Exhibit 1(d)
------------
CP&L ENERGY, INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
___________, ____
To the Representative named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Dear Sirs:
The undersigned CP&L Energy, Inc., (the "Company") hereby confirms its
agreement with each of the several Underwriters hereinafter named as follows:
1. Underwriters and Representative. The term "Underwriters" as used
-------------------------------
herein shall be deemed to mean the firm or corporation or the several firms or
corporations named in Schedule II hereto and any underwriter substituted as
provided in paragraph 6 hereof, and the term "Underwriter" shall be deemed to
mean one of such Underwriters. If the firm or firms listed in Schedule I hereto
(the "Representative") are the same as the firm or firms listed in Schedule II
hereto, then the terms "Underwriters" and "Representative," as used herein,
shall each be deemed to refer to such firm or firms. The Representative
represents that it has been authorized by the Underwriters to execute this
Agreement on their behalf and to act for them in the manner herein provided. All
obligations of the Underwriters hereunder are several and not joint. If more
than one firm is named in Schedule I hereto, any action under or in respect of
this Agreement may be taken by such firms jointly as the Representative or by
one of the firms acting on behalf of the Representative, and such action will be
binding upon all the Underwriters.
2. Description of Securities. The Company proposes to issue and sell to
-------------------------
the several Underwriters _____ shares of its common stock (no par value) in the
amount specified in Schedule I hereto (the Firm Shares). The Company also
proposes to issue and sell to the several Underwriters not more than an
additional _______ shares of its common stock (no par value) (the "Option
Shares") if and to the extent the Representative shall have determined to
exercise, on behalf of the Underwriters, the right to purchase such shares of
common stock granted to the Underwriters in paragraph 4 hereof. The Firm Shares
and the Option Shares are hereinafter collectively referred to as the Shares.
The shares of common stock (no par value) of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the Common Stock.
3. Representations and Warranties of the Company. The Company represents
---------------------------------------------
and warrants to each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-3 (No.
333-_______) (the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), for the registration of up to
an aggregate of $_______________of the Company's securities (the
"Registered Securities") as described in the Registration Statement. As
of the date hereof, the Company has sold Registered Securities in the
aggregate amount of $_____________. The Registration Statement has been
declared effective by the Commission. The term "Registration Statement"
shall be deemed to include all amendments thereto to the date hereof
and all documents incorporated by reference therein (the "Incorporated
Documents"). The prospectus included in the Registration Statement, as
it is to be supplemented by a prospectus supplement, dated on or about
the date hereof, relating to the Shares (the "Prospectus Supplement"),
and all prior amendments or supplements thereto (other than amendments
or supplements relating to securities of the Company other than the
Shares), including the Incorporated Documents, is hereinafter referred
to as the "Prospectus." Any reference herein to the terms "amend, "
"amendment" or "supplement" with respect to the Registration Statement
or the Prospectus shall be deemed to refer to and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), deemed to be incorporated therein after the date
hereof and prior to the termination of the offering of the Shares by
the Underwriters; and any references herein to the terms "Registration
Statement" or "Prospectus" at a date after the filing of the Prospectus
Supplement shall be deemed to refer to the Registration Statement or
the Prospectus, as the case may be, as each may be amended or
supplemented prior to such date.
(b) Prior to the termination of the offering of the Shares, the
Company will not file any amendment to the Registration Statement or
supplement to the Prospectus which shall not have previously been
furnished to the Representative or of which the Representative shall
not previously have been advised or to which the Representative shall
reasonably object in writing and which has not been approved by the
Underwriter(s) or their counsel acting on behalf of the Underwriters.
(c) The Registration Statement, at the time and date it was
declared effective by the Commission, complied, and the Registration
Statement and the Prospectus, at the date the Prospectus is filed with,
or transmitted for filing to, the Commission pursuant to Rule 424 under
the Securities Act ("Rule 424") and at the Closing Date (as defined
herein), will comply, in all material respects, with the applicable
provisions of the Securities Act and the 1939 Act and the applicable
rules and regulations of the Commission thereunder; the Registration
Statement, at the time and date it was declared effective by the
Commission, did 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 the
Prospectus, at the date it is filed with, or transmitted for filing to,
the Commission pursuant to Rule 424 and at the Closing Date, will not
contain an untrue statement of a material fact or omit 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;
provided, however, that the foregoing representations and warranties in
this subparagraph (c) shall not apply to statements or omissions made
in reliance upon and in conformity with information furnished herein or
in writing to the Company by the Representative or by or on behalf of
any Underwriter through the Representative expressly for use in the
Prospectus or to any statements in or omissions from the Statement of
Eligibility (Forms T-1) of the trustee under any indenture. The
Incorporated Documents, when they were filed with the Commission,
complied in all material respects with the applicable requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder; and any
-2-
documents so filed and incorporated by reference subsequent to the date
hereof and prior to the termination of the offering of the Shares by
the Underwriters will, when they are filed with the Commission, comply
in all material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder; and, when read
together with the Registration Statement and the Prospectus, none of
such documents included or includes or will include any untrue
statement of a material fact or omitted or omits or will 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.
(d) The financial statements incorporated by reference in the
Registration Statement present fairly the financial condition and
operations of the Company at the respective dates or for the respective
periods to which they apply; such financial statements have been
prepared in each case in accordance with generally accepted accounting
principles consistently applied throughout the periods involved; and
______________, who have audited certain of the financial statements,
are independent public or independent certified public accountants as
required by the Securities Act or the Exchange Act and the rules and
regulations of the Commission thereunder.
