CAROLINA POWER & LIGHT COMPANY d/b/a PROGRESS ENERGY CAROLINAS, INC. First Mortgage Bonds UNDERWRITING AGREEMENT
Exhibit 1(a)
CAROLINA POWER & LIGHT COMPANY
d/b/a PROGRESS ENERGY CAROLINAS, INC.
d/b/a PROGRESS ENERGY CAROLINAS, INC.
First Mortgage Bonds
, 20__
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 Carolina Power & Light Company d/b/a Progress Energy Carolinas, 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 7 hereof, and the term “Underwriter” shall be
deemed to mean any one of such Underwriters:
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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 First
Mortgage Bonds of the designation, with the terms and in the amount specified in Schedule I hereto
(the “Securities”), under its Mortgage and Deed of Trust, dated as of May 1, 1940, with The Bank of
New York (formerly Irving Trust Company) and Xxxxxxxxx X. Xxxxxx (Xxxxxxx X. XxxXxxxx, successor),
as Trustees, as supplemented and as it will be further supplemented by a supplemental indenture
relating to the Securities (the “Supplemental Indenture”), in substantially the form heretofore
delivered to the Representative, said Mortgage and Deed of Trust as
supplemented and to be supplemented by the Supplemental Indenture being hereinafter referred
to as the “Mortgage.”
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-___) (the “New
Registration Statement”) under the Securities Act of 1933, as amended (the “Securities
Act”), for the registration of up to an aggregate of $ principal amount of First
Mortgage Bonds, Debt Securities and Preferred Stock in unallocated amounts. The New
Registration Statement also constituted post-effective amendment no. 1 to a registration
statement on Form S-3 (No. 333-___) (the “Post-Effective Amendment” and together with the
New Registration Statement, the “Registration Statement”) under the Securities Act relating
to an aggregate of $ 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 $ principal amount of the
Company’s First Mortgage Bonds, Debt Securities and Preferred Stock (the “Registered
Securities”) in unallocated amounts. The Registration Statement was declared effective by
the Commission on , 20___. As of the date hereof, the Company has sold an
aggregate of $ 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 , 20___, 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 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 document under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), deemed to be incorporated therein after the date
hereof and prior
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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 ___(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 Mortgage, 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 Statements of Eligibility (Forms T-1 and T-2) of the
Trustees. 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 information contained in the Registration
Statement, the Pricing Prospectus or the Prospectus.
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(c) 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; 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 material agreements to which it is a party;
and 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.
(d) 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 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 applicable Exchange Act rules and 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.
(e) 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, (ii) there has not been any material transaction
entered into by the Company other than transactions contemplated by the Registration
Statement and the Pricing Prospectus or transactions arising in the ordinary course of
business and (iii) the Company has no 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.
(f) 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 restated charter
(the “Charter”), by-laws and applicable law; and the Securities, when issued and delivered
as provided herein, will constitute legal, valid and binding obligations of the Company in
accordance with their terms subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws affecting mortgagees’ and
other 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,
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delaying or prohibiting the making of payments outside the United States); provided,
however, that certain remedies, waivers and other provisions of the Securities may not be
enforceable, but such unenforceability will not render the Securities invalid as a whole or
affect the judicial enforcement of (i) the obligation of the Company to repay the principal,
together with the interest thereon as provided in the Securities or (ii) the right of the
Trustees to exercise their right to foreclose under the Mortgage.
(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 Charter, the Company’s by-laws, applicable law or any indenture,
mortgage, deed of trust or other agreement or instrument to which the Company 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 assets, properties or operations
that, in the case of any such breach or default, would have a material adverse effect on the
business, properties, results of operations or financial condition of the Company.
(h) The Securities conform in all material respects to the description contained in the
Pricing Disclosure Package and the Prospectus.
(i) The Company has no subsidiaries that meet the definition of “significant
subsidiary” as defined in Section 210.1-02(w) of Regulation S-X promulgated under the
Securities Act.
(j) The Mortgage (A) has been duly authorized, executed and delivered by the Company,
and, assuming due authorization, execution and delivery of the Supplemental Indenture by the
Trustees, 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 Prospectus. The Mortgage has been qualified under the 1939
Act.
