EXHIBIT 1.1
DUKE ENERGY FIELD SERVICES, LLC
$300,000,000
5.75% NOTES DUE 2006
November 6, 2001
UNDERWRITING AGREEMENT
Banc of America Securities LLC
Banc One Capital Markets, Inc.
Scotia Capital (USA) Inc.
c/o Banc of America Securities LLC,
Bank of America Corporate Center
000 Xxxxx Xxxxx Xxxxxx
0xx Xxxxx,
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Duke Energy Field Services, LLC, a Delaware limited liability company
(the "Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several underwriters named in Schedule I hereto (the
"Underwriters") $300,000,000 aggregate principal amount of 5.75% Notes due 2006
(the "Notes"), to be issued pursuant to the provisions of an Indenture, dated as
of August 16, 2000, between the Company and The Chase Manhattan Bank, as
Trustee, as supplemented on August 16, 2000 and February 2, 2001, and as to be
supplemented by a third supplemental indenture, dated as of November 9, 2001,
relating to the Notes (the "Indenture").
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement (No. 333-57376) in respect of the
Notes (as amended by Amendment No. 1, filed on March 27, 2001) has been
filed on Form S-3 with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act");
such registration statement and any post-effective amendment thereto,
each in the form heretofore delivered to you, and including exhibits
thereto and all documents incorporated by reference in the prospectus
contained therein, has been declared effective by the Commission in
such form; no other document with respect to such registration
statement or any document incorporated by reference therein has
heretofore been filed with the Commission which has not been delivered
to you; 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; and the Company has filed, or proposes to file, with the
Commission pursuant to Rule 424 of the Act a prospectus supplement
specifically relating to the Notes (the various parts of the
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, as amended to the date hereof, being
hereinafter called the "Registration Statement"; the related prospectus
contained in the Registration Statement, at the time it became
effective, being hereinafter called the "Basic Prospectus"; and the
Basic Prospectus, as supplemented by the prospectus supplement
specifically relating to the Notes, in the form first used to confirm
sales, being hereinafter called the "Prospectus"; and any reference
herein to the Registration Statement or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference
therein, as of the date of the Registration Statement or Prospectus, as
the case may be; any reference to any amendment or supplement to any
Registration Statement or Prospectus shall be deemed to refer to and
include any documents filed after the date of the Registration
Statement or Prospectus under the Securities Exchange Act of 1934, as
amended (the "1934 Act") and incorporated by reference in such
Prospectus; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any report of the
Company 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). If the Company has filed
an abbreviated registration statement to register additional Notes
pursuant to Rule 462(b) under the Act (the "Rule 462 Registration
Statement"), then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration
Statement.
(b) No order preventing or suspending the use of the Registration
Statement or Basic Prospectus has been issued by the Commission, and
each of the Registration Statement (at the time it was declared
effective) and the Basic Prospectus (at the time of filing thereof)
conformed in all material respects to the requirements of the Act and
the respective rules and regulations of the Commission thereunder.
(c) The Registration Statement and the Basic Prospectus conform
and the Prospectus will conform in all material respects to the
requirements of the Act and, as applicable, to the Trust Indenture Act
of 1939, and the respective rules and regulations thereunder, and the
Registration Statement and the Prospectus do not and the Prospectus
will not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, except that this
representation and warranty shall not apply to statements or omissions
made in any such document in reliance upon and in conformity with
information relating to the Underwriters furnished in writing to the
Company by an Underwriter through you expressly for use therein.
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(d) The documents incorporated by reference in the Registration
Statement or the Prospectus, at the time they were filed with the
Commission, conformed in all material respects to the requirements of
the 1934 Act and the rules and regulations of the Commission thereunder
(the "1934 Act Regulations"), and, when read together with the other
information in the Registration Statement and the Prospectus, do not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and any documents deemed to be
incorporated by reference in the Prospectus will, when they are filed
with the Commission, 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 light of the circumstances under which they are
made, not misleading.
