PROGRESS ENERGY, INC. Common Stock UNDERWRITING AGREEMENT
Exhibit 1
PROGRESS ENERGY, INC.
Common Stock
January 7, 2009
To the Representative(s) named in Schedule II hereto
of the Underwriters named in Schedule II hereto
of the Underwriters named in Schedule II hereto
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. Underwriter(s) and Representative(s). The term “Underwriters” as used in this
Underwriting Agreement (the “Agreement”) shall be deemed to mean the firm or the several firms
named in Schedule II hereto and any underwriter substituted as provided in paragraph 7
hereof, and the term “Underwriter” shall be deemed to mean any one of such Underwriters. If the
firm or firms listed as Representative(s) in Schedule II hereto (individually and
collectively, the “Representative”) 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. Each Representative represents jointly and severally that they have been authorized
by the Underwriters to execute this Agreement on their behalf and to act for them in the manner
herein provided. All obligations of the Underwriters hereunder are several and not joint. If
more than one firm is named as Representative in Schedule II 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 12,500,000
shares of its common stock (no par value) in the amount specified in Schedule II hereto
(the “Firm Shares”). The Company also proposes to issue and sell to the several Underwriters not
more than an additional 1,875,000 shares of its common stock (no par value) (the “Option Shares”)
if and to the extent the Representative shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock granted to the Underwriters in
paragraph 4 hereof. The Firm Shares and the Option Shares are hereinafter collectively referred to
as the “Shares.” The shares of common stock (no par value) of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as the “Common Stock.”
3. Representations and Warranties of the Company. The Company represents and warrants
to each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3 (No. 333-155418) (the
“Registration Statement”), under the Securities Act of 1933, as amended (the
“Securities Act”), for the registration of an indeterminate amount of Senior Debt
Securities, Junior Subordinated Debentures, Common Stock, Preferred Stock, Stock Purchase
Contracts, Stock Purchase Units and Guarantees (collectively, the “Registered Securities”).
The Registration Statement was effective upon filing on November 18, 2008. The term
“Registration Statement” shall be deemed to include all amendments prior to the Applicable
Time (defined below) 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 6, 2009, relating to the Shares, and all prior amendments or supplements thereto
(other than amendments or supplements relating to the Registered Securities other than the
Shares), 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 Shares (the “Prospectus
Supplement”) and all prior amendments or supplements thereto (other than amendments or
supplements relating to securities of the Company other than the Shares), including the
Incorporated Documents, is hereinafter referred to as the “Prospectus.” Any reference
herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration
Statement or the Prospectus shall be deemed to refer to and include any post-effective
amendment to the Registration Statement, any prospectus supplement relating to the Shares
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 to the termination of the
offering of the Shares by the Underwriters; and any references herein to the terms
“Registration Statement” or “Prospectus” at a date after the filing of the Prospectus
Supplement shall be deemed to refer to the Registration Statement or the Prospectus, as the
case may be, as each may be amended or supplemented prior to such date.
For purposes of this Agreement, the “Applicable Time” is 5:00 p.m. (New York City time)
on the date of this Agreement; the documents and other information listed in Schedule
III hereto, taken together, as of the Applicable Time are collectively referred to as
the “Pricing Disclosure Package”; and all references to the Registration Statement, the
Pricing Disclosure Package or the Prospectus or any amendment or supplement thereto shall be
deemed to include the copy filed with the Commission pursuant to its Electronic Data
Gathering Analysis and Retrieval system (“XXXXX”).
(b) The Registration Statement, at each time and date it became, or is deemed to have
become, effective, complied, and the Registration Statement and the Prospectus, as of the
date hereof and at the Closing Date, will comply, in all material respects, with the
applicable provisions of the Securities Act and the applicable instructions, rules and
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regulations of the Commission thereunder; the Registration Statement, at each time and
date it became, or is deemed to have become, effective, did not contain an untrue statement
of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and the 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 light of the
circumstances under which they were made, not misleading; each broadly available electronic
road show within the meaning of Rule 433(h)(5), if any, when considered as a whole with 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 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 the 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. 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 Shares 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
Disclosure Package 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 III hereto does not conflict in
any material respect with the information contained in the Registration Statement, the
Pricing Disclosure Package or the Prospectus.
(c) With respect to the Registration Statement, (i) the Registration Statement is an
“automatic shelf registration statement” (as defined in Rule 405 under the Securities Act),
(ii) the Company has not received from the Commission any notice pursuant to Rule 401(g)(2)
of the Securities Act objecting to the use of the automatic shelf registration statement and
(iii) the conditions for use of Form S-3, as set forth in the General Instructions thereof,
have been satisfied.
(d) (i) At the time of filing of the Registration Statement and (ii) at the time the
Company or any person acting on its behalf (within the meaning, for this clause only, of
Rule 163(c) under the Securities Act) made any offer relating to the Shares in reliance on
the exemption of Rule 163 under the Securities Act, the Company was a “well-known seasoned
issuer” (as defined in Rule 405 under the Securities Act;
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(e) 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 and its subsidiaries as a whole 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 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.