(k) The Company is not an “investment company” within the meaning of the Investment
Company Act of 1940, as amended (the “1940 Act”).
(l) 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 its properties that 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, or that are likely in the
aggregate to materially and adversely affect the Mortgage, the Securities or the
consummation of this Agreement or the transactions contemplated herein or therein.
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(m) 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
Mortgage 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 Mortgage under the 1939 Act.
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 a purchase price of % of the
principal amount thereof:
| Underwriter | Principal Amount of Securities | ||
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Total |
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5. Reoffering by Underwriters. 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 (i) no sales
of the Securities will occur before investors are presented with the information that is contained
in the Pricing Disclosure Package and (ii) such information that is presented to investors is
consistent with the information that is contained in the Pricing Disclosure Package.
6. 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
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 6(b) below.
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(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 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.
7. 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 The Bank of New
York, Corporate Trust Department, 000 Xxxxxxx Xxxxxx, Xxxxx 0X, Xxx Xxxx, Xxx Xxxx, 00000 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 to The
Depository Trust Company or to The Bank of New York, 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
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 The Bank of New York. 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 The Bank of New York.
(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 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 set forth opposite
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their respective names in paragraph 4) the principal amount of such Securities that
such defaulting Underwriter or Underwriters failed to take up and pay for, up to a principal
amount thereof equal to 10% of the principal amount of such Securities. 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 paragraph 4, 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 that 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 7, 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 that shall have failed or refused, in accordance with the terms hereof, to
purchase and pay for the principal amount of the Securities that such Underwriter has agreed
to purchase as provided in paragraph 4 hereof), except as otherwise provided in paragraph 8
and paragraph 9 hereof.
8. 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
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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 the
fiscal quarter in which the filing of the Prospectus pursuant to Rule 424 occurs, an
earnings 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) As soon as reasonably possible after the Closing Date, the Company will cause the
Supplemental Indenture to be recorded in all recording offices in the States of North
Carolina and South Carolina in which the property intended to be subject to the lien of the
Mortgage is located.
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(f) 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.
(g) 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.
(h) 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.
9. 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 paragraph 8(g), including filing fees and the fees and disbursements of
counsel for the Underwriters in connection therewith, such fees and disbursements 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, execution, filing and
recording by the Company of the Supplemental Indenture (such filing and recordation to be promptly
made after execution and delivery of the Supplemental Indenture to the Trustees under the Mortgage
in the counties in which the mortgaged property of the Company is located); and the Company will
pay all taxes, if any (but not including any transfer taxes), on the issue of the Securities and
the filing and recordation of the Supplemental Indenture. The fees and disbursements of
Underwriters’ counsel shall be paid by the Underwriters (subject, however, to the provisions of
this paragraph 9 requiring payment by the Company of fees and disbursements not to exceed $7,500);
provided, however, that if this Agreement is terminated in accordance with the provisions of
paragraph 10, 11 or 13 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
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paragraph 8 hereof and in this paragraph 9. The Company shall not in any event be liable to
any of the Underwriters for damages on account of the loss of anticipated profit.
10. 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, Treasurer 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 time of execution of this Agreement, or such later date as shall have been
consented to by the Representative, there shall have been issued, and on the Closing Date
there shall be in full force and effect, orders of the North Carolina Utilities Commission
and the Public Service Commission of South Carolina authorizing the issuance and sale of the
Securities, which shall not contain any provision unacceptable to the Representative by
reason of its being materially adverse to the Company (it being understood that no such
order in effect on the date of this Agreement and heretofore furnished to the Representative
or counsel for the Underwriters contains any such unacceptable provision).