(e) Except as reflected in, or contemplated by, the Registration
Statement and the Prospectus, since the respective dates as of which
information is given in the Registration Statement and Prospectus, and
prior to the Closing Date, (i) there has been no material adverse
change in the financial condition, earnings, business affairs or
business prospects of the Company; (ii) there has been no material
transaction entered into by the Company or any of its subsidiaries
other than transactions contemplated by the Registration Statement and
Prospectus or transactions arising in the ordinary course of business;
(iii) the Company has no material contingent obligation that is not
disclosed in the Registration Statement and Prospectus; and (iv) there
has been no dividend or distribution of any kind declared, paid or made
by the Company or, except for dividends paid to the Company or other
subsidiaries, any of its subsidiaries on any class of capital stock or
repurchase or redemption by the Company or any of its subsidiaries of
any class of capital stock..
(f) The consummation of the transactions herein contemplated and
the fulfillment of the terms hereof on the part of the Company to be
fulfilled have been duly authorized by all necessary corporate action
of the Company in accordance with the provisions of its articles of
incorporation (the "Articles"), by-laws and applicable law.
(g) The consummation of the transactions herein contemplated and
the fulfillment of the terms hereof will not result in a breach of any
of the terms or provisions of, or constitute a default under, the
Articles, the Company's by-laws, applicable law or any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company or any significant subsidiary (as such term is defined in Rule
1-01(w) of Regulation S-X) of the Company (each a "Significant
Subsidiary" and each of which is listed on Schedule III hereto) is now
a party or any judgment, order, writ or decree of any government or
governmental authority or agency or court having jurisdiction over the
Company or any of its subsidiaries or any of their assets, properties
or operations.
(h) The Shares conform in all material respects to the
description contained in the Prospectus.
-3-
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of North Carolina; each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its organization; each of the
Company and each Significant Subsidiary has corporate power and
authority to own, lease and operate its properties and to conduct its
business as contemplated under this Agreement and the other agreements
to which it is a party; and each of the Company and each Significant
Subsidiary is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on the
financial condition, earnings, business affairs or business prospects
of the Company and its subsidiaries considered as a whole.
(j) The outstanding capital stock of the Company has been duly
authorized and validly issued and is fully paid and non-assessable and
is not subject to preemptive or other similar rights.
(k) The issued and outstanding capital stock of each Significant
Subsidiary has been duly authorized and validly issued and is fully
paid and non-assessable; and the common capital stock of each
Significant Subsidiary is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equitable right.
(l) The Shares have been duly authorized by the Company and,
when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and
the issuance of such Shares will not be subject to any preemptive or
similar rights.
(m) The Common Stock (other than the Shares) is and, upon
issuance the Shares will be, listed on the New York Stock Exchange.
(n) Neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "1940 Act").
(o) Except as described in or contemplated by the Prospectus,
there are no pending actions, suits or proceedings against or affecting
the Company or any of its subsidiaries or properties which are likely
in the aggregate, to result in any material adverse change in the
financial condition, earnings, business affairs, or business prospects
of the Company and its subsidiaries considered as a whole or which are
likely in the aggregate to materially and adversely affect the
consummation of this Agreement or the transactions contemplated herein
or therein.
(p) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the
performance by the Company of its obligations hereunder in connection
with the offering, issuance or sale of the Shares hereunder or the
consummation of the transactions herein contemplated, except such as
have been already obtained or as may be required under the Securities
Act or state securities laws.
-4-
4. Purchase and Sale.
-----------------
(a) On the basis of the representations, warranties and
covenants herein contained, but subject to the terms and conditions
herein set forth, the Company agrees to sell to each of the
Underwriters, severally and not jointly, and each such Underwriter
agrees, severally and not jointly, to purchase from the Company, the
respective number of Shares set forth opposite the name of such
Underwriter in Schedule II hereto at a price of $________ per share
(the "Purchase Price").
(b) On the basis of the representations and warranties
contained in this Agreement, and subject to its terms and conditions,
the Company agrees to sell to the Underwriters the Option Shares, and
the Underwriters shall have a one-time right to purchase, severally and
not jointly, all or part of _______ Option Shares at the Purchase
Price. Option Shares may be purchased as provided in this paragraph 4
solely for the purpose of covering over- allotments made in connection
with the offering of the Firm Shares. If any Option Shares are to be
purchased, each Underwriter agrees, severally and not jointly, to
purchase the number of Option Shares (subject to such adjustments to
eliminate fractional shares as the Representative may determine) that
bears approximately the same proportion to the total number of Option
Shares to be purchased as the number of Firm Shares set forth in
Schedule II hereto opposite the name of such Underwriter bears to the
total number of Firm Shares.
(c) The Company hereby agrees that, without the prior written
consent of the Representative, it will not during the period ending 60
days after the date of the Prospectus (i) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, or to
register or announce the sale or offering of any shares of common stock
of the Company or any securities convertible into or exercisable or
exchangeable for such common stock or (ii) enter into any agreement
that transfers, in whole or in part, the economic consequences of
ownership of such common stock, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of such common
stock or such other securities in cash or otherwise.
(d) The foregoing subparagraph (c) shall not apply to (i) the
Shares to be sold hereunder; (ii) the issuance by the Company of shares
of common stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing; (iii) the issuance or grant
of shares of common stock or options or rights to purchase shares of
common stock pursuant to the Company's benefit and compensation plans
including, but not limited to, _____________ [list employee benefit
plans], in amounts and on terms consistent with those plans; (iv) the
issuance or grant of shares of common stock or options or rights to
purchase shares of common stock in connection with the Company's
______________ [list investor plans]; and (v) agreements or
arrangements in connection with acquisition transactions involving the
issuance or sale of shares of common stock or relating to options,
rights, warrants or any securities convertible into or exercisable or
exchangeable for shares of common stock, where the acquisition
transactions are consummated more than 60 days after the date of the
Prospectus.