(f) Except as reflected in, or contemplated by, the Registration Statement and the
Pricing Disclosure Package, 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
IV hereto) other than transactions contemplated by the Registration Statement and the
Pricing Prospectus or transactions arising in the ordinary course of business; (iii) neither
the Company nor its subsidiaries has any material contingent obligation that is not
disclosed in the Registration Statement and the Pricing Disclosure Package 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; and (iv)
there has been no dividend or distribution of any kind declared, paid or made by the Company
or, except for dividends paid to the Company or other subsidiaries, any of its subsidiaries
on any class of capital stock or repurchase or redemption by the Company or any of its
subsidiaries of any class of capital stock.
(g) 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, by-laws and applicable law.
(h) 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 material agreement or instrument to which the Company or
any Significant Subsidiary is now a party, or any judgment, order, writ or decree of any
government or governmental authority or agency or court having jurisdiction over the Company
or any of its Significant Subsidiaries or any of their assets,
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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.
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.
(i) The Shares conform in all material respects to the description contained in the
Pricing Disclosure Package and the Prospectus.
(j) 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.
(k) The Company has the authorized capitalization as set forth in the Pricing
Disclosure Package. The authorized capital stock of the Company is 20,000,000 shares of
preferred stock and 500,000,000 shares of common stock, of which no shares of preferred
stock and 263,504,616 shares of common stock are issued and outstanding (except for
subsequent issuances, if any, pursuant to this Agreement, or pursuant to agreements or
employee benefit plans referred to in the Prospectus or pursuant to the Company’s Investor
Plus Plan). The shares of issued and outstanding capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock of the Company were issued in violation of the
preemptive or other similar rights, if any, of any securityholder of the Company.
(l) The issued and outstanding capital stock of each Significant Subsidiary has been
duly authorized and validly issued and is fully paid and non-assessable; and the common
capital stock of each Significant Subsidiary is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equitable right.
(m) The issuance of the Shares has been duly authorized by the Company and, when issued
and delivered in accordance with the terms of this Agreement, will be validly issued, fully
paid and non-assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights.
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(n) The Common Stock (other than the Shares) is and, upon issuance and the giving of
official notice of issuance to The New York Stock Exchange, the Shares will be, listed on
The New York Stock Exchange.
(o) Neither the Company nor any of its Significant Subsidiaries is an “investment
company” within the meaning of the Investment Company Act of 1940, as amended (the “1940
Act”).
(p) Except as described in or contemplated by the Pricing Disclosure Package and the
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 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 and its subsidiaries considered as a whole, or that are likely in the aggregate
to materially and adversely affect the Shares or the consummation of this Agreement or the
transactions contemplated herein or therein.
(q) No filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations hereunder in connection with
the offering, issuance or sale of the Shares hereunder or the consummation of the
transactions herein contemplated, except such as have already been made or obtained or as
may be required under the Securities Act or state securities laws.
(r) Neither the Company nor any of its subsidiaries is in violation of its articles of
incorporation or by-laws or is 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.
(s) Except as described in the Registration Statement, the Pricing Disclosure Package
and the 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.
(t) Except as disclosed in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, the Company and its subsidiaries possess all licenses, certificates,
permits and other authorizations issued by the appropriate federal, state, local or foreign
governmental or regulatory authorities that are necessary for the conduct of their
respective businesses as described in the Registration Statement, the Pricing
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Disclosure Package and the Prospectus, except where the failure to possess or make the
same would not, individually or in the aggregate, 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; and except as described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, neither the Company nor any of its
subsidiaries has received notice of any revocation or modification of any such license,
certificate, permit or authorization, except where such revocation or modification would
not, individually or in the aggregate, 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.
(u) The Company’s internal control over financial reporting includes policies and
procedures that are designed to (i) provide for the maintenance of records that, in
reasonable detail, accurately and fairly reflect transactions concerning the assets of the
Company; (ii) 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; (iii) 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 (iv) 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.
(v) There are no persons with registration rights or other similar rights to have any
securities registered pursuant to the Registration Statement or otherwise registered by the
Company under the Securities Act.
(w) 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; as of the time of the last evaluation by the
Company’s principal executive and principal financial officers, such disclosure controls and
procedures are effective.
4. Purchase and Sale.
(a) On the basis of the representations, warranties and covenants herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to sell to each of
the Underwriters, severally and not jointly, and each such Underwriter agrees, severally and
not jointly, to purchase from the Company, the respective number of Firm Shares set forth
opposite the name of such Underwriter in Schedule II hereto at the purchase price
set forth in Schedule III hereto.
(b) On the basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, the Company agrees to sell to the Underwriters the
Option Shares, and the Underwriters shall have a right to purchase,
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severally and not jointly, the Option Shares at the purchase price set forth in
Schedule III, less an amount per share equal to any dividends declared by the
Company and payable on the Firm Shares but not payable on the Option Shares. Option Shares
may be purchased as provided in this paragraph 4 in whole or in part from time to time, on
the Closing Date and thereafter as provided herein, solely for the purpose of covering
overallotments made in connection with the offering of the Firm Shares. If any Option
Shares are to be purchased, each Underwriter agrees, severally and not jointly, to purchase
the number of Option Shares (subject to such adjustments to eliminate fractional shares as
the Representative may determine) that bears approximately the same proportion to the total
number of Option Shares to be purchased as the number of Firm Shares set forth in
Schedule II hereto opposite the name of such Underwriter bears to the total number
of Firm Shares.