(c) At the Closing Date, the Representative shall receive favorable opinions from: (1)
Hunton & 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 Hunton & 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 and South
Carolina law upon the opinions of Xxxxx X. Xxxxxxxx, Esq., Vice President of Progress Energy
Service Company LLC, acting as counsel to the Company, and [South Carolina counsel],
respectively, to the effect that:
(i) The Mortgage 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 binding mortgage of the Company enforceable in accordance with
its terms, except as limited by bankruptcy, insolvency or other laws affecting
mortgagees’ and other creditors’ rights and general equitable principles and any
implied covenant of good faith and fair dealing (with this opinion only required in
the opinions of Hunton & Xxxxxxxx LLP and Xxxxx Xxxxxxxxxx LLP as to the
supplemental indentures subsequent to the Sixty-fourth
11
Supplemental Indenture); provided, however, that certain remedies, waivers and
other provisions of the Mortgage may not be enforceable, but such unenforceability
will not render the Mortgage invalid as a whole or affect the judicial enforcement
of (i) the obligation of the Company to repay the principal, together with the
interest thereon as provided in the Securities or (ii) the right of the Trustees to
exercise their right to foreclose under the Mortgage;
(ii) The Mortgage has been duly qualified under the 1939 Act;
(iii) Assuming authentication of the Securities by the Trustee in accordance
with the Mortgage 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 mortgagees’ and other
creditors’ rights and general equitable principles and any implied covenant of good
faith and fair dealings, and are entitled to the benefits of the security afforded
by the Mortgage, and are secured equally and ratably with all other bonds
outstanding under the Mortgage except insofar as any sinking or other fund may
afford additional security for the bonds of any particular series;
(iv) The statements made in the Prospectus under the caption “Description of
First Mortgage Bonds” and in the Prospectus Supplement under the captions “Certain
Terms of the Bonds” and “Description of First Mortgage Bonds,” 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 and date it was declared effective
by the Commission and as of the date hereof, the Preliminary Prospectus, the Pricing
Prospectus, the Permitted Free Writing Prospectuses and the Prospectus, at the time
each 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, the Preliminary Prospectus,
the Pricing Prospectus 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 and that part of the Registration
Statement that constitutes the Statements of Eligibility on Form T-1 and Form T-2,
upon which such opinions need not pass), at the time they were filed with the
Commission, complied as to
12
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; and
(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 by the Commission and as of the date hereof, 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; and nothing has come to
the attention of said counsel that would lead them to believe that (x) the Pricing
Disclosure Package as of the Applicable Time, included an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not
misleading or (y) the Prospectus, as of its date and, as amended or supplemented, 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, the Pricing Disclosure
Package or the Prospectus or incorporated by reference therein and that part of the
Registration Statement that constitutes the Statements of Eligibility on Form T-1
and Form T-2, upon which such opinions need not pass);
(d) At the Closing Date, the Representative shall receive from Xxxxx X. Xxxxxxxx, Esq.,
Vice President of Progress Energy Service Company, LLC, acting as counsel to 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), (iii), (v) and (vii)
of subparagraph (c) of this paragraph 10 as the opinions required by said subparagraph (c),
and to the further effect that:
(i) The Company is a validly organized and existing corporation under the laws
of the State of North Carolina and is in good standing under the laws of the State
of North Carolina and is duly qualified to do business in the State of South
Carolina;
(ii) The Company is duly authorized by its Charter to conduct the business that
it is now conducting as set forth in the Prospectus;
(iii) The Company has valid and subsisting franchises, licenses and permits
adequate for the conduct of its business, except where the failure to hold such
franchises, licenses and permits would not have a material adverse effect on the
business, properties, results of operations or financial condition of the Company;
13
(iv) The Company has good and marketable title, with minor exceptions,
restrictions and reservations in conveyances, and defects that are of the nature
ordinarily found in properties of similar character and magnitude and that, in his
opinion, will not in any substantial way impair the security afforded by the
Mortgage, to all the properties described in the granting clauses of the Mortgage
and upon which the Mortgage purports to create a lien, except certain rights-of-way
over private property on which are located transmission and distribution lines
formerly owned by the Tide Water Power Company (merged into the Company on February
29, 1952), title to which can be perfected by condemnation proceedings. The
description in the Mortgage of the above-mentioned properties (including those
formerly owned by Tide Water Power Company) is legally sufficient to constitute the
Mortgage a lien upon said properties, including without limitation properties
hereafter acquired by the Company (other than those expressly excepted and reserved
