan Bank, as Trustee, in the manner provided in the Indenture and delivered against payment therefor, will constitute valid and legally binding obligations of the Corporation enforceable against the Corporation in accordance with their terms, subject to the qualifications that the enforceability of the Corporation's obligations under the Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), and are entitled to the benefits afforded by the Indenture in accordance with the terms of the Indenture and the Notes. Such counsel shall also state that nothing has come to her attention that has caused her to believe that the Registration Statement as of the date of effectiveness under the 1933 Act and the Prospectus as of the date it was filed with, or transmitted for filing to, the Commission, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus as of the date it was filed with, or transmitted for filing to, the Commission and at the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Such counsel may also state that, except as otherwise expressly provided in such opinion, she does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in or incorporated by reference into the Registration Statement and the Prospectus and does not express any opinion or belief as to the financial statements or other financial data contained in or incorporated by 7 reference into the Registration Statement and the Prospectus, the statement of the eligibility and qualification of the Trustee or as to the information set forth in the Prospectus under the caption "Description of the Series Senior Notes--Book-Entry Only Issuance--The Depository Trust Company." In rendering the foregoing opinion, such counsel may state that she expresses no opinion as to the laws of any jurisdiction other than North Carolina and may rely on the opinion of Austin, Lewis & Rogers 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 Dewey Ballantine LLP, counsel to the Corporation, dated the Closing Date, with respect to the matters set forth in (i), (iii), (v) through (ix) of Section 6(d) and to the further effect that: (i) Each of the Principal Subsidiaries has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus. (ii) The Corporation is not an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended. (iii) The Corporation is not a holding company under the Public Utility Holding Company Act of 1935, as amended. (iv) The Indenture is duly qualified under the Trust Indenture Act of 1939. (v) The Registration Statement as of the date of effectiveness under the 1933 Act and the Prospectus as of the date it was filed with, or transmitted for filing to, the Commission complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations; and nothing has come to their attention that would lead them to believe that the Registration Statement as of the date of effectiveness under the 1933 Act (or if an amendment to such Registration Statement or an annual report on Form 10-K has been filed by the Corporation with the Commission subsequent to the effectiveness of the Registration Statement, then at the time of the most recent such filing) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus as of the date it was filed with, or transmitted for filing to, the Commission and at the Closing Date contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such opinion may state that such counsel do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in or incorporated by reference into the Registration Statement and Prospectus except as otherwise 8 expressly provided in such opinion and do not express any opinion or belief as to the financial statements or other financial data contained in or incorporated by reference into the Registration Statement and the Prospectus, the statement of the eligibility and qualification of the Trustee or as to the information set forth in the Prospectus under the caption "Description of the Series Senior Notes--Book-Entry Only Issuance--The Depository Trust Company." (vi) The statements made in the Prospectus under the captions "Description of the Senior Notes" and "Description of the Series Senior Notes," insofar as they purport to summarize provisions of documents specifically referred to therein, fairly present the information called for with respect thereto by Form S-3. (vii) No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the issue and sale of the Notes or the consummation by the Corporation of the transactions contemplated by this Agreement or the Indenture, except for authorization by the North Carolina Utilities Commission and The Public Service Commission of South Carolina and such as have been obtained under the 1933 Act and the Trust Indenture Act of 1939 and such consents, approvals, authorizations, orders, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Notes by the Underwriters. In rendering the foregoing opinion or opinions, Dewey Ballantine LLP may state that such opinion or opinions are limited to the Federal laws of the United States, the laws of the State of New York and the General Corporation Law of the State of Delaware, and that they are relying on the opinion of Ellen T. Ruff, Esq. as to matters of North Carolina law and on the opinion of Austin, Lewis & Rogers of Columbia, South Carolina as to matters of South Carolina law. In addition, such counsel may state that they have relied as to certain factual matters on information obtained from public officials, officers of the Corporation and other sources believed by them to be responsible and that the signatures on all documents examined by them are genuine, assumptions which such counsel have not independently verified. (f) You shall have received an opinion of , counsel for the Underwriters, dated the Closing Date, with respect to the incorporation of the Corporation, the validity of the Notes, the Registration Statement and the Prospectus, as amended or supplemented, and such other related matters as you may require, and the Corporation shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. In giving their opinion, may rely on the opinion of Ellen T. Ruff, Esq. as to matters of North Carolina law and on the opinion of Austin, Lewis & Rogers of Columbia, South Carolina as to matters of South Carolina law. (g) On or after the date hereof, there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally or of the securities of the Corporation, Duke Energy Capital Trust I or Duke Energy Capital Trust II on the New York Stock Exchange; or (ii) a general moratorium on commercial banking activities in 9 New York declared by either Federal or New York State authorities; or (iii) the outbreak or material escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war if the effect of any such event specified in this subsection (g) in your reasonable judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Notes on the terms and in the manner contemplated in the Prospectus. In such event there shall be no liability on the part of any party to any other party except as otherwise provided in Section 7 hereof and except for the expenses to be borne by the Corporation as provided in Section 5(g) hereof. (h) You shall have received a certificate of the Chairman of the Board, the President, any Vice President, the Secretary or an Assistant Secretary and any financial or accounting officer of the Corporation, dated the Closing Date, in which such officers, to the best of their knowledge after reasonable investigation, shall state that the representations and warranties of the Corporation in this Agreement are true and correct as of the Closing Date, that the Corporation has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Date, that the conditions specified in Section 6(b) and Section 6(c) have been satisfied, and that no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are threatened by the Commission. (i) On the date of this Agreement, you shall have received a letter dated the date hereof, in form and substance satisfactory to you, from the Corporation's independent public accountants, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus as of a specified date not more than three business days prior to the date of this Agreement. (j) At the Closing Date you shall have received from the Corporation's independent public accountants a letter, dated the Closing Date, to the effect that such accountants reaffirm the statements made in the letter furnished pursuant to paragraph (i) of this Section 6, except that the specified date referred to shall be a date not more than three business days prior to the Closing Date. The Corporation will furnish you with such conformed copies of such opinions, certificates, letters and documents as you reasonably request. 7. Indemnification. (a) The Corporation agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act, as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the prospectus constituting a part of the Registration Statement in the form in which it became effective or the Prospectus (or any amendment or supplement thereto) or 10 the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with written information furnished to the Corporation by any Underwriter through you expressly for use in the Registration Statement (or any amendment thereto) or such Preliminary Prospectus, such prospectus, or the Prospectus (or any amendment or supplement thereto); (ii) against any and all loss, liability, claim, damage and expense whatsoever to the extent of the aggregate amount paid in settlement of any litigation, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Corporation; and (iii) against any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) of this Section 7. In no case shall the Corporation be liable under this indemnity agreement with respect to any claim made against any Underwriter or any such controlling person unless the Corporation shall be notified in writing of the nature of the claim within a reasonable time after the assertion thereof, but failure so to notify the Corporation shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. The Corporation shall be entitled to participate at its own expense in the defense, or, if it so elects, within a reasonable time after receipt of such notice, to assume the defense of any suit brought to enforce any such claim, but if it so elects to assume the defense, such defense shall be conducted by counsel chosen by it and approved by the Underwriter or Underwriters or controlling person or persons, or defendant or defendants in any suit so brought, which approval shall not be unreasonably withheld. In any such suit, any Underwriter or any such controlling person shall have the right to employ its own counsel, but the fees and expenses of such counsel shall be at the expense of such Underwriter or such controlling person unless (i) the Corporation and such Underwriter shall have mutually agreed to the employment of such counsel, or (ii) the named parties to any such action (including any impleaded parties) include both such Underwriter or such controlling person and the Corporation and such Underwriter or such controlling person shall have been advised by such counsel that a conflict of interest between the Corporation and such Underwriter or such controlling person may arise and for this reason it is not desirable for the same counsel to represent both the indemnifying party and also the indemnified party (it being understood, however, that the Corporation shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys for all such Underwriters and all such controlling persons, which firm shall be designated in writing by you). The Corporation agrees to notify you within a reasonable time of the assertion of any claim against it, any of its officers or directors or any person who controls the 11 Corporation within the meaning of Section 15 of the 1933 Act, in connection with the sale of the Notes. (b) Each Underwriter severally agrees that it will indemnify and hold harmless the Corporation, its directors and each of the officers of the Corporation who signed the Registration Statement and each person, if any, who controls the Corporation within the meaning of Section 15 of the 1933 Act to the same extent as the indemnity contained in subsection (a) of this Section, but only with respect to statements or omissions made in the Registration Statement (or any amendment thereto) or any Preliminary Prospectus, such prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Corporation by such Underwriter through you expressly for use in the Registration Statement (or any amendment thereto), such Preliminary Prospectus, such prospectus or the Prospectus (or any amendment or supplement thereto). In case any action shall be brought against the Corporation or any person so indemnified based on the Registration Statement (or any amendment thereto) or such Preliminary Prospectus, such prospectus or the Prospectus (or any amendment or supplement thereto) and in respect of which indemnity may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Corporation, and the Corporation and each person so indemnified shall have the rights and duties given to the Underwriters, by the provisions of subsection (a) of this Section. (c) No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) If the indemnification provided for in this Section 7 is unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses (or actions in respect thereof) that would otherwise have been indemnified under the terms of such indemnity, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Corporation on the one hand and the Underwriters on the other from the offering of the Notes. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Corporation on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses (or actions in respect thereof), as well as any other relevant equity considerations. The relative benefits received by the Corporation on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) 12 received by the Corporation bear to the total compensation received by the Underwriters in respect of the underwriting discount as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Corporation on the one hand or the Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Corporation and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses (or actions in respect thereof) referred to above in this Section shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Notes underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute are several in proportion to their respective underwriting obligations and not joint. 8. Default by One or More of the Underwriters. (a) If any Underwriter shall default in its obligation to purchase the Notes which it has agreed to purchase hereunder on the Closing Date, you may in your discretion arrange for you or another party or other parties to purchase such Notes on the terms contained herein. If within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such Notes, then the Corporation shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to you to purchase such Notes on such terms. In the event that, within the respective prescribed periods, you notify the Corporation that you have so arranged for the purchase of such Notes, or the Corporation notifies you that it has so arranged for the purchase of such Notes, you or the Corporation shall have the right to postpone such Closing Date for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Corporation agrees to file promptly any amendments to the Registration Statement or the Prospectus which may be required. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Notes. (b) If, after giving effect to any arrangements for the purchase of the Notes of a defaulting Underwriter or Underwriters by you or the Corporation as provided in subsection (a) above, the aggregate amount of such Notes which remains unpurchased does not exceed one- 13 tenth of the aggregate amount of all the Notes to be purchased at such Closing Date, then the Corporation shall have the right to require each non-defaulting Underwriter to purchase the amount of Notes which such Underwriter agreed to purchase hereunder at such Closing Date and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the amount of Notes which such Underwriter agreed to purchase hereunder) of the Notes of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. (c) If, after giving effect to any arrangements for the purchase of the Notes of a defaulting Underwriter or Underwriters by you or the Corporation as provided in subsection (a) above, the aggregate amount of such Notes which remains unpurchased exceeds one-tenth of the aggregate amount of all the Notes to be purchased at such Closing Date, or if the Corporation shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Notes of a defaulting Underwriter or Underwriters, then this Agreement shall thereupon terminate, without liability on the part of any non- defaulting Underwriter or the Corporation, except for the expenses to be borne by the Corporation as provided in Section 5(g) hereof and the indemnity and contribution agreement in Section 7 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 9. Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other statements of the Corporation or its officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter or the Corporation, or any of its officers or directors or any controlling person, and will survive delivery of and payment for the Notes. 10. Reliance on Your Acts. In all dealings hereunder, shall act on behalf of each of the Underwriters, and the Corporation shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by . 11. Notices. All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed or telecopied and confirmed to the Underwriters in care of Attn: , , , facsimile number ( ) - , or, if sent to the Corporation, will be mailed or telecopied and confirmed to it at 526 South Church Street, Charlotte, N.C. 28202, facsimile number (704) 382-1452, attention of David L. Hauser, Senior Vice President and Treasurer; provided, however, that any notice to an Underwriter pursuant to Section 7 hereof shall be sent by mail or telecopy to such Underwriter at its address or telecopy number set forth in its Underwriters' Questionnaire or telex constituting such Questionnaire, which address or telecopy number will be supplied to the Corporation by . Any such communications shall take effect upon receipt thereof. 12. Business Day. As used herein, the term "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business. 14 13. Successors. This Agreement shall inure to the benefit of and be binding upon the Underwriters and the Corporation and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons, officers and directors referred to in Section 7 and their respective successors, heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained; this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective successors and said controlling persons, officers and directors and their respective successors, heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Notes from any Underwriter shall be deemed to be a successor or assign by reason merely of such purchase. 14. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 15. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the choice of law or conflict of law principles thereof. 15 If the foregoing is in accordance with your understanding, kindly sign and return to us two counterparts hereof, and upon confirmation and acceptance by on behalf of each of the Underwriters, this letter and such confirmation and acceptance will become a binding agreement between the Corporation, on the one hand, and each of the Underwriters, on the other hand, in accordance with its terms. It is understood that confirmation and acceptance of this letter by on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement Among Underwriters, the form of which shall be submitted to the Corporation for examination, but without warranty on your part as to the authority of the signers thereof. Very truly yours, Duke Energy Corporation By:__________________________________ Name: Title: The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written. By: By:_______________________________________ Name: Title: On behalf of each of the Underwriters 16 SCHEDULE A
Principal Amount of Notes to be Underwriter Purchased - ----------- ---------------- $ ----- Total........................................................ $ =====
EX-1.B 3 dex1b.txt UNDERWRITING AGREEMT., JR. SUBORD. NOTES Exhibit 1-B $ DUKE ENERGY CORPORATION SERIES % JUNIOR SUBORDINATED NOTES DUE UNDERWRITING AGREEMENT ' Ladies and Gentlemen: 1. Introductory. DUKE ENERGY CORPORATION, a North Carolina corporation ("Corporation"), proposes, subject to the terms and conditions stated herein, to issue and sell $ aggregate principal amount of Series % Junior Subordinated Notes due ("Notes"), to be issued pursuant to the provisions of a Subordinated Indenture, dated as of December 1, 1997, as the same may be amended and supplemented by supplemental indentures (including the supplemental indenture to be dated as of , , relating to the Notes), between the Corporation and The Chase Manhattan Bank (the "Indenture"), and hereby agrees with the several Underwriters hereinafter named in Schedule A (the "Underwriters") as follows: 2. Representations and Warranties of the Corporation. The Corporation represents and warrants to, and agrees with, the several Underwriters that: (a) A registration statement (No. 333- , which also constitutes a post- effective amendment to a previous registration statement No. 333-52204, including a combined prospectus, relating to the Notes and certain other securities has been filed with the Securities and Exchange Commission ("Commission") under the Securities Act of 1933, as amended (the "1933 Act"). Such registration statement and any post-effective amendment thereto, each in the form heretofore delivered to you, and, excluding exhibits thereto but including all documents incorporated by reference in the prospectus contained therein, for each of the other Underwriters, have been declared effective by the Commission in such form, and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in such registration statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the 1933 Act ("1933 Act Regulations") being hereinafter called a "Preliminary Prospectus"; the various parts of such registration statement, including all exhibits thereto and including the documents incorporated by reference in the prospectus contained in the registration statement at the time such part of the registration statement became effective, each as amended at the time such part of the registration statement became effective, being hereinafter called the "Registration Statement"; and the final prospectus relating to the Notes, in the form first filed pursuant to Rule 424(b) under the 1933 Act Regulations, being hereinafter called the "Prospectus"; and any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; and any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Corporation filed pursuant to Section 13(a) or 15(d) of the 1934 Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement). (b) The Registration Statement conforms and the Prospectus will conform in all material respects to the requirements of the 1933 Act and the 1933 Act Regulations, and the Registration Statement does not and the Prospectus will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the Corporation makes no warranty or representation to the Underwriters with respect to any statements or omissions made in reliance upon and in conformity with written information furnished to the Corporation by any Underwriter specifically for use therein or any information set forth in the Prospectus under the caption "Description of the Series Junior Subordinated Notes - Book-Entry Only Issuance - The Depository Trust Company." (c) The documents incorporated by reference in the Prospectus, at the time they were filed with the Commission, complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the "1934 Act Regulations"), and, when read together with the other information in the Prospectus, do not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and any documents deemed to be incorporated by reference in the Prospectus will, when they are filed with the Commission, comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations, and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the Corporation makes no warranty or representation to the Underwriters with respect to any statements or omissions made in reliance upon and in conformity with written information furnished to the Corporation by any Underwriter specifically for use therein or any information set forth in the Prospectus under the caption "Description of the Series Junior Subordinated Notes - Book-Entry Only Issuance - The Depository Trust Company." (d) The compliance by the Corporation with all of the provisions of this Agreement has been duly authorized by all necessary corporate action and the consummation of the transactions herein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Corporation or any of its Principal Subsidiaries (as hereinafter defined) is a party or by which any of them or their respective property is bound or to which any of their property or assets is subject that would have a material adverse effect on the business, financial condition or results of operations of the Corporation and its subsidiaries, taken as a whole, nor will such action result in any violation of the provisions of the Restated Articles of Incorporation or By- Laws of the Corporation or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Corporation or its Principal Subsidiaries or any of their respective property that would have a material adverse effect on the business, financial condition or results of operations of the Corporation and its subsidiaries, taken as a whole; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the consummation by the Corporation of the transactions contemplated by this Agreement, except for authorization by the North Carolina Utilities Commission and The Public Service Commission of South Carolina and the registration under the 1933 Act of the Notes, qualification under the Trust Indenture Act of 1939 and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Notes by the Underwriters. (e) This Agreement has been duly authorized, executed and delivered by the Corporation. (f) Each of Duke Capital Corporation, PanEnergy Corp, Duke Energy Natural Gas Corporation and Texas Eastern Transmission Corporation, each a Delaware corporation (and herein called a "Principal Subsidiary"), is a direct or indirect wholly owned subsidiary of the Corporation. 3. Purchase, Sale and Delivery of Notes. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Corporation agrees to sell to the Underwriters, and the Underwriters agree, severally and not jointly, to purchase from the Corporation, at a purchase price of % of the principal amount of the Notes, the respective principal amount of Notes set forth opposite the names of the Underwriters in Schedule A hereto plus the respective principal amount of additional Notes which each such Underwriter may become obligated to purchase pursuant to the provisions of Section 8 hereof. Payment of the purchase price for the Notes to be purchased by the Underwriters shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue of the Americas, New York, N.Y., or at such other place as shall be mutually agreed upon by you and the Corporation, at 10:00 a.m., New York City time, on , (unless postponed in accordance with the provisions of Section 8) or such other time and date as shall be agreed upon in writing by you and the Corporation (the "Closing Date"). Payment shall be made to the Corporation by wire transfer in immediately available funds, payable to the order of the Corporation against delivery of the Notes, in fully registered form, to you or upon your order. The Notes shall be delivered in the form of one or more global certificates in aggregate denomination equal to the aggregate principal amount of the Notes upon original issuance and registered in the name of Cede & Co., as nominee for The Depository Trust Company ("DTC"). 2 4. Offering by the Underwriters. It is understood that the several Underwriters propose to offer the Notes for sale to the public as set forth in the Prospectus. 5. Covenants of the Corporation. The Corporation covenants and agrees with the several Underwriters that: (a) The Corporation will advise you promptly of the filing of any amendment (and effectiveness thereof) or supplementation of the Registration Statement or the Prospectus, of the filing of any Rule 462(b) registration statement and of the institution by the Commission of any stop order proceedings in respect of the Registration Statement, and will use its best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued. (b) If at any time when a prospectus relating to the Notes is required to be delivered under the 1933 Act any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the 1933 Act, the Corporation promptly will prepare and file with the Commission an amendment, supplement or an appropriate document pursuant to Section 13 or 14 of the 1934 Act which will correct such statement or omission or which will effect such compliance. (c) The Corporation, during the period when a prospectus relating to the Notes is required to be delivered under the 1933 Act, will timely file all documents required to be filed with the Commission pursuant to Section 13 or 14 of the 1934 Act. (d) The Corporation will make generally available to its security holders, in each case as soon as practicable but not later than 60 days after the close of the period covered thereby, earnings statements (in form complying with the provisions of Section 11(a) of the 1933 Act, which need not be certified by independent certified public accountants unless required by the 1933 Act) covering (i) a twelve-month period beginning not later than the first day of the Corporation's fiscal quarter next following the effective date of the Registration Statement and (ii) a twelve-month period beginning not later than the first day of the Corporation's fiscal quarter next following the date of this Agreement. (e) The Corporation will furnish to you, without charge, copies of the Registration Statement ( of which will be signed and will include all exhibits other than those incorporated by reference), the Prospectus, and all amendments and supplements to such documents, in each case as soon as available and in such quantities as you reasonably request. (f) The Corporation will arrange or cooperate in arrangements for the qualification of the Notes for sale under the laws of such jurisdictions as you designate and will continue such qualifications in effect so long as required for the distribution; provided, however, that the Corporation shall not be required to qualify as a foreign corporation or to file any general consents to service of process under the laws of any state where it is not now so subject. (g) The Corporation will pay all expenses incident to the performance of its obligations under this Agreement including (i) the printing and filing of the Registration Statement and the printing of this Agreement and any Blue Sky Survey, (ii) the issuance and delivery of the Notes as specified herein, (iii) the fees and disbursements of counsel for the Underwriters in connection with the qualification of the Notes under the securities laws of any jurisdiction in accordance with the provisions of Section 5(f) and in connection with the preparation of the Blue Sky Survey, such fees not to exceed $5,000, (iv) the printing and delivery to the Underwriters, in quantities as hereinabove referred to, of copies of the Registration Statement and any amendments thereto, and of the Prospectus and any amendments or supplements thereto, (v) any fees charged by independent rating agencies for rating the Notes, (vi) any fees and expenses in 3 connection with the listing of the Notes on the New York Stock Exchange, (vii) any filing fee required by the National Association of Securities Dealers, Inc., (viii) the costs of any depository arrangements for the Notes with DTC or any successor depositary and (ix) the costs and expenses of the Corporation relating to investor presentations on any "road show" undertaken in connection with the marketing of the offering of the Notes, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Corporation, travel and lodging expenses of and officers of the Corporation and any such consultants, and the cost of any aircraft chartered in connection with the road show; provided, however, the Underwriters shall reimburse a portion of the costs and expenses referred to in this clause (ix). 6. Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Notes will be subject to the accuracy of the representations and warranties on the part of the Corporation herein, to the accuracy of the statements of officers of the Corporation made pursuant to the provisions hereof, to the performance by the Corporation of its obligations hereunder and to the following additional conditions precedent: (a) Prior to the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Corporation or you, shall be threatened by the Commission. (b) Prior to the Closing Date, the rating assigned by Moody's Investors Service, Inc. or Standard & Poor's Ratings Services to (i) any debt securities or preferred stock of the Corporation or (ii) any trust preferred securities of Duke Energy Capital Trust I or Duke Energy Capital Trust II as of the date of this Agreement shall not have been lowered. (c) Since the respective most recent dates as of which information is given in the Prospectus and up to the Closing Date, there shall not have been any material adverse change in the condition of the Corporation, financial or otherwise, except as reflected in or contemplated by the Prospectus, and, since such dates and up to the Closing Date, there shall not have been any material transaction entered into by the Corporation other than transactions contemplated by the Prospectus and transactions in the ordinary course of business, the effect of which in your reasonable judgment is so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Notes on the terms and in the manner contemplated by the Prospectus. (d) You shall have received an opinion of Ellen T. Ruff, Esq., Senior Vice President and General Counsel of the Corporation, dated the Closing Date, to the effect that: (i) The Corporation has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of North Carolina, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement. (ii) Each of the Corporation and the Principal Subsidiaries is duly qualified to do business in each jurisdiction in which the ownership or leasing of its property or the conduct of its business requires such qualification, except where the failure to so qualify, considering all such cases in the aggregate, does not have a material adverse effect on the business, properties, financial position or results of operations of the Corporation and its subsidiaries taken as a whole. (iii) The Registration Statement has become effective under the 1933 Act, and, to the best of the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or threatened under the 1933 Act. 4 (iv) The descriptions in the Registration Statement and the Prospectus of legal or governmental proceedings are accurate and fairly present the information required to be shown, and such counsel does not know of any litigation or any legal or governmental proceeding instituted or threatened against the Corporation or any of its subsidiaries or any of their respective properties that would be required to be disclosed in the Prospectus and is not so disclosed. (v) This Agreement has been duly authorized, executed and delivered by the Corporation. (vi) The performance by the Corporation of this Agreement and the Indenture will not contravene any of the provisions of the Restated Articles of Incorporation or By-Laws of the Corporation or any statute or any order, rule or regulation of which such counsel is aware of any court or governmental agency or body having jurisdiction over the Corporation or any of its Principal Subsidiaries or any of their respective property, nor will such action conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which the Corporation or any of its Principal Subsidiaries is a party or by which any of them or their respective property is bound or to which any of their property or assets is subject which affects in a material way the Corporation's ability to perform its obligations under this Agreement and the Indenture. (vii) The North Carolina Utilities Commission and The Public Service Commission of South Carolina have issued appropriate orders with respect to the issuance and sale of the Notes in accordance with this Agreement, and, to the best of the knowledge of such counsel, such orders are still in effect; the issuance and sale of the Notes to the Underwriters are in conformity with the terms of such orders; and no other authorization, approval or consent of any other governmental body (other than in connection or compliance with the provisions of the securities or Blue Sky laws of any jurisdiction) is legally required for the issuance and sale of the Notes pursuant to this Agreement. (viii) The Indenture has been duly authorized, executed and delivered by the Corporation and, assuming the due authorization, execution and delivery thereof by The Chase Manhattan Bank, as Trustee, constitutes a valid and legally binding instrument of the Corporation enforceable against the Corporation in accordance with its terms, subject to the qualifications that the enforceability of the Corporation's obligations under the Indenture may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). (ix) The Notes have been duly authorized and executed by the Corporation and, when authenticated by The Chase Manhattan Bank, as Trustee, in the manner provided in the Indenture and delivered against payment therefor, will constitute valid and legally binding obligations of the Corporation, enforceable against the Corporation in accordance with their terms, subject to the qualifications that the enforceability of the Corporation's obligations under the Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), and are entitled to the benefits afforded by the Indenture in accordance with the terms of the Indenture and the Notes. Such counsel shall also state that nothing has come to her attention that has caused her to believe that the Registration Statement as of the date of effectiveness under the 1933 Act and the Prospectus as of the date it was filed with, or transmitted for filing to, the Commission, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus as of the date it was filed with, or transmitted for filing to, the Commission and at the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Such counsel may also state that, except as otherwise expressly provided in such opinion, she does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in or incorporated by reference into the Registration Statement and Prospectus and does not express any opinion or belief as to the financial statements or other financial data contained in or incorporated by reference into the Registration Statement and the Prospectus, the statement of the eligibility and qualification of the Trustee or as to the information set forth in the Prospectus under the caption "Description of the Series Junior Subordinated Notes--Book-Entry Only Issuance--The Depository Trust Company." In rendering the foregoing opinion, such counsel may state that she expresses no opinion as to the laws of any jurisdiction other than North Carolina and may rely on the opinion of Austin, Lewis & Rogers 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 Dewey Ballantine LLP, counsel to the Corporation, dated the Closing Date, with respect to the matters set forth in (i), (iii), (v) through (ix) of Section 6(d) and to the further effect that: (i) Each of the Principal Subsidiaries has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus. (ii) The Corporation is not an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended. (iii) The Corporation is not a holding company under the Public Utility Holding Company Act of 1935, as amended. (iv) The Indenture is duly qualified under the Trust Indenture Act of 1939. (v) The Registration Statement as of the date of effectiveness under the 1933 Act and the Prospectus as of the date it was filed with, or transmitted for filing to, the Commission complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations; and nothing has come to their attention that would lead them to believe that the Registration Statement as of the date of effectiveness under the 1933 Act (or if an amendment to such Registration Statement or an annual report on Form 10-K has been filed by the Corporation with the Commission subsequent to the effectiveness of the Registration Statement, then at the time of the most recent such filing) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus as of the date it was filed with, or transmitted for filing to, the Commission and at the Closing Date contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such opinion may state that such counsel do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in or incorporated by reference into the Registration Statement and Prospectus except as otherwise expressly provided in such opinion and do not express any opinion or belief as to the financial statements or other financial data contained in or incorporated by reference into the Registration Statement and the Prospectus, the statement of the eligibility and qualification of the Trustee or as to the information set forth in the Prospectus under the caption "Description of the Series Junior Subordinated Notes--Book-Entry Only Issuance--The Depository Trust Company." (vi) The statements made in the Prospectus under the captions "Description of the Junior Subordinated Notes" and "Description of the Series Junior Subordinated Notes," insofar as they purport to summarize provisions of documents specifically referred to therein, fairly present the information called for with respect thereto by Form S-3. (vii) No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the issue and sale of the Notes or the consummation by the Corporation of the transactions contemplated by this Agreement or the Indenture, except for authorization by the North Carolina Utilities Commission and The Public Service Commission of South Carolina and such as have been obtained under the 1933 Act and the Trust Indenture Act of 1939 and such consents, approvals, authorizations, orders, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Notes by the Underwriters. In rendering the foregoing opinion or opinions, Dewey Ballantine LLP may state that such opinion or opinions are limited to the Federal laws of the United States, the laws of the State of New York and the General Corporation Law of the State of Delaware, and that they are relying on the opinion of Ellen T. Ruff, Esq. as to matters of North Carolina law and on the opinion Austin, Lewis & Rogers 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. 5 (f) You shall have received an opinion of , counsel for the Underwriters, dated the Closing Date, with respect to the incorporation of the Corporation, the validity of the Notes, the Registration Statement and the Prospectus, as amended or supplemented, and such other related matters as you may require, and the Corporation shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. In giving their opinion, may rely on the opinion of Ellen T. Ruff, Esq. as to matters of North Carolina law and on the opinion of Austin, Lewis & Rogers of Columbia, South Carolina as to matters of South Carolina law. (g) On or after the date hereof, there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally or of the securities of the Corporation, Duke Energy Capital Trust I or Duke Energy Capital Trust II on the New York Stock Exchange; or (ii) a general moratorium on commercial banking activities in New York declared by either Federal or New York State authorities; or (iii) the outbreak or material escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war if the effect of any such event specified in this subsection (g) in your reasonable judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Notes on the terms and in the manner contemplated in the Prospectus. In such event there shall be no liability on the part of any party to any other party except as otherwise provided in Section 7 hereof and except for the expenses to be borne by the Corporation as provided in Section 5(g) hereof. (h) You shall have received a certificate of the Chairman of the Board, the President, any Vice President, the Secretary or an Assistant Secretary and any financial or accounting officer of the Corporation, dated the Closing Date, in which such officers, to the best of their knowledge after reasonable investigation, shall state that the representations and warranties of the Corporation in this Agreement are true and correct as of the Closing Date, that the Corporation has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Date, that the conditions specified in Section 6(b) and Section 6(c) have been satisfied, and that no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are threatened by the Commission. (i) On the date of this Agreement, you shall have received a letter dated the date hereof, in form and substance satisfactory to you, from the Corporation's independent public accountants, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus as of a specified date not more than three business days prior to the date of this Agreement. (j) At the Closing Date you shall have received from the Corporation's independent public accountants a letter, dated the Closing Date, to the effect that such accountants reaffirm the statements made in the letter 6 furnished pursuant to paragraph (i) of this Section 6, except that the specified date referred to shall be a date not more than three business days prior to the Closing Date. The Corporation will furnish you with such conformed copies of such opinions, certificates, letters and documents as you reasonably request. 7. Indemnification. (a) The Corporation agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act, as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the prospectus constituting a part of the Registration Statement in the form in which it became effective or the Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with written information furnished to the Corporation by any Underwriter through you expressly for use in the Registration Statement (or any amendment thereto) or such Preliminary Prospectus, such prospectus, or the Prospectus (or any amendment or supplement thereto); (ii) against any and all loss, liability, claim, damage and expense whatsoever to the extent of the aggregate amount paid in settlement of any litigation, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Corporation; and (iii) against any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) of this Section 7. In no case shall the Corporation be liable under this indemnity agreement with respect to any claim made against any Underwriter or any such controlling person unless the Corporation shall be notified in writing of the nature of the claim within a reasonable time after the assertion thereof, but failure so to notify the Corporation shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. The Corporation shall be entitled to participate at its own expense in the defense, or, if it so elects, within a reasonable time after receipt of such notice, to assume the defense of any suit brought to enforce any such claim, but if it so elects to assume the defense, such defense shall be conducted by counsel chosen by it and approved by the Underwriter or Underwriters or controlling person or persons, or defendant or defendants in any suit so brought, which approval shall not be unreasonably withheld. In any such suit, any Underwriter or any such controlling person shall have the right to employ its own counsel, but the fees and expenses of such counsel shall be at the expense of such Underwriter or such controlling person unless (i) the Corporation and such Underwriter shall have mutually agreed to the employment of such counsel, or (ii) the named parties to any such action (including any impleaded parties) include both such Underwriter or such controlling person and the Corporation and such Underwriter or such controlling person shall have been advised by such counsel that a conflict of interest between the Corporation and such Underwriter or such controlling person may arise and for this reason it is not desirable for the same counsel to represent both the indemnifying party and also the indemnified party (it being understood, however, that the Corporation shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys for all such Underwriters and all such controlling persons, which firm shall be designated in writing by you). The Corporation agrees to notify you within a reasonable time of the assertion of any claim against it, any of its officers or directors or any person who controls the Corporation within the meaning of Section 15 of the 1933 Act, in connection with the sale of the Notes. 7 (b) Each Underwriter severally agrees that it will indemnify and hold harmless the Corporation, its directors and each of the officers of the Corporation who signed the Registration Statement and each person, if any, who controls the Corporation within the meaning of Section 15 of the 1933 Act to the same extent as the indemnity contained in subsection (a) of this Section, but only with respect to statements or omissions made in the Registration Statement (or any amendment thereto) or any Preliminary Prospectus, such prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Corporation by such Underwriter through you expressly for use in the Registration Statement (or any amendment thereto), such Preliminary Prospectus, such prospectus or the Prospectus (or any amendment or supplement thereto). In case any action shall be brought against the Corporation or any person so indemnified based on the Registration Statement (or any amendment thereto) or such Preliminary Prospectus, such prospectus or the Prospectus (or any amendment or supplement thereto) and in respect of which indemnity may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Corporation, and the Corporation and each person so indemnified shall have the rights and duties given to the Underwriters, by the provisions of subsection (a) of this Section. (c) No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) If the indemnification provided for in this Section 7 is unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses (or actions in respect thereof) that would otherwise have been indemnified under the terms of such indemnity, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Corporation on the one hand and the Underwriters on the other from the offering of the Notes. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Corporation on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses (or actions in respect thereof), as well as any other relevant equity considerations. The relative benefits received by the Corporation on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Corporation bear to the total compensation received by the Underwriters in respect of the underwriting discount as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Corporation on the one hand or the Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Corporation and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses (or actions in respect thereof) referred to above in this Section shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Notes underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute are several in proportion to their respective underwriting obligations and not joint. 8. Default by One or More of the Underwriters. (a) If any Underwriter shall default in its obligation to purchase the Notes which it has agreed to purchase hereunder on the Closing Date, you may in your discretion arrange for you or another party or other parties to purchase such Notes on the terms contained herein. If within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such Notes, then the Corporation shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to you to purchase such Notes on such terms. In the event that, within the respective prescribed periods, you notify the Corporation that you have so arranged for the purchase of such Notes, or the Corporation notifies you that it has so arranged for the purchase of such Notes, you or the Corporation shall have the right to postpone such Closing Date for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Corporation agrees to file promptly any amendments to the Registration Statement or the Prospectus which may be required. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Notes. (b) If, after giving effect to any arrangements for the purchase of the Notes of a defaulting Underwriter or Underwriters by you or the Corporation as provided in subsection (a) above, the aggregate amount of such Notes which remains unpurchased does not exceed one-tenth of the aggregate amount of all the Notes to be purchased at such Closing Date, then the Corporation shall have the right to require each non-defaulting Underwriter to purchase the amount of Notes which such Underwriter agreed to purchase hereunder at such Closing Date and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the amount of Notes which such Underwriter agreed to purchase hereunder) of the Notes of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. (c) If, after giving effect to any arrangements for the purchase of the Notes of a defaulting Underwriter or Underwriters by you or the Corporation as provided in subsection (a) above, the aggregate amount of such Notes which remains unpurchased exceeds one-tenth of the aggregate amount of all the Notes to be purchased at such Closing Date, or if the Corporation shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Notes of a defaulting Underwriter or Underwriters, then this Agreement shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Corporation, except for the expenses to be borne by the Corporation as provided in Section 5(g) hereof and the indemnity and contribution agreement in Section 7 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 9. Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other statements of the Corporation or its officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any 8 investigation, or statement as to the results thereof, made by or on behalf of any Underwriter or the Corporation, or any of its officers or directors or any controlling person, and will survive delivery of and payment for the Notes. 10. Reliance on Your Acts. In all dealings hereunder, shall act on behalf of each of the Underwriters, and the Corporation shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by . 11. Notices. All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed or telecopied and confirmed to the Underwriters in care of Attn: , , , facsimile number ( ) - , or, if sent to the Corporation, will be mailed or telecopied and confirmed to it at 526 South Church Street, Charlotte, N.C. 28202, facsimile number (704) 382-1452, attention of David L. Hauser, Senior Vice President and Treasurer; provided, however, that any notice to an Underwriter pursuant to Section 7 hereof shall be sent by mail or telecopy to such Underwriter at its address or telecopy number set forth in its Underwriters' Questionnaire or telex constituting such Questionnaire, which address or telecopy number will be supplied to the Corporation by . Any such communications shall take effect upon receipt thereof. 12. Business Day. As used herein, the term "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business. 13. Successors. This Agreement shall inure to the benefit of and be binding upon the Underwriters and the Corporation and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons, officers and directors referred to in Section 7 and their respective successors, heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained; this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective successors and said controlling persons, officers and directors and their respective successors, heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Notes from any Underwriter shall be deemed to be a successor or assign by reason merely of such purchase. 14. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 15. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the choice of law or conflict of law principles thereof. If the foregoing is in accordance with your understanding, kindly sign and return to us two counterparts hereof, and upon confirmation and acceptance by on behalf of each of the Underwriters, this letter and such confirmation and acceptance will become a binding agreement between the Corporation, on the one hand, and each of the Underwriters, on the other hand, in accordance with its terms. It is understood that confirmation and acceptance of this letter by on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement Among Underwriters, the form of which shall be submitted to the Corporation for examination, but without warranty on your part as to the authority of the signers thereof. Very truly yours, Duke Energy Corporation By: _________________________________ Name: Title: The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written. By: By: _________________________________ Name: Title: On behalf of each of the Underwriters 9 SCHEDULE A
Principal Amount of Notes to be Underwriter Purchased ----------- ---------------- ----- Total.......................................................... $ =====
EX-1.C 4 dex1c.txt UNDERWRITING AGREEMENT, BONDS Exhibit 1-C $ DUKE ENERGY CORPORATION FIRST AND REFUNDING MORTGAGE BONDS, % SERIES DUE UNDERWRITING AGREEMENT , Ladies and Gentlemen: 1. Introductory. DUKE ENERGY CORPORATION, a North Carolina corporation ("Corporation"), proposes, subject to the terms and conditions stated herein, to issue and sell $ aggregate principal amount of First and Refunding Mortgage Bonds, % Series Due ("Bonds"), to be issued pursuant to the provisions of a First and Refunding Mortgage, dated as of December 1, 1927 ("Original Indenture"), from the Corporation to The Chase Manhattan Bank, successor Trustee, as amended and supplemented by various supplemental indentures, including the supplemental indenture to be dated as of , (the Original Indenture, as so amended and supplemented, being hereinafter called the "Mortgage"), and hereby agrees with the several Underwriters hereinafter named in Schedule A (the "Underwriters") as follows: 2. Representations and Warranties of the Corporation. The Corporation represents and warrants to, and agrees with, the several Underwriters that: (a) A registration statement (No. 333- , which also constitutes a post- effective amendment to a previous registration statement No. 333-52204), including a combined prospectus, relating to the Bonds and certain other securities has been filed with the Securities and Exchange Commission ("Commission") under the Securities Act of 1933, as amended (the "1933 Act"). Such registration statement and any post-effective amendment thereto, each in the form heretofore delivered to you, and, excluding exhibits thereto but including all documents incorporated by reference in the prospectus contained therein, for each of the other Underwriters, have been declared effective by the Commission in such form, and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in such registration statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the 1933 Act ("1933 Act Regulations") being hereinafter called a "Preliminary Prospectus"; the various parts of such registration statement, including all exhibits thereto and including the documents incorporated by reference in the prospectus contained in the registration statement at the time such part of the registration statement became effective, each as amended at the time such part of the registration statement became effective, being hereinafter called the "Registration Statement"; and the final prospectus relating to the Bonds, in the form first filed pursuant to Rule 424(b) under the 1933 Act Regulations, being hereinafter called the "Prospectus"; and any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; and any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Corporation filed pursuant to Section 13(a) or 15(d) of the 1934 Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement). (b) The Registration Statement conforms and the Prospectus will conform in all material respects to the requirements of the 1933 Act and the 1933 Act Regulations, and the Registration Statement does not and the Prospectus will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the Corporation makes no warranty or representation to the Underwriters with respect to any statements or omissions made in reliance upon and in conformity with written information furnished to the Corporation by any Underwriter specifically for use therein. (c) The documents incorporated by reference in the Prospectus, at the time they were filed with the Commission, complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the "1934 Act Regulations"), and, when read together with the other information in the Prospectus, do not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and any documents deemed to be incorporated by reference in the Prospectus will, when they are filed with the Commission, comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations, and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the Corporation makes no warranty or representation to the Underwriters with respect to any statements or omissions made in reliance upon and in conformity with written information furnished to the Corporation by any Underwriter specifically for use therein. (d) The compliance by the Corporation with all of the provisions of this Agreement has been duly authorized by all necessary corporate action and the consummation of the transactions herein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Corporation or any of its Principal Subsidiaries (as hereinafter defined) is a party or by which any of them or their respective property is bound or to which any of their property or assets is subject that would have a material adverse effect on the business, financial condition or results of operations of the Corporation and its subsidiaries, taken as a whole, nor will such action result in any violation of the provisions of the Restated Articles of Incorporation or By- Laws of the Corporation or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Corporation or its Principal Subsidiaries or any of their respective property that would have a material adverse effect on the business, financial condition or results of operations of the Corporation and its subsidiaries, taken as a whole; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the consummation by the Corporation of the transactions contemplated by this Agreement, except for authorization by the North Carolina Utilities Commission and The Public Service Commission of South Carolina and the registration under the 1933 Act of the Bonds, qualification under the Trust Indenture Act of 1939 and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Bonds by the Underwriters. (e) This Agreement has been duly authorized, executed and delivered by the Corporation. (f) Each of Duke Capital Corporation, PanEnergy Corp, Duke Energy Natural Gas Corporation and Texas Eastern Transmission Corporation, each a Delaware corporation (and herein called a "Principal Subsidiary"), is a direct or indirect wholly owned subsidiary of the Corporation. 3. Purchase, Sale and Delivery of Bonds. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Corporation agrees to sell to the Underwriters, and the Underwriters agree, severally and not jointly, to purchase from the Corporation, at a purchase price of % of the principal amount of the Bonds, the respective principal amount of Bonds set forth opposite the names of the Underwriters in Schedule A hereto plus the respective principal amount of additional Bonds which each such Underwriter may become obligated to purchase pursuant to the provisions of Section 8 hereof. Payment of the purchase price for the Bonds to be purchased by the Underwriters shall be made at the offices of Dewey Ballantine LLP, 1301 Avenue of the Americas, New York, N.Y., or at such other place as shall be mutually agreed upon by you and the Corporation, at 10:00 a.m., New York City time, on , (unless postponed in accordance with the provisions of Section 8) or such other time and date as shall be agreed upon in writing by you and the Corporation (the "Closing Date"). Payment shall be made to the Corporation by certified or official bank check or checks in New York Clearing House or similar next day funds, payable to the order of the Corporation, against delivery to you of the Bonds. The Bonds shall be in such denominations and registered in such names as you may request in writing at least two full business days before the Closing Date. 4. Offering by the Underwriters. It is understood that the several Underwriters propose to offer the Bonds for sale to the public as set forth in the Prospectus. 5. Covenants of the Corporation. The Corporation covenants and agrees with the several Underwriters that: (a) The Corporation will advise you promptly of the filing of any amendment (and effectiveness thereof) or supplementation of the Registration Statement or the Prospectus, of the filing of any Rule 462(b) registration statement and of the institution by the Commission of any stop order proceedings in respect of the Registration Statement, and will use its best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued. (b) If at any time when a prospectus relating to the Bonds is required to be delivered under the 1933 Act any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the 1933 Act, the Corporation promptly will prepare and file with the Commission an amendment, supplement or an appropriate document pursuant to Section 13 or 14 of the 1934 Act which will correct such statement or omission or which will effect such compliance. (c) The Corporation, during the period when a prospectus relating to the Bonds is required to be delivered under the 1933 Act, will timely file all documents required to be filed with the Commission pursuant to Section 13 or 14 of the 1934 Act. (d) The Corporation will make generally available to its security holders, in each case as soon as practicable but not later than 60 days after the close of the period covered thereby, earnings statements (in form complying with the provisions of Section 11(a) of the 1933 Act, which need not be certified by independent certified public accountants unless required by the 1933 Act) covering (i) a twelve-month period beginning not later than the first day of the Corporation's fiscal quarter next following the effective date of the Registration Statement and (ii) a twelve-month period beginning not later than the first day of the Corporation's fiscal quarter next following the date of this Agreement. (e) The Corporation will furnish to you, without charge, copies of the Registration Statement ( of which will be signed and will include all exhibits other than those incorporated by reference), the Prospectus, and all amendments and supplements to such documents, in each case as soon as available and in such quantities as you reasonably request. (f) The Corporation will arrange or cooperate in arrangements for the qualification of the Bonds for sale under the laws of such jurisdictions as you designate and will continue such qualifications in effect so long as required for the distribution; provided, however, that the Corporation shall not be required to qualify as a foreign corporation or to file any general consents to service of process under the laws of any state where it is not now so subject. (g) The Corporation will pay all expenses incident to the performance of its obligations under this Agreement including (i) the printing and filing of the Registration Statement and the printing of this Agreement and any Blue Sky Survey, (ii) the issuance and delivery of the Bonds as specified herein, (iii) the fees and disbursements of counsel for the Underwriters in connection with the qualification of the Bonds 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 Bonds, (vi) any fees and expenses in connection with the listing of the Bonds on the New York Stock Exchange,(vii) any filing fee required by the National Association of Securities Dealers, Inc. and (viii) the costs and expenses of the Corporation relating to investor presentations on any "road show" undertaken in connection with the marketing of the offering of the Bonds, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Corporation, travel and lodging expenses of and officers of the Corporation and any such consultants, and the cost of any aircraft chartered in connection with the road show; provided, however, the Underwriters shall reimburse a portion of the costs and expenses referred to in this clause (viii). 2 6. Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Bonds will be subject to the accuracy of the representations and warranties on the part of the Corporation herein, to the accuracy of the statements of officers of the Corporation made pursuant to the provisions hereof, to the performance by the Corporation of its obligations hereunder and to the following additional conditions precedent: (a) Prior to the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Corporation or you, shall be threatened by the Commission. (b) Prior to the Closing Date, the rating assigned by Moody's Investors Service, Inc. or Standard & Poor's Ratings Services to (i) any debt securities or preferred stock of the Corporation or (ii) any trust preferred securities of Duke Energy Capital Trust I or Duke Energy Capital Trust II as of the date of this Agreement shall not have been lowered. (c) Since the respective most recent dates as of which information is given in the Prospectus and up to the Closing Date, there shall not have been any material adverse change in the condition of the Corporation, financial or otherwise, except as reflected in or contemplated by the Prospectus, and, since such dates and up to the Closing Date, there shall not have been any material transaction entered into by the Corporation other than transactions contemplated by the Prospectus and transactions in the ordinary course of business, the effect of which in your reasonable judgment is so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Bonds on the terms and in the manner contemplated by the Prospectus. (d) You shall have received an opinion of Ellen T. Ruff, Esq., Senior Vice President and General Counsel of the Corporation, dated the Closing Date, to the effect that: (i) The Corporation has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of North Carolina, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement. (ii) Each of the Corporation and the Principal Subsidiaries is duly qualified to do business in each jurisdiction in which the ownership or leasing of its property or the conduct of its business requires such qualification, except where the failure to so qualify, considering all such cases in the aggregate, does not have a material adverse effect on the business, properties, financial position or results of operations of the Corporation and its subsidiaries taken as a whole. (iii) The Registration Statement has become effective under the 1933 Act, and, to the best of the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or threatened under the 1933 Act. 3 (iv) The descriptions in the Registration Statement and the Prospectus of legal or governmental proceedings are accurate and fairly present the information required to be shown, and such counsel does not know of any litigation or any legal or governmental proceeding instituted or threatened against the Corporation or any of its subsidiaries or any of their respective properties that would be required to be disclosed in the Prospectus and is not so disclosed. (v) This Agreement has been duly authorized, executed and delivered by the Corporation. (vi) The performance by the Corporation of this Agreement and the Mortgage 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 Mortgage. (vii) The North Carolina Utilities Commission and The Public Service Commission of South Carolina have issued appropriate orders with respect to the issuance and sale of the Bonds in accordance with this Agreement, and, to the best of the knowledge of such counsel, such orders are still in effect; the issuance and sale of the Bonds to the Underwriters are in conformity with the terms of such orders; and no other authorization, approval or consent of any other governmental body (other than in connection or compliance with the provisions of the securities or Blue Sky laws of any jurisdiction) is legally required for the issuance and sale of the Bonds pursuant to this Agreement. (viii) The Mortgage has been duly authorized, executed and delivered by the Corporation and is a legal, valid and enforceable instrument in accordance with its terms, except (x) as the same may be limited by the laws of the States of North Carolina and South Carolina (in which States such counsel is advised all physical property of the Corporation subject to the Mortgage is located except for certain interconnection lines) with respect to or affecting the remedies to enforce the security provided by the Mortgage, which laws do not, in the opinion of such counsel, make inadequate the remedies necessary for the realization of the benefits of such security, and by bankruptcy, insolvency, reorganization or other laws affecting the enforcement of creditors' rights, and (y) that the provisions of the Mortgage subjecting to the lien thereof the revenues and income from the mortgaged property may not be effective prior to the delivery or taking of possession of such revenues or income or of the mortgaged property by or on behalf of the bondholders. 