PROGRESS ENERGY, INC. Series A Floating Rate Senior Notes due 2010 UNDERWRITING AGREEMENT
EXHIBIT 1
PROGRESS ENERGY, INC.
5.625% Senior Notes due 2016
Series A Floating Rate Senior Notes due 2010
January 10, 2006
To the Representative named in Schedule I hereto
of the Underwriters named in Section 1 herein
of the Underwriters named in Section 1 herein
Dear Ladies and Gentlemen:
The undersigned Progress 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 in this
Underwriting Agreement (this “Agreement”) shall be deemed to mean the following firms, and any
underwriter substituted as provided in paragraph 6 hereof, and the term “Underwriter” shall be
deemed to mean any one of such Underwriters:
Banc of America Securities LLC
Citigroup Global Markets Inc.
Barclays Capital Inc.
X.X. Xxxxxx Securities Inc.
Citigroup Global Markets Inc.
Barclays Capital Inc.
X.X. Xxxxxx Securities Inc.
The term “Representative” as used herein shall be deemed to mean the firm or the firms named
in Schedule I hereto, collectively. If any firm or firms named as Representative in Schedule I
hereto are the only firm or firms serving as underwriters, then the terms “Underwriters” and
“Representative,” as used herein, shall each be deemed to refer to such firm or firms. If more
than one firm is named in Schedule I hereto, such firms represent, jointly and severally, that they
have been authorized by the Underwriters to execute this Agreement on their behalf and to act for
them as Representative in the manner herein provided. All obligations of the Underwriters
hereunder are several and not joint. If more than one firm is named as Representative 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 its debt
securities of the designation, with the terms and in the amount specified in Schedule I hereto (the
“Securities”) in one or more new series under a governing indenture dated as of February 15, 2001
(the “Base Indenture”) between the Company and X.X. Xxxxxx Trust Company, National
Association, as successor trustee (the “Trustee”), as supplemented and amended, and as further
supplemented and amended by two officer’s certificates dated as of January 13, 2006 (the “Officer’s
Certificates”; and the Base Indenture as so supplemented, the “Indenture”), in substantially the
form heretofore delivered to the Representative.
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, as amended (No. 333-81278) (the “New
Registration Statement”) under the Securities Act of 1933, as amended (the “Securities
Act”), for the registration of up to an aggregate of $2,000,000,000 principal amount of the
Company’s securities as described therein in unallocated amounts. The New Registration
Statement also constituted post-effective amendment no. 1 to a registration statement on
Form S-3 (No. 333-69738) (the “Post-Effective Amendment” and together with the New
Registration Statement, the “Registration Statement”) under the Securities Act relating to
an aggregate of $494,000,000 principal amount of the Company’s securities, which had been
previously registered under the Securities Act but remained unsold at the time the
Post-Effective Amendment became effective. The Registration Statement contained a combined
prospectus for the sale of up to an aggregate of $2,494,000,000 principal amount of the
Company’s securities as described therein (the “Registered Securities”) in unallocated
amounts. The Registration Statement was declared effective by the Commission on February 7,
2002. As of the date hereof, the Company has sold an aggregate of $1,414,673,000 principal
amount of the Registered Securities. The term “Registration Statement” shall be deemed to
include all amendments to the date hereof and all documents incorporated by reference
therein (the “Incorporated Documents”). The base prospectus filed as part of the
Registration Statement, in the form in which it has most recently been filed with the
Commission prior to the date of this Agreement, is hereinafter called the “Basic
Prospectus.” The Basic Prospectus included in the Registration Statement, as supplemented
by a preliminary prospectus supplement, dated January 10, 2006, relating to the Securities,
and all prior amendments or supplements thereto (other than amendments or supplements
relating to Registered Securities other than the Securities), including the Incorporated
Documents, is hereinafter referred to as the “Preliminary Prospectus.” The Preliminary
Prospectus, as amended and supplemented, including the Incorporated Documents, at or
immediately prior to the Applicable Time (as defined below) is hereinafter called the
“Pricing Prospectus.” The Basic Prospectus included in the Registration Statement, as it is
to be supplemented by a prospectus supplement, dated on the date hereof, substantially in
the form delivered to the Representative prior to the execution hereof, relating to the
Securities (the “Prospectus Supplement”) and all prior amendments or supplements thereto
(other than amendments or supplements relating to Registered Securities of the Company other
than the Securities), 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 any post-effective amendment to the Registration Statement, any prospectus
supplement relating to the Securities filed with the Commission pursuant to Rule 424(b)
under the Securities Act and the filing of any
-2-
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 Securities 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.
