Exhibit 1.01
Public Service Company of North Carolina, Incorporated
$150,000,000 Medium-Term Notes
Due From Nine Months to Thirty Years
From Date of Issue
Banc of America Securities LLC
Bank of America Corporate Center
000 Xxxxx Xxxxx Xxxxxx
XX0 000 00 00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention Short and Medium Term Products Group
UBS Warburg LLC
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Selling Agency Agreement
__________, 2001
New York, New York
Dear Sirs:
Public Service Company of North Carolina, Incorporated, a South
Carolina corporation (the "Company"), confirms its agreement with each of you as
evidenced by this Selling Agency Agreement dated _____________, 2001 (the
"Agreement"), with respect to the issue and sale by the Company of up to
$150,000,000 aggregate principal amount of its Medium-Term Notes, Due from Nine
Months to Thirty Years from Date of Issue (the "Notes"). The Notes will be
issued under an Indenture dated as of January 1, 1996, as amended and
supplemented and including particularly as supplemented by the Fourth
Supplemental Indenture dated as of __________ 1, 2001 (as amended and
supplemented, the "Indenture") between the Company, successor to Public Service
Company of North Carolina, Incorporated, a North Carolina corporation, and First
Union National Bank, formerly First Union National Bank of North Carolina, as
trustee (the "Trustee"). Unless otherwise set forth in a supplement to the
Prospectus referred to below, the Notes will be issued in fully registered form
in minimum denominations of $1,000 and in denominations exceeding such amount by
integral multiples of $1,000, and will have the annual interest rates,
maturities and, if appropriate, other terms set forth in such supplement to the
Prospectus. The Notes will be issued, and the terms thereof established, in
accordance with the Indenture and, in the case of Notes sold pursuant to Section
2(a), the Medium-Term Note Administrative Procedures attached hereto as Exhibit
A (the "Procedures") (unless a Terms Agreement (as defined in Section 2(b))
modifies or supersedes such Procedures with respect to the Notes issued pursuant
to such Terms Agreement). The Procedures may be amended only by written
agreement of the Company and you after notice to, and with the approval of, the
Trustee. For the purposes of this Agreement, the term "Agent" shall refer to any
of you, together with any others who are subsequently appointed as agents
pursuant to Section 2(c) hereof, acting solely in the capacity as agent for the
Company pursuant to Section 2(a) and not as principal (collectively, including
any other who is subsequently appointed as an agent pursuant to Section 2(c)
hereof, the "Agents"), the term the "Purchaser" shall refer to one of you or any
other who is subsequently appointed as principal pursuant to Section 2(c)
hereof, acting solely as principal pursuant to Section 2(b) and not as agent,
and the term "you" shall refer to you collectively whether at any time any of
you are acting in both such capacities or in either such capacity.
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, you as set forth below in this Section 1. Certain terms
used in this Section 1 are defined in paragraph (i) hereof.
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act") and has filed with the
Securities and Exchange Commission (the "Commission") a registration statement
on such Form (File Number: 333-45206), including a prospectus (the
"Prospectus"), which registration statement has become effective, for the
registration under the Act of $150,000,000 aggregate principal amount of Notes.
Such registration statement, as amended at the date of this Agreement, meets the
requirements set forth in Rule 415(a)(1)(ix) or (x) under the Act and complies
in all other material respects with said Rule. In connection with the sale of
Notes the Company proposes to file with the Commission pursuant to the
applicable paragraph of Rule 424(b) under the Act supplements to the Prospectus
specifying the interest rates, maturity dates and, if appropriate, other terms
of the Notes sold pursuant hereto or the offering thereof.
(b) As of the Execution Time (as defined by Section 1(h)), on
the Effective Date (as defined by Section 1(h)), when any supplement to the
Prospectus is filed with the Commission, as of the date of any Terms Agreement
and at the date of delivery by the Company of any Notes sold hereunder (a
"Closing Date"), (i) the Registration Statement (as defined by Section 1(h)), as
amended as of any such time, and the Prospectus, as supplemented as of any such
time, and the Indenture will comply in all material respects with the applicable
requirements of the Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the respective rules thereunder; (ii) the Registration
Statement, as amended as of any such time, did not or will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading; and (iii) the Prospectus, as supplemented as of any such time, will
not contain any 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 Company makes no representations or warranties as to (i) that part of
the Registration Statement which shall constitute the Statement of Eligibility
(Form T-1) under the Trust Indenture Act of the Trustee or (ii) the information
contained in or omitted from the Registration Statement or the Prospectus (or
any supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by any of you specifically for use in
connection with the preparation of the Registration Statement or the Prospectus
(or any supplement thereto).