4 (ix) The Bonds have been duly authorized by all necessary corporate action and, when the same have been executed and authenticated as specified in the Mortgage and delivered to the Underwriters against payment of the consideration therefor specified in this Agreement, will be legal, valid and binding obligations of the Corporation enforceable in accordance with their terms, except, in each case, as the same may be limited by bankruptcy, insolvency, reorganization or other laws affecting the enforcement of creditors' rights, and are entitled to the benefits and security afforded by the Mortgage in accordance with the terms of the Mortgage and the Bonds, except as set forth in paragraph (viii) above. (x) The Corporation has good title to all properties owned by it, subject only (a) to the lien of the Mortgage, (b) to permitted encumbrances as defined in the Mortgage, (c) to minor exceptions and defects which do not, in the aggregate, in the opinion of such counsel, materially interfere with the use by the Corporation of such properties for the purposes for which they are held, materially detract from the value of said properties or in any material way impair the security afforded by the Mortgage, and (d) in the case of the Corporation's existing hydroelectric plants, to provisions of licenses issued by the Federal Power Commission or the Federal Energy Regulatory Commission and to the provisions of the Federal Power Act. (xi) The Mortgage complies as to form with all applicable laws of the States wherein the properties subjected or intended to be subjected to the lien of the Mortgage are located, including all applicable recording laws, and constitutes a valid, direct first mortgage lien on all properties and franchises purported to be owned by the Corporation, except such property as is specifically excepted from the lien thereof, subject only to the liens, charges and encumbrances stated in paragraph (x) above; all fixed electric properties hereafter acquired by the Corporation will, upon such acquisition, become subject to the lien of the Mortgage, subject, however, to liens or charges of the character permitted to exist by the Mortgage, and to liens, if any, existing or placed on such property at the time of the acquisition thereof by the Corporation, and the description of such property and franchises in the Mortgage is adequate to constitute the same a lien on such property and franchises of the Corporation except as aforesaid. (xii) The Corporation holds valid and subsisting franchises, licenses and permits in all communities wherein it operates its properties, which are free from unduly burdensome restrictions, are individually satisfactory and vest in the Corporation adequate authority to operate its public utility system therein, except that in a few municipalities the Corporation is operating either without franchises or with franchises the validity of which might possibly be called into question; in the opinion of such counsel, however, the Corporation's franchises, licenses and permits relating to its public utility business, as a system, are satisfactory for the adequate conduct of the business of the Corporation in the territory which it serves, the rights of the Corporation to maintain transmission lines through unincorporated communities and over public lands not located in incorporated communities and over private rights of way are, as a system, satisfactory for the adequate conduct of the business of the Corporation in the territory which it serves, and, as a public utility corporation operating under the laws of the States of North Carolina and South Carolina, the Corporation has adequate rights to operate its system. (xiii) The Original Indenture and the supplemental indentures thereto, other than the supplemental indenture dated as of , , have been duly recorded or filed for recordation in all such offices as are necessary to perfect and to preserve and protect the lien of the Mortgage upon the property intended to be subjected to the lien thereof, and upon the filing and recording of the supplemental indenture dated as of , , no other recording or any periodic or other refiling or rerecording of the Mortgage is or will be required in order to perfect and to preserve and protect the lien of the Mortgage upon such property, and there are no mortgage, recording or other taxes required to be paid in connection with such filing and recording or in connection with the issuance of the Bonds other than customary filing and recording fees. Such counsel shall also state that nothing has come to her attention that has caused her to believe that the Registration Statement as of the date of effectiveness under the 1933 Act and the Prospectus as of the date it was filed with, or transmitted for filing to, the Commission, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus as of the date it was filed with, or transmitted for filing to, the Commission and at the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Such counsel may also state that, except as otherwise expressly provided in such opinion, she does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in or incorporated by reference into the Registration Statement and the Prospectus and does not express any opinion or belief as to the financial statements or other financial data contained in or incorporated by reference into the Registration Statement and the Prospectus or as to the statement of the eligibility and qualification of the Trustee. In rendering the foregoing opinion, such counsel may state that she expresses no opinion as to the laws of any jurisdiction other than North Carolina and may rely on the opinion of Austin, Lewis & Rogers 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 Dewey Ballantine LLP, counsel to the Corporation, dated the Closing Date, with respect to the matters set forth in (i), (iii), (v) through (ix) of Section 6(d) and to the further effect that: (i) Each of the Principal Subsidiaries has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus. (ii) The Corporation is not an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended. (iii) The Corporation is not a holding company under the Public Utility Holding Company Act of 1935, as amended. (iv) The Mortgage is duly qualified under the Trust Indenture Act of 1939. (v) The Registration Statement as of the date of effectiveness under the 1933 Act and the Prospectus as of the date it was filed with, or transmitted for filing to, the Commission complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations; and nothing has come to their attention that would lead them to believe that the Registration Statement as of the date of effectiveness under the 1933 Act (or if an amendment to such Registration Statement or an annual report on Form 10-K has been filed by the Corporation with the Commission subsequent to the effectiveness of the Registration Statement, then at the time of the most recent such filing) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus as of the date it was filed with, or transmitted for filing to, the Commission and at the Closing Date contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such opinion may state that such counsel do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in or incorporated by reference into the Registration Statement and Prospectus except as otherwise expressly provided in such opinion and do not express any opinion or belief as to the financial statements or other financial data contained in or incorporated by reference into the Registration Statement and the Prospectus or as to the statement of the eligibility and qualification of the Trustee. (vi) The statements made in the Prospectus under the captions "Description of the First and Refunding Mortgage Bonds" and "Certain Terms of the Series Bonds," insofar as they purport to summarize provisions of documents specifically referred to therein, fairly present the information called for with respect thereto by Form S-3. (vii) No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the issue and sale of the Bonds or the consummation by the Corporation of the transactions contemplated by this Agreement or the Mortgage, except for authorization by the North Carolina Utilities Commission and The Public Service Commission of South Carolina and such as have been obtained under the 1933 Act and the Trust Indenture Act of 1939 and such consents, approvals, authorizations, orders, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Bonds by the Underwriters. In rendering the foregoing opinion or opinions, Dewey Ballantine LLP may state that such opinion or opinions are limited to the Federal laws of the United States, the laws of the State of New York and the General Corporation Law of the State of Delaware, and that they are relying on the opinion of Ellen T. Ruff, Esq. as to matters of North Carolina law and on the opinion of Austin, Lewis & Rogers of Columbia, South Carolina as to matters of South Carolina law. In addition, such counsel may state that they have relied as to certain factual matters on information obtained from public officials, officers of the Corporation and other sources believed by them to be responsible and that the signatures on all documents examined by them are genuine, assumptions which such counsel have not independently verified. (f) You shall have received an opinion of , counsel for the Underwriters, dated the Closing Date, with respect to the incorporation of the Corporation, the validity of the Bonds, 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 5 enabling them to pass upon such matters. In giving their opinion, may rely on the opinion of Ellen T. Ruff, Esq. as to matters of North Carolina law and on the opinion of Austin, Lewis & Rogers of Columbia, South Carolina as to matters of South Carolina law. (g) On or after the date hereof, there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally or of the securities of the Corporation, Duke Energy Capital Trust I or Duke Energy Capital Trust II on the New York Stock Exchange; or (ii) a general moratorium on commercial banking activities in New York declared by either Federal or New York State authorities; or (iii) the outbreak or material escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war if the effect of any such event specified in this subsection (g) in your reasonable judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Bonds on the terms and in the manner contemplated in the Prospectus. In such event there shall be no liability on the part of any party to any other party except as otherwise provided in Section 7 hereof and except for the expenses to be borne by the Corporation as provided in Section 5(g) hereof. (h) You shall have received a certificate of the Chairman of the Board, the President, any Vice President, the Secretary or an Assistant Secretary and any financial or accounting officer of the Corporation, dated the Closing Date, in which such officers, to the best of their knowledge after reasonable investigation, shall state that the representations and warranties of the Corporation in this Agreement are true and correct as of the Closing Date, that the Corporation has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Date, that the conditions specified in Section 6(b) and Section 6(c) have been satisfied, and that no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are threatened by the Commission. (i) On the date of this Agreement, you shall have received a letter dated the date hereof, in form and substance satisfactory to you, from the Corporation's independent public accountants, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus as of a specified date not more than three business days prior to the date of this Agreement. (j) At the Closing Date you shall have received from the Corporation's independent public accountants a letter, dated the Closing Date, to the effect that such accountants reaffirm the statements made in the letter furnished pursuant to paragraph (i) of this Section 6, except that the specified date referred to shall be a date not more than three business days prior to the Closing Date. 6 The Corporation will furnish you with such conformed copies of such opinions, certificates, letters and documents as you reasonably request. 7. Indemnification. (a) The Corporation agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act, as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the prospectus constituting a part of the Registration Statement in the form in which it became effective or the Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with written information furnished to the Corporation by any Underwriter through you expressly for use in the Registration Statement (or any amendment thereto) or such Preliminary Prospectus, such prospectus, or the Prospectus (or any amendment or supplement thereto); (ii) against any and all loss, liability, claim, damage and expense whatsoever to the extent of the aggregate amount paid in settlement of any litigation, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Corporation; and (iii) against any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) of this Section 7. In no case shall the Corporation be liable under this indemnity agreement with respect to any claim made against any Underwriter or any such controlling person unless the Corporation shall be notified in writing of the nature of the claim within a reasonable time after the assertion thereof, but failure so to notify the Corporation shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. The Corporation shall be entitled to participate at its own expense in the defense, or, if it so elects, within a reasonable time after receipt of such notice, to assume the defense of any suit brought to enforce any such claim, but if it so elects to assume the defense, such defense shall be conducted by counsel chosen by it and approved by the Underwriter or Underwriters or controlling person or persons, or defendant or defendants in any suit so brought, which approval shall not be unreasonably withheld. In any such suit, any Underwriter or any such controlling person shall have the right to employ its own counsel, but the fees and expenses of such counsel shall be at the expense of such Underwriter or such controlling person unless (i) the Corporation and such Underwriter shall have mutually agreed to the employment of such counsel, or (ii) the named parties to any such action (including any impleaded parties) include both such Underwriter or such controlling person and the Corporation and such Underwriter or such controlling person shall have been advised by such counsel that a conflict of interest between the Corporation and such Underwriter or such controlling person may arise and for this reason it is not desirable for the same counsel to represent both the indemnifying party and also the indemnified party (it being understood, however, that the Corporation shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys for all such Underwriters and all such controlling persons, which firm shall be designated in writing by you). The Corporation agrees to notify you within a reasonable time of the assertion of any claim against it, any of its officers or directors or any person who controls the Corporation within the meaning of Section 15 of the 1933 Act, in connection with the sale of the Bonds. (b) Each Underwriter severally agrees that it will indemnify and hold harmless the Corporation, its directors and each of the officers of the Corporation who signed the Registration Statement and each person, if any, who controls the Corporation within the meaning of Section 15 of the 1933 Act to the same extent as the indemnity contained in subsection (a) of this Section, but only with respect to statements or omissions made in the Registration Statement (or any amendment thereto) or any Preliminary Prospectus, such prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Corporation by such Underwriter through you expressly for use in the Registration Statement (or any amendment thereto), such Preliminary Prospectus, such prospectus or the Prospectus (or any amendment or supplement thereto). In case any action shall be brought against the Corporation or any person so indemnified based on the Registration Statement (or any amendment thereto) or such Preliminary Prospectus, such prospectus or the Prospectus (or any amendment or supplement thereto) and in respect of which indemnity may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Corporation, and the Corporation and each person so indemnified shall have the rights and duties given to the Underwriters, by the provisions of subsection (a) of this Section. (c) No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) If the indemnification provided for in this Section 7 is unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses (or actions in respect thereof) that would otherwise have been indemnified under the terms of such indemnity, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Corporation on the one hand and the Underwriters on the other from the offering of the Bonds. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Corporation on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses (or actions in respect thereof), as well as any other relevant equity considerations. The relative benefits received by the Corporation on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Corporation bear to the total compensation received by the Underwriters in respect of the underwriting discount as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Corporation on the one hand or the Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Corporation and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses (or actions in respect thereof) referred to above in this Section shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Bonds underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute are several in proportion to their respective underwriting obligations and not joint. 8. Default by One or More of the Underwriters. (a) If any Underwriter shall default in its obligation to purchase the Bonds 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 Bonds 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 Bonds, then the Corporation shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to you to purchase such Bonds on such terms. In the event that, within the respective prescribed periods, you notify the Corporation that you have so arranged for the purchase of such Bonds, or the Corporation notifies you that it has so arranged for the purchase of such Bonds, you or the Corporation shall have the right to postpone such Closing Date for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Corporation agrees to file promptly any amendments to the Registration Statement or the Prospectus which may be required. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Bonds. (b) If, after giving effect to any arrangements for the purchase of the Bonds of a defaulting Underwriter or Underwriters by you or the Corporation as provided in subsection (a) above, the aggregate amount of such Bonds which remains unpurchased does not exceed one-tenth of the aggregate amount of all the Bonds to be purchased at such Closing Date, then the Corporation shall have the right to require each non-defaulting Underwriter to purchase the amount of Bonds which such Underwriter agreed to purchase hereunder at such Closing Date and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the amount of Bonds which such Underwriter agreed to purchase hereunder) of the Bonds 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 Bonds of a defaulting Underwriter or Underwriters by you or the Corporation as provided in subsection (a) above, the aggregate amount of such Bonds which remains unpurchased exceeds one-tenth of the aggregate amount of all the Bonds to be purchased at such Closing Date, or if the Corporation shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Bonds of a defaulting Underwriter or Underwriters, then this Agreement shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Corporation, except for the expenses to be borne by the Corporation as provided in Section 5(g) hereof and the indemnity and contribution agreement in Section 7 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 9. Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other statements of the Corporation or its officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter or the Corporation, or any of its officers or directors or any controlling person, and will survive delivery of and payment for the Bonds. 7 10. Reliance on Your Acts. In all dealings hereunder, shall act on behalf of each of the Underwriters, and the Corporation shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by . 11. Notices. All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed or telecopied and confirmed to the Underwriters in care of Attn: , , , facsimile number ( ) - , or, if sent to the Corporation, will be mailed or telecopied and confirmed to it at 526 South Church Street, Charlotte, N.C. 28202, facsimile number (704) 382-1452, attention of David L. Hauser, Senior Vice President and Treasurer; provided, however, that any notice to an Underwriter pursuant to Section 7 hereof shall be sent by mail or telecopy to such Underwriter at its address or telecopy number set forth in its Underwriters' Questionnaire or telex constituting such Questionnaire, which address or telecopy number will be supplied to the Corporation by . Any such communications shall take effect upon receipt thereof. 12. Business Day. As used herein, the term "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business. 13. Successors. This Agreement shall inure to the benefit of and be binding upon the Underwriters and the Corporation and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons and the officers and directors referred to in Section 7, and their respective successors, heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained; this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective successors and said controlling persons, officers and directors and their respective successors, heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Bonds from any Underwriter shall be deemed to be a successor or assign by reason merely of such purchase. 14. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 15. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the choice of law or conflict of law principles thereof. If the foregoing is in accordance with your understanding, kindly sign and return to us two counterparts hereof, and upon confirmation and acceptance by on behalf of each of the Underwriters, this letter and such confirmation and acceptance will become a binding agreement between the Corporation, on the one hand, and each of the Underwriters, on the other hand, in accordance with its terms. It is understood that confirmation and acceptance of this letter by on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement Among Underwriters, the form of which shall be submitted to the Corporation for examination, but without warranty on your part as to the authority of the signers thereof. Very truly yours, Duke Energy Corporation By:____________________ Name: Title: The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written. By:____________________ By:____________________ Name: Title: On behalf of each of the Underwriters 8 SCHEDULE A Principal Amount of Bonds to be Underwriter Purchased - ----------- --------- $ Total................................................. --------- $ ========= EX-1.D 5 dex1d.txt UNDERWRITING AGREEMENT, COMMON STOCK Exhibit 1-D DUKE ENERGY CORPORATION UNDERWRITING AGREEMENT For Purchase of Shares of Common Stock of the Corporation Ladies and Gentlemen: 1. Introductory. DUKE ENERGY CORPORATION, a North Carolina corporation ("Corporation"), proposes, subject to the terms and conditions stated herein, to issue and sell to the Underwriters named in Schedule A hereto (the "Underwriters") an aggregate of shares (the "Firm Shares") and, at the election of the Underwriters, up to additional shares (the "Optional Shares") of Common Stock ("Stock") of the Corporation (the Firm Shares and the Optional Shares that the Underwriters elect to purchase pursuant to Section 3 hereof being collectively called the "Shares"). (" ") and (" ") are the representatives (the "Representatives") of the Underwriters. 2. Representations and Warranties of the Corporation. The Corporation represents and warrants to, and agrees with, the several Underwriters that: (a) A registration statement (No. 333- , which also constitutes a post- effective amendment to a previous registration statement No. 333- 52204), including a combined prospectus, relating to the Shares and certain other securities has been filed with the Securities and Exchange Commission ("Commission") under the Securities Act of 1933, as amended (the "1933 Act"). Such registration statement and any post- effective amendment thereto, each in the form heretofore delivered to you, and, excluding exhibits thereto but including all documents incorporated by reference in the prospectus contained therein, for each of the other Underwriters, have been declared effective by the Commission in such form, and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in such registration statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the 1933 Act ("1933 Act Regulations") being hereinafter called a "Preliminary Prospectus"; the various parts of such registration statement, including all exhibits thereto and including the documents incorporated by reference in the prospectus contained in the registration statement at the time such part of the registration statement became effective, each as amended at the time such part of the registration statement became effective, being hereinafter called the "Registration Statement"; and the final prospectus relating to the Shares, in the form first filed pursuant to Rule 424(b) under the 1933 Act Regulations, being hereinafter called the "Prospectus"; and any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; and any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Corporation filed pursuant to Section 13(a) or 15(d) of the 1934 Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement). (b) The Registration Statement conforms and the Prospectus will conform in all material respects to the requirements of the 1933 Act and the 1933 Act Regulations, and the Registration Statement does not and the Prospectus will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the Corporation makes no warranty or representation to the Underwriters with respect to any statements or omissions made in reliance upon and in conformity with written information furnished to the Corporation by any Underwriter specifically for use therein. (c) The documents incorporated by reference in the Prospectus, at the time they were filed with the Commission, complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the "1934 Act Regulations"), and, when read together with the other information in the Prospectus, do not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and any documents deemed to be incorporated by reference in the Prospectus will, when they are filed with the Commission, comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations, and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the 2 circumstances under which they were made, not misleading, except that the Corporation makes no warranty or representation to the Underwriters with respect to any statements or omissions made in reliance upon and in conformity with written information furnished to the Corporation by any Underwriter specifically for use therein. (d) The compliance by the Corporation with all of the provisions of this Agreement has been duly authorized by all necessary corporate action and the consummation of the transactions herein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Corporation or any of its Principal Subsidiaries (as hereinafter defined) is a party or by which any of them or their respective property is bound or to which any of their property or assets is subject that would have a material adverse effect on the business, financial condition or results of operations of the Corporation and its subsidiaries, taken as a whole, nor will such action result in any violation of the provisions of the Restated Articles of Incorporation or By-Laws of the Corporation or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Corporation or its Principal Subsidiaries or any of their respective property that would have a material adverse effect on the business, financial condition or results of operations of the Corporation and its subsidiaries, taken as a whole; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the consummation by the Corporation of the transactions contemplated by this Agreement, except for authorization by the North Carolina Utilities Commission and The Public Service Commission of South Carolina and the registration under the 1933 Act of the Shares 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 Shares by the Underwriters. (e) This Agreement has been duly authorized, executed and delivered by the Corporation. (f) The Shares have been duly authorized for issuance and sale to the Underwriters pursuant to this Agreement and, when issued and delivered by the Corporation pursuant to this Agreement against payment of the consideration set forth herein, will be validly issued, fully paid and nonassessable; no holder of the Shares will be subject to personal liability by reason of being such a holder; and the issuance of the Shares is not subject to the preemptive or other similar rights of any security holder of the Corporation. (g) Each of Duke Capital Corporation, PanEnergy Corp, Duke Energy Natural Gas Corporation and Texas Eastern Transmission Corporation, each a Delaware corporation (and herein called a "Principal Subsidiary"), is a direct or indirect wholly owned subsidiary of the Corporation. 3. Purchase and Sale. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth (a) the Corporation agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Corporation, at a purchase price per share of $ , the number of Firm Shares set forth opposite the name of such Underwriter in Schedule A hereto and (b) in the event and to the extent that the Underwriters shall exercise the election to purchase Optional Shares as provided below, the Corporation agrees to issue and sell to each of the Underwriters, and each of the 3 Underwriters agrees, severally and not jointly, to purchase from the Corporation, at the purchase price per share set forth in this Section 3, that portion of the number of Optional Shares as to which such election shall have been exercised (to be adjusted by you so as to eliminate fractional shares) determined by multiplying such number of Optional Shares by a fraction, the numerator of which is the maximum number of Optional Shares which such Underwriter is entitled to purchase as set forth opposite the name of such Underwriter in Schedule A hereto and the denominator of which is the maximum number of Optional Shares that all of the Underwriters are entitled to purchase hereunder. The Corporation hereby grants to the Underwriters the right to purchase at their election up to Optional Shares, at the purchase price per share set forth in the paragraph above, for the purpose of covering sales of shares in excess of the number of Firm Shares. Any such election to purchase Optional Shares may be exercised only by written notice from you to the Corporation, given within a period of 30 calendar days after the date of this Agreement, setting forth the aggregate number of Optional Shares to be purchased and the date on which such Optional Shares are to be delivered, as determined by you but in no event earlier than the First Time of Delivery (as defined in Section 5 hereof) or, unless you and the Corporation otherwise agree in writing, earlier than two or later than ten business days after the date of such notice. 4. Offering by the Underwriters. It is understood that the several Underwriters propose to offer the Shares for sale to the public as set forth in the Prospectus. 5. Payment and Delivery. (a) The Shares to be purchased by each Underwriter hereunder, in definitive form, and in such authorized denominations and registered in such names as the Representatives may request upon at least forty- eight hours' prior notice to the Corporation, shall be delivered by or on behalf of the Corporation to , through the facilities of The Depository Trust Company ("DTC"), for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified by the Corporation to the Representatives at least forty-eight hours in advance. The Corporation will cause the certificates representing the Shares to be made available for checking and packaging at least twenty-four hours prior to the Time of Delivery (as defined below) with respect thereto at the office of , (the "Designated Office"). The time and date of such delivery and payment shall be, with respect to the Firm Shares, 10:00 a.m., New York time, on or such other time and date as the Representatives and the Corporation may agree upon in writing, and, with respect to the Optional Shares, 10:00 a.m., New York time, on the date specified by the Representatives in the written notice given by the Representatives of the Underwriters' election to purchase such Optional Shares, or such other time and date as the Representatives and the Corporation may agree upon in writing. Such time and date for delivery of the Firm Shares is herein called the "First Time of Delivery," such time and date for delivery of the Optional Shares, if not the First Time of Delivery, is herein called the "Second Time of Delivery," and each such time and date for delivery is herein called a "Time of Delivery." (b) The documents to be delivered at each Time of Delivery by or on behalf of the parties hereto pursuant to subsections (d), (e), (f), (h) and (j) of Section 7 hereof, including the 4 cross receipt for the Shares and any additional documents requested by the Underwriters pursuant to the last sentence of such Section 7, will be delivered at the offices of Dewey Ballantine LLP, 1301 Avenue of the Americas, New York, New York 10019, and the Shares will be delivered at the Designated Office, all at such Time of Delivery. A meeting will be held at said offices of Dewey Ballantine LLP at 3:00 p.m., New York time, on the Business Day immediately preceding such Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Section 5, "Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York, New York or Charlotte, North Carolina are generally authorized or obligated by law or executive order to close. 6. Covenants of the Corporation. The Corporation covenants and agrees with the several Underwriters that: (a) The Corporation will advise you promptly of the filing of any amendment (and effectiveness thereof) or supplementation of the Registration Statement or the Prospectus, of the filing of any Rule 462(b) registration statement and of the institution by the Commission of any stop order proceedings in respect of the Registration Statement, and will use its best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued. (b) If at any time when a prospectus relating to the Shares is required to be delivered under the 1933 Act any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the 1933 Act, the Corporation promptly will prepare and file with the Commission an amendment, supplement or an appropriate document pursuant to Section 13 or 14 of the 1934 Act which will correct such statement or omission or which will effect such compliance. (c) The Corporation, during the period when a prospectus relating to the Shares is required to be delivered under the 1933 Act, will timely file all documents required to be filed with the Commission pursuant to Section 13 or 14 of the 1934 Act. (d) The Corporation will make generally available to its security holders, in each case as soon as practicable but not later than 60 days after the close of the period covered thereby, earnings statements (in form complying with the provisions of Section 11(a) of the 1933 Act, which need not be certified by independent certified public accountants unless required by the 1933 Act) covering (i) a twelve-month period beginning not later than the first day of the Corporation's fiscal quarter next following the effective date of the Registration Statement and (ii) a twelve-month period beginning not later than the first day of the Corporation's fiscal quarter next following the date of this Agreement. (e) The Corporation will furnish to you, without charge, copies of the Registration Statement ( of which will be signed and will include all exhibits other than those incorporated by reference), the Prospectus, and all amendments and supplements to such documents, in each case as soon as available and in such quantities as you reasonably request. 5 (f) The Corporation will arrange or cooperate in arrangements for the qualification of the Shares for sale under the laws of such jurisdictions as you designate and will continue such qualifications in effect so long as required for the distribution; provided, however, that the Corporation shall not be required to qualify as a foreign corporation or to file any general consents to service of process under the laws of any state where it is not now so subject. (g) The Corporation will pay all expenses incident to the performance of its obligations under this Agreement including (i) the printing and filing of the Registration Statement and the printing of this Agreement and any Blue Sky Survey, (ii) the issuance and delivery of the Shares as specified herein (other than any transfer taxes), (iii) the fees and disbursements of counsel for the Underwriters in connection with the qualification of the Shares under the securities laws of any jurisdiction in accordance with the provisions of Section 6(f) and in connection with the preparation of any 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 and expenses in connection with the listing of the Shares on the New York Stock Exchange, (vi) any filing fee required by the National Association of Securities Dealers, Inc., (vii) the costs of any depository arrangements for the Shares with DTC or any successor depositary and (viii) the costs and expenses of the Corporation relating to investor presentations on any "road show" undertaken in connection with the marketing of the offering of the Shares, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Corporation, travel and lodging expenses of the Representatives and officers of the Corporation and any such consultants, and the cost of any aircraft chartered in connection with the road show; provided, however, the Underwriters shall reimburse a portion of the costs and expenses referred to in this clause (viii). (h) During a period of 90 days from the date of the Prospectus, the Corporation will not, without the prior written consent of the Representatives, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer, dispose of, directly or indirectly, any Shares or any securities convertible into or exercisable or exchangeable for Shares or enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership of any Shares, whether any such swap or transaction is to be settled by delivery of Shares or other securities, in cash or otherwise; provided, however, that the foregoing shall not apply to any securities or options to purchase any securities granted or sold pursuant to any employee or director compensation plans of the Corporation or employee or other investment plans of the Corporation in effect on the date of this Agreement. (i) The Corporation will use its best efforts to maintain the listing of the Shares on the New York Stock Exchange. 6 7. Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Shares will be subject at each Time of Delivery to the accuracy of the representations and warranties on the part of the Corporation herein, to the accuracy of the statements of officers of the Corporation made pursuant to the provisions hereof, to the performance by the Corporation of its obligations hereunder and to the following additional conditions precedent: (a) Prior to such Time of Delivery, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Corporation or you, shall be threatened by the Commission. (b) Prior to such Time of Delivery, the rating assigned by Moody's Investors Service, Inc. or Standard & Poor's Ratings Services to (i) any debt securities or preferred stock of the Corporation or (ii) any trust preferred securities of Duke Energy Capital Trust I or Duke Energy Capital Trust II as of the date of this Agreement shall not have been lowered. (c) Since the respective most recent dates as of which information is given in the Prospectus and up to such Time of Delivery, there shall not have been any material adverse change in the condition of the Corporation, financial or otherwise, except as reflected in or contemplated by the Prospectus, and, since such dates and up to such Time of Delivery, there shall not have been any material transaction entered into by the Corporation other than transactions contemplated by the Prospectus and transactions in the ordinary course of business, the effect of which in your reasonable judgment is so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares on the terms and in the manner contemplated by the Prospectus. (d) You shall have received an opinion of Ellen T. Ruff, Esq., Senior Vice President and General Counsel of the Corporation, dated such Time of Delivery, to the effect that: (i) The Corporation has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of North Carolina, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement. (ii) Each of the Corporation and the Principal Subsidiaries is duly qualified to do business in each jurisdiction in which the ownership or leasing of its property or the conduct of its business requires such qualification, except where the failure to so qualify, considering all such cases in the aggregate, does not have a material adverse effect on the business, properties, financial position or results of operations of the Corporation and its subsidiaries taken as a whole. (iii) The Registration Statement has become effective under the 1933 Act, and, to the best of the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or threatened under the 1933 Act. 7 (iv) The descriptions in the Registration Statement and the Prospectus of legal or governmental proceedings are accurate and fairly present the information required to be shown, and such counsel does not know of any litigation or any legal or governmental proceeding instituted or threatened against the Corporation or any of its subsidiaries or any of their respective properties that would be required to be disclosed in the Prospectus and is not so disclosed. (v) This Agreement has been duly authorized, executed and delivered by the Corporation. (vi) The performance by the Corporation of this Agreement 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. (vii) The North Carolina Utilities Commission and The Public Service Commission of South Carolina have issued appropriate orders with respect to the issuance and sale of the Shares in accordance with this Agreement, and, to the best of the knowledge of such counsel, such orders are still in effect; the issuance and sale of the Shares to the Underwriters are in conformity with the terms of such orders; and no other authorization, approval or consent of any other governmental body (other than in connection or compliance with the provisions of the securities or Blue Sky laws of any jurisdiction) is legally required for the issuance and sale of the Shares pursuant to this Agreement. (viii) The Shares have been duly authorized; the Shares, when issued and delivered by the Corporation to the Underwriters against payment therefor as described in the Prospectus, will be validly issued, fully paid and nonassessable; none of the Shares are subject to preemptive rights of any security holder of the Corporation; and the Shares conform as to legal matters in all material respects to the description thereof in the Prospectus under the caption "Description of the Common Stock." 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 such Time of Delivery, 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, 8 not misleading. Such counsel may also state that, except as otherwise expressly provided in such opinion, she does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in or incorporated by reference into the Registration Statement and the Prospectus and does not express any opinion or belief as to the financial statements or other financial data contained in or incorporated by reference into the Registration Statement and the Prospectus. 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 Austin, Lewis & Rogers 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 Dewey Ballantine LLP, counsel to the Corporation, dated such Time of Delivery, with respect to the matters set forth in (i), (iii), (v) through (viii) of Section 7(d) and to the further effect that: (i) Each of the Principal Subsidiaries has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus. (ii) The Corporation is not an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended. (iii) The Corporation is not a holding company under the Public Utility Holding Company Act of 1935, as amended. (iv) The Registration Statement as of the date of effectiveness under the 1933 Act and the Prospectus as of the date it was filed with, or transmitted for filing to, the Commission complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations; and nothing has come to their attention that would lead them to believe that the Registration Statement as of the date of effectiveness under the 1933 Act (or if an amendment to such Registration Statement or an annual report on Form 10-K has been filed by the Corporation with the Commission subsequent to the effectiveness of the Registration Statement, then at the time of the most recent such filing) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus as of the date it was filed with, or transmitted for filing to, the Commission and at such Time of Delivery contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such opinion may state that such counsel do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in or incorporated by reference into the Registration Statement and Prospectus except as otherwise expressly provided in such opinion and do not express any 9 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. (v) The statements made in the Prospectus under the caption "Description of the Common Stock," insofar as they purport to summarize provisions of documents specifically referred to therein, fairly present the information called for with respect thereto by Form S-3. (vi) No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the issue and sale of the Shares or the consummation by the Corporation of the transactions contemplated by this Agreement, except for authorization by the North Carolina Utilities Commission and The Public Service Commission of South Carolina and such as have been obtained under the 1933 Act and such consents, approvals, authorizations, orders, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Shares by the Underwriters. In rendering the foregoing opinion or opinions, Dewey Ballantine LLP may state that such opinion or opinions are limited to the Federal laws of the United States, the laws of the State of New York and the General Corporation Law of the State of Delaware, and that they are relying on the opinion of Ellen T. Ruff, Esq. as to matters of North Carolina law and on the opinion of Austin, Lewis & Rogers of Columbia, South Carolina as to matters of South Carolina law. In addition, such counsel may state that they have relied as to certain factual matters on information obtained from public officials, officers of the Corporation and other sources believed by them to be responsible and that the signatures on all documents examined by them are genuine, assumptions which such counsel have not independently verified. (f) You shall have received an opinion of , counsel for the Underwriters, dated such Time of Delivery, with respect to the incorporation of the Corporation, the validity of the Shares, 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 Ellen T. Ruff, Esq. as to matters of North Carolina law and on the opinion of Austin, Lewis & Rogers of Columbia, South Carolina as to matters of South Carolina law. (g) On or after the date hereof, there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally or of the securities of the Corporation, Duke Energy Capital Trust I or Duke Energy Capital Trust II on the New York Stock Exchange; or (ii) a general moratorium on commercial banking activities in New York declared by either Federal or New York State authorities; or (iii) the outbreak or material escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war if the effect of any such event specified in this subsection (g) in your reasonable judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares 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 8 hereof and except for the expenses to be borne by the Corporation as provided in Section 6(g) hereof. 10 (h) You shall have received a certificate of the Chairman of the Board, the President, any Vice President, the Secretary or an Assistant Secretary and any financial or accounting officer of the Corporation, dated such Time of Delivery, in which such officers, to the best of their knowledge after reasonable investigation, shall state that the representations and warranties of the Corporation in this Agreement are true and correct as of such Time of Delivery, that the Corporation has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Time of Delivery, that the conditions specified in Section 7(b) and Section 7(c) have been satisfied, and that no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are threatened by the Commission. (i) On the date of this Agreement, you shall have received a letter dated the date hereof, in form and substance satisfactory to you, from the Corporation's independent public accountants, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus as of a specified date not more than three business days prior to the date of this Agreement. (j) At such Time of Delivery you shall have received from the Corporation's independent public accountants a letter, dated such Time of Delivery, to the effect that such accountants reaffirm the statements made in the letter furnished pursuant to subsection (i) of this Section 7, except that the specified date referred to shall be a date not more than three business days prior to such Time of Delivery. (k) The Shares to be sold at such Time of Delivery shall have been duly listed for trading on the New York Stock Exchange subject to official notice of issuance. (l) At the First Time of Delivery, each of the executive officers of the Corporation shall have entered into an agreement substantially in the form of Exhibit 1 hereto. The Corporation will furnish you with such conformed copies of such opinions, certificates, letters and documents as you reasonably request. 8. Indemnification. (a) The Corporation agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act, as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the prospectus constituting a part of the Registration Statement in the form in which it became effective or the Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission or such alleged 11 statement or omission was made in reliance upon and in conformity with written information furnished to the Corporation by any Underwriter through you expressly for use in the Registration Statement (or any amendment thereto) or such Preliminary Prospectus, such prospectus, or the Prospectus (or any amendment or supplement thereto); (ii) against any and all loss, liability, claim, damage and expense whatsoever to the extent of the aggregate amount paid in settlement of any litigation, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Corporation; and (iii) against any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) of this Section 8. In no case shall the Corporation be liable under this indemnity agreement with respect to any claim made against any Underwriter or any such controlling person unless the Corporation shall be notified in writing of the nature of the claim within a reasonable time after the assertion thereof, but failure so to notify the Corporation shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. The Corporation shall be entitled to participate at its own expense in the defense, or, if it so elects, within a reasonable time after receipt of such notice, to assume the defense of any suit brought to enforce any such claim, but if it so elects to assume the defense, such defense shall be conducted by counsel chosen by it and approved by the Underwriter or Underwriters or controlling person or persons, defendant or defendants in any suit so brought, which approval shall not be unreasonably withheld. In any such suit, any Underwriter or any such controlling person shall have the right to employ its own counsel, but the fees and expenses of such counsel shall be at the expense of such Underwriter or such controlling person unless (i) the Corporation and such Underwriter shall have mutually agreed to the employment of such counsel, or (ii) the named parties to any such action (including any impleaded parties) include both such Underwriter or such controlling person and the Corporation and such Underwriter or such controlling person shall have been advised by such counsel that a conflict of interest between the Corporation and such Underwriter or such controlling person may arise and for this reason it is not desirable for the same counsel to represent both the indemnifying party and also the indemnified party (it being understood, however, that the Corporation shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys for all such Underwriters and all such controlling persons, which firm shall be designated in writing by you). The Corporation agrees to notify you within a reasonable time of the assertion of any claim against it, any of its officers or directors or any person who controls the Corporation within the meaning of Section 15 of the 1933 Act, in connection with the sale of the Shares. (b) Each Underwriter severally agrees that it will indemnify and hold harmless the Corporation, its directors and each of the officers of the Corporation who signed the 12 Registration Statement and each person, if any, who controls the Corporation within the meaning of Section 15 of the 1933 Act to the same extent as the indemnity contained in subsection (a) of this Section, but only with respect to statements or omissions made in the Registration Statement (or any amendment thereto) or any Preliminary Prospectus, such prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Corporation by such Underwriter through you expressly for use in the Registration Statement (or any amendment thereto), such Preliminary Prospectus, such prospectus or the Prospectus (or any amendment or supplement thereto). In case any action shall be brought against the Corporation or any person so indemnified based on the Registration Statement (or any amendment thereto) or such Preliminary Prospectus, such prospectus or the Prospectus (or any amendment or supplement thereto) and in respect of which indemnity may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Corporation, and the Corporation and each person so indemnified shall have the rights and duties given to the Underwriters, by the provisions of subsection (a) of this Section. (c) No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses (or actions in respect thereof) that would otherwise have been indemnified under the terms of such indemnity, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Corporation on the one hand and the Underwriters on the other from the offering of the Shares. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Corporation on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses (or actions in respect thereof), as well as any other relevant equity considerations. The relative benefits received by the Corporation on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Corporation bear to the total compensation received by the Underwriters in respect of the underwriting discount as set forth in the table on the cover page of the Prospectus, including proceeds from and compensation received with respect to the sale of any Optional Shares. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or 13 alleged omission to state a material fact relates to information supplied by the Corporation on the one hand or the Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Corporation and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses (or actions in respect thereof) referred to above in this Section shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute are several in proportion to their respective underwriting obligations and not joint. 9. Substitution of Underwriters. (a) If any Underwriter under this Agreement shall fail or refuse (whether for some reason sufficient to justify, in accordance with the terms hereof, the termination of its obligations to purchase or otherwise) to purchase the Shares which it has agreed to purchase, the Corporation shall immediately notify the remaining Underwriters and the remaining Underwriters may, within 24 hours of receipt of such notice, procure some other responsible party or parties satisfactory to the Corporation, who may include one or more of the remaining Underwriters, to purchase or agree to purchase such Shares on the terms herein set forth; and, if the remaining Underwriters shall fail to procure a satisfactory party or parties to purchase or agree to purchase such Shares on such terms within such period after the receipt of such notice, then the Corporation shall be entitled to an additional period of 24 hours within which to procure another party or parties to purchase or agree to purchase such Shares on the terms herein set forth. In any such case, either the remaining Underwriters or the Corporation shall have the right to postpone the Time of Delivery for a period not to exceed five business days from the date set forth in Section 5 hereof, in order that the necessary changes to the Prospectus and any other documents and arrangements may be effected. 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 Shares. (b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the Corporation as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased does not exceed one-tenth of the aggregate number of all the Shares to be purchased at such Time of 14 Delivery, then the Corporation shall have the right to require each non- defaulting Underwriter to purchase the number of Shares which such Underwriter agreed to purchase hereunder at such Time of Delivery and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the number of Shares which such Underwriter agreed to purchase hereunder at such Time of Delivery) of the Shares 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 Shares of a defaulting Underwriter or Underwriters by you and the Corporation as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased exceeds one-tenth of the aggregate number of all the Shares to be purchased at such Time of Delivery, or if the Corporation shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement (or, with respect to the Second Time of Delivery, the obligations of the Underwriters to purchase and of the Corporation to sell the Optional Shares) shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Corporation, except for the expenses to be borne by the Corporation as provided in Section 6(g) hereof and the indemnity and contribution agreement in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 10. Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other statements of the Corporation or its officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter or the Corporation, or any of its officers or directors or any controlling person, and will survive delivery of and payment for the Shares. 11. Reliance on Your Acts. In all dealings hereunder, the Representatives shall act on behalf of each of the Underwriters, and the Corporation shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by the Representatives. 12. Notices. All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed or telecopied and confirmed to the Underwriters, in care of Attn: , , , (facsimile number ( ) - ), or, if sent to the Corporation, will be mailed or telecopied and confirmed to it at 526 South Church Street, Charlotte, N.C. 28202, facsimile number (704) 382-1452, attention of David L. Hauser, Senior Vice President and Treasurer; provided, however, that any notice to an Underwriter pursuant to Section 8 hereof shall be sent by mail or telecopy to such Underwriter at its address or telecopy number set forth in its Underwriters' Questionnaire or telex constituting such Questionnaire, which address or telecopy number will be supplied to the Corporation by the Representatives. Any such communications shall take effect upon receipt thereof. 15 13. Business Day. As used herein, the term "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business. 14. Successors. This Agreement shall inure to the benefit of and be binding upon the Underwriters and the Corporation and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons, officers and directors referred to in Section 8 and their respective successors, heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained; this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective successors and said controlling persons, officers and directors and their respective successors, heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Shares from any Underwriter shall be deemed to be a successor or assign by reason merely of such purchase. 15. 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. 16. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the choice of law or conflict of law principles thereof. 16 If the foregoing is in accordance with your understanding, kindly sign and return to us two counterparts hereof, and upon confirmation and acceptance by the Representatives on behalf of each of the Underwriters, this letter and such confirmation and acceptance will become a binding agreement between the Corporation, on the one hand, and each of the Underwriters, on the other hand, in accordance with its terms. It is understood that confirmation and acceptance of this letter by the Representatives on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement Among Underwriters, the form of which shall be submitted to the Corporation for examination, but without warranty on your part as to the authority of the signers thereof. Very truly yours, DUKE ENERGY CORPORATION By: _________________________________ Name: Title: The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written. By: By: _________________________________ Name: Title: On behalf of each of the Underwriters 17 SCHEDULE A Underwriters
Number of Shares to be Purchased if Maximum Total Number of Shares to Option to Purchase Underwriter be Purchased Exercised ----------- ------------------------- ---------------------- ----- ----- Total Shares ===== =====