5. Reoffering by Underwriters. The Underwriters agree to make promptly
--------------------------
a bona fide public offering of the Shares to the public for sale as set forth in
the Prospectus, subject, however, to the terms and conditions of this Agreement.
The Company is further advised by the Underwriters that the
-5-
Shares are to be offered by the Underwriters to the public initially at $______
a share (the "Public Offering Price") and to certain dealers selected by the
Representatives at a price that represents a concession not in excess of $____ a
share under the Public Offering Price, and that any Underwriter may allow, and
such dealers may reallow, a concession, not in excess of $____ a share, to any
Underwriter or to certain other dealers. It is understood that after such
initial offering the several Underwriters reserve the right to vary the offering
price and further reserve the right to withdraw, cancel or modify such offering
without notice.
6. Time and Place of Closing; Default of Underwriters.
--------------------------------------------------
(a) Payment for the Firm Shares shall be made at the place,
time and date specified in Schedule I hereto against delivery of the
Shares to the office of the Representative, or such other place, time
and date as the Representative and the Company may agree. Payment for
the Firm Shares shall be by wire transfer of immediately available
funds against delivery of the Firm Shares to the Representative or upon
its order at the office of the Representative, at 10:00 A.M., New York
City time, on the third business day (unless postponed in accordance
with the provisions of paragraph 12 hereof) following the date of this
Agreement, or if pricing takes place after 4:30 P.M. New York City
time, on the fourth business day following the date of this Agreement
(unless postponed in accordance with the provisions of paragraph 12
hereof), or at such other time on the same or such other earlier date,
as shall be agreed upon by the Representative and the Company. The hour
and date of such delivery and payment are herein referred to as the
"Closing Date."
(b) Payment for any Option Shares shall be made by or on
behalf of the several Underwriters by the wire transfer of immediately
available funds to the Company's account. Such payment shall be made
upon delivery of the Option Shares to the Representative or upon its
order at the office of the Representative, at 10:00 A.M., New York City
time, on such date (which may be the same as the Closing Date but shall
in no event be earlier than the Closing Date nor later than ten
business days after the giving of the notice hereinafter referred to)
as shall be designated in a written notice from the Representative to
the Company of the Representative's determination, on behalf of the
Underwriters, to purchase a number, specified in said notice, of Option
Shares, or on such other date, in any event not later than ______
200__, as shall be agreed upon by the Representative and the Company.
The time and date of such payment are hereinafter referred to as the
"Option Closing Date" (the Closing Date or the Option Closing Date, as
applicable, is hereinafter referred to as the "Relevant Closing Date").
The notice of the determination to exercise the option to purchase
Option Shares and of the Option Closing Date may be given at any time
within 30 days after the date of this Agreement.
[(c) Certificates for the Firm Shares and Option Shares shall
be in definitive form and registered in such names and in such
denominations as the Representative shall request in writing not later
than one full business day prior to the Relevant Closing Date. The
certificates evidencing the Firm Shares and Option Shares shall be
delivered to the Representative on the Relevant Closing Date for the
respective accounts of the several Underwriters, with any transfer
taxes payable in connection with the transfer of the Shares to the
Underwriters duly paid, against payment of the Purchase Price therefor.
OR
-6-
(c) On the Relevant Closing Date, the Company shall deliver,
or cause to be delivered a credit representing the Firm Shares or the
Option Shares, as the case may be, to an account or accounts at The
Depository Trust Company as designated by the Representative for the
accounts of the Representative and the several Underwriters against the
irrevocable release of a wire transfer of immediately available funds
for the amount of the purchase price therefor. Time shall be of the
essence, and delivery at the time and place specified in this Agreement
is a further condition to the obligations of the Underwriters.]
(d) If, on the Relevant Closing Date one or more of the
Underwriters shall, for any reason permitted hereunder, cancel its
obligation to purchase hereunder and to take up and pay for the number
of Shares to be purchased by such one or more Underwriters, the Company
shall immediately notify the Representative, and the remaining
Underwriters shall have the right, within 24 hours of receipt of such
notice, either to take up and pay for (in such proportion as may be
agreed upon among them) or to substitute another Underwriter or
Underwriters, satisfactory to the Company, to take up and pay for the
number of Shares which such one or more Underwriters did not purchase.