(c) As of the Execution and as of the time any Notes are
issued and sold hereunder, the Indenture has or will have been duly authorized,
executed and delivered, has or will have been duly qualified under the Trust
Indenture Act, and did or will constitute a legal, valid and binding instrument
enforceable against the Company in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from time to time
in effect), and such Notes will have been duly authorized, executed,
authenticated and, when paid for by the purchasers thereof, will constitute
legal, valid and binding obligations of the Company entitled to the benefits of
the Indenture (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditor's rights
generally from time to time in effect.
(d) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the State of South Carolina, with
full corporate power and authority to own its properties and conduct its
business as described in the Prospectus, and is duly qualified to do business as
a foreign corporation and is in good standing in North Carolina or any other
jurisdiction which requires such qualification wherein it owns or leases
material properties or conducts material business.
(e) The Company's authorized equity capitalization is as set
forth in the Registration Statement; and the Notes conform to the description
thereof contained in the Prospectus (subject to the insertion in the Notes of
the maturity dates, the interest rates and other similar terms thereof which
will be described in supplements to the Prospectus as contemplated by the third
sentence of Section l(a) of this Agreement).
(f) The Company is a "public utility company" and a
"subsidiary company" of a "registered holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended (the "PUHC Act"). The
Company is not subject to registration under the Investment Company Act of 1940,
as amended (the "Investment Company Act").
(g) Except for such approvals as may be required under the
PUHC Act, which have been obtained for the period ending , , all approvals
required to be obtained from governmental and regulatory authorities in
connection with the issuance and sale of the Notes have been obtained and are in
full force and effect.
(h) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "Effective Date" shall mean the date that
Registration Statement No. 333-45206 and any subsequent post-effective amendment
or amendments to the Registration Statement became or become effective.
"Execution Time" shall mean the date and time that this Agreement is executed
and delivered by the parties hereto. "Prospectus" shall mean the form of basic
prospectus relating to the Notes contained in the Registration Statement at the
Effective Date. "Registration Statement" shall mean the registration statement
referred to in paragraph (a) above, including incorporated documents, exhibits
and financial statements, as amended at the Execution Time. "Rule 415" and "Rule
424" refer to such rules under the Act. Any reference herein to the Registration
Statement or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Prospectus, as the case may be;
and any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement or the Prospectus shall be deemed to refer
to and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the
Prospectus, as the case may be, deemed to be incorporated therein by reference.
(i) As of the Execution Time, this Agreement has been duly
authorized and delivered by the Company.
(j) As of the Execution Time, since the date of the most
recent financial statement included in the Prospectus (exclusive of any
supplement thereto dated after the Execution Time), there has been no material
adverse change in the condition (financial or other), earnings, business or
properties of the Company and its subsidiaries, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto dated after
the Execution Time).
2. Appointment of Agents; Solicitation by the Agents of Offers to
Purchase; Sales of Notes to a Purchaser.
(a) Subject to the terms and conditions set forth herein, the
Company hereby authorizes each of the Agents to act as its agent to solicit
offers for the purchase of all or part of the Notes from the Company.
On the basis of the representations and warranties, and subject to the
terms and conditions set forth herein, each of the Agents agrees, as agent of
the Company, to use its reasonable efforts to solicit offers to purchase the
Notes from the Company upon the terms and conditions set forth in the Prospectus
(and any supplement thereto) and in the Procedures. Each Agent shall make
reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by such Agent and
accepted by the Company, but such Agent shall not, except as otherwise provided
in this Agreement, have any liability to the Company in the event any such
purchase is not consummated for any reason. Except as provided in Section 2(b),
under no circumstances will any Agent be obligated to purchase any Notes for its
own account. It is understood and agreed, however, that any Agent may purchase
Notes as principal pursuant to Section 2(b).
The Company reserves the right, in its sole discretion, to instruct the
Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Notes. Upon receipt of instructions from
the Company, the Agents will forthwith suspend solicitation of offers to
purchase Notes from the Company until such time as the Company has advised them
that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, on the Closing Date
with respect to each sale of Notes by the Company as a result of a solicitation
made by such Agent, in an amount equal to that percentage specified in Schedule
I hereto of the aggregate principal amount of the Notes sold by the Company.