(e) This Agreement has been duly authorized, executed and
delivered by the Company. The compliance by the Company with all of the
provisions of this Agreement, the Indenture and the Notes, and the
consummation of the transactions herein and therein 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 Company or any entity in which the Company owns
at least 50% of the capital stock or other interests or voting
securities or voting interests (each such entity, a "subsidiary") is a
party or by which the Company or any of its subsidiaries or their
respective property is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, in each case that
is material to the Company and its subsidiaries taken as a whole; nor
will such action result in any violation of the provisions of the
Restated Certificate of Formation or the Amended and Restated Limited
Liability Company Agreement and the First Amendment, dated August 4,
2000, thereto of the Company or similar organizational documents of any
of its subsidiaries or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or its subsidiaries or any of their respective properties; and
no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the consummation by the Company of the transactions
contemplated by this Agreement, the Indenture or the Notes, except the
registration under the Act of the Notes and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state or foreign securities or Blue Sky laws in connection with
the purchase and distribution of the Notes by the Underwriters.
(f) The Company has been duly formed, is validly existing as a
limited liability company in good standing under the laws of the
jurisdiction of its formation, has the limited liability company power
and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business
and is in good standing in each jurisdiction in which
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the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(g) Each subsidiary has been duly incorporated or formed, is
validly existing as a corporation (or limited liability company, as the
case may be) in good standing under the laws of the jurisdiction of its
incorporation or formation, has the corporate (or limited liability
company) power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing or to have such power and
authority singly or in the aggregate would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole; all of
the issued shares of capital stock (or limited liability company
interests) of each wholly-owned subsidiary of the Company have been
duly and validly authorized and issued, are fully paid and
non-assessable; and the issued shares of capital stock (or limited
liability company interests) of each subsidiary of the Company that are
owned directly by the Company (or if not owned directly by the Company,
are owned by a subsidiary of the Company), are so owned free and clear
of all liens, encumbrances, equities or claims.
(h) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto dated subsequent to the date of this Agreement).
(i) The Company and its subsidiaries: (i) are in compliance with
any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"); (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and (iii)
are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals
or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(j) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating
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activities and any potential liabilities to third parties) that would,
singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(k) Deloitte & Touche LLP, who has certified certain financial
statements of the Company, its subsidiaries and predecessors, is an
independent public accountant as required by the Act and the rules and
regulations of the Commission thereunder.
(l) The Company and its subsidiaries have good and marketable
title to all real property and beneficial or record title to or
interest in all pipeline easements, rights of way, licenses and land
use permits owned by them, except where such failure would not, singly
or in the aggregate, have a material adverse effect on the Company and
its subsidiaries taken as a whole, in each case free and clear of all
liens, encumbrances and defects except (i) such as are described in the
Prospectus and (ii) liens securing taxes and other governmental charges
or claims of materialmen, mechanics and similar persons that are not
yet due and payable and that do not materially affect the value of such
property and do not materially interfere with the use made and proposed
to be made of such property by the Company and its subsidiaries; and
any real property and buildings held under lease by the Company and its
subsidiaries are held by them under leases that are valid, existing and
in full force and effect, except as described in the Prospectus or
where the failure to be valid, existing and in full force and effect
would not have a material adverse effect on the Company and its
subsidiaries, taken a whole.
(m) Except as described in the Registration Statement or the
Prospectus, the Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their respective
businesses except where such failure to possess required certificates,
authorizations and permits would not, singly or in the aggregate, have
a material adverse effect on the Company and its subsidiaries, taken as
a whole, and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit that,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(n) There are no legal or governmental proceedings pending or to
the Company's knowledge threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not
so described or any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
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(o) No material labor dispute with the employees of the Company or
any of its subsidiaries exists, except as described in the Registration
Statement or the Prospectus, or, to the knowledge of the Company, is
imminent.
(p) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require
the Company (i) to file a registration statement under the Act with
respect to any securities of the Company (except for contracts,
agreements or understandings described in the Registration Statement or
the Prospectus) or (ii) to include any such securities with the Notes
registered pursuant to the Registration Statement.
(q) The statements in the Registration Statement under the caption
"Description of Debt Securities" and in the Prospectus under the
caption "Description of the Notes", in each case insofar as such
statements constitute summaries of the documents or proceedings
referred to therein, fairly present the information called for with
respect to such documents and proceedings and fairly summarize the
matters referred to therein.