18 Exhibit 1 Duke Energy Corporation Lock-Up Agreement , Re: Duke Energy Corporation--Lock-Up Agreement Ladies and Gentlemen: The undersigned understands that you, as representatives (the "Representatives"), propose to enter into an Underwriting Agreement on behalf of the several Underwriters named in Schedule A to such agreement (collectively, the "Underwriters") with Duke Energy Corporation, a North Carolina corporation (the "Corporation"), providing for a public offering (the "Public Offering") of shares of the common stock (the "Common Stock") of the Corporation (the "Shares") pursuant to a Registration Statement on Form S-3 filed with the Securities and Exchange Commission (the "SEC"). In consideration of the agreement by the Underwriters to offer and sell the Shares, the undersigned agrees that, during the period beginning from the date of the definitive prospectus supplement covering the public offering of the Shares and continuing to and including the date (the "Cut-off Date") 90 days after the date of such definitive prospectus supplement, the undersigned will not (i) directly or indirectly offer or sell (or grant any option or warrant to offer to sell), (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Subject Shares (as hereinafter defined), whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery 19 of Subject Shares or such other securities, in cash or otherwise, or any options or warrants to purchase any Subject Shares, or any securities convertible into, exchangeable for or that represent the right to receive Subject Shares. The foregoing restriction is expressly agreed to preclude the undersigned from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the undersigned's Subject Shares even if such Subject Shares would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include without limitation any short sale or any purchase, sale or grant of any right (including without limitation any put or call option) with respect to any of the undersigned's Subject Shares or with respect to any security that includes, relates to, or derives any significant part of its value from such Subject Shares. The term "Subject Shares" means (i) the shares of Common Stock, whether now owned or hereafter acquired, owned directly by the undersigned (including holding as a custodian) or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC and (ii) shares of Common Stock acquired prior to the Cut-Off Date pursuant to any employee or director compensation plan of the Corporation or pursuant to any employee or shareholder investment plan of the Corporation. Notwithstanding the foregoing, the undersigned may transfer the Subject Shares (i) as a gift or gifts, provided that the donee or donees thereof agree(s) to be bound in writing by the restrictions set forth herein, (ii) to any member of the immediate family of the undersigned provided that the transferee or transferees agree(s) to be bound in writing by the restrictions set forth herein, (iii) to any trust or foundation, provided that the trustee of the trust or foundation agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, (iv) to an entity controlled by the undersigned provided the transferee or transferees agree(s) to be bound in writing by the restrictions set forth herein, (v) pursuant to the laws of testamentary or intestate descent, provided that the transferee or transferees agree(s) to be bound in writing by the restrictions set forth herein or (vi) with the prior written consent of the Representatives on behalf of the Underwriters. For purposes of this Lock-Up Agreement, "immediate family" shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. The undersigned will have at the time the undersigned acquires each of the Subject Shares, and, except as contemplated by clause (i), (ii), (iii), (iv), (v) or (vi) above, for the duration of this Lock-Up Agreement will have, good and marketable title to such Subject Shares, free and clear of all liens, encumbrances and claims whatsoever created by the undersigned. The undersigned also agrees and consents to the entry of stop transfer instructions with the Corporation in its capacity as transfer agent and registrar against the transfer of the Subject Shares except in compliance with the foregoing restrictions. Notwithstanding the foregoing, the undersigned may not make any transfer of the Shares under clauses (i), (ii), (iii) or (iv) above if any filing by any party (donor, donee, transferor or transferee) under Section 16(a) of the Securities Exchange Act of 1934, as amended, shall be required (or be made voluntarily) in connection with such transfer or distribution (other than a filing on a Form 5 made after the expiration of the 90-day period referred to above). 20 The undersigned understands that the Corporation and the Underwriters are relying upon this Lock-Up Agreement in proceeding toward consummation of the offering. The undersigned further understands that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned's heirs, legal representatives, successors, and assigns. Very truly yours, _____________________________________ Exact Name of Shareholder _____________________________________ Authorized Signature _____________________________________ Title 21 EX-1.E 6 dex1e.txt UNDERWRITING AGREEMT., TRUST PREF. SECURITIES Exhibit 1-E Preferred Securities DUKE ENERGY CAPITAL TRUST [ ] % Trust Preferred Securities (Liquidation Amount $ per Preferred Security) UNDERWRITING AGREEMENT , Ladies and 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, subject to the terms and conditions stated herein, 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, to be 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 and as to be supplemented by a supplemental indenture, to be 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 a previous registration statement No. 333-52204, including a combined prospectus, relating to the Preferred Securities, the Guarantee, the Notes and certain other securities has been filed with the Securities and Exchange Commission ("Commission") under the Securities Act of 1933, as amended (the "1933 Act"). Such registration statement and any post-effective amendment thereto, each in the form heretofore delivered to you, and, excluding exhibits thereto but including all documents incorporated by reference in the prospectus contained therein, for each of the other Underwriters, have been declared effective by the Commission in such form, and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in such registration statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the 1933 Act ("1933 Act Regulations") being hereinafter called a "Preliminary Prospectus"; the various parts of such registration statement, including all exhibits thereto and including the documents incorporated by reference in the prospectus contained in the registration statement at the time such part of the registration statement became effective, each as amended at the time such part of the registration statement became effective, being hereinafter called the "Registration Statement"; and the final prospectus relating to the Preferred Securities, the Guarantee and the Notes, in the form first filed pursuant to Rule 424(b) under the 1933 Act Regulations, being hereinafter called the "Prospectus"; and any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; and any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Corporation filed pursuant to Section 13(a) or 15(d) of the 1934 Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement). (b) The Registration Statement conforms and the Prospectus will conform in all material respects to the requirements of the 1933 Act and the 1933 Act Regulations, and the Registration Statement does not and the Prospectus will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the Corporation makes no warranty or representation to the Underwriters with respect to any statements or omissions made in reliance upon and in conformity with written information 2 furnished to the Trust or the Corporation by any Underwriter 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, complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the "1934 Act Regulations"), and, when read together with the other information in the Prospectus, do not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and any documents deemed to be incorporated by reference in the Prospectus will, when they are filed with the Commission, comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations, and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the Corporation makes no warranty or representation to the Underwriters with respect to any statements or omissions made in reliance upon and in conformity with written information furnished to the Trust or the Corporation by any Underwriter 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." (d) The compliance by the Corporation and the Trust with all of the provisions of this Agreement has been duly authorized by all necessary corporate or business trust action and the consummation of the transactions herein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Corporation or any of its Principal Subsidiaries (as hereinafter defined) is a party or by which any of them or their respective property is bound or to which any of their property or assets is subject that would have a material adverse effect on the business, financial condition or results of operations of the Corporation and its subsidiaries, taken as a whole, nor will such action result in any violation of the provisions of the Restated Articles of Incorporation or By-Laws of the Corporation, 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 that would have a material adverse effect on the business, financial condition or results of operations of the Corporation and its subsidiaries, taken as a whole 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 and the registration under the 1933 Act of the Preferred Securities, the Guarantee and the Notes, the qualification of the Corporation Agreements under the Trust Indenture Act of 1939 and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Preferred Securities by the Underwriters. (e) This Agreement has been duly authorized, executed and delivered by the Corporation. (f) Each of Duke Capital Corporation, PanEnergy Corp, Duke Energy Natural Gas Corporation and Texas Eastern Transmission Corporation, each a Delaware corporation (and 3 herein 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, 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 Dewey Ballantine LLP, 1301 Avenue of the Americas, New York, New York 10019, 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 the filing of any amendment (and effectiveness thereof) or supplementation of the Registration Statement or the Prospectus, of the filing of any Rule 462(b) registration statement and of the institution by the Commission of any stop order proceedings in respect of the Registration Statement, and will use 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 timely file all documents required to be filed with the Commission pursuant to Section 13 or 14 of the 1934 Act. (d) The Corporation will make generally available to its security holders, in each case as soon as practicable but not later than 60 days after the close of the period covered thereby, earnings statements (in form complying with the provisions of Section 11(a) of the 1933 Act, which need not be certified by independent certified public accountants unless required by the 1933 Act) covering (i) a twelve-month period beginning not later than the first day of the Corporation's fiscal quarter next following the effective date of the Registration Statement and (ii) a twelve-month period beginning not later than the first day of the Corporation's fiscal quarter next following the date of this Agreement. (e) The 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 any 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 5 Preferred Securities and, if applicable, the Notes, (vi) all fees and expenses of the 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., (ix) the costs of any depository arrangements for the Preferred Securities with DTC or any successor depositary and (x) the costs and expenses of the Corporation relating to investor presentations on any "road show" undertaken in connection with the marketing of the offering of the Preferred Securities, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Corporation, travel and lodging expenses of and officers of the Corporation and any such consultants, and the cost of any aircraft chartered in connection with the road show; provided, however, the Underwriters shall reimburse a portion of the costs and expenses referred to in this clause (x). 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 Moody's Investors Service, Inc. or Standard & Poor's Ratings Services to (i) any debt securities or preferred stock of the Corporation or (ii) any trust preferred securities of Duke Energy Capital Trust I or Duke Energy Capital Trust II as of the date of this Agreement shall not have been lowered. (c) Since the respective most recent dates as of which information is given in the Prospectus and up to the Closing Date, there shall not have been any material adverse change in the condition of the 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, the effect of which in your reasonable judgment is so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Preferred Securities on the terms and in the manner contemplated by the Prospectus. (d) You shall have received an opinion of Ellen T. Ruff, Esq., Senior Vice President and General Counsel of the Corporation, dated the Closing Date, to the effect that: (i) The Corporation has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of North Carolina, with power and authority 6 (corporate and other) to own its properties and conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement. (ii) Each of the Corporation and the Principal Subsidiaries is duly qualified to do business in each jurisdiction in which the ownership or leasing of its property or the conduct of its business requires such qualification, except where the failure to so qualify, considering all such cases in the aggregate, does not have a material adverse effect on the business, properties, financial position or results of operations of the Corporation and its subsidiaries taken as a whole. (iii) The Registration Statement has become effective under the 1933 Act, and, to the best of the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or threatened under the 1933 Act. (iv) The descriptions in the Registration Statement and the Prospectus of legal or governmental proceedings are accurate and fairly present the information required to be shown, and such counsel does not know of any litigation or any legal or governmental proceeding instituted or threatened against the Corporation or any of its subsidiaries or any of their respective properties that would be required to be disclosed in the Prospectus and is not so disclosed. (v) This Agreement has been duly authorized, executed and delivered by the Corporation. (vi) The performance by the Corporation of this Agreement and the 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. (vii) 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 issuances 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 (other than in connection or compliance with the provisions of the securities or Blue Sky laws of any jursidiction) is legally required for the issuance of the Notes and the Guarantee. (viii) 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 7 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). (ix) 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). (x) 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). (xi) 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). 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 8 for the accuracy, completeness or fairness of the statements contained in or incorporated by reference into the Registration Statement and the Prospectus and does not express any opinion or belief as to the financial statements or other financial data contained in or incorporated by 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 Austin, Lewis & Rogers 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 Dewey Ballantine LLP, counsel to the Corporation, dated the Closing Date, with respect to the matters set forth in (i), (iii), (v) through (xi) of Section 6(d) and to the further effect that: (i) Each of the Principal Subsidiaries has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus. (ii) The Corporation is not an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended. (iii) The Corporation is not a holding company under the Public Utility Holding Company Act of 1935, as amended. (iv) The Registration Statement as of the date of effectiveness under the 1933 Act and the Prospectus as of the date it was filed with, or transmitted for filing to, the Commission complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations; 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 or incorporated by reference into the Registration Statement and Prospectus except as otherwise expressly 9 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." (v) 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 summarize provisions of documents specifically referred to therein, fairly present the information called for with respect thereto by Form S-3, 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. (vi) No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the issuance of the Notes and the Guarantee or the consummation by the Corporation or the Trust of the transactions contemplated by this Agreement or the Indenture, except for authorization by the North Carolina Utilities Commission and The Public Service Commission of South Carolina and such as have been obtained under the 1933 Act and the Trust Indenture Act of 1939 and such consents, approvals, authorizations, orders, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Preferred Securities by the Underwriters. In rendering the foregoing opinion or opinions, Dewey Ballantine LLP may state that such opinion or opinions are limited to the Federal laws of the United States, the laws of the State of New York and the General Corporation Law of the State of Delaware, and that they are relying on the opinion of Ellen T. Ruff, Esq. as to matters of North Carolina law and on the opinion of Austin, Lewis & Rogers 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 Richards, Layton & 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 10 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 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, 11 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 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 Ellen T. Ruff, Esq. as to matters of North Carolina law and on the opinion of Austin, Lewis & Rogers 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 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 subsection (h) in your reasonable judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Preferred Securities 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, the 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 12 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 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 13 upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) of this Section 7. In no case shall the 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 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 14 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. (c) No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) If the indemnification provided for in this Section 7 is unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses (or actions in respect thereof) that would otherwise have been indemnified under the terms of such indemnity, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Trust and the Corporation on the one hand and the Underwriters on the other from the offering of the Preferred Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Trust and the Corporation on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses (or actions in respect thereof), as well as any other relevant equity considerations. The relative benefits received by the Trust and the Corporation on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Trust and the Corporation bear to the total compensation received by the Underwriters in respect of the underwriting discount as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Trust or the Corporation on the one hand or the Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Trust, the Corporation and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses (or actions in respect thereof) referred to above in this Section shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Preferred Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No 15 person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute are several in proportion to their respective underwriting obligations and not joint. 8. Default by One or More of the Underwriters. (a) If any Underwriter shall default in its obligation to purchase the 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-tenth 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 provided in subsection (a) above, the aggregate number of such Preferred Securities which remains unpurchased exceeds one-tenth 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 and contribution agreement in Section 7 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 16 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 several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any 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, 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 . 11. Notices. All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed or telecopied and confirmed to the Underwriters in care of Attn: , , , facsimile number ( ) - , or, if sent to the Trust or the Corporation, will be mailed or telecopied and confirmed to them at 526 South Church Street, Charlotte, N.C. 28202, facsimile number (704) 382-1452, attention of David L. Hauser, Senior Vice President and Treasurer; provided, however, that any notice to an Underwriter pursuant to Section 7 hereof shall be sent by mail or telecopy to such Underwriter at its address or telecopy number set forth in its Underwriters' Questionnaire or telex constituting such Questionnaire, which address or telecopy number will be supplied to the Trust and the Corporation by . Any such communications shall take effect upon receipt thereof. 12. Business Day. As used herein, the term "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business. 13. Successors. This Agreement shall inure to the benefit of and be binding upon the Underwriters, 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 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, without giving effect to the choice of law or conflict of law principles thereof. 17 If the foregoing is in accordance with your understanding, kindly sign and return to us two counterparts hereof, and upon confirmation and acceptance by on behalf of each of the Underwriters, this letter and such confirmation and acceptance will become a binding agreement between the 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 confirmation and acceptance of this letter by on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement Among Underwriters, the form of which shall be submitted to the 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 18 SCHEDULE A
Number of Underwriter Preferred Securities - ----------- --------------------- ---- Total................................................. ====
EX-1.F 7 dex1f.txt FORM OF CALC. AGENT AGREEMT., SR. NOTES Exhibit 1-F CALCULATION AGENT AGREEMENT THIS AGREEMENT dated as of , between Duke Energy Corporation (hereinafter called the "Issuer"), having its principal office at 526 South Church Street, Charlotte, North Carolina 28202, and The Chase Manhattan Bank, a New York banking corporation (hereinafter sometimes called the "Calculation Agent" which term shall, unless the context shall otherwise require, include its successors and assigns), having its principal corporate trust office at 450 West 33rd Street, New York, New York 10001. Recitals of the Issuer The Issuer proposes to issue from time to time Senior Notes (the "Notes") under a Senior Indenture dated as of September 1, 1998 (the "Indenture"), between the Issuer and The Chase Manhattan Bank, as Trustee. Capitalized terms used in this Agreement and not otherwise defined herein are used as defined in the Indenture. Certain of the Notes may bear interest at one of several floating rates determined by reference to an interest rate formula (the "Floating Rate Notes") and the Issuer desires to engage the Calculation Agent to perform certain services in connection therewith. NOW IT IS HEREBY AGREED THAT: 1. The Issuer hereby appoints The Chase Manhattan Bank as Calculation Agent for the Floating Rate Notes, upon the terms and subject to the conditions herein mentioned, subject to the Issuer's right to designate a different party as Calculation Agent in the Prospectus Supplement relating to the Floating Rate Notes, and The Chase Manhattan Bank hereby accepts such appointment. This appointment shall apply only to those series of Floating Rate Notes for which no other Calculation Agent is designated in the applicable Prospectus Supplement relating to the Floating Rate Notes and the term "Floating Rate Notes" in this Agreement shall mean only Floating Rate Notes as to which this appointment applies. Subject to the foregoing, the Calculation Agent shall act as an agent of the Issuer for the purpose of determining the interest rate or rates of the Floating Rate Notes. 2. The Issuer agrees to deliver to the Calculation Agent, prior to the issuance of any Floating Rate Notes, copies of the proposed forms of such Notes, including copies of the terms and conditions relating to the determination of the interest rate thereunder. The Issuer shall not issue any Floating Rate Note prior to the receipt of confirmation from the Calculation Agent of its acceptance of the proposed form of such Note. 3. The Issuer shall notify the Calculation Agent of the issuance of any Floating Rate Notes prior to the issuance thereof and at the time of such issuance shall deliver to the Calculation Agent the information required to be provided by the Issuer for the calculation of the applicable interest rates thereunder. The Calculation Agent shall calculate the applicable interest rates for Floating Rate Notes in accordance with the terms of such Notes, the Indenture and the provisions of this Agreement. 4. Upon the determination of an interest rate applicable to a Floating Rate Note, the Calculation Agent shall promptly notify the Issuer, the Trustee and any Paying Agent of such interest rate. Upon the request of the holder of a Floating Rate Note, the Calculation Agent shall advise such holder of the interest rate then in effect and, if different, the interest rate which will become effective as a result of a determination already made with respect to such Floating Rate Note. 5. The Issuer will pay such compensation as shall be agreed upon with the Calculation Agent and the out-of-pocket expenses, including reasonable counsel fees, incurred by the Calculation Agent in connection with its duties hereunder, upon receipt of such invoices as the Issuer shall reasonably require. 6. Notwithstanding any satisfaction or discharge of the Notes or the Indenture, the Issuer will indemnify the Calculation Agent against any losses, liabilities, costs, claims, actions or demands which it may incur or sustain or which may be made against it in connection with its appointment or the exercise of its powers and duties hereunder as well as the reasonable costs, including the reasonable expenses and fees of counsel in defending any claim, action or demand, except such as may result from the gross negligence, wilful misconduct or bad faith of the Calculation Agent or any of its employees or agents. The Calculation Agent shall give the Issuer prompt notice of any such claim, action or demand known to it, but failure to do so shall not affect the indemnity provided hereby. Except as provided in the preceding sentence, the Calculation Agent shall incur no liability and shall be indemnified and held harmless by the Issuer for, or in respect of, any actions taken or suffered to be taken in good faith by the Calculation Agent in reliance upon (i) the written opinion or advice of counsel or (ii) written instructions from an officer of the Issuer. 7. The Calculation Agent accepts its obligations herein set forth upon the terms and conditions hereof, including the following, to all of which the Issuer agrees: (i) in acting under this Agreement and in connection with the Floating Rate Notes, the Calculation Agent, acting as agent for the Issuer, does not assume any obligation toward, or any 2 relationship of agency or trust for or with, any of the holders of such Floating Rate Notes; (ii) unless herein otherwise specifically provided, any order, certificate, notice, request or communication from the Issuer made or given under any provisions of this Agreement shall be sufficient if signed by any person whom the Calculation Agent reasonably believes to be a duly authorized officer or attorney-in-fact of the Issuer; (iii) the Calculation Agent shall be obligated to perform only such duties as are set forth specifically herein, in the Floating Rate Notes or in the Indenture and any duties necessarily incidental thereto; (iv) the Calculation Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted to be taken or anything suffered by it in reliance upon any provision contained in a Floating Rate Note, the Indenture or any information supplied to it by an officer of the Issuer pursuant to this Agreement, including the information to be supplied pursuant to paragraph 3 above; (v) the Calculation Agent, whether acting for itself or in any other capacity, may become the owner or pledgee of Notes with the same rights as it would have had if it were not acting hereunder as Calculation Agent; (vi) the Calculation Agent shall incur no liability hereunder except for loss sustained by reason of its or its employees' or agents' gross negligence, wilful misconduct or bad faith; and (vii) in no event shall the Calculation Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Calculation Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. 8. (a) The Issuer agrees to notify the Calculation Agent at least three Business Days prior to the issuance of any Floating Rate Note with an interest rate to be determined by any formula that would require the Calculation Agent to select banks or other financial institutions (the "Reference Banks") for purposes of quoting rates. Immediately prior to seeking such quotes from such Reference Banks, the Calculation Agent will notify the Issuer and the Trustee of the names and addresses of such Reference Banks. The Calculation Agent shall not be responsible to the Issuer or any third party for any failure of the Reference Banks to fulfill their duties or meet their obligations as Reference Banks or as a result of the Calculation Agent having acted (except in the event of gross negligence, wilful misconduct or bad faith) on any quotation or other information given by any Reference Bank which subsequently may be found to be incorrect. 3 (b) Except as provided below, the Calculation Agent may at any time resign as Calculation Agent by giving written notice to the Issuer and the Trustee of such intention on its part, specifying the date on which its desired resignation shall become effective, provided that such notice shall be given not less than 60 days prior to the said effective date unless the Issuer agrees in writing. The Calculation Agent may be removed by the filing with it and the Trustee of an instrument in writing signed by the Issuer specifying such removal and the date when it shall become effective. Any resignation or removal of the Calculation Agent shall take effect only upon: (i) the appointment by the Issuer as hereinafter provided of a successor Calculation Agent; and (ii) the acceptance of such appointment by such successor Calculation Agent; provided, however, that in the event the Calculation Agent has given not less than 60 days' prior notice of its desired resignation, and during such 60 days there has not been acceptance by a successor Calculation Agent of its appointment as successor Calculation Agent, the Calculation Agent so resigning may petition any court of competent jurisdiction for the appointment of a successor Calculation Agent. The Issuer covenants that it shall appoint a successor Calculation Agent as soon as practicable after receipt of any notice of resignation hereunder. Upon its resignation or removal becoming effective, the retiring Calculation Agent shall be entitled to the payment of all compensation and the reimbursement of its expenses (including reasonable counsel fees) incurred by such retiring Calculation Agent, in accordance with paragraph 5 hereof, to the date such resignation or removal becomes effective. (c) If at any time the Calculation Agent shall resign or be removed, or shall become incapable of acting or shall be adjudged bankrupt or insolvent, or liquidated or dissolved, or an order is made or an effective resolution is passed to wind up the Calculation Agent, or if the Calculation Agent shall file a voluntary petition in bankruptcy or make an assignment for the benefit of its creditors, or shall consent to the appointment of a receiver, administrator or other similar official of all or any substantial part of its property, or shall admit in writing its inability to pay or meet its debts as they mature, or if a receiver, administrator or other similar official of the Calculation Agent or of all or any substantial part of its property shall be appointed, or if any order of any court shall be entered approving any petition filed by or against the Calculation Agent under the provisions of any applicable bankruptcy or insolvency law, or if any public officer 4 shall take charge or control of the Calculation Agent or its property or affairs for the purpose of rehabilitation, conservation or liquidation, then a successor Calculation Agent shall be appointed by the Issuer by an instrument in writing filed with the predecessor Calculation Agent, the successor Calculation Agent and the Trustee. Upon the appointment as aforesaid of a successor Calculation Agent and acceptance by the latter of such appointment the former Calculation Agent shall cease to be Calculation Agent hereunder. (d) Any successor Calculation Agent appointed hereunder shall execute and deliver to its predecessor, the Issuer and the Trustee an instrument accepting such appointment hereunder, and thereupon such successor Calculation Agent, without any further act, deed or conveyance, shall become vested with all the authority, rights, powers, immunities, duties and obligations of such predecessor with like effect as if originally named as the Calculation Agent hereunder, and such predecessor shall thereupon become obliged to transfer and deliver, and such successor Calculation Agent shall be entitled to receive, copies of any relevant records maintained by such predecessor Calculation Agent. (e) Any corporation into which the Calculation Agent may be merged or converted or any corporation with which the Calculation Agent may be consolidated or any corporation resulting from any merger, conversion or consolidation to which the Calculation Agent shall be a party shall, to the extent permitted by applicable law, be the successor Calculation Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto. Notice of any such merger, conversion or consolidation shall forthwith be given to the Issuer and the Trustee. (f) The provisions of paragraph 6 hereof shall survive any resignation or removal hereunder. 9. Any notice required to be given hereunder shall be delivered in person against written receipt, sent by letter or telecopy or communicated by telephone (subject, in the case of communication by telephone, to confirmation dispatched within two Business Days by letter or telecopy), in the case of the Issuer, to it at the address set forth in the heading of this Agreement, Attention: Treasurer; in the case of the Calculation Agent, to it at the address set forth in the heading of this Agreement, Attention: Capital Markets Fiduciary Services; in the case of the Trustee, to it at 450 West 33rd Street, New York, New York 10001, Attention: Capital Markets Fiduciary Services; or, in any case, 5 to any other address of which the party receiving notice shall have notified the party giving such notice in writing. 10. This Agreement may be amended only by a writing duly executed and delivered by each of the parties signing below. 11. The provisions of this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. 12. This Agreement may be executed in counterparts and the executed counterparts shall together constitute a single instrument. IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the day and year first above written. DUKE ENERGY CORPORATION By: ------------------------------- Title: THE CHASE MANHATTAN BANK By: ------------------------------- Title: 6 EX-4.D.7 8 dex4d7.txt SUPP INDENTURE, SR. INDENTURE, SR. NOTES Exhibit 4-D-7 DUKE ENERGY CORPORATION TO THE CHASE MANHATTAN BANK Trustee ---------------- Supplemental Indenture Dated as of , ---------------- $ Series % Senior Notes due ---------------- TABLE OF CONTENTS (1) ARTICLE 1 Series % Senior Notes
Page ---- Section 101. Establishment................................................. 1 Section 102. Definitions................................................... 2 Section 103. Payment of Principal and Interest............................. 2 Section 104. Denominations................................................. 3 Section 105. Global Securities............................................. 3 Section 106. Redemption at the Option of the Corporation................... 3 Section 107. Paying Agent.................................................. 5 ARTICLE 2 Miscellaneous Provisions Section 201. Recitals by Corporation....................................... 5 Section 202. Ratification and Incorporation of Original Indenture.......... 5 Section 203. Executed in Counterparts...................................... 5
Exhibit A Form of Series % Senior Note due Exhibit B Certificate of Authentication - -------- (1) This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions. THIS SUPPLEMENTAL INDENTURE is made as of the day of , , by and between DUKE ENERGY CORPORATION, a North Carolina corporation, having its principal office at 526 South Church Street, Charlotte, North Carolina 28202 (the "Corporation"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as Trustee (herein called the "Trustee"). W I T N E S S E T H: WHEREAS, the Corporation has heretofore entered into a Senior Indenture, dated as of September 1, 1998 (the "Original Indenture"), with The Chase Manhattan Bank, as Trustee; WHEREAS, the Original Indenture is incorporated herein by this reference and the Original Indenture, as may be amended and supplemented to the date hereof, including by this Supplemental Indenture, is herein called the "Indenture"; WHEREAS, under the Indenture, a new series of Securities may at any time be established in accordance with the provisions of the Indenture and the terms of such series may be described by a supplemental indenture executed by the Corporation and the Trustee; WHEREAS, the Corporation proposes to create under the Indenture a series of Securities; WHEREAS, additional Securities of other series hereafter established, except as may be limited in the Indenture as at the time supplemented and modified, may be issued from time to time pursuant to the Indenture as at the time supplemented and modified; and WHEREAS, all conditions necessary to authorize the execution and delivery of this Supplemental Indenture and to make it a valid and binding obligation of the Corporation have been done or performed. NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE 1 Series % Senior Notes Section 101. Establishment. There is hereby established a new series of Securities to be issued under the Indenture, to be designated as the Corporation's Series % Senior Notes due (the "Series Notes"). There are to be authenticated and delivered $ principal amount of Series Notes, and no further Series Notes shall be authenticated and delivered except as provided by Section 304, 305, 306, 906 or 1106 of the Original Indenture. The Series Notes shall be issued in fully registered form without coupons. The Series Notes shall be in substantially the form set out in Exhibit A hereto, and the form of the Trustee's Certificate of Authentication for the Series Notes shall be in substantially the form set forth in Exhibit B hereto. 1 Each Series Note shall be dated the date of authentication thereof and shall bear interest from the date of original issuance thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for. Section 102. Definitions. The following defined terms used herein shall, unless the context otherwise requires, have the meanings specified below. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Original Indenture. "Interest Payment Dates" means and , commencing , . "Original Issue Date" means , . "Regular Record Date" means, with respect to each Interest Payment Date, the close of business on the 15th calendar day prior to such Interest Payment Date. "Stated Maturity" means , . Section 103. Payment of Principal and Interest. The principal of the Series Notes shall be due at Stated Maturity (unless earlier redeemed). The unpaid principal amount of the Series Notes shall bear interest at the rate of % per annum until paid or duly provided for, such interest to accrue from , or from the most recent Interest Payment Date to which interest has been paid or duly provided for. Interest shall be paid semiannually in arrears on each Interest Payment Date to the Person or Persons in whose name the Series Notes are registered on the Regular Record Date for such Interest Payment Date; provided that interest payable at the Stated Maturity of principal or on a Redemption Date as provided herein shall be paid to the Person to whom principal is payable. Any such interest that is not so punctually paid or duly provided for shall forthwith cease to be payable to the Holders on such Regular Record Date and may either be paid to the Person or Persons in whose name the Series Notes are registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee ("Special Record Date"), notice whereof shall be given to Holders of the Series Notes not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Series Notes may be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Original Indenture. Payments of interest on the Series Notes shall include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for the Series Notes shall be computed and paid on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on the Series Notes is not a Business Day, then payment of the interest payable on such date shall be made on the next succeeding day that is a Business Day (and without any interest or payment in respect of any such delay) with the same force and effect as if made on the date the payment was originally payable. "Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day on which banking institutions in New York, New York are authorized or obligated by law or executive order to remain closed or (iii) a day on which the Corporate Trust Office is closed for business. 2 Payment of principal of, premium, if any, and interest on the Series Notes shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal of, premium, if any, and interest on Series Notes represented by a Global Security shall be made by wire transfer of immediately available funds to the Holder of such Global Security, provided that, in the case of payments of principal and premium, if any, such Global Security is first surrendered to the Paying Agent. If any of the Series Notes are no longer represented by a Global Security, (i) payments of principal, premium, if any, and interest due at the Stated Maturity or earlier redemption of such Series Notes shall be made at the office of the Paying Agent upon surrender of such Series Notes to the Paying Agent and (ii) payments of interest shall be made, at the option of the Corporation, subject to such surrender where applicable, (A) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (B) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto. Section 104. Denominations. The Series Notes shall be issued in denominations of $ or any integral multiple thereof. Section 105. Global Securities. The Series Notes shall initially be issued in the form of one or more Global Securities registered in the name of the Depositary (which initially shall be The Depository Trust Company) or its nominee. Except under the limited circumstances described below, Series Notes represented by such Global Security or Global Securities shall not be exchangeable for, and shall not otherwise be issuable as, Series Notes in definitive form. The Global Securities described above may not be transferred except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor Depositary or its nominee. A Global Security shall be exchangeable for Series Notes registered in the names of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Corporation that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary shall have been appointed by the Corporation within 90 days of receipt by the Corporation of such notification, or if at any time the Depositary ceases to be a clearing agency registered under the Exchange Act at a time when the Depositary is required to be so registered to act as such Depositary and no successor Depositary shall have been appointed by the Corporation within 90 days after it becomes aware of such cessation or (ii) the Corporation in its sole discretion determines that such Global Security shall be so exchangeable. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Series Notes registered in such names as the Depositary shall direct. Section 106. Redemption at the Option of the Corporation. The Series Notes shall be redeemable, in whole or from time to time in part, at the option of the Corporation on any date (a "Redemption Date"), at a Redemption Price equal to the greater of (i) 100% of the principal amount of the Series Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to such Redemption Date) discounted to such Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus basis points, plus, in either case, accrued and unpaid interest on the principal amount being redeemed to such Redemption Date. 3 "Treasury Rate" means, with respect to any Redemption Date for the Series Notes, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Stated Maturity, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined, and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date. "Comparable Treasury Issue" means the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable to the remaining term of the Series Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Series Notes. "Independent Investment Banker" means and any successor firm or, if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Trustee after consultation with the Corporation. "Comparable Treasury Price" means, with respect to any Redemption Date for the Series Notes, (i) the average of Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than such Reference Treasury Dealer Quotations, the average of all such quotations. "Reference Treasury Dealer" means each of , , , and and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the Corporation will substitute therefor another Primary Treasury Dealer. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date. Notwithstanding Section 1104 of the Original Indenture, the notice of redemption with respect to the foregoing redemption need not set forth the Redemption Price but only the manner of calculation thereof. 4 The Corporation shall notify the Trustee of the Redemption Price with respect to the foregoing redemption promptly after the calculation thereof. The Trustee shall not be responsible for calculating said Redemption Price. If less than all of the Series Notes are to be redeemed, the Trustee shall select the Series Notes or portions of Series Notes to be redeemed by such method as the Trustee shall deem fair and appropriate. The Trustee may select for redemption Series Notes and portions of Series Notes in amounts of whole multiples of $ . The Series Notes shall not have a sinking fund. Section 107. Paying Agent. The Trustee shall initially serve as Paying Agent with respect to the Series Notes, with the Place of Payment initially being the Corporate Trust Office. ARTICLE 2 Miscellaneous Provisions Section 201. Recitals by Corporation. The recitals in this Supplemental Indenture are made by the Corporation only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of the Series Notes and of this Supplemental Indenture as fully and with like effect as if set forth herein in full. Section 202. Ratification and Incorporation of Original Indenture. As supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture and this Supplemental Indenture shall be read, taken and construed as one and the same instrument. Section 203. Executed in Counterparts. This Supplemental Indenture may be executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and behalf by its duly authorized officers, all as of the day and year first above written. Duke Energy Corporation By: ----------------------------------- Vice President Attest: - ------------------------------- The Chase Manhattan Bank, as Trustee By: ----------------------------------- Vice President Attest: - ------------------------------- 5 EXHIBIT A FORM OF SERIES % SENIOR NOTE DUE No. CUSIP No. DUKE ENERGY CORPORATION SERIES % SENIOR NOTE DUE Principal Amount: $ Regular Record Date: close of business on the 15th calendar day prior to the relevant Interest Payment Date Original Issue Date: , Stated Maturity: , Interest Payment Dates: and , commencing , Interest Rate: % per annum Authorized Denomination: $ or any integral multiples thereof Duke Energy Corporation, a North Carolina corporation (the "Corporation," which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to , or registered assigns, the principal sum of DOLLARS ($ ) on the Stated Maturity shown above and to pay interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semiannually in arrears on each Interest Payment Date as specified above, commencing on the Interest Payment Date next succeeding the Original Issue Date shown above and on the Stated Maturity at the rate per annum shown above (the "Interest Rate") until the principal hereof is paid or made available for payment and on any overdue principal and on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (other than an Interest Payment Date that is the Stated Maturity or a Redemption Date) will, as provided in the Indenture, be paid to the Person in whose name this Series % Senior Note due (this "Security") is registered on the Regular Record Date as specified above next preceding such Interest Payment Date; provided that any interest payable at Stated Maturity or on a Redemption Date will be paid to the Person to whom principal is payable. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Securities of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture. A-1 Payments of interest on this Security will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for this Security shall be computed and paid on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on this Security is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or payment in respect of any such delay) with the same force and effect as if made on the date the payment was originally payable. "Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day on which banking institutions in New York, New York are authorized or obligated by law or executive order to remain closed or (iii) a day on which the Corporate Trust Office is closed for business. Payment of principal of, premium, if any, and interest on the Securities of this series shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal of, premium, if any, and interest on Securities of this series represented by a Global Security shall be made by wire transfer of immediately available funds to the Holder of such Global Security, provided that, in the case of payments of principal and premium, if any, such Global Security is first surrendered to the Paying Agent. If any of the Securities of this series are no longer represented by a Global Security, (i) payments of principal, premium, if any, and interest due at the Stated Maturity or earlier redemption of such Securities shall be made at the office of the Paying Agent upon surrender of such Securities to the Paying Agent, and (ii) payments of interest shall be made, at the option of the Corporation, subject to such surrender where applicable, (A) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (B) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Corporation has caused this instrument to be duly executed under its corporate seal. Dated: Duke Energy Corporation By: ---------------------------------- Vice President Attest: - ------------------------------------- Assistant Secretary A-2 CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. The Chase Manhattan Bank, as Trustee By: ---------------------------------- (Reverse Side of Security) This Security is one of a duly authorized issue of Securities of the Corporation (the "Securities"), issued and issuable in one or more series under a Senior Indenture, dated as of September 1, 1998, as supplemented (the "Indenture"), between the Corporation and The Chase Manhattan Bank, as Trustee (the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Corporation, the Trustee and the Holders of the Securities issued thereunder and of the terms upon which said Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof as Series % Senior Notes due in the aggregate principal amount of $ . Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Indenture. The Securities of this series will be redeemable, in whole or from time to time in part, at the option of the Corporation on any date (a "Redemption Date"), at a Redemption Price equal to the greater of (i) 100% of the principal amount of the Securities of this series to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to such Redemption Date) discounted to such Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus basis points, plus, in either case, accrued and unpaid interest on the principal amount being redeemed to such Redemption Date. "Treasury Rate" means, with respect to any Redemption Date for the Securities of this series, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Stated Maturity, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined, and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date. A-3 "Comparable Treasury Issue" means the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable to the remaining term of the Securities of this series to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Securities of this series. "Independent Investment Banker" means and any successor firm or, if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Trustee after consultation with the Corporation. "Comparable Treasury Price" means with respect to any Redemption Date for the Securities of this series (i) the average of Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations or (ii) if the Trustee obtains fewer than such Reference Treasury Dealer Quotations, the average of all such quotations. "Reference Treasury Dealer" means each of , , , and and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the Corporation will substitute therefor another Primary Treasury Dealer. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its prinicpal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date. Notice of any redemption by the Corporation will be mailed at least 30 days but not more than 60 days before any Redemption Date to each Holder of Securities of this series to be redeemed. If less than all the Securities of this series are to be redeemed at the option of the Corporation, the Trustee shall select, in such manner as it shall deem fair and appropriate, the Securities of this series to be redeemed in whole or in part. The Trustee may select for redemption Securities of this series and portions of Securities of this series in amounts of whole multiples of $ . In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the surrender hereof. If an Event of Default with respect to the Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Corporation and the rights of the Holders of the Securities of all series affected under the Indenture at any time by the Corporation and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Outstanding A-4 Securities of all series affected thereby (voting as one class). The Indenture contains provisions permitting the Holders of not less than a majority in principal amount of the Outstanding Securities of all series with respect to which a default under the Indenture shall have occurred and be continuing (voting as one class), on behalf of the Holders of the Securities of all such series, to waive, with certain exceptions, such default under the Indenture and its consequences. The Indenture also permits the Holders of not less than a majority in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Corporation with certain provisions of the Indenture affecting such series. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Corporation, which is absolute and unconditional, to pay the principal of and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Corporation for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Corporation and the Security Registrar and duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Corporation may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Indenture contains provisions for defeasance at any time of the entire indebtedness of the Securities of this series and for covenant defeasance at any time of certain covenants in the Indenture upon compliance with certain conditions set forth in the Indenture. Prior to due presentment of this Security for registration of transfer, the Corporation, the Trustee and any agent of the Corporation or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Corporation, the Trustee nor any such agent shall be affected by notice to the contrary. The Securities of this series are issuable only in registered form without coupons in denominations of $ and any integral multiple thereof. As provided in the Indenture and subject to the limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series of a different authorized denomination, as requested by the Holder surrendering the same upon surrender of the Security or Securities to be exchanged at the office or agency of the Corporation. This Security shall be governed by, and construed in accordance with, the internal laws of the State of New York. A-5 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM--as tenants in common UNIF GIFT MIN ACT- ______ Custodian _______ (Cust) (Minor) TEN ENT--as tenants by the entireties JT TEN--as joint tenants with rights of under Uniform Gifts to survivorship and not as tenants in common Minors Act ______________ (State) Additional abbreviations may also be used though not on the above list. - ------------------------------------------------------------------------------- FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto _______ (please insert Social Security or other identifying number of assignee) - ------------------------------------------------------------------------------- PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- the within Security and all rights thereunder, hereby irrevocably constituting and appointing - ------------------------------------------------------------------------------- agent to transfer said Security on the books of the Corporation, with full power of substitution in the premises. Dated: _____________________________ -------------------------------------- -------------------------------------- NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever. A-6 EXHIBIT B CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. The Chase Manhattan Bank, as Trustee By: ---------------------------------- Authorized Officer B-1 EX-4.E.4 9 dex4e4.txt SUPP INDENTURE, SUB INDENTURE FOR JR SUB NOTES Exhibit 4-E-4 DUKE ENERGY CORPORATION TO THE CHASE MANHATTAN BANK Trustee ---------------- Supplemental Indenture Dated as of , ---------------- $ Series % Junior Subordinated Notes due ---------------- TABLE OF CONTENTS (1) ARTICLE 1 Series % Junior Subordinated Notes
PAGE ---- Section 101. Establishment............................................... 1 Section 102. Definitions................................................. 1 Section 103. Payment of Principal and Interest........................... 2 Section 104. Denominations............................................... 2 Section 105. Global Securities........................................... 2 Section 106. Redemption at the Option of the Corporation................. 3 Section 107. Subordination............................................... 4 Section 108. Paying Agent................................................ 4 ARTICLE 2 Miscellaneous Provisions Section 201. Recitals by Corporation..................................... 4 Section 202. Ratification and Incorporation of Original Indenture........ 4 Section 203. Executed in Counterparts.................................... 4
Exhibit A Form of Series % Junior Subordinated Note due Exhibit B Certificate of Authentication - -------- (1) This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions. i THIS SUPPLEMENTAL INDENTURE is made as of the day of , , by and between DUKE ENERGY CORPORATION, a North Carolina corporation, having its principal office at 526 South Church Street, Charlotte, North Carolina 28202 (the "Corporation"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as Trustee (herein called the "Trustee"). W I T N E S S E T H: WHEREAS, the Corporation has heretofore entered into a Subordinated Indenture, dated as of December 1, 1997 (the "Original Indenture") with The Chase Manhattan Bank, as Trustee; WHEREAS, the Original Indenture is incorporated herein by this reference and the Original Indenture, as may be amended and supplemented to the date hereof, including by this Supplemental Indenture, is herein called the "Indenture"; WHEREAS, under the Indenture, a new series of Securities may at any time be established in accordance with the provisions of the Indenture and the terms of such series may be described by a supplemental indenture executed by the Corporation and the Trustee; WHEREAS, the Corporation proposes to create under the Indenture a series of Securities; WHEREAS, additional Securities of other series hereafter established, except as may be limited in the Indenture as at the time supplemented and modified, may be issued from time to time pursuant to the Indenture as at the time supplemented and modified; and WHEREAS, all conditions necessary to authorize the execution and delivery of this Supplemental Indenture and to make it a valid and binding obligation of the Corporation have been done or performed. NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE 1 Series % Junior Subordinated Notes Section 101. Establishment. There is hereby established a new series of Securities to be issued under the Indenture, to be designated as the Corporation's Series % Junior Subordinated Notes due (the "Series Notes"). There are to be authenticated and delivered $ principal amount of Series Notes, and no further Series Notes shall be authenticated and delivered except as provided by Section 304, 305, 306, 906 or 1106 of the Original Indenture. The Series Notes shall be issued in fully registered form without coupons. The Series Notes shall be in substantially the form set out in Exhibit A hereto, and the form of the Trustee's Certificate of Authentication for the Series Notes shall be in substantially the form set forth in Exhibit B hereto. Each Series Note shall be dated the date of authentication thereof and shall bear interest from the date of original issuance thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for. Section 102. Definitions. The following defined terms used herein shall, unless the context otherwise requires, have the meanings specified below. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Original Indenture. "Interest Payment Dates" means and , commencing , . "Original Issue Date" means , . "Regular Record Date" means, with respect to each Interest Payment Date, the close of business on the 15th calendar day prior to such Interest Payment Date. "Stated Maturity" means , . Section 103. Payment of Principal and Interest. The principal of the Series Notes shall be due at Stated Maturity (unless earlier redeemed). The unpaid principal amount of the Series Notes shall bear interest at the rate of % per annum until paid or duly provided for, such interest to accrue from , or from the most recent Interest Payment Date to which interest has been paid or duly provided for. Interest shall be paid semiannually in arrears on each Interest Payment Date to the Person or Persons in whose name the Series Notes are registered on the Regular Record Date for such Interest Payment Date; provided that interest payable at the Stated Maturity of principal or on a Redemption Date as provided herein shall be paid to the Person to whom principal is payable. Any such interest that is not so punctually paid or duly provided for shall forthwith cease to be payable to the Holders on such Regular Record Date and may either be paid to the Person or Persons in whose name the Series Notes are registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee ("Special Record Date"), notice whereof shall be given to Holders of the Series Notes not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Series Notes may be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Original Indenture. Payments of interest on the Series Notes shall include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for the Series Notes shall be computed and paid on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on the Series Notes is not a Business Day, then payment of the interest payable on such date shall be made on the next succeeding day that is a Business Day (and without any interest or payment in respect of any such delay) with the same force and effect as if made on the date the payment was originally payable. "Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day on which banking institutions in New York, New York are authorized or obligated by law or executive order to remain closed or (iii) a day on which the Corporate Trust Office is closed for business. Payment of principal of, premium, if any, and interest on the Series Notes shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal of, premium, if any, and interest on Series Notes represented by a Global Security shall be made by wire transfer of immediately available funds to the Holder of such Global Security, provided that, in the case of payments of principal and premium, if any, such Global Security is first surrendered to the Paying Agent. If any of the Series Notes are no longer represented by a Global Security, (i) payments of principal, premium, if any, and interest due at the Stated Maturity or earlier redemption of such Series Notes shall be made at the office of the Paying Agent upon surrender of such Series Notes to the Paying Agent and (ii) payments of interest shall be made, at the option of the Corporation, subject to such surrender where applicable, (A) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (B) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto. Section 104. Denominations. The Series Notes shall be issued in denominations of $ or any integral multiple thereof. Section 105. Global Securities. The Series Notes shall initially be issued in the form of one or more Global Securities registered in the name of the Depositary (which initially shall be The Depository Trust Company) or its nominee. Except under the limited circumstances described below, Series Notes represented 2 by such Global Security or Global Securities shall not be exchangeable for, and shall not otherwise be issuable as, Series Notes in definitive form. The Global Securities described above may not be transferred except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor Depositary or its nominee. A Global Security shall be exchangeable for Series Notes registered in the names of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Corporation that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary shall have been appointed by the Corporation within 90 days of receipt by the Corporation of such notification, or if at any time the Depositary ceases to be a clearing agency registered under the Exchange Act at a time when the Depositary is required to be so registered to act as such Depositary and no successor Depositary shall have been appointed by the Corporation within 90 days after it becomes aware of such cessation or (ii) the Corporation in its sole discretion determines that such Global Security shall be so exchangeable. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Series Notes registered in such names as the Depositary shall direct. Section 106. Redemption at the Option of the Corporation. The Series Notes shall be redeemable, in whole or from time to time in part, at the option of the Corporation on any date (a "Redemption Date"), at a Redemption Price equal to the greater of (i) 100% of the principal amount of the Series Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to such Redemption Date) discounted to such Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus basis points, plus, in either case, accrued and unpaid interest on the principal amount being redeemed to such Redemption Date. "Treasury Rate" means, with respect to any Redemption Date for the Series Notes, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Stated Maturity, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined, and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date. "Comparable Treasury Issue" means the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable to the remaining term of the Series Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Series Notes. "Independent Investment Banker" means and any successor firm or, if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Trustee after consultation with the Corporation. 3 "Comparable Treasury Price" means with respect to any Redemption Date for the Series Notes (i) the average of Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than such Reference Treasury Dealer Quotations, the average of all such quotations. "Reference Treasury Dealer" means each of , , , and and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the Corporation will substitute therefor another Primary Treasury Dealer. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date. Notwithstanding Section 1104 of the Original Indenture, the notice of redemption with respect to the foregoing redemption need not set forth the Redemption Price but only the manner of calculation thereof. The Corporation shall notify the Trustee of the Redemption Price with respect to the foregoing redemption promptly after the calculation thereof. The Trustee shall not be responsible for calculating said Redemption Price. If less than all of the Series Notes are to be redeemed, the Trustee shall select the Series Notes or portions of Series Notes to be redeemed by such method as the Trustee shall deem fair and appropriate. The Trustee may select for redemption Series Notes and portions of Series Notes in amounts of whole multiples of $ . The Series Notes shall not have a sinking fund. Section 107. Subordination. The indebtedness evidenced by the Series Notes shall be, to the extent and in the manner set forth in the Original Indenture, subordinate and junior in right of payment to the prior payment in full of all Senior Indebtedness (as defined in the Original Indenture) with respect to the Series Notes, and the Series Notes shall rank pari passu in right of payment with each other series of Securities issued under the Indenture, with the exception of any series of Securities which by its terms provides otherwise. Section 108. Paying Agent. The Trustee shall initially serve as Paying Agent with respect to the Series Notes, with the Place of Payment initially being the Corporate Trust Office. ARTICLE 2 Miscellaneous Provisions Section 201. Recitals by Corporation. The recitals in this Supplemental Indenture are made by the Corporation only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of the Series Notes and of this Supplemental Indenture as fully and with like effect as if set forth herein in full. Section 202. Ratification and Incorporation of Original Indenture. As supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture and this Supplemental Indenture shall be read, taken and construed as one and the same instrument. Section 203. Executed in Counterparts. This Supplemental Indenture may be executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument. 4 IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and behalf by its duly authorized officers, all as of the day and year first above written. Duke Energy Corporation By: --------------------------------- Vice President Attest: - ----------------------------- The Chase Manhattan Bank, as Trustee By: --------------------------------- Vice President Attest: - ----------------------------- 5 EXHIBIT A FORM OF SERIES % JUNIOR SUBORDINATED NOTE DUE No. CUSIP No. THE INDEBTEDNESS EVIDENCED BY THIS SECURITY IS, TO THE EXTENT PROVIDED IN THE INDENTURE, SUBORDINATE AND SUBJECT IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL SENIOR INDEBTEDNESS, AND THIS SECURITY IS ISSUED SUBJECT TO THE PROVISIONS OF THE INDENTURE WITH RESPECT THERETO. DUKE ENERGY CORPORATION SERIES % JUNIOR SUBORDINATED NOTE DUE Principal Amount: $ Regular Record Date: close of business on the 15th calendar day prior to the relevant Interest Payment Date Original Issue Date: , Stated Maturity: , Interest Payment Dates: and , commencing , . Interest Rate: % per annum Authorized Denomination: $ or any integral multiples thereof Duke Energy Corporation, a North Carolina corporation (the "Corporation," which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to , or registered assigns, the principal sum of DOLLARS ($ ) on the Stated Maturity shown above and to pay interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semiannually in arrears on each Interest Payment Date as specified above, commencing on the Interest Payment Date next succeeding the Original Issue Date shown above and on the Stated Maturity at the rate per annum shown above (the "Interest Rate") until the principal hereof is paid or made available for payment and on any overdue principal and on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (other than an Interest Payment Date that is the Stated Maturity or a Redemption Date) will, as provided in the Indenture, be paid to the Person in whose name this Series % Junior Subordinated Note due (this "Security") is registered on the Regular Record Date as specified above next preceding such Interest Payment Date; provided that any interest payable at Stated Maturity or on a Redemption Date will be paid to the Person to whom principal is payable. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Securities of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture. Payments of interest on this Security will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for this Security shall be computed and paid on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on this Security is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without A-1 any interest or payment in respect of any such delay) with the same force and effect as if made on the date the payment was originally payable. "Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day on which banking institutions in New York, New York are authorized or obligated by law or executive order to remain closed or (iii) a day on which the Corporate Trust Office is closed for business. Payment of principal of, premium, if any, and interest on the Securities of this series shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal of, premium, if any, and interest on Securities of this series represented by a Global Security shall be made by wire transfer of immediately available funds to the Holder of such Global Security, provided that, in the case of payments of principal and premium, if any, such Global Security is first surrendered to the Paying Agent. If any of the Securities of this series are no longer represented by a Global Security, (i) payments of principal, premium, if any, and interest due at the Stated Maturity or earlier redemption of such Securities shall be made at the office of the Paying Agent upon surrender of such Securities to the Paying Agent, and (ii) payments of interest shall be made, at the option of the Corporation, subject to such surrender where applicable, (A) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (B) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto. The indebtedness evidenced by this Security is, to the extent and in the manner set forth in the Indenture, subordinate in right of payment to the prior payment in full of all Senior Indebtedness (as defined in the Indenture), and this Security is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided, and (c) appoints the Trustee his attorney-in-fact for any and all such purposes. Each Holder hereof, by his acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness whether now outstanding or hereafter incurred and waives reliance by each such holder upon said provisions. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Corporation has caused this instrument to be duly executed under its corporate seal. Dated: Duke Energy Corporation By: --------------------------------- Vice President Attest: - ------------------------------------- Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. The Chase Manhattan Bank, as Trustee By: --------------------------------- A-2 (Reverse Side of Security) This Security is one of a duly authorized issue of Securities of the Corporation (the "Securities"), issued and issuable in one or more series under a Subordinated Indenture, dated as of December 1, 1997, as supplemented (the "Indenture"), between the Corporation and The Chase Manhattan Bank, as Trustee (the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Corporation, the Trustee and the Holders of the Securities issued thereunder and of the terms upon which said Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof as Series % Junior Subordinated Notes due in the aggregate principal amount of $ . Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Indenture. The Securities of this series will be redeemable, in whole or from time to time in part, at the option of the Corporation on any date (a "Redemption Date"), at a Redemption Price equal to the greater of (i) 100% of the principal amount of the Securities of this series to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to such Redemption Date) discounted to such Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus basis points, plus, in either case, accrued and unpaid interest on the principal amount being redeemed to such Redemption Date. "Treasury Rate" means, with respect to any Redemption Date for the Securities of this series, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Stated Maturity, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined, and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date. "Comparable Treasury Issue" means the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable to the remaining term of the Securities of this series to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Securities of this series. "Independent Investment Banker" means and any successor firm or, if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Trustee after consultation with the Corporation. "Comparable Treasury Price" means with respect to any Redemption Date for the Securities of this series (i) the average of Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations or (ii) if the Trustee obtains fewer than such Reference Treasury Dealer Quotations, the average of all such quotations. A-3 "Reference Treasury Dealer" means each of , , , and and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the Corporation will substitute therefor another Primary Treasury Dealer. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date. Notice of any redemption by the Corporation will be mailed at least 30 days but not more than 60 days before any Redemption Date to each Holder of Securities of this series to be redeemed. If less than all the Securities of this series are to be redeemed at the option of the Corporation, the Trustee shall select, in such manner as it shall deem fair and appropriate, the Securities of this series to be redeemed in whole or in part. The Trustee may select for redemption Securities of this series and portions of Securities of this series in amounts of whole multiples of $ . In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the surrender hereof. If an Event of Default with respect to the Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Corporation and the rights of the Holders of the Securities of all series affected under the Indenture at any time by the Corporation and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of all series affected thereby (voting as one class). The Indenture contains provisions permitting the Holders of not less than a majority in principal amount of the Outstanding Securities of all series with respect to which a default under the Indenture shall have occurred and be continuing (voting as one class), on behalf of the Holders of the Securities of all such series, to waive, with certain exceptions, such default under the Indenture and its consequences. The Indenture also permits the Holders of not less than a majority in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Corporation with certain provisions of the Indenture affecting such series. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Corporation, which is absolute and unconditional, to pay the principal of and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Corporation for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Corporation and the Security Registrar and duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Corporation may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. A-4 The Indenture contains provisions for defeasance at any time of the entire indebtedness of the Securities of this series and for covenant defeasance at any time of certain covenants in the Indenture upon compliance with certain conditions set forth in the Indenture. Prior to due presentment of this Security for registration of transfer, the Corporation, the Trustee and any agent of the Corporation or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Corporation, the Trustee nor any such agent shall be affected by notice to the contrary. The Securities of this series are issuable only in registered form without coupons in denominations of $ and any integral multiple thereof. As provided in the Indenture and subject to the limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series of a different authorized denomination, as requested by the Holder surrendering the same upon surrender of the Security or Securities to be exchanged at the office or agency of the Corporation. This Security shall be governed by, and construed in accordance with, the internal laws of the State of New York. A-5 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common UNIF GIFT MIN ACT - Custodian ------- ------ (Cust) (Minor) under Uniform Gifts to Minors Act -------------------------- (State) TEN ENT -- as tenants by the entireties JT TEN -- as joint tenants with rights of survivorship and not as tenants in common Additional abbreviations may also be used though not on the above list. - ------------------------------------------------------------------------------- FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto -------- - ------------------------------------------------------------------------------- (please insert Social Security or other identifying number of assignee) - ------------------------------------------------------------------------------- PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- the within Security and all rights thereunder, hereby irrevocably constituting and appointing - ------------------------------------------------------------------------------- agent to transfer said Security on the books of the Corporation, with full power of substitution in the premises. Dated: -------------------------- ------------------------------------------ ------------------------------------------ NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever. A-6 EXHIBIT B CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. The Chase Manhattan Bank, as Trustee By: --------------------------------- Authorized Officer B-1 EX-4.E.5 10 dex4e5.txt SUPP INDENT., JR SUB NOTES FOR TRST PREF. SEC. Exhibit 4-E-5 DUKE ENERGY CORPORATION TO THE CHASE MANHATTAN BANK Trustee ------------------------- SUPPLEMENTAL INDENTURE Dated as of , ------------------------- $ SERIES % JUNIOR SUBORDINATED NOTES DUE , TABLE OF CONTENTS (/1/)