For purposes of this Agreement, the “Applicable Time” is 1:30 p.m. (New York City time)
on the date of this Agreement; the documents listed in Schedule II, taken together, are
collectively referred to as the “Pricing Disclosure Package.”
(b) The Registration Statement, at the time and date it was declared effective by the
Commission, complied, and the Registration Statement, the Prospectus and the Indenture, as
of the date hereof and at the Closing Date (as defined herein), will comply, in all material
respects, with the applicable provisions of the Securities Act and the Trust Indenture Act
of 1939, as amended (the “1939 Act”), and the applicable instructions, rules and regulations
of the Commission thereunder; the Registration Statement, at the time and date it was
declared effective by the Commission and as of the date hereof, 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; the Pricing Disclosure Package
as of the Applicable Time did 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; and the Prospectus, as of its date
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 (b) 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 (“Form T-1”) of the Trustee
under the Indenture. The Incorporated Documents, at the time they were each filed with the
Commission, complied in all material respects with the applicable requirements of the
Exchange Act and the instructions, rules and regulations of the Commission thereunder; and
any documents so filed and incorporated by reference subsequent to the date hereof and prior
to the termination of the offering of the Securities by the Underwriters will, at the time
they are each filed with the Commission, comply in all material respects with the
requirements of the Exchange Act and the instructions, rules and regulations of the
Commission thereunder; and, when read together with the Registration Statement, the Pricing
Prospectus, the Permitted Free Writing Prospectuses (as defined in paragraph 5(a) hereof)
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. Each Permitted Free Writing
Prospectus listed on Schedule II does not conflict in any material respect with the
-3-
information contained in the Registration Statement, the Pricing Prospectus or the
Prospectus.
(c) The historical financial statements incorporated by reference in the Registration
Statement, the Pricing Prospectus and the Prospectus 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 in the United States consistently applied
throughout the periods involved, except that the quarterly financial statements, if any,
incorporated by reference from any Quarterly Reports on Form 10-Q contain condensed
footnotes prepared in accordance with Exchange Act regulations; and Deloitte & Touche LLP,
which has audited certain of the financial statements, is an independent registered public
accounting firm as required by the Securities Act or the Exchange Act and the rules and
regulations of the Commission thereunder.
(d) Except as reflected in, or contemplated by, the Registration Statement and the
Pricing Prospectus, since the respective dates as of which information is given in the
Registration Statement and the Pricing Prospectus, and prior to the Closing Date, (i) there
has not been any material adverse change in the business, properties, results of operations
or financial condition of the Company and its subsidiaries, considered as a whole, (ii)
there has not been any material transaction entered into by the Company or any of its
significant subsidiaries (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)
other than transactions contemplated by the Registration Statement and the Pricing
Prospectus or transactions arising in the ordinary course of business and (iii) neither the
Company and its subsidiaries has any material contingent obligation that is not disclosed in
the Registration Statement and the Pricing Prospectus that could likely result in a material
adverse change in the business, properties, results of operations or financial condition of
the Company and its subsidiaries, considered as a whole.
(e) The Company has full power and authority to execute, deliver and perform its
obligations under this Agreement. The execution and delivery of this Agreement, 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.
(f) 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 or Repayment Event (as defined below) under, the articles of incorporation or the
by-laws of the Company or any Significant Subsidiary, 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 (except for the Company’s Credit Agreement dated
November 21, 2005), 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 Significant
Subsidiaries or any of their assets, properties or
-4-
operations, that, in the case of any such breach, default or Repayment Event, would
have a material adverse effect on the business, properties, results of operations or
financial condition of the Company and its subsidiaries considered as a whole. As used
herein, a “Repayment Event” means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any Significant Subsidiary of the Company.
(g) The Securities conform in all material respects to the description contained in the
Pricing Disclosure Package and the Prospectus.
(h) 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 business, properties, results of operations or financial
condition of the Company and its subsidiaries considered as a whole.