(r) The Company is not a "holding company", or a "public-utility
company", or a "subsidiary company" of a "holding company", as each
such term is defined in the Public Utility Holding Company Act of 1935,
as amended.
(s) The limited liability company member interests outstanding
prior to the issuance of the Notes have been duly authorized and are
validly issued.
(t) The Indenture has been duly authorized and duly qualified
under the Trust Indenture Act of 1939 and when executed and delivered
by the Company, assuming the due authorization, execution and delivery
thereof by The Chase Manhattan Bank, as Trustee, will constitute a
valid and legally binding instrument of the Company, enforceable
against the Company in accordance with its terms, subject to the
qualifications that the enforceability of the Company'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).
(u) The Notes have been duly authorized, and when executed by the
Company and when authenticated by The Chase Manhattan Bank, as Trustee,
in each case in the manner provided in the Indenture, and delivered
against payment therefor, will constitute valid and legally binding
obligations of the Company, enforceable against the Company in
accordance with their terms, subject to the qualifications that the
enforceability of the Company'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
will be entitled to the benefits afforded by the Indenture in
accordance with the terms of the Indenture and the Notes.
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2. Subject to the terms and conditions herein set forth, the Company
agrees to sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company the respective principal
amount of the Notes set forth opposite the name of such Underwriter in Schedule
I hereto, plus the respective principal amount of additional Notes, which each
such Underwriter may become obligated to purchase pursuant to the provisions of
Section 9 hereof, at a purchase price of 99.27% of the principal amount of the
Notes, plus accrued interest from November 9, 2001.
3. Upon the authorization by you of the release of the Notes, the
several Underwriters propose to offer the Notes for sale upon the terms and
conditions set forth in the Prospectus.
4. The Notes, in the form of one or more global certificates and in
aggregate denominations equal to the aggregate amount of the Notes, upon
original issuance and registered in the name of Cede & Co., as nominee for The
Depository Trust Company ("DTC") or such other nominees as the Underwriters may
designate upon at least 48 hours' prior notice to the Company, shall be
delivered by or on behalf of the Company to you for the account of each
Underwriter hereunder, against payment by such Under-writer or on its behalf of
the purchase price therefor by wire transfer in immediately available funds to
an account of the Company properly identified at least 48 hours in advance, at
the office of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
or at such other place as you and the Company may determine. The time and date
of such delivery and payment shall be 9:30 a.m., New York City time, on November
9, 2001, or such other time and date as you and the Company may agree upon in
writing (the "Closing Date").
5. The Company covenants and agrees with the several Underwriters that:
(a) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which you reasonably object, and to file with the
Commission within the applicable period specified in Rule 424(b) under
the Act any prospectus required to be filed pursuant to such Rule.
(b) The Company will advise you promptly after it receives notice
thereof 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 withdrawal, if issued.
(c) If at any time when a prospectus relating to the Notes is
required to be delivered under the Act any event occurs as a result of
which the Prospectus as
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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 Act, the Company promptly will
prepare and, subject to Section 5(a), file with the Commission an
amendment, supplement or an appropriate document that will correct such
statement or omission or that will effect such compliance.
(d) The Company, during the period when a prospectus relating to
the Notes is required to be delivered under the Act, will timely file
all documents required to be filed with the Commission pursuant to
Section 13 or 14 of the 1934 Act.
(e) The Company 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, an earnings statement
(in form complying with the provisions of Section 11(a) of the Act,
which need not be certified by independent certified public accountants
unless required by the Act) covering (i) a 12 month period beginning
not later than the first day of the Company's fiscal quarter next
following the effective date of the Registration Statement and (ii) a
12 month period beginning not later than the first day of the Company's
fiscal quarter next following the date of this Agreement.
(f) The Company will furnish to you copies of the Registration
Statement (three 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.
(g) The Company will arrange or cooperate in arrangements for the
qualification of the Notes for sale under the laws of the United
States, each State thereof, the District of Columbia and such
jurisdictions as you reasonably designate and will continue such
qualifications in effect so long as required for the distribution;
provided, however, that the Company shall not be required to qualify as
a foreign company or to file any general consents to service of process
under the laws of any state where it is not now so subject.