PAGE ---- ARTICLE 1 Series % Junior Subordinated Notes.......................... 1 SECTION 101. Establishment.............................................. 1 SECTION 102. Definitions................................................ 2 SECTION 103. Payment of Principal and Interest.......................... 4 SECTION 104. Deferral of Interest Payments.............................. 5 SECTION 105. Denominations.............................................. 6 SECTION 106. Global Securities.......................................... 6 SECTION 107. Redemption................................................. 7 SECTION 108. Additional Interest........................................ 7 SECTION 109. Limitations on Dividend and Certain Other Payments......... 8 SECTION 110. Covenants Regarding Securities Trust....................... 9 SECTION 111. No Fiduciary Duty of Trustee to Holders of Trust Securities................................................. 9 SECTION 112. Listing of Series Notes.................................. 9 SECTION 113. Covenant Defeasance........................................ 9 SECTION 114. Set-Off.................................................... 9 SECTION 115. Subordination.............................................. 10 SECTION 116. Paying Agent............................................... 10 ARTICLE 2 Miscellaneous Provisions................................... 10 SECTION 201. Recitals by Corporation.................................... 10 SECTION 202. Ratification and Incorporation of Original Indenture....... 10 SECTION 203. Executed in Counterparts................................... 10 SECTION 204. Assignment................................................. 10 SECTION 205. Enforcement by Holders of Preferred Securities of Right of Holders to Receive Principal and Interest................. 10 EXHIBIT A Form of Series % Junior Subordinated Note Due , EXHIBIT B Certificate of Authentication
- -------- (1) This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions. i THIS SUPPLEMENTAL INDENTURE is made as of the day of , , by and between DUKE ENERGY CORPORATION, a North Carolina corporation, having its principal office at 526 South Church Street, Charlotte, North Carolina 28202 (the "Corporation"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as Trustee (herein called the "Trustee"). WITNESSETH: WHEREAS, the Corporation has heretofore entered into a Subordinated Indenture, dated as of December 1, 1997 (the "Original Indenture") with The Chase Manhattan Bank; WHEREAS, the Original Indenture is incorporated herein by this reference and the Original Indenture, as supplemented by this Supplemental Indenture, is herein called the "Indenture"; WHEREAS, under the Original Indenture, a new series of Securities may at any time be established in accordance with the provisions of the Original Indenture and the terms of such series may be described by a supplemental indenture executed by the Corporation and the Trustee; WHEREAS, the Corporation proposes to create under the Indenture a series of Securities; WHEREAS, additional Securities of other series hereafter established, except as may be limited in the Original Indenture as at the time supplemented and modified, may be issued from time to time pursuant to the Indenture as at the time supplemented and modified; and WHEREAS, all conditions necessary to authorize the execution and delivery of this Supplemental Indenture and to make it a valid and binding obligation of the Corporation have been done or performed. NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE 1 Series % Junior Subordinated Notes SECTION 101. Establishment. There is hereby established a new series of Securities to be issued under the Indenture, to be designated as the Corporation's Series % Junior Subordinated Notes due , (the "Series Notes"). There are to be authenticated and delivered $ principal amount of Series Notes, and no further Series Notes shall be authenticated and delivered except as provided by Sections 304, 305, 306, 906 or 1106 of the Original Indenture. The Series Notes shall be issued in definitive fully registered form without coupons. The Series Notes shall be in substantially the form set out in Exhibit A hereto. The entire principal amount of the Series Notes shall initially be evidenced by one certificate issued to the Property Trustee of Duke Energy Capital Trust [ ]. The form of the Trustee's Certificate of Authentication for the Series Notes shall be in substantially the form set forth in Exhibit B hereto. Each Series Note shall be dated the date of authentication thereof and shall bear interest from the date of original issuance thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for. SECTION 1.02. Definitions. The following defined terms used herein shall, unless the context otherwise requires, have the meanings specified below. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Original Indenture. "Additional Interest" means (i) such additional amounts as may be required so that the net amounts received and retained by the Holder (if the Holder is the Securities Trust) after paying taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United States or any other taxing authority will not be less than the amounts the Holder would have received had not such taxes, duties, assessments, or other governmental charges been imposed; and (ii) such interest as shall accrue on interest due and not paid on an Interest Payment Date, accruing at the rate of % per annum from the applicable Interest Payment Date to the date of payment, compounded quarterly, on each Interest Payment Date, to the extent permitted by applicable law. "Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day on which banks in New York, New York are authorized or obligated by law or executive order to remain closed or (iii) a day on which the Corporate Trust Office or the principal corporate trust office of the Property Trustee is closed for business. "Deferred Interest" means such installments of interest as are not paid during any Extension Period, plus Additional Interest (as defined in clause (ii) of the definition thereof) thereon. "Extension Period" means any period during which the Corporation has elected to defer payments of interest, which deferral may be for a period of up to ( ) consecutive quarters. "Guarantee" means the Guarantee Agreement executed and delivered by the Corporation and The Chase Manhattan Bank, as guarantee trustee, for the benefit of the holders of the Preferred Securities, as such Agreement may be amended from time to time. "Interest Payment Dates" means March 31, June 30, September 30 and December 31 of each year. "Investment Company Act Event" means that the Administrative Trustees (as defined in the Trust Agreement) and the Corporation shall have received an Opinion of Counsel experienced in such matters to the effect that, as a result of the occurrence of a change in law or regulation or a written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is more than an insubstantial risk that the Securities Trust is or will be considered an "investment company" that is required to be registered under the Investment Company Act of 1940, as amended, which change becomes effective on or after the Original Issue Date. 2 "Original Issue Date" means , . "Outstanding", when used with respect to the Series Notes, means, as of the date of determination, all Series Notes, theretofore authenticated and delivered under the Indenture, except: (i) Series Notes theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (ii) Series Notes for whose payment or redemption the necessary amount of money or money's worth has been theretofore deposited with the Trustee or any Paying Agent (other than the Corporation) in trust or set aside and segregated in trust by the Corporation (if the Corporation shall act as its own Paying Agent) for the Holders of such Series Notes; provided that if such Series Notes are to be redeemed, notice of such redemption has been duly given pursuant to the Indenture or provision therefor satisfactory to the Trustee has been made; (iii) Series Notes as to which Defeasance has been effected pursuant to Section 1302 of the Original Indenture; and (iv) Series Notes that have been paid or in exchange for or in lieu of which other Series Notes have been authenticated and delivered pursuant to the Indenture, other than any such Series Notes in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Series Notes are held by a bona fide purchaser in whose hands such Series Notes are valid obligations of the Corporation; provided, however, that in determining, during any period in which any Series Notes are owned by any Person other than the Corporation or any Affiliate thereof, whether the Holders of the requisite principal amount of Outstanding Series Notes have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date, Series Notes owned, whether of record or beneficially, by the Corporation or any Affiliate thereof (with the exception of the Securities Trust) shall be disregarded and deemed not to be Outstanding. In determining whether the Trustee shall be protected in relying upon such request, demand, authorization, direction, notice, consent, waiver or other action, only Series Notes that the Trustee knows to be so owned by the Corporation or an Affiliate of the Corporation (with the exception of the Securities Trust) in the above circumstances shall be so disregarded. Series Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Series Notes and that the pledgee is not the Corporation or any Affiliate of the Corporation. "Preferred Securities" means the % Trust Preferred Securities issued by the Securities Trust. "Property Trustee," when used with respect to the Series Notes, means the Person designated as such in the Trust Agreement. "Regular Record Date" means, with respect to each Interest Payment Date, the close of business on the 15th calendar day preceding such Interest Payment Date. 3 "Securities Trust" means Duke Energy Capital Trust [ ], a statutory business trust formed by the Corporation under Delaware law to issue the Trust Securities, the proceeds of which will be used to purchase Series Notes, or a successor thereof. "Special Event" means an Investment Company Act Event or Tax Event. "Stated Maturity" means , . "Tax Event" means that the Administrative Trustees and the Corporation shall have received an Opinion of Counsel experienced in such matters to the effect that, as a result of (a) any amendment to, or change (including any announced prospective change) in, laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein or (b) any amendment to, or change in, an interpretation or application of such laws or regulations, there is more than an insubstantial risk that (i) the Securities Trust would be subject to United States federal income tax with respect to income accrued or received on the Series Notes, (ii) interest payable on the Series Notes would not be deductible by the Corporation for United States federal income tax purposes, or (iii) the Securities Trust would be subject to more than a de minimis amount of other taxes, duties or other governmental charges, which change or amendment becomes effective on or after the Original Issue Date. "Trust Agreement" means the Amended and Restated Trust Agreement that governs the affairs of the Securities Trust. "Trust Securities" means the securities issued by the Securities Trust evidencing the entire beneficial interest therein. SECTION 103. Payment of Principal and Interest. The principal of the Series Notes shall be due at Stated Maturity (unless earlier redeemed). The unpaid principal amount of the Series Notes shall bear interest at the rate of % per annum until paid or duly provided for, such interest to accrue from , or from the most recent Interest Payment Date to which interest has been paid or duly provided for. Interest shall be paid quarterly in arrears on each Interest Payment Date to the Person in whose name the Series Notes are registered on the Regular Record Date for such Interest Payment Date; provided that interest payable at the Stated Maturity of principal or on a Redemption Date as provided herein will be paid to the Person to whom principal is payable. So long as an Extension Period is not occurring, any such interest that is not so punctually paid or duly provided for will forthwith cease to be payable to the Holders on such Regular Record Date and may either be paid to the Person or Persons in whose name the Series Notes are registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee ("Special Record Date"), notice whereof shall be given to Holders of the Series Notes not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Series Notes may be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Original Indenture. Payments of interest on the Series Notes will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for the Series Notes shall be computed and paid on the basis of a 360-day year of twelve 30-day months. In the event that any date on which 4 interest is payable on the Series Notes is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date the payment was originally payable. Payment of the principal and interest (including Additional Interest, if any) on the Series Notes shall be made at the office of the Paying Agent in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, with any such payment that is due at the Stated Maturity or at earlier redemption of any Series Notes being made upon surrender of such Series Notes to the Paying Agent. Payments of interest (including interest on any Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Corporation, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto. The Corporation shall pay, as additional interest on the Series Notes, when due to the United States or any other taxing authority, the amounts set forth in clause (i) of the definition of Additional Interest. SECTION 104. Deferral of Interest Payments. The Corporation has the right at any time and from time to time to extend the interest payment period of the Series Notes for up to ( ) consecutive quarters (each, an "Extension Period"), during which Extension Period the Corporation shall have the right to make partial payments of interest on any Interest Payment Date; provided, however, that no such Extension Period may extend beyond the Stated Maturity. Notwithstanding the foregoing, the Corporation has no right to extend its obligation to pay such amounts as are defined in clause (i) of the definition of Additional Interest. Prior to the termination of any such Extension Period, the Corporation may further extend the interest payment period; provided that such Extension Period, together with all such previous and further extensions of that Extension Period, shall not exceed ( ) consecutive quarters. Upon the termination of any such Extension Period and upon the payment of all accrued and unpaid interest and any Additional Interest then due, the Corporation may select a new Extension Period, subject to the above limitations and requirements. Upon the termination of any Extension Period, which termination shall be on an Interest Payment Date, the Corporation shall pay all Deferred Interest on the next succeeding Interest Payment Date to the Person or Persons in whose name the Series Notes are registered on the Regular Record Date for such Interest Payment Date; provided that Deferred Interest payable at Stated Maturity or on any Redemption Date will be paid to the Person or Persons to whom principal is payable. The Corporation shall give the Holder or Holders of the Series Notes and the Trustee notice, as provided in Sections 105 and 106, respectively, of the Original Indenture, of its selection or extension of an Extension Period at least one Business Day prior to the earlier of (i) the Regular Record Date relating to the Interest Payment Date on which the Extension Period is to commence or 5 relating to the Interest Payment Date on which an Extension Period that is being extended would otherwise terminate, or (ii) the date the Corporation or the Securities Trust is required to give notice to the New York Stock Exchange or other applicable self-regulatory organization of the record date or the date such distributions are payable. The Corporation shall cause the Securities Trust to give notice of the Corporation's selection of such Extension Period to Holders of the Trust Securities. The month in which any notice is given pursuant to the immediately preceding sentence of this Section shall constitute the first month of the first quarter of the ( ) consecutive quarters which comprise the maximum Extension Period. At any time any of the foregoing notices are given to the Trustee, the Corporation shall give to the Paying Agent for the Series Notes such information as said Paying Agent shall reasonably require in order to fulfill its tax reporting obligations with respect to such Series Notes. SECTION 105. Denominations. The Series Notes may be issued in denominations of $ , or any integral multiple thereof. SECTION 106. Global Securities. If the Series Notes are distributed to holders of the Trust Securities in liquidation of such holders' interests therein, the Series Notes will be issued in the form of one or more Global Securities registered in the name of the Depositary (which shall be The Depository Trust Company) or its nominee. Except under the limited circumstances described below, Series Notes represented by such Global Security or Global Securities will not be exchangeable for, and will not otherwise be issuable as, Series Notes in definitive form. The Global Securities described above may not be transferred except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor Depositary or its nominee. Owners of beneficial interests in such a Global Security will not be considered the Holders thereof for any purpose under the Indenture, and no Global Security representing a Series Note shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or to a successor Depositary or its nominee or except as described below. The rights of Holders of such Global Security shall be exercised only through the Depositary. A Global Security shall be exchangeable for Series Notes registered in the names of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Corporation that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary shall have been appointed by the Corporation within 90 days of receipt by the Corporation of such notification, or if at any time the Depositary ceases to be a clearing agency registered under the Exchange Act at a time when the Depositary is required to be so registered to act as such Depositary and no successor Depositary shall have been appointed by the Corporation within 90 days after it becomes aware of such cessation, or (ii) the Corporation in its sole discretion determines that such Global Security shall be so exchangeable. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Series Notes registered in such names as the Depositary shall direct. 6 SECTION 107. Redemption. The Series Notes shall be subject to redemption at the option of the Corporation, in whole or in part, without premium or penalty, at any time or from time to time on or after , , at a Redemption Price equal to % of the principal amount to be redeemed plus accrued but unpaid interest (including any Additional Interest) to the Redemption Date; provided, however, that, if a redemption in part shall result in the delisting of the Preferred Securities, the Corporation may redeem the Series Notes only in whole. In addition, upon the occurrence of a Special Event, the Corporation may, within ninety (90) days following the occurrence thereof and subject to the terms and conditions of the Indenture, redeem the Series Notes, in whole, at a price equal to % of the principal amount to be redeemed plus any accrued but unpaid interest (including Additional Interest, if any) to the Redemption Date. In the event of redemption of the Series Notes in part only, a new Series Note or Notes for the unredeemed portion shall be issued in the name or names of the Holders thereof upon the surrender thereof. The Series Notes shall not have a sinking fund. Notice of redemption shall be given as provided in Section 1104 of the Original Indenture. Notwithstanding the foregoing, no notice of redemption that is given pursuant to such Section with respect to any Series Notes shall, while any Preferred Securities are outstanding, contain a condition that provides that redemption of the Series Notes, or the part thereof, specified therein, shall be conditional upon receipt by the Trustee or the Paying Agent for such Series Notes, on or prior to the date fixed for such redemption, of money sufficient to pay the principal of and any interest on such Series Notes. Any notice provided to the Trustee under Section 1102 of the Original Indenture shall also be provided by the Corporation to the Property Trustee; provided that the Corporation shall provide notice pursuant to such Section 1102 on a date less than 45 days prior to the Redemption Date only if such shorter notice is satisfactory to both the Trustee and the Property Trustee. Any redemption of less than all of the Series Notes shall, with respect to the principal thereof, be divisible by $ . SECTION 108. Additional Interest. Whenever there is mentioned in the Indenture, in any context, the payment of the principal of, or any premium or interest on, or in respect of, Securities of any series, such mention shall, with respect to the Series Notes, be deemed to include mention of the payment of Additional Interest provided for by the terms of the Series Notes to the extent that, in such context, Additional Interest is, were or would be payable in respect thereof pursuant to such terms, and express mention of the payment of Additional Interest in any provisions of this Supplemental Indenture shall not be construed as excluding Additional Interest in those provisions of the Original Indenture or this Supplemental Indenture in which such express mention is not made. If, subsequent to the date that a satisfaction and discharge or Defeasance is effected pursuant to Section 401 or 1302, respectively, of the Original Indenture, Additional Interest (for purposes of this paragraph, as defined in clause (i) of the definition thereof) (in excess of that established as of the date that such discharge or Defeasance is effected) becomes payable in respect of the Series Notes 7 so discharged or defeased, the Corporation shall irrevocably deposit or cause to be irrevocably deposited in accordance with the provisions of Section 401 or 1304 of the Original Indenture, as the case may be, within ten Business Days prior to the date the first payment in respect of any portion of such excess Additional Interest becomes due, such additional moneys or Government Obligations as are necessary to satisfy the provisions of Section 401 or 1304 of the Original Indenture, as the case may be, as if a discharge or Defeasance were being effected as of the date of such subsequent deposit. Except as otherwise provided in or pursuant to the Indenture, at least 10 days prior to the first Interest Payment Date upon which Additional Interest (for purposes of this paragraph, as defined in clause (i) of the definition thereof) shall be payable, and at least 10 days prior to each date of payment of principal and any premium or interest if there has been any change with respect to the information set forth in the Officers' Certificate hereinafter mentioned, the Corporation shall furnish the Trustee and any Paying Agent, if other than the Trustee or the Corporation, with an Officers' Certificate stating the amount of the Additional Interest payable per minimum authorized denomination of the Series Notes. SECTION 109. Limitations on Dividend and Certain Other Payments. The Corporation covenants, for the benefit of the Holders of the Series Notes, that, subject to the next succeeding sentence, (a) the Corporation shall not declare or pay any dividend on, or make any distributions with respect to, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock, and (b) the Corporation shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities (including guarantees other than the Guarantee) issued by the Corporation which rank pari passu with or junior to the Series Notes (i) if at such time the Corporation shall have given notice of its election to extend an interest payment period for the Series Notes and such extension shall be continuing or (ii) if at such time an Event of Default with respect to the Series Notes shall have occurred and be continuing. The preceding sentence, however, shall not restrict (A) any of the actions described in the preceding sentence resulting from any reclassification of the Corporation's capital stock or the exchange or conversion of one class or series of the Corporation's capital stock for another class or series of the Corporation's capital stock, (B) the declaration and payment of a dividend or distribution or similar share purchase rights in the future, (C) repurchases, redemptions or other acquisitions of shares of the Corporation's capital stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers or directors or a stock purchase and dividend reinvestment plan, (D) acquisitions of shares of the Corporation's capital stock in connection with the issuance of shares of the Corporation's capital stock (or securities convertible into or exchangeable for shares of the Corporation's capital stock) as consideration in an acquisition transaction that was entered into prior to the commencement of the relevant Extension Period, (E) dividends or distributions in capital stock of the Corporation, (F) the purchase of fractional interests in shares of the Corporation's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, or (G) mandatory sinking fund payments with respect to any series of the Corporation's preferred stock or preferred stock A; provided that the aggregate stated value of all such series outstanding at the time of any such payment does not exceed 5% of the aggregate of (1) the total principal amount of all bonds or 8 other securities representing secured indebtedness issued or assumed by the Corporation and then outstanding and (2) the capital and surplus of the Corporation to be stated on the books of account of the Corporation after giving effect to such payment; provided, however, that any moneys deposited into any sinking fund and not in violation of this provision may thereafter be applied to the purchase or redemption of such preferred stock or preferred stock A in accordance with the terms of such sinking fund without regard to the restrictions contained in this Section 109. SECTION 110. Covenants Regarding Securities Trust. For so long as the Trust Securities remain outstanding, the Corporation covenants (i) directly or indirectly to maintain 100% ownership of the Common Securities (as defined in the Trust Agreement) of the Securities Trust; provided, however, that any permitted successor of the Corporation under the Indenture may succeed to the Corporation's ownership of such Common Securities, and (ii) to use its reasonable efforts to cause the Securities Trust (a) to remain a statutory business trust, except in connection with the distribution of Series Notes to the holders of Trust Securities in liquidation of the Securities Trust, the redemption of all of the Trust Securities, or certain mergers, consolidations or amalgamations, each as permitted under the Trust Agreement, and (b) to otherwise continue to be classified as a grantor trust for United States federal income tax purposes. The Corporation shall deliver to the Trustee, no later than the Business Day on which the event occurs, written notice of the liquidation, dissolution or winding-up of the Securities Trust if such liquidation, dissolution or winding-up would occur earlier than the Stated Maturity of the Series Notes owned by such Securities Trust. SECTION 111. No Fiduciary Duty of Trustee to Holders of Trust Securities. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Trust Securities and shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of a Trust Security to establish that such Person is such a holder. SECTION 112. Listing of Series Notes. If the Series Notes are to be issued as a Global Security in connection with the distribution of the Series Notes to the holders of the Preferred Securities, the Corporation shall use its best efforts to list such Series Notes on the New York Stock Exchange or any other exchange on which such Preferred Securities are then listed. The Corporation shall notify the Trustee if and when the Series Notes become admitted to trading on the New York Stock Exchange or any other national securities exchange. SECTION 113. Covenant Defeasance. Section 1303 of the Original Indenture shall not apply to any of the Series Notes. SECTION 114. Set-Off. Notwithstanding anything to the contrary in the Indenture or in any Series Note, prior to the dissolution of the Securities Trust, the Corporation shall have the right to set-off and apply against any payment it is otherwise required to make hereunder or thereunder with respect to the principal of or interest (including any Additional Interest) on the Series Notes with and to the extent the Corporation has theretofore made, or is concurrently on the date of such payment making, a payment with respect to the Preferred Securities under the Guarantee. Contemporaneously with, or as promptly as practicable after, any such payment under the Guarantee, the Corporation shall deliver to the Trustee an Officers' Certificate (upon which the Trustee shall be entitled to rely conclusively without any requirement to investigate the facts contained therein) to the 9 effect that such payment has been made and that, as a result of such payment, the corresponding payment under the Series Notes has been set off in accordance with this Section 114. SECTION 115. Subordination. The indebtedness evidenced by the Series Notes shall be, to the extent and in the manner set forth in the Original Indenture, subordinate and junior in right of payment to the prior payment in full of all Senior Indebtedness (as defined in the Original Indenture) with respect to the Series Notes, and the Series Notes shall rank pari passu in right of payment with each other series of Securities issued under the Indenture, with the exception of any series of Securities which by its terms provides otherwise. SECTION 116. Paying Agent. The Trustee shall initially serve as Paying Agent with respect to the Series Notes, with the Place of Payment initially being the Corporate Trust Office of the Trustee. ARTICLE 2 Miscellaneous Provisions SECTION 201. Recitals by Corporation. The recitals in this Supplemental Indenture are made by the Corporation only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of the Series Notes and of this Supplemental Indenture as fully and with like effect as if set forth herein in full. SECTION 202. Ratification and Incorporation of Original Indenture. As supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture and this Supplemental Indenture shall be read, taken and construed as one and the same instrument. SECTION 203. Executed in Counterparts. This Supplemental Indenture may be executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument. SECTION 204. Assignment. The Corporation shall have the right at all times to assign any of its rights or obligations under this Indenture with respect to the Series Notes to a direct or indirect wholly owned subsidiary of the Corporation; provided that, in the event of any such assignment, the Corporation shall remain primarily liable for the performance of all such obligations. The Indenture may also be assigned by the Corporation in connection with a transaction described in Article Eight of the Original Indenture. SECTION 205. Enforcement by Holders of Preferred Securities of Right of Holders to Receive Principal and Interest. So long as the Series Notes are held by the Property Trustee on behalf of the Securities Trust, a registered holder of Preferred Securities may institute a legal proceeding directly against the Corporation, without first instituting a legal proceeding directly against or requesting or directing that action be taken by the Property Trustee or any other Person, for enforcement of payment to such registered holder of principal of or interest on Series Notes having a principal amount equal to the aggregate stated liquidation amount of such Preferred Securities of such registered holder on or after the due dates therefor specified or provided for in the 10 Series Notes. This Section 205 and Section 109 of this Supplemental Indenture are for the benefit of the registered holders of Preferred Securities and, prior to the dissolution of the Securities Trust, may be enforced by such holders. A holder of a Preferred Security shall not have the right, as such holder, to enforce any other provision of the Indenture. 11 IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and behalf by its duly authorized officers, all as of the day and year first above written. DUKE ENERGY CORPORATION By: _____________________________________ Attest: _______________________________ THE CHASE MANHATTAN BANK, as Trustee, By: _____________________________________ Attest: _______________________________ 12 EXHIBIT A FORM OF SERIES % JUNIOR SUBORDINATED NOTE DUE , No. CUSIP No. THE INDEBTEDNESS EVIDENCED BY THIS SECURITY IS, TO THE EXTENT PROVIDED IN THE INDENTURE, SUBORDINATE AND SUBJECT IN RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL SENIOR INDEBTEDNESS AND THIS SECURITY IS ISSUED SUBJECT TO THE PROVISIONS OF THE INDENTURE WITH RESPECT THERETO. DUKE ENERGY CORPORATION SERIES % JUNIOR SUBORDINATED NOTE DUE , Principal Amount: $ Regular Record Date: 15th calendar day prior to Interest Payment Date Original Issue Date: , Stated Maturity: , Interest Payment Dates: March 31, June 30, September 30, December 31 Interest Rate: % per annum Authorized Denomination: $ Initial Redemption Date: ,
Duke Energy Corporation, a North Carolina corporation (the "Corporation," which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to , or registered assigns, the principal sum of DOLLARS ($ ) on the Stated Maturity shown above (or upon earlier redemption), and to pay interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears on each Interest Payment Date as specified above, commencing on the Interest Payment Date next succeeding the Original Issue Date shown above and on the Stated Maturity (or upon earlier redemption) at the rate per annum shown above (the "Interest Rate") until the principal hereof is paid or made available for payment and on any overdue principal and on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (other than an Interest Payment Date that is the Stated Maturity or on a Redemption Date) will, as provided in such Indenture, be paid to the Person in whose name this Series % Junior Subordinated Note (this "Security") is registered at the close of business on the Regular Record Date as specified above next preceding such Interest Payment Date; provided that any interest payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice A-1 whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Securities of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in said Indenture. Payments of interest on this Security will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for this Security shall be computed and paid on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on this Security is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date the payment was originally payable. "Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day on which banks in New York, New York are authorized or obligated by law or executive order to remain closed or (iii) a day on which the Corporate Trust Office or the principal corporate trust office of the Property Trustee is closed for business. The Corporation shall have the right at any time and from time to time during the term of this Security to extend the interest payment period of such Security for up to consecutive quarters (each, an "Extension Period"), but not beyond the Stated Maturity of this Security, during which Extension Periods interest shall accrue on unpaid installments of interest at the Interest Rate, compounded quarterly, to the date of payment to the extent permitted by applicable law (such unpaid interest plus such interest thereon being called "Deferred Interest"); provided, however, that the Corporation shall have the right to make partial payments of interest on any Interest Payment Date during any Extension Period. Upon the termination of each Extension Period, which shall be an Interest Payment Date, the Corporation shall pay all Deferred Interest on the next succeeding Interest Payment Date to the Person in whose name this Security is registered at the close of business on the Regular Record Date for such Interest Payment Date; provided that any Deferred Interest payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. Prior to the termination of any such Extension Period, the Corporation may further extend the interest payment period; provided that such Extension Period together with all such previous and further extensions thereof shall not exceed ( ) consecutive quarters. Upon the termination of any such Extension Period, and the payment of all accrued and unpaid interest (including any Additional Interest) then due, the Corporation may select a new Extension Period, subject to the above requirements. The Corporation shall not (i) declare or pay any dividend or distribution on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock, and (ii) make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities (including guarantees other than the Guarantee) issued by the Corporation that rank pari passu with or junior to this Security if the Corporation shall have given notice of its election to extend an interest payment per period for this Security and such extension shall be continuing or if at such time an Event of Default with respect to the series of which this Security is a part shall have occurred and be continuing. The preceding sentence, however, shall not restrict (A) any of the actions described in the preceding sentence resulting from any reclassification of the A-2 Corporation's capital stock or the exchange or conversion of one class or series of the Corporation's capital stock for another class or series of the Corporation's capital stock, (B) the declaration and payment of a dividend or distribution or similar share purchase rights in the future, (C) repurchases, redemptions or other acquisitions of shares of the Corporation's capital stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers or directors or a stock purchase and dividend reinvestment plan, (D) acquisitions of shares of the Corporation's capital stock in connection with the issuance of shares of the Corporation's capital stock (or securities convertible into or exchangeable for shares of the Corporation's capital stock) as consideration in an acquisition transaction that was entered into prior to the commencement of the relevant Extension Period, (E) dividends or distributions on capital stock of the Corporation, (F) the purchase of fractional interests in shares of the Corporation's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, or (G) mandatory sinking fund payments with respect to any series of the Corporation's preferred stock or preferred stock A; provided that the aggregate stated value of all such series outstanding at the time of any such payment does not exceed 5% of the aggregate of (1) the total principal amount of all bonds or other securities representing secured indebtedness issued or assumed by the Corporation and then outstanding and (2) the capital and surplus of the Corporation to be stated on the books of account of the Corporation after giving effect to such payment; provided, however, that any moneys deposited into any sinking fund and not in violation of this provision may thereafter be applied to the purchase or redemption of such preferred stock or preferred stock A in accordance with the terms of such sinking fund without regard to the restrictions contained in this provision. The Corporation shall give the Holder of this Security and the Trustee notice of its selection or extension of an Extension Period at least one Business Day prior to the earlier of (i) the Regular Record Date relating to the Interest Payment Date on which the Extension Period is to commence or relating to the Interest Payment Date on which an Extension Period that is being extended would otherwise terminate or (ii) the date the Corporation or the Securities Trust is required to give notice to the New York Stock Exchange or other applicable self-regulatory organization of the record date or the date such distributions are payable. The Corporation also shall be obligated to pay when due and without extension all additional amounts as may be required so that the net amount received and retained by the Holder of this Security (if the Holder is the Securities Trust) after paying taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed by the United States or any other taxing authority will not be less than the amounts such Holder would have received had no such taxes, duties, assessments, or other governmental charges been imposed. Payment of the principal of and interest (including Additional Interest, if any) due at the Stated Maturity or earlier redemption of this Security shall be made upon surrender of this Security, at the Corporate Trust Office of the Trustee, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payment of interest (including interest on an Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Corporation, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto. A-3 The indebtedness evidenced by this Security is, to the extent and in the manner set forth in the Indenture, subordinate in right of payment to the prior payment in full of all Senior Indebtedness (as defined in the Indenture), and this Security is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided, and (c) appoints the Trustee his attorney-in- fact for any and all such purposes. Each Holder hereof, by his acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness whether now outstanding or hereafter incurred and waives reliance by each such holder upon said provisions. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. A-4 IN WITNESS WHEREOF, the Corporation has caused this instrument to be duly executed under its corporate seal. Dated: DUKE ENERGY CORPORATION By: _________________________________ Vice President Attest: _________________________________ Assistant Secretary CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. THE CHASE MANHATTAN BANK, as Trustee By: _________________________________ Authorized Officer A-5 (Reverse Side of Security) This Security is one of a duly authorized issue of Securities of the Corporation (the "Securities"), issued and issuable in one or more series under a Subordinated Indenture, dated as of December 1, 1997, as supplemented (the "Indenture"), between the Corporation and The Chase Manhattan Bank, as Trustee (the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Corporation, the Trustee and the Holders of the Securities issued thereunder and of the terms upon which said Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof as Series % Junior Subordinated Notes due , (the "Series Notes") in the aggregate principal amount of up to $ . Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Indenture. The Corporation shall have the right, subject to the terms and conditions of the Indenture, to redeem this Security at any time on or after , at the option of the Corporation, without premium or penalty, in whole or in part, at a Redemption Price equal to % of the principal amount to be redeemed plus accrued but unpaid interest (including any Additional Interest) to the Redemption Date. Upon the occurrence of a Special Event (as defined below), the Corporation may, within 90 days following the occurrence thereof and subject to the terms and conditions of the Indenture, redeem this Security without premium or penalty, in whole, at a Redemption Price equal to % of the principal amount thereof plus accrued but unpaid interest (including any Additional Interest) to the Redemption Date. A Special Event may be a Tax Event or an Investment Company Act Event. "Tax Event" means that the Administrative Trustees and the Corporation shall have received an Opinion of Counsel experienced in such matters to the effect that, as a result of (a) any amendment to, or change (including any announced prospective change) in, laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein or (b) any amendment to, or change in, an interpretation or application of such laws or regulations, there is more than an insubstantial risk that (i) the Securities Trust would be subject to United States federal income tax with respect to income accrued or received on the Series Notes, (ii) interest payable on the Series Notes would not be deductible by the Corporation for United States federal income tax purposes, or (iii) the Securities Trust would be subject to more than a de minimis amount of other taxes, duties or other governmental charges, which change or amendment becomes effective on or after the Original Issue Date. "Investment Company Act Event" means that the Administrative Trustees and the Corporation shall have received an Opinion of Counsel experienced in such matters to the effect that, as a result of the occurrence of a change in law or regulation or a written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is more than an insubstantial risk that the Securities Trust is or will be considered an "investment company" that is required to be registered under the Investment Company Act of 1940, as amended, which change becomes effective on or after the Original Issue Date. In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the surrender hereof. The Securities of this series will not have a sinking fund. A-6 If an Event of Default with respect to the Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Corporation and the rights of the Holders of the Securities of all series affected under the Indenture at any time by the Corporation and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of all series affected thereby (voting as one class). The Indenture contains provisions permitting the Holders of not less than a majority in principal amount of the Outstanding Securities of all series with respect to which a default under the Indenture shall have occurred and be continuing (voting as one class), on behalf of the Holders of the Securities of all such series, to waive, with certain exceptions, such default under the Indenture and its consequences. The Indenture also permits the Holders of not less than a majority in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Corporation with certain provisions of the Indenture affecting such series. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Corporation, which is absolute and unconditional, to pay the principal of and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Corporation for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Corporation and the Security Registrar and duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Corporation may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than a majority in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request and shall have failed to A-7 institute any such proceeding for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any interest hereon on or after the respective due dates expressed herein. The Indenture contains provisions for defeasance at any time of the entire indebtedness of the Securities of this series upon compliance with certain conditions set forth in the Indenture. Prior to due presentment of this Security for registration of transfer, the Corporation, the Trustee and any agent of the Corporation or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Corporation, the Trustee nor any such agent shall be affected by notice to the contrary. The Securities of this series are issuable only in registered form without coupons in denominations of $ and any integral multiple thereof. As provided in the Indenture and subject to the limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series of a different authorized denomination, as requested by the Holder surrendering the same upon surrender of the Security or Securities to be exchanged at the office or agency of the Corporation. This Security shall be governed by, and construed in accordance with, the internal laws of the State of New York. A-8 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM-- as tenants in common UNIF GIFT MIN ACT-- ______ Custodian _______ (Cust) (Minor) TEN ENT-- as tenants by the entireties JT TEN-- as joint tenants with rights under Uniform Gifts to Minors of survivorship and not as Act__________________________ tenants in common (State) Additional abbreviations may also be used though not on the above list. ---------------- FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto (please insert Social Security or other identifying number of assignee). - -------------------------------------------------------------------------------- PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- the within Security and all rights thereunder, hereby irrevocably constituting and appointing - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- agent to transfer said Security on the books of the Corporation, with full power of substitution in the premises. Dated: NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever. A-9 EXHIBIT B CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. THE CHASE MANHATTAN BANK, as Trustee By: _________________________________ Authorized Officer B-1 EX-4.F.81 11 dex4f81.txt SUPPLEMENTAL INDENTURE, BONDS Exhibit 4-F-81 ================================================================================ DUKE ENERGY CORPORATION TO THE CHASE MANHATTAN BANK, Trustee __________ EIGHTY - SUPPLEMENTAL INDENTURE Dated as of , __________ CREATING AN ISSUE OF FIRST AND REFUNDING MORTGAGE BONDS, % SERIES DUE __________ SUPPLEMENTAL TO FIRST AND REFUNDING MORTGAGE DATED AS OF DECEMBER 1, 1927 ================================================================================ SUPPLEMENTAL INDENTURE, bearing date as of the day of , , made and entered into by and between Duke Energy Corporation, formerly known as Duke Power Company, a corporation duly organized and existing under the laws of the State of North Carolina, hereinafter called the "Corporation," party of the first part, and The Chase Manhattan Bank, formerly known as Chemical Bank (successor to Morgan Guaranty Trust Company of New York, as Trustee), a New York banking corporation, having its principal place of business in the Borough of Manhattan, City and State of New York, hereinafter called the "Trustee," as Trustee, party of the second part. Whereas Duke Power Company, a New Jersey corporation, hereinafter called the "New Jersey Company," duly executed and delivered its First and Refunding Mortgage, dated as of December 1, 1927, to Guaranty Trust Company of New York, as Trustee, to secure its First and Refunding Mortgage Gold Bonds, to be issued from time to time in series as provided in said Mortgage, and has from time to time duly executed and delivered supplemental indentures, including supplemental indentures dated as of September 1, 1947 and February 1, 1949, to Guaranty Trust Company of New York (the corporate name of which has been changed to Morgan Guaranty Trust Company of New York), as Trustee, and a supplemental indenture dated as of February 1, 1960 to Morgan Guaranty Trust Company of New York, as Trustee, supplementing and modifying said Mortgage (said Mortgage, as so supplemented and modified, being hereinafter referred to as the "original indenture"); and Whereas bonds of a series known as the "First and Refunding Mortgage Bonds, 2.65% Series Due 1977" (herein called "bonds of the 2.65% Series"), bonds of a series known as the "First and Refunding Mortgage Bonds, 2 7/8% Series Due 1979" (herein called "bonds of the 1979 Series"), bonds of a series known as the "First and Refunding Mortgage Bonds, 6 3/8% Series Due 1998" (herein called "bonds of the 1998 Series"), bonds of a series known as the "First and Refunding Mortgage Bonds, Pollution Control Facilities Revenue Refunding Series Due 2014" (herein called "bonds of the 1990 Pollution Control Series"), bonds of a series known as the "First and Refunding Mortgage Bonds, City of Greensboro Series Due 2027" (herein called "bonds of the 2027 City of Greensboro Series") bonds of a series known as the "First and Refunding Mortgage Bonds, Medium-Term Notes Series" (herein called "bonds of the Medium-Term Notes Series"), bonds of a series known as the "First and Refunding Mortgage Bonds, 6 5/8% Series B Due 2003" (herein called "bonds of the 2003 Series B"), bonds of a series known as the "First and Refunding Mortgage Bonds,6 3/8% Series Due 2008" (herein called "bonds of the 2008 Series"), bonds of a series known as the "First and Refunding Mortgage Bonds, 5 7/8% Series C Due 2003" (herein called "bonds of the 2003 Series C"), bonds of a series known as the "First and Refunding Mortgage Bonds, Pollution Control Facilities Revenue Refunding Series Due 2014" (herein called "bonds of the 1993 Pollution Control Series"), bonds of a series known as the "First and Refunding Mortgage Bonds, 6 1/4% Series B 2004" (herein called "bonds of the 2004 Series B"), bonds of a series known as the "First and Refunding Mortgage Bonds, 7% Series Due 2033" (herein called "bonds of the 2033 Series"), bonds of a series known as the "First and Refunding Mortgage Bonds, 6 7/8% Series B Due 2023" (herein called "bonds of the 2023 Series B"), bonds of a series known as the "First and Refunding Mortgage Bonds, 6 3/4% Series Due 2025" (herein called "bonds of the 2025 Series"), bonds of a series known as the "First and Refunding Mortgage Bonds, 7 7/8% Series Due 2024" (herein called "bonds of the 2024 Series") and bonds of a series known as the "First and Refunding Mortgage Bonds, 7 1/2% Series B Due 2025" (herein called "bonds of 2 the 2025 Series B") have heretofore been issued and (except for bonds of the 2.65% Series, bonds of the 1979 Series and bonds of the 1998 Series which have been retired in their entirety) are the only bonds now outstanding under the original indenture as heretofore supplemented; and WHEREAS the Corporation has duly executed and delivered a supplemental indenture, dated as of June 15, 1964, to Morgan Guaranty Trust Company of New York, as Trustee, for the purpose of evidencing the succession by merger of the Corporation to the New Jersey Company and the assumption by the Corporation of the covenants and conditions of the New Jersey Company in the original indenture and to enable the Corporation to have and exercise the powers and rights of the New Jersey Company under the original indenture in accordance with the terms thereof and whereby the Corporation assumed and agreed to pay duly and punctually the principal of and interest on the bonds issued under the original indenture in accordance with the provisions of said bonds and the coupons thereto appertaining and the original indenture, and agreed to perform and fulfill all the terms, covenants and conditions of the original indenture binding upon the New Jersey Company; and WHEREAS Morgan Guaranty Trust Company of New York resigned as Trustee under the original indenture as heretofore supplemented and Chemical Bank was appointed successor Trustee, said resignation and appointment having taken effect on August 30, 1994 pursuant to an Instrument of Resignation, Appointment and Acceptance dated as of August 30, 1994 among the Corporation, Morgan Guaranty Trust Company of New York, as Trustee, and Chemical Bank (now The Chase Manhattan Bank), as successor Trustee; and WHEREAS the Corporation desires to create under the original indenture, as heretofore supplemented and as to be supplemented by this supplemental indenture, a new series of bonds, to be known as its "First and Refunding Mortgage Bonds, % Series Due , " and to determine the terms and provisions and the form of the bonds of such series; and WHEREAS for the purposes hereinabove recited, and pursuant to due corporate action, the Corporation has duly determined to execute and deliver to the Trustee a supplemental indenture in the form hereof supplementing the original indenture (the original indenture, as supplemented by the aforesaid supplemental indenture dated as of June 15, 1964, by supplemental indentures dated as of February 1, 1968, March 1, 1990, May 15, 1990, July 1, 1991, February 1, 1993, March 1, 1993, April 1, 1993, May 1, 1993, July 1, 1993, August 1, 1993, August 20, 1993, May 1, 1994, August 1, 3 1995 and as hereby supplemented, being sometimes hereinafter referred to as the "Indenture"); and WHEREAS all conditions and requirements necessary to make this supplemental indenture a valid, legal and binding instrument in accordance with its terms have been done and performed, and the execution and delivery hereof have been in all respects duly authorized: Now, Therefore, This Indenture Witnesseth: That in consideration of the premises and of the sum of one dollar duly paid by the Corporation to the Trustee at or before the execution and delivery of these presents, the receipts whereof is hereby acknowledged, the Corporation hereby covenants and agrees with the Trustee and its successors in the trust under the Indenture as follows: PART ONE. Bonds of the % Series Due . Section 1. The Corporation hereby creates a new series of bonds to be issued under and secured by the Indenture and known as its First and Refunding Mortgage Bonds, % Series Due (herein called "bonds of the Series"), and the Corporation hereby establishes, determines and fixes the terms and provisions of the bonds of the Series as hereinafter in this Part One set forth. Each bond of the Series shall be dated the date of its authentication (except that if any such bond shall be authenticated on any interest payment date, it shall be dated the following day) and interest shall be payable on the principal represented thereby commencing , , from the or , as the case may be, next preceding the date thereof to which interest has been paid, unless such date of authentication is prior to , , in which case interest shall be payable from , ; provided, however, that interest shall be payable on each bond of the Series authenticated after the record date (as defined in the next succeeding paragraph of this Section 1) with respect to any interest payment date and prior to such interest payment date, only from such interest payment date. Interest on any bond of the Series shall be paid to the person who, according to the bond register of the Corporation, is the registered holder of such bond of the Series at the close of business on the applicable record date, and such interest payments shall be made by check mailed to such registered holder at his last address shown on such bond register; provided, however, that, if the Corporation shall default in the payment of the interest due on any interest payment date on any bond of the Series, such defaulted interest shall be 4 paid to the registered holder of such bond (or any bond or bonds of the Series issued upon transfer, exchange or substitution thereof) on the date of subsequent payment of such defaulted interest or, at the election of the Corporation, to the person in whose name such bond (or any bond or bonds of the Series issued upon transfer, exchange or substitution thereof) is registered on a subsequent record date established by notice given by mail by or on behalf of the Corporation to the holders of all bonds of the Series not less than ten (10) days preceding such subsequent record date. The term "record date" as used in this Section 1 shall mean, with respect to any semi- annual interest payment date, the close of business on the or , as the case may be, next preceding such interest payment date or, in the case of a payment of defaulted interest, the close of business on any subsequent record date established as provided above. Section 2. All bonds of the Series shall mature as to principal on , , and shall bear interest at a rate of % per annum, payable semi-annually on the day of and in each year. Section 3. The bonds of the Series shall be fully registered bonds, without coupons, in denominations of one thousand dollars ($1,000) and any integral multiple of one thousand dollars ($1,000), all such bonds to be numbered, and shall be transferable and exchangeable as provided in the form of bond set forth in this supplemental indenture. The provisions of (S) 1.19 and any other provision in the Indenture in respect of coupon bonds or reservation of coupon bond numbers shall be inapplicable to the bonds of the Series. Section 4. The bonds of the Series are not subject to redemption (otherwise than through the operation of the Replacement Fund provided in Part Two of this supplemental indenture or through the application of moneys paid to the Trustee pursuant to the provisions of (S) 5.05 of the Indenture) prior to , . On and after , , the bonds of the Series are subject to redemption (otherwise than through the operation of the Replacement Fund provided in Part Two of this supplemental indenture or through the application of moneys paid to the Trustee pursuant to the provisions of (S) 5.05 of the Indenture) prior to maturity, at the option of the Corporation, as a whole at any time or in part from time to time, in principal amounts equal to $1,000 or any multiple thereof, upon prior notice as hereinafter provided, at the redemption prices specified in the third paragraph of the reverse side of the form of bond set forth in this supplemental indenture, together with interest accrued thereon to the date fixed for redemption thereof. The bonds of the Series are also subject to redemption through the operation of the Replacement Fund provided in Part Two of this supplemental 5 indenture or through the application of moneys paid to the Trustee pursuant to the provisions of (S) 5.05 of the Indenture, at any time or from time to time prior to maturity, upon prior notice as hereinafter provided, at the redemption prices specified in the fourth paragraph of the reverse side of the form of bond set forth in this supplemental indenture, together with interest accrued thereon to the date fixed for redemption thereof. All such redemption of bonds of the Series shall be effected as provided in Article 3 of the Indenture except that, in case a part only of the bonds of the Series is to be paid and redeemed, the particular bonds or part thereof shall be selected by the Trustee in such manner as the Trustee in its uncontrolled discretion shall determine to be fair and in any case where several bonds are registered in the same name, the Trustee may treat the aggregate principal amount so registered as if it were represented by one bond and except that when bonds are redeemed in part only the notice given to any particular holder need state only the principal amount of the bonds of that holder which are to be redeemed and except that notice to the holders of bonds to be redeemed shall be given by mailing to such holders a notice of such redemption, first class mail postage prepaid, not later than the thirtieth day, and not earlier than the sixtieth day, before the date fixed for redemption, at their last addresses as they shall appear upon the bond register of the Corporation. Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the holder receives such notice; and failure duly to give such notice by mail, or any defect in such notice, to the holder of any bond designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other bond. No publication of notice of such redemption shall be required. Section 5. The aggregate principal amount of the bonds of the Series shall be unlimited. Section 6. The place or places of payment (as to principal and premium, if any, and interest), redemption, transfer, exchange and registration of the bonds of the Series shall be the office or offices or the agency or agencies of the Corporation in the Borough of Manhattan, The City of New York, designated from time to time by the Board of Directors of the Corporation. Section 7. The form of the bonds of the Series and the certificate of the Trustee to be endorsed on the bonds, respectively, shall be substantially as follows: 6 [FORM OF BOND OF THE SERIES] [FACE SIDE OF BOND] DUKE ENERGY CORPORATION FIRST AND REFUNDING MORTGAGE BOND, % Series Due No. $ Duke Energy Corporation, a North Carolina corporation (hereinafter called the "Corporation"), for value received, hereby promises to pay to or registered assigns, the principal sum of Dollars on , , in any coin or currency of the United States of America which at the time of payment shall be legal tender for the payment of public and private debts, at the office or agency of the Corporation in the Borough of Manhattan, The City of New York, and to pay interest thereon at said office or agency from the interest payment date next preceding the date hereof to which interest on outstanding bonds of this series has been paid (unless the date hereof is prior to , in which case from , , and unless the date hereof is a date subsequent to , or a date subsequent to , in which case from the next succeeding or , as the case may be), at the rate of per cent per annum, in like coin or currency, semi-annually on and in each year until the principal hereof shall become due and payable. Such interest payments shall be made by check mailed to the person in whose name this bond is registered at the close of business on the day of or preceding each semi-annual interest payment date, as the case may be (subject to certain exceptions provided in the Indenture hereinafter mentioned), at his last address as it shall appear upon the bond register of the Corporation. The provisions of this bond are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth in this place. This bond shall not become or be valid or obligatory for any purpose until the Trustee shall have signed the form of certificate endorsed hereon. 7 In Witness Whereof, the Corporation has caused this instrument to be signed in its name by its President or one of its Vice Presidents, manually or by facsimile signature, and its corporate seal to be hereto affixed, or a facsimile thereof to be hereon engraved, lithographed or printed, and to be attested by the manual or facsimile signature of its Secretary or one of its Assistant Secretaries. Dated: Duke Energy Corporation By: ............................ President Attest: ............................ Secretary [FORM OF TRUSTEE'S CERTIFICATE FOR BOND OF THE SERIES] This bond is one of the bonds, of the series designated therein, described in the within-mentioned Indenture. The Chase Manhattan Bank, Trustee By: ............................ Authorized Officer 8 [REVERSE SIDE OF BOND] This bond is one of the bonds of a series, designated specially as First and Refunding Mortgage Bonds, % Series Due , of an authorized issue of bonds of the Corporation, without limit as to aggregate principal amount, designated generally as First and Refunding Mortgage Bonds, all issued and to be issued under and equally and ratably secured by an indenture dated as of December 1, 1927, duly executed by Duke Power Company, a New Jersey corporation (hereinafter called the "New Jersey Company"), to Guaranty Trust Company of New York (now Morgan Guaranty Trust Company of New York), as Trustee (The Chase Manhattan Bank, formerly known as Chemical Bank, successor Trustee), as supplemented and modified by indentures supplemental thereto, including supplemental indentures dated as of September 1, 1947, February 1, 1949, February 1, 1960, June 15, 1964 (under which the Corporation succeeded to and was substituted for the New Jersey Company), February 1, 1968, March 1, 1990, May 15, 1990, July 1, 1991, February 1, 1993, March 1, 1993, April 1, 1993, May 1, 1993, July 1, 1993, August 1, 1993, August 20, 1993, May 1, 1994, August 1, 1995 and , , the latter providing for said series (said indenture as so supplemented and modified being hereinafter referred to as the "Indenture"), to which Indenture reference is made for a description of the property mortgaged, the nature and extent of the security, the rights of the holders of the bonds in respect thereof, the terms and conditions upon which the bonds are secured and the restrictions subject to which additional bonds secured thereby may be issued. To the extent permitted by, and as provided in, the Indenture, modifications or alterations of the Indenture, or of any indenture supplemental thereto, and of the rights and obligations of the Corporation and of the holders of the bonds, may be made with the consent of the Corporation by the affirmative vote, or with the written consent, of the holders of not less than 66 2/3% in principal amount of the bonds then outstanding, and by the affirmative vote, or with the written consent, of the holders of not less than 66 2/3% in principal amount of the bonds of any series then outstanding and affected by such modification or alteration, in case one or more but less than all of the series of bonds then outstanding under the Indenture are so affected, evidenced, in each case, as provided in the Indenture; provided that any supplemental indenture may be modified in accordance with the provisions contained therein for its modification; and provided, further, that no such modification or alteration shall be made which will affect the terms of payment of the principal of, or interest or premium on, this bond, or the right of any bondholder to institute suit for the enforcement of any such payment on or after the 9 respective due dates expressed in this bond, or reduce the percentage required for the taking of any such action. Any such affirmative vote of, or written consent given by, any holder of this bond is binding upon all subsequent holders hereof as provided in the Indenture. In case an event of default as defined in the Indenture shall occur, the principal of all the bonds outstanding thereunder may become or be declared due and payable, at the time, in the manner and with the effect provided in the Indenture. The bonds of this series are not subject to redemption (otherwise than for the Replacement Fund hereinafter mentioned or upon application of certain moneys included in the trust estate) prior to , . On and after , , the bonds of this series are subject to redemption (otherwise than for the Replacement Fund hereinafter mentioned or upon application of certain moneys included in the trust estate) prior to maturity, at the option of the Corporation, as a whole at any time or in part from time to time, at the following redemption prices (expressed as percentages of their principal amounts), in each case together with accrued interest to the date fixed for redemption: If redeemed during the twelve-month period beginning : REDEMPTION REDEMPTION YEAR PRICE YEAR PRICE - ---- ---------- ---- ---------- % % 10 The bonds of this series are also subject to redemption for the Replacement Fund for bonds of this series provided for in the supplemental indenture dated as of , , providing for this series, or upon application of certain moneys included in the trust estate, at any time or from time to time prior to maturity, at the following redemption prices (expressed as percentages of their principal amounts), in each case together with accrued interest to the date fixed for redemption: If redeemed during the twelve-month period beginning :
REDEMPTION REDEMPTION YEAR PRICE YEAR PRICE - ---- ---------- ---- ---------- % %