(i) 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
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.
(j) The Indenture (A) has been duly authorized, executed and delivered by the Company,
and, assuming due authorization, execution and delivery by the Trustee, constitutes a valid
and legally binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to (i) applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or similar laws affecting creditors’ rights generally and
(ii) general principles of equity (regardless of whether such enforceability is considered
in a proceeding at law or in equity and except for the effect on enforceability of federal
or state law limiting, delaying or prohibiting the making of payments outside the United
States); and (B) conforms in all material respects to the description thereof in the Pricing
Disclosure Package and the Prospectus. The Indenture has been qualified under the 1939 Act.
(k) The Securities have been duly authorized by the Company and, when issued and
authenticated in the manner provided for in the Indenture and delivered against payment of
the required consideration therefor, will constitute valid and legally binding obligations
of the Company, entitled to the benefits of the Indenture and
-5-
enforceable against the Company in accordance with their terms, subject to (i)
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
similar laws affecting creditors’ rights generally and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding at law or in equity
and except for the effect on enforceability of federal or state law limiting, delaying or
prohibiting the making of payments outside the United States). Such Securities rank and
will rank on a parity with all unsecured and unsubordinated indebtedness of the Company.
(l) 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”).
(m) Except as described in or contemplated by the Pricing Prospectus, there are no
pending or, to the knowledge of the Company, threatened actions, suits or proceedings
(regulatory or otherwise) 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
business, properties, results of operations or financial condition of the Company and its
subsidiaries considered as a whole, or which are likely in the aggregate to materially and
adversely affect the Indenture, the Securities or the consummation of this Agreement or the
transactions contemplated herein or therein.
(n) 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 Securities hereunder or the consummation of the
transactions herein contemplated or for the due execution, delivery or performance of the
Indenture by the Company, except such as have already been made or obtained or as may be
required under the Securities Act or state securities laws and except for the qualification
of the Indenture under the 1939 Act.
(o) Neither the Company nor any of its subsidiaries is in violation of its charter or
by-laws or in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreements or instruments to which the Company or any
of its subsidiaries is a party or by which it or any of them may be bound or to which any of
the property or assets of the Company or any of them is subject except for such defaults
that would not result in a material adverse change in the business, properties, results of
operations or financial condition of the Company and its subsidiaries considered as a whole.
(p) Except as described in the Registration Statement and the Pricing Prospectus and
except as would not, in the aggregate, result in a material adverse change in the business,
properties, results of operations or financial condition of the Company and its subsidiaries
considered as a whole, neither the Company nor any of its subsidiaries is in violation of
any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy
or rule of common law or any judicial or administrative interpretation thereof.
-6-
(q) The Company’s internal control over financial reporting includes policies and
procedures that are designed to (1) provide for the maintenance of records that, in
reasonable detail, accurately and fairly reflect transactions concerning the assets of the
Company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting
principles in the United States of America; (3) provide reasonable assurance that receipts
and expenditures of the Company are being made only in accordance with authorizations of
management and directors of the Company; and (4) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition of the
Company’s assets that could have a material effect on the financial statements.
(r) The Company employs disclosure controls and procedures that are designed to ensure
that information required to be disclosed by the Company in the reports that it files or
submits under the Exchange Act is accumulated and communicated to the Company’s management,
including its principal executive and principal financial officer, as appropriate, to allow
timely decisions regarding disclosure.
4. Purchase and Sale. 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 principal amount of
Securities set forth opposite the name of such Underwriter below at purchase prices of 99.16% of
the principal amount of the 5.625% Senior Notes due 2016 and 99.525% of the principal amount of the
Series A Floating Rate Senior Notes due 2010:
| Principal Amount of: | ||||||||
| 5.625% Senior | Series A Floating | |||||||
| Underwriter | Notes | Rate Senior Notes | ||||||
Banc of America Securities LLC |
$ | 120,000,000 | $ | 40,000,000 | ||||
Citigroup Global Markets Inc. |
$ | 120,000,000 | $ | 40,000,000 | ||||
Barclays Capital Inc. |
$ | 30,000,000 | $ | 10,000,000 | ||||
X.X. Xxxxxx Securities Inc. |
$ | 30,000,000 | $ | 10,000,000 | ||||
Total |
$ | 300,000,000 | $ | 100,000,000 | ||||
The Underwriters agree to make promptly a bona fide public offering of the Securities to the
public for sale as set forth in the Prospectus, subject, however, to the terms and conditions of
this Agreement. The Underwriters agree that the information that has been or will be presented to
investors is or will be consistent with the information that is contained in the Pricing Disclosure
Package.