(c) The Company hereby agrees that, without the prior written consent of the
Representative, it will not during the period ending 60 days after the date of this
Agreement (i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or warrant for
the sale of or otherwise transfer or dispose of, directly or indirectly, or to register or
announce the sale or offering of any shares of common stock of the Company or any securities
convertible into or exercisable or exchangeable for such common stock or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequences of ownership of such common stock, whether any such
swap or transaction described in clause (i) or (ii) above is to be settled by delivery of
such common stock or such other securities, in cash or otherwise.
(d) The foregoing subparagraph (c) shall not apply to (i) the Shares to be sold
hereunder; (ii) the issuance by the Company of shares of common stock upon the exercise of
an option or warrant or the conversion of a security outstanding on the date hereof of which
the Underwriters have been advised in writing and to which the Representative has consented;
(iii) the issuance or grant of shares of common stock or options or rights to purchase
shares of common stock pursuant to the Company’s benefit and compensation plans existing on
the date hereof including, but not limited to, the Progress Energy 401(k) Savings and Stock
Ownership Plan, the Savings Plan for Employees of Florida Progress Corporation, the Progress
Energy Inc. 1997 Equity Incentive Plan Amended and Restated as of September 26, 2001, the
Progress Energy Inc. 2002 Equity Incentive Plan (amended and restated effective July 10,
2002) and any employee stock option plan that may be adopted by the Company, in amounts and
on terms consistent with those plans; (iv) the issuance or grant of shares of common stock
or options or rights to purchase shares of common stock in connection with the Progress
Energy Investor Plus Plan; and (v) agreements or arrangements in connection with acquisition
transactions involving the issuance or sale of shares of common stock or relating to
options, rights, warrants or any securities convertible into or exercisable or exchangeable
for shares of common stock, where the acquisition transactions are consummated more than 60
days after the date of the Prospectus.
5. Manner of Sale. The Underwriters agree to make promptly a bona fide public
offering of the Shares to the public for sale as set forth in the Pricing Disclosure Package,
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subject, however, to the terms and conditions of this Agreement. The Underwriters agree that
the information that they have presented to investors at or prior to the execution of this
Agreement is consistent in all material respects 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 Shares that
would constitute a “free writing prospectus” as defined in Rule 405 under the Securities
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 Shares that would constitute a “free writing
prospectus,” as defined in Rule 405 under the Securities 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. 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 final term sheet referred to in paragraph 6(b) below.
(b) The Company agrees to file a final term sheet (if one is conveyed to investors), 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 164 and 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 that 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.
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7. Delivery of the Shares and Payment Therefor; Default of Underwriters.
(a) Delivery of and payment for the Firm Shares shall be made at 10:00 a.m., New York
City time, on January 12, 2009, which date and time may be postponed by mutual written
agreement of the Representative and the Company (such date and time of delivery and payment
for the Shares being herein called the “Closing Date”). Delivery of and payment of all or
any portion of the Option Shares shall be made from time to time at 10:00 a.m., New York
City time, on the third business day (unless postponed in accordance with the provisions of
paragraph 7(c) hereof) following the giving of the notice described below, each as shall be
designated in written notices from the Representative to the Company of the Representative’s
determination, on behalf of the Underwriters, to purchase a number, specified in said
notices, of Option Shares, or on such other date as shall be agreed upon by the
Representative and the Company. The time and date of any such payments are hereinafter
referred to as an “Option Closing Date” (the Closing Date or any Option Closing Date, as
applicable, is hereinafter referred to as the “Relevant Closing Date”). The notices of a
determination to exercise the option to purchase all or any portion of the Option Shares and
of an Option Closing Date may be given at any time within 30 days after the date of this
Agreement.
(b) Delivery of the Shares shall be made against payment by the Representative of the
applicable purchase price thereof, to or upon the order of the Company by wire transfer
payable in same-day funds to an account specified by the Company. The Shares will be
delivered to the Representative for the respective accounts of the several Underwriters
through the facilities of The Depository Trust Company (“DTC”) and will be made available
for inspection by the Representative at the offices of Hunton & Xxxxxxxx LLP, Raleigh, North
Carolina, not later than 1:00 p.m. New York City time on the business day before the
Relevant Closing Date, or such other date, time and place as the Representative and the
Company may agree. The certificates evidencing Shares to be purchased hereunder shall be
delivered to, or at the direction of, the Representative on the Relevant Closing Date
against payment of the applicable purchase price therefor by wire transfer of immediately
available funds to the order of the Company.