Such commission shall be payable as specified in the Procedures.
Subject to the provisions of this Section and the Procedures, offers
for the purchase of Notes may be solicited by an Agent, as agent for the
Company, at such time and in such amounts as such Agent deems advisable. The
Company may from time to time offer Notes for sale otherwise than through an
Agent.
If the Company shall default in its obligations to deliver Notes to a
purchaser whose offer it has accepted, the Company shall indemnify and hold each
of you harmless against any loss, claim or damage arising from or as a result of
such default by the Company.
(b) Subject to the terms and conditions stated herein,
whenever the Company and any Agent determine that the Company shall sell Notes
directly to such Agent as a Purchaser, each such sale of Notes shall be made in
accordance with the terms of this Agreement, unless otherwise agreed by the
Company and such Agent, and any supplemental agreement relating thereto (which
may be an oral or written agreement) between the Company and the Purchaser. Each
such supplemental agreement (which shall be substantially in the form of Exhibit
B) is herein referred to as a "Terms Agreement." Each Terms Agreement shall
describe (whether orally or in writing) the Notes to be purchased by the
Purchaser pursuant thereto, and shall specify the principal amount of such
Notes, the maturity date of such Notes, the rate at which interest will be paid
on the Notes and the record dates for each payment of interest, the Closing Date
for the purchase of such Notes, the place of delivery of the Notes and payment
therefor, the method of payment and any requirements for the delivery of
opinions of counsel, certificates from the Company or its officers, or a letter
from the Company's independent public accountants as described in Section 6(b).
Such Terms Agreement shall also specify the period of time referred to in
Section 4(m). The Purchaser's commitment to purchase Notes pursuant to any Terms
Agreement shall be deemed to have been made on the basis of the representations
and warranties of the Company herein contained and shall be subject to the terms
and conditions herein set forth.
Delivery of the certificates for Notes sold to the Purchaser pursuant
to any Terms Agreement shall be made as agreed to between the Company and the
Purchaser as set forth in the respective Terms Agreement, not later than the
Closing Date set forth in such Terms Agreement, against payment of funds to the
Company in the net amount due to the Company for such Notes by the method and in
the form set forth in the Procedures unless otherwise agreed to between the
Company and the Purchaser in such Terms Agreement.
Unless otherwise agreed to between the Company and the Purchaser in a
Terms Agreement, any Note sold to a Purchaser (i) shall be purchased by such
Purchaser at a price equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of a Note of
identical maturity and (ii) may be resold by such Agent at varying prices from
time to time. In connection with any resale of Notes purchased, a Purchaser may
use a selling or dealer group and may reallow any portion of the discount or
commission payable pursuant hereto to dealers or purchasers.
(c) The Company may appoint additional agents in connection
with the offering and sale of the Notes from time to time or in connection with
a single offering and sale of the Notes, whether as agent or principal, provided
that, in any such case, the Company gives the Agents at least five (5) days'
prior notice of such appointment and any such additional agent enters into an
agreement with the Company making such additional agent an Agent or Purchaser,
as the case may be, under this Agreement with respect to such offering and sale
of the Notes from time to time or solely for the purpose of such single offering
and sale of the Notes, as the case may be.
3. Offering and Sale of Notes.
Each Agent and the Company agree to perform the respective
duties and obligations specifically provided to be performed by them in the
Procedures.