5. Free Writing Prospectuses.
(a) The Company represents and agrees that, without the prior consent of the
Representative, it has not made and will not make any offer relating to the Securities that
would constitute a “free writing prospectus” as defined in Rule 405 under the Act, other
-7-
than a Permitted Free Writing Prospectus; each Underwriter represents and agrees that,
without the prior consent of the Company and the Representative, it has not made and will
not make any offer relating to the Securities that would constitute a “free writing
prospectus,” as defined in Rule 405 under the Act, other than a Permitted Free Writing
Prospectus or a free writing prospectus that is not required to be filed by the Company
pursuant to Rule 433 under the Securities Act (an “Underwriter Free Writing Prospectus”).
Any such free writing prospectus the use of which is consented to by the Company and the
Representative is referred to herein as a “Permitted Free Writing Prospectus”. The only
Permitted Free Writing Prospectus as of the time of this Agreement is the pricing term sheet
referred to in paragraph 5(b) below.
(b) The Company agrees to file a pricing term sheet, in the form of Schedule I hereto
and approved by the Representative pursuant to Rule 433(d) under the Securities Act within
the time period prescribed by such Rule.
(c) The Company and the Underwriters have complied and will comply with the
requirements of Rule 433 under the Securities Act applicable to any free writing prospectus,
including timely Commission filing where required and legending.
(d) The Company agrees that if at any time following issuance of a Permitted Free
Writing Prospectus and prior to the Closing Date any event occurred or occurs as a result of
which such Permitted Free Writing Prospectus would conflict in any material respect with the
information in the Registration Statement, the Pricing Prospectus or the Prospectus or
include an untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances then prevailing, not
misleading, the Company will give prompt notice thereof to the Representative and, if
requested by the Representative, will prepare and furnish without charge to each Underwriter
a Permitted Free Writing Prospectus or other document which will correct such conflict,
statement or omission; provided, however, that this representation and warranty shall not
apply to any statements or omissions in a Permitted Free Writing Prospectus made in reliance
upon and in conformity with information furnished in writing to the Company by an
Underwriter through the Representative, expressly for use therein.
6. Time and Place of Closing; Default of Underwriters.
(a) Payment for the Securities shall be made at the office of Hunton & Xxxxxxxx LLP,
located at 000 Xxxxxxxxxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000 on the date specified
in Schedule I hereto against delivery of the Securities at the office of X.X. Xxxxxx Trust
Company, National Association, Xxx Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000-0126, or
such other place, time and date as the Representative and the Company may agree. The hour
and date of such delivery and payment are herein called the “Closing Date.” Payment for the
Securities shall be by wire transfer of immediately available funds against delivery of the
Securities to The Depository Trust Company or to X.X. Xxxxxx Trust Company, National
Association, as custodian for The Depository Trust Company, in fully registered global form
registered in the name of Cede & Co., as nominee for The Depository Trust Company, for the
respective accounts specified by the
-8-
Representative not later than the close of business on the business day prior to the
Closing Date or such other date and time not later than the Closing Date as agreed by The
Depository Trust Company or X.X. Xxxxxx Trust Company, National Association. For the
purpose of expediting the checking of the certificates by the Representative, the Company
agrees to make the Securities available to the Representative not later than 10:00 A.M. New
York time, on the last full business day prior to the Closing Date at said office of X.X.
Xxxxxx Trust Company, National Association.
(b) If one or more Underwriters shall, for any reason other than a reason permitted
hereunder, fail to take up and pay for the principal amount of the Securities of any series
to be purchased by such one or more Underwriters, the Company shall immediately notify the
Representative, and the non-defaulting Underwriters shall be obligated to take up and pay
for (in addition to the respective principal amount of the Securities of such series set
forth opposite their respective names in paragraph 4 hereof) the principal amount of the
Securities of such series which such defaulting Underwriter or Underwriters failed to take
up and pay for, up to a principal amount thereof equal to, in the case of each such
non-defaulting Underwriter, 10% of the principal amount of the Securities of such series.