Redemption is in every case to be effected at the office or agency of the Corporation in the Borough of Manhattan, The City of New York, upon at least thirty days' prior notice, given by mail as more fully provided in the Indenture. If this bond or any portion hereof ($1,000 or a multiple thereof) is called for redemption and payment is duly provided, this bond or such portion thereof shall cease to bear interest from and after the date fixed for such redemption. This bond is transferable, as provided in the Indenture, by the registered owner hereof in person or by duly authorized attorney, at the office or agency of the Corporation in the Borough of Manhattan, The City of New York, upon surrender and cancellation of this bond, and thereupon a new bond of the same series and of like aggregate principal amount will be issued to the transferee in exchange herefor as provided in the Indenture; or the registered owner of this bond, at his option, may surrender the same for cancellation at said office or agency of the Corporation and receive in exchange herefor the same aggregate 11 principal amount of bonds of the same series of authorized denominations; all subject to the terms of the Indenture but without payment of any charges other than a sum sufficient to reimburse the Corporation for any stamp taxes or other governmental charges incident thereto. This bond is a corporate obligation only and no recourse whatsoever, either directly or through the Corporation or any trustee, receiver, assignee or any other person, shall be had for the payment of the principal of or premium, if any, or interest on this bond, or for the enforcement of any claim based hereon, or otherwise in respect hereof or of the Indenture, against any promoter, subscriber to the capital stock, incorporator, or any past, present or future stockholder, officer or director of the Corporation as such, or of any successor or predecessor corporation, whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment, penalty, subscription or otherwise, any and all such liability of promoters, subscribers, incorporators, stockholders, officers and directors being waived and released by each successive holder hereof by the acceptance of this bond, and as a part of the consideration for the issue hereof, and being likewise waived and released by the terms of the Indenture. [END OF BOND FORM] PART TWO. Replacement Fund. Section 1. So long as any of the bonds of the Series are outstanding, the Corporation will continue to maintain the Replacement Fund set forth in, and in accordance with the applicable terms and conditions now contained in, Part Two of the supplemental indenture dated as of February 1, 1949, and the covenants on the part of the Corporation contained in such Part Two shall continue and remain in full force and effect, whether or not bonds of the 1979 Series are outstanding and to the same extent as though the words "or any bonds of the Series" were inserted after the word "Series" appearing in the second line of Section 1 and the second line of Section 4 of said Part Two of said supplemental indenture dated as of February 1, 1949. Section 2. If at any time (a) bonds of the Series are outstanding and (b) no bonds of the Medium-Term Notes Series, of the 2003 Series B, of the 2008 Series, of the 2003 Series C, of the 2004 Series B, of the 2033 Series, of the 2023 Series B, of the 2025 Series, of the 2024 Series or of the 2025 Series B are outstanding and (c) cash which shall have been deposited with the Trustee 12 pursuant to such Replacement Fund shall not within five years from the date of deposit thereof have been paid out, or used or set aside by the Trustee for the payment, purchase or redemption of bonds, pursuant to such Replacement Fund, such cash shall, if in excess of fifty thousand dollars ($50,000), be applied to the redemption of bonds of the Series in an aggregate principal amount sufficient to exhaust as nearly as possible the full amount of such cash. Anything in Section 5 of Part Two of the aforesaid supplemental indenture dated as of February 1, 1949, in Section 3 of Part Two of the supplemental indentures dated as of February 1, 1993, May 1, 1993, July 1, 1993, August 1, 1993, August 20, 1993, May 1, 1994 and August 1, 1995, in Section 3 of Part Three of the supplemental indenture dated as of March 1, 1990 and in Section 5 of Part Four of the supplemental indenture dated as of March 1, 1993 to the contrary notwithstanding, no cash shall be paid over to the Corporation thereunder if at the time any bonds of the Series are then outstanding, and such cash shall in such event be applied as in this Part Two set forth. Section 3. Whenever all of the bonds of the Series, the Medium-Term Notes Series, the 2003 Series B, the 2008 Series, the 2003 Series C, the 2004 Series B, the 2033 Series, the 2023 Series B, the 2025 Series, the 2024 Series and the 2025 Series B shall have been paid, purchased or redeemed, the Trustee shall, upon application of the Corporation, pay to or upon the order of the Corporation all cash theretofore deposited with the Trustee pursuant to the provisions of the Replacement Fund and not previously disposed of pursuant to the provisions of the Replacement Fund, and shall deliver to the Corporation any bonds which shall theretofore have been deposited with the Trustee pursuant to the provisions of the Replacement Fund or paid, purchased or redeemed pursuant to the provisions of the Replacement Fund. PART THREE. Additional Covenants of the Corporation. Section 1. Whether or not the covenants on the part of the Corporation contained in Part Three of the supplemental indenture dated as of February 1, 1949 are modified with the consent of the holders of bonds of the 1990 Pollution Control Series, 13 the 2027 City of Greensboro Series, the Medium-Term Notes Series, the 2003 Series B, the 2008 Series, the 2003 Series C, the 1993 Pollution Control Series, the 2004 Series B, the 2033 Series, the 2023 Series B, the 2025 Series, the 2024 Series or the 2025 Series B and whether or not the bonds of the 1990 Pollution Control Series, the 2027 City of Greensboro Series, the Medium-Term Notes Series, the 2003 Series B, the 2008 Series, the 2003 Series C, the 1993 Pollution Control Series, the 2004 Series B, the 2033 Series, the 2023 Series B, the 2025 Series, the 2024 Series or the 2025 Series B are outstanding, such covenants on the part of the Corporation contained in said Part Three shall continue and remain in full force and effect so long as any of the bonds of the Series are outstanding and to the same extent as though the words "or so long as any bonds of the Series are outstanding" were inserted after the words "so long as any of the bonds of the 1979 Series or any bonds of the 2.65% Series are outstanding" wherever such words appear in said Part Three of the supplemental indenture dated as of February 1, 1949. Section 2. Whether or not the second sentence of paragraph (a) of (S) 2.08 of the original indenture (making certain provisions for the definition of the term "net amount" applicable while bonds of the 2.65% Series were outstanding and which was originally set forth in Section 4 of Article One of the supplemental indenture dated as of September 1, 1947 and which is corrected and clarified by Section 2 of Part Four of the supplemental indenture dated as of February 1, 1968) is modified with the consent of the holders of bonds of the 1990 Pollution Control Series, the 2027 City of Greensboro Series, the Medium- Term Notes Series, the 2003 Series B, the 2008 Series, the 2003 Series C, the 1993 Pollution Control Series, the 2004 Series B, the 2033 Series, the 2023 Series B, the 2025 Series, the 2024 Series or the 2025 Series B and whether or not bonds of the 1990 Pollution Control Series, the 2027 City of Greensboro Series, the Medium-Term Notes Series, the 2003 14 Series B, the 2008 Series, the 2003 Series C, the 1993 Pollution Control Series, the 2004 Series B, the 2033 Series, the 2023 Series B, the 2025 Series, the 2024 Series or the 2025 Series B are outstanding, said sentence shall continue and remain in full force and effect so long as any bonds of the Series are outstanding, and with the same force and effect as though said sentence had stated that such provisions were to be applicable so long as any of the bonds of the Series are outstanding. PART FOUR. Miscellaneous. Section 1. (a) For the purposes of (S) 2.10 of the Indenture and for the purposes of any modification of the provisions of the Replacement Fund referred to in Part Two of this supplemental indenture, the covenants and provisions on the part of the Corporation which are set forth or incorporated in Part Two of this supplemental indenture shall be for the benefit only of the holders of the bonds of the Series. Such covenants and provisions shall remain in force and be applicable only so long as any bonds of the Series shall be outstanding, and, subject to the provisions of paragraph (2) of subdivision (c) of (S) 10.01 of the Indenture, any such covenants and provisions may be modified with the consent, in writing or by vote at a bondholders' meeting, of the holders of sixty-six and two-thirds per cent (66 2/3%) of the principal amount of the bonds of the Series at the time outstanding and without the consent of the holders of any other bonds then outstanding under the Indenture; provided that no such consent shall be effective to waive any past default under such covenants and provisions, and its consequences, unless the consent of the holders of at least a majority in principal amount of all bonds then outstanding under the Indenture is obtained. Such covenants shall be deemed to be additional covenants and none of them shall affect or derogate from, or relieve the Corporation from, its obligation to comply with any of the other covenants, conditions, requirements or provisions of the Indenture or any other supplemental indenture. (b) For the purposes of (S) 2.10 of the Indenture and for the purposes of any modification of the provisions of Part Three of this supplemental indenture, the covenants and provisions on the part of the Corporation which are set forth or incorporated in said Part Three shall be for the benefit only of the holders of the bonds of the Series. Such covenants and provisions shall remain in force and be applicable only so long as any bonds of the Series shall be outstanding, and, subject to the provisions of paragraph (2) of subdivision (c) of (S) 10.01 of the Indenture, any such covenants and provisions may be 15 modified with the consent, in writing or by vote at a bondholders' meeting, of the holders of sixty-six and two-thirds per cent (66 2/3%) of the principal amount of the bonds of the Series at the time outstanding and without the consent of the holders of any other bonds then outstanding under the Indenture; provided that no such consent shall be effective to waive any past default under such covenants and provisions, and its consequences, unless the consent of the holders of at least a majority in principal amount of all bonds then outstanding under the Indenture is obtained. Such covenants shall be deemed to be additional covenants and none of them shall affect or derogate from, or relieve the Corporation from, its obligation to comply with any of the other covenants, conditions, requirements or provisions of the Indenture or any other supplemental indenture. Section 2. All terms contained in this supplemental indenture shall, except as specifically provided herein or except as the context may otherwise require, have the meanings given to such terms in the Indenture. Section 3. In case any one or more of the provisions contained in this supplemental indenture should be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision contained in this supplemental indenture, and, to the extent, but only to the extent, that such provision is invalid, illegal or unenforceable, this supplemental indenture shall be construed as if such provision had never been contained herein. Section 4. The Trustee hereby accepts the trusts herein declared and provided upon the terms and conditions in the Indenture set forth. Section 5. This supplemental indenture may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. 16 In Witness Whereof, Duke Energy Corporation, the party of the first part hereto, has caused this supplemental indenture to be signed in its name by one of its Vice Presidents and its corporate seal to be hereunto affixed, and the same to be attested by one of its Assistant Secretaries, and The Chase Manhattan Bank, the party of the second part hereto, in token of its acceptance of the trust hereby created, has caused this supplemental indenture to be signed in its name by one of its Vice Presidents and its corporate seal to be hereunto affixed, and the same to be attested by one of its Senior Trust Officers, all as of the day and year first above written. Duke Energy Corporation By: ........................ Vice President Attest: .......................................... Assistant Secretary Signed, sealed, executed, acknowledged and delivered by Duke Energy Corporation, in the presence of: .......................................... .......................................... The Chase Manhattan Bank By: ........................ Vice President Attest: .......................................... Senior Trust Officer Signed, sealed, executed, acknowledged and delivered by The Chase Manhattan Bank, in the presence of: .......................................... .......................................... 17 State of New York ) ) ss.: County of New York ) Personally appeared before me and made oath that she saw , a Vice President, and , a Senior Trust Officer, respectively, of The Chase Manhattan Bank, sign, attest and affix hereto the corporate seal of said The Chase Manhattan Bank, and, as the act and deed of said corporation, deliver the within written and foregoing deed, and that she, with , witnessed the execution thereof. ........................................ Sworn and subscribed before me this day of , . ..................................... Notary Public, State of New York No. Qualified in County Certificate Filed in New York County Commission Expires , . State of New York ) ) ss.: County of New York ) I, , a Notary Public in and for the State and County aforesaid, certify that personally came before me this day and acknowledged that he is a Senior Trust Officer of The Chase Manhattan Bank, a New York corporation, and that, by authority duly given and as the act of the corporation, the foregoing instrument was signed in its name by one of its Vice Presidents, sealed with its corporate seal, and attested by himself as one of its Senior Trust Officers. Witness may hand and official seal, this day of , . ......................................... Notary Public, State of New York No. Qualified in County Certificate Filed in New York County Commission Expires , . 18 State of North Carolina ) ss.: County of Mecklenburg ) Personally appeared before me and made oath that she saw , a Vice President, and , an Assistant Secretary, respectively, of Duke Energy Corporation, sign, attest and affix hereto the corporate seal of said Duke Energy Corporation, and, as the act and deed of said corporation, deliver the within written and foregoing deed, and that she, with , witnessed the execution thereof. ..................................... Sworn and subscribed before me this day of , . .............................................. Notary Public County, N.C. My Commission expires , . State of North Carolina ) ss.: County of Mecklenburg ) I, , a Notary Public in and for the State and County aforesaid, certify that personally came before me this day and acknowledged that he is an Assistant Secretary of Duke Energy Corporation, a North Carolina corporation, and that, by authority duly given and as the act of the corporation, the foregoing instrument was signed in its name by one of its Vice Presidents, sealed with its corporate seal, and attested by himself as one of its Assistant Secretaries. My commission expires , . Witness my hand and official seal, this day of , . .............................. Notary Public County, N.C. 19 EX-4.I 12 dex4i.txt AMENDED AND RESTATED TRUST AGREEMENT Exhibit 4-I Duke Energy Capital Trust [ ] AMENDED AND RESTATED TRUST AGREEMENT among DUKE ENERGY CORPORATION, as Depositor, THE CHASE MANHATTAN BANK, as Property Trustee CHASE MANHATTAN BANK DELAWARE, as Delaware Trustee and Robert T. Lucas III and S.L. Love, as Administrative Trustees Dated as of , DUKE ENERGY CAPITAL TRUST [ ] Certain Sections of this Trust Agreement relating to Sections 310 through 318 of the Trust Indenture Act of 1939:
Trust Indenture Trust Agreement Act Section Section - --------------- --------------- Section 310(a)(1)............................................. 8.07 (a)(2)..................................................... 8.07 (a)(3)..................................................... 8.09 (a)(4)..................................................... Not Applicable (b)........................................................ 8.08 Section 311(a)................................................ 8.13 (b)........................................................ 8.13 Section 312(a)................................................ 5.07 (b)........................................................ 5.07 (c)........................................................ 5.07 Section 313(a)................................................ 8.14(a) (a)(4)..................................................... 8.14(b) (b)........................................................ 8.14(b) (c)........................................................ 8.14(a) (d)........................................................ 8.14(a), 8.14(b) Section 314(a)................................................ 8.15 (b)........................................................ Not Applicable (c)(1)..................................................... 8.15, 8.16 (c)(2)..................................................... 8.16 (c)(3)..................................................... 8.16 (d)........................................................ Not Applicable (e)........................................................ 8.16 Section 315(a)................................................ 8.01 (b)........................................................ 8.02, 8.14(b) (c)........................................................ 8.01(a) (d)........................................................ 8.01, 8.03 (e)........................................................ Not Applicable Section 316(a)................................................ Not Applicable (a)(1)(A).................................................. 8.19 (a)(1)(B).................................................. 8.19 (a)(2)..................................................... Not Applicable (b)........................................................ Not Applicable (c)........................................................ Not Applicable Section 317(a)(1)............................................. Not Applicable (a)(2)..................................................... Not Applicable (b)........................................................ 5.09 Section 318(a)................................................ 10.10
- -------- Note: This Cross-Reference Table does not constitute part of the Trust Agreement and shall not affect the interpretation of any of its terms and provisions. TABLE OF CONTENTS
Page ---- ARTICLE I Defined Terms...................................................... 1 Section 1.01 Definitions........................................................ 1 ARTICLE II Establishment of the Trust......................................... 9 Section 2.01 Name............................................................... 9 Section 2.02 Offices of the Trustees; Principal Place of Business............... 9 Section 2.03 Initial Contribution of Trust Property; Organizational Expenses.... 9 Section 2.04 Issuance of the Preferred Securities............................... 9 Section 2.05 Subscription and Purchase of Junior Subordinated Notes; Issuance of the Common Securities.................................. 9 Section 2.06 Declaration of Trust............................................... 10 Section 2.07 Authorization to Enter into Certain Transactions................... 10 Section 2.08 Assets of Trust.................................................... 14 Section 2.09 Title to Trust Property............................................ 14 Section 2.10 Mergers and Consolidations of the Trust............................ 14 ARTICLE III Payment Account.................................................... 15 Section 3.01 Payment Account.................................................... 15 ARTICLE IV Distributions; Redemption.......................................... 15 Section 4.01 Distributions...................................................... 15 Section 4.02 Redemption......................................................... 16 Section 4.03 Subordination of Common Securities................................. 18 Section 4.04 Payment Procedures................................................. 19 Section 4.05 Tax Returns and Reports............................................ 19 ARTICLE V Trust Securities Certificates...................................... 19 Section 5.01 Initial Ownership.................................................. 19 Section 5.02 The Trust Securities Certificates.................................. 19 Section 5.03 Authentication of Trust Securities Certificates.................... 19 Section 5.04 Registration of Transfer and Exchange of Preferred Securities Certificates....................................................... 20 Section 5.05 Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates....................................................... 20 Section 5.06 Persons Deemed Securityholders..................................... 21 Section 5.07 Access to List of Securityholders' Names and Addresses............. 21 Section 5.08 Maintenance of Office or Agency.................................... 21 Section 5.09 Appointment of Paying Agent........................................ 22 Section 5.10 Ownership of Common Securities by Depositor........................ 22 Section 5.11 Book-Entry Preferred Securities Certificates; Common Securities Certificate........................................................ 22 Section 5.12 Notices to Clearing Agency......................................... 23 Section 5.13 Definitive Preferred Securities Certificates....................... 23 Section 5.14 Rights of Securityholders.......................................... 24
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Page ---- ARTICLE VI Acts of Securityholders; Meetings; Voting.......................... 24 Section 6.01 Limitations on Voting Rights....................................... 24 Section 6.02 Notice of Meetings................................................. 25 Section 6.03 Meetings of Preferred Securityholders.............................. 25 Section 6.04 Voting Rights...................................................... 25 Section 6.05 Proxies, etc. ..................................................... 26 Section 6.06 Securityholder Action by Written Consent........................... 26 Section 6.07 Record Date for Voting and Other Purposes.......................... 26 Section 6.08 Acts of Securityholders............................................ 26 Section 6.09 Inspection of Records.............................................. 27 ARTICLE VII Representations and Warranties of the Property Trustee and Delaware Trustee............................................................ 27 Section 7.01 Representations and Warranties of the Property Trustee and Delaware Trustee............................................................ 27 Section 7.02 Representations and Warranties of Depositor........................ 28 ARTICLE VIII The Trustees....................................................... 28 Section 8.01 Certain Duties and Responsibilities................................ 28 Section 8.02 Notice of Defaults................................................. 29 Section 8.03 Certain Rights of Property Trustee................................. 29 Section 8.04 Not Responsible for Recitals or Issuance of Securities............. 30 Section 8.05 May Hold Securities................................................ 30 Section 8.06 Compensation; Fees; Indemnity...................................... 30 Section 8.07 Trustees Required; Eligibility..................................... 31 Section 8.08 Conflicting Interests.............................................. 31 Section 8.09 Co-Property Trustees and Separate Trustee.......................... 32 Section 8.10 Resignation and Removal; Appointment of Successor.................. 33 Section 8.11 Acceptance of Appointment by Successor............................. 34 Section 8.12 Merger, Conversion, Consolidation or Succession to Business........ 34 Section 8.13 Preferential Collection of Claims Against Depositor or Trust....... 35 Section 8.14 Reports by Property Trustee........................................ 35 Section 8.15 Reports to the Property Trustee.................................... 35 Section 8.16 Evidence of Compliance with Conditions Precedent................... 36 Section 8.17 Number of Trustees................................................. 36 Section 8.18 Delegation of Power................................................ 36 Section 8.19 Enforcement of Rights of Property Trustee by Securityholders....... 36 Section 8.20 Delaware Trustee................................................... 37 ARTICLE IX Termination and Liquidation........................................ 38 Section 9.01 Termination Upon Expiration Date................................... 38 Section 9.02 Early Termination.................................................. 38 Section 9.03 Termination........................................................ 38 Section 9.04 Liquidation........................................................ 38 Section 9.05 Bankruptcy......................................................... 39
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Page ---- ARTICLE X Miscellaneous Provisions........................................... 40 Section 10.01 Guarantee by the Depositor......................................... 40 Section 10.02 Limitation of Rights of Securityholders............................ 40 Section 10.03 Amendment.......................................................... 40 Section 10.04 Separability....................................................... 41 Section 10.05 Governing Law...................................................... 41 Section 10.06 Notice of Deferral of Distribution................................. 41 Section 10.07 Headings........................................................... 41 Section 10.08 Notice and Demand.................................................. 42 Section 10.09 Agreement Not to Petition.......................................... 42 Section 10.10 Conflict with Trust Indenture Act.................................. 42 Section 10.11 Successors......................................................... 43 EXHIBIT A Certificate of Trust EXHIBIT B (Reserved) EXHIBIT C Form of Common Securities Certificate EXHIBIT D Form of Expense Agreement EXHIBIT E Form of Preferred Securities Certificate
iii AMENDED AND RESTATED TRUST AGREEMENT THIS AMENDED AND RESTATED TRUST AGREEMENT is made as of , , by and among (i) Duke Energy Corporation, a North Carolina corporation (the "Depositor" or the "Corporation"), (ii) The Chase Manhattan Bank, a banking corporation duly organized and existing under the laws of the State of New York, as trustee (the "Property Trustee" and, in its separate corporate capacity and not in its capacity as Property Trustee, the "Bank"), (iii) Chase Manhattan Bank Delaware, a banking corporation duly organized under the laws of the State of Delaware, as Delaware trustee (the "Delaware Trustee" and, in its separate corporate capacity and not in its capacity as Delaware Trustee, the "Delaware Bank"), (iv) Robert T. Lucas III, an individual, and S.L. Love, an individual, as administrative trustees (each an "Administrative Trustee" and together the "Administrative Trustees") (the Property Trustee, the Delaware Trustee and the Administrative Trustees referred to collectively as the "Trustees") and (v) the several Holders, as hereinafter defined. WITNESSETH: WHEREAS, the Depositor and the Delaware Trustee have heretofore duly declared and established a business trust pursuant to the Delaware Business Trust Act by the entering into that certain Trust Agreement, dated as of , (the "Original Trust Agreement"), and by the execution and filing by the Delaware Trustee with the Secretary of State of the State of Delaware of the Certificate of Trust, dated , (the "Certificate of Trust") and WHEREAS, the parties hereto desire to amend and restate the Original Trust Agreement in its entirety as set forth herein to provide for, among other things, (i) the addition of the Bank, Robert T. Lucas III and S.L. Love as trustees of the Trust, (ii) the acquisition by the Trust, from the Depositor of all of the right, title and interest in the Junior Subordinated Notes, (iii) the issuance of the Common Securities by the Trust to the Depositor, and (iv) the issuance and sale of the Preferred Securities by the Trust pursuant to the Underwriting Agreement. NOW THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, each party, for the benefit of the other parties and for the benefit of the Securityholders, hereby amends and restates the Original Trust Agreement in its entirety and agrees as follows: ARTICLE I Defined Terms Section 1.01 Definitions. For all purposes of this Trust Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (b) all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; 1 (c) unless the context otherwise requires, any reference to an "Article" or a "Section" refers to an Article or a Section, as the case may be, of this Trust Agreement; and (d) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section or other subdivision. "Act" has the meaning specified in Section 6.08. "Additional Amount" means, with respect to Trust Securities of a given Liquidation Amount and/or a given period, an amount equal to the Additional Interest (as defined in clause (ii) of the definition of "Additional Interest" in the Subordinated Indenture) paid by the Depositor on a Like Amount of Junior Subordinated Notes for such period. "Administrative Trustee" means each of the individuals identified as an "Administrative Trustee" in the preamble to this Trust Agreement solely in their capacities as Administrative Trustees of the Trust formed and continued hereunder and not in their individual capacities, or such trustee's successor(s) in interest in such capacity, or any successor "Administrative Trustee" appointed as herein provided. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Bank" has the meaning specified in the preamble to this Trust Agreement. "Bankruptcy Event" means, with respect to any Person: (i) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of such Person in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging such Person a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of such Person under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of such Person or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; or (ii) the commencement by such Person of a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of such Person in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other 2 similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Corporation or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the authorization of any such action by the board of directors of such Person; "Bankruptcy Laws" has the meaning specified in Section 10.09. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Depositor to have been duly adopted by the Depositor's Board of Directors or a duly authorized committee thereof and to be in full force and effect on the date of such certification, and delivered to the Trustees. "Book-Entry Preferred Securities Certificates" means certificates representing Preferred Securities issued in global, fully registered form to the Clearing Agency as described in Section 5.11. "Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day on which banks in New York, New York are authorized or obligated by law or executive order to remain closed or (iii) a day on which the Corporate Trust Office or the Indenture Trustee's principal corporate trust office is closed for business. "Certificate Depository Agreement" means the agreement among the Trust, The Chase Manhattan Bank, as agent, and The Depository Trust Company, as the initial Clearing Agency, dated , relating to the Preferred Securities Certificates as the same may be amended and supplemented from time to time. "Clearing Agency" means an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act. The Depository Trust Company will be the initial Clearing Agency. "Clearing Agency Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency. "Code" means the Internal Revenue Code of 1986, as amended. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Common Security" means an undivided beneficial ownership interest in the assets of the Trust having a Liquidation Amount of $ and having the rights provided therefor in this Trust Agreement, including the right to receive Distributions and a Liquidation Distribution as provided herein. 3 "Common Securities Certificate" means a certificate evidencing ownership of a Common Security or Securities, substantially in the form attached as Exhibit C. "Corporate Trust Office" means the office of the Property Trustee located in New York, New York at which its corporate trust business shall be principally administered. "Corporation" means Duke Energy Corporation, its successors and assigns. "Definitive Preferred Securities Certificates" means either or both (as the context requires) of (i) Preferred Securities Certificates issued in certificated, fully registered form as provided in Section 5.11(a) and (ii) Preferred Securities Certificates issued in certificated, fully registered form as provided in Section 5.13. "Delaware Bank" has the meaning specified in the preamble to this Trust Agreement. "Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time. "Delaware Trustee" means the commercial bank or trust company or any other person identified as the "Delaware Trustee" and has the meaning specified in the preamble to this Trust Agreement solely in its capacity as Delaware Trustee of the Trust formed and continued hereunder and not in its individual capacity, or its successor in interest in such capacity, or any successor Delaware Trustee appointed as herein provided. "Depositor" means Duke Energy Corporation, in its capacity as "Depositor" under this Trust Agreement, its successors and assigns. "Distribution Date" has the meaning specified in Section 4.01(a). "Distributions" means amounts payable in respect of the Trust Securities as provided in Section 4.01. "Event of Default" means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (i) the occurrence of an Indenture Event of Default; or (ii) default by the Trust in the payment of any Distribution when it becomes due and payable, and continuation of such default for a period of 30 days; or (iii) default by the Trust in the payment of any Redemption Price of any Trust Security when it becomes due and payable; or (iv) default in the performance, or breach, of any covenant or warranty of the Trustees in this Trust Agreement (other than a covenant or warranty a default in whose performance or breach is dealt with in clause (ii) or (iii) above) and continuation of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Trustees by 4 the Holders of at least 25% in Liquidation Amount of the Outstanding Preferred Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; unless Holders in Liquidation Amount of Outstanding Preferred Securities not less than the Liquidation Amount of Outstanding Preferred Securities the Holders of which gave such notice, shall agree in writing to an extension of such period prior to its expiration; provided, however, that the Holders of such Liquidation Amount of Outstanding Preferred Securities shall be deemed to have agreed to an extension of such period if corrective action is initiated by the Trustees within such period and is being diligently pursued; or (v) the occurrence of a Bankruptcy Event with respect to the Trust. "Expense Agreement" means the Agreement as to Expenses and Liabilities between the Corporation and the Trust, substantially in the form attached as Exhibit D, as amended from time to time. "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor legislation. "Guarantee" means the Guarantee Agreement executed and delivered by the Corporation and The Chase Manhattan Bank, as Guarantee Trustee, contemporaneously with the execution and delivery of this Trust Agreement, for the benefit of the Holders of the Preferred Securities, as amended from time to time. "Indenture Event of Default" means an "Event of Default," as defined in the Subordinated Indenture with respect to the Junior Subordinated Notes. "Indenture Redemption Date" means "Redemption Date," as defined in the Subordinated Indenture. "Indenture Trustee" means the trustee under the Subordinated Indenture. "Investment Company Act" means the Investment Company Act of 1940, as amended from time to time, or any successor legislation. "Issue Date" means the date of the delivery of the Trust Securities. "Junior Subordinated Notes" means the $ aggregate principal amount of the Depositor's Series % Junior Subordinated Notes due , issued pursuant to the Subordinated Indenture. "Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of trust, adverse ownership interest, hypothecation, assignment, security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever. "Like Amount" means (i) Trust Securities having a Liquidation Amount equal to the principal amount of Junior Subordinated Notes to be contemporaneously redeemed in accordance with the Subordinated Indenture and the proceeds of which will be used to pay the Redemption Price of such Trust Securities and (ii) Junior Subordinated Notes having a principal amount equal to the Liquidation Amount of the Trust Securities of the Holder to whom such Junior Subordinated Notes are distributed. 5 "Liquidation Amount" means the stated amount of $ per Trust Security. "Liquidation Date" means the date on which Junior Subordinated Notes are to be distributed to Holders of Trust Securities in connection with a liquidation of the Trust pursuant to Section 9.04. "Liquidation Distribution" has the meaning specified in Section 9.05. "Officers' Certificate" means a certificate signed by the Chairman of the Board, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Depositor, and delivered to the appropriate Trustee. One of the officers signing an Officers' Certificate to be delivered by the Depositor pursuant to Section 8.16 shall be the principal executive, financial or accounting officer of the Depositor. An Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Trust Agreement shall include: (a) a statement that each officer signing the Officers' Certificate has read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in the Officers' Certificate are based; (c) a statement that, in the opinion of each such officer, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. "OID" means "original issue discount" as that term is defined in the Internal Revenue Code of 1986, as amended. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Trust, the Trustees or the Depositor, but not an employee of the Trust or the Trustees, and who shall be reasonably acceptable to the Property Trustee. Any Opinion of Counsel pertaining to federal income tax matters may rely on published rulings of the Internal Revenue Service. "Original Trust Agreement" has the meaning specified in the recitals to this Trust Agreement. "Outstanding," when used with respect to Preferred Securities, means, as of the date of determination, all Preferred Securities theretofore authenticated and delivered under this Trust Agreement, except: (i) Preferred Securities theretofore cancelled by the Administrative Trustees or delivered to the Administrative Trustees for cancellation; (ii) Preferred Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Property Trustee or any Paying Agent for the Holders of such Preferred Securities; provided that if such Preferred Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Trust Agreement or provision therefor satisfactory to the Property Trustee has been made; and (iii) Preferred Securities in exchange for or in lieu of which other Preferred Securities have been authenticated and delivered pursuant to this Trust Agreement; provided, however, that in 6 determining whether the Holders of the requisite Liquidation Amount of the Outstanding Preferred Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Preferred Securities owned, whether of record or beneficially, by the Depositor, the Holder of the Common Securities, any Administrative Trustee or any Affiliate of the Depositor or any Administrative Trustee shall be disregarded and deemed not to be Outstanding, except that (a) in determining whether any Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Preferred Securities which such Trustee knows to be so owned shall be so disregarded and (b) the foregoing shall not apply at any time when all of the outstanding Preferred Securities are owned by the Depositor, the Holder of the Common Securities, one or more Administrative Trustees and/or any such Affiliate. Preferred Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Administrative Trustees the pledgee's right so to act with respect to such Preferred Securities and that the pledgee is not the Depositor or any Affiliate of the Depositor. "Owner" means each Person who is the beneficial owner of a Book-Entry Preferred Securities Certificate as reflected in the records of the Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as reflected in the records of a Person maintaining an account with such Clearing Agency (directly or indirectly, in accordance with the rules of such Clearing Agency). "Paying Agent" means any paying agent or co-paying agent appointed pursuant to Section 5.09 and shall initially be the Property Trustee. "Payment Account" means a segregated non-interest-bearing corporate trust account maintained by the Property Trustee for the benefit of the Securityholders in which all amounts paid in respect of the Junior Subordinated Notes will be held and from which the Property Trustee shall make payments to the Securityholders in accordance with Section 4.01. "Person" means an individual, corporation, partnership, joint venture, trust, limited liability company or corporation, unincorporated organization or government or any agency or political subdivision thereof. "Preferred Security" means an undivided beneficial ownership interest in the assets of the Trust having a Liquidation Amount of $ and having rights provided therefor in this Trust Agreement, including the right to receive Distributions and a Liquidation Distribution as provided herein. "Preferred Securities Certificate" means a certificate evidencing ownership of a Preferred Security or Securities, substantially in the form attached as Exhibit E. "Property Trustee" means the commercial bank or trust company identified as the "Property Trustee" in the preamble to this Trust Agreement solely in its capacity as Property Trustee of the Trust formed and continued hereunder and not in its individual capacity, or its successor in interest in such capacity, or any successor "Property Trustee" as herein provided. "Redemption Date" means, with respect to any Trust Security to be redeemed, the date fixed for such redemption by or pursuant to this Trust Agreement; provided that each Indenture Redemption Date shall be a Redemption Date for a Like Amount of Trust Securities. 7 "Redemption Price" means, with respect to any date fixed for redemption of any Trust Security, the Liquidation Amount of such Trust Security, plus accrued and unpaid Distributions to such date. "Relevant Trustee" has the meaning specified in Section 8.10. "Securities Act" means the Securities Act of 1933, as amended from time to time, or any successor legislation. "Security Register" and "Security Registrar" are described in Section 5.04. "Securityholder" or "Holder" means a Person in whose name a Trust Security or Securities is registered in the Security Register; any such Person is a beneficial owner within the meaning of the Delaware Business Trust Act. "Subordinated Indenture" means the Subordinated Indenture, dated as of December 1, 1997, between the Depositor and the Indenture Trustee, as supplemented by the Supplemental Indenture. "Supplemental Indenture" means the Supplemental Indenture, dated as of , , by and between the Depositor and the Indenture Trustee. "Trust" means the Delaware business trust continued hereby and identified on the cover page to this Trust Agreement. "Trust Agreement" means this Amended and Restated Trust Agreement, as the same may be modified, amended or supplemented in accordance with the applicable provisions hereof, including all exhibits hereto, including, for all purposes of this Amended and Restated Trust Agreement and any modification, amendment or supplement, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this Amended and Restated Trust Agreement and any such modification, amendment or supplement, respectively. "Trustees" means the Persons identified as "Trustees" in the preamble to this Trust Agreement solely in their capacities as Trustees of the Trust formed hereunder and not in their individual capacities, or any successor in interest in such capacity, or any successor trustee appointed as herein provided. "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Trust Property" means (i) the Junior Subordinated Notes, (ii) any cash on deposit in, or owing to, the Payment Account, and (iii) all proceeds and rights in respect of the foregoing and any other property and assets for the time being held or deemed to be held by the Property Trustee pursuant to this Trust Agreement. "Trust Securities Certificate" means any one of the Common Securities Certificates or the Preferred Securities Certificates. 8 "Trust Security" means any one of the Common Securities or the Preferred Securities. "Underwriting Agreement" means the Underwriting Agreement, dated as of , , among the Trust, the Depositor and the underwriters named herein. ARTICLE II Establishment of the Trust Section 2.01 Name. The Trust continued hereby shall be known as "Duke Energy Capital Trust [ ]," in which name the Trustees may conduct the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued. The Administrative Trustees may change the name of the Trust from time to time following written notice to the Holders. Section 2.02 Offices of the Trustees; Principal Place of Business. The address of the Property Trustee is The Chase Manhattan Bank, 450 West 33rd Street, New York, New York 10001, or at such other address in New York as the Property Trustee may designate by written notice to the Securityholders and the Depositor. The principal place of business of the Delaware Trustee is 1201 Market Street, Wilmington, Delaware 19801, or at such other address in Delaware as the Delaware Trustee may designate by notice to the Depositor. The address of the Administrative Trustees is c/o Duke Energy Corporation, 526 South Church Street, Charlotte, North Carolina 28202, Attention: Corporate Secretary. The principal place of business of the Trust is c/o Duke Energy Corporation, 526 South Church Street, Charlotte, North Carolina 28202. The Depositor may change the principal place of business of the Trust at any time by giving notice thereof to the Trustees. Section 2.03 Initial Contribution of Trust Property; Organizational Expenses. The Delaware Trustee acknowledges receipt in trust from the Depositor in connection with the Original Trust Agreement of the sum of $10, which constituted the initial Trust Property. The Depositor shall pay organizational expenses of the Trust as they arise or shall, upon request of the Trustees, promptly reimburse the Trustees for any such expenses paid by the Trustees. The Depositor shall make no claim upon the Trust Property for the payment of such expenses. Section 2.04 Issuance of the Preferred Securities. Contemporaneously with the execution and delivery of this Trust Agreement, the Administrative Trustees, on behalf of the Trust, shall execute and deliver to the underwriters named in the Underwriting Agreement Preferred Securities Certificates, registered in the name of the nominee of the initial Clearing Agency, in an aggregate amount of Preferred Securities having an aggregated Liquidation Amount of $ (the "Preferred Securities") against receipt of the aggregate purchase price of such Preferred Securities of $ , which amount the Administrative Trustees shall promptly deliver to the Property Trustee. Section 2.05 Subscription and Purchase of Junior Subordinated Notes; Issuance of the Common Securities. Contemporaneously with the execution and delivery of this Trust Agreement, the Administrative Trustees, on behalf of the Trust, shall execute and deliver to the Depositor Common Securities Certificates, registered in the name of the Depositor, in an aggregate amount of Common Securities having an aggregate Liquidation Amount of $ against 9 payment by the Depositor of such amount. Contemporaneously therewith, the Administrative Trustees, on behalf of the Trust, shall subscribe to and purchase from the Depositor Junior Subordinated Notes, registered in the name of Property Trustee, on behalf of the Trust and the Holders, and having an aggregate principal amount equal to $ and, in satisfaction of the purchase price for such Junior Subordinated Notes, the Property Trustee, on behalf of the Trust, shall deliver to the Depositor the sum of $ . Section 2.06 Declaration of Trust. The exclusive purposes and functions of the Trust are (i) to issue and sell the Trust Securities and use the proceeds from such sale to acquire the Junior Subordinated Notes, and (ii) to engage in only those other activities necessary, incidental, appropriate or convenient thereto. The Depositor hereby appoints each of the Bank, the Delaware Bank, Robert T. Lucas III, and S.L. Love as trustees of the Trust, to have all the rights, powers and duties to the extent set forth herein. The Property Trustee hereby declares that it will hold the Trust Property in trust upon and subject to the conditions set forth herein for the benefit of the Trust and the Securityholders. The Trustees shall have all rights, powers and duties set forth herein and in accordance with applicable law with respect to accomplishing the purposes of the Trust. The Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities of the Property Trustee or the Administrative Trustees set forth herein. The Delaware Trustee shall be one of the Trustees for the sole and limited purpose of fulfilling the requirements of Section 3807 of the Delaware Business Trust Act. The Delaware Trustee, as the trustee under the Original Trust Agreement, has filed the Certificate of Trust of the Trust with the office of the Secretary of State of the State of Delaware, a copy of which is attached hereto as Exhibit A, and such filing is hereby confirmed and ratified. Section 2.07 Authorization to Enter into Certain Transactions. The Trustees shall conduct the affairs of the Trust in accordance with the terms of this Trust Agreement. Subject to the limitations set forth in paragraph (C) of this Section, and in accordance with the following paragraphs (A) and (B), the Trustees shall have the authority to enter into all transactions and agreements determined by the Trustees to be appropriate in exercising the authority, express (in the case of the Property Trustee) or implied, otherwise granted to the Trustees under this Trust Agreement, and to perform all acts in furtherance thereof, including without limitation, the following: (A) As among the Trustees, the Administrative Trustees, acting singly or jointly, shall have the exclusive power, duty and authority to act on behalf of the Trust with respect to the following matters: (i) to acquire the Junior Subordinated Notes with the proceeds of the sale of the Trust Securities; provided, however, the Administrative Trustees shall cause legal title to all of the Junior Subordinated Notes to be vested in, and the Junior Subordinated Notes to be held of record in the name of, the Property Trustee for the benefit of the Trust and the Holders of the Trust Securities; (ii) to give the Depositor and the Property Trustee prompt written notice of the occurrence of any Special Event (as defined in the Supplemental Indenture) and to take any ministerial actions in connection therewith; provided that the Administrative Trustees shall consult with the Depositor and the Property Trustee before taking or refraining to take any ministerial action in relation to a Special Event; 10 (iii) to establish a record date with respect to all actions to be taken hereunder that require a record date be established, including for the purposes of Section 316(c) of the Trust Indenture Act and with respect to Distributions, voting rights, redemptions, and exchanges, and to issue relevant notices to Holders of the Trust Securities as to such actions and applicable record dates; (iv) to bring or defend, pay, collect, compromise, arbitrate, resort to legal action, or otherwise adjust claims or demands of or against the Trust ("Legal Action"), unless pursuant to Section 2.07(B)(v), the Property Trustee has the power to bring such Legal Action; (v) to employ or otherwise engage employees and agents (who may be designated as officers with titles) and managers, contractors, advisors, and consultants and pay reasonable compensation for such services; (vi) to cause the Trust to comply with the Trust's obligations under the Trust Indenture Act; (vii) to give the certificate to the Property Trustee required by Section 314(a)(4) of the Trust Indenture Act, which certificate may be executed by any Administrative Trustee; (viii) to take all actions and perform such duties as may be required of the Administrative Trustees pursuant to the terms of this Trust Agreement; (ix) to take all action that may be necessary or appropriate for the preservation and the continuation of the Trust's valid existence, rights, franchises and privileges as a statutory business trust under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Holders of the Trust Securities or to enable the Trust to effect the purposes for which the Trust has been created; (x) to take all action necessary to cause all applicable tax returns and tax information reports that are required to be filed with respect to the Trust to be duly prepared and filed by the Administrative Trustees, on behalf of the Trust; (xi) to issue and sell the Trust Securities; (xii) to cause the Trust to enter into, and to execute, deliver and perform on behalf of the Trust, the Expense Agreement and such other agreements as may be necessary or desirable in connection with the consummation hereof; (xiii) to assist in the registration of the Preferred Securities under the Securities Act and under state securities or blue sky laws, and the qualification of the Trust Agreement as a trust indenture under the Trust Indenture Act; (xiv) to assist in the listing of the Preferred Securities upon such securities exchange or exchanges as shall be determined by the Depositor and, if required, the registration of the Preferred Securities under the Exchange Act, and the preparation and filing of all periodic and other reports and other documents pursuant to the foregoing; (xv) to send notices (other than notices of default) and other information regarding the Trust Securities and the Junior Subordinated Notes to the Securityholders in accordance with this Trust Agreement; (xvi) to appoint a Paying Agent (subject to Section 5.09), authenticating agent and Security Registrar in accordance with this Trust Agreement; (xvii) to register transfers of the Trust Securities in accordance with this Trust Agreement; 11 (xviii) to assist in, to the extent provided in this Trust Agreement, the winding-up of the affairs of and termination of the Trust and the preparation, execution and filing of the certificate of cancellation with the Secretary of State of the State of Delaware; and (xix) to take any action incidental to the foregoing as the Administrative Trustees may from time to time determine is necessary, appropriate, convenient or advisable to protect and conserve the Trust Property for the benefit of the Securityholders (without consideration of the effect of any such action on any particular Securityholder). (B) As among the Trustees, the Property Trustee shall have the exclusive power, duty and authority to act on behalf of the Trust with respect to the following matters: (i) engage in such ministerial activities as shall be necessary or appropriate to effect promptly the redemption of the Trust Securities to the extent the Junior Subordinated Notes are redeemed or mature; (ii) upon notice of distribution issued by the Administrative Trustees in accordance with the terms of this Trust Agreement, engage in such ministerial activities as shall be necessary or appropriate to effect promptly the distribution pursuant to the terms of this Trust Agreement of Junior Subordinated Notes to Holders of Trust Securities; (iii) subject to the terms hereof, exercise all of the rights, powers and privileges of a holder of the Junior Subordinated Notes under the Subordinated Indenture and, if an Event of Default occurs and is continuing, enforce for the benefit of, and subject to the rights of, the Holders of the Trust Securities, its rights as holder of the Junior Subordinated Notes under the Subordinated Indenture; (iv) take all actions and perform such duties as may be specifically required of the Property Trustee pursuant to the terms of this Trust Agreement; (v) take any Legal Action which arises out of or in connection with an Event of Default or the Property Trustee's duties and obligations under this Trust Agreement, the Delaware Business Trust Act or the Trust Indenture Act; (vi) the establishment and maintenance of the Payment Account; (vii) the receipt of and holding of legal title to the Junior Subordinated Notes as described herein; (viii) the collection of interest, principal and any other payments made in respect of the Junior Subordinated Notes in the Payment Account; (ix) the distribution of amounts received in the Payment Account and owed to the Securityholders in respect of the Trust Securities; (x) the sending of notices of default and other information regarding the Trust Securities and the Junior Subordinated Notes to the Securityholders in accordance with this Trust Agreement; (xi) the distribution of the Trust Property in accordance with the terms of this Trust Agreement; 12 (xii) as provided in this Trust Agreement, the winding-up of the affairs of and termination of the Trust and the preparation, execution and filing of the certificate of cancellation with the Secretary of State of Delaware; and (xiii) the taking of any action incidental to the foregoing as the Property Trustee may from time to time determine is necessary, appropriate, convenient or advisable to protect and conserve the Trust Property for the benefit of the Securityholders (without consideration of the effect of any such action on any particular Securityholder). (C) So long as this Trust Agreement remains in effect, the Trust (or the Trustees acting on behalf of the Trust) shall not undertake any business, activity or transaction except as expressly provided herein or contemplated hereby. In particular, the Trustees shall not (i) acquire any investments or engage in any activities not authorized by this Trust Agreement, (ii) sell, assign, transfer, exchange, pledge, set-off or otherwise dispose of any of the Trust Property or interests therein, including to Securityholders, except as expressly provided herein, (iii) take any action that would cause the Trust to fail or cease to qualify as a grantor trust for United States federal income tax purposes, (iv) incur any indebtedness for borrowed money, (v) take or consent to any action that would result in the placement of a Lien on any of the Trust Property, (vi) issue any securities other than the Trust Securities, or (vii) have any power to, or agree to any action by the Depositor that would, vary the investment (within the meaning of Treasury Regulation Section 301.7701-4(c)) of the Trust or of the Securityholders. The Trustees shall defend all claims and demands of all Persons at any time claiming any Lien on any of the Trust Property adverse to the interest of the Trust or the Securityholders in their capacity as Securityholders. (D) In connection with the issue and sale of the Preferred Securities, the Depositor shall have the right and responsibility to assist the Trust with respect to, or effect on behalf of the Trust, the following (and any actions taken by the Depositor in furtherance of the following prior to the date of this Trust Agreement are hereby ratified and confirmed in all respects): (i) to prepare for filing by the Trust with the Commission a registration statement on Form S-3 under the Securities Act in relation to the Preferred Securities, including any amendments thereto; (ii) to determine the states in which to take appropriate action to qualify or register for sale all or part of the Preferred Securities and to do any and all such acts, other than actions which must be taken by or on behalf of the Trust, and advise the Trustees of actions they must take on behalf of the Trust, and prepare for execution and filing any documents to be executed and filed by the Trust or on behalf of the Trust, as the Depositor deems necessary or advisable in order to comply with the applicable laws of any such states; (iii) to prepare for filing by the Trust an application to the New York Stock Exchange or any other national stock exchange or the NASDAQ National Market for listing upon notice of issuance of any Preferred Securities; (iv) to prepare for filing by the Trust with the Commission a registration statement on Form 8-A relating to the registration of the Preferred Securities under Section 12(b) of the Exchange Act, including any amendments thereto; (v) to negotiate terms of the Underwriting Agreement providing for the sale of the Preferred Securities and to execute, deliver and perform the Underwriting Agreement on behalf of the Trust; 13 (vi) to negotiate the terms of the Certificate Depository Agreement relating to the Preferred Securities and to execute, deliver and perform the Certificate Depository Agreement on behalf of the Trust; and (vii) any other actions necessary, incidental, appropriate or convenient to carry out any of the foregoing activities. (E) Notwithstanding anything herein to the contrary, the Administrative Trustees are authorized and directed to conduct the affairs of the Trust and to operate the Trust so that the Trust will not be deemed to be an "investment company" required to be registered under the Investment Company Act, or taxed as other than a grantor trust for United States federal income tax purposes and so that the Junior Subordinated Notes will be treated as indebtedness of the Depositor for United States federal income tax purposes. In this connection, the Depositor and the Administrative Trustees are authorized to take any action, not inconsistent with applicable law, the Certificate of Trust or this Trust Agreement, that each of the Depositor and the Administrative Trustees determines in its discretion to be necessary or desirable for such purposes, as long as such action does not materially and adversely affect the interests of the Holders of the Preferred Securities. Section 2.08 Assets of Trust. The assets of the Trust shall consist of the Trust Property. Section 2.09 Title to Trust Property. Legal title to all Trust Property shall be vested at all times in the Property Trustee (in its capacity as such) and shall be held and administered by the Property Trustee for the benefit of the Securityholders and the Trust in accordance with this Trust Agreement. The right, title and interest of the Property Trustee to the Junior Subordinated Notes shall vest automatically in each Person who may thereafter be appointed as Property Trustee in accordance with the terms hereof. Such vesting and cessation of title shall be effective whether or not conveyancing documents have been executed and delivered. Section 2.10 Mergers and Consolidations of the Trust. The Trust may not consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any corporation or other entity, except as described below. The Trust may at the request of the Corporation, with the consent of the Administrative Trustees and without the consent of the Holders of the Trust Securities, consolidate, amalgamate, merge with or into, or be replaced by a trust organized as such under the laws of any state; provided that (i) such successor entity either (x) expressly assumes all of the obligations of the Trust with respect to the Trust Securities or (y) substitutes for the Preferred Securities and the Common Securities other securities having substantially the same terms as the Trust Securities (herein referred to as the "Successor Securities") so long as the Successor Securities rank the same as the Trust Securities rank in priority with respect to Distributions and payments upon liquidation, redemption and otherwise, (ii) the Corporation expressly appoints a trustee of such successor entity possessing the same powers and duties as the Property Trustee as the holder of legal title to the Junior Subordinated Notes, (iii) the Preferred Securities or any Successor Securities are listed, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or other organization on which the Preferred Securities are then listed, (iv) such merger, consolidation, amalgamation or replacement does not cause the Preferred Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization, (v) such consolidation, 14 amalgamation, merger or replacement does not adversely affect the rights, preferences and privileges of the Holders of the Trust Securities (including any Successor Securities) in any material respect, (vi) such successor entity has a purpose substantially identical to that of the Trust, (vii) prior to such consolidation, amalgamation, merger or replacement, the Corporation and the Property Trustee have received an Opinion of Counsel experienced in such matters to the effect that (A) such consolidation, amalgamation, merger or replacement does not adversely affect the rights, preferences and privileges of the Holders of the Trust Securities (including any Successor Securities) in any material respect, and (B) following such consolidation, amalgamation, merger or replacement, neither the Trust nor such successor entity will be required to register as an investment company under the Investment Company Act, and (viii) the Corporation owns all of the common securities of such successor entity and guarantees the obligations of such successor entity under the Successor Securities at least to the extent provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not, except with the consent of Holders of 100% in Liquidation Amount of the Trust Securities, consolidate, amalgamate, merge with or into, or be replaced by any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it if such consolidation, amalgamation, merger or replacement would cause the Trust or the successor entity to be classified as other than a grantor trust for United States federal income tax purposes. ARTICLE III Payment Account Section 3.01 Payment Account. (a) On or prior to the Issue Date, the Property Trustee shall establish the Payment Account. The Property Trustee and an agent of the Property Trustee shall have exclusive control and sole right of withdrawal with respect to the Payment Account for the purpose of making deposits in and withdrawals from the Payment Account in accordance with this Trust Agreement. All monies and other property deposited or held from time to time in the Payment Account shall be held by the Property Trustee in the Payment Account for the exclusive benefit of the Securityholders and for distribution as herein provided, including (and subject to) any priority of payments provided for herein. (b) The Property Trustee shall deposit in the Payment Account, promptly upon receipt, all payments of principal or interest on, and any other payments or proceeds with respect to, the Junior Subordinated Notes. Amounts held in the Payment Account shall not be invested by the Property Trustee pending distribution thereof. ARTICLE IV Distributions; Redemption Section 4.01 Distributions. (a) Distributions on the Trust Securities shall be cumulative and accrue from the Issue Date and, except in the event that the Depositor exercises its right to extend the interest payment period for the Junior Subordinated Notes pursuant to Section 104 of the Supplemental Indenture, shall be 15 payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing on , . If any date on which Distributions are otherwise payable on the Trust Securities is not a Business Day, then the payment of such Distribution shall be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, payment of such Distribution shall be made on the immediately preceding Business Day, in each case, with the same force and effect as if made on such date (each such date, a "Distribution Date"). (b) Distributions payable on the Trust Securities shall be fixed at a rate of % per annum of the Liquidation Amount of the Trust Securities. The amount of Distributions payable for any full quarterly period shall be computed on the basis of twelve 30-day months and a 360-day year. If the interest payment period for the Junior Subordinated Notes is extended pursuant to Section 104 of the Supplemental Indenture (an "Extension Period"), then the rate per annum at which Distributions on the Trust Securities accumulate shall be increased by an amount such that the aggregate amount of Distributions that accumulate on all Trust Securities during any such Extension Period is equal to the aggregate amount of interest (including interest payable on unpaid interest at the percentage rate per annum set forth above, compounded quarterly, to the extent permitted by applicable law) that accrues during any such Extension Period on the Junior Subordinated Notes. The payment of such deferred interest, together with interest thereon, will be distributed, if funds are legally available therefor, to the Holders of the Trust Securities (as they appear on the books and records of the Trust on the record date (as specified in Section 4.01(d)) next following the termination of such Extension Period) as received at the end of any Extension Period. The amount of Distributions payable for any period shall include the Additional Amounts, if any. (c) Distributions on the Trust Securities shall be made and shall be deemed payable on each Distribution Date only to the extent that the Trust has legally and immediately available funds in the Payment Account for the payment of such Distributions. (d) Distributions (including Additional Amounts, if any) on the Trust Securities on each Distribution Date shall be payable to the Holders thereof as they appear on the Security Register for the Trust Securities on the relevant record date, which shall be the close of business on the fifteenth calendar day prior to the relevant Distribution Date. Each Trust Security upon registration of transfer of or in exchange for or in lieu of any other Trust Security shall carry the rights of Distributions accrued (including Additional Amounts, if any) and unpaid, and to accrue (including Additional Amounts, if any), which were carried by such other Trust Security. Section 4.02 Redemption. (a) On each Redemption Date with respect to the Junior Subordinated Notes, the Trust will be required to redeem a Like Amount of Trust Securities at the Redemption Price. (b) Notice of redemption shall be given by the Property Trustee by first- class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date to each Holder of Trust Securities to be redeemed, at such Holder's address appearing in the Security Register. All notices of redemption shall state: (i) the Redemption Date; 16 (ii) the Redemption Price; (iii) the CUSIP number; (iv) if less than all the Outstanding Trust Securities are to be redeemed, the total Liquidation Amount of the Trust Securities to be redeemed; and (v) that on the Redemption Date the Redemption Price will become due and payable upon each such Trust Security to be redeemed and the Distributions thereon will cease to accrue on and after such date. (c) The Trust Securities redeemed on each Redemption Date shall be redeemed at the Redemption Price with the proceeds from the contemporaneous redemption of Junior Subordinated Notes. Redemptions of the Trust Securities shall be made and the Redemption Price shall be deemed payable on each Redemption Date only to the extent that the Trust has funds legally and immediately available in the Payment Account for the payment of such Redemption Price. (d) If the Property Trustee gives a notice of redemption in respect of any Preferred Securities, then, by 2:00 P.M. New York City time, on the Redemption Date, subject to Section 4.02(c), the Property Trustee will, so long as the Preferred Securities are in book-entry only form, irrevocably deposit with the Clearing Agency for the Preferred Securities funds sufficient to pay the applicable Redemption Price. If the Preferred Securities are not in book-entry only form, the Property Trustee, subject to Section 4.02(c), shall irrevocably deposit with the Paying Agent funds sufficient to pay the applicable Redemption Price and will give the Paying Agent irrevocable instructions to pay the Redemption Price to the Holders thereof upon surrender of their Preferred Securities Certificates. Notwithstanding the foregoing, Distributions payable on or prior to the Redemption Date for any Trust Securities called for redemption shall be payable to the Holders of such Trust Securities as they appear on the Security Register for the Trust Securities on the relevant record dates for the related Distribution Dates. If notice of redemption shall have been given and funds deposited as required, then immediately prior to the close of business on the date of such deposit, all rights of Securityholders holding Trust Securities so called for redemption will cease, except the right of such Securityholders to receive the Redemption Price, but without interest, and such Securities will cease to be outstanding. In the event that any date on which any Redemption Price is payable is not a Business Day, then payment of the Redemption Price payable on such date shall be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, payment of such Redemption Price shall be made on the immediately preceding Business Day, in each case, with the same force and effect as if made on such date. In the event that payment of the Redemption Price in respect of Trust Securities is improperly withheld or refused and not paid either by the Trust or by the Depositor pursuant to the Guarantee, Distributions on such Trust Securities will continue to accrue at the then applicable rate, from such Redemption Date originally established by the Trust for such Preferred Securities to the date such Redemption Price is actually paid. (e) Payment of the Redemption Price on the Trust Securities shall be made to the recordholders thereof as they appear on the Security Register for the Trust Securities on the relevant record date, which shall be the close of business on the fifteenth calendar day prior to the Redemption Date. 17 (f) If less than all the Outstanding Trust Securities are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust Securities to be redeemed shall be allocated 3% to the Common Securities and 97% to the Preferred Securities, with such adjustments that each amount so allocated shall be divisible by $ . The particular Preferred Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Property Trustee from the Outstanding Preferred Securities not