If one or more Underwriters shall, for any reason other than a reason
permitted hereunder, fail to take up and pay for the number of Shares
to be purchased by such one or more Underwriters, the Company shall
immediately notify the Representative, and the remaining Underwriters
shall be obligated to take up and pay for (in addition to the number of
Shares set forth opposite their respective names in Schedule II hereto)
the number of Shares which such defaulting Underwriter or Underwriters
failed to take up and pay for, up to a number thereof equal to, in the
case of each such remaining Underwriter, 10% of the number of Shares
set forth opposite the name of such remaining Underwriter in said
Schedule II, and such remaining Underwriters shall have the right,
within 24 hours of receipt of such notice, either to take up and pay
for (in such proportion as may be agreed upon among them), or to
substitute another Underwriter or Underwriters, satisfactory to the
Company, to take up and pay for, the remaining number of Shares which
the defaulting Underwriter or Underwriters agreed but failed to
purchase. If any unpurchased Shares still remain, then the Company or
the Representative shall be entitled to an additional period of 24
hours within which to procure another party or parties, members of the
National Association of Securities Dealers, Inc. (or if not members of
such Association, who are not eligible for membership in said
Association and who agree (i) to make no sales within the United
States, its territories or its possessions or to persons who are
citizens thereof or residents therein and (ii) in making sales to
comply with said Association's Rules of Fair Practice) and satisfactory
to the Company, to purchase or agree to purchase such unpurchased
Shares on the terms herein set forth. In any such case either the
Representative or the Company shall have the right to postpone the
Closing Date for a period not to exceed three full business days from
the date agreed upon in accordance with this paragraph 6, in order that
the necessary changes in the Registration Statement and Prospectus and
any other documents and arrangements may be effected. If (i) neither
the non-defaulting Underwriters nor the Company has arranged for the
purchase of such unpurchased Shares by another party or parties as
above provided and (ii) the Company and the non-defaulting Underwriters
have not mutually agreed to offer and sell the Shares other than the
unpurchased Shares, then this Agreement shall terminate without any
liability on the part of the Company or any Underwriter (other than an
Underwriter which shall have failed or refused, in accordance with the
terms hereof, to purchase and pay for the number of Shares which such
Underwriter has agreed to purchase as provided in paragraph 4 hereof),
except as otherwise provided in paragraph 7 and paragraph 8 hereof.
7. Covenants of the Company. The Company covenants with each
------------------------
Underwriter that:
-7-
(a) As soon as possible after the execution and delivery of
this Agreement, the Company will file the Prospectus with the
Commission pursuant to Rule 424, setting forth, among other things, the
necessary information with respect to the terms of offering of the
Shares. The Company will promptly deliver to the Representative and to
counsel for the Underwriters, to the extent not previously delivered,
one fully executed copy or one conformed copy, certified by an officer
of the Company, of the Registration Statement, as originally filed, and
of all amendments thereto, heretofore or hereafter made, (other than
those relating solely to securities other than the Shares), including
any post-effective amendment (in each case including all exhibits filed
therewith and all documents incorporated therein not previously
furnished to the Representative), including signed copies of each
consent and certificate included therein or filed as an exhibit
thereto, and will deliver to the Representative for distribution to the
Underwriters as many conformed copies of the foregoing (excluding the
exhibits, but including all documents incorporated therein) as the
Representative may reasonably request. The Company will also send to
the Underwriters as soon as practicable after the date of this
Agreement and thereafter from time to time as many copies of the
Prospectus as the Representative may reasonably request for the
purposes required by the Securities Act.
(b) During such period (not exceeding nine months) after the
commencement of the offering of the Shares as the Underwriters may be
required by law to deliver a Prospectus, if any event relating to or
affecting the Company, or of which the Company shall be advised in
writing by the Representative shall occur, which in the Company's
opinion should be set forth in a supplement to or an amendment of the
Prospectus in order to make the Prospectus not misleading in the light
of the circumstances when it is delivered to a purchaser, or if it is
necessary to amend the Prospectus to comply with the Securities Act,
the Company will forthwith at its expense prepare and furnish to the
Underwriters and dealers named by the Representative a reasonable
number of copies of a supplement or supplements or an amendment or
amendments to the Prospectus which will supplement or amend the
Prospectus so that as supplemented or amended it will comply with the
Securities Act and will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading. In case any
Underwriter is required to deliver a Prospectus after the expiration of
nine months after the commencement of the offering of the Shares, the
Company, upon the request of the Representative, will furnish to the
Representative, at the expense of such Underwriter, a reasonable
quantity of a supplemented or amended prospectus, or supplements or
amendments to the Prospectus, complying with Section 10(a) of the
Securities Act.
(c) The Company will make generally available to its security
holders, as soon as reasonably practicable, but in any event not later
than 16 months after the end of the fiscal quarter in which the filing
of the Prospectus pursuant to Rule 424 occurs, an earning statement (in
form complying with the provisions of Section 11(a) of the Securities
Act, which need not be certified by independent public accountants)
covering a period of twelve months beginning not later than the first
day of the Company's fiscal quarter next following the filing of the
Prospectus pursuant to Rule 424.
(d) The Company will use its best efforts promptly to do and
perform all things to be done and performed by it hereunder prior to
the Closing Date and to satisfy all conditions precedent to the
delivery by it of the Shares.
-8-
(e) The Company will advise the Representative promptly of the
filing of the Prospectus pursuant to Rule 424 and of any amendment or
supplement to the Prospectus or Registration Statement or of official
notice of institution of proceedings for, or the entry of, a stop order
suspending the effectiveness of the Registration Statement and, if such
a stop order should be entered, use its best efforts to obtain the
prompt removal thereof.
(f) The Company will use its best efforts to qualify the
Shares, as may be required, for offer and sale under the Blue Sky or
legal investment laws of such jurisdictions as the Representative may
designate, and will file and make in each year such statements or
reports as are or may be reasonably required by the laws of such
jurisdictions; provided, however, that the Company shall not be
required to qualify as a foreign corporation or dealer in securities,
or to file any general consents to service of process under the laws of
any jurisdiction.