Each non-defaulting Underwriter shall do so on a pro-rata basis according to the amounts set
forth opposite the name of such non-defaulting Underwriter in said paragraph 4, and such
non-defaulting 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 principal amount of the Securities which the defaulting Underwriter
or Underwriters agreed but failed to purchase. If any unpurchased Securities 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 Conduct Rules) and
satisfactory to the Company, to purchase or agree to purchase such unpurchased Securities 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 Securities 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 Securities other than the unpurchased Securities, 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 principal amount of the Securities which
such Underwriter has agreed to purchase as provided in paragraph 4 hereof), except as
otherwise provided in paragraph 7 and paragraph 8 hereof.
-9-
7. Covenants of the Company. The Company covenants with each Underwriter that:
(a) As soon as reasonably possible after the execution and delivery of this Agreement,
the Company will file the Prospectus with the Commission pursuant to Rule 424 under the
Securities Act (“Rule 424”), setting forth, among other things, the necessary information
with respect to the terms of offering of the Securities and make any other required filings
pursuant to Rule 433 under the Securities Act. Upon request, 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, if any, heretofore or hereafter made (other than those relating solely to
Registered Securities other than the Securities), 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 and the Preliminary 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 Securities 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 reasonable
opinion (after consultation with counsel for the Representative) 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
Securities, 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
-10-
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 Securities.
(e) The Company will advise the Representative, or the Representative’s counsel,
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 Securities, 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.
(g) Prior to the termination of the offering of the Securities, the Company will not
file any amendment to the Registration Statement or supplement to the Pricing Prospectus or
the Prospectus (in each case other than amendments or supplements relating to Registered
Securities other than the Securities) 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 Representative or its counsel.
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 Securities 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 Securities 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, such fees and
disbursements (excluding filing fees) not to exceed $7,500, (v) the printing and delivery to the
Underwriters of copies of the Registration Statement and all amendments thereto, of the Preliminary
Prospectus, any Permitted Free Writing Prospectus and the Prospectus and any amendments or
supplements thereto, (vi) the printing and delivery to the Underwriters of copies of the Blue Sky
Survey, and (vii) the preparation and execution by the Company of the Indenture; and the Company
will pay all taxes, if any (but not including any transfer taxes), on the issue of the Securities.
-11-
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 disbursements (excluding filing fees) not to exceed $7,500); 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 Securities 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 Securities, 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.
(b) At the Closing Date, the Representative shall receive favorable opinions and/or
assurance letters from: (1) Xxxxxx & Xxxxxxxx LLP, counsel to the Company, which opinion
shall be satisfactory in form and substance to counsel for the Underwriters, and (2) Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, in each of which opinions (except Xxxxxx &
Xxxxxxxx LLP as to matters of North Carolina law and except as to subdivision (vi) (as to
documents incorporated by reference, at the time they were filed with the Commission) as to
which Xxxxx Xxxxxxxxxx LLP need express no opinion) said counsel may rely as to all matters
of North Carolina law upon the opinion of Xxxxx X. Xxxxxxxx, Vice President of Progress
Energy Service Company, LLC acting as counsel to the Company, to the effect that:
(i) the Indenture has been duly and validly authorized by all necessary
corporate action, has been duly and validly executed and delivered by the Company,
and is a valid and legally binding obligation of the Company enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency or other laws
affecting the rights of other creditors, and by general equitable principles and any
implied covenant of good faith and fair dealings;
(ii) the Indenture has been duly qualified under the 1939 Act;
-12-
(iii) assuming authentication of the Securities by the Trustee in accordance
with the Indenture and delivery of the Securities to and payment for the Securities
by the Underwriters, as provided in this Agreement, the Securities have been duly
and validly authorized, executed and delivered and are legal, valid and binding
obligations of the Company enforceable in accordance with their terms, except as
limited by bankruptcy, insolvency or other laws affecting the rights of other
creditors, and by general equitable principles and any implied covenant of good
faith and fair dealings, and are entitled to the benefits of the Indenture;
(iv) the statements made in the Prospectus under the caption “Description of
Debt Securities” and in the Prospectus Supplement under the caption “Description of