previously called for redemption, by such method as the Property Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to $ or integral multiples thereof) of the Liquidation Amount of Preferred Securities of a denomination larger than $ ; provided, however, that before undertaking redemption of the Preferred Securities on other than a pro rata basis, the Property Trustee shall have received an Opinion of Counsel that the status of the Trust as a grantor trust for United States federal income tax purposes would not be adversely affected. The Property Trustee shall promptly notify the Security Registrar in writing of the Preferred Securities selected for redemption and, in the case of any Preferred Securities selected for partial redemption, the Liquidation Amount thereof to be redeemed. For all purposes of this Trust Agreement, unless the context otherwise requires, all provisions relating to the redemption of Preferred Securities shall relate, in the case of any Preferred Securities redeemed or to be redeemed only in part, to the portion of the Liquidation Amount of Preferred Securities which has been or is to be redeemed. (g) Subject to the foregoing provisions of Section 4.02 and to applicable law (including, without limitation, United States federal securities laws), the Corporation or its Affiliates may, at any time and from time to time, purchase outstanding Preferred Securities by tender, in the open market or by private agreement. Section 4.03 Subordination of Common Securities. (a) Payment of Distributions (including Additional Amounts, if applicable) on, and the Redemption Price of, the Trust Securities, as applicable, shall be made pro rata based on the Liquidation Amount of the Trust Securities; provided, however, that if on any Distribution Date or Redemption Date an Indenture Event of Default shall have occurred and be continuing, no payment of any Distribution (including Additional Amounts, if applicable) on, or Redemption Price of, any Common Security, and no other payment on account of the redemption, liquidation or other acquisition of Common Securities, shall be made unless payment in full in cash of all accumulated and unpaid Distributions (including Additional Amounts, if applicable) on all Outstanding Preferred Securities for all distribution periods terminating on or prior thereto, or in the case of payment of the Redemption Price the full amount of such Redemption Price on all Outstanding Preferred Securities, shall have been made or provided for, and all funds immediately available to the Property Trustee shall first be applied to the payment in full in cash of all Distributions (including Additional Amounts, if applicable) on, or the Redemption Price of, Preferred Securities then due and payable. (b) In the case of the occurrence of any Indenture Event of Default, the Holder of Common Securities will be deemed to have waived any such Event of Default under this Trust Agreement until the effect of all such Events of Default with respect to the Preferred Securities have been cured, waived or otherwise eliminated. Until any such Events of Default under this Trust Agreement with respect to the Preferred Securities have been so cured, waived or otherwise eliminated, the Property Trustee shall act solely on behalf of the Holders of the Preferred Securities and not the Holder of the 18 Common Securities, and only the Holders of the Preferred Securities will have the right to direct the Property Trustee to act on their behalf. Section 4.04 Payment Procedures. Payments in respect of the Preferred Securities shall be made by check mailed to the address of the Person entitled thereto as such address shall appear on the Security Register or, if the Preferred Securities are held by a Clearing Agency, such Distributions shall be made to the Clearing Agency, which shall credit the relevant Persons' accounts at such Clearing Agency on the applicable Distribution Dates. Payments in respect of the Common Securities shall be made in such manner as shall be mutually agreed between the Property Trustee and the Holder of the Common Securities. Section 4.05 Tax Returns and Reports. The Administrative Trustees shall prepare (or cause to be prepared), at the Depositor's expense, and file all United States federal, state and local tax and information returns and reports required to be filed by or in respect of the Trust. The Administrative Trustees shall provide or cause to be provided on a timely basis to each Holder any Internal Revenue Service form required to be so provided in respect of the Trust Securities. ARTICLE V Trust Securities Certificates Section 5.01 Initial Ownership. Upon the formation of the Trust by the contribution by the Depositor pursuant to Section 2.03 and until the issuance of the Trust Securities, and at any time during which no Trust Securities are outstanding, the Depositor shall be the sole beneficial owner of the Trust. Section 5.02 The Trust Securities Certificates. Each of the Preferred and Common Securities Certificates shall be issued in minimum denominations of $ and integral multiples in excess thereof. The Trust Securities Certificates shall be executed on behalf of the Trust by manual or facsimile signature of at least one Administrative Trustee. Trust Securities Certificates bearing the manual or facsimile signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign on behalf of the Trust, shall be validly issued and entitled to the benefits of this Trust Agreement, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the authentication and delivery of such Trust Securities Certificates or did not hold such offices at the date of authentication and delivery of such Trust Securities Certificates. A transferee of a Trust Securities Certificate shall become a Securityholder, and shall be entitled to the rights and subject to the obligations of a Securityholder hereunder, upon due registration of such Trust Securities Certificate in such transferee's name pursuant to Section 5.04. Section 5.03 Authentication of Trust Securities Certificates. On the Issue Date, the Administrative Trustees shall cause Trust Securities Certificates, in an aggregate Liquidation Amount as provided in Sections 2.04 and 2.05, to be executed on behalf of the Trust, authenticated and delivered to or upon the written order of the Depositor signed by its Chairman of the Board, its President or any Vice President, without further corporate action by the Depositor, in authorized denominations. No Trust Securities Certificate shall entitle its Holder to any benefit under this Trust 19 Agreement, or shall be valid for any purpose, unless there shall appear on such Trust Securities Certificate a certificate of authentication substantially in the form set forth in Exhibit E or Exhibit C, as applicable, executed by at least one Administrative Trustee by manual signature; such authentication shall constitute conclusive evidence that such Trust Securities Certificate shall have been duly authenticated and delivered hereunder. All Trust Securities Certificates shall be dated the date of their authentication. Section 5.04 Registration of Transfer and Exchange of Preferred Securities Certificates. The Security Registrar shall keep or cause to be kept, at the office or agency maintained pursuant to Section 5.08, a Security Register in which, subject to such reasonable regulations as it may prescribe, the Security Registrar shall provide for the registration of Preferred Securities Certificates and the Common Securities Certificates (subject to Section 5.10 in the case of the Common Securities Certificates) and registration of transfers and exchanges of Preferred Securities Certificates as herein provided. The Property Trustee shall be the initial Security Registrar. Upon surrender for registration of transfer of any Preferred Securities Certificate at the office or agency maintained pursuant to Section 5.08, the Administrative Trustees shall execute, authenticate and deliver in the name of the designated transferee or transferees, one or more new Preferred Securities Certificates in authorized denominations of a like aggregate Liquidation Amount dated the date of authentication by the Administrative Trustee or Trustees. The Security Registrar shall not be required to register the transfer of any Preferred Securities that have been called for redemption. At the option of a Holder, Preferred Securities Certificates may be exchanged for other Preferred Securities Certificates in authorized denominations of the same class and of a like aggregate Liquidation Amount upon surrender of the Preferred Securities Certificates to be exchanged at the office or agency maintained pursuant to Section 5.08. Every Preferred Securities Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Administrative Trustees and the Security Registrar duly executed by the Holder or such Holder's attorney duly authorized in writing. Each Preferred Securities Certificate surrendered for registration of transfer or exchange shall be cancelled and subsequently disposed of by the Security Registrar in accordance with its customary practice. No service charge shall be made for any registration of transfer or exchange of Preferred Securities Certificates, but the Security Registrar or the Administrative Trustees may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Preferred Securities Certificates. Section 5.05 Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates. If (a) any mutilated Trust Securities Certificate shall be surrendered to the Security Registrar, or if the Security Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Trust Securities Certificate and (b) there shall be delivered to the Security Registrar and the Administrative Trustees such security or indemnity as may be required by them to save each of them harmless, then in the absence of notice that such Trust Securities Certificate shall have been acquired by a bona fide purchaser, the Administrative Trustees or any one of them on behalf of the Trust shall execute and authenticate and make available for delivery, in exchange for or in lieu of any such mutilated, 20 destroyed, lost or stolen Trust Securities Certificate, a new Trust Securities Certificate of like class, tenor and denomination. In connection with the issuance of any new Trust Securities Certificate under this Section, the Administrative Trustees or the Security Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Trust Securities Certificate issued pursuant to this Section shall constitute conclusive evidence of an ownership interest in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Trust Securities Certificate shall be found at any time. Section 5.06 Persons Deemed Securityholders. Prior to due presentation of a Trust Securities Certificate for registration of transfer, the Trustees or the Security Registrar shall treat the Person in whose name any Trust Securities Certificate shall be registered in the Security Register as the owner of such Trust Securities Certificate for the purpose of receiving Distributions (subject to Section 4.01(d)) and for all other purposes whatsoever, and neither the Trustees nor the Security Registrar shall be bound by any notice to the contrary. Section 5.07 Access to List of Securityholders' Names and Addresses. The Administrative Trustees shall furnish or cause to be furnished to (i) the Depositor and the Property Trustee semi-annually, not later than June 1 and December 1 in each year and (ii) the Depositor or the Property Trustee, as the case may be, within 30 days after receipt by any Administrative Trustee of a request therefor from the Depositor or the Property Trustee, as the case may be, in writing, a list, in such form as the Depositor or the Property Trustee, as the case may be, may reasonably require, of the names and addresses of the Securityholders as of a date not more than 15 days prior to the time such list is furnished; provided that the Administrative Trustees shall not be obligated to provide such list at any time such list does not differ from the most recent list given to the Depositor and the Property Trustee by the Administrative Trustees or at any time the Property Trustee is the Security Registrar. If three or more Securityholders or one or more Holders of Trust Securities Certificates evidencing not less than 25% of the outstanding Liquidation Amount apply in writing to the Administrative Trustees, and such application states that the applicants desire to communicate with other Securityholders with respect to their rights under this Trust Agreement or under the Trust Securities Certificates and such application is accompanied by a copy of the communication that such applicants propose to transmit, then the Administrative Trustees shall, within five Business Days after the receipt of such application, afford such applicants access during normal business hours to the current list of Securityholders. Each Holder, by receiving and holding a Trust Securities Certificate, shall be deemed to have agreed not to hold either the Depositor or the Administrative Trustees accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived. Section 5.08 Maintenance of Office or Agency. The Administrative Trustees shall maintain in the Borough of Manhattan, New York, an office or offices or agency or agencies where Preferred Securities Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Trustees in respect of the Trust Securities Certificates may be served. The Administrative Trustees initially designate The Chase Manhattan Bank, 450 West 33rd Street, New York, New York 10001 as the principal agency for such purposes. The Administrative Trustees shall give prompt written notice to the Depositor and to the Securityholders of any change in the location of the Security Register or any such office or agency. 21 Section 5.09 Appointment of Paying Agent. The Paying Agent shall make Distributions and other payments provided hereby to Securityholders from the Payment Account and shall report the amounts of such Distributions and payments to the Property Trustee and the Administrative Trustees. Any Paying Agent shall have the revocable power to withdraw funds from the Payment Account for the purpose of making the Distributions and payments provided hereby. The Administrative Trustees may revoke such power and remove the Paying Agent if such Trustees determine in their sole discretion that the Paying Agent shall have failed to perform its obligations under this Trust Agreement in any material respect. The Paying Agent shall initially be the Property Trustee, and it may choose any co-paying agent that is acceptable to the Administrative Trustees and the Depositor. Any Person acting as Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Administrative Trustees and the Depositor. In the event that a Paying Agent shall resign or be removed, the Administrative Trustees shall appoint a successor that is acceptable to the Depositor to act as Paying Agent (which shall be a bank or trust company). The Administrative Trustees shall cause such successor Paying Agent or any additional Paying Agent appointed by the Administrative Trustees to execute and deliver to the Trustees an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Trustees that as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Securityholders in trust for the benefit of the Securityholders entitled thereto until such sums shall be paid to such Securityholders. The Paying Agent shall return all unclaimed funds to the Property Trustee and upon removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Property Trustee. The provisions of Sections 8.01, 8.03 and 8.06 shall apply to the Property Trustee also in its role as Paying Agent, for so long as the Property Trustee shall act as Paying Agent and, to the extent applicable, to any other paying agent appointed hereunder. Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise. Section 5.10 Ownership of Common Securities by Depositor. On the Issue Date, the Depositor shall acquire, and thereafter retain, beneficial and record ownership of the Common Securities. Any attempted transfer of the Common Securities, except for transfers by operation of law or to an Affiliate of the Depositor or a permitted successor under Section 801 of the Subordinated Indenture, shall be void. The Administrative Trustees shall cause each Common Securities Certificate issued to the Depositor and its permitted transferees to contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN THE TRUST AGREEMENT REFERRED TO HEREIN." Section 5.11 Book-Entry Preferred Securities Certificates; Common Securities Certificate. (a) The Preferred Securities Certificates, upon original issuance, will be issued in the form of a typewritten Preferred Securities Certificate or Certificates representing Book-Entry Preferred Securities Certificates, to be delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the Trust. Such Preferred Securities Certificate or Certificates shall initially be registered on the Security Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Owner will receive a definitive Preferred Securities Certificate representing such beneficial owner's interest in such Preferred Securities, except as provided in Section 5.13. 22 Unless and until Definitive Preferred Securities Certificates have been issued to Owners pursuant to Section 5.13: (i) the provisions of this Section 5.11(a) shall be in full force and effect; (ii) the Security Registrar and the Trustees shall be entitled to deal with the Clearing Agency for all purposes of this Trust Agreement relating to the Book-Entry Preferred Securities Certificates (including the payment of principal of and interest on the Book-Entry Preferred Securities and the giving of instructions or directions to Owners of Book-Entry Preferred Securities) as the sole Holder of Book-Entry Preferred Securities and shall have no obligations to the Owners thereof; (iii) to the extent that the provisions of this Section conflict with any other provisions of this Trust Agreement, the provisions of this Section shall control; (iv) the rights of the Owners of the Book-Entry Preferred Securities Certificates shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Owners and the Clearing Agency and/or the Clearing Agency Participants. Pursuant to the Certificate Depository Agreement, unless and until Definitive Preferred Securities Certificates are issued pursuant to Section 5.13, the Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments on the Preferred Securities to such Clearing Agency Participants; and (v) whenever this Trust Agreement requires or permits actions to be taken based upon instructions or directions of Holders of Trust Securities Certificates evidencing a specified percentage of the aggregate Liquidation Amount, the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Owners and/or Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in the applicable class of Trust Securities Certificates and has delivered such instructions to the Trustees. (b) A single Common Securities Certificate representing the Common Securities shall be issued to the Depositor in the form of a definitive Common Securities Certificate. Section 5.12 Notices to Clearing Agency. To the extent a notice or other communication to the Owners is required under this Trust Agreement, unless and until Definitive Preferred Securities Certificates shall have been issued to Owners pursuant to Section 5.13, the Trustees shall give all such notices and communications specified herein to be given to Owners to the Clearing Agency, and shall have no obligations to the Owners. Section 5.13 Definitive Preferred Securities Certificates. If (i) the Depositor advises the Trustees in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities with respect to the Preferred Securities Certificates, and the Depositor is unable to locate a qualified successor within 90 days of receipt by the Depositor of such written advice, or (ii) the Depositor at its option advises the Trustees in writing that it elects to terminate the book-entry system through the Clearing Agency, then the Administrative Trustees shall notify the Clearing Agency and Holders of the Preferred Securities. Upon surrender to the Administrative Trustees of the typewritten Preferred Securities Certificate or Certificates representing the Book-Entry Preferred Securities Certificates by the Clearing Agency, accompanied by registration instructions, the 23 Administrative Trustees or any one of them shall execute and authenticate the Definitive Preferred Securities Certificates in accordance with the instructions of the Clearing Agency. Neither the Security Registrar nor the Trustees shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Preferred Securities Certificates, the Trustees shall recognize the Holders of the Definitive Preferred Securities Certificates as Securityholders. The Definitive Preferred Securities Certificates shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Administrative Trustees, as evidence by the execution thereof by the Administrative Trustees or any one of them. Section 5.14 Rights of Securityholders. The legal title to the Trust Property is vested exclusively in the Property Trustee (in its capacity as such) in accordance with Section 2.09, and the Securityholders shall not have any right or title therein other than the undivided beneficial ownership interest in the assets of the Trust conferred by their Trust Securities, and they shall have no right to call for any partition or division of property, profits or rights of the Trust except as described below. The Trust Securities shall be personal property giving only the rights specifically set forth therein and in this Trust Agreement. The Trust Securities shall have no preemptive or other similar rights and when issued and delivered to Securityholders against payment of the purchase price therefor will be fully paid and nonassessable by the Trust. Except as otherwise provided in the Expense Agreement and Section 10.01 hereof with respect to the Depositor, the Holders of the Trust Securities shall be 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. ARTICLE VI Acts of Securityholders; Meetings; Voting Section 6.01 Limitations on Voting Rights. (a) Except as provided in this Section, in Section 8.10 or Section 10.03 of this Trust Agreement, in the Subordinated Indenture, and as otherwise required by law, no Holder of Preferred Securities shall have any right to vote or in any manner otherwise control the administration, operation and management of the Trust or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Trust Securities Certificates, be construed so as to constitute the Securityholders from time to time as partners or members of an association. (b) So long as any Junior Subordinated Notes are held by the Property Trustee, the Trustees shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Indenture Trustee, or executing any trust or power conferred on the Indenture Trustee with respect to such Junior Subordinated Notes, (ii) consent to waive any past default which is waivable under Section 513 of the Subordinated Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Junior Subordinated Notes shall be due and payable or (iv) consent to any amendment, modification or termination of the Subordinated Indenture or the Junior Subordinated Notes, where such consent shall be required, or to any other action, as holder of the Junior Subordinated Notes, under the Subordinated Indenture, without, in each case, obtaining the prior approval of the Holders of at least 66 2/3% in Liquidation Amount of the Outstanding Preferred 24 Securities; provided, however, that where a consent under the Subordinated Indenture would require the consent of each holder of Junior Subordinated Notes affected thereby, no such consent shall be given by the Trustees without the prior written consent of each Holder of Preferred Securities. The Trustees shall not revoke any action previously authorized or approved by a vote of the Holders of Preferred Securities, except pursuant to a subsequent vote of the Holders of Preferred Securities. The Property Trustee shall notify all Holders of the Preferred Securities of any notice of default received from the Indenture Trustee with respect to the Junior Subordinated Notes. (c) If any proposed amendment to the Trust Agreement provides for, or the Trustees otherwise propose to effect, (i) any action that would adversely affect the powers, preferences or special rights of the Preferred Securities, whether by way of amendment to this Trust Agreement or otherwise, or (ii) the dissolution, winding-up or termination of the Trust, other than pursuant to the terms of this Trust Agreement, then the Holders of Outstanding Preferred Securities as a class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of the Holders of at least 66 2/3% in Liquidation Amount of the Outstanding Preferred Securities. Section 6.02 Notice of Meetings. Notice of all meetings of the Preferred Securityholders, stating the time, place and purpose of the meeting, shall be given by the Administrative Trustees pursuant to Section 10.08 to each Preferred Securityholder of record, at his registered address, at least 15 days and not more than 90 days before the meeting. At any such meeting, any business properly before the meeting may be so considered whether or not stated in the notice of the meeting. Any adjourned meeting may be held as adjourned without further notice. Any and all notice to which any Preferred Securityholder hereunder may be entitled and any and all communications shall be deemed duly served or given if mailed, postage prepaid, addressed to any Preferred Securityholder of record at his last known address as recorded on the Security Register. Section 6.03 Meetings of Preferred Securityholders. No annual meeting of Securityholders is required to be held. The Administrative Trustees, however, shall call a meeting of Securityholders to vote on any matter upon the written request of the Preferred Securityholders of record of 25% of the Preferred Securities (based upon their Liquidation Amount), and the Administrative Trustees or the Property Trustee may, at any time in their discretion, call a meeting of Preferred Securityholders to vote on any matters as to which Preferred Securityholders are entitled to vote. Preferred Securityholders of record of 50% of the Preferred Securities (based upon their Liquidation Amount), present in person or by proxy, shall constitute a quorum at any meeting of Securityholders. If a quorum is present at a meeting, an affirmative vote by the Preferred Securityholders of record present, in person or by proxy, holding more than 66 2/3% of the Preferred Securities (based upon their Liquidation Amount) held by the Preferred Securityholders of record present, either in person or by proxy, at such meeting shall constitute the action of the Securityholders, unless this Trust Agreement requires a greater proportion of affirmative votes. Section 6.04 Voting Rights. Securityholders shall be entitled to one vote for each $ of Liquidation Amount represented by their Trust Securities in respect of any matter as to which such Securityholders are entitled to vote. 25 Section 6.05 Proxies, etc. At any meeting of Securityholders, any Securityholder entitled to vote may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Administrative Trustees, or with such other officer or agent of the Trust as the Administrative Trustees may direct, for verification prior to the time at which such vote shall be taken. Pursuant to a resolution of the Property Trustee, proxies may be solicited in the name of the Property Trustee or one or more officers of the Property Trustee. Only Securityholders of record shall be entitled to vote. When Trust Securities are held jointly by several Persons, any one of them may vote at any meeting in person or by proxy in respect of such Trust Securities, but if more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Trust Securities. A proxy purporting to be executed by or on behalf of a Securityholder shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger. No proxy shall be valid more than three years after its date of execution. Section 6.06 Securityholder Action by Written Consent. Any action which may be taken by Securityholders at a meeting may be taken without a meeting if Securityholders holding at least 66 2/3% of all outstanding Trust Securities entitled to vote in respect of such action (or such other proportion thereof as shall be required by any express provision of this Trust Agreement) shall consent to the action in writing (based upon their Liquidation Amount). Section 6.07 Record Date for Voting and Other Purposes. For the purposes of determining the Securityholders who are entitled to notice of and to vote at any meeting or by written consent, or to participate in any Distribution on the Trust Securities in respect of which a record date is not otherwise provided for in this Trust Agreement, or for the purpose of any other action, the Administrative Trustees may from time to time fix a date, not more than 90 days prior to the date of any meeting of Securityholders or the payment of any Distribution or other action, as the case may be, as a record date for the determination of the identity of the Securityholders of record for such purposes. Section 6.08 Acts of Securityholders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Trust Agreement to be given, made or taken by Securityholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Securityholders in person or by an agent appointed in writing; and, except as otherwise expressly provided herein, such action shall become effective when such instrument or instruments are delivered to the Administrative Trustees. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Securityholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Trust Agreement and (subject to Section 8.01) conclusive in favor of the Trustees, if made in the manner provided in this Section. The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgements of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also 26 constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustees deem sufficient. The ownership of Preferred Securities shall be proved by the Security Register. Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Securityholder of any Trust Security shall bind every future Securityholder of the same Trust Security and the Securityholder of every Trust Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustees or the Trust in reliance thereon, whether or not notation of such action is made upon such Trust Security. Without limiting the foregoing, a Securityholder entitled hereunder to take any action hereunder with regard to any particular Trust Security may do so with regard to all or any part of the Liquidation Amount of such Trust Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such Liquidation Amount. If any dispute shall arise between the Holders of Trust Securities and the Administrative Trustees or among such Securityholders or Trustees with respect to the authenticity, validity or binding nature of any request, demand, authorization, direction, consent, waiver or other Act of such Securityholder or Trustee under this Article VI, then the determination of such matter by the Property Trustee shall be conclusive with respect to such matter. Section 6.09 Inspection of Records. Upon reasonable notice to the Trustees, the records of the Trust shall be open to inspection by a Securityholder during normal business hours for any purpose reasonably related to such Securityholder's interest as a Securityholder. ARTICLE VII Representations and Warranties of the Property Trustee and Delaware Trustee Section 7.01 Representations and Warranties of the Property Trustee and Delaware Trustee. The Bank, the Delaware Bank, the Property Trustee and the Delaware Trustee, each on behalf of and as to itself, hereby represents and warrants for the benefit of the Depositor and the Securityholders that: (a) the Bank is a banking corporation or trust company duly organized, validly existing and in good standing under the laws of the State of New York, and the Delaware Trustee is a banking corporation or trust company duly organized, validly existing and in good standing under the laws of the State of Delaware; (b) each of the Bank and the Delaware Bank has full corporate power, authority and legal right to execute, deliver and perform their obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement; (c) this Trust Agreement has been duly authorized, executed and delivered by each of the Bank and the Delaware Bank and constitutes the valid and legally binding agreement of each of 27 the Bank and the Delaware Bank, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (d) the execution, delivery and performance by each of the Bank and the Delaware Bank of this Trust Agreement have been duly authorized by all necessary corporate action on the part of the Bank, Property Trustee, the Delaware Bank and the Delaware Trustee and do not require any approval of stockholders of the Bank or the Delaware Bank and such execution, delivery and performance will not (i) violate the Bank's or the Delaware Bank's charter or by-laws, or (ii) violate any law, governmental rule or regulation of the United States or the State of New York or Delaware, as the case may be, governing the banking or trust powers of the Bank and the Property Trustee or the Delaware Bank and the Delaware Trustee, or any order, judgment or decree applicable to the Bank, the Property Trustee, the Delaware Bank or the Delaware Trustee; and (e) neither the authorization, execution or delivery by the Bank or the Delaware Bank of this Trust Agreement, nor the consummation of any of the transactions by the Bank, the Property Trustee, the Delaware Bank or the Delaware Trustee (as appropriate in context) contemplated herein or therein, nor the issuance of the Trust Securities Certificates pursuant to this Trust Agreement require the consent or approval of, the giving of notice to, the registration with or the taking of any other action with respect to any governmental authority or agency under any existing federal, New York or Delaware law governing the banking or trust powers of the Bank or the Delaware Bank. Section 7.02 Representations and Warranties of Depositor. The Depositor hereby represents and warrants for the benefit of the Securityholders that: (a) the Trust Securities Certificates being issued on behalf of the Trust have been duly authorized and will have been, duly and validly executed, issued and delivered by the Trustees pursuant to the terms and provisions of, and in accordance with the requirements of, this Trust Agreement and the Securityholders will be, as of the date of issuance, entitled to the benefits of this Trust Agreement; and (b) there no taxes, fees or other governmental charges payable by the Trust (or the Trustees on behalf of the Trust) under the laws of the State of Delaware or any political subdivision thereof in connection with the execution, delivery and performance by the Property Trustee or the Delaware Trustee, as the case may be, of this Trust Agreement. ARTICLE VIII The Trustees Section 8.01 Certain Duties and Responsibilities. (a) The rights, duties and responsibilities of the Trustees shall be as provided by this Trust Agreement and the Delaware Business Trust Act (except that the immunities and standard of care of the Property Trustee shall be governed by New York law) and, in the case of the Property Trustee, the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Trust Agreement shall require the Trustees to expend or risk their own funds or otherwise incur any financial liability in the 28 performance of any of their duties hereunder, or in the exercise of any of their rights or powers, if they shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to them. Whether or not therein expressly so provided, every provision of this Trust Agreement relating to the conduct or affecting the liability of or affording protection to the Trustees shall be subject to the provisions of this Section. (b) All payments made by the Property Trustee in respect of the Trust Securities shall be made only from the income and proceeds from the Trust Property and only to the extent that there shall be sufficient income or proceeds from the Trust Property to enable the Property Trustee to make payments in accordance with the terms hereof. Each Securityholder, by its acceptance of a Trust Security, agrees that it will look solely to the income and proceeds from the Trust Property to the extent available for distribution to it as herein provided and that the Trustees are not personally liable to it for any amount distributable in respect of any Trust Security or for any other liability in respect of any Trust Security. This Section 8.01(b) does not limit the liability of the Trustees expressly set forth elsewhere in this Trust Agreement or, in the case of the Property Trustee, in the Trust Indenture Act. Section 8.02 Notice of Defaults. Within 90 days after the occurrence of any default, the Property Trustee shall transmit, in the manner and to the extent provided in Section 10.08, notice of any such default known to the Property Trustee to the Securityholders, the Administrative Trustees and the Depositor, unless such default shall have been cured or waived. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default. Section 8.03 Certain Rights of Property Trustee. Subject to the provisions of Section 8.01 and except as provided by law: (i) the Property Trustee may rely and shall be protected in acting or refraining from acting in good faith upon any resolution, Opinion of Counsel, certificate, written representation of a Holder or transferee, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (ii) if (A) in performing its duties under this Trust Agreement the Property Trustee is required to decide between alternative courses of action, or (B) in construing any of the provisions in this Trust Agreement the Property Trustee finds the same ambiguous or inconsistent with any other provisions contained herein, or (C) the Property Trustee is unsure of the application of any provision of this Trust Agreement, then, except as to any matter as to which the Preferred Securityholders are entitled to vote under the terms of this Trust Agreement, the Property Trustee shall deliver a notice to the Depositor requesting written instructions of the Depositor as to the course of action to be taken. The Property Trustee shall take such action, or refrain from taking such action, as the Property Trustee shall be instructed in writing to take, or to refrain from taking, by the Depositor; provided, however, that if the Property Trustee does not receive such instructions of the Depositor within ten Business Days after it has delivered such notice, or such reasonably shorter period of time set forth in such notice (which to the extent practicable shall not be less than two Business Days), it may, but shall be under no duty to, take 29 or refrain from taking such action not inconsistent with this Trust Agreement as it shall deem advisable and in the best interests of the Securityholders, in which event the Property Trustee shall have no liability except for its own bad faith, negligence or willful misconduct; (iii) the Property Trustee may consult with counsel of its selection and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (iv) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement as the request or direction of any of the Securityholders pursuant to this Trust Agreement, unless such Securityholders shall have offered to the Property Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (v) the Property Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other document, unless requested in writing to do so by one or more Securityholders; and (vi) the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or attorneys, provided that the Property Trustee shall be responsible for its own negligence or recklessness with respect to selection of any agent or attorney appointed by it hereunder. Section 8.04 Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Trust Securities Certificates shall be taken as the statements of the Trust, and the Trustees do not assume any responsibility for their correctness. The Trustees shall not be accountable for the use or application by the Trust of the proceeds of the Trust Securities in accordance with Section 2.05. The Property Trustee may conclusively assume that any funds held by it hereunder are legally available unless an officer of the Property Trustee assigned to its Corporate Trustee Administrative Department shall have received written notice from the Corporation, any Holder or any other Trustee that such funds are not legally available. Section 8.05 May Hold Securities. Except as provided in the definition of the term "Outstanding" in Article I, any Trustee or any other agent of the Trustees or the Trust, in its individual or any other capacity, may become the owner or pledgee of Trust Securities and may otherwise deal with the Trust with the same rights it would have if it were not a Trustee or such other agent. Section 8.06 Compensation; Fees; Indemnity. The Depositor agrees: (1) to pay to the Trustees from time to time reasonable compensation for all services rendered by the Trustees hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); 30 (2) except as otherwise expressly provided herein, to reimburse the Trustees upon request for all reasonable expenses, disbursements and advances incurred or made by the Trustees in accordance with any provision of this Trust Agreement (including the reasonable compensation and the expenses and disbursements of their agents and counsel), except any such expense, disbursement or advance as may be attributable to their negligence, willful misconduct or bad faith; and (3) to indemnify the Trustees for, and to hold the Trustees harmless against, any and all loss, damage, claims, liability or expense incurred without negligence, willful misconduct or bad faith on their part, arising out of or in connection with the acceptance or administration of this Trust Agreement, including the costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The provisions of this Section 8.06 shall survive the termination of this Trust Agreement. Section 8.07 Trustees Required; Eligibility. (a) There shall at all times be a Property Trustee hereunder with respect to the Trust Securities. The Property Trustee shall be a Person that has a combined capital and surplus of at least $50,000,000. If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Property Trustee with respect to the Trust Securities shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. (b) There shall at all times be one or more Administrative Trustees hereunder with respect to the Trust Securities. Each Administrative Trustee shall be either a natural person who is at least 21 years of age or a legal entity that shall act through one or more persons authorized to bind such entity. (c) There shall at all times be a Delaware Trustee with respect to the Trust Securities. The Delaware Trustee shall either be (i) a natural person who is at least 21 years of age and a resident of the State of Delaware or (ii) a legal entity authorized to conduct a trust business and with its principal place of business in the State of Delaware that shall act through one or more persons authorized to bind such entity. Section 8.08 Conflicting Interests. If the Property Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Property Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Trust Agreement. To the extent permitted by the Trust Indenture Act, the Property Trustee shall not be deemed to have a conflicting interest by virtue of being trustee under the Guarantee, the Guarantee Agreements dated as of December 8, 1997 and June 14, 1999, between the Depositor, as guarantor, and The Chase Manhattan Bank, as trustee, and the Amended and Restated Trust Agreements dated 31 as of December 8, 1997 and June 14, 1999, among the Depositor, as depositor, Chase Manhattan Bank Delaware, as Delaware trustee, Robert T. Lucas III and S.L. Love, as administrative trustees, and The Chase Manhattan Bank, as property trustee. Section 8.09 Co-Property Trustees and Separate Trustee. At any time or times, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the Trust Property may at the time be located, the Holder of the Common Securities and the Property Trustee shall have power to appoint, and upon the written request of the Property Trustee, the Depositor shall for such purpose join with the Property Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Property Trustee either to act as co-property trustee, jointly with the Property Trustee, of all or any part of such Trust Property, or to act as separate trustee of any such Trust Property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section. If the Depositor does not join in such appointment within 15 days after the receipt by it of a request so to do, or in case an Indenture Event of Default has occurred and is continuing, the Property Trustee alone shall have power to make such appointment. Any co-property trustee or separate trustee appointed pursuant to this Section shall satisfy the requirements of Section 8.07. Should any written instrument from the Depositor be required by any co- property trustee or separate trustee so appointed for more fully confirming to such co-property trustee or separate trustee such property, title, right, or power, any and all such instruments shall, on request, be executed, acknowledged, and delivered by the Depositor. Every co-property trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms, namely: (i) The Trust Securities shall be executed, authenticated and delivered and all rights, powers, duties, and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Trustees hereunder, shall be exercised, solely by the Trustees. (ii) The rights, powers, duties, and obligations hereby conferred or imposed upon the Property Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Property Trustee or by the Property Trustee and such co- property trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-property trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Property Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties, and obligations shall be exercised and performed by such co-property trustee or separate trustee. (iii) The Property Trustee at any time, by an instrument in writing executed by it, with the written concurrence of the Depositor, may accept the resignation of or remove any co-property trustee or separate trustee appointed under this Section, and, in case an Indenture Event of Default has occurred and is continuing, the Property Trustee shall have power to accept the resignation of, or remove, any such co-property trustee or separate trustee without the 32 concurrence of the Depositor. Upon the written request of the Property Trustee, the Depositor shall join with the Property Trustee in the execution, delivery, and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-property trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section. (iv) No co-property trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Property Trustee, or any other such trustee hereunder. (v) The Trustees shall not be liable by reason of any act of a co- property trustee or separate trustee. (vi) Any Act of Holders delivered to the Property Trustee shall be deemed to have been delivered to each such co-property trustee and separate trustee. Section 8.10 Resignation and Removal; Appointment of Successor. No resignation or removal of any Trustee (the "Relevant Trustee") and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 8.11. Subject to the immediately preceding paragraph, the Relevant Trustee may resign at any time by giving written notice thereof to the Holders. If the instrument of acceptance by the successor Trustee required by Section 8.11 shall not have been delivered to the Relevant Trustee within 30 days after the giving of such notice of resignation, the resigning Relevant Trustee may petition, at the expense of the Trust, any court of competent jurisdiction for the appointment of a successor Relevant Trustee. Unless an Indenture Event of Default shall have occurred and be continuing, any Trustee may be removed at any time by Act of the Holder of the Common Securities. If an Indenture Event of Default shall have occurred and be continuing, the Property Trustee or the Delaware Trustee, or both of them, may be removed at such time by Act of the Holders of a majority in Liquidation Amount of the Preferred Securities, delivered to the Relevant Trustee (in its individual capacity and on behalf of the Trust). An Administrative Trustee may be removed by the Holder of the Common Securities at any time. In no event will the Holders of the Preferred Securities have a right to vote to appoint, remove or replace the Administrative Trustees. If any Trustee shall resign, be removed or become incapable of continuing to act as Trustee, or if a vacancy shall occur in the office of any Trustee for any reason, at a time when no Indenture Event of Default shall have occurred and be continuing, the Holder of the Common Securities, by Act of the Holder of the Common Securities, shall promptly appoint a successor Trustee or successor Trustees, and the retiring Trustee shall comply with the applicable requirements of Section 8.11. If the Property Trustee or the Delaware Trustee shall resign, be removed or become incapable of continuing to act as the Property Trustee or the Delaware Trustee, as the case may be, or a vacancy shall occur in the office of any such Trustee for any reason, at a time when an Indenture Event of Default shall have occurred and be continuing, the Holders of Preferred Securities, by Act of the Holders of a majority in Liquidation Amount of the Preferred Securities then Outstanding, shall promptly appoint a successor Relevant Trustee or Relevant Trustees and such successor Relevant Trustee or Relevant Trustees shall comply with the applicable requirements of Section 8.11. If an 33 Administrative Trustee shall resign, be removed or become incapable of acting as Administrative Trustee, or a vacancy shall occur in the office of any such Trustee for any reason, at a time when an Indenture Event of Default shall have occurred and be continuing, the Holder of the Common Securities, by Act of the Holder of the Common Securities, shall promptly appoint a successor Administrative Trustee or Administrative Trustees and such successor Administrative Trustee or Administrative Trustees shall comply with the applicable requirements of Section 8.11. If no successor Relevant Trustee shall have been so appointed in accordance with this Section 8.10 and accepted appointment in the manner required by Section 8.11, any Holder who has been a Holder of Trust Securities for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Relevant Trustee. The Property Trustee shall give notice of each resignation and each removal of a Trustee and each appointment of a successor Trustee to all Holders in the manner provided in Section 10.08 and shall give notice to the Depositor. Each notice shall include the name of the successor Relevant Trustee and the address of its Corporate Trust Office if it is the Property Trustee. Notwithstanding the foregoing or any other provision of this Trust Agreement, in the event any Administrative Trustee or a Delaware Trustee who is a natural person dies or becomes, in the opinion of the Depositor, incompetent or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by (i) the act of the remaining Administrative Trustee or (ii) otherwise by the Depositor (with the successor in each case being a Person who satisfies the eligibility requirements for an Administrative Trustee or a Delaware Trustee, as the case may be, set forth in Section 8.07). Section 8.11 Acceptance of Appointment by Successor. In case of the appointment hereunder of a successor Relevant Trustee, every such successor Relevant Trustee so appointed shall execute, acknowledge and deliver to the Trust and to the retiring Relevant Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Relevant Trustee shall become effective and such successor Relevant Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Relevant Trustee; but, on the request of the Depositor or the successor Relevant Trustee, such retiring Relevant Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Relevant Trustee all the rights, powers and trusts of the retiring Relevant Trustee and shall duly assign, transfer and deliver to such successor Relevant Trustee all property and money held by such retiring Relevant Trustee hereunder. Upon request of any such successor Relevant Trustee, the Trust shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Relevant Trustee all such rights, powers and trusts referred to in the preceding paragraph. No successor Relevant Trustee shall accept its appointment unless at the time of such acceptance such successor Relevant Trustee shall be qualified and eligible under this Article. Section 8.12 Merger, Conversion, Consolidation or Succession to Business. Any Person into which the Property Trustee, Delaware Trustee or any Administrative Trustee which is not a natural person may be merged or converted or with which it may be consolidated, or any Person resulting 34 from any merger, conversion or consolidation to which such Relevant Trustee shall be a party, or any Person succeeding to all or substantially all the corporate trust business of such Relevant Trustee, shall be the successor of such Relevant Trustee hereunder, provided such Person shall be otherwise qualified and eligible, without the execution or filing of any paper or any further act on the part of any of the parties hereto. Section 8.13 Preferential Collection of Claims Against Depositor or Trust. If and when the Property Trustee shall be or become a creditor of the Depositor or the Trust (or any other obligor upon the Junior Subordinated Notes or the Trust Securities), the Property Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Depositor or Trust (or any such other obligor). For purposes of Sections 311(b)(4) and (6) of the Trust Indenture Act: (a) "cash transaction" means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; and (b) "self-liquidating paper" means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Depositor or the Trust (or any such obligor) for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Property Trustee simultaneously with the creation of the creditor relationship with the Depositor or the Trust (or any such obligor) arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation. Section 8.14 Reports by Property Trustee. (a) Within 60 days after October 1 of each year commencing with October 1, , if required by Section 313(a) of the Trust Indenture Act, the Property Trustee shall transmit a brief report dated as of such October 1 with respect to any of the events specified in such Section 313(a) that may have occurred since the later of the date of this Trust Agreement or the preceding October 1. (b) The Property Trustee shall transmit to Securityholders the reports required by Section 313(b) of the Trust Indenture Act at the times specified therein. (c) Reports pursuant to this Section shall be transmitted in the manner and to the Persons required by Sections 313(c) and (d) of the Trust Indenture Act. Section 8.15 Reports to the Property Trustee. The Depositor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such documents, reports and information as required by Section 314 of the Trust Indenture Act (if any) and, within 120 days after the end of each fiscal year of the Depositor, the compliance certificate required by Section 314(a)(4) of the Trust Indenture Act in the form and in the manner required by Section 314 of the Trust Indenture Act. 35 Section 8.16 Evidence of Compliance with Conditions Precedent. Each of the Depositor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Trust Agreement that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given pursuant to Section 314(c)(1) of the Trust Indenture Act shall comply with Section 314(e) of the Trust Indenture Act. Section 8.17 Number of Trustees. (a) The number of Trustees shall initially be four, provided that the Depositor by written instrument may increase or decrease the number of Administrative Trustees. (b) If a Trustee ceases to hold office for any reason and the number of Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall occur. The vacancy shall be filled with a Trustee appointed in accordance with Section 8.10. (c) The death, resignation, retirement, removal, bankruptcy, incompetence or incapacity to perform the duties of a Trustee shall not operate to annul the Trust. Whenever a vacancy in the number of Administrative Trustees shall occur, until such vacancy is filled by the appointment of an Administrative Trustee in accordance with Section 8.10, the Administrative Trustees in office, regardless of their number (and notwithstanding any other provision of this Trust Agreement), shall have all powers granted to the Administrative Trustees and shall discharge the duties imposed upon the Administrative Trustees by this Trust Agreement. Section 8.18 Delegation of Power. (a) Any Administrative Trustee, may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the purpose of executing any documents contemplated in Section 2.07(A), including any registration statement or amendment thereto filed with the Commission, or making any other governmental filing; and (b) The Administrative Trustees shall have power to delegate from time to time to such of their number the doing of such things and the execution of such instruments either in name of the Trust or the names of the Administrative Trustees or otherwise as the Administrative Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of the Trust, as set forth herein. Section 8.19 Enforcement of Rights of Property Trustee by Securityholders. If an Indenture Event of Default occurs and is continuing, then (i) the Holders of Preferred Securities will rely on the enforcement by the Property Trustee of its rights against the Corporation as the holder of the Junior Subordinated Notes and (ii) the Holders of a majority in aggregate Liquidation Amount of the Preferred Securities will have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Property Trustee or to direct the exercise of any trust or power conferred upon the Property Trustee under this Trust Agreement, including the right to direct the Property Trustee to exercise the remedies available to it as a holder of the Junior Subordinated Notes, provided that such direction shall not be in conflict with any rule of law or with this Trust 36 Agreement, and could not involve the Property Trustee in personal liability in circumstances where reasonable indemnity would not be adequate. If the Property Trustee fails to enforce its rights under the Junior Subordinated Notes, a Holder of Preferred Securities may, to the extent permitted by applicable law, institute a legal proceeding against the Corporation to enforce its rights under this Trust Agreement without first instituting any legal proceeding against the Property Trustee or any other Person, including the Trust; it being understood and intended that no one or more of such Holders shall have any right in any manner whatsoever by virtue of, or by availing of, any provision of this Trust Agreement to affect, disturb or prejudice the rights of any other of such Holders or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Trust Agreement, except in the manner herein provided and for the equal and ratable benefit of all such Holders. Notwithstanding the foregoing, a Holder of Preferred Securities may institute a legal proceeding directly against the Corporation without first instituting a legal proceeding against or requesting or directing that action be taken by the Property Trustee or any other Person, for enforcement of payment to such Holder of principal of or interest on the Junior Subordinated Notes having a principal amount equal to the aggregate stated Liquidation Amount of the Preferred Securities of such Holder on or after the due dates therefor specified or provided for in the Junior Subordinated Notes. The Corporation shall be subrogated to all rights of the Holders of Preferred Securities in respect of any amounts paid to such Holders by the Corporation pursuant to this Section. Section 8.20 Delaware Trustee. (a) Notwithstanding any other provision of this Trust Agreement, the Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities, of the Administrative Trustees or the Property Trustee described in this Trust Agreement. The Delaware Trustee shall be a trustee for the sole and limited purpose of fulfilling the requirements of (S)3807 of the Delaware Business Trust Act. (b) It is expressly understood and agreed by the parties hereto that in fulfilling its obligations as Delaware Trustee hereunder on behalf of the Trust (i) any agreements or instruments executed and delivered by Chase Manhattan Bank Delaware are executed and delivered not in its individual capacity but solely as Delaware Trustee under this Trust Agreement in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Trust is made and intended not as representations, warranties, covenants, undertakings and agreements by Chase Manhattan Bank Delaware in its individual capacity but is made and intended for the purpose of binding only the Trust, and (iii) under no circumstances shall Chase Manhattan Bank Delaware in its individual capacity be personally liable for the payment of any indebtedness or expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Trust Agreement, except if such breach or failure is due to any gross negligence or willful misconduct of Chase Manhattan Bank Delaware as the Delaware Trustee. 37 ARTICLE IX Termination and Liquidation Section 9.01 Termination Upon Expiration Date. The Trust shall automatically terminate on , (the "Expiration Date") or earlier pursuant to Section 9.02. Section 9.02 Early Termination. Upon the first to occur of any of the following events (such first occurrence, an "Early Termination Event"), the Trust shall be dissolved and terminated in accordance with the terms hereof: (i) the occurrence of a Bankruptcy Event in respect of the Depositor, dissolution or liquidation of the Depositor, or the dissolution of the Trust pursuant to judicial decree; (ii) the delivery of written direction to the Property Trustee by the Depositor at any time (which direction is optional and wholly within the discretion of the Depositor) to terminate the Trust and distribute the Junior Subordinated Notes to Securityholders as provided in Section 9.04; and (iii) the payment at maturity or redemption of all of the Junior Subordinated Notes, and the consequent payment of the Trust Securities. Section 9.03 Termination. The respective obligations and responsibilities of the Trust and the Trustees created hereby shall terminate upon the latest to occur of the following: (a) the distribution by the Property Trustee to Securityholders upon the liquidation of the Trust pursuant to Section 9.04, or upon the redemption of all of the Trust Securities pursuant to Section 4.02, of all amounts or instruments required to be distributed hereunder upon the final payment of the Trust Securities; (b) the payment of any expenses owed by the Trust; and (c) the discharge of all administrative duties of the Administrative Trustees, including the performance of any tax reporting obligations with respect to the Trust or the Securityholders. Section 9.04 Liquidation. (a) If any Early Termination Event specified in clause (ii) of Section 9.02 occurs, the Trust shall be liquidated and the Property Trustee shall distribute the Junior Subordinated Notes to the Securityholders as provided in this Section 9.04. (b) In connection with a distribution of the Junior Subordinated Notes, each Holder of Trust Securities shall be entitled to receive, after the satisfaction of liabilities to creditors of the Trust (as evidenced by a certificate of the Administrative Trustees), a Like Amount of Junior Subordinated Notes. Notice of liquidation shall be given by the Trustees by first-class mail, postage prepaid, mailed not later than 30 nor more than 60 days prior to the Liquidation Date to each Holder of Trust Securities at such Holder's address appearing in the Security Register. All notices of liquidation shall: (i) state the Liquidation Date; (ii) state that from and after the Liquidation Date, the Trust Securities will no longer be deemed to be Outstanding and any Trust Securities Certificates not surrendered for exchange will be deemed to represent a Like Amount of Junior Subordinated Notes; and 38 (iii) provide such information with respect to the mechanics by which Holders may exchange Trust Securities Certificates for Junior Subordinated Notes as the Administrative Trustees or the Property Trustee shall deem appropriate. (c) In order to effect the liquidation of the Trust and distribution of the Junior Subordinated Notes to Securityholders, the Property Trustee shall establish a record date for such distribution (which shall be not more than 45 days prior to the Liquidation Date) and, either itself acting as exchange agent or through the appointment of a separate exchange agent, shall establish such procedures as it shall deem appropriate to effect the distribution of Junior Subordinated Notes in exchange for the Outstanding Trust Securities Certificates. (d) After the Liquidation Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii) certificates representing a Like Amount of Junior Subordinated Notes will be issued to Holders of Trust Securities Certificates, upon surrender of such certificates to the Administrative Trustees or their agent for exchange, (iii) any Trust Securities Certificates not so surrendered for exchange will be deemed to represent a Like Amount of Junior Subordinated Notes, accruing interest at the rate provided for in the Junior Subordinated Notes from the last Distribution Date on which a Distribution was made on such Trust Securities Certificates until such certificates are so surrendered (and until such certificates are so surrendered, no payments of interest or principal will be made to Holders of Trust Securities Certificates with respect to such Junior Subordinated Notes) and (iv) all rights of Securityholders holding Trust Securities will cease, except the right of such Securityholders to receive Junior Subordinated Notes upon surrender of Trust Securities Certificates. (e) The Depositor will use its best efforts to have the Junior Subordinated Notes that are distributed in exchange for the Preferred Securities to be listed on such securities exchange as the Preferred Securities are then listed. The Depositor may elect to have the Junior Subordinated Notes issued in book- entry form to the Clearing Agency or its nominee pursuant to the Certificate Depository Agreement. Section 9.05 Bankruptcy. If an Early Termination Event specified in clause (i) of Section 9.02 has occurred, the Trust shall be liquidated. The Property Trustee shall distribute the Junior Subordinated Notes to the Securityholders as provided in Section 9.04, unless such distribution is determined by the Administrative Trustees not to be practical, in which event the Holders will be entitled to receive out of the assets of the Trust available for distribution to Securityholders, after satisfaction of liabilities to creditors, an amount equal to the Liquidation Amount per Trust Security plus accrued and unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"). If such Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then, subject to the next succeeding sentence, the amounts payable by the Trust on the Trust Securities shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holder of the Common Securities will be entitled to receive Liquidation Distributions upon any such dissolution, winding-up or termination pro rata (determined as aforesaid) with Holders of Preferred Securities, except that, if an Indenture Event of Default has occurred and is continuing, the Preferred Securities shall have a priority over the Common Securities. 39 ARTICLE X Miscellaneous Provisions Section 10.01 Guarantee by the Depositor. Subject to the terms and conditions hereof, the Depositor irrevocably and unconditionally guarantees to each person or entity to whom the Trust is now or hereafter becomes indebted or liable (the "Beneficiaries") the full payment, when and as due, of any and all Obligations (as hereinafter defined) to such Beneficiaries. As used herein, "Obligations" means any indebtedness, expenses or liabilities of the Trust, other than obligations of the Trust to pay to Holders of any Preferred Securities or other similar interests in the Trust the amounts due such Holders pursuant to the terms of the Preferred Securities or such other similar interests, as the case may be. Such guarantee is intended to be for the benefit of, and to be enforceable by, all such Beneficiaries, whether or not such Beneficiaries have received notice hereof. Section 10.02 Limitation of Rights of Securityholders. The death or incapacity of any Person having an interest, beneficial or otherwise, in a Trust Security shall not operate to terminate this Trust Agreement, nor entitle the legal representatives or heirs of such Person or any Securityholder for such Person, to claim an accounting, take any action or bring any proceeding in and for a partition or winding up of the arrangements contemplated hereby, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. Section 10.03 Amendment. (a) This Trust Agreement may be amended from time to time by the Trustees and the Depositor, without the consent of any Securityholders, (i) to cure any ambiguity, correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Trust Agreement, which shall not be inconsistent with the other provisions of this Trust Agreement, provided, however, that any such amendment shall not adversely affect in any material respect the interests of any Securityholder, (ii) to modify, eliminate or add to any provisions of this Trust Agreement to such extent as shall be necessary to ensure that the Trust will not be classified as other than a grantor trust for United States federal income tax purposes at any time that any Trust Securities are outstanding; provided, however, that, in the case of clause (i), any amendments of this Trust Agreement shall become effective when notice thereof is given to the Securityholders or (iii) to provide the Property Trustee with the authority to authenticate on behalf of the Administrative Trustees Definitive Preferred Securities Certificates. (b) Except as provided in Section 10.03(c) hereof, any provision in this Trust Agreement may be amended by the Trust or the Trustees with (i) the consent of Securityholders representing not less than 66 2/3% (based upon Liquidation Amounts) of the Trust Securities then Outstanding and (ii) receipt by the Trustees of an Opinion of Counsel to the effect that such amendment or the exercise of any power granted to the Trustees in accordance with such amendment will not affect the Trust's status as a grantor trust for United States federal income tax purposes or the Trust's exemption from status of an "investment company" under the Investment Company Act. (c) In addition to and notwithstanding any other provision in this Trust Agreement, without the consent of each affected Securityholder (such consent being obtained in accordance with Section 6.03 40 or 6.06 hereof), this Trust Agreement may not be amended to (i) change the amount or timing of any Distribution (or payment upon redemption) on the Trust Securities or otherwise adversely affect the amount of any Distribution (or payment upon redemption) required to be made in respect of the Trust Securities as of a specified date, (ii) restrict the right of a Securityholder to institute suit for the enforcement of any such payment on or after such date, (iii) change the purpose of the Trust, (iv) authorize the issuance of any additional beneficial interests in the Trust, or (v) change the consent required pursuant to this Section 10.03. (d) Notwithstanding any other provisions of this Trust Agreement, the Trustees shall not enter into or consent to any amendment to this Trust Agreement which would cause the Trust to fail or cease to qualify for the exemption from status of an "investment company" under the Investment Company Act afforded by Rule 3a-5 thereunder. (e) Without the consent of the Depositor, this Trust Agreement may not be amended in a manner which imposes any additional obligation on the Depositor. In executing any amendment permitted by this Trust Agreement, the Trustees shall be entitled to receive, and (subject to Section 8.01) shall be fully protected in relying upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Trust Agreement. Any Trustee may, but shall not be obligated to, enter into any such amendment which affects such Trustee's own rights, duties, immunities or liabilities under this Trust Agreement or otherwise. (f) In the event that any amendment to this Trust Agreement is made, the Administrative Trustees shall promptly provide to the Depositor a copy of such amendment. Section 10.04 Separability. In case any provision in this Trust Agreement or in the Trust Securities Certificates shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 10.05. Governing Law. THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF DELAWARE; PROVIDED THAT THE IMMUNITIES AND STANDARD OF CARE OF THE PROPERTY TRUSTEE SHALL BE GOVERNED BY NEW YORK LAW. Section 10.06 Notice of Deferral of Distribution. In the event that the Depositor exercises its right to extend an interest payment period in respect of the Junior Subordinated Notes pursuant to Section 104 of the Supplement Indenture and notice of such extension has been provided by the Depositor to the Property Trustee, the Property Trustee shall give written notice of such extension and of the deferral of the related Distribution on the Trust Securities, by first-class mail, postage prepaid, mailed not later than ten days prior to the Distribution Date upon which such Distribution would otherwise be payable, to each Holder of Preferred Securities at such Holder's address appearing in the Security Register. Section 10.07 Headings. The Article and Section headings are for convenience only and shall not affect the construction of this Trust Agreement. 41 Section 10.08 Notice and Demand. Any notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon any Securityholder or the Depositor may be given or served in writing by deposit thereof, first class postage prepaid, in the United States mail, hand delivery or facsimile transmission, in each case, addressed, (i) in the case of a Preferred Securityholder, to such Preferred Securityholder as such Securityholder's name and address appear on the Security Register and (ii) in the case of the Common Securityholder or the Depositor, to Duke Energy Corporation, 526 South Church Street, Charlotte, North Carolina 28202, Attention: Treasurer, Facsimile No. (704) 382-4964, with a copy to Corporate Secretary, Facsimile No. (704) 382-8137. Such notice, demand or other communication to or upon a Securityholder shall be deemed to have been sufficiently given or made, for all purposes, upon hand delivery, mailing or transmission. Any notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon the Trust or the Trustees shall be given in writing addressed (until another address is published by the Trust) as follows: (i) with respect to the Property Trustee and the Delaware Trustee, The Chase Manhattan Bank, 450 West 33rd Street, New York, New York 10001, Attention: Capital Markets Fiduciary Services; Chase Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801, Attention: Corporate Trust Department, as the case may be; and (ii) with respect to the Administrative Trustees, to them at the address above for notices to the Depositor, marked Attention: Administrative Trustees of Duke Energy Capital Trust [ ] c/o Corporate Secretary. Such notice, demand or other communication to or upon the Trust or the Trustees shall be deemed to have been sufficiently given or made only upon actual receipt of the writing by the applicable Trustee. Section 10.09. Agreement Not to Petition. Each of the Trustees and the Depositor agrees for the benefit of the Securityholders that, until at least one year and one day after the Trust has been terminated in accordance with Article IX, it shall not file, or join in the filing of, a petition against the Trust under any bankruptcy, reorganization, arrangement, insolvency, liquidation or other similar law (including, without limitation, the United States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in the commencement of any proceeding against the Trust under any Bankruptcy Law. In the event the Depositor takes action in violation of this Section 10.09, the Property Trustee agrees, for the benefit of Securityholders, that it shall file an answer with the bankruptcy court or otherwise properly contest the filing of such petition by the Depositor against the Trust or the commencement of such action and raise the defense that the Depositor has agreed in writing not to take such action and should be stopped and precluded therefrom and such other defenses, if any, as counsel for the Trustees or the Trust may assert. The provisions of this Section 10.09 shall survive the termination of this Trust Agreement. Section 10.10 Conflict with Trust Indenture Act. (a) This Trust Agreement is subject to the provisions of the Trust Indenture Act that are required to be part of this Trust Agreement and shall, to the extent applicable, be governed by such provisions. (b) The Property Trustee shall be the only Trustee which is a Trustee for the purposes of the Trust Indenture Act. 42 (c) If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Trust Agreement by any of the provisions of the Trust Indenture Act, such required provision shall control. (d) The application of the Trust Indenture Act to this Trust Agreement shall not affect the nature of the Trust Securities as equity securities representing undivided beneficial interests in the assets of the Trust. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE SUBORDINATED INDENTURE AND THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THOSE TERMS AND PROVISIONS SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS. Section 10.11 Successors. This Trust Agreement shall be binding upon and shall inure to the benefit of any successor to both the Trust and the Trustees, including any successor by operation of law. 43 IN WITNESS WHEREOF, the parties hereto have executed this Trust Agreement or have caused this Trust Agreement to be executed on their behalf, all as of the day and year first above written. Duke Energy Corporation By: _________________________________ Title: ______________________________ The Chase Manhattan Bank, as Property Trustee By: _________________________________ Title: ______________________________ Chase Manhattan Bank Delaware, as Delaware Trustee By: _________________________________ Title: ______________________________ _____________________________________ as Administrative Trustee _____________________________________ as Administrative Trustee 44 EXHIBIT A CERTIFICATE OF TRUST OF DUKE ENERGY CAPITAL TRUST [ ] THIS Certificate of Trust of Duke Energy Capital Trust [ ] (the "Trust"), dated as of , , is being duly executed and filed by the undersigned, as trustee, to form a business trust under the Delaware Business Trust Act (12 Del. C. (S)3801. et seq.). 1. Name. The name of the business trust formed hereby is Duke Energy Capital Trust [ ]. 2. Delaware Trustee. The name and business address of the trustee of the Trust with a principal place of business in the State of Delaware are Chase Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801. 3. Effective Date. This Certificate of Trust shall be effective upon filing. IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust, has executed this Certificate of Trust as of the date first-above written. Chase Manhattan Bank Delaware, not in its individual capacity but solely as trustee of the Trust By: _________________________________ Name: Title: EXHIBIT B [RESERVED] EXHIBIT C THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN THE TRUST AGREEMENT REFERRED TO HEREIN Certificate Number Number of Common Securities C-