(h) The Company will not, during the period of seven days from the
date hereof, sell, offer to sell, grant any option for the sale of, or
otherwise dispose of any Notes, any security convertible into or
exchangeable for the Notes or any debt security substantially similar
to the Notes (except for the Notes issued pursuant to this Agreement),
without your prior written consent.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following:
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(a) The fees, disbursements and expenses of the Company's counsel
and accountants in connection with the registration of the Notes under
the Act and all other expenses in connection with the preparation,
printing and filing with the Commission of the Registration Statement,
the Prospectus and amendments and supplements thereto and the mailing
and delivering of copies thereof to the Underwriters and dealers.
(b) The cost of printing or producing any Agreement among
Underwriters, this Agreement, the Indenture, the Blue Sky memorandum,
closing binders and any other documents in connection with the
offering, purchase, sale and delivery of the Notes.
(c) All expenses in connection with the qualification of the Notes
for offering and sale under state securities laws as provided in
Section 5(g) hereof, including the fees and disbursements of counsel
for the Underwriters in connection with such qualification and in
connection with the Blue Sky survey.
(d) The filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incident to securing any required review by
the National Association of Securities Dealers, Inc. of the terms of
the sale of the Notes.
(e) The costs of any depository clearing and settlement
arrangements for the Notes with DTC or any successor depository.
(f) All expenses incident to the issuance and delivery of the
Notes as specified herein.
(g) Any fees charged by independent rating agencies for rating the
Notes.
(h) The costs and expenses of the Company 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
Company, travel and lodging expenses of the representatives and
officers of the Company and any such consultants, and the cost of any
aircraft chartered in connection with the road show.
(i) All other costs and expenses (other than as provided for in
Section 8) incident to the performance of the Company's obligations
hereunder that are not otherwise specifically provided for in this
Section. It is understood that, except as provided in this Section and
Sections 8 and 10 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel, and any
advertising expenses connected with any offers they may make.
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7. The obligations of the Underwriters to purchase and pay for the
Notes shall be subject, in their discretion, to the condition that all
representations and warranties of the Company herein and the statements of the
officers of the Company made pursuant to the provisions hereof are, at and as of
the Closing Date, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus shall have been filed, if required, with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act;
no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding
for that purpose shall have been initiated or, to the knowledge of the
Company, threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with
to your reasonable satisfaction.
(b) Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated the Closing Date,
generally with respect to the matters set forth in clause (c)(i),
(c)(ii), (c)(iii) and (c)(vi) and with respect to such other matters as
are reasonably requested by you, and such counsel shall have received
such papers and information as they may reasonably request to enable
them to pass upon such matters.
(c) Xxxxxx & Xxxxxx LLP, counsel for the Company, shall have
furnished to you its written opinion, dated the Closing Date, in form
and substance satisfactory to you, to the effect that:
(i) The Company is validly existing as a limited liability
company in good standing under the laws of the jurisdiction of its
formation, and has the limited liability company power and authority to
own its property and to conduct its business as described in the
Prospectus.
(ii) The Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust Indenture
Act of 1939 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 Company, enforceable against the
Company in accordance with its terms, subject to the qualifications
that the enforceability of the Company'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).
(iii) The Notes have been duly authorized and executed by the
Company and, when authenticated by The Chase Manhattan Bank, as
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Trustee, in the manner provided in the Indenture and delivered against
payment therefor, will constitute valid and legally binding obligations
of the Company, enforceable against the Company in accordance with
their terms, subject to the qualifications that the enforceability of
the Company'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.
(iv) Each "Significant Subsidiary" of the Company (as such
term is defined in Rule 1-02 of Regulation S-X) (each a "Significant
Subsidiary" and, collectively, the "Significant Subsidiaries") is
validly existing as a corporation (or limited liability company, as the
case may be) in good standing under the laws of the jurisdiction of its
incorporation or formation, and has the corporate (or limited liability
company) power and authority to own its property and to conduct its
business as described in the Prospectus. (v) The Registration Statement
has become effective under the Act, and, to 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 Act.