(c) If one or more Underwriters shall, for any reason other than a reason permitted
hereunder, fail to take up and pay for the number of Shares to be purchased by such one or
more Underwriters, the Company shall immediately notify the Representative, and the
non-defaulting Underwriters shall be obligated to take up and pay for (in addition to the
respective number of Shares set forth opposite their respective names in Schedule II
hereto) the number of Shares which such defaulting Underwriter or Underwriters failed to
take up and pay for, up to a number thereof equal to, in the case of each non-defaulting
Underwriter, 10% of the number of Shares otherwise to be purchased by such. Each
non-defaulting Underwriter on such Relevant Closing Date shall do so on a pro-rata basis
according to the amounts set forth opposite the name of such non-defaulting Underwriter in
Schedule II hereto, 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
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remaining number of Shares which the defaulting Underwriter or Underwriters agreed but
failed to purchase. If any unpurchased Shares still remain, then the Company or the
Representative shall be entitled to an additional period of 24 hours within which to procure
another party or parties, members of the Financial Industry Regulatory Authority, Inc. (the
“Authority”) (or if not members of the Authority, who are not eligible for membership in the
Authority 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 the Authority’s Conduct Rules) and satisfactory to the Company,
to purchase or agree to purchase such unpurchased Shares on the terms herein set forth. In
any such case, either the Representative or the Company shall have the right to postpone the
Relevant 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 Shares by another party or parties as above provided and
(ii) the Company and the non-defaulting Underwriters have not mutually agreed to offer and
sell the Shares other than the unpurchased Shares, then this Agreement, or the obligations
of the several Underwriters to purchase Option Shares on a date which is after the Closing
Date, as the case may be, 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 number of Shares 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 Shares 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 Shares), including any post-effective amendment (in
each case including all exhibits filed therewith and all documents incorporated therein not
previously furnished to the Representative), including signed copies of each consent and
certificate included therein or filed as an exhibit thereto, and will deliver to the
Representative for distribution to the Underwriters as many conformed copies of the
foregoing (excluding the exhibits, but including all documents incorporated therein) as the
Representative may reasonably request. The Company will also send to the Underwriters as
soon as practicable after the date of this Agreement and thereafter from time to time as
many copies of the Prospectus and the Preliminary Prospectus as the Representative may
reasonably request for the purposes required by the Securities Act.
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(b) During such period (not exceeding nine months) after the commencement of the
offering of the Shares as the Underwriters may be required by law to deliver a Prospectus
(or in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act), 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 light of
the circumstances when it is delivered to a purchaser (or in lieu thereof, the notice
referred to in Rule 173(a) under the Securities Act), or if it is necessary to amend the
Prospectus to comply with the Securities Act, the Company will forthwith at its expense
prepare, file with the Commission 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 that 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 (or in lieu thereof, the notice referred to in Rule 173(a) under the Securities
Act) after the expiration of nine months after the commencement of the offering of the
Shares, the Company, upon the request of the Representative, will furnish to the
Representative, at the expense of such Underwriter, a reasonable quantity of a supplemented
or amended prospectus, or supplements or amendments to the Prospectus, complying with
Section 10(a) of the Securities Act.
(c) The Company will make generally available to its security holders, as soon as
reasonably practicable, but in any event not later than 16 months after the end of the
fiscal quarter in which the filing of the Prospectus pursuant to Rule 424 occurs, an
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 commercially reasonable efforts promptly to do and perform all
things to be done and performed by it hereunder prior to the Relevant Closing Date and to
satisfy all conditions precedent to the delivery by it of the Shares.
(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 commercially
reasonable efforts to obtain the prompt removal thereof.
(f) If at any time when Shares remain unsold by the Underwriters, the Company receives
from the Commission a notice pursuant to Rule 401(g)(2) of the Securities Act or otherwise
ceases to be eligible to use the automatic shelf registration statement form, the Company
will (i) promptly notify the Representative, (ii) promptly
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file a new registration statement or post-effective amendment on the proper form
relating to the Shares, in a form reasonably satisfactory to the Representative, or take
such other action, after consultation with counsel, as the Company believes is appropriate,
(iii) use commercially reasonable efforts to cause any new registration statement or
post-effective amendment that may be filed pursuant to clause (ii) above, to be declared
effective and (iv) promptly notify the Representative of any such effectiveness. The
Company will take all other commercially reasonable action as it deems appropriate to permit
the public offering and sale of the Shares to continue as contemplated in the registration
statement that was subject of the Rule 401(g)(2) notice or for which the Company has
otherwise become ineligible. References herein to the Registration Statement shall include
such new registration statement or post-effective amendment, as the case may be.
(g) The Company will use commercially reasonable efforts to qualify the Shares, as may
be required, for offer and sale under the Blue Sky or legal investment laws of such
jurisdictions as the Representative may designate, and will file and make in each year such
statements or reports as are or may be reasonably required by the laws of such
jurisdictions; provided, however, that the Company shall not be required to qualify as a
foreign corporation or dealer in securities, or to file any general consents to service of
process under the laws of any jurisdiction.
(h) Prior to the termination of the offering of the Shares, the Company will not file
any amendment to the Registration Statement or supplement to the Pricing Prospectus or the
Prospectus that shall not have previously been furnished to the Representative or of which
the Representative shall not previously have been advised or to which the Representative
shall reasonably object in writing and which has not been approved by the Underwriter(s) or
their counsel acting on behalf of the Underwriter(s).
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 Shares to the Underwriters,
(iii) the fees and disbursements of the Company’s counsel and accountants, (iv) the expenses in
connection with the qualification of the Shares under securities laws in accordance with the
provisions of paragraph 8(g) hereof, 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, the Preliminary Prospectus, any Permitted Free Writing Prospectus and
the Prospectus and any amendments or supplements thereto and (vi) the printing and delivery to the
Underwriters of copies of the Blue Sky Survey; and the Company will pay all taxes, if any (but not
including any transfer taxes), on the issue of the Shares.