4. Agreements. The Company agrees with you that:
(a) Prior to the termination of the offering of the Notes, the
Company will not file any amendment to the Registration Statement or supplement
to the Prospectus without the consent of the Agents (except (i) periodic or
current reports filed under the Exchange Act or (ii) a supplement relating to
any offering of Notes providing solely for the specification of or a change in
the maturity dates, interest rates, issuance prices or other similar terms of
any Notes). Subject to the foregoing sentence, the Company will cause each
supplement to the Prospectus to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to you of such filing. The Company will promptly
advise each of you (i) when the Prospectus, and any supplement thereto, shall
have been filed with the Commission pursuant to Rule 424(b), (ii) when, prior to
the termination of the offering of the Notes, any amendment of the Registration
Statement shall have been filed or become effective, (iii) of any request by the
Commission for any amendment of the Registration Statement or supplement to the
Prospectus or for any additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement, or any part thereof, or the institution or threatening of any
proceeding for that purpose, or if the Company has knowledge that any such
action is contemplated by the Commission, and (v) of the receipt by the Company
of any notification with respect to the suspension of the qualification of the
Notes for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its best efforts to prevent
the issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it shall be necessary to amend the Registration
Statement or to supplement the Prospectus to comply with the Act or the Exchange
Act or the respective rules thereunder, the Company promptly will (i) notify
each of you to suspend solicitation of offers to purchase Notes (and, if so
notified by the Company, each of you shall forthwith suspend such solicitation
and cease using the Prospectus as then supplemented), (ii) prepare and file with
the Commission an amendment or supplement which will correct such statement or
omission or effect such compliance and (iii) supply any supplemented Prospectus
to each of you in such quantities as you may reasonably request. If such
amendment or supplement, and any documents, certificates and opinions furnished
to any of you pursuant to paragraph (g) of this Section 4 in connection with the
preparation or filing of such amendment or supplement are satisfactory in all
respects to you, you will, upon the filing of such amendment or supplement with
the Commission and upon the effectiveness of an amendment to the Registration
Statement, if such an amendment is required, resume your obligation to solicit
offers to purchase Notes hereunder. Notwithstanding the foregoing, if, at the
time of any notification to suspend solicitations, any Agent shall own any of
the Notes with the intention of reselling them, or the Company has accepted an
offer to purchase Notes but the related settlement has not occurred, the
Company, subject to the provisions of subsection (a) of this Section, will
promptly prepare and file with the Commission an amendment or supplement which
will correct such statement or omission or an amendment which will effect such
compliance.
(c) The Company, during the period when a prospectus relating
to the Notes is required to be delivered under the Act, will file promptly all
documents required to be filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act and will furnish to each of you copies of
such documents. In addition, on or prior to the date on which the Company makes
any announcement to the general public concerning earnings or concerning any
other event which is required to be described, or which the Company proposes to
describe, in a document filed pursuant to the Exchange Act, the Company will
furnish to each of you the information contained or to be contained in such
announcement. The Company also will furnish to each of you copies of all other
press releases or announcements to the general public. The Company will
immediately notify each of you of any downgrading in the rating of the Notes or
any other debt securities of the Company, or any proposal relating to
downgrading the rating of the Notes or any other debt securities of the Company,
by any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), as soon as the Company learns of any
such downgrading or proposal.
(d) As soon as practicable, the Company will make generally
available to its security holders and to each of you an earnings statement or
statements of the Company and its subsidiaries which will satisfy the provisions
of Section 11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to each of you and your counsel,
without charge, copies of the Registration Statement (including all amendments
and exhibits thereto) and, so long as delivery of a prospectus may be required
by the Act, as many copies of the Prospectus and any supplement thereto as you
may reasonably request.
(f) The Company will arrange for the qualification of the
Notes for sale under the laws of such jurisdictions as any of you may designate,
will maintain such qualifications in effect so long as required for the
distribution of the Notes, and will arrange for the determination of the
legality of the Notes for purchase by institutional investors.
(g) The Company shall furnish to each of you such information,
documents, certificates of officers of the Company and opinions of counsel for
the Company relating to the business, operations and affairs of the Company, the
Registration Statement, the Prospectus, and any amendments thereof or
supplements thereto, the Indenture, the Notes, this Agreement, the Procedures
and the performance by the Company and you of its and your respective
obligations hereunder and thereunder as any of you may from time to time and at
any time prior to the termination of this Agreement reasonably request.
(h) The Company shall, whether or not any sale of the Notes is
consummated, (i) pay all expenses incident to the performance of its obligations
under this Agreement, including the fees and disbursements of its accountants
and counsel, the cost of printing or other production and delivery of the
Registration Statement, the Prospectus, all amendments thereof and supplements
thereto, the Indenture, this Agreement and all other documents relating to the
offering, the cost of preparing, printing, packaging and delivering the Notes,
the fees and disbursements, including fees of counsel, incurred in compliance
with Section 4(f), the fees and disbursements of the Trustee and the fees of any
agency that rates the Notes, (ii) reimburse each of you on a monthly basis for
all out-of-pocket expenses (including without limitation advertising expenses),
if any, incurred by you in connection with this Agreement and the transactions
contemplated hereunder and (iii) pay the reasonable fees and expenses of your
counsel incurred in connection with this Agreement and the transactions
contemplated hereunder.
