EXHIBIT 1.2
$
DUKE CAPITAL CORPORATION
SERIES % JUNIOR SUBORDINATED NOTES DUE
UNDERWRITING AGREEMENT
Ladies and Gentlemen:
1. Introductory. DUKE CAPITAL CORPORATION, a Delaware 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 April 1, 1998, between the Corporation
and The Chase Manhattan Bank, as amended and supplemented and as to be
supplemented by a supplemental indenture, to be dated as of , ,
relating to the Notes (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. 333-92283),
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, to you for each of the other Underwriters, have been declared
effective by the Commission in such form, and no stop order suspending the
effectiveness of such registration statement has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in such registration statement or filed with
the Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the 1933 Act ("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 in all material respects to the
requirements of the 1933 Act and the 1933 Act Regulations, and the Registration
Statement does 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; the Prospectus will conform in all material
respects to the requirements of the 1933 Act and the 1933 Act Regulations, 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 in this subsection with respect to any
statements or omissions in any such document based upon 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
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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 Certificate of Incorporation or By-Laws of the
Corporation or result in any violation of 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 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 PanEnergy Corp and Duke Energy Natural Gas Corporation, each a
Delaware corporation, and Texas Eastern Transmission, LP, a Delaware limited
partnership (each herein called a "Principal Subsidiary"), is in good standing
in the State of Delaware and 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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 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 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").
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.
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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 $7,500, (iv) the
printing and delivery to the Underwriters, in quantities as hereinabove
referred to, of copies of the
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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 any 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 ▇▇▇▇▇'▇ Investors
Service, Inc. or Standard & Poor's Ratings Services to (i) any debt securities
of the Corporation or (ii) any trust preferred securities of Duke Capital
Financing Trust I, Duke Capital Financing Trust II or Duke Capital Financing
Trust III 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 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 or opinions of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP,
counsel to the Corporation, dated the Closing Date, to the effect that:
(i) The Corporation has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, 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 PanEnergy Corp and Duke Energy Natural Gas Corporation has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware and
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Texas Eastern Transmission, LP has been duly formed and is validly existing as
a limited partnership in good standing under the laws of the State of Delaware,
in each case with power and authority to own its properties and conduct its
business as described in the Prospectus.
(iii) 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.
(iv) The Corporation is not a holding company under the Public Utility Holding
Company Act of 1935, as amended.
(v) 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.
(vi) 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
the 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."
(vii) 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.
(viii) This Agreement has been duly authorized, executed and delivered by the
Corporation.
(ix) The performance by the Corporation of this Agreement and the Indenture
will not contravene any of the provisions of the Restated Certificate of
Incorporation or By-Laws of the Corporation, nor will such performance
contravene 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
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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.
(x) 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 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.
(xi) The Indenture has been duly authorized, executed and delivered by the
Corporation 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 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).
(xii) 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.
In rendering the foregoing opinion or opinions, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP may state
that such opinion or opinions are limited to the federal laws of the United
States, the laws of the State of New York and the General Corporation Law of
the State of Delaware, and that they are expressing no opinion as to the effect
of the laws of any other jurisdiction. 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.
(e) You shall have received an opinion, dated the Closing Date, of ▇▇▇▇▇ ▇.
▇▇▇▇, Esq., General Counsel of the Corporation, to the effect that:
(i) 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
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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.
(ii) 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.
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, 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 rely, to the extent
recited therein, upon opinions of local counsel. 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.
(f) You shall have received the opinion or opinions of , counsel for
the Underwriters, dated the Closing Date, with respect to the incorporation of
the Corporation, the validity of the Notes, the Registration Statement and the
Prospectus, as amended or supplemented, and such other related matters as you
may require, and the Corporation shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(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 Duke Energy Corporation, the Corporation,
Duke Capital Financing Trust I, Duke Capital Financing Trust II or Duke Capital
Financing Trust III 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 judgment makes it impracticable or
inadvisable to proceed with the public
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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.
(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 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);
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(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.
(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
10
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
11
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 ▇▇▇▇ ▇▇▇) 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-eleventh 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-eleventh 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.
12
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 in connection with the transaction to be
performed under this Agreement.
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 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇, attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, 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 internal laws of the State of New York.
13
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 Capital 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
14
SCHEDULE A
Principal
Amount of
Notes to
be
Underwriter Purchased
----------- ---------
$
--------
Total............................................................. $
========