the Senior Notes,” insofar as they purport to constitute summaries of the documents
referred to therein, are accurate summaries 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 it became effective, and the
Preliminary Prospectus, the Permitted Free Writing Prospectus, and the Prospectus,
as of their respective dates (except as to the financial statements and schedules
and notes thereto or other financial, numerical, accounting, statistical or
quantitative information (or the assumptions with respect thereto) included in,
incorporated by reference in, or excluded from the Registration Statement or
exhibits thereto, upon which such opinions need not pass), appeared on their face to
respond 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, the Preliminary Prospectus and the Prospectus pursuant to Item 12 of Form
S-3 (except as to the financial statements and schedules and notes thereto or other
financial, numerical, accounting, statistical or quantitative information (or the
assumptions with respect thereto) included in, incorporated by reference in, or
excluded from the Registration Statement or exhibits thereto, the Preliminary
Prospectus or the Prospectus, and that part of the Registration Statement that
constitutes the Statement of Eligibility on Form T-1, upon which such opinions need
not pass), at the time each was filed with the Commission, appeared on their face to
respond 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 said
counsel has been orally advised by the Staff of the Commission that 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 have been
instituted by the Commission under Section 8 of the Securities Act; and
-13-
(vii) nothing has come to the attention of said counsel that would lead them to
believe, insofar as relevant to the offering of the Notes, (1) that the Registration
Statement, at the time it became effective, contained an untrue statement of a
material fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, (2) that the Pricing
Disclosure Package, as of the Applicable Time, contained any untrue statement of a
material fact or omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made,
not misleading and (3) that the Prospectus, as of its date and the Closing Date,
contained or contains any untrue statement of a material fact or omitted or omits to
state any 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
the financial statements and schedules and notes thereto or other financial,
numerical, accounting, statistical or quantitative information (or the assumptions
with respect thereto) included in, incorporated by reference in, or excluded from
the Registration Statement or exhibits thereto, the Pricing Disclosure Package or
the Prospectus, and that part of the Registration Statement that constitutes the
Statement of Eligibility on Form T-1, upon which such opinions need not pass).
(c) At the Closing Date, the Representative shall receive from Xxxxx X. Xxxxxxxx, Vice
President of Progress Energy Service Company, LLC acting as counsel to the Company, a
favorable opinion and/or assurance letter in form and substance satisfactory to counsel for
the Underwriters, to the same effect with respect to the matters enumerated in subdivisions
(i), (iii), (v) and (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 Securities 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, results of operations or financial
condition of the Company and its subsidiaries considered as a whole or which are
-14-
likely, in the aggregate, to materially and adversely affect the consummation
of this Agreement or the transactions contemplated herein or therein;
(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 or Repayment Event under, the articles of
incorporation or by-laws of the Company or any Significant Subsidiary, 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 (except the Company’s
Credit Agreement dated November 21, 2005) 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 that, in the case of any such breach, default or Repayment Event, would
have a material adverse effect on the business, properties, results of operations or
financial condition of the Company and its subsidiaries considered as a whole;
(vi) an appropriate order of the Commission with respect to the sale of the
Securities 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 under the Holding Company
Act for the sale of the Securities as contemplated by this Agreement; and
(vii) 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
Securities hereunder or the consummation of the transactions herein contemplated or
for the due execution, delivery or performance of the Indenture by the Company,
except such as have been already obtained or as may be required under the Securities
Act or state securities laws and except for the qualification of the Indenture under
the 1939 Act.
(d) The Representative shall have received on the date hereof and shall receive on the
Closing Date from Deloitte & Touche LLP, a letter addressed to the Representative containing
statements and information of the type ordinarily included in accountants’ SAS 72 “comfort
letters” to underwriters with respect to the audit reports, financial statements and certain
financial information contained in or incorporated by reference into the Prospectus.
(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.
-15-
(f) The Permitted Free Writing Prospectus, and any other material required pursuant to
Rule 433(d) under the Securities Act, shall have been filed by the Company with the
Commission within the applicable time periods prescribed by Rule 433.
(g) All legal proceedings taken in connection with the sale and delivery of the
Securities shall have been satisfactory in form and substance to counsel for the
Underwriters.