(vi) This Agreement has been duly authorized, executed and
delivered by the Company.
(vii) The performance by the Company of this Agreement, the
Indenture and the Notes, and the consummation of the transactions
herein and therein contemplated will not contravene any of the
provisions or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party that in each case has
been filed as an exhibit to the Registration Statement or any of the
provisions of the Restated Certificate of Formation or the Amended and
Restated Limited Liability Company Agreement and the First Amendment,
dated August 4, 2000, thereto of the Company.
(viii) The Company is not and, after giving effect to the
offering and sale of the Notes and the application of the proceeds
thereof as described in the Prospectus, will not be required to
register as an "investment company" under the Investment Company Act of
1940, as amended.
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(ix) The Company is not, and after giving effect to the
offering and sale of the Notes and the application of the proceeds
thereof as described in the Prospectus will not be, required to
register as a "holding company" under the Public Utility Holding
Company Act of 1935, as amended.
(x) No authorization, approval, consent, order, registration
or qualification of or with any court or governmental agency or body is
legally required for the issue and sale of the Notes or the
consummation by the Company of the transactions contemplated by this
Agreement or the Indenture, except the registration under the Act of
the Notes and the qualification of the indenture under Trust Indenture
Act of 1939, and such consents, approvals, authorizations, orders,
registrations and qualifications as may be required under state or
foreign securities or Blue Sky laws in connection with the purchase and
distribution of the Notes by the Underwriters.
(xi) The Registration Statement as of the date of
effectiveness under the Act and the Prospectus as of the date it was
filed with, or transmitted for filing to, the Commission (in each case,
other than the financial statements and other financial information
included therein, as to which no opinion need be rendered) appeared on
their face to comply as to form in all material respects with the
requirements of the Act and the Trust Indenture Act of 1939 and the
respective rules and regulations thereunder, 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 Act (or if an
amendment to such Registration Statement has been filed by the Company
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.
(xii) The statements made in the Registration Statement under
the caption "Description of Debt Securities" and in the Prospectus
under the caption "Description of the Notes", insofar as they purport
to constitute summaries of the terms of the Notes, and in the
Prospectus under the caption "Underwriting" insofar as they purport to
constitute summaries of the legal matters and documents referred to
therein, are accurate in all material respects.
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In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the State of
Texas, the State of New York, the General Corporation Law and the
Limited Liability Company Act of the State of Delaware and the federal
laws of the United States.
(d) Xxxxxx Xxxxxx, General Counsel to the Company, shall have
furnished to you her written opinion dated the Closing Date, in form
and substance satisfactory to you, to the effect that:
(i) Each of the Company and its subsidiaries is validly
existing as a corporation (or limited liability company, as the case
may be), is in good standing under the laws of the jurisdiction of its
incorporation or formation, has the corporate (or limited liability
company) power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(ii) The performance by the Company of this Agreement, the
Indenture and the Notes, and the consummation of the transactions
herein and therein contemplated will not, to the best knowledge of such
counsel, contravene any of the provisions or constitute a default under
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of its
subsidiaries is subject other than such contraventions or default as
would not have a material adverse effect on the Company and its
subsidiaries taken as a whole, nor will such action, to the best
knowledge of such counsel, contravene any of the provisions of the
Certificate of Incorporation or By-Laws or similar organizational
documents of any of its subsidiaries or to the best knowledge of such
counsel any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its properties (except that no opinion is expressed as to federal
securities laws or other anti-fraud laws) other than such
contraventions as would not have a material adverse effect on the
Company and its subsidiaries taken as a whole or a material adverse
effect on the interests of the holders of the Notes.
(iii) The outstanding limited liability company member
interests of the Company have been duly authorized and issued.
(iv) The descriptions in or incorporated by reference in the
Registration Statement and Prospectus of legal or governmental
-13-
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 proceedings instituted or threatened in writing against
the Company or any of its subsidiaries or any of their respective
properties that would be required to be described in the Registration
Statement or Prospectus and that are not described as required.
(e) As of the date of this Agreement and also at the Closing Date,
Deloitte & Touche LLP shall have furnished to you a letter or letters,
dated the respective dates of delivery thereof in form and substance
satisfactory to you.