Certificate Evidencing Common Securities of Duke Energy Capital Trust [ ] Common Securities (Liquidation Amount $ per Common Security) Duke Energy Capital Trust [ ], a statutory business trust formed under the laws of the State of Delaware (the "Trust"), hereby certifies that Duke Energy Corporation (the "Holder") is the registered owner of ( ) common securities of the Trust representing undivided beneficial interests in the assets of the Trust and designated the Common Securities (Liquidation Amount $ per Common Security) (the "Common Securities"). In accordance with Section 5.10 of the Trust Agreement (as defined below) the Common Securities are not transferable, except by operation of law or to an Affiliate of the Holder or a permitted successor under Section 801 of the Subordinated Indenture, dated as of December 1, 1997, between the Holder and The Chase Manhattan Bank, as trustee, and any attempted transfer hereof shall be void. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Common Securities are set forth in, and this certificate and the Common Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust dated as of , , as the same may be amended from time to time (the "Trust Agreement"), including the designation of the terms of the Common Securities as set forth therein. The Trust will furnish a copy of the Trust Agreement to the Holder without charge upon written request to the Trust at its principal place of business or registered office. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. IN WITNESS WHEREOF, the Administrative Trustees of the Trust have executed this certificate this day of , . Duke Energy Capital Trust [ ] By: _________________________________ Robert T. Lucas III, as Administrative Trustee By: _________________________________ S.L. Love, as Administrative Trustee CERTIFICATE OF AUTHENTICATION This is one of the Common Securities referred to in the within-mentioned Trust Agreement. _____________________________________ as Administrative Trustee EXHIBIT D AGREEMENT AS TO EXPENSES AND LIABILITIES THIS AGREEMENT AS TO EXPENSES AND LIABILITIES (this "Agreement") is made as of , between Duke Energy Corporation, a North Carolina corporation (the "Corporation"), and Duke Energy Capital Trust [ ], a Delaware business trust (the "Trust"). WHEREAS, the Trust intends to issue its Common Securities (the "Common Securities") to and receive Series % Junior Subordinated Notes due , (the "Junior Subordinated Notes") from the Corporation and to issue and sell Duke Energy Capital Trust [ ] % Trust Preferred Securities (the "Preferred Securities") with such powers, preferences and special rights and restrictions as are set forth in the Amended and Restated Trust Agreement of the Trust dated as of , , as the same may be amended from time to time (the "Trust Agreement"); and WHEREAS, the Corporation is the issuer of the Junior Subordinated Notes. NOW, THEREFORE, in consideration of the purchase by each holder of the Preferred Securities, which purchase the Corporation hereby agrees shall benefit the Corporation and which purchase the Corporation acknowledges will be made in reliance upon the execution and delivery of this Agreement, the Corporation and the Trust hereby agree as follows: ARTICLE I Section 1.01. Guarantee by the Corporation. Subject to the terms and conditions hereof, the Corporation hereby irrevocably and unconditionally guarantees to each person or entity to whom the Trust is now or hereafter becomes indebted or liable (the "Beneficiaries") the full payment, when and as due, of any and all Obligations (as hereinafter defined) to such Beneficiaries. As used herein, "Obligations" means any indebtedness, expenses or liabilities of the Trust, other than obligations of the Trust to pay to holders of any Preferred Securities or other similar interests in the Trust the amounts due such holders pursuant to the terms of the Preferred Securities or such other similar interests, as the case may be. This Agreement is intended to be for the benefit of, and to be enforceable by, all such Beneficiaries, whether or not such Beneficiaries have received notice hereof. Section 1.02. Term of Agreement. This Agreement shall terminate and be of no further force and effect upon the date on which there are no Beneficiaries remaining; provided, however, that this Agreement shall continue to be effective or shall be reinstated, as the case may be, if at any time any holder of Preferred Securities or any Beneficiary must restore payment of any sums paid under the Preferred Securities, under any Obligation, under the Guarantee Agreement dated the date hereof by the Corporation and The Chase Manhattan Bank, as guarantee trustee, or under this Agreement for any reason whatsoever. This Agreement is continuing, irrevocable, unconditional and absolute. Section 1.03. Waiver of Notice. The Corporation hereby waives notice of acceptance of this Agreement and of any Obligation to which it applies or may apply, and the Corporation hereby 1 waives presentment, demand for payment, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. Section 1.04. No Impairment. The obligations, covenants, agreements and duties of the Corporation under this Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the extension of time for the payment by the Trust of all or any portion of the Obligations or for the performance of any other obligation under, arising out of, or in connection with, the Obligations; (b) any failure, omission, delay or lack of diligence on the part of the Beneficiaries to enforce, assert or exercise any right, privilege, power or remedy conferred on the Beneficiaries with respect to the Obligations or any action on the part of the Trust granting indulgence or extension of any kind; or (c) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Trust or any of the assets of the Trust. There shall be no obligation of the Beneficiaries to give notice to, or obtain the consent of, the Corporation with respect to the happening of any of the foregoing. Section 1.05. Enforcement. A Beneficiary may enforce this Agreement directly against the Corporation and the Corporation waives any right or remedy to require that any action be brought against the Trust or any other person or entity before proceeding against the Corporation. ARTICLE II Section 2.01. Binding Effect. All guarantees and agreements contained in this Agreement shall bind the successors, assigns, receivers, trustees and representatives of the Corporation and shall inure to the benefit of the Beneficiaries. Section 2.02. Amendment. So long as there remains any Beneficiary or any Preferred Securities are outstanding, this Agreement shall not be modified or amended in any manner adverse to such Beneficiary or to the holders of the Preferred Securities. Section 2.03. Notices. Any notice, request or other communication required or permitted to be given hereunder shall be given in writing by delivering the same against receipt therefor by facsimile transmission (confirmed by mail), or by registered or certified mail, addressed as follows (and if so given, shall be deemed given when mailed), to wit: Duke Energy Capital Trust [ ] c/o The Chase Manhattan Bank 450 West 33rd Street New York, New York 10001 Facsimile No.: (212) 946-8159 Attention: Capital Markets Fiduciary Services 2 Duke Energy Corporation 526 South Church Street Charlotte, North Carolina 28202 Facsimile No.: (704) 382-8137 Attention: Corporate Secretary Section 2.04. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THIS AGREEMENT is executed as of the date and year first above written. Duke Energy Corporation By: _________________________________ Name: Title: Duke Energy Capital Trust [ ] By: _________________________________ as Administrative Trustee By: _________________________________ as Administrative Trustee 3 EXHIBIT E Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to Duke Energy Capital Trust [ ] or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge, or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner thereof, Cede & Co., has an interest herein. Certificate Number Number of Preferred Securities P- CUSIP No. Certificate Evidencing Preferred Securities of Duke Energy Capital Trust [ ] % Trust Preferred Securities (Liquidation Amount $ per Preferred Security) Duke Energy Capital Trust [ ], a statutory business trust formed under the laws of the State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the "Holder") is the registered owner of ( ) Preferred Securities of the Trust representing undivided beneficial interests in the assets of the Trust and designated the Duke Energy Capital Trust [ ] % Trust Preferred Securities (Liquidation Amount $ per Preferred Security) (the "Preferred Securities"). The Preferred Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer as provided in Section 5.04 of the Trust Agreement (as defined below). The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities are set forth in, and this certificate and the Preferred Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust, dated as of , , as the same may be amended from time to time (the "Trust Agreement"), including the designation of the terms of Preferred Securities as set forth therein. The holder of this certificate is entitled to the benefits of a guarantee by Duke Energy Corporation, a North Carolina corporation (the "Corporation"), pursuant to a Guarantee Agreement between the Corporation and The Chase Manhattan Bank, as guarantee trustee, dated as of , , as the same may be amended from time to time (the "Guarantee"), to the extent provided therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee to the holder of this certificate without charge upon written request to the Trust at its principal place of business or registered office. Upon receipt of this certificate, the holder of this certificate is bound by the Trust Agreement and is entitled to the benefits thereunder. 1 IN WITNESS WHEREOF, the Administrative Trustees of the Trust have executed this certificate this day of , . Duke Energy Capital Trust [ ] By: _________________________________ as Administrative Trustee By: _________________________________ as Administrative Trustee CERTIFICATE OF AUTHENTICATION This is one of the Preferred Securities referred to in the within-mentioned Trust Agreement. _____________________________________ as Administrative Trustee 2 ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Security to: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Insert assignee's social security or tax identification number) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Insert address and zip code of assignee) and irrevocably appoints - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- agent to transfer this Preferred Securities Certificate on the books of the Trust. The agent may substitute another to act for him or her. Date: _______________________________ Signature: __________________________ (Sign exactly as your name appears on the other side of this Preferred Securities Certificate) EX-4.N 13 dex4n.txt GUARANTEE AGREEMENT Exhibit 4-N GUARANTEE AGREEMENT between DUKE ENERGY CORPORATION (as Guarantor) and THE CHASE MANHATTAN BANK (as Trustee) Dated as of , CROSS-REFERENCE TABLE/1/
Section of Section of Trust Indenture Act Guarantee of 1939, as amended Agreement - -------------------- ---------- 310(a)...................................................... 4.01(a) 310(b)...................................................... 4.01(c), 2.08 310(c)...................................................... Inapplicable 311(a)...................................................... 2.02(b) 311(b)...................................................... 2.02(b) 311(c)...................................................... Inapplicable 312(a)...................................................... 2.02(a) 312(b)...................................................... 2.02(b) 313......................................................... 2.03 314(a)...................................................... 2.04 314(b)...................................................... Inapplicable 314(c)...................................................... 2.05 314(d)...................................................... Inapplicable 314(e)...................................................... 1.01, 2.05, 3.02 314(f)...................................................... 2.01, 3.02 315(a)...................................................... 3.01(d) 315(b)...................................................... 2.07 315(c)...................................................... 3.01 315(d)...................................................... 3.01(d) 315(e)...................................................... Inapplicable 316(a)...................................................... 5.04(i), 2.06 316(b)...................................................... 5.03 316(c)...................................................... 2.02 317(a)...................................................... Inapplicable 317(b)...................................................... Inapplicable 318(a)...................................................... 2.01(b) 318(b)...................................................... 2.01 318(c)...................................................... 2.01(a)
- -------- /1/ This Cross-Reference Table does not constitute part of the Guarantee Agreement and shall not affect the interpretation of any of its terms or provisions. i TABLE OF CONTENTS
Page ARTICLE I Definitions........................................................ 1 Section 1.01. Definitions........................................................ 1 ARTICLE II Trust Indenture Act................................................ 3 Section 2.01. Trust Indenture Act; Application................................... 3 Section 2.02. Lists of Holders of Securities..................................... 3 Section 2.03. Reports by the Trustee............................................. 4 Section 2.04. Periodic Reports to Trustee........................................ 4 Section 2.05. Evidence of Compliance with Conditions Precedent................... 4 Section 2.06. Events of Default; Waiver.......................................... 4 Section 2.07. Event of Default; Notice........................................... 4 Section 2.08. Conflicting Interests.............................................. 5 ARTICLE III Powers, Duties and Rights of Trustee............................... 5 Section 3.01. Powers and Duties of the Trustee................................... 5 Section 3.02. Certain Rights of Trustee.......................................... 6 Section 3.03. Compensation; Fees; Indemnity...................................... 7 ARTICLE IV Trustee............................................................ 8 Section 4.01. Trustee; Eligibility............................................... 8 Section 4.02. Appointment, Removal and Resignation of Trustee.................... 8 ARTICLE V Guarantee.......................................................... 9 Section 5.01. Guarantee.......................................................... 9 Section 5.02. Waiver of Notice and Demand........................................ 9 Section 5.03. Obligations Not Affected........................................... 9 Section 5.04. Rights of Holders.................................................. 10 Section 5.05. Guarantee of Payment............................................... 10 Section 5.06. Subrogation........................................................ 10 Section 5.07. Independent Obligations............................................ 11 ARTICLE VI Subordination...................................................... 11 Section 6.01. Subordination...................................................... 11 ARTICLE VII Termination........................................................ 11 Section 7.01. Termination........................................................ 11 ARTICLE VIII Miscellaneous...................................................... 11 Section 8.01. Successors and Assigns............................................. 11 Section 8.02. Amendments......................................................... 11 Section 8.03. Notices............................................................ 12 Section 8.04. Benefit............................................................ 12 Section 8.05. Interpretation..................................................... 12 Section 8.06. Governing Law...................................................... 13
ii GUARANTEE AGREEMENT This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of , , is executed and delivered by DUKE ENERGY CORPORATION, a North Carolina corporation (the "Guarantor"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as trustee (the "Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Preferred Securities (as defined herein) of DUKE ENERGY CAPITAL TRUST [ ], a Delaware statutory business trust (the "Trust"). WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust Agreement"), dated as of , , among the Trustee, the other Trustees named therein, and Duke Energy Corporation, as Depositor, and the holders of undivided beneficial interests in the assets of the Trust, the Trust is issuing as of the date hereof $ aggregate liquidation amount of its % Trust Preferred Securities (the "Preferred Securities") representing preferred undivided beneficial interests in the assets of the Trust and having the terms set forth in the Trust Agreement; WHEREAS, the Preferred Securities will be issued by the Trust and the proceeds thereof will be used to purchase Junior Subordinated Notes (as defined in the Trust Agreement) of the Guarantor, which will be held by the Trust as trust assets; and WHEREAS, as incentive for the Holders to purchase the Preferred Securities, the Guarantor desires to irrevocably and unconditionally agree, to the extent set forth herein, to pay to the Holders the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the payment for Preferred Securities by each Holder thereof, which payment the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the benefit of the Holders from time to time of the Preferred Securities. ARTICLE I Definitions Section 1.01. Definitions. As used in this Guarantee Agreement, the terms set forth below shall, unless the context otherwise requires, have the following meanings. Capitalized or otherwise defined terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Trust Agreement as in effect on the date hereof. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. 1 "Common Securities" means the securities representing common undivided beneficial interests in the assets of the Trust. "Event of Default" means a failure by the Guarantor to perform any of its payment obligations under this Guarantee Agreement. "Guarantee Payments" shall mean the following payments or distributions, without duplication, with respect to the Preferred Securities, to the extent not paid or made by or on behalf of the Trust: (i) any accrued and unpaid distributions that are required to be paid on such Preferred Securities but if and only if and to the extent the Trust has funds legally and immediately available therefor to make such payment; (ii) the redemption price, including all accrued and unpaid distributions to the date of redemption (the "Redemption Price"), with respect to the Preferred Securities called for redemption by the Trust but if and only if and to the extent that the Trust has funds legally and immediately available therefor sufficient to make such payment; and (iii) upon a voluntary or involuntary dissolution, winding-up or termination of the Trust (other than in connection with the distribution of Junior Subordinated Notes to the holders of Trust Securities or the redemption of all of the Preferred Securities), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid distributions on the Preferred Securities to the date of payment, to the extent the Trust has funds legally and immediately available therefor, and (b) the amount of assets of the Trust remaining available for distribution to Holders in liquidation of the Trust (in either case, the "Liquidation Distribution"). "Holder" shall mean any holder, as registered on the books and records of the Trust, of any Preferred Securities; provided, however, that in determining whether the holders of the requisite percentage of Preferred Securities have given any request, notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate of the Guarantor. "Indenture" means the Subordinated Indenture, dated as of December 1, 1997, among the Guarantor, as issuer, and The Chase Manhattan Bank, as trustee, as supplemented to the date hereof, including by the Supplemental Indenture, dated as of , , by and between the Guarantor and The Chase Manhattan Bank, as trustee. "Majority in liquidation amount of Preferred Securities" means a vote by Holder(s) of Preferred Securities, voting separately as a class, of more than 50% of the liquidation amount of all Preferred Securities outstanding at the time of determination. "Officers' Certificate" means a certificate signed by the Chairman of the Board, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Guarantor, and delivered to the Trustee. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Guarantee Agreement shall include: (a) a statement that each officer signing the Officers' Certificate has read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in the Officers' Certificate are based; 2 (c) a statement that, in the opinion of each such officer, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. "Person" means any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof. "Responsible Officer" means, with respect to the Trustee, any vice president, any assistant vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, any senior trust officer, trust officer or assistant trust officer or any other officer of the Corporate Trust Department of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject. "Successor Trustee" means a successor Trustee possessing the qualifications to act as Trustee under Section 4.01. "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended. "Trust Securities" means the Preferred Securities and the Common Securities. "Trustee" means The Chase Manhattan Bank until a Successor Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee Agreement and thereafter means each such Successor Trustee. ARTICLE II Trust Indenture Act Section 2.01. Trust Indenture Act: Application. (a) This Guarantee Agreement is subject to the provisions of the Trust Indenture Act that are required to be part of this Guarantee Agreement and shall, to the extent applicable, be governed by such provisions; and (b) If and to the extent that any provision of this Guarantee Agreement limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control. Section 2.02. Lists of Holders of Securities. (a) The Guarantor shall furnish or cause to be furnished to the Trustee (a) semiannually, not later than June 1 and December 1 in each year, a list, in such form as the Trustee may reasonably 3 require, of the names and addresses of the Holders ("List of Holders") as of a date not more than 15 days prior to the time such list is furnished, and (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Guarantor of any such request, a List of Holders as of a date not more than 15 days prior to the time such list is furnished; provided that the Guarantor shall not be obligated to provide such List of Holders at any time the List of Holders does not differ from the most recent List of Holders given to the Trustee by the Guarantor or at any time the Trustee is the Securities Registrar under the Trust Agreement. The Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. (b) The Trustee shall comply with its obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act. Section 2.03. Reports by the Trustee. Within 60 days after October 1 of each year, the Trustee shall provide to the Holders of the Preferred Securities such reports as are required by Section 313(a) of the Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust Indenture Act. The Trustee shall also comply with the other requirements of Section 313 of the Trust Indenture Act. Section 2.04. Periodic Reports to Trustee. The Guarantor shall provide to the Trustee such documents, reports and information as required by Section 314 of the Trust Indenture Act, if any, in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act, and shall provide, within 120 days after the end of each fiscal year of the Guarantor, the compliance certificate required by Section 314(a)(4) of the Trust Indenture Act in the form and in the manner required by such Section. Section 2.05. Evidence of Compliance with Conditions Precedent. The Guarantor shall provide to the Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Guarantee Agreement that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) may be given in the form of an Officers' Certificate. Section 2.06. Events of Default; Waiver. The Holders of a Majority in liquidation amount of Preferred Securities may, by vote, on behalf of all of the Holders, waive any past Event of Default and its consequences. Upon such waiver, any such Event of Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured and not to have existed, for every purpose of this Guarantee Agreement, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. Section 2.07. Event of Default; Notice. (a) The Trustee shall, within 90 days after the occurrence of an Event of Default, transmit by mail, first class postage prepaid, to the Holders, notices of all Events of Default known to the Trustee, unless such defaults have been cured before the giving of such notice, provided that the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Holders. 4 (b) The Trustee shall not be deemed to have knowledge of any Event of Default unless the Trustee shall have received written notice, or a Responsible Officer charged with the administration of the Trust Agreement shall have obtained written notice, of such Event of Default. Section 2.08. Conflicting Interests. The Guarantee Agreements dated as of December 8, 1997 and June 14, 1999, between the Guarantor, as guarantor, and The Chase Manhattan Bank, as trustee, the Amended and Restated Trust Agreements dated as of December 8, 1997 and June 14, 1999, among the Guarantor, as depositor, Chase Manhattan Bank Delaware, as Delaware trustee, Robert T. Lucas III and S.L. Love, as administrative trustees, and The Chase Manhattan Bank, as property trustee, and the Trust Agreement, shall be deemed to be specifically described in this Guarantee Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. ARTICLE III Powers, Duties and Rights of Trustee Section 3.01. Powers and Duties of the Trustee. (a) This Guarantee Agreement shall be held by the Trustee for the benefit of the Holders, and the Trustee shall not transfer this Guarantee Agreement to any Person unless the Trustee shall assign rights hereunder to a Holder to the extent such assignment is necessary to exercise such Holder's rights pursuant to Section 5.04 or to a Successor Trustee upon acceptance by such Successor Trustee of its appointment to act as Successor Trustee. The right, title and interest of the Trustee shall automatically vest in any Successor Trustee, and such vesting and cessation of title shall be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Trustee. (b) If an Event of Default has occurred and is continuing, the Trustee shall enforce this Guarantee Agreement for the benefit of the Holders. (c) The Trustee, before the occurrence of any Event of Default and after the curing or waiving of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Guarantee Agreement, and no implied covenants shall be read into this Guarantee Agreement against the Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.06), the Trustee shall exercise such of the rights and powers vested in it by this Guarantee Agreement, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (d) No provision of this Guarantee Agreement shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) prior to the occurrence of any Event of Default and after the curing or waiving of all such Events of Default that may have occurred: (A) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Guarantee Agreement, and the Trustee shall not be liable except for the 5 performance of such duties and obligations as are specifically set forth in this Guarantee Agreement; and (B) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Guarantee Agreement; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Guarantee Agreement; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (iii) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a Majority in liquidation amount of the Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Guarantee Agreement; and (iv) no provision of this Guarantee Agreement shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Trustee shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Guarantee Agreement or adequate indemnity against such risk or liability is not reasonably assured to it. Section 3.02. Certain Rights of Trustee. (a) Subject to the provisions of Section 3.01: (i) the Trustee may rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed, sent or presented by the proper party or parties; (ii) any direction or act of the Guarantor contemplated by this Guarantee Agreement shall be sufficiently evidenced by an Officers' Certificate; (iii) whenever, in the administration of this Guarantee Agreement, the Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting any action hereunder, the Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and rely upon an Officers' Certificate which, upon receipt of such request, shall be promptly delivered by the Guarantor; (iv) the Trustee may consult with counsel of its choice, and the written advice or opinion of such counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or opinion; such counsel may be counsel to the Guarantor or any 6 of its Affiliates and may include any of its employees; the Trustee shall have the right at any time to seek instructions concerning the administration of this Guarantee Agreement from any court of competent jurisdiction; (v) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Guarantee Agreement at the request or direction of any Holder, unless such Holder shall have provided to the Trustee such adequate security and indemnity as would satisfy a reasonable person in the position of the Trustee, against the costs, expenses (including attorneys' fees and expenses) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Trustee; provided that nothing contained in this Section 3.02(a)(v) shall be taken to relieve the Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Guarantee Agreement; (vi) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit; (vii) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; and (viii) whenever in the administration of this Guarantee Agreement the Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Trustee (i) may request instructions from the Holders, (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (iii) shall be protected in acting in accordance with such instructions. (b) No provision of this Guarantee Agreement shall be deemed to impose any duty or obligation on the Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Trustee shall be construed to be a duty. Section 3.03. Compensation; Fees; Indemnity. The Guarantor agrees: (a) to pay to the Trustee from time to time reasonable compensation for all services rendered by the Trustee hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided herein, to reimburse the Trustee upon request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Guarantee Agreement (including the reasonable 7 compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (c) to indemnify the Trustee for, and to hold the Trustee harmless against, any and all loss, damage, claims, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this Guarantee Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The provisions of this Section 3.03 shall survive the termination of this Guarantee Agreement. ARTICLE IV Trustee Section 4.01. Trustee; Eligibility. (a) There shall at all times be a Trustee which shall: (i) not be an Affiliate of the Guarantor; and (ii) be a corporation organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a corporation or Person permitted by the Securities and Exchange Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and subject to supervision or examination by Federal, State, Territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then, for the purposes of this Section 4.01(a)(ii), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. (b) If at any time the Trustee shall cease to be eligible to so act under Section 4.01(a), the Trustee shall immediately resign in the manner and with the effect set out in Section 4.02(c). (c) If the Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act, subject to the rights of the Trustee under the penultimate paragraph thereof. Section 4.02. Appointment, Removal and Resignation of Trustee. (a) Subject to Section 4.02(b), the Trustee may be appointed or removed without cause at any time by the Guarantor. (b) The Trustee shall not be removed until a Successor Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Trustee and delivered to the Guarantor. 8 (c) The Trustee appointed to office shall hold office until a Successor Trustee shall have been appointed or until its removal or a resignation. The Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Trustee and delivered to the Guarantor and the resigning Trustee. (d) If no Successor Trustee shall have been appointed and accepted appointment as provided in this Section 4.02 within 60 days after delivery to the Guarantor of an instrument of resignation, the resigning Trustee may petition any court of competent jurisdiction for appointment of a Successor Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Trustee. ARTICLE V Guarantee Section 5.01. Guarantee. The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by or on behalf of the Trust), as and when due, regardless of any defense, right of set-off or counterclaim which the Guarantor may have or assert against any person. The Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Trust to pay such amounts to the Holders. Section 5.02. Waiver of Notice and Demand. The Guarantor hereby waives notice of acceptance of this Guarantee Agreement and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Trust or any other Person before proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. Section 5.03. Obligations Not Affected. The obligation of the Guarantor to make the Guarantee Payments under this Guarantee Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the release or waiver, by operation of law or otherwise, of the performance or observance by the Trust of any express or implied agreement, covenant, term or condition relating to the Preferred Securities to be performed or observed by the Trust; (b) the extension of time for the payment by the Trust of all or any portion of the Distributions, Redemption Price, Liquidation Distribution or any other sums payable under the terms of the Preferred Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Preferred Securities (other than an extension of time for payment of Distributions, Redemption Price, Liquidation Distribution or other sum payable that results from the extension of any interest payment period on the Junior Subordinated Notes permitted by the Indenture); (c) any failure, omission, delay or lack of diligence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the 9 terms of the Preferred Securities, or any action on the part of the Trust granting indulgence or extension of any kind; (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Trust or any of the assets of the Trust; (e) any invalidity of, or defect or deficiency in, the Preferred Securities; (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or (g) any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this Section 5.03 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. There shall be no obligation of the Holders to give notice to, or obtain consent of, the Guarantor with respect to the happening of any of the foregoing. Section 5.04. Rights of Holders. The Guarantor expressly acknowledges that: (i) this Guarantee Agreement will be deposited with the Trustee to be held for the benefit of the Holders; (ii) the Trustee has the right to enforce this Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in liquidation amount of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee in respect of this Guarantee Agreement or to direct the exercise of any trust or power conferred upon the Trustee under this Guarantee Agreement, provided that such direction shall not be in conflict with any rule of law or with this Guarantee Agreement, and could not involve the Trustee in personal liability in circumstances where reasonable indemnity would not be adequate; and (iv) any Holder may institute a legal proceeding directly against the Guarantor to enforce its rights under this Guarantee Agreement, without first instituting a legal proceeding against or requesting or directing that action be taken by the Trustee or any other person; it being understood and intended that no one or more of such Holders shall have any right in any manner whatsoever by virtue of, or by availing of, any provision of this Guarantee Agreement to affect, disturb or prejudice the rights of any other of such Holders or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Guarantee Agreement, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. Section 5.05. Guarantee of Payment. This Guarantee Agreement creates a guarantee of payment and not of collection. This Guarantee Agreement will not be discharged except by payment of the Guarantee Payments in full (without duplication) or upon the distribution of Junior Subordinated Notes to the Holders in exchange for all of the Preferred Securities. Section 5.06. Subrogation. The Guarantor shall be subrogated to all (if any) rights of the Holders against the Trust in respect of any amounts paid to the Holders by the Guarantor under this Guarantee Agreement; provided, however, that the Guarantor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any rights which it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee Agreement, if, at the time of any such payment, any amounts of Guarantee Payments are due and unpaid under this Guarantee Agreement. If any amount shall be 10 paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Holders. Section 5.07. Independent Obligations. The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Trust with respect to the Preferred Securities and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof. ARTICLE VI Subordination Section 6.01. Subordination. This Guarantee Agreement will constitute an unsecured obligation of the Guarantor and will rank (i) subordinate and junior in right of payment to all other liabilities of the Guarantor, including the Junior Subordinated Notes, except those obligations or liabilities made pari passu or subordinate by their terms, (ii) pari passu with the preferred stock or preferred stock A now or hereafter issued by the Guarantor, and (iii) senior to all common stock of the Guarantor. This Guarantee Agreement ranks pari passu with each other substantially similar guarantee agreement entered into by the Guarantor in respect of trust or other preferred securities issued by an Affiliate of the Guarantor. ARTICLE VII Termination Section 7.01. Termination. This Guarantee Agreement shall terminate and be of no further force and effect upon: (i) full payment of the Redemption Price of all Preferred Securities, (ii) the distribution of Junior Subordinated Notes to the Holders in exchange for all of the Preferred Securities, or (iii) full payment of the amounts payable in accordance with the Trust Agreement upon liquidation of the Trust. Notwithstanding the foregoing, this Guarantee Agreement will continue to be effective or will be reinstated, as the case may be, if at any time any Holder must restore payment of any sums paid with respect to Preferred Securities or under this Guarantee Agreement. ARTICLE VIII Miscellaneous Section 8.01. Successors and Assigns. All guarantees and agreements contained in this Guarantee Agreement shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders then outstanding. Except in connection with a consolidation, merger, conveyance, transfer, or lease involving the Guarantor that is permitted under Article Eight of the Indenture, the Guarantor shall not assign its obligations hereunder. Section 8.02. Amendments. Except with respect to any changes which do not materially and adversely affect the rights of Holders (in which case no consent of Holders will be required), this Guarantee Agreement may only be amended with the prior approval of the Holders of not less than 66 2/3% in liquidation amount of all the outstanding Preferred Securities. The provisions of Article Six of the Trust Agreement concerning meetings of Holders shall apply to the giving of such approval. 11 Section 8.03. Notices. Any notice, request or other communication required or permitted to be given hereunder shall be in writing, duly signed by the party giving such notice, and delivered, telecopied or mailed by first class mail as follows: (a) if given to the Guarantor, to the address set forth below or such other address as the Guarantor may give notice of to the Trustee and the Holders: Duke Energy Corporation 526 South Church Street Charlotte, North Carolina 28202 Attn: Corporate Secretary (b) if given to the Trust, in care of the Trustee, or to the Trustee at the Trust's (and the Trustee's) address set forth below or such other address as the Trustee on behalf of the Trust may give notice to the Holders: Duke Energy Capital Trust [ ] c/o The Chase Manhattan Bank 450 West 33rd Street New York, New York 10001 Attn: Capital Markets Fiduciary Services with a copy, in the case of a notice to the Trust (other than a notice from the Guarantor), to the Guarantor. (c) if given to any Holder, at the address set forth on the books and records of the Trust. All notices hereunder shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. Section 8.04. Benefit. This Guarantee Agreement is solely for the benefit of the Holders and, subject to Section 3.01(a), is not separately transferable from the Preferred Securities. Section 8.05. Interpretation. In this Guarantee Agreement, unless the context otherwise requires: (a) capitalized terms used in this Guarantee Agreement but not defined in the preamble hereto have the respective meanings assigned to them in Section 1.01; (b) a term defined anywhere in this Guarantee Agreement has the same meaning throughout; (c) all references to "the Guarantee Agreement" or "this Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented or amended from time to time; (d) all references in this Guarantee Agreement to Articles and Sections are to Articles and Sections of this Guarantee Agreement unless otherwise specified; 12 (e) a term defined in the Trust Indenture Act has the same meaning when used in this Guarantee Agreement unless otherwise defined in this Guarantee Agreement or unless the context otherwise requires; (f) a reference to the singular includes the plural and vice versa; and (g) the masculine, feminine or neuter genders used herein shall include the masculine, feminine and neuter genders. Section 8.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. THE GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS GUARANTEE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE GUARANTOR HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS GUARANTEE AGREEMENT OR ANY DOCUMENT OR ANY INSTRUMENT REFERRED TO HEREIN OR THE SUBJECT MATTER HEREOF MAY NOT BE LITIGATED IN OR BY SUCH COURTS. THE GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN THIS GUARANTEE AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. THIS GUARANTEE AGREEMENT is executed as of the day and year first above written. Duke Energy Corporation By: _________________________________ Name: Title: The Chase Manhattan Bank, as Trustee By: _________________________________ Name: Title: 13 EX-5.A 14 dex5a.txt OPINION OF ELLEN T. RUFF, ESQ. Exhibit 5-A April 12, 2001 Duke Energy Corporation 526 South Church Street Charlotte, North Carolina 28202 Dear Sirs: I am acting as counsel to Duke Energy Corporation (the Corporation) in connection with the preparation of a Registration Statement on Form S-3 to be filed today with the Securities and Exchange Commission under the Securities Act of 1933, as amended, relating to the proposed issuance and sale of up to $2,000,000,000 of the Corporation's Senior Notes (Senior Notes), Junior Subordinated Notes (Junior Subordinated Notes), First and Refunding Mortgage Bonds (Bonds), Common Stock without par value (Common Stock), contracts to purchase shares of Common Stock (Stock Purchase Contracts) and/or units, each comprised of a Stock Purchase Contract and either Senior Notes, Junior Subordinated Notes, other debt securities of the Corporation or one of its subsidiaries, debt obligations of third parties (including U.S. Treasury securities), Preferred Securities (as hereinafter defined) or preferred securities issued by a trust of which a subsidiary of the Corporation owns all the common securities, in each such case pledged to secure the holder's obligations to purchase Common Stock under the Stock Purchase Contract (Stock Purchase Units), and/or Preferred Securities (liquidation amount $ per Preferred Security) (Preferred Securities) of Duke Energy Capital Trust III, Duke Energy Capital Trust IV and/or Duke Energy Capital Trust V, all as contemplated in the above-mentioned Registration Statement. Such Registration Statement also relates to the proposed issuance of the Corporation's Guarantees (as defined in such Registration Statement), Junior Subordinated Notes with respect to the Preferred Securities (Trust Preferred Junior Subordinated Notes) and Stock Purchase Contracts with respect to the Stock Purchase Units, each as contemplated by such Registration Statement. As General Counsel of the Corporation, I am familiar with the Articles of Incorporation and By-Laws of the Corporation, both as amended to date, the form of supplemental indenture relating to the Senior Notes (the Senior Notes Supplemental Indenture) supplementing the Senior Indenture dated as of September 1, 1998 from the Corporation to The Chase Manhattan Bank, as Trustee, as heretofore supplemented (the Senior Indenture), the form of supplemental indenture relating to the Junior Subordinated Notes (the Subordinated Notes Supplemental Indenture) supplementing the Subordinated Indenture dated as of December 1, 1997 from the Corporation to The Chase Manhattan Bank, as Trustee, as heretofore supplemented (the Subordinated Indenture), the form of supplemental indenture relating to the Trust Preferred Junior Subordinated Notes (the Trust Preferred Subordinated Notes Supplemental Indenture) supplementing the Subordinated Indenture, the form of supplemental indenture relating to the Bonds (the Bonds Supplemental Indenture) supplementing the First and Refunding Mortgage, dated as of December 1, 1927, from the Corporation to The Chase Manhattan Bank, as successor Trustee, as heretofore supplemented and amended (the First and Refunding Mortgage), and the form of Guarantee Agreement between the Corporation and the trustee named therein (the Guarantee Agreement) relating to the Guarantees. I have also made such examination of corporate records and proceedings and other documents and questions of law as I have considered necessary for the purposes of this opinion. 2 Based upon the foregoing, I am of the opinion that: (1) 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. (2) Upon (a) the above-mentioned Registration Statement under the Securities Act of 1933, as amended, becoming effective; (b) compliance with any applicable securities or blue sky laws; (c) the Senior Indenture, as to be supplemented by the Senior Notes Supplemental Indenture, having qualified under the Trust Indenture Act of 1939, as amended; (d) the execution and delivery of the Senior Notes Supplemental Indenture; (e) the execution, authentication and delivery of the Senior Notes in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with the provisions of the Senior Indenture as to be supplemented by the Senior Notes Supplemental Indenture; and (f) the issuance and sale of the Senior Notes in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with appropriate orders of the North Carolina Utilities Commission and The Public Service Commission of South Carolina, the Senior Notes will be valid, binding and legal obligations of the Corporation in accordance with their terms, except as limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights. (3) Upon (a) the above-mentioned Registration Statement under the Securities Act of 1933, as amended, becoming effective; (b) compliance with any applicable securities or blue sky laws; (c) the Subordinated Indenture, as to be supplemented by the Subordinated Notes Supplemental Indenture, having qualified under the Trust Indenture Act of 1939, as amended; (d) the execution and delivery of the 3 Subordinated Notes Supplemental Indenture; (e) the execution, authentication and delivery of the Junior Subordinated Notes in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with the provisions of the Subordinated Indenture as to be supplemented by the Subordinated Notes Supplemental Indenture; and (f) the issuance and sale of the Junior Subordinated Notes in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with appropriate orders of the North Carolina Utilities Commission and The Public Service Commission of South Carolina, the Junior Subordinated Notes will be valid, binding and legal obligations of the Corporation in accordance with their terms, except as limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights. (4) Upon (a) the above-mentioned Registration Statement under the Securities Act of 1933, as amended, becoming effective; (b) compliance with any applicable securities or blue sky laws; (c) the First and Refunding Mortgage, as to be supplemented by the Bonds Supplemental Indenture, having qualified under the Trust Indenture Act of 1939, as amended; (d) the execution and delivery of the Bonds Supplemental Indenture; (e) the execution, authentication and delivery of the Bonds in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with the provisions of the First and Refunding Mortgage as to be supplemented by the Bonds Supplemental Indenture; and (f) the issuance and sale of the Bonds in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with appropriate orders of the North Carolina Utilities Commission and The 4 Public Service Commission of South Carolina, the Bonds will be valid, binding and legal obligations of the Corporation in accordance with their terms, except as limited by bankruptcy, insolvency or other laws affecting the enforcement of mortgagees' and other creditors' rights. (5) Upon (a) the above-mentioned Registration Statement under the Securities Act of 1933, as amended, becoming effective; (b) compliance with any applicable securities or blue sky laws; (c) the issuance and sale of the Common Stock in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation, in accordance with appropriate orders of the North Carolina Utilities Commission and The Public Service Commission of South Carolina, and, if issued pursuant to Stock Purchase Contracts or Stock Purchase Units, in accordance with the terms thereof; and (d) the receipt by the Corporation of the full purchase price thereof, the Common Stock will be duly authorized, validly issued, fully paid and nonassessable. (6) Upon (a) the above-mentioned Registration Statement under the Securities Act of 1933, as amended, becoming effective; (b) compliance with any applicable securities or blue sky laws; (c) the fixing and determination of the terms of the Stock Purchase Contracts and/or the Stock Purchase Units in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation; (d) the execution and delivery of the agreements relating to the issuance of the Stock Purchase Contracts and/or the Stock Purchase Units; (e) the execution and delivery of the Stock Purchase Contracts and/or the Stock Purchase Units in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with the above-mentioned 5 agreements; and (f) the issuance and sale of the Stock Purchase Contracts and/or the Stock Purchase Units in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with appropriate orders of the North Carolina Utilities Commission and The Public Service Commission of South Carolina, the Stock Purchase Contracts and/or the Stock Purchase Units will be valid, binding and legal obligations of the Corporation in accordance with their terms, except as limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights. (7) Upon (a) the above-mentioned Registration Statement under the Securities Act of 1933, as amended, becoming effective; (b) compliance with any applicable securities or blue sky laws; (c) the Subordinated Indenture, as to be supplemented by the Trust Preferred Subordinated Notes Supplemental Indenture, and the Guarantee Agreements having qualified under the Trust Indenture Act of 1939, as amended; (d) the execution and delivery of the Trust Preferred Subordinated Notes Supplemental Indenture and of the Guarantee Agreements; (e) the execution, authentication and delivery of the Trust Preferred Junior Subordinated Notes in accordance with the Trust Preferred Subordinated Notes Supplemental Indenture and of the Guarantees in accordance with the Guarantee Agreements; and (f) the issuance of the Trust Preferred Junior Subordinated Notes and of the Guarantees, in each case in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with appropriate orders of the North Carolina Utilities Commission and The Public Service Commission 6 of South Carolina, the Trust Preferred Junior Subordinated Notes and the Guarantees will be valid, binding and legal obligations of the Corporation in accordance with their terms, except as limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights. I am a member of the bar of the State of North Carolina and the foregoing opinion is limited solely to the laws of that State. I hereby consent to the filing of this opinion with the Securities and Exchange Commission as an exhibit to the above-mentioned Registration Statement and to the use of my name and the reference made to me under the captions "Validity of the Securities" in such Registration Statement. Except as stated above, without my prior written consent, this opinion may not be furnished or quoted to, or relied upon by, any other person for any purpose. Very truly yours, /s/ Ellen T. Ruff 7 EX-5.B 15 dex5b.txt OPINION OF DEWEY BALLANTINE LLP Exhibit 5-B April 12, 2001 Duke Energy Corporation 526 South Church Street Charlotte, North Carolina 28202 Dear Sirs: We are acting as counsel to Duke Energy Corporation (the Corporation) in connection with the preparation of a Registration Statement on Form S-3 to be filed today with the Securities and Exchange Commission under the Securities Act of 1933, as amended, relating to the proposed issuance and sale of up to $2,000,000,000 of the Corporation's Senior Notes (Senior Notes), Junior Subordinated Notes (Junior Subordinated Notes), First and Refunding Mortgage Bonds (Bonds), Common Stock without par value (Common Stock), contracts to purchase shares of Common Stock (Stock Purchase Contracts) and/or units, each comprised of a Stock Purchase Contract and either Senior Notes, Junior Subordinated Notes, other debt securities of the Corporation or one of its subsidiaries, debt obligations of third parties (including U.S. Treasury securities), Preferred Securities (as hereinafter defined) or preferred securities issued by a trust of which a subsidiary of the Corporation owns all the common securities, in each such case pledged to secure the holder's obligations to purchase Common Stock under the Stock Purchase Contract (Stock Purchase Units), and/or Preferred Securities (liquidation amount $ per Preferred Security) (Preferred Securities) of Duke Energy Capital Trust III, Duke Energy Capital Trust IV and/or Duke Energy Capital Trust V, all as contemplated in the above-mentioned Registration Statement. Such Registration Statement also relates to the proposed issuance of the Corporation's Guarantees (as defined in such Registration Statement), Junior Subordinated Notes with respect to the Preferred Securities (Trust Preferred Junior Subordinated Notes) and Stock Purchase Contracts with respect to the Stock Purchase Units, each as contemplated by such Registration Statement. As counsel to the Corporation, we are familiar with the Articles of Incorporation and By-Laws of the Corporation, both as amended to date, the form of supplemental indenture relating to the Senior Notes (the Senior Notes Supplemental Indenture) supplementing the Senior Indenture dated as of September 1, 1998 from the Corporation to The Chase Manhattan Bank, as Trustee, as heretofore supplemented (the Senior Indenture), the form of supplemental indenture relating to the Junior Subordinated Notes (the Subordinated Notes Supplemental Indenture) supplementing the Subordinated Indenture dated as of December 1, 1997 from the Corporation to The Chase Manhattan Bank, as Trustee, as heretofore supplemented (the Subordinated Indenture), the form of supplemental indenture relating to the Trust Preferred Junior Subordinated Notes (the Trust Preferred Subordinated Notes Supplemental Indenture) supplementing the Subordinated Indenture, the form of supplemental indenture relating to the Bonds (the Bonds Supplemental Indenture) supplementing the First and Refunding Mortgage, dated as of December 1, 1927, from the Corporation to The Chase Manhattan Bank, as successor Trustee, as heretofore supplemented and amended (the First and Refunding Mortgage), and the form of Guarantee Agreement between the Corporation and the trustee named therein (the Guarantee Agreement) relating to the Guarantees. We have also made such examination of corporate records and proceedings and other documents and questions of law as we have considered necessary for the purposes of this opinion. Based upon the foregoing, we are of the opinion that: 2 (1) Upon (a) the above-mentioned Registration Statement under the Securities Act of 1933, as amended, becoming effective; (b) compliance with any applicable securities or blue sky laws; (c) the Senior Indenture, as to be supplemented by the Senior Notes Supplemental Indenture, having qualified under the Trust Indenture Act of 1939, as amended; (d) the execution and delivery of the Senior Notes Supplemental Indenture; (e) the execution, authentication and delivery of the Senior Notes in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with the provisions of the Senior Indenture as to be supplemented by the Senior Notes Supplemental Indenture; and (f) the issuance and sale of the Senior Notes in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with appropriate orders of the North Carolina Utilities Commission and The Public Service Commission of South Carolina, the Senior Notes will be valid, binding and legal obligations of the Corporation in accordance with their terms, except as limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights. (2) Upon (a) the above-mentioned Registration Statement under the Securities Act of 1933, as amended, becoming effective; (b) compliance with any applicable securities or blue sky laws; (c) the Subordinated Indenture, as to be supplemented by the Subordinated Notes Supplemental Indenture, having qualified under the Trust Indenture Act of 1939, as amended; (d) the execution and delivery of the Subordinated Notes Supplemental Indenture; (e) the execution, authentication and delivery of the Junior Subordinated Notes in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in 3 accordance with the provisions of the Subordinated Indenture as to be supplemented by the Subordinated Notes Supplemental Indenture; and (f) the issuance and sale of the Junior Subordinated Notes in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with appropriate orders of the North Carolina Utilities Commission and The Public Service Commission of South Carolina, the Junior Subordinated Notes will be valid, binding and legal obligations of the Corporation in accordance with their terms, except as limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights. (3) Upon (a) the above-mentioned Registration Statement under the Securities Act of 1933, as amended, becoming effective; (b) compliance with any applicable securities or blue sky laws; (c) the First and Refunding Mortgage, as to be supplemented by the Bonds Supplemental Indenture, having qualified under the Trust Indenture Act of 1939, as amended; (d) the execution and delivery of the Bonds Supplemental Indenture; (e) the execution, authentication and delivery of the Bonds in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with the provisions of the First and Refunding Mortgage as to be supplemented by the Bonds Supplemental Indenture; and (f) the issuance and sale of the Bonds in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with appropriate orders of the North Carolina Utilities Commission and The Public Service Commission of South Carolina, the Bonds will be valid, binding and legal obligations of the Corporation in accordance with their terms, except as limited by 4 bankruptcy, insolvency or other laws affecting the enforcement of mortgagees' and other creditors' rights. (4) Upon (a) the above-mentioned Registration Statement under the Securities Act of 1933, as amended, becoming effective; (b) compliance with any applicable securities or blue sky laws; (c) the issuance and sale of the Common Stock in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation, in accordance with appropriate orders of the North Carolina Utilities Commission and The Public Service Commission of South Carolina, and, if issued pursuant to Stock Purchase Contracts or Stock Purchase Units, in accordance with the terms thereof; and (d) the receipt by the Corporation of the full purchase price thereof, the Common Stock will be duly authorized, validly issued, fully paid and nonassessable. (5) Upon (a) the above-mentioned Registration Statement under the Securities Act of 1933, as amended, becoming effective; (b) compliance with any applicable securities or blue sky laws; (c) the fixing and determination of the terms of the Stock Purchase Contracts and/or the Stock Purchase Units in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation; (d) the execution and delivery of the agreements relating to the issuance of the Stock Purchase Contracts and/or the Stock Purchase Units; (e) the execution and delivery of the Stock Purchase Contracts and/or the Stock Purchase Units in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with the above-mentioned agreements; and (f) the issuance and sale of the Stock Purchase Contracts and/or the Stock Purchase Units in accordance with resolutions to be adopted by the 5 Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with appropriate orders of the North Carolina Utilities Commission and The Public Service Commission of South Carolina, the Stock Purchase Contracts and/or the Stock Purchase Units will be valid, binding and legal obligations of the Corporation in accordance with their terms, except as limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights. (6) Upon (a) the above-mentioned Registration Statement under the Securities Act of 1933, as amended, becoming effective; (b) compliance with any applicable securities or blue sky laws; (c) the Subordinated Indenture, as to be supplemented by the Trust Preferred Subordinated Notes Supplemental Indenture, and the Guarantee Agreements having qualified under the Trust Indenture Act of 1939, as amended; (d) the execution and delivery of the Trust Preferred Subordinated Notes Supplemental Indenture and of the Guarantee Agreements; (e) the execution, authentication and delivery of the Trust Preferred Junior Subordinated Notes in accordance with the Trust Preferred Subordinated Notes Supplemental Indenture and of the Guarantees in accordance with the Guarantee Agreements; and (f) the issuance of the Trust Preferred Junior Subordinated Notes and of the Guarantees, in each case in accordance with resolutions to be adopted by the Chief Executive Officer of the Corporation pursuant to authority expressly granted to him by the Board of Directors of the Corporation and in accordance with appropriate orders of the North Carolina Utilities Commission and The Public Service Commission of South Carolina, the Trust Preferred Junior Subordinated Notes and the Guarantees will be valid, binding and legal obligations of the Corporation in 6 accordance with their terms, except as limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights. The foregoing opinion is limited solely to the laws of the State of New York, the General Corporation Law of the State of Delaware and the Federal laws of the United States of America, and we express no opinion as to the laws of any other state or jurisdiction. We hereby consent to the filing of this opinion with the Securities and Exchange Commission as an exhibit to the above-mentioned Registration Statement and to the statements with respect to our firm under the captions "Validity of the Securities" in such Registration Statement. In giving the foregoing consent, we do not thereby admit, and hereby expressly disclaim, that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Commission thereunder. Except as stated above, without our prior written consent, this opinion may not be furnished or quoted to, or relied upon by, any other person for any purpose. Very truly yours, /s/ Dewey Ballantine LLP 7 EX-5.C.1 16 dex5c1.txt OPINION OF RICHARDS, LAYTON & FINGER PA, TRST. III Exhibit 5-C-1 RICHARDS, LAYTON & FINGER, P.A. One Rodney Square Wilmington, Delaware 19899 April 12, 2001 Duke Energy Capital Trust III c/o Duke Energy Corporation 526 South Church Street Charlotte, North Carolina 28202 Re: Duke Energy Capital Trust III Ladies and Gentlemen: We have acted as special Delaware counsel for Duke Energy Corporation, a North Carolina corporation (the "Company"), and Duke Energy Capital Trust III, a Delaware business trust (the "Trust"), in connection with the matters set forth herein. At your request, this opinion is being furnished to you. For purposes of giving the opinions hereinafter set forth, our examination of documents has been limited to the examination of originals or copies of the following: (a) The Certificate of Trust of the Trust, dated May 13, 1999 as filed with the office of the Secretary of State of the State of Delaware (the "Secretary of State") on May 13, 1999; (b) The Trust Agreement of the Trust, dated as of May 13, 1999 between the Company, as Depositor, and the trustee of the Trust named therein; (c) The Registration Statement (the "Registration Statement") on Form S-3, including a preliminary prospectus (the "Prospectus") and a preliminary prospectus supplement (the "Prospectus Supplement"), relating to the % Trust Preferred Securities of the Trust representing preferred undivided beneficial interests in the assets of the Trust (each, a "Preferred Security" and collectively, the "Preferred Securities"), filed by the Company, the Trust and others as set forth therein with the Securities and Exchange Commission on or about April 12, 2001; (d) A form of Amended and Restated Trust Agreement for the Trust, to be entered into between the Company, the trustees of the Trust named therein, and the holders, from time to time, of undivided beneficial interests in the assets of the Trust (including Exhibits C and E thereto) (the "Trust Agreement"), attached as an exhibit to the Registration Statement; and (e) A Certificate of Good Standing for the Trust, dated April 12, 2001, obtained from the Secretary of State. Initially capitalized terms used herein and not otherwise defined are used as defined in the Trust Agreement. For purposes of this opinion, we have not reviewed any documents other than the documents listed in paragraphs (a) through (e) above. In particular, we have not reviewed any document (other than the documents listed in paragraphs (a) through (e) above) that is referred to in or incorporated by reference into the documents reviewed by us. We have assumed that there exists no provision in any document that we have not reviewed that is inconsistent with the opinions stated herein. We have conducted no independent factual investigation of our own but rather have relied solely upon the foregoing documents, the statements and information set forth therein and the additional matters recited or assumed herein, all of which we have assumed to be true, complete and accurate in all material respects. With respect to all documents examined by us, we have assumed (i) the authenticity of all documents submitted to us as authentic originals, (ii) the conformity with the originals of all documents submitted to us as copies or forms, and (iii) the genuineness of all signatures. For purposes of this opinion, we have assumed (i) that the Trust Agreement and the Certificate of Trust are in full force and effect and have not been amended, (ii) except to the extent provided in paragraph 1 below, the due creation, due organization or due formation, as the case may be, and valid existence in good standing of each party to the documents examined by us under the laws of the jurisdiction governing its creation, organization or formation, (iii) the legal capacity of natural persons who are parties to the documents examined by us, (iv) that each of the parties to the documents examined by us has the power and authority to execute and deliver, and to perform its obligations under, such documents, (v) the due authorization, execution and delivery by all parties thereto of all documents examined by us, (vi) the receipt by each Person to whom a Preferred Security is to be issued by the Trust (collectively, the "Preferred Security Holders") of a Preferred Security Certificate for such Preferred Security and the payment for such Preferred Security, in accordance with the Trust Agreement and the Registration Statement, and (vii) that the Preferred Securities are issued and sold to the Preferred Security Holders in accordance with the Trust Agreement and the Registration Statement. We have not participated in the preparation of the Registration Statement and assume no responsibility for its contents. This opinion is limited to the laws of the State of Delaware (excluding the securities laws of the State of Delaware), and we have not considered and express no opinion on the laws of any other jurisdiction, including federal laws and rules and regulations relating thereto. Our opinions are rendered only with respect to Delaware laws and rules, regulations and orders thereunder which are currently in effect. Based upon the foregoing, and upon our examination of such questions of law and statutes of the State of Delaware as we have considered necessary or appropriate, and subject to the assumptions, qualifications, limitations and exceptions set forth herein, we are of the opinion that: 1. The Trust has been duly created and is validly existing in good standing as a business trust under the Delaware Business Trust Act. 2 2. The Preferred Securities will represent valid and, subject to the qualifications set forth in paragraph 3 below, fully paid and nonassessable undivided beneficial interests in the assets of the Trust. 