8. Payment of Expenses. The Company 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, (ii) the delivery of the Shares to the Underwriters, (iii) the fees
and disbursements of the Company's counsel and accountants, (iv) the expenses in
connection with the qualification of the Shares under securities laws in
accordance with the provisions of subparagraph (f) of paragraph 7 hereof,
including filing fees and the fees and disbursements of counsel for the
Underwriters in connection therewith, and in connection with the preparation of
the Blue Sky Survey and any Legality Memorandum, such fees and disbursements not
to exceed $5,000, (v) the printing and delivery to the Underwriters of copies of
the Registration Statement and all amendments thereto, of the preliminary
prospectuses, and of the Prospectus and any amendments or supplements thereto
and (vi) the printing and delivery to the Underwriters of copies of the Blue Sky
Survey and Legality Memorandum; and the Company will pay all taxes, if any (but
not including any transfer taxes), on the issue of the Shares.
The fees and disbursements of Underwriters' counsel shall be paid by
the Underwriters (subject, however, to the provisions of the preceding paragraph
requiring payment by the Company of fees and expenses not to exceed $5,000);
provided, however, that if this Agreement is terminated in accordance with the
provisions of paragraph 9, 10 or 12 hereof, the Company shall reimburse the
Representative for the account of the Underwriters for the fees and
disbursements of Underwriters' counsel. The Company shall not be required to pay
any amount for any expenses of the Representative or of any other of the
Underwriters except as provided in paragraph 7 hereof and in this paragraph 8.
The Company shall not in any event be liable to any of the Underwriters for
damages on account of the loss of anticipated profit.
9. Conditions of Underwriters' Obligations. The several obligations of
---------------------------------------
the Underwriters to purchase and pay for the shares shall be subject to the
accuracy of the representations and warranties on the part of the Company as of
the date hereof and the Closing Date, to the performance by the Company of its
obligations to be performed hereunder prior to the Closing Date, and to the
following further conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall be in effect on the Closing Date; and no
proceedings for that purpose shall be pending before, or, to the
Company's knowledge, threatened by, the Commission on the Closing Date.
The Representative shall have received, prior to payment for the
Shares, a certificate dated the Closing Date and signed by the
Chairman, President or a Vice President of the Company to the effect
that no such stop order is in effect and that no proceedings for such
purpose are pending before or, to the knowledge of the Company,
threatened by the Commission.
-9-
(b) At the Closing Date, the Representative shall receive
favorable opinions from (1) Hunton & Xxxxxxxx, of counsel to the
Company, which opinion shall be satisfactory in form and substance to
counsel for the Underwriters, and (2) ______________, counsel for the
Underwriters (which counsel may rely as to all matters of North
Carolina law upon the opinions of Xxxxxxx X. Xxxxxxx, Esq., Senior Vice
President and Corporate Secretary for the Company) to the effect that:
(i) assuming delivery to and payment for the Shares by
the Underwriters, as provided in this Agreement, the Shares
are validly issued, fully paid and non-assessable;
(ii) the Shares are not subject to any preemptive or
similar rights and have been duly authorized for listing on
the New York Stock Exchange;
(iii) the form of the certificates for the Shares
conforms in all material respects to the requirements of the
North Carolina Business Corporation Act and the New York Stock
Exchange;
(iv) the statements made in the Prospectus under the
captions "DESCRIPTION OF CAPITAL STOCK--Common Stock Listing"
and "DESCRIPTION OF CAPITAL STOCK--Common Stock" and in the
Prospectus Supplement under the caption "Description of the
Shares," insofar as they purport to constitute summaries of
the documents referred to therein, are correct in all material
respects;
(v) this Agreement has been duly and validly
authorized, executed and delivered by the Company;
(vi) the Registration Statement, at the time and date it
was declared effective by the Commission, and the Prospectus,
at the time it was filed with, or transmitted for filing to,
the Commission pursuant to Rule 424, (except as to the
financial statements and other financial and statistical data
constituting a part thereof or incorporated by reference
therein, upon which such opinions need not pass), complied as
to form in all material respects with the requirements of the
Securities Act and the 1939 Act and the applicable
instructions, rules and regulations of the Commission
thereunder; the documents or portions thereof filed with the
Commission pursuant to the Exchange Act and deemed to be
incorporated by reference in the Registration Statement and
the Prospectus pursuant to Item 12 of Form S-3 (except as to
financial statements and other financial and statistical data
constituting a part thereof or incorporated by reference
therein, upon which such opinions need not pass), at the time
they were filed with the Commission, complied as to form in
all material respects with the requirements of the Exchange
Act and the applicable instructions, rules and regulations of
the Commission thereunder; the Registration Statement has
become effective under the Securities Act and, to the best of
the knowledge of said counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued
and not withdrawn and no proceedings for a stop order with
respect thereto are threatened or pending under Section 8 of
the Securities Act;
(vii) nothing has come to the attention of said counsel
that would lead them to believe that the Registration
Statement, at the time and date it was declared effective
-10-
by the Commission, 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, at the time it was filed
with, or transmitted for filing to, the Commission pursuant to
Rule 424 or at the Closing Date, included or includes 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 (except as to financial
statements and other financial and statistical data
constituting a part of the Registration Statement or the
Prospectus or incorporated by reference therein, upon which
such opinions need not pass); and
(viii) an appropriate order of the Commission with respect
to the sale of the Shares under the Public Utility Holding
Company Act of 1935, as amended (the "Holding Company Act"),
has been issued, and such order remains in effect at this date
and constitutes valid and sufficient authorization for the
sale of the Shares as contemplated by this Agreement; and no
approval or consent by any public regulatory body, other than
such order and notification of effectiveness by the
Commission, is legally required in connection with the sale of
the Shares as contemplated by this Agreement (except to the
extent that compliance with the provisions of securities or
blue sky laws of certain states may be required in connection
with the sale of the Shares in such states) and the carrying
out of the provisions of this Agreement.