(h) At the Closing Date, an order or orders of the Commission pursuant to the Holding
Company Act permitting the issuance and sale of the Securities 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 Securities shall be subject to the conditions set forth in the first sentence of
subparagraph (a) of paragraph 9 hereof and in subparagraph (h) 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, each officer
and director of 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 and to
reimburse each such Underwriter, each such officer and director, 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, the Preliminary Prospectus, the
Pricing Prospectus, the Permitted Free Writing Prospectuses 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 in any free writing prospectus used by
the Company other than a Permitted Free Writing
-16-
Prospectus, 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 (i) was made in reliance upon and in
conformity with information furnished herein or in writing to the Company by any Underwriter
through the Representative expressly for use in the Registration Statement, the Preliminary
Prospectus, the Pricing Prospectus, the Permitted Free Writing Prospectuses or the
Prospectus, or any amendment or supplement to either thereof, or (ii) arose out
of, or was based upon, statements in or omissions from that part of the Registration
Statement which shall constitute the Statement of Eligibility under the 1939 Act (Form T-1)
of the Trustee under the Indenture. 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 officer or director or any
such controlling person and shall survive the delivery of the Securities. 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 officer or director, or
any such controlling person, in connection with the sale of the Securities.
(b) Each Underwriter severally, and not jointly, agrees to indemnify and hold harmless
the Company, its officers who signed the Registration Statement and its 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 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, the Preliminary Prospectus, the Pricing Prospectus, the Permitted
Free Writing Prospectuses 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 expressly for use in
the Registration Statement, the Preliminary Prospectus, the Pricing Prospectus, the
Permitted Free Writing Prospectus or the Prospectus or any amendment or supplement to any
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
officer or director or any such controlling person, and shall survive the delivery of the
Securities. The Company agrees promptly to notify the Representative of the commencement of
any litigation or
-17-
proceedings against the Company or any of its officers or directors, or any such
controlling person, in connection with the sale of the Securities.
(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 that 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 that 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 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 (in addition to one local counsel) representing the indemnified parties who are
parties to such action). Each of the Company and the several Underwriters agrees that
without the other party’s prior written consent, which consent shall not be unreasonably
withheld, it will not settle, compromise or consent to the entry of any judgment in any
claim in respect of which indemnification may be sought under the indemnification provisions
of this Agreement, unless such settlement, compromise or consent includes an unconditional
release of such other party from all liability arising out of such claim.
(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
-18-
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
Securities 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 that 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 Securities of any series pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net proceeds from the
offering of the Securities of such series pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount received by the
Underwriters with respect to such series, in each case as set forth on the cover of the
Prospectus, bear to the aggregate initial public offering price of such Securities 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 that does not
take account of the equitable considerations referred to above in this subparagraph (d).
The rights of contribution contained in this paragraph (d) shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of any
Underwriter of the Company and shall survive delivery of the Securities. 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 officer and director of each
Underwriter and 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, 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 principal amount of Securities of each series set forth opposite their
respective names in paragraph 4 hereof and not joint.
(e) For purposes of this paragraph 11, it is understood and agreed that the only
information provided by the Underwriters for use in the Registration Statement, the Pricing
Prospectus, the Permitted Free Writing Prospectuses and Prospectus were the following parts
of the section titled “Underwriting”: the third, fourth and fifth sentences of the second
paragraph, the third sentence of the third paragraph, the fourth paragraph, the fifth
paragraph and the sixth paragraph.
-19-
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 that existed prior to
the date of this Agreement, or any national or international calamity or crisis, or any material
adverse change in the financial markets of the United States, the effect of which outbreak,
escalation, calamity or crisis, or material adverse change in 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 Securities, 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 Securities and the delivery of the Securities 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 Securities 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 Securities and the delivery of the Securities by the several
Underwriters at the initial public offering price or (e) there shall have been declared, by New
York or federal authorities, a general banking moratorium. 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, the Pricing Prospectus
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 Securities. 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 hereof, 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 Securities from any of
the several Underwriters.