(i) Each acceptance by the Company of an offer to purchase
Notes will be deemed to be an affirmation that its representations and
warranties contained in this Agreement are true and correct at the time of such
acceptance, as though made at and as of such time, and a covenant that such
representations and warranties will be true and correct at the time of delivery
to the purchaser of the Notes relating to such acceptance, as though made at and
as of such time (it being understood that for purposes of the foregoing
affirmation and covenant such representations and warranties shall relate to the
Registration Statement and Prospectus as amended or supplemented at each such
time). Each such acceptance by the Company of an offer for the purchase of Notes
shall be deemed to constitute an additional representation, warranty and
agreement by the Company that, as of the settlement date for the sale of such
Notes, after giving effect to the issuance of such Notes and of any other Notes
to be issued on or prior to such settlement date, the aggregate amount of Notes
which have been issued and sold by the Company will not exceed the amount of
Notes registered pursuant to the Registration Statement.
(j) Each time that the Registration Statement or the
Prospectus is amended or supplemented (other than by an amendment or supplement
providing solely for the specification of or a change in the maturity dates, the
interest rates, the issuance prices or other similar terms of any Notes sold
pursuant hereto), the Company will deliver or cause to be delivered promptly to
each of you a certificate of the Company, signed by the Chairman of the Board or
the President and the principal financial or accounting officer of the Company,
dated the date of the effectiveness of such amendment or the date of the filing
of such supplement, in form reasonably satisfactory to you, of the same tenor as
the certificate referred to in Section 5(e) but modified to relate to the last
day of the fiscal quarter for which financial statements of the Company were
last filed with the Commission and to the Registration Statement and the
Prospectus as amended and supplemented to the time of the effectiveness of such
amendment or the filing of such supplement.
(k) Each time that the Registration Statement or the
Prospectus is amended or supplemented (other than by an amendment or supplement
(i) providing solely for the specification of or a change in the maturity dates,
the interest rates, the issuance prices or other similar terms of any Notes sold
pursuant hereto or (ii) setting forth or incorporating by reference financial
statements or other information as of and for a fiscal quarter, unless, in the
case of clause (ii) above, in the reasonable judgment of any of you, such
financial statements or other information are of such a nature that an opinion
of counsel should be furnished), the Company shall furnish or cause to be
furnished promptly to each of you written opinions of counsel to the Company
satisfactory to each of you, dated the date of the effectiveness of such
amendment or the date of the filing of such supplement, in form satisfactory to
each of you, of the same tenor as the opinions referred to in Sections 5(b) and
5(c) but modified to relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of the effectiveness of such amendment or
the filing of such supplement or, in lieu of such opinion, counsel last
furnishing such an opinion to you may furnish each of you with a letter to the
effect that you may rely on such last opinion to the same extent as though it
were dated the date of such letter authorizing reliance (except that statements
in such last opinion will be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to the time of the effectiveness of
such amendment or the filing of such supplement).
(l) Each time that the Registration Statement or the
Prospectus is amended or supplemented to set forth amended or supplemental
financial information, the Company shall cause its independent public
accountants promptly to furnish to each of you a letter, dated the date of the
effectiveness of such amendment or the date of the filing of such supplement, in
form satisfactory to each of you, of the same tenor as the letter referred to in
Section 5(f) with such changes as may be necessary to reflect the amended and
supplemental financial information included or incorporated by reference in the
Registration Statement and the Prospectus, as amended or supplemented to the
date of such letter; provided, however, that, if the Registration Statement or
the Prospectus is amended or supplemented solely to include or incorporate by
reference financial information as of and for a fiscal quarter, the Company's
independent public accountants may limit the scope of such letter, which shall
be satisfactory in form to each of you, to the unaudited financial statements,
the related "Management's Narrative Analysis of Results of Operations" and any
other information of an accounting, financial or statistical nature included in
such amendment or supplement, unless, in the reasonable judgment of any of you,
such letter should cover other information or changes in specified financial
statement line items.
(m) During the period, if any, specified (whether orally or in
writing) in any Terms Agreement, the Company shall not, without the prior
consent of the Purchaser thereunder, offer, sell, contract to sell or announce
the proposed issuance of any debt securities, including Notes, with terms
substantially similar to the Notes being purchased pursuant to such Terms
Agreement, other than borrowings under its revolving credit agreements and lines
of credit and issuances of its commercial paper.