The fees and disbursements of Underwriters’ counsel shall be paid by the Underwriters
(subject, however, to the provisions of 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
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for any expenses of the Representative or of any other of the Underwriters except as provided
in 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 Shares shall be subject to the accuracy of the
representations and warranties on the part of the Company as of the date hereof and the Closing
Date, to the performance by the Company of its obligations to be performed hereunder prior to the
Closing Date, and to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration Statement shall be
in effect on the Closing Date; and no proceedings for that purpose shall be pending before,
or, to the Company’s knowledge, threatened by, the Commission on the Closing Date and no
notice from the Commission pursuant to Rule 401(g)(2) of the Securities Act shall have been
received by the Company. The Representative shall have received, prior to payment for the
Shares, 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, that no proceedings for such purpose are pending before or, to the knowledge of the
Company, threatened by the Commission and no notice from the Commission pursuant to Rule
401(g)(2) of the Securities Act has been received by the Company.
(b) There shall not have occurred any material adverse change in the business,
properties, results of operations or financial condition of the Company and its
subsidiaries, considered as a whole, from that set forth in the Pricing Disclosure Package
as of the date of this Agreement that, in the judgment of the Representative, is material
and adverse and that makes it, in the judgment of the Representative, impracticable to
market the Shares on the terms and in the manner contemplated in the Pricing Disclosure
Package.
(c) At the Closing Date, the Representative shall receive favorable opinions and, with
respect to clauses (vii) and (viii), assurance statements 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 & XxXxxxx LLP, counsel for the Underwriters, in each of
which opinions said counsel may rely as to all matters of North Carolina law upon the
opinion of Xxxxx X. Xxxxxxxx, Esq., General Counsel of the Company, to the effect that:
(i) assuming delivery to and payment for the Shares by the Underwriters, as
provided in this Agreement, the Shares will be validly issued, fully paid and
non-assessable;
(ii) the shareholders of the Company are not entitled to statutory preemptive
or, to such counsel’s knowledge, other similar contractual rights to subscribe for
the Shares, and the Shares have been duly authorized for listing on The New York
Stock Exchange;
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(iii) the form of the certificates for the Shares conforms in all material
respects to the requirements of the North Carolina Business Corporation Act and The
New York Stock Exchange;
(iv) the statements made in the Basic Prospectus under the caption “DESCRIPTION
OF CAPITAL STOCK—Common Stock,” insofar as they purport to constitute summaries of
the documents referred to therein, are accurate summaries in all material respects;
(v) the statements made in the Pricing Prospectus and the Prospectus under the
caption “Material United States Federal Income and Estate Tax Consequences to
Non-U.S. Holders of Common Stock,” insofar as they purport to constitute summaries
of matters of U.S. federal income tax law or legal conclusions with respect thereto,
are accurate and complete in all material respects;
(vi) this Agreement has been duly and validly authorized, executed and
delivered by the Company;
(vii) the Registration Statement, at each time and date it was declared, or is
deemed to have become effective by the Commission, and the Pricing Disclosure
Package 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 or incorporated by reference therein, or excluded therefrom and
that part of the Registration Statement that constitutes the Statement of
Eligibility on Form T-1 upon which such opinions need not pass), appeared on their
face to respond in all material respects to the requirements of the Securities Act
and the applicable instructions, rules and regulations of the Commission thereunder;
and 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 schedules and
notes thereto or other financial, numerical, accounting, statistical or quantitative
information (or the assumptions with respect thereto) included in or incorporated by
reference therein or excluded therefrom 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 they were filed with the Commission, appeared on their
face to respond in all material respects to 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, such
counsel has been verbally 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; and
-15-
(viii) nothing has come to the attention of said counsel that would lead them
to believe that the Registration Statement, at each time and date it was declared,
or is deemed to have become, effective by the Commission contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; 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 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 schedules and notes
thereto or other financial, numerical, accounting, statistical or quantitative
information (or the assumptions with respect thereto) included in or incorporated by
reference therein, or excluded therefrom, and that part of the Registration
Statement that constitutes the Statement of Eligibility on Form T-1, upon which such
opinions need not pass).
provided, however, that Xxxxx & XxXxxxx LLP will not provide the opinion contained in
subparagraphs (b)(ii) and (b)(iii) (as to the requirements of the North Carolina Business
Corporation Act), (b)(v) or (b)(vii) (as to documents incorporated by reference, at the time
they were filed with the Commission) of this paragraph 10.