(c) At the Closing Date, the Representative shall receive from
Xxxxxxx X. Xxxxxxx, Esq., Senior Vice President and Corporate Secretary
for the Company, a favorable opinion in form and substance satisfactory
to counsel for the Underwriters, to the same effect with respect to the
matters enumerated in subdivisions (i) through (v) and subdivision
(vii) of subparagraph (b) of this paragraph 9 as the opinions required
by said subparagraph (b), and to the further effect that:
(i) the Company is a validly organized and existing
corporation and is in good standing under the laws of the
State of North Carolina; each Significant Subsidiary is a
validly organized and existing corporation and is in good
standing under the laws of the jurisdiction of its
organization; and the Company and each of its subsidiaries is
qualified as a foreign corporation in each state where the
failure to be so qualified would have a material adverse
effect on the Company and its subsidiaries considered as a
whole;
(ii) each of the Company and each Significant Subsidiary
is duly authorized by its articles of incorporation to conduct
the business which it is now conducting as set forth in the
Prospectus;
(iii) the issuance and sale of the Shares have been duly
authorized by all necessary corporate action on the part of
the Company;
(iv) except as described in or contemplated by the
Prospectus, there are no pending actions, suits or proceedings
against or affecting the Company or any Significant Subsidiary
which are likely in the aggregate, to result in any material
adverse change in the business, property, financial condition,
earnings, business affairs, or business prospects of the
Company and its subsidiaries considered as a whole or which
-11-
are likely in the aggregate, to materially and adversely affect the
consummation of this Agreement or the transactions contemplated herein
or therein; and
(v) the consummation of the transactions herein contemplated and
the fulfillment of the terms hereof will not result in a breach of any
of the terms or provisions of, or constitute a default under, the
Articles, the Company's by-laws, applicable law or any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company or any Significant Subsidiary is now a party or any judgment,
order, writ or decree of any government or governmental authority or
agency or court having jurisdiction over the Company or any of its
subsidiaries or any of their assets, properties or operations.
(d) At the Closing Date, the Representative shall have received from
______________ a letter, dated the Closing Date, confirming that they are
independent certified public accountants within the meaning of the
Securities Act and the Exchange Act, and of the applicable published rules
and regulations thereunder, and stating in effect that: (i) in their
opinion, the audited financial statements incorporated by reference in the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Securities Act or the Exchange
Act, as applicable, and of the published rules and regulations thereunder;
(ii) based on the performance of the procedures specified by the American
Institute of Certified Public Accountants for review of interim financial
information as described in Statement on Auditing Standards ("SAS") No. 71,
Interim Financial Information, on the unaudited financial statements
-----------------------------
incorporated by reference in the Registration Statement, inquiries of
officials of the Company responsible for financial and accounting matters
and reading the minutes of meetings of the Board of Directors, of the
Executive Committee of the Board of Directors and of the shareholders,
nothing came to their attention that caused them to believe that (A) the
unaudited financial statements incorporated by reference in the
Registration Statement do not comply as to form in all material respects
with the applicable accounting requirements of the Securities Act or the
Exchange Act, as applicable, and the published rules and regulations
thereunder or any material modifications should be made for them to be in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the most recent audited financial
statements incorporated by reference in the Registration Statement; or (B)
at the date of the latest available interim balance sheet read by them and
at a subsequent date not more than three days prior to the date of the
letter, there was any change in the capital stock or long-term debt of the
Company, or at the date of the latest available interim balance sheet read
by them, there was any decrease in net assets as compared with the amount
shown on the most recent balance sheet incorporated by reference in the
Registration Statement, except for changes or decreases that the
Registration Statement discloses have occurred or may occur, for
declarations of dividends, for common stock sales under _________________
[employee benefit plans], or for changes or decreases that are described in
the letter; and (iii) covering such other matters as the Representative
shall reasonably request.
(e) At the Closing Date, the Representative shall receive a
certificate of the Chairman, President or a Vice President of the Company,
dated the Closing Date, to the effect that the representations and
warranties of the Company in this Agreement are true and correct as of the
Closing Date.
(f) All legal proceedings taken in connection with the sale and
delivery of the Shares shall have been satisfactory in form and substance
to counsel for the Underwriters.
-12-
(g) At the Closing Date an order or orders of the Commission pursuant
to the Holding Company Act permitting the issuance and sale of the Shares
shall be in full force and effect and all provisions of such order or
orders heretofore entered are deemed acceptable to the Representative and
the Company, and all provisions of such order or orders hereafter entered
shall be deemed acceptable to the Representative and the Company unless
within 24 hours after receiving a copy of any such order either shall give
notice to the other to the effect that such order contains an unacceptable
provision.
In case any of the conditions specified above in this paragraph 9 shall not
have been fulfilled or waived by 2:00 P.M. on the Closing Date, this Agreement
may be terminated by the Representative by delivering written notice thereof to
the Company. Any such termination shall be without liability of any party to any
other party except as otherwise provided in paragraphs 7 and 8 hereof.
10. Conditions of the Company's Obligations. The obligations of the
---------------------------------------
Company to deliver the Shares shall be subject to the conditions set forth in
the first sentence of subparagraph (a) of paragraph 9 hereof and in subparagraph
(g) of paragraph 9 hereof. In case these conditions shall not have been
fulfilled at the Closing Date, this Agreement may be terminated by the Company
by mailing or delivering written notice thereof to the Representative. Any such
termination shall be without liability of any party to any other party except as
otherwise provided in paragraphs 7 and 8 hereof.
11. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person who controls any Underwriter within the meaning
of Section 15 of the Securities Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act or under any other statute or
common law and to reimburse each such Underwriter and each such controlling
person for any legal or other expenses (including to the extent hereinafter
provided, reasonable counsel fees) incurred by them, when and as incurred,
in connection with investigating any such losses, claims, damages or
liabilities or in connection with defending any actions, insofar as such
losses, claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement, or alleged untrue statement, of a
material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus, or in the Registration Statement or
Prospectus as amended or supplemented (if any amendments or supplements
thereto shall have been furnished), or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that the
indemnity agreement contained in this paragraph 11 shall not apply to any
such losses, claims, damages, liabilities, expenses or actions arising out
of, or based upon any such untrue statement or alleged untrue statement, or
any such omission or alleged omission, if such statement or omission was
made in reliance upon and in conformity with information furnished herein
or in writing to the Company by any Underwriter through the Representative
for use in the Registration Statement, any preliminary prospectus or the
Prospectus, or any amendment or supplement to either thereof, or arising
out of, or based upon, statements in or omissions from that part of the
Registration Statement which shall constitute the Statement of Eligibility
under the 1939 Act (Forms T-1) of the trustee under any indenture, and
provided, further, that the indemnity agreement contained in this paragraph
11 shall not inure to the benefit of any Underwriter (or of any person
controlling such Underwriter) on account of any such losses, claims,
damages, liabilities, expenses or actions arising from the sale of the
Shares to any person if a copy of the Prospectus (excluding
-13-
documents incorporated by reference therein) shall not have been given or
sent to such person by or on behalf of such Underwriter with or prior to
the written confirmation of the sale involved, unless such Prospectus
failed to correct the omission or misstatement. The indemnity agreement of
the Company contained in this paragraph 11 and the representations and
warranties of the Company contained in paragraph 3 hereof shall remain
operative and in full force and effect regardless of any investigation made
by or on behalf of any Underwriter or any such controlling person and shall
survive the delivery of the Shares. The Underwriters agree to notify
promptly the Company, and each other Underwriter, of the commencement of
any litigation or proceedings against them or any of them, or any such
controlling person, in connection with the sale of the Shares.
(b) Each Underwriter severally, and not jointly, agrees to indemnify
and hold harmless the Company, its officers and directors, and each person
who controls the Company within the meaning of Section 15 of the Securities
Act, against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the
Securities Act or under any other statute or common law, and to reimburse
each of them for any legal or other expenses (including, to the extent
hereinafter provided, reasonable counsel fees) incurred by them, when and
as incurred, in connection with investigating any such losses, claims,
damages, or liabilities, or in connection with defending any actions,
insofar as such losses, claims, damages, liabilities, expenses or actions
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any
preliminary prospectus or the Prospectus as amended or supplemented (if any
amendments or supplements thereto shall have been furnished), or the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, if such statement or omission was made in reliance upon and in
conformity with information furnished herein or in writing to the Company
by such Underwriter or through the Representative on behalf of such
Underwriter for use in the Registration Statement, any preliminary
prospectus or the Prospectus or any amendment or supplement to either
thereof. The indemnity agreement of all the respective Underwriters
contained in this paragraph 11 shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Company
or any other Underwriter, or any such controlling person, and shall survive
the delivery of the Shares. The Company agrees promptly to notify the
Representative of the commencement of any litigation or proceedings against
the Company or any of its officers or directors, or any such controlling
person, in connection with the sale of the Shares.
(c) The Company and each of the Underwriters agree that, upon the
receipt of notice of the commencement of any action against it, its
officers and directors, or any person controlling it as aforesaid, in
respect of which indemnity may be sought on account of any indemnity
agreement contained herein, it will promptly give written notice of the
commencement thereof to the party or parties against whom indemnity shall
be sought hereunder. The Company and each of the Underwriters agree that
the notification required by the preceding sentence shall be a material
term of this Agreement. The omission so to notify such indemnifying party
or parties of any such action shall relieve such indemnifying party or
parties from any liability which it or they may have to the indemnified
party on account of any indemnity agreement contained herein if such
indemnifying party was materially prejudiced by such omission, but shall
not relieve such indemnifying party or parties from any liability which it
or they may have to the indemnified party otherwise than on account of such
indemnity agreement. In case such notice of any such action shall be so
given, such indemnifying party shall be entitled to participate at its own
expense in the defense or, if it so elects, to assume (in
-14-
conjunction with any other indemnifying parties) the defense of such
action, in which event such defense shall be conducted by counsel chosen by
such indemnifying party (or parties) and satisfactory to the indemnified
party or parties who shall be defendant or defendants in such action, and
such defendant or defendants shall bear the fees and expenses of any
additional counsel retained by them; but if the indemnifying party shall
elect not to assume the defense of such action, such indemnifying parties
will reimburse such indemnified party or parties for the reasonable fees
and expenses of any counsel retained by them, as such expenses are
incurred; provided, however, if the defendants (including any impleaded
parties) in any such action include both the indemnified party and the
indemnifying party, and counsel for the indemnified party shall have
concluded, in its reasonable judgment, that there may be a conflict of
interest involved in the representation by such counsel of both the
indemnifying party and the indemnified party, the indemnified party or
parties shall have the right to select separate counsel, satisfactory to
the indemnifying party, to participate in the defense of such action on
behalf of such indemnified party or parties (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more
than one separate counsel representing the indemnified parties who are
parties to such action).