-20-
14. Nature of Relationship. The Company acknowledges and agrees that (i) in
connection with all aspects of each transaction contemplated by this Agreement, the Company and the
Underwriters have an arms length business relationship that creates no fiduciary duty on the part
of any party and each expressly disclaims any fiduciary relationship, (ii) the Underwriters and
their respective affiliates may be engaged in a broad range of transactions that involve interests
that differ from those of the Company, (iii) the Underwriters have not provided any legal,
accounting, regulatory or tax advice with respect to the offering contemplated hereby and the
Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it
deemed appropriate, and (iv) any review by the Underwriters of the Company, the transactions
contemplated hereby or other matters relating to such transactions will be performed solely for the
benefit of the Underwriters and shall not be on behalf of the Company.
15. 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 Banc of America Securities LLC, 00 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: High Grade Debt Capital Markets Transaction Management and
Citigroup Global Markets Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Transaction Execution Group, and if to the Company, shall be mailed or delivered to it at 000 X.
Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000-0000, attention of Xxxxxx X. Xxxxxxxx, Treasurer.
16. 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.
17. Defined Terms. Unless otherwise defined herein, capitalized terms used in this
Agreement shall have the meanings assigned to them in the Registration Statement.
[The remainder of this page has been intentionally left blank.]
-21-
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, PROGRESS ENERGY, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxx | |||
Accepted as of the date first
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named in,
Section 1 of this Agreement.
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named in,
Section 1 of this Agreement.
| BANC OF AMERICA SECURITIES LLC | ||||
By:
|
/s/ Xxxx Xxxxx | |||
| Authorized Representative | ||||
| CITIGROUP GLOBAL MARKETS INC. | ||||
By:
|
/s/ Brain X. Xxxxxxxxx | |||
| Authorized Representative | ||||
[Signature Page for the Senior Notes Underwriting Agreement]
SCHEDULE
I
PRICING TERM SHEET
| Underwriting Agreement dated January 10, 2006 | ||||
| Representative(s): | Banc of America Securities LLC | |||
| Citigroup Global Markets Inc. | ||||
| Designation: | 5.625% Senior Notes due 2016 | |||
| Principal Amount: | $300,000,000 | |||
| Maturity: | January 15, 2016 | |||
| Interest: | 5.625%, payable semiannually on January 15 and July 15 of each year, commencing July 15, 2006. | |||
| Make Whole Call: | Treasury Rate plus 25 basis points. | |||
| Public Offering Price: | 99.81% of the principal amount thereof. | |||
| Designation: | Series A Floating Rate Senior Notes due 2010 | |||
| Principal Amount: | $100,000,000 | |||
| Maturity: | January 15, 2010 | |||
| Interest: | Floating rate based on the three-month LIBOR rate (calculated as described in the Preliminary Prospectus Supplement dated January 10, 2006) plus 0.45%; reset quarterly, and payable quarterly on January 15, April 15, July 15 and October 15, commencing April 15, 2006. | |||
| Redemption Terms: | On or after January 15, 2008 at par. | |||
| Public Offering Price: | 100% of the principal amount thereof. | |||
| Settlement: | January 13, 2006 | |||
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
XXXXX on the SEC Web site at xxx.xxx.xxx. Alternatively, the issuer, any underwriter or any dealer
participating in the offering will arrange to send you the prospectus if you request it by calling
toll-free at 0-000-000-0000 0-000-000-0000, or you may e-mail a request to
xx.xxxxxxxxxx_xxxxxxxxxxxx@xxxxxxxxxxxxxx.xxx.
SCHEDULE II
PRICING DISCLOSURE PACKAGE
| 1) | Prospectus dated February 7, 2002 | |
| 2) | Preliminary Prospectus Supplement dated January 10, 2006 (which shall be deemed to include the Incorporated Documents) | |
| 3) | Permitted Free Writing Prospectuses |
| a) | Pricing Term Sheet attached as Schedule I hereto |
SCHEDULE III
Significant Subsidiaries
1. Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc.
2. Florida Power Corporation d/b/a Progress Energy Florida, Inc.
3. Progress Ventures, Inc. d/b/a Progress Energy Ventures, Inc.
4. Florida Progress Corporation
2. Florida Power Corporation d/b/a Progress Energy Florida, Inc.
3. Progress Ventures, Inc. d/b/a Progress Energy Ventures, Inc.
4. Florida Progress Corporation