5. Conditions to the Obligations of the Agents.
The obligation of each Agent to solicit offers to purchase the Notes
shall be subject to the accuracy of the representations and warranties on the
part of the Company contained herein as of the Execution Time, on the Effective
Date, when any supplement to the Prospectus is filed with the Commission, as of
each Closing Date and on the date of each solicitation, to the accuracy of the
statements of the Company made in any certificates pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus, and any such supplement, shall
have been filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the Registration
Statement, or any part thereof, shall have been issued and no proceedings for
that purpose shall have been instituted or threatened, or, to the knowledge of
the Company or any Agent, be contemplated by the Commission.
(b) The Company shall have furnished to each Agent the opinion
of its General Counsel or one of the Associate General Counsel for the Company
designated by its General Counsel, dated the Execution Time, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation under the laws of the State of South Carolina,
with full corporate power and authority to own its properties and conduct its
business as described in the Prospectus, and is duly qualified to do business as
a foreign corporation and is in good standing in North Carolina and any other
jurisdiction which requires such qualification wherein it owns or leases
material properties or conducts material business;
(ii) the Company's authorized equity capitalization
is as set forth in the Registration Statement; and the Notes conform to the
description thereof contained in the Prospectus subject to the insertion in the
Notes of the maturity dates, the interest rates and other similar terms thereof
which will be described in supplements to the Prospectus as contemplated by the
third sentence of Section 1(a) of this Agreement);
(iii) the Indenture has been duly authorized,
executed and delivered by the Company, has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and binding instrument enforceable
against the Company in accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time in effect
which, however, do not make the remedies afforded inadequate for the practical
realization of the benefits afforded by the Indenture); and the Notes have been
duly authorized by the Board of Directors of the Company and, when authorized,
approved or ratified by the PSNC Ad Hoc Debt Committee, executed and
authenticated in accordance with the provisions of the Indenture and the
Procedures and delivered by the Trustee and paid for by the purchasers thereof,
will constitute legal, valid and binding obligations of the Company entitled to
the benefits of the Indenture (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect which,
however, do not make the remedies afforded inadequate for the practical
realization of the benefits afforded by the Indenture);
(iv) the Company is a "public utility company" and a
"subsidiary company" of a "registered holding company" within
the meaning of the PUHC Act, subject to regulations thereunder
and is not subject to registration under the Investment
Company Act;
(v) except for such approvals as may be required
under the PUHC Act, which have been obtained for the period
ending all approvals required to be obtained from governmental
and regulatory authorities in connection with the issuance and
sale of the Notes have been obtained and are in full force and
effect;
(vi) to the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Company, of a character required to
be disclosed in the Registration Statement which is not
adequately disclosed in the Prospectus, and there is no
franchise, contract or other document of a character required
to be described in the Registration Statement or Prospectus,
or to be filed as an exhibit, which is not described or filed
as required; and the statements included or incorporated in
the Prospectus describing any legal proceedings or material
contracts or agreements relating to the Company fairly
summarize such matters;
(vii) the Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b);
to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been
instituted or threatened, and the Registration Statement and
the Prospectus (except that no opinion need be expressed as to
the financial statements and other financial and statistical
information contained or incorporated by reference therein or
the Trustee's Statement of Eligibility on Form T-1) comply as
to form in all material respects with the applicable
requirements of the Act and the Exchange Act and the
respective rules promulgated thereunder; and such counsel has
no reason to believe that the Registration Statement at the
Execution Time contained any untrue statement of a material
fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus includes any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading
(except that no opinion need be expressed as to the financial
statements and other financial and statistical information
contained or incorporated by reference therein or to any
information relating to the book-entry system of payments and
transfers of the Notes or the depository therefor set forth
under the caption "Book-Entry System" in the Prospectus or as
to the Trustee's Statement of Eligibility on Form T-1);
(viii) this Agreement has been duly authorized,
executed and delivered by the Company, and the Company has
full corporate power and authority to enter into this
Agreement;
(ix) except for such approvals as may be required
under the PUHC Act and the North Carolina Utilities
Commission, which have been obtained for the period ending
, , no consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transactions contemplated herein except
such as have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in
connection with the sale of the Notes as contemplated by this
Agreement;
(x) neither the execution and delivery of the
Indenture, the issue and sale of the Notes, nor the
consummation of any other of the transactions contemplated
herein nor the fulfillment of the terms hereof will conflict
with, result in a breach or violation of, or constitute a
default under, any law or the charter or bylaws of the Company
or the terms of any indenture or other agreement or instrument
known to such counsel and to which the Company or any of its
subsidiaries is a party or bound, or any judgment, order,
decree or regulation known to such counsel to be applicable to
the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or any of its
subsidiaries; and
(xi) no holders of securities of the Company have
rights to the registration of such securities under the
Registration Statement.