(d) If the indemnification provided for in subparagraphs (a) or (b)
above is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by
the Company, on the one hand, and the Underwriters, on the other hand, from
the offering of the Shares pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above 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 which resulted in such losses,
liabilities, claims, damages or expenses, 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 Shares pursuant to this Agreement shall be deemed to be
in the same respective proportions as the total net proceeds from the
offering of the Shares pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount
received by the Underwriters, in each case as set forth on the cover of the
Prospectus, bear to the aggregate initial public offering price of the
Shares as set forth on such cover. 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 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 Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this subparagraph (d) 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 subparagraph (d). No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this subparagraph (d), each
person, if any, who controls an Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the
same rights to contribution as such Underwriter,
-15-
and each director of the Company, each officer of the Company who signed
the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act shall have the same rights to contribution as the
Company. The Underwriters' respective obligations to contribute pursuant to
this subparagraph (d) are several in proportion to the number of Shares set
forth opposite their respective names in Schedule II hereto and not joint.
(e) For purposes of this paragraph 11, it is understood and agreed
that the only information provided by the Underwriters for inclusion in the
Registration Statement and the Prospectus was as follows:
________________________________________________.
12. Termination Date of this Agreement. This Agreement may be terminated
----------------------------------
by the Representative at any time prior to the Closing Date by delivering
written notice thereof to the Company, if on or after the date of this Agreement
but prior to such time (a) there shall have occurred any general suspension of
trading in securities on the New York Stock Exchange, or there shall have been
established by the New York Stock Exchange or by the Commission or by any
federal or state agency or by the decision of any court any limitation on prices
for such trading or any restrictions on the distribution of securities, or (b)
there shall have occurred any new outbreak of hostilities, including, but not
limited to, an escalation of hostilities which existed prior to the date of this
Agreement or any national or international calamity or crisis, the effect of
which on the financial markets of the United States shall be such as to make it
impracticable, in the reasonable judgment of the Representative, for the
Underwriters to enforce contracts for the sale of the Shares, or (c) the Company
or any Significant Subsidiary shall have sustained a substantial loss by fire,
flood, accident or other calamity which renders it impracticable, in the
reasonable judgment of the Representative, to consummate the sale of the Shares
and the delivery of the Shares by the several Underwriters at the initial public
offering price or (d) there shall have been any downgrading or any notice of any
intended or potential downgrading in the rating accorded the Company's
securities by any "nationally recognized statistical rating organization" as
that term is defined by the Commission for the purposes of Securities Act Rule
436(g)(2), or any such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating of
the Shares or any of the Company's other outstanding debt, the effect of which,
in the reasonable judgment of the Representative, makes it impracticable or
inadvisable to consummate the sale of the Shares and the delivery of the Shares
by the several Underwriters at the initial public offering price. This Agreement
may also be terminated at any time prior to the Closing Date if in the
reasonable judgment of the Representative the subject matter of any amendment or
supplement to the Registration Statement or Prospectus (other than an amendment
or supplement relating solely to the activity of any Underwriter or
Underwriters) filed after the execution of this Agreement shall have materially
impaired the marketability of the Shares. Any termination hereof pursuant to
this paragraph 12 shall be without liability of any party to any other party
except as otherwise provided in paragraphs 7 and 8 hereof.
13. Miscellaneous. The validity and interpretation of this Agreement shall
-------------
be governed by the laws of the State of New York. Unless otherwise specified,
time of day refers to New York City time. This Agreement shall inure to the
benefit of, and be binding upon, the Company, the several Underwriters, and with
respect to the provisions of paragraph 11 hereof, the officers and directors and
each controlling person referred to in paragraph 11, and their respective
successors. Nothing in this Agreement is intended or shall be construed to give
to any other person, firm or corporation any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained.
The term "successors" as used in this Agreement shall not include any purchaser,
as such purchaser, of any of the Shares from any of the several Underwriters.
-16-
14. Notices. All communications hereunder shall be in writing or by
-------
telefax and, if to the Underwriters, shall be mailed, transmitted by any
standard form of telecommunication or delivered to the Representative at the
address set forth in Schedule I hereto and if to the Company, shall be mailed or
delivered to it at 000 Xxxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000-0000,
attention of ___________________.
15. Counterparts. This Agreement may be simultaneously executed in
------------
counterparts, each of which when so executed shall be deemed to be an original.
Such counterparts shall together constitute one and the same instrument.
16. Defined Terms. Unless otherwise defined herein, capitalized terms used
-------------
in this Agreement shall have the meanings assigned to them in the Registration
Statement.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed duplicate hereof whereupon it
will become a binding agreement between the Company and the several Underwriters
in accordance with its terms.
Very truly yours,
CP&L ENERGY, INC.
By: _______________________________
Authorized Representative
Accepted as of the date first
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named in, Schedule II.
[NAME OF REPRESENTATIVE]
By ___________________________
-17-
SCHEDULE I
Underwriting Agreement dated ___________, ____
Registration Statement No. 333-_____
Representative and Address:
Designation: Common Stock
Amount: _____ shares
Purchase Price: $____ per share
Public Offering Price: $ ____ per share.
Closing Date and Location: _______________, 200__; Hunton & Xxxxxxxx, 000
Xxxxxxxxxxxx Xxxxxx Xxxx, Xxxxxxx Xxxxx Xxxxxxxx 00000
SCHEDULE II
Number of Firm Shares
---------------------
Underwriters to be Purchased
------------ ---------------
TOTAL...................................
SCHEDULE III
Significant Subsidiaries
------------------------