(d) At the Closing Date, the Representative shall receive from Xxxxx X. Xxxxxxxx, Esq.,
General Counsel of the Company, a favorable opinion and/or assurance statement in form and
substance satisfactory to counsel for the Underwriters, to the same effect with respect to
the matters enumerated in subdivisions (i) through (iv), (vi) and (viii) of subparagraph (b)
of this paragraph 10 as the opinions required by said subparagraph (b) and to the further
effect that:
(i) the Company has been incorporated, 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 Pricing Disclosure Package and the Prospectus;
(iii) the issuance and sale of the Shares have been duly authorized by all
necessary corporate action on the part of the Company;
-16-
(iv) the authorized capital stock of the Company is 20,000,000 shares of
preferred stock and 500,000,000 shares of common stock; the shares of issued and
outstanding capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; and none of the outstanding shares of
capital stock of the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company to subscribe for such stock;
(v) to the best of his knowledge, there are no persons with registration rights
or other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the Securities
Act;
(vi) except as described in or contemplated by the Pricing Disclosure Package
and the Prospectus, there are no pending actions, suits or proceedings (regulatory
or otherwise) against the Company or any Significant Subsidiary 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 and its subsidiaries
considered as a whole or that are likely, in the aggregate, to materially and
adversely affect the consummation of this Agreement, or the transactions
contemplated herein or therein; and
(vii) 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 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; and
(viii) no filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of its
obligations hereunder in connection with the offering, issuance or sale of the
Shares hereunder or the consummation of the transactions herein contemplated, except
such as have been already obtained or as may be required under the Securities Act or
state securities laws.
(e) 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, on behalf
of the Underwriters, containing statements and information of the type ordinarily included
in accountants’ SAS 72 “comfort letters” to underwriters
-17-
with respect to the audit reports, financial statements and certain financial
information contained in or incorporated by reference into the Pricing Prospectus and the
Prospectus.
(f) 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.
(g) Any 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 Shares
shall have been satisfactory in form and substance to counsel for the Underwriters.
(i) At the Closing Date, the Shares shall have been approved for listing on The New
York Stock Exchange, subject only to official notice of issuance.
(j) At the date of this Agreement, the Representative shall have received an agreement
substantially in the form of Exhibit A to Schedule V hereto signed by the persons
listed on Schedule V hereto.
(k) If the Underwriters exercise their option provided in paragraph 4(b) hereof to
purchase all or any portion of the Option Shares, the representations and warranties of the
Company contained herein and the statements in any certificates furnished by the Company or
any subsidiary of the Company hereunder shall be true and correct as of each Option Closing
Date and, at each Option Closing Date, the Representative shall have received:
(i) Officers’ Certificate. A certificate, dated such Option Closing
Date, of the Chairman, President, Treasurer or a Vice President of the Company
confirming that the certificates delivered at the Closing Date pursuant to
paragraphs 10(a) and 10(e) hereof remain true and correct as of such Option Closing
Date.
(ii) Opinion of Counsel for the Company. The favorable opinion and/or
assurance statement of Hunton & Xxxxxxxx LLP, counsel to the Company, together with
the favorable opinion and/or assurance statement of Xxxxx X. Xxxxxxxx, Esq., General
Counsel of the Company, each in form and substance satisfactory to counsel for the
Underwriters, dated such Option Closing Date, relating to the Option Shares to be
purchased on such Option Closing Date and otherwise to the same effect as the
opinions required by paragraphs 10(b) and 10(c), respectively, hereof.
(iii) Opinion of Counsel for the Underwriters. The favorable opinion
of Xxxxx & XxXxxxx LLP, counsel for the Underwriters, dated such Option Closing
Date, relating to the Option Shares to be purchased on such Option
-18-
Closing Date and otherwise to the same effect as the opinion required by
paragraph 10(b) hereof.
(iv) Bring-down Comfort Letter. A letter from Deloitte & Touche LLP,
in form and substance satisfactory to the Representative and dated such Option
Closing Date, substantially in the same form and substance as the letters furnished
to the Representative pursuant to paragraph 10(d) hereof, except that the “specified
date” in the letter furnished pursuant to this paragraph shall be a date not more
than three days prior to such Option Closing Date.
In case any of the conditions specified above in this paragraph 10 shall not have been
fulfilled or waived by 2:00 p.m. New York City time on the Relevant Closing Date, this Agreement
or, in the case of any condition to the purchase of Option Shares, on a date which is after the
Closing Date, the obligations of the several Underwriters to purchase the relevant Option Shares,
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 Shares on the Relevant Closing Date shall be subject to the following condition. No
stop order suspending the effectiveness of the Registration Statement shall be in effect on the
Relevant Closing Date, and no proceedings for that purpose shall be pending before or threatened by
the Commission on the Relevant Closing Date.
In case the condition specified in this paragraph 11 shall not have been fulfilled at the Relevant
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 Pricing Disclosure Package 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 issuer free
writing prospectus (as defined in Rule 433(h) under the Securities Act), 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
-19-
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 the information furnished herein or in writing to the Company by any
Underwriter through the Representative expressly for use in the Registration Statement, the
Pricing Disclosure Package or the Prospectus, or any amendment or supplement to any thereof,
or any free writing prospectus used by the Company, or arising out of, or based upon,
statements in or omissions from that part of the Registration Statement that shall
constitute the Statement of Eligibility under the Trust Indenture Act of 1939, as amended
(Form T-1) of the Trustee. 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 any such officer or director or any such
controlling person and shall survive the delivery of the Shares. The Underwriters agree to
notify promptly the Company, and each other Underwriter, of the commencement of any
litigation or proceedings against them, or any of them, or any such officer or director, or
any such controlling person, in connection with the sale of the Shares.
(b) Each Underwriter severally, and not jointly, agrees to indemnify and hold harmless
the Company, its officers 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 Pricing Disclosure Package 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, or the Pricing Disclosure
Package 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 Shares. The Company agrees promptly to notify the
Representative of the commencement of any litigation or proceedings against the Company or
any of its officers or directors, or any such controlling person, in connection with the
sale of the Shares.