therefrom). Said properties constitute substantially all the permanent physical
properties and franchises (other than those expressly excepted and reserved
therefrom) of the Company and are held by the Company free and clear of all liens
and encumbrances except the lien of the Mortgage and Excepted Encumbrances, as
defined in the Mortgage. The Company has followed the practice generally of
acquiring (i) certain rights-of-way and easements and certain small parcels of fee
property appurtenant thereto and for use in conjunction therewith and (ii) certain
other properties of small or inconsequential value, without an examination of title
and, as to the title to lands affected by said rights-of-way and easements, of not
examining the title of the lessor or grantor whenever the lands affected by such
rights-of-way and easements are not of such substantial value as in the opinion of
the Company to justify the expense attendant upon examination of titles in
connection therewith. In the opinion of said counsel, such practice of the Company
is consistent with sound economic practice and with the method followed by other
companies engaged in the same business and is reasonably adequate to assure the
Company of good and marketable title to all such property acquired by it. It is the
opinion of said counsel that any such conditions or defects as may be covered by the
above recited exceptions are not, except as to certain rights-of-way on which are
located transmission lines acquired from Tide Water Power Company, substantial and
would not materially interfere with the Company’s use of such properties or with its
business operations. The Company has the right of eminent domain in the States of
North Carolina and South Carolina under which it may, if necessary, perfect or
obtain title to privately owned land or acquire easements or rights-of-way required
for use or used by the Company in its public utility operations;
(v) The Company’s Mortgage and Deed of Trust dated as of May 1, 1940 and the
First through the [Seventy-fourth] Supplemental Indentures thereto have been filed
for record both as a real estate mortgage and as a chattel mortgage or security
interest in all counties in the States of North Carolina and South Carolina in which
any of the property described in the Mortgage as subject thereunder to the lien
thereof is located; and the Supplemental Indenture relating to the Securities is in
proper form for filing for record both as a real estate
14
mortgage and as a security interest in all counties in the States of North
Carolina and South Carolina in which any of the property described therein or in the
Mortgage as subject to the lien of the Mortgage is located. By virtue of filing
financing statements with the Offices of the Secretaries of State of North Carolina
and South Carolina, the Trustees have a perfected security interest in that portion
of the collateral described therein to which Article 9 of the Uniform Commercial
Code of North Carolina or South Carolina is applicable and in which a security
interest is perfected by the central filing of a financing statement to perfect a
security interest in collateral of a transmitting utility under the UCC;
(vi) The Mortgage constitutes a valid, direct and first mortgage lien of record
upon all franchises and properties now owned by the Company (other than those
expressly excepted therefrom and other than those franchises and properties which
are not, individually or in the aggregate, material to the Company or the security
afforded by the Mortgage) situated in the States of North Carolina and South
Carolina, as described or referred to in the granting clauses of the Mortgage,
subject to the exceptions as to bankruptcy, insolvency and other laws stated in
subdivision (i) of subparagraph (c) above;
(vii) The issuance and sale of the Securities have been duly authorized by all
necessary corporate action on the part of the Company;
(viii) Orders have been entered by the North Carolina Utilities Commission and
the Public Service Commission of South Carolina authorizing the issuance and sale of
the Securities, and to the best of the knowledge of said counsel, said orders are
still in force and effect; and no further filing with, approval, authorization,
consent or other order of any public board or body (except such as have been
obtained under the Securities Act and as may be required under the state securities
or Blue Sky laws of any jurisdiction) is legally required for the consummation of
the transactions contemplated in this Agreement;
(ix) Except as described in or contemplated by the Prospectus, there are no
pending actions, suits or proceedings (regulatory or otherwise) against the Company
or any properties that 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 or that are likely, in the aggregate, to materially and
adversely affect the Mortgage, the Securities or the consummation of this Agreement,
or the transactions contemplated herein or therein; and
(x) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not (i) result in a breach of any of the terms
or provisions of, or constitute a default under, the Charter or the Company’s
by-laws or (ii) result in a material breach of any terms or provisions of, or
constitute a default under, any applicable law, indenture, mortgage, deed of trust
or other agreement or instrument to which the Company is now a party or any
judgment, order, writ or decree of any government or governmental authority or
agency or
15
court having jurisdiction over the Company or any of its assets, properties or
operations that, in the case of any such breach or default, would have a material
adverse effect on business, properties, results of operations or financial condition
of the Company.