In rendering such opinion, such counsel may limit its opinion to laws of the
State of South Carolina and the federal laws of the United States and may rely
as to matters of fact, to the extent deemed proper, on certificates of
responsible officers of the Company and public officials and may assume that the
laws of the State of New York are identical to the laws of the State of South
Carolina. References to the Prospectus in this paragraph (b) include any
supplements thereto at the date such opinion is rendered.
(c) The Company shall have furnished to each Agent the opinion
of XxXxxx Law Firm, P.A., counsel for the Company, dated the Execution Time, to
the effect that:
(i) the Company has been duly incorporated and is validly existing as a
corporation under the laws of the State of South Carolina, with full
corporate power and authority to own its properties and conduct its
business as described in the Prospectus;
(ii) the Indenture has been duly authorized, executed and delivered by the
Company, has been duly qualified under the Trust Indenture Act, and
constitutes a legal, valid and binding instrument enforceable against the
Company in accordance with its terms, and the Notes have been duly
authorized by the Board of Directors of the Company, and, when authorized,
approved or ratified by the PSNC Ad Hoc Debt Committee, executed and
authenticated in accordance with the provisions of the Indenture and the
Procedures and delivered by the Trustee and paid for by the purchasers
thereof, will constitute legal, valid and binding obligations of the
Company entitled to the benefits of the Indenture (subject in each case, as
to enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors' rights generally
from time to time in effect);
(iii)the Registration Statement has become effective under the Act; any required
filing of the Prospectus, and any supplements thereto, pursuant to Rule
424(b) has been made in the manner and within the time period required by
Rule 424(b); to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been issued,
no proceedings for that purpose have been instituted or threatened, and the
Registration Statement and the Prospectus (except that no opinion need be
expressed as to the financial statements and other financial and
statistical information contained or incorporated by reference therein or
the Trustee's Statement of Eligibility on Form T-1) comply as to form in
all material respects with the applicable requirements of the Act and the
Exchange Act and the respective rules promulgated thereunder; and such
counsel has no reason to believe that the Registration Statement, including
the Prospectus, at the Execution Time contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading (except
that no opinion need be expressed as to the financial statements and other
financial and statistical information contained or incorporated by
reference therein or to any information relating to the book-entry system
of payments and transfers of the Notes or the depository therefor set forth
under the caption "Book-Entry System" in the Prospectus or as to the
Trustee's Statement of Eligibility on Form T-1);
(iv) the Company is a "public utility company" and a "subsidiary company" of a
"registered holding company" within the meaning of the PUHC Act and is
subject to registration thereunder and is not subject to registration under
the Investment Company Act.
(v) except for such approvals as may be required under the PUHC Act, which have
been obtained for the period ending , , all approvals required to be
obtained from governmental and regulatory authorities in connection with
the issuance and sale of the Notes have been obtained and are in full force
and effect;
(vi) this Agreement has been duly authorized, executed and delivered by the
Company; and
(vii)neither the execution and delivery of the Indenture, the issue and sale of
the Notes, nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will conflict with,
result in a breach or violation of, or constitute a default under, any law
or the charter or bylaws of the Company or the terms of any indenture or
other agreement or instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or bound, or any judgment,
order, decree or regulation known to such counsel to be applicable to the
Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over the Company or any of its subsidiaries.
In rendering such opinion, such counsel may limit its opinion to the laws of the
State of South Carolina and the federal laws of the United States (except as to
the matters set forth in clause (v), as to which the opinion may be limited to
the laws of the States of North Carolina and South Carolina and the federal laws
of the United States and may rely as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the Company and public
officials and may assume that the laws of the State of New York are identical to
the laws of the State of South Carolina. References to the Prospectus in this
paragraph (c) include any supplements thereto at the date such opinion is
rendered.
(d) Each Agent shall have received from Xxxxxx Xxxx & Priest
LLP, New York, New York, counsel for the Agents, such opinion or opinions, dated
the Execution Time, with respect to the issuance and sale of the Notes, the
Indenture, the Registration Statement, the Prospectus (together with any
supplement thereto) and other related matters as the Agents may reasonably
require, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to each Agent a
certificate of the Company, signed by the Chairman of the Board or the President
and the principal financial or accounting officer of the Company, dated the
Execution Time, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Prospectus, any supplement to
the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects upon and as of the date hereof with the same effect
as if made on the date hereof and the Company has complied
with all the agreements and satisfied all the conditions on
its part to be performed or satisfied as a condition to the
obligation of the Agents to solicit offers to purchase the
Notes;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto dated after the Execution Time), there has
been no material adverse change in the condition (financial or
other), earnings, business or properties of the Company and
its subsidiaries, whether or not arising from transactions in
the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement
thereto dated after the Execution Time).