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(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 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
proportion as is appropriate to reflect the relative benefits received by the Company, on
the one hand, and the Underwriters, on the other hand, from the offering of the Shares
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted
-21-
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 Shares pursuant to this Agreement shall be deemed to be
in the same respective proportions as the total net proceeds from the offering of the Shares
pursuant to this Agreement (before deducting expenses) received by the Company and the total
underwriting discount received by the Underwriters, in each case as set forth on the cover
of the Prospectus, bear to the aggregate initial public offering price of the Shares as set
forth on such cover. The relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company or by the
Underwriters and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution pursuant to this
subparagraph (d) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to above in this subparagraph (d).
The rights of contribution contained in this Section 12 shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any Underwriter or
the Company and shall survive delivery of the Shares. 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 Shares set forth opposite their respective names in Schedule
II hereto 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 and
the Pricing Disclosure Package (other than information separately provided by Lazard Capital
Markets LLC) were the following parts of the section titled “Underwriting”: the second,
seventh, thirteenth, fourteenth and fifteenth paragraphs. In addition, Lazard Capital
Markets LLC provided paragraph six under the caption “Underwriting.”
13. Termination Date of this Agreement. This Agreement, or the obligations of the
several Underwriters to purchase Option Shares on a date which is after the Closing Date, may
-22-
be terminated by the Representative at any time prior to the Relevant 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 trading in any
securities of the Company shall have been suspended or materially limited by The New York Stock
Exchange, or (b) there shall have occurred any new outbreak of hostilities, including, but not
limited to, significant escalation of hostilities that existed on or 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 judgment of the Representative, for the Underwriters to enforce
contracts for the sale of the Shares, or (c) the Company or any Significant Subsidiary shall have
sustained a substantial loss by fire, flood, accident or other calamity that renders it
impracticable, in the judgment of the Representative, to consummate the sale of the Shares and the
delivery of the Shares by the several Underwriters at the initial public offering price or (d)
there shall have been any downgrading or any notice of any intended or potential downgrading in the
rating accorded the Company’s securities by any “nationally recognized statistical rating
organization” as that term is defined by the Commission for the purposes of Securities Act Rule
436(g)(2), or any such organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company’s outstanding debt,
the effect of which, in the judgment of the Representative, makes it impracticable or inadvisable
to consummate the sale of the Shares and the delivery of the Shares by the several Underwriters at
the initial public offering price or (e) there shall have been declared, by either federal or New
York authorities, a general banking moratorium. This Agreement (or such obligation to purchase
Option Shares) may also be terminated at any time prior to the Relevant Closing Date if, in the
judgment of the Representative, the subject matter of any amendment or supplement to the
Registration Statement, the Preliminary 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 but prior to such Relevant Closing Date shall have materially impaired
the marketability of the Shares. 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 hereof.
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 Shares from any of the
several Underwriters.
-23-
15. Nature of Relationship. The Company acknowledges and agrees that (a) 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, (b) 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, (c) 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 (d) any review by the Underwriters or 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 Representatives at X.X. Xxxxxx Securities Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 and Xxxxxx Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, 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, Vice President and 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
Agreement shall have the meanings assigned to them in the Registration Statement.
[The remainder of this page has been intentionally left blank.]
-24-
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 | |||
| Authorized Representative | ||||
Accepted as of the date first
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named on
Schedule III of this Agreement.
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named on
Schedule III of this Agreement.
X.X. XXXXXX SECURITIES INC.
By: |
/s/ Xxx Xxxxxxxx | |||
| Title: Managing Director | ||||
| XXXXXX XXXXXXX & CO. INCORPORATED | ||||
By: |
/s/ Xxxxxxx X. Xxxxx | |||
| Name: Xxxxxxx X. Xxxxx | ||||
| Title: Managing Director | ||||
[Signature Page for the Common Stock Underwriting Agreement]
-25-
NOT USED
SCHEDULE I
Free Writing Prospectus Dated January [7], 2009
Registration Statement No. 333-155418
Filed Pursuant to Rule 433 of the Securities Act of 1933
Registration Statement No. 333-155418
Filed Pursuant to Rule 433 of the Securities Act of 1933
Progress Energy, Inc.
Shares of Common Stock
Shares of Common Stock
| Issuer: | Progress Energy, Inc. | |||
| Security: | Shares of Common Stock | |||
| Shares Offered: | [ ] common shares | |||
| Option Shares: | [ ] common shares | |||
| Public Offering Price: | [$ ] per common share; [$ ] total (not including Option Shares) | |||
| Underwriting Discounts and Commissions: |
[$ ] per common share; [$ ] total (not including Option Shares) | |||
| Proceeds to the Issuer (before expenses) |
[$ ] per common share; [$ ] total (not including Option Shares) | |||
| Estimated Issuer Expenses: | [$ ], excluding underwriting discounts and commissions | |||
| Use of Proceeds: | Issuer intends to use approximately [$ ] million of the net proceeds from this offering to [ ] | |||
| Co-Lead Managers: | X.X. Xxxxxx Securities Inc. Xxxxxx Xxxxxxx Co. & Incorporated |
|||
Underwriting Allocation:
|
X.X. Xxxxxx Securities Inc | [ ] | ||
| Xxxxxx Xxxxxxx Co. & Incorporated | [ ] | |||
| Xxxxxx X. Xxxxx & Co. Incorporated | [ ] | |||
| Lazard Capital Markets LLC | [ ] | |||
| UBS Securities LLC | [ ] | |||
Settlement Date:
|
January 12, 2009 | |||
Type of Security:
|
SEC Registered |
The issuer has filed a registration statement (including 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’s web site at xxx.xxx.xxx. Alternatively, the issuer, any Underwriter or any
dealer participating in this offering will arrange to send to you the prospectus if you request it
by calling X.X. Xxxxxx Securities Inc., toll-free at 0-000-000-0000, or Xxxxxx Xxxxxxx & Co.