In said opinion such counsel may rely as to all matters of South Carolina law on the opinion
of [South Carolina counsel].
(e) At the Closing Date, the Representative shall receive from [South Carolina
counsel], a favorable opinion in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Company is an electrical utility engaged in the business of generating,
transmitting, distributing and selling electric power to the general public in the
States of South Carolina and North Carolina, and the Company conducts its South
Carolina retail operations subject to the jurisdiction of the South Carolina Public
Service Commission pursuant to South Carolina Code Annotated, Sections 58-27-10 et
seq. (1976 as amended);
(ii) The Company is duly qualified to transact business in the State of South
Carolina;
(iii) The Company’s Mortgage and Deed of Trust dated as of May 1, 1940, and the
First through the [Seventy-fourth] Supplemental Indentures thereto, have been
recorded and filed in such manner and in such places as may be required by law, in
the State of South Carolina, in order to fully preserve and protect the security of
the bondholders and all rights of the Trustees thereunder. By virtue of filing
financing statements with the Offices of the Secretaries of State of North Carolina
and South Carolina, the Trustees have a perfected security interest in that portion
of the collateral described therein to which Article 9 of the Uniform Commercial
Code of North Carolina or South Carolina is applicable and in which a security
interest is perfected by the central filing of a financing statement to perfect a
security interest in collateral of a transmitting utility under the UCC;
(iv) The Supplemental Indenture relating to the Securities is in the proper
form for the filing as a real estate mortgage and a security agreement in all
counties in the State of South Carolina where the Mortgage is filed and the
Supplemental Indenture is to be filed and upon such filing creates a lien and/or
security interest in that property located within such counties that is described in
the Mortgage or in the Supplemental Indenture as being subject to the lien of the
Mortgage (except that property which has been expressly excepted from the lien in
the Supplemental Indenture and the Mortgage, as heretofore supplemented); and
(v) Said counsel has reviewed the opinion letter of even date therewith
addressed to you by Xxxxx X. Xxxxxxxx, Esq., Vice President of Progress Energy
16
Service Company, LLC, and said counsel concurs in the opinions which Xx.
Xxxxxxxx has expressed therein insofar as they relate to the laws of the State of
South Carolina.
(f) 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.
(g) At the Closing Date, the Representative shall receive a certificate of the
Chairman, President, Treasurer 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.
(h) 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.
(h) 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, and the Company, as of the Closing Date, shall be in compliance with any
governing orders of the North Carolina Utilities Commission and the Public Service
Commission of South Carolina, except where the failure to comply with such orders would not
be material to the offering or validity of the Securities.
In case any of the conditions specified above in this paragraph 10 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 8 and
9 hereof.
11. Conditions of the Company’s Obligations. The obligations of the Company to
deliver the Securities shall be subject to the following 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 threatened by the Commission on the Closing Date.
(b) Prior to 12:00 Noon, New York time, on the day following the date of this
Agreement, or such later date as shall have been consented to by the Company, there shall
have been issued and on the Closing Date there shall be in full force and effect orders of
the North Carolina Utilities Commission and the Public Service Commission of South Carolina
authorizing the issuance and sale by the Company of the Securities, which shall not contain
any provision unacceptable to the Company by reason of its being materially adverse to the
Company (it being understood that no such order in effect as of the date of this Agreement
contains any such unacceptable provision).
17
In case any of the conditions specified in this paragraph 11 shall not have been fulfilled at
the Closing Date, this Agreement may be terminated by the Company by 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 8 and 9 hereof.