(f) Since the respective dates as of which information is given in
the Prospectus and up to the Closing Date, there shall not have been
any change or any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) and since
such dates and up to the Closing Date, the effect of which is, in your
judgment, so material and adverse as to make it, in your judgment,
impracticable or inadvisable to proceed with the public offering or the
delivery of the Notes at the Closing Date on the terms and in the
manner contemplated in the Prospectus.
(g) As of the Closing Date, each of Standard & Poor's Ratings
Services and Fitch IBCA, Inc. have assigned a BBB rating and Xxxxx'x
Investors Service, Inc. has assigned a Baa2 rating to the Notes.
(h) There shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded the securities of the
Company by any "nationally recognized statistical rating organization",
as such term is defined for purposes of Rule 436(g)(2) under the Act.
(i) 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 Company 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 a material disruption in commercial banking activities
in New York or securities settlement or clearance services in the
United States; (iii) the outbreak or material escalation of hostilities
involving the United States, or an outbreak or material escalation of
hostilities not involving the United States that could adversely affect
the public offering, or the declaration by the United States of a
national emergency or war; or (iv) any change in financial markets or
any calamity or crisis, if the effect of any such event specified in
these clauses (i) through (iv) in your judgment makes it impracticable
or inadvisable to proceed with the public offering or the delivery of
-14-
the Notes on the Closing Date on the terms and in the manner
contemplated in the Prospectus.
(j) The Company shall have furnished or caused to be furnished to
you at the Closing Date certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of the Closing Date, as to
the performance by the Company of all of its obligations hereunder to
be performed at or prior to the Closing Date, and as to such other
matters relating to the transactions contemplated herein as you may
reasonably request, and the Company shall have furnished or caused to
be furnished certificates as to the matters set forth in subsections
(a), (f), (g) and (h) of this Section, and as to such other matters
relating to the transactions contemplated herein as you may reasonably
request.
(k) As of the Closing Date, the Company shall have furnished or
caused to be furnished to you a certificate of the Company's officer(s)
relating to certain financial and factual data, dated the Closing Date,
in form and substance satisfactory to you.
8. (a) The Company 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 Act or Section 20 of the 1934 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 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;
(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 Company; and
(iii) against any and all expense whatsoever reasonably
incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above;
-15-
unless in each case of (i), (ii) or (iii) above such statement or
omission or such alleged statement or omission was made in reliance
upon and in conformity with the information relating to the
Underwriters furnished in writing to the Company by an Underwriter
through you expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement
thereto).
In no case shall the Company be liable under this indemnity
agreement with respect to any claim made against any Underwriter or any
such controlling person unless the Company shall be notified in writing
of the nature of the claim within a reasonable time after the assertion
thereof, but failure to so notify the Company shall not relieve it from
any liability that it may have otherwise than on account of this
indemnity agreement. The Company 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 Company 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 Company and such Underwriter or such
controlling person shall have been advised by such counsel that a
conflict of interest between the Company 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 Company
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 (in addition to any local counsel) for all such Underwriters
and all such controlling persons, which firm shall be designated in
writing by you). The Company 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 Company within the meaning of
Section 15 of the Act or Section 20 of the 1934 Act, in connection with
the sale of the Notes.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors and each of the Company's
officers who signed the Registration Statement and each person, if any,
who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the 1934 Act, to the same extent as the indemnity
contained in subsection (a) of this
-16-
Section, but only with respect to statements or omissions made in the
Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity
with the information relating to the Underwriters furnished in writing
to the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto). In case any action shall be
brought against the Company or any person so indemnified based on the
Registration Statement (or any amendment thereto) 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 Company, and the Company 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) To the extent the indemnification provided for in Sections
8(a) or 8(b) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to
therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities in such proportion as is
appropriate to reflect not only the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the
offering of the Notes but also the relative fault of the Company on the
one hand and of the Underwriters on the other hand in connection with
the statements or omissions that resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand in connection with the
offering of the Notes shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Notes (before
deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, in each case as
set forth in the table on the cover of the Prospectus, bear to the
aggregate public offering price of the Notes. The relative fault of the
Company on the one hand and the Underwriters on the other hand 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 Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 8 are
-17-
several in proportion to the respective principal amount of Notes they
have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 8 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 that does not take account of the equitable considerations
referred to in Section 8(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, 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 8, 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 that 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 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in Section
8 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full
force and effect regardless of: (i) any termination of this Agreement;
(ii) any investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter or by or on behalf of the Company,
its officers or directors or any person controlling the Company; and
(iii) acceptance of and payment for any of the Notes.