Incorporated at 1-866-718-1649.
-II-
SCHEDULE II
| Number of Firm Shares | Number of Option Shares | |||||||
| Underwriters | to be Purchased | to be Purchased | ||||||
X.X. Xxxxxx Securities Inc. |
5,000,000 | 750,000 | ||||||
Xxxxxx Xxxxxxx & Co.
Incorporated |
5,000,000 | 750,000 | ||||||
Xxxxxx X. Xxxxx & Co.
Incorporated |
1,000,000 | 150,000 | ||||||
Lazard Capital Markets LLC |
750,000 | 112,500 | ||||||
UBS Securities LLC |
750,000 | 112,500 | ||||||
| Representatives: | X.X. Xxxxxx Securities Inc. Xxxxxx Xxxxxxx & Co. Incorporated |
SCHEDULE III
Pricing Disclosure Package
| 1) | Preliminary Prospectus Supplement dated January 6, 2009 | |
| 2) | Permitted Free Writing Prospectuses |
| a) | None |
Information Conveyed to Investors at or About the Time of Pricing
Designation:
|
Common Stock | |
Amount:
|
12,500,000 shares | |
Purchase Price:
|
$36.375 per share | |
Public Offering Price:
|
$37.50 per share |
SCHEDULE IV
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) | Florida Progress Corporation |
SCHEDULE V
Persons Executing Lock-Up Agreements
Xxxxx X. Xxxxxx, Xx.
Xxxxx X. Burner
Xxxxxxx X. Xxxxxxx
Xxxxxx X. XxXxxxx, Xx.
Xxxxx X. Xxxxx, Xx.
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
W. Xxxxxx Xxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Xxxx X. XxXxxxxx
E. Xxxxx XxXxx
Xxxx X. Xxxxxxx
Xxxx X. Xxxxxx, III
Xxxxxxx X. Xxxxx, Xx.
Xxxxxx X. Xxxxxxxxxx
Xxxxx Xxxxxxx
Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxx
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxx, Xx.
Xxxxx X. Xxxxx
Xxxxx X. Burner
Xxxxxxx X. Xxxxxxx
Xxxxxx X. XxXxxxx, Xx.
Xxxxx X. Xxxxx, Xx.
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
W. Xxxxxx Xxxxx
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Xxxx X. XxXxxxxx
E. Xxxxx XxXxx
Xxxx X. Xxxxxxx
Xxxx X. Xxxxxx, III
Xxxxxxx X. Xxxxx, Xx.
Xxxxxx X. Xxxxxxxxxx
Xxxxx Xxxxxxx
Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxx
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxx, Xx.
Xxxxx X. Xxxxx
Exhibit A
[Form of Lock-Up Agreement]
January [___], 2009
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
| Re: | Proposed Public Offering by Progress Energy, Inc. |
Dear Sirs:
The undersigned, an officer and/or director of Progress Energy, Inc. (the “Company”), understands
that X.X. Xxxxxx Securities Inc. and Xxxxxx Xxxxxxx & Co. Incorporated (the “Representative”)
propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) with the Company
providing for the public offering of shares (the “Securities”) of the Company’s common stock (no
par value) (the “Common Stock”). In recognition of the benefit that such an offering will confer
upon the undersigned as an officer and/or director of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees
with each underwriter to be named in the Underwriting Agreement that, during a period of 60 days
from the date of the Underwriting Agreement, the undersigned will not, without the prior written
consent of the Representative, directly or indirectly, (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of, or otherwise dispose of or transfer any shares of Common Stock or
any securities convertible into or exchangeable or exercisable for Common Stock or make any demand
for or exercise any right with respect to the registration of the foregoing under the Securities
Act of 1933, as amended, or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of
the Common Stock, whether any such swap or transaction is to be settled by delivery of Common Stock
or other securities, in cash or otherwise. Notwithstanding the foregoing, nothing in this
agreement shall prohibit or otherwise restrict the undersigned from making (i) a transfer to a
family member or trust, provided the transferee or transferees thereof agree in writing to be bound
by this restriction or (ii) a transfer to a transferee or transferees as a bona fide gift or gifts,
provided the transferee or transferees thereof agree in writing to be bound by this restriction.
[The remainder of this page has been left intentionally blank]
If for any reason the Underwriting Agreement shall be terminated prior to the Closing Date (as
defined in the Underwriting Agreement), the agreement set forth herein shall likewise be
terminated.
| Very truly yours, | ||||||
| Signature: | ||||||
| Print Name: | ||||||