12. 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 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 12 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 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 any
thereof, or arising out of, or based upon, statements in or omissions from that part of the
Registration Statement that shall constitute the Statements of Eligibility under the 1939
Act (Form T-1 and Form T-2) of the Trustees, and provided, further, that the indemnity
agreement contained in this paragraph 12 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 Securities to any
person if a copy of the Permitted Free Writing Prospectus or Prospectus (excluding documents
incorporated by reference therein) shall not have been given or sent to such person by or on
behalf of such Underwriter at or prior to the entry into the contract of sale, unless such
Prospectus or Permitted Free Writing Prospectus failed to correct the omission or
misstatement. The indemnity agreement of the Company contained in this paragraph 12 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, and such officer or director or any such controlling person and shall
survive the delivery of the Securities. The Underwriters agree to notify
18
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, the Prospectus as amended or supplemented (if any amendments or
supplements thereto shall have been furnished), or any Underwriter Free Writing Prospectus
used by such Underwriter (but only to the extent that the content of such Underwriter Free
Writing Prospectus that is subject to indemnification is materially inconsistent with the
information contained in the Permitted Free Writing Prospectus or the 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, 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 12 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 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 or 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
19
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
(i) includes an unconditional release of such other party from all liability arising out of
such claim and (ii) does not include a statement as to or an admission of fault, culpability
or a failure to act by or on behalf of such other party.
(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 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 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 pursuant to this
Agreement (before deducting expenses) received by the Company and
20
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
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 12 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 number of Securities set forth opposite their respective names in
paragraph 4 and not joint.
(e) For purposes of this paragraph 12, it is understood and agreed that the only
information provided by the Underwriters expressly 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”: .
13. 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, significant 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 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 Securities, or (c) the Company shall
have sustained a substantial loss by fire, flood, accident or other calamity that
21
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 either federal or New York
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 13 shall be without liability of any
party to any other party except as otherwise provided in paragraphs 8 and 9.
14. 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 12 hereof, the
officers and directors and each controlling person referred to in paragraph 12 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.
15. 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.
16. 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 , and if
22
to the Company, shall be mailed or delivered to it at 000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxx Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, Treasurer.
17. 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.
18. Defined Terms. Unless otherwise defined herein, capitalized terms used in this
Underwriting Agreement shall have the meanings assigned to them in the Registration Statement.
[The remainder of this page has been intentionally left blank]
23
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, | ||||||||
| CAROLINA POWER & LIGHT COMPANY | ||||||||
| d/b/a PROGRESS ENERGY CAROLINAS, INC. | ||||||||
| By: | ||||||||
| 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. | ||||||||
| [REPRESENTATIVE] | ||||||||
By: |
||||||||
| Authorized Representative | ||||||||
[Signature Page of First Mortgage Bond Underwriting Agreement]
SCHEDULE I
PRICING TERM SHEET
Underwriting Agreement dated , 20__
Representative(s):
| Supplemental Indenture: | , dated as of , 20__ | |||
| Designation: | First Mortgage Bonds, ____% Series due ____ | |||
| Principal Amount: | , ___ | |||
| Date of Maturity: | $ | |||
| Interest Rate: _____% per annum, payable and of each year, commencing , ____. | ||||
| Purchase Price: ______% of the principal amount thereof, plus accrued interest, if any, from , ____, if settlement occurs after that date. | ||||
| Public Offering Price: ______% of the principal amount thereof, plus accrued interest, if any, from , ____, if settlement occurs after that date. | ||||
Redemption Terms: |
||||
Closing Date:
|
, ___ | |||
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 (and more specifically, at the URL link
xxxx://xxx.xxx/xxx-xxx/xxxxxx-xxxxx?xxxxxxxxxxxxxxxxxxxxxx&XXXx&xxxxxxxx&Xxxxxx&XXXx&xxxxxxxxxxxxx&x
ction=getcompany). 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
1-8[xx-xxx-xxxx].
SCHEDULE II
PRICING DISCLOSURE PACKAGE
| 1) | Prospectus dated , 20___ | |
| 2) | Preliminary Prospectus Supplement dated , 20___(which shall be deemed to include the Incorporated Documents) | |
| 3) | Permitted Free Writing Prospectuses |
| a) | Pricing Term Sheet attached as Schedule I hereto |