9. This Agreement shall become effective upon the execution and
delivery hereof by the parties hereto.
(a) If any Underwriter shall default in its obligation to purchase
the principal amount of Notes that 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 principal amount of
Notes on the terms contained herein. If within thirty-six hours after
such default by any Underwriter, you notify the Company that you have
so arranged for the purchase of such principal amount of Notes, you
shall have the right to postpone the 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 Company agrees to file
promptly any amendments to the Registration Statement or the Prospectus
that may be required. The term "Underwriter" as used in this Agreement
shall include any person
-18-
substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such
principal amount of Notes.
(b) If, after giving effect to any arrangements for the purchase
of the Notes of a defaulting Underwriter or Underwriters as provided in
subsection (a) above, the aggregate principal amount of such Notes that
remains unpurchased does not exceed 10% of the aggregate principal
amount of all the Notes to be purchased at the Closing Date, then the
Company shall have the right to require each non-defaulting Underwriter
to purchase the principal amount of Notes that such Underwriter agreed
to purchase hereunder at the Closing Date and, in addition, to require
each non-defaulting Underwriter to purchase its pro rata share (based
on the principal amount of Notes that such Underwriter agreed to
purchase hereunder) of the principal amount of 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 principal amount of Notes of a defaulting Underwriter or
Underwriters by you as provided in subsection (a) above, the aggregate
principal amount of such Notes that remains unpurchased exceeds 10% of
the aggregate principal amount of all the Notes to be purchased at the
Closing Date, or if the Company 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 Company, except for the expenses
to be borne by the Company and the Underwriters as provided in Section
6 hereof and the indemnity agreement in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its
default.
10. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not be under any liability to any Underwriter except as
provided in Section 6 and Section 8 hereof; but, if for any other reason any
Notes are not delivered by or on behalf of the Company as provided herein, the
Company will reimburse you for all out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred by you in making preparations for
the purchase, sale and delivery of the Notes not so delivered, but the Company
shall then be under no further liability to any Underwriter in respect of the
Notes not so delivered except as provided in Sections 6 and 8 hereof.
11. All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail or
facsimile transmission to you in care of Banc of America Securities LLC, Bank of
America Corporate Center, 000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, XX
00000, Attention: Transaction Management (facsimile: (000) 000 0000); and if to
the Company shall be delivered or sent by mail or facsimile transmission to the
address of the Company set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(a) hereof shall be delivered or sent by mail or facsimile transmission
to such Underwriter at its address or facsimile number set forth
-19-
in its Underwriters' Questionnaire or telex or facsimile constituting such
Questionnaire, which address or facsimile number will be supplied to the Company
by you upon request. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Section 8
hereof, the officers and directors of the Company, and each person who controls
the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Notes from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
-20-
If the foregoing is in accordance with your understanding, please sign
and return to us four counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters and
the Company.
Very truly yours,
DUKE ENERGY FIELD SERVICES, LLC
By: /s/ XXXX X. XXXXXXX
------------------------------
Name: Xxxx X. Xxxxxxx
Vice President and
Chief Financial Officer
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPTIAL MARKETS, INC.
SCOTIA CAPITAL (USA) INC.
By: BANC OF AMERICA SECURITIES LLC
By: /s/ XXXX XXXXX
-----------------------------------
Principal
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SCHEDULE I
UNDERWRITER PRINCIPAL AMOUNT OF NOTES
----------- -------------------------
Banc of America Securities LLC $210,000,000
Banc One Capital Markets, Inc. $ 45,000,000
Scotia Capital (USA) Inc. $ 45,000,000
------------------------- ------------
Total $300,000,000
============
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