3. The Preferred Security Holders, as beneficial owners of the Trust, will be 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. We note that the Preferred Security Holders may be obligated to make payments as set forth in the Trust Agreement. We consent to the filing of this opinion with the Securities and Exchange Commission as an exhibit to the Registration Statement. In addition, we hereby consent to the use of our name under the heading "Validity of the Securities" in the Prospectus and "Validity of the Securities" in the Prospectus Supplement. In giving the foregoing consents, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder. Except as stated above, without our prior written consent, this opinion may not be furnished or quoted to, or relied upon by, any other person for any purpose. Very truly yours, /s/ Richards, Layton & Finger 3 EX-5.C.2 17 dex5c2.txt OPINION OF RICHARDS, LAYTON & FINGER PA, TRST. IV Exhibit 5-C-2 RICHARDS, LAYTON & FINGER, P.A. One Rodney Square Wilmington, Delaware 19899 April 12, 2001 Duke Energy Capital Trust IV c/o Duke Energy Corporation 526 South Church Street Charlotte, North Carolina 28202 Re: Duke Energy Capital Trust IV Ladies and Gentlemen: We have acted as special Delaware counsel for Duke Energy Corporation, a North Carolina corporation (the "Company"), and Duke Energy Capital Trust IV, a Delaware business trust (the "Trust"), in connection with the matters set forth herein. At your request, this opinion is being furnished to you. For purposes of giving the opinions hereinafter set forth, our examination of documents has been limited to the examination of originals or copies of the following: (a) The Certificate of Trust of the Trust, dated May 13, 1999 as filed with the office of the Secretary of State of the State of Delaware (the "Secretary of State") on May 13, 1999; (b) The Trust Agreement of the Trust, dated as of May 13, 1999 between the Company, as Depositor, and the trustee of the Trust named therein; (c) The Registration Statement (the "Registration Statement") on Form S-3, including a preliminary prospectus (the "Prospectus") and a preliminary prospectus supplement (the "Prospectus Supplement"), relating to the % Trust Preferred Securities of the Trust representing preferred undivided beneficial interests in the assets of the Trust (each, a "Preferred Security" and collectively, the "Preferred Securities"), filed by the Company, the Trust and others as set forth therein with the Securities and Exchange Commission on or about April 12, 2001; (d) A form of Amended and Restated Trust Agreement for the Trust, to be entered into between the Company, the trustees of the Trust named therein, and the holders, from time to time, of undivided beneficial interests in the assets of the Trust (including Exhibits C and E thereto) (the "Trust Agreement"), attached as an exhibit to the Registration Statement; and (e) A Certificate of Good Standing for the Trust, dated April 12, 2001, obtained from the Secretary of State. Initially capitalized terms used herein and not otherwise defined are used as defined in the Trust Agreement. For purposes of this opinion, we have not reviewed any documents other than the documents listed in paragraphs (a) through (e) above. In particular, we have not reviewed any document (other than the documents listed in paragraphs (a) through (e) above) that is referred to in or incorporated by reference into the documents reviewed by us. We have assumed that there exists no provision in any document that we have not reviewed that is inconsistent with the opinions stated herein. We have conducted no independent factual investigation of our own but rather have relied solely upon the foregoing documents, the statements and information set forth therein and the additional matters recited or assumed herein, all of which we have assumed to be true, complete and accurate in all material respects. With respect to all documents examined by us, we have assumed (i) the authenticity of all documents submitted to us as authentic originals, (ii) the conformity with the originals of all documents submitted to us as copies or forms, and (iii) the genuineness of all signatures. For purposes of this opinion, we have assumed (i) that the Trust Agreement and the Certificate of Trust are in full force and effect and have not been amended, (ii) except to the extent provided in paragraph 1 below, the due creation, due organization or due formation, as the case may be, and valid existence in good standing of each party to the documents examined by us under the laws of the jurisdiction governing its creation, organization or formation, (iii) the legal capacity of natural persons who are parties to the documents examined by us, (iv) that each of the parties to the documents examined by us has the power and authority to execute and deliver, and to perform its obligations under, such documents, (v) the due authorization, execution and delivery by all parties thereto of all documents examined by us, (vi) the receipt by each Person to whom a Preferred Security is to be issued by the Trust (collectively, the "Preferred Security Holders") of a Preferred Security Certificate for such Preferred Security and the payment for such Preferred Security, in accordance with the Trust Agreement and the Registration Statement, and (vii) that the Preferred Securities are issued and sold to the Preferred Security Holders in accordance with the Trust Agreement and the Registration Statement. We have not participated in the preparation of the Registration Statement and assume no responsibility for its contents. This opinion is limited to the laws of the State of Delaware (excluding the securities laws of the State of Delaware), and we have not considered and express no opinion on the laws of any other jurisdiction, including federal laws and rules and regulations relating thereto. Our opinions are rendered only with respect to Delaware laws and rules, regulations and orders thereunder which are currently in effect. Based upon the foregoing, and upon our examination of such questions of law and statutes of the State of Delaware as we have considered necessary or appropriate, and subject to the assumptions, qualifications, limitations and exceptions set forth herein, we are of the opinion that: 1. The Trust has been duly created and is validly existing in good standing as a business trust under the Delaware Business Trust Act. 2 2. The Preferred Securities will represent valid and, subject to the qualifications set forth in paragraph 3 below, fully paid and nonassessable undivided beneficial interests in the assets of the Trust. 3. The Preferred Security Holders, as beneficial owners of the Trust, will be 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. We note that the Preferred Security Holders may be obligated to make payments as set forth in the Trust Agreement. We consent to the filing of this opinion with the Securities and Exchange Commission as an exhibit to the Registration Statement. In addition, we hereby consent to the use of our name under the heading "Validity of the Securities" in the Prospectus and "Validity of the Securities" in the Prospectus Supplement. In giving the foregoing consents, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder. Except as stated above, without our prior written consent, this opinion may not be furnished or quoted to, or relied upon by, any other person for any purpose. Very truly yours, /s/ Richards, Layton & Finger 3 EX-5.C.3 18 dex5c3.txt OPINION OF RICHARDS, LAYTON & FINGER PA, TRST. V Exhibit 5-C-3 RICHARDS, LAYTON & FINGER, P.A. One Rodney Square Wilmington, Delaware 19899 April 12, 2001 Duke Energy Capital Trust V c/o Duke Energy Corporation 526 South Church Street Charlotte, North Carolina 28202 Re: Duke Energy Capital Trust V Ladies and Gentlemen: We have acted as special Delaware counsel for Duke Energy Corporation, a North Carolina corporation (the "Company"), and Duke Energy Capital Trust V, a Delaware business trust (the "Trust"), in connection with the matters set forth herein. At your request, this opinion is being furnished to you. For purposes of giving the opinions hereinafter set forth, our examination of documents has been limited to the examination of originals or copies of the following: (a) The Certificate of Trust of the Trust, dated February 9, 2000 as filed with the office of the Secretary of State of the State of Delaware (the "Secretary of State") on February 9, 2000; (b) The Trust Agreement of the Trust, dated as of February 9, 2000 between the Company, as Depositor, and the trustee of the Trust named therein; (c) The Registration Statement (the "Registration Statement") on Form S-3, including a preliminary prospectus (the "Prospectus") and a preliminary prospectus supplement (the "Prospectus Supplement"), relating to the % Trust Preferred Securities of the Trust representing preferred undivided beneficial interests in the assets of the Trust (each, a "Preferred Security" and collectively, the "Preferred Securities"), filed by the Company, the Trust and others as set forth therein with the Securities and Exchange Commission on or about April 12, 2001; (d) A form of Amended and Restated Trust Agreement for the Trust, to be entered into between the Company, the trustees of the Trust named therein, and the holders, from time to time, of undivided beneficial interests in the assets of the Trust (including Exhibits C and E thereto) (the "Trust Agreement"), attached as an exhibit to the Registration Statement; and (e) A Certificate of Good Standing for the Trust, dated April 12, 2001, obtained from the Secretary of State. Initially capitalized terms used herein and not otherwise defined are used as defined in the Trust Agreement. For purposes of this opinion, we have not reviewed any documents other than the documents listed in paragraphs (a) through (e) above. In particular, we have not reviewed any document (other than the documents listed in paragraphs (a) through (e) above) that is referred to in or incorporated by reference into the documents reviewed by us. We have assumed that there exists no provision in any document that we have not reviewed that is inconsistent with the opinions stated herein. We have conducted no independent factual investigation of our own but rather have relied solely upon the foregoing documents, the statements and information set forth therein and the additional matters recited or assumed herein, all of which we have assumed to be true, complete and accurate in all material respects. With respect to all documents examined by us, we have assumed (i) the authenticity of all documents submitted to us as authentic originals, (ii) the conformity with the originals of all documents submitted to us as copies or forms, and (iii) the genuineness of all signatures. For purposes of this opinion, we have assumed (i) that the Trust Agreement and the Certificate of Trust are in full force and effect and have not been amended, (ii) except to the extent provided in paragraph 1 below, the due creation, due organization or due formation, as the case may be, and valid existence in good standing of each party to the documents examined by us under the laws of the jurisdiction governing its creation, organization or formation, (iii) the legal capacity of natural persons who are parties to the documents examined by us, (iv) that each of the parties to the documents examined by us has the power and authority to execute and deliver, and to perform its obligations under, such documents, (v) the due authorization, execution and delivery by all parties thereto of all documents examined by us, (vi) the receipt by each Person to whom a Preferred Security is to be issued by the Trust (collectively, the "Preferred Security Holders") of a Preferred Security Certificate for such Preferred Security and the payment for such Preferred Security, in accordance with the Trust Agreement and the Registration Statement, and (vii) that the Preferred Securities are issued and sold to the Preferred Security Holders in accordance with the Trust Agreement and the Registration Statement. We have not participated in the preparation of the Registration Statement and assume no responsibility for its contents. This opinion is limited to the laws of the State of Delaware (excluding the securities laws of the State of Delaware), and we have not considered and express no opinion on the laws of any other jurisdiction, including federal laws and rules and regulations relating thereto. Our opinions are rendered only with respect to Delaware laws and rules, regulations and orders thereunder which are currently in effect. Based upon the foregoing, and upon our examination of such questions of law and statutes of the State of Delaware as we have considered necessary or appropriate, and subject to the assumptions, qualifications, limitations and exceptions set forth herein, we are of the opinion that: 1. The Trust has been duly created and is validly existing in good standing as a business trust under the Delaware Business Trust Act. 2 2. The Preferred Securities will represent valid and, subject to the qualifications set forth in paragraph 3 below, fully paid and nonassessable undivided beneficial interests in the assets of the Trust. 3. The Preferred Security Holders, as beneficial owners of the Trust, will be 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. We note that the Preferred Security Holders may be obligated to make payments as set forth in the Trust Agreement. We consent to the filing of this opinion with the Securities and Exchange Commission as an exhibit to the Registration Statement. In addition, we hereby consent to the use of our name under the heading "Validity of the Securities" in the Prospectus and "Validity of the Securities" in the Prospectus Supplement. In giving the foregoing consents, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder. Except as stated above, without our prior written consent, this opinion may not be furnished or quoted to, or relied upon by, any other person for any purpose. Very truly yours, /s/ Richards, Layton & Finger 3 EX-8 19 dex8.txt TAX OPINION OF DEWEY BALLANTINE LLP Exhibit 8 Dewey Ballantine LLP 1301 Avenue of the Americas New York, New York 10019 April 12, 2001 Duke Energy Corporation 526 South Church Street Charlotte, North Carolina 28202 Re: Registration Statement on Form S-3 Gentlemen: We have acted as counsel to Duke Energy Corporation ("Duke"), Duke Energy Capital Trust III, Duke Energy Capital Trust IV and Duke Energy Capital Trust V (the "Trusts") in connection with the preparation of a Registration Statement on Form S-3, including a preliminary prospectus and preliminary prospectus supplement, being filed today with the Securities and Exchange Commission (the "Commission") for the registration under the Securities Act of 1933 (the "Securities Act"), of, among other securities, (1) Junior Subordinated Notes (the "Junior Subordinated Notes") to be issued by Duke to the Trusts, (2) Trust Preferred Securities (liquidation amount $ per Preferred Security) to be issued by the Trusts and (3) Duke's Guarantees (as defined in the Registration Statement) with respect to such Trust Preferred Securities. The Trusts will be organized pursuant to an amended and restated trust agreement between Duke and the trustees named therein. The Junior Subordinated Notes will be issued pursuant to the Subordinated Indenture, as supplemented, dated as of December 1, 1997, between Duke and the trustee named therein and the Guarantees will be issued pursuant to guarantee agreements between Duke and the trustee named therein, in the form filed as an exhibit to the Registration Statement. On the basis and subject to the accuracy of the statements contained in the materials referred to above, and our consideration of such other matters as we have deemed necessary, it is our opinion that under current law the material federal income tax consequences to holders of Trust Preferred Securities issued by the Trusts will be as described under the heading "Material Federal Income Tax Considerations" in the preliminary prospectus supplement constituting part of the Registration Statement. You have not requested, and we do not express, an opinion concerning any other tax consequences of the issuance by the Trusts of the Trust Preferred Securities. This opinion is not to be used, circulated, quoted or otherwise referred to for any purpose without our express written permission. We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement and to the statements with respect to our firm in the section captioned "Material Federal Income Tax Considerations" in the preliminary prospectus supplement constituting part of the Registration Statement. In giving the foregoing consent, we do not thereby admit, and we hereby expressly disclaim, that we come within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder. Very truly yours, /s/ Dewey Ballantine LLP 2 EX-12 20 dex12.txt COMPUT. OF RATIO OF EARNINGS TO FIXED CHARGES Exhibit 12 DUKE ENERGY CORPORATION COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Year Ended December 31, -------------------------------------------------- 2000 1999 1998 1997(a) 1996(a) -------- -------- -------- -------- -------- Earnings Before Income Taxes..... $2,796 $1,300 $2,037 $1,613 $1,789 Fixed Charges.................... 997 671 555 520 540 ------ ------ ------ ------ ------ Total........................ $3,793 $1,971 $2,592 $2,133 $2,329 ====== ====== ====== ====== ====== Fixed Charges Interest on debt............... $ 970 $ 645 $ 533 $ 497 $ 514 Interest component of rentals.. 27 26 22 23 26 ------ ------ ------ ------ ------ Fixed Charges................ $ 997 $ 671 $ 555 $ 520 $ 540 ====== ====== ====== ====== ====== Ratio of Earnings to Fixed Charges......................... 3.8 2.9 4.7 4.1 4.3
- -------- (a) Financial information reflects accounting for the combination with PanEnergy Corp on June 18, 1997 as a pooling of interests. As a result, the financial information gives effect to the combination as if it had occurred on January 1, 1996. EX-23.A 21 dex23a.txt CONSENT OF INDEPENDENT AUDITORS Exhibit 23-A INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Duke Energy Corporation on Form S-3 of our reports dated January 18, 2001, appearing in the Annual Report on Form 10-K of Duke Energy Corporation for the year ended December 31, 2000 and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. /s/ Deloitte & Touche LLP - ------------------------- Deloitte & Touche LLP Charlotte, North Carolina April 12, 2001 EX-24.A 22 dex24a.txt POWER OF ATTORNEY OF CERTAIN OFFICERS AND DIRS. Exhibit 24-A DUKE ENERGY CORPORATION POWER OF ATTORNEY ----------------- A maximum of $2,000,000,000 aggregate public offering price of Debt Securities, First and Refunding Mortgage Bonds, Common Stock, without par value, Stock Purchase Contracts and/or Stock Purchase Units, and/or Trust Preferred Securities or Capital Securities (Securities) The undersigned DUKE ENERGY CORPORATION, a North Carolina corporation, and certain of its officers and/or directors, do each hereby constitute and appoint Richard B. Priory, Robert P. Brace, David L. Hauser, Myron L. Caldwell and Robert T. Lucas III, and each of them, to act as attorneys-in-fact for and in the respective names, places and stead of the undersigned, to execute, seal, sign, and file with the Securities and Exchange Commission a Registration Statement or Registration Statements of said Duke Energy Corporation on Form S-3 and any and all amendments thereto for the purpose of registering under the Securities Act of 1933 the Securities, hereby granting to said attorneys-in- fact, and each of them, full power and authority to do and perform all and every act and thing whatsoever requisite, necessary, or proper to be done in and about the premises, as fully to all intents and purposes as the undersigned, or any of them, might or could do if personally present, hereby ratifying and approving the acts of said attorneys-in-fact. Executed the 20th day of December, 2000. DUKE ENERGY CORPORATION By /s/ R. B. Priory ---------------------------- Chairman, President and Chief Executive Officer (Corporate Seal) ATTEST: /s/ Robert T. Lucas III - -------------------------- Assistant Secretary /s/ R. B. PRIORY Chairman, President and Chief Executive Officer ------------------------ (Principal Executive Officer and Director) R. B. Priory /s/ ROBERT P. BRACE Executive Vice President and Chief Financial ------------------------ Officer (Principal Financial Officer) Robert P. Brace /s/ SANDRA P. MEYER Senior Vice President and Corporate Controller ------------------------ (Principal Accounting Officer) Sandra P. Meyer /s/ G. ALEX BERNHARDT, SR. (Director) ------------------------ G. Alex Bernhardt, Sr. /s/ WILLIAM A. COLEY (Director) ------------------------ William A. Coley /s/ WILLIAM T. ESREY (Director) ------------------------ William T. Esrey /s/ ANN M. GRAY (Director) ------------------------ Ann M. Gray /s/ DENNIS R. HENDRIX (Director) ------------------------ Dennis R. Hendrix /s/ HAROLD S. HOOK (Director) ------------------------ Harold S. Hook /s/ GEORGE D. JOHNSON, JR. (Director) ------------------------ George D. Johnson, Jr. /s/ MAX LENNON (Director) ------------------------ Max Lennon /s/ LEO E. LINBECK, JR. (Director) ------------------------ Leo E. Linbeck, Jr. /s/ JAMES G. MARTIN (Director) ------------------------ James G. Martin EX-24.B 23 dex24b.txt RESOL. OF DUKE ENERGY CORP, POWER OF ATTORNEY Exhibit 24-B DUKE ENERGY CORPORATION CERTIFICATE The undersigned officer of DUKE ENERGY CORPORATION, a North Carolina corporation (the "Corporation"), does hereby certify that attached hereto is a true and complete copy of a resolution adopted by the Board of Directors of the Corporation with respect to the Registration Statement, which resolution is presently in full force and effect. IN WITNESS WHEREOF, the undersigned has hereunto set his hand and affixed the seal of the Corporation this 12th day of April, 2001. /s/ Robert T. Lucas III ---------------------------- Robert T. Lucas III Assistant Secretary (Corporate Seal) FURTHER RESOLVED, That each officer and director who may be required to execute such Registration Statement or any amendment thereto (whether on behalf of the Corporation or as an officer or director thereof or by attesting the seal of the Corporation or otherwise) be and hereby is authorized to execute a power of attorney appointing Richard B. Priory, Robert P. Brace, David L. Hauser, Myron L. Caldwell and Robert T. Lucas III, and each of them, as true and lawful attorneys and agents to execute in his name, place and stead (in any such capacity) such Registration Statement and any and all amendments thereto and all instruments necessary or advisable in connection therewith, to attest the seal of the Corporation thereon and to file the same with the Securities and Exchange Commission, each of said attorneys and agents to have power to act with or without the others and to have full power and authority to do and perform in the name and on behalf of each of such officers and directors, or both, as the case may be, every act whatsoever necessary or advisable to be done in the premises as fully and to all intents and purposes as any such officer or director might or could do in person; EX-25.A 24 dex25a.txt STATEMENT OF ELIGIBILITY, SR. INDENT. TRUSTEE Exhibit 25-A ________________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________ FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ________________________________________ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ________________________________________ THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification no.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) ____________________________________________ DUKE ENERGY CORPORATION (Exact name of obligor as specified in its charter) NORTH CAROLINA 56-0205520 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 526 SOUTH CHURCH STREET CHARLOTTE, NORTH CAROLINA 28202 (Address of principal executive offices) (Zip Code) -------------------------------------------------- Senior Notes (Title of the indenture securities) -------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, Suite 2310, 5 Empire State Plaza, Albany, New York 12223. Board of Governors of the Federal Reserve System, 20th and C Street, NW, Washington, D.C. 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. 10045. Federal Deposit Insurance Corporation, 550 Seventeenth Street, NW, Washington, D.C. 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76439, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33- 50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 30th day of March 2001. THE CHASE MANHATTAN BANK By /s/ N. Rodriguez ----------------------- N. Rodriguez Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 2000, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin................................................... $ 22,648 Interest-bearing balances............................................ 6,608 Securities: Held to maturity securities............................................ 556 Available for sale securities.......................................... 66,556 Federal funds sold and securities purchased under agreements to resell................................................. 35,508 Loans and lease financing receivables: Loans and leases, net of unearned income........$158,034 Less: Allowance for loan and lease losses....... 2,399 Less: Allocated transfer risk reserve........... 0 -------- Loans and leases, net of unearned income, allowance and reserve................................................ 155,635 Trading assets......................................................... 59,802 Premises and fixed assets (including capitalized leases).............................................................. 4,398 Other real estate owned................................................ 20 Investments in unconsolidated subsidiaries and associated companies................................................. 338 Customers' liability to this bank on acceptances outstanding.......................................................... 367 Intangible assets...................................................... 4,794 Other assets........................................................... 19,886 -------- TOTAL ASSETS........................................................... $377,116 ========
-4- LIABILITIES
Deposits: In domestic offices............................................ $132,165 Noninterest-bearing........................$54,608 Interest-bearing........................... 77,557 ------ In foreign offices, Edge and Agreement subsidiaries and IBF's......................................... 106,670 Noninterest-bearing .......................$ 6,059 Interest-bearing .......................... 100,611 Federal funds purchased and securities sold under agreements to repurchase....................................... 45,967 Demand notes issued to the U.S. Treasury......................... 500 Trading liabilities.............................................. 41,384 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less.................. 6,722 With a remaining maturity of more than one year through three years....................................... 0 With a remaining maturity of more than three years............. 276 Bank's liability on acceptances executed and outstanding ........ 367 Subordinated notes and debentures................................ 6,349 Other liabilities................................................ 14,515 TOTAL LIABILITIES................................................ 354,915 -------- EQUITY CAPITAL Perpetual preferred stock and related surplus.................... 0 Common stock..................................................... 1,211 Surplus (exclude all surplus related to preferred stock)......... 12,614 Undivided profits and capital reserves........................... 8,658 Net unrealized holding gains (losses) on available-for-sale securities............................... (298) Accumulated net gains (losses) on cash flow hedges............... 0 Cumulative foreign currency translation adjustments.............. 16 TOTAL EQUITY CAPITAL............................................. 22,201 -------- TOTAL LIABILITIES AND EQUITY CAPITAL............................. $377,116 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true and correct. DOUGLAS A.WARNER III ) WILLIAM B. HARRISON, JR.) DIRECTORS ELLEN V. FUTTER ) -5- EX-25.B 25 dex25b.txt STATEMENT OF ELIGIBILITY, SUB INDENT. TRUSTEE Exhibit 25-B - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) -------- ---------------------------------------- THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) New York 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification no.) 270 Park Avenue New York, New York 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) -------------------------------------------- Duke Energy Corporation (Exact name of obligor as specified in its charter) North Carolina 56-0205520 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 526 South Church Street Charlotte, North Carolina 28202 (Address of principal executive offices) (Zip Code) ----------------------------------------------- Junior Subordinated Notes (Title of the indenture securities) -------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, Suite 2310, 5 Empire State Plaza, Albany, New York 12223. Board of Governors of the Federal Reserve System, 20th and C Street, NW, Washington, D.C. 20551. Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. 10045. Federal Deposit Insurance Corporation, 550 Seventeenth Street, NW, Washington, D.C. 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. - 2 - Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76439, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 30th day of March 2001. THE CHASE MANHATTAN BANK By /s/ N. Rodriguez ---------------------- N. Rodriguez Assistant Vice President - 3 - Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 2000, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS in Millions Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.................................... $22,648 Interest-bearing balances.............................. 6,608 Securities: Held to maturity securities.............................. 556 Available for sale securities............................ 66,556 Federal funds sold and securities purchased under agreements to resell................................... 35,508 Loans and lease financing receivables: Loans and leases, net of unearned income. $158,034 Less: Allowance for loan and lease losses 2,399 Less: Allocated transfer risk reserve.... 0 -------- Loans and leases, net of unearned income, allowance, and reserve............................... 155,635 Trading assets........................................... 59,802 Premises and fixed assets (including capitalized leases)................................................ 4,398 Other real estate owned.................................. 20 Investments in unconsolidated subsidiaries and associated companies................................... 338 Customers' liability to this bank on acceptances outstanding............................................ 367 Intangible assets........................................ 4,794 Other assets............................................. 19,886 -------- TOTAL ASSETS............................................. $377,116 ======== - 4 - LIABILITIES
Deposits: In domestic offices............................................ $132,165 Noninterest-bearing........................$ 54,608 Interest-bearing........................... 77,557 ------- In foreign offices, Edge and Agreement subsidiaries and IBF's......................................... 106,670 Noninterest-bearing .......................$ 6,059 Interest-bearing .......................... 100,611 Federal funds purchased and securities sold under agreements to repurchase....................................... 45,967 Demand notes issued to the U.S. Treasury......................... 500 Trading liabilities.............................................. 41,384 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less.................. 6,722 With a remaining maturity of more than one year through three years....................................... 0 With a remaining maturity of more than three years............. 276 Bank's liability on acceptances executed and outstanding ........ 367 Subordinated notes and debentures................................ 6,349 Other liabilities................................................ 14,515 TOTAL LIABILITIES................................................ 354,915 -------- EQUITY CAPITAL Perpetual preferred stock and related surplus.................... 0 Common stock..................................................... 1,211 Surplus (exclude all surplus related to preferred stock)......... 12,614 Undivided profits and capital reserves........................... 8,658 Net unrealized holding gains (losses) on available-for-sale securities............................... (298) Accumulated net gains (losses) on cash flow hedges............... 0 Cumulative foreign currency translation adjustments.............. 16 TOTAL EQUITY CAPITAL............................................. 22,201 -------- TOTAL LIABILITIES AND EQUITY CAPITAL............................. $377,116 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true and correct. DOUGLAS A.WARNER III ) WILLIAM B. HARRISON, JR.) DIRECTORS ELLEN V. FUTTER ) -5- EX-25.C 26 dex25c.txt STATEMENT OF ELIGIBILITY, BOND TRUSTEE Exhibit 25-C ________________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________ FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ___________________________________________ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ________________________________________ THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification no.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) ____________________________________________ Duke Energy Corporation (Exact name of obligor as specified in its charter) NORTH CAROLINA 56-0205520 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 526 SOUTH CHURCH STREET CHARLOTTE, NORTH CAROLINA 28202 (Address of principal executive offices) (Zip Code) ------------------------------------------------ First and Refunding Mortgage Bonds (Title of the indenture securities) ------------------------------------------------ GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, Suite 2310, 5 Empire State Plaza, Albany, New York 12223. Board of Governors of the Federal Reserve System, 20th and C Street, NW, Washington, D.C. 20551. Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. 10045. Federal Deposit Insurance Corporation, 550 Seventeenth Street, NW, Washington, D.C. 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76439, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33- 50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 30th day of March 2001. THE CHASE MANHATTAN BANK By /s/ N. Rodriguez -------------------- N. Rodriguez Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 2000, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin................................................... $ 22,648 Interest-bearing balances............................................ 6,608 Securities: Held to maturity securities............................................ 556 Available for sale securities.......................................... 66,556 Federal funds sold and securities purchased under agreements to resell................................................. 35,508 Loans and lease financing receivables: Loans and leases, net of unearned income........$158,034 Less: Allowance for loan and lease losses....... 2,399 Less: Allocated transfer risk reserve........... 0 -------- Loans and leases, net of unearned income, allowance and reserve................................................ 155,635 Trading assets......................................................... 59,802 Premises and fixed assets (including capitalized leases).............................................................. 4,398 Other real estate owned................................................ 20 Investments in unconsolidated subsidiaries and associated companies................................................. 338 Customers' liability to this bank on acceptances outstanding.......................................................... 367 Intangible assets...................................................... 4,794 Other assets........................................................... 19,886 -------- TOTAL ASSETS........................................................... $377,116 ========
-4- LIABILITIES
Deposits: In domestic offices............................................ $132,165 Noninterest-bearing........................$ 54,608 Interest-bearing........................... 77,557 ------- In foreign offices, Edge and Agreement subsidiaries and IBF's......................................... 106,670 Noninterest-bearing .......................$ 6,059 Interest-bearing .......................... 100,611 Federal funds purchased and securities sold under agreements to repurchase....................................... 45,967 Demand notes issued to the U.S. Treasury......................... 500 Trading liabilities.............................................. 41,384 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less.................. 6,722 With a remaining maturity of more than one year through three years....................................... 0 With a remaining maturity of more than three years............. 276 Bank's liability on acceptances executed and outstanding ........ 367 Subordinated notes and debentures................................ 6,349 Other liabilities................................................ 14,515 TOTAL LIABILITIES................................................ 354,915 -------- EQUITY CAPITAL Perpetual preferred stock and related surplus.................... 0 Common stock..................................................... 1,211 Surplus (exclude all surplus related to preferred stock)......... 12,614 Undivided profits and capital reserves........................... 8,658 Net unrealized holding gains (losses) on available-for-sale securities............................... (298) Accumulated net gains (losses) on cash flow hedges............... 0 Cumulative foreign currency translation adjustments.............. 16 TOTAL EQUITY CAPITAL............................................. 22,201 -------- TOTAL LIABILITIES AND EQUITY CAPITAL............................. $377,116 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true and correct. DOUGLAS A.WARNER III ) WILLIAM B. HARRISON, JR.) DIRECTORS ELLEN V. FUTTER ) -5- EX-25.D.1 27 dex25d1.txt STATMT. OF ELIGI., PROP. TRUSTEE, CAP. TRST. III Exhibit 25-D-1 ----------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ---------------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ------- ---------------------------------------------------- THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) New York 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification no.) 270 Park Avenue New York, New York 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) ----------------------------------------------------------- Duke Energy Capital Trust III (Exact name of obligor as specified in its charter) North Carolina 52-2171524 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 526 South Church Street Charlotte, North Carolina 28202 (Address of principal executive offices) (Zip Code) ---------------------------------------------- Trust Preferred Securities (Title of the indenture securities) --------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Suite 2310, 5 Empire State Plaza, Albany, New York 12223. Board of Governors of the Federal Reserve System, 20th and C Street, NW, Washington, D.C. 20551. Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. 10045. Federal Deposit Insurance Corporation, 550 Seventeenth Street, NW, Washington, D.C. 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. - 2 - Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76439, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33- 50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 30th day of March 2001. THE CHASE MANHATTAN BANK By /s/ N. Rodriguez ------------------------- N. Rodriguez Assistant Vice President - 3 - Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 2000, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.................................................. $ 22,648 Interest-bearing balances............................................ 6,608 Securities: Held to maturity securities............................................ 556 Available for sale securities.......................................... 66,556 Federal funds sold and securities purchased under agreements to resell................................................. 35,508 Loans and lease financing receivables: Loans and leases, net of unearned income........$158,034 Less: Allowance for loan and lease losses....... 2,399 Less: Allocated transfer risk reserve........... 0 -------- Loans and leases, net of unearned income, allowance and reserve.............................................. 155,635 Trading assets......................................................... 59,802 Premises and fixed assets (including capitalized leases).............................................................. 4,398 Other real estate owned................................................ 20 Investments in unconsolidated subsidiaries and associated companies................................................. 338 Customers' liability to this bank on acceptances outstanding.......................................................... 367 Intangible assets...................................................... 4,794 Other assets........................................................... 19,886 -------- TOTAL ASSETS........................................................... $377,116 ========
-4- LIABILITIES
Deposits: In domestic offices............................................ $132,165 Noninterest-bearing........................$ 54,608 Interest-bearing........................... 77,557 ------- In foreign offices, Edge and Agreement subsidiaries and IBF's......................................... 106,670 Noninterest-bearing .......................$ 6,059 Interest-bearing .......................... 100,611 Federal funds purchased and securities sold under agreements to repurchase....................................... 45,967 Demand notes issued to the U.S. Treasury......................... 500 Trading liabilities.............................................. 41,384 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less.................. 6,722 With a remaining maturity of more than one year through three years.......................................... 0 With a remaining maturity of more than three years............. 276 Bank's liability on acceptances executed and outstanding ........ 367 Subordinated notes and debentures................................ 6,349 Other liabilities................................................ 14,515 TOTAL LIABILITIES................................................ 354,915 -------- EQUITY CAPITAL Perpetual preferred stock and related surplus.................... 0 Common stock..................................................... 1,211 Surplus (exclude all surplus related to preferred stock)......... 12,614 Undivided profits and capital reserves........................... 8,658 Net unrealized holding gains (losses) on available-for-sale securities............................... (298) Accumulated net gains (losses) on cash flow hedges............... 0 Cumulative foreign currency translation adjustments.............. 16 TOTAL EQUITY CAPITAL............................................. 22,201 -------- TOTAL LIABILITIES AND EQUITY CAPITAL............................. $377,116 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true and correct. DOUGLAS A.WARNER III ) WILLIAM B. HARRISON, JR.) DIRECTORS ELLEN V. FUTTER ) -5- EX-25.D.2 28 dex25d2.txt STATMT. OF ELIGI., PROP. TRUSTEE, CAPITAL TRUST IV Exhibit 25-D-2 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ---------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ------- ---------------------------------------------- THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) New York 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification no.) 270 Park Avenue New York, New York 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) ------------------------------------------------------- Duke Energy Capital Trust IV (Exact name of obligor as specified in its charter) North Carolina 52-2171526 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 526 South Church Street Charlotte, North Carolina 28202 (Address of principal executive offices) (Zip Code) ------------------------------------------------------- Trust Preferred Securities (Title of the indenture securities) ----------------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, Suite 2310, 5 Empire State Plaza, Albany, New York 12223. Board of Governors of the Federal Reserve System, 20th and C Street, NW, Washington, D.C. 20551. Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. 10045. Federal Deposit Insurance Corporation, 550 Seventeenth Street, NW, Washington, D.C. 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. - 2 - Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76439, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33- 50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 30th Day of March 2001. THE CHASE MANHATTAN BANK By /s/ N. Rodriguez --------------------- N. Rodriguez Assistant Vice President - 3 - Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 2000, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.................................................. $ 22,648 Interest-bearing balances............................................ 6,608 Securities: Held to maturity securities............................................ 556 Available for sale securities.......................................... 66,556 Federal funds sold and securities purchased under agreements to resell................................................. 35,508 Loans and lease financing receivables: Loans and leases, net of unearned income........$158,034 Less: Allowance for loan and lease losses....... 2,399 Less: Allocated transfer risk reserve........... 0 -------- Loans and leases, net of unearned income, allowance and reserve................................................ 155,635 Trading assets......................................................... 59,802 Premises and fixed assets (including capitalized leases).............................................................. 4,398 Other real estate owned................................................ 20 Investments in unconsolidated subsidiaries and associated companies................................................. 338 Customers' liability to this bank on acceptances outstanding.......................................................... 367 Intangible assets...................................................... 4,794 Other assets........................................................... 19,886 -------- TOTAL ASSETS........................................................... $377,116 ========
-4- LIABILITIES Deposits: In domestic offices...................................... $132,165 Noninterest-bearing..........................$ 54,608 Interest-bearing............................. 77,557 ------- In foreign offices, Edge and Agreement subsidiaries and IBF's................................... 106,670 Noninterest-bearing .........................$ 6,059 Interest-bearing............................. 100,611 Federal funds purchased and securities sold under agreements to repurchase.................................. 45,967 Demand notes issued to the U.S. Treasury................... 500 Trading liabilities........................................ 41,384 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less............ 6,722 With a remaining maturity of more than one year through three years.................................... 0 With a remaining maturity of more than three years....... 276 Bank's liability on acceptances executed and outstanding... 367 Subordinated notes and debentures.......................... 6,349 Other liabilities.......................................... 14,515 TOTAL LIABILITIES.......................................... 354,915 EQUITY CAPITAL Perpetual preferred stock and related surplus.............. 0 Common stock............................................... 1,211 Surplus (exclude all surplus related to preferred stock).. 12,614 Undivided profits and capital reserves..................... 8,658 Net unrealized holding gains (losses) on available-for-sale securities......................... (298) Accumulated net gains (losses) on cash flow hedges........ 0 Cumulative foreign currency translation adjustments........ 16 TOTAL EQUITY CAPITAL....................................... 22,201 -------- TOTAL LIABILITIES AND EQUITY CAPITAL....................... $377,116 ======== I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the in-structions issued by the appropriate federal regulatory authority and is true and correct. DOUGLAS A. WARNER III ) WILLIAM B. HARRISON JR. ) DIRECTORS ELLEN V. FUTTER ) -5- EX-25.D.3 29 dex25d3.txt STATMT. OF ELIGI., PROPERTY TRUSTEE, CAPITAL V Exhibit 25-D-3 ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------------ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---------- ------------------------------------------------- THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) New York 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification no.) 270 Park Avenue New York, New York 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) ----------------------------------------------- Duke Energy Capital Trust V (Exact name of obligor as specified in its charter) North Carolina 56-6575443 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 526 South Church Street Charlotte, North Carolina 28202 (Address of principal executive offices) (Zip Code) ---------------------------------------------- Trust Preferred Securities (Title of the indenture securities) --------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, Suite 2310, 5 Empire State Plaza, Albany, New York 12223. Board of Governors of the Federal Reserve System, 20th and C Street, NW, Washington, D.C. 20551. Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. 10045. Federal Deposit Insurance Corporation, 550 Seventeenth Street, NW, Washington, D.C. 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. - 2 - Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76439, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33- 50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 30th day of March 2001. THE CHASE MANHATTAN BANK By /s/ N. Rodriguez ------------------------- N. Rodriguez Assistant Vice President - 3 - Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 2000, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin................................................... $ 22,648 Interest-bearing balances............................................ 6,608 Securities: Held to maturity securities............................................ 556 Available for sale securities.......................................... 66,556 Federal funds sold and securities purchased under agreements to resell................................................. 35,508 Loans and lease financing receivables: Loans and leases, net of unearned income........$158,034 Less: Allowance for loan and lease losses....... 2,399 Less: Allocated transfer risk reserve........... 0 -------- Loans and leases, net of unearned income, allowance and reserve................................................ 155,635 Trading assets......................................................... 59,802 Premises and fixed assets (including capitalized leases).............................................................. 4,398 Other real estate owned................................................ 20 Investments in unconsolidated subsidiaries and associated companies................................................. 338 Customers' liability to this bank on acceptances outstanding.......................................................... 367 Intangible assets...................................................... 4,794 Other assets........................................................... 19,886 -------- TOTAL ASSETS........................................................... $377,116 ========
-4- LIABILITIES
Deposits: In domestic offices............................................ $132,165 Noninterest-bearing........................$ 54,608 Interest-bearing........................... 77,557 ------- In foreign offices, Edge and Agreement subsidiaries and IBF's......................................... 106,670 Noninterest-bearing .......................$ 6,059 Interest-bearing .......................... 100,611 Federal funds purchased and securities sold under agreements to repurchase....................................... 45,967 Demand notes issued to the U.S. Treasury......................... 500 Trading liabilities.............................................. 41,384 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less.................. 6,722 With a remaining maturity of more than one year through three years.......................................... 0 With a remaining maturity of more than three years............. 276 Bank's liability on acceptances executed and outstanding ........ 367 Subordinated notes and debentures................................ 6,349 Other liabilities................................................ 14,515 TOTAL LIABILITIES................................................ 354,915 -------- EQUITY CAPITAL Perpetual preferred stock and related surplus.................... 0 Common stock..................................................... 1,211 Surplus (exclude all surplus related to preferred stock)......... 12,614 Undivided profits and capital reserves........................... 8,658 Net unrealized holding gains (losses) on available-for-sale securities............................... (298) Accumulated net gains (losses) on cash flow hedges............... 0 Cumulative foreign currency translation adjustments.............. 16 TOTAL EQUITY CAPITAL............................................. 22,201 -------- TOTAL LIABILITIES AND EQUITY CAPITAL............................. $377,116 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true and correct. DOUGLAS A.WARNER III ) WILLIAM B. HARRISON, JR.) DIRECTORS ELLEN V. FUTTER ) -5- EX-25.E.1 30 dex25e1.txt STATMT. OF ELIGI., GUA. TRUSTEE, CAP. TRUST III Exhibit 25-E-1 ----------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ------- ----------------------------------------- THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) New York 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification no.) 270 Park Avenue New York, New York 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) ----------------------------------------------------------- Duke Energy Corporation (Exact name of obligor as specified in its charter) North Carolina 56-0205520 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 526 South Church Street Charlotte, North Carolina 28202 (Address of principal executive offices) (Zip Code) ---------------------------------------------- Guarantee Duke Energy Capital Trust III Trust Preferred Securities (Title of the indenture securities) --------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, Suite 2310, 5 Empire State Plaza, Albany, New York 12223. Board of Governors of the Federal Reserve System, 20th and C Street, NW, Washington, D.C. 20551. Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. 10045. Federal Deposit Insurance Corporation, 550 Seventeenth Street, NW, Washington, D.C. 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. - 2 - Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76439, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33- 50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 30th day of March 2001. THE CHASE MANHATTAN BANK By /s/ N. Rodriguez ----------------------- N. Rodriguez Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 2000, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin................................................... $ 22,648 Interest-bearing balances............................................ 6,608 Securities: Held to maturity securities............................................ 556 Available for sale securities.......................................... 66,556 Federal funds sold and securities purchased under agreements to resell................................................. 35,508 Loans and lease financing receivables: Loans and leases, net of unearned income........$158,034 Less: Allowance for loan and lease losses....... 2,399 Less: Allocated transfer risk reserve........... 0 -------- Loans and leases, net of unearned income, allowance and reserve................................................ 155,635 Trading assets......................................................... 59,802 Premises and fixed assets (including capitalized leases).............................................................. 4,398 Other real estate owned................................................ 20 Investments in unconsolidated subsidiaries and associated companies................................................. 338 Customers' liability to this bank on acceptances outstanding.......................................................... 367 Intangible assets...................................................... 4,794 Other assets........................................................... 19,886 -------- TOTAL ASSETS........................................................... $377,116 ========
-4- LIABILITIES
Deposits: In domestic offices............................................ $132,165 Noninterest-bearing........................$ 54,608 Interest-bearing........................... 77,557 ------- In foreign offices, Edge and Agreement subsidiaries and IBF's......................................... 106,670 Noninterest-bearing .......................$ 6,059 Interest-bearing .......................... 100,611 Federal funds purchased and securities sold under agreements to repurchase....................................... 45,967 Demand notes issued to the U.S. Treasury......................... 500 Trading liabilities.............................................. 41,384 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less.................. 6,722 With a remaining maturity of more than one year through three years....................................... 0 With a remaining maturity of more than three years............. 276 Bank's liability on acceptances executed and outstanding ........ 367 Subordinated notes and debentures................................ 6,349 Other liabilities................................................ 14,515 TOTAL LIABILITIES................................................ 354,915 -------- EQUITY CAPITAL Perpetual preferred stock and related surplus.................... 0 Common stock..................................................... 1,211 Surplus (exclude all surplus related to preferred stock)......... 12,614 Undivided profits and capital reserves........................... 8,658 Net unrealized holding gains (losses) on available-for-sale securities............................... (298) Accumulated net gains (losses) on cash flow hedges............... 0 Cumulative foreign currency translation adjustments.............. 16 TOTAL EQUITY CAPITAL............................................. 22,201 -------- TOTAL LIABILITIES AND EQUITY CAPITAL............................. $377,116 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true and correct. DOUGLAS A.WARNER III ) WILLIAM B. HARRISON, JR.) DIRECTORS ELLEN V. FUTTER ) -5- EX-25.E.2 31 dex25e2.txt STATMT OF ELIGI., GUA. TRUSTEE, CAP. TRUST IV Exhibit 25-E-2 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE -------------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ------ -------------------------------------------------- THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) New York 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification no.) 270 Park Avenue New York, New York 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) ------------------------------------------------------- Duke Energy Corporation (Exact name of obligor as specified in its charter) North Carolina 56-0205520 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 526 South Church Street Charlotte, North Carolina 28202 (Address of principal executive offices) (Zip Code) ------------------------------------------------------- Guarantee Duke Energy Capital Trust IV Trust Preferred Securities (Title of the indenture securities) ----------------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, Suite 2310, 5 Empire State Plaza, Albany, New York 12223. Board of Governors of the Federal Reserve System, 20th and C Street, NW, Washington, D.C. 20551. Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. 10045. Federal Deposit Insurance Corporation, 550 Seventeenth Street, NW, Washington, D.C. 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. - 2 - Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76439, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33- 50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 30th day of March 2001. THE CHASE MANHATTAN BANK By /s/ N. Rodriguez ----------------------- N. Rodriguez Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 2000, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin................................................... $ 22,648 Interest-bearing balances............................................ 6,608 Securities: Held to maturity securities............................................ 556 Available for sale securities.......................................... 66,556 Federal funds sold and securities purchased under agreements to resell................................................. 35,508 Loans and lease financing receivables: Loans and leases, net of unearned income........$158,034 Less: Allowance for loan and lease losses....... 2,399 Less: Allocated transfer risk reserve........... 0 -------- Loans and leases, net of unearned income, allowance and reserve................................................ 155,635 Trading assets......................................................... 59,802 Premises and fixed assets (including capitalized leases).............................................................. 4,398 Other real estate owned................................................ 20 Investments in unconsolidated subsidiaries and associated companies................................................. 338 Customers' liability to this bank on acceptances outstanding.......................................................... 367 Intangible assets...................................................... 4,794 Other assets........................................................... 19,886 -------- TOTAL ASSETS........................................................... $377,116 ========
-4- LIABILITIES
Deposits: In domestic offices............................................ $132,165 Noninterest-bearing........................$ 54,608 Interest-bearing........................... 77,557 ------- In foreign offices, Edge and Agreement subsidiaries and IBF's......................................... 106,670 Noninterest-bearing .......................$ 6,059 Interest-bearing .......................... 100,611 Federal funds purchased and securities sold under agreements to repurchase....................................... 45,967 Demand notes issued to the U.S. Treasury......................... 500 Trading liabilities.............................................. 41,384 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less.................. 6,722 With a remaining maturity of more than one year through three years....................................... 0 With a remaining maturity of more than three years............. 276 Bank's liability on acceptances executed and outstanding ........ 367 Subordinated notes and debentures................................ 6,349 Other liabilities................................................ 14,515 TOTAL LIABILITIES................................................ 354,915 -------- EQUITY CAPITAL Perpetual preferred stock and related surplus.................... 0 Common stock..................................................... 1,211 Surplus (exclude all surplus related to preferred stock)......... 12,614 Undivided profits and capital reserves........................... 8,658 Net unrealized holding gains (losses) on available-for-sale securities............................... (298) Accumulated net gains (losses) on cash flow hedges............... 0 Cumulative foreign currency translation adjustments.............. 16 TOTAL EQUITY CAPITAL............................................. 22,201 -------- TOTAL LIABILITIES AND EQUITY CAPITAL............................. $377,116 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true and correct. DOUGLAS A.WARNER III ) WILLIAM B. HARRISON, JR.) DIRECTORS ELLEN V. FUTTER ) -5- EX-25.E.3 32 dex25e3.txt STATMT. OF ELIGI., GUA. TRUSTEE, CAP. TRUST V Exhibit 25-E-3 ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------------ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---------- ------------------------------------------------- THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) New York 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification no.) 270 Park Avenue New York, New York 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) ----------------------------------------------- Duke Energy Corporation (Exact name of obligor as specified in its charter) North Carolina 56-0205520 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 526 South Church Street Charlotte, North Carolina 28202 (Address of principal executive offices) (Zip Code) ---------------------------------------------- Guarantee Duke Energy Capital Trust V Trust Preferred Securities (Title of the indenture securities) --------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, Suite 2310, 5 Empire State Plaza, Albany, New York 12223. Board of Governors of the Federal Reserve System, 20th and C Street, NW, Washington, D.C. 20551. Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. 10045. Federal Deposit Insurance Corporation, 550 Seventeenth Street, NW, Washington, D.C. 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. - 2 - Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76439, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33- 50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 30th day of March 2001. THE CHASE MANHATTAN BANK By /s/ N. Rodriguez ----------------------- N. Rodriguez Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 2000, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin................................................... $ 22,648 Interest-bearing balances............................................ 6,608 Securities: Held to maturity securities............................................ 556 Available for sale securities.......................................... 66,556 Federal funds sold and securities purchased under agreements to resell................................................. 35,508 Loans and lease financing receivables: Loans and leases, net of unearned income........$158,034 Less: Allowance for loan and lease losses....... 2,399 Less: Allocated transfer risk reserve........... 0 -------- Loans and leases, net of unearned income, allowance and reserve................................................ 155,635 Trading assets......................................................... 59,802 Premises and fixed assets (including capitalized leases).............................................................. 4,398 Other real estate owned................................................ 20 Investments in unconsolidated subsidiaries and associated companies................................................. 338 Customers' liability to this bank on acceptances outstanding.......................................................... 367 Intangible assets...................................................... 4,794 Other assets........................................................... 19,886 -------- TOTAL ASSETS........................................................... $377,116 ========
-4- LIABILITIES
Deposits: In domestic offices............................................ $132,165 Noninterest-bearing........................$ 54,608 Interest-bearing........................... 77,557 ------- In foreign offices, Edge and Agreement subsidiaries and IBF's......................................... 106,670 Noninterest-bearing .......................$ 6,059 Interest-bearing .......................... 100,611 Federal funds purchased and securities sold under agreements to repurchase....................................... 45,967 Demand notes issued to the U.S. Treasury......................... 500 Trading liabilities.............................................. 41,384 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less.................. 6,722 With a remaining maturity of more than one year through three years....................................... 0 With a remaining maturity of more than three years............. 276 Bank's liability on acceptances executed and outstanding ........ 367 Subordinated notes and debentures................................ 6,349 Other liabilities................................................ 14,515 TOTAL LIABILITIES................................................ 354,915 -------- EQUITY CAPITAL Perpetual preferred stock and related surplus.................... 0 Common stock..................................................... 1,211 Surplus (exclude all surplus related to preferred stock)......... 12,614 Undivided profits and capital reserves........................... 8,658 Net unrealized holding gains (losses) on available-for-sale securities............................... (298) Accumulated net gains (losses) on cash flow hedges............... 0 Cumulative foreign currency translation adjustments.............. 16 TOTAL EQUITY CAPITAL............................................. 22,201 -------- TOTAL LIABILITIES AND EQUITY CAPITAL............................. $377,116 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate federal regulatory authority and is true and correct. DOUGLAS A.WARNER III ) WILLIAM B. HARRISON, JR.) DIRECTORS ELLEN V. FUTTER ) -5- -----END PRIVACY-ENHANCED MESSAGE-----