(f) At the Execution Time, Xxxxxx Xxxxxxxx LLP and/or Deloitte
& Touche LLP shall have furnished to each Agent a letter or letters (which may
refer to letters previously delivered to the Agents), dated as of the Execution
Time, in form and substance satisfactory to the Agents, confirming that they are
independent accountants within the meaning of the Act and the Exchange Act and
the respective applicable published rules and regulations thereunder and stating
in effect that:
(i) in their opinion the audited financial
statements, financial statement schedules and pro forma
financial statements, if any, included or incorporated in the
Registration Statement and the Prospectus and reported on by
them comply in form in all material respects with the
applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest
unaudited consolidated financial statements made available by
the Company; carrying out certain specified procedures (but
not an examination in accordance with generally accepted
auditing standards) which would not necessarily reveal matters
of significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
stockholders, directors and executive committee of the Company
and its subsidiaries; and inquiries of certain officials of
the Company who have responsibility for financial and
accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to the date of the most
recent audited financial statements included or incorporated
in the Prospectus, nothing came to their attention which
caused them to believe that:
(1) any unaudited consolidated financial
statements included or incorporated in the
Registration Statement and the Prospectus do not
comply in form in all material respects with
applicable accounting requirements and with the
published rules and regulations of the Commission
with respect to financial statements included or
incorporated in quarterly reports on Form 10-Q under
the Exchange Act; and said unaudited financial
statements are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited
financial statements included or incorporated in the
Registration Statement and the Prospectus, except as
previously disclosed in the Company's most recently
filed Form 10-Q;
(2) with respect to the period subsequent to
the date of the most recent consolidated financial
statements (other than any capsule information),
audited or unaudited, in or incorporated by reference
in the Registration Statement and the Prospectus,
there were any changes, at a specified date not more
than five business days prior to the date of the
letter, in the long-term debt, common equity or
preferred stock (not subject to purchase or sinking
funds) of the Company and its subsidiaries, or
decreases in the stockholders' investment of the
Company and its subsidiaries, as compared with the
amounts shown on the most recent consolidated balance
sheet included or incorporated in the Registration
Statement and the Prospectus, or for the period from
the date of the most recent financial statements
included or incorporated in the Registration
Statement and the Prospectus to such specified date
there were any decreases, as compared with the
corresponding period in the preceding year in
operating revenues or operating income or income
before interest charges or in total or per share
amounts of net income of the Company and its
subsidiaries, except in all instances for changes or
decreases set forth in such letter, in which case the
letter shall be accompanied by an explanation by the
Company as to the significance thereof unless said
explanation is not deemed necessary by the Agents; or
(3) the amounts included under the caption
"Summary Consolidated Financial and Operating
Information" in the Prospectus, were not determined
on a basis substantially consistent with that of the
corresponding amounts in the audited financial
statements included or incorporated in the
Registration Statement and the Prospectus, except as
previously disclosed in the Company's most recently
filed Form 10-Q ;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Prospectus, including certain of the
information included or incorporated in Items 1, 6, 7, 8 and 9
of the Company's Annual Report on Form 10-K, incorporated in
the Registration Statement and the Prospectus, certain of the
information included in the "Management's Narrative Analysis
of Results of Operations" included or incorporated in the
Company's Quarterly Reports on Form 10-Q, incorporated in the
Registration Statement and the Prospectus, and the information
included in the Prospectus under the captions "Ratio of
Earnings to Fixed Charges" and "Summary Consolidated Financial
and Operating Information" and certain other information as
you may reasonably request, agrees with the accounting records
of the Company and its subsidiaries, excluding any questions
of legal interpretation; and
(iv) if unaudited pro forma financial statements are
included or incorporated in the Registration Statement and the
Prospectus, on the basis of a reading of the unaudited pro
forma financial statements, carrying out certain specified
procedures, inquiries of certain officials of the Company and
its subsidiaries (including any entity which is acquired, by
merger or otherwise, after the Execution Time, and including
any entity which is the subject of any contract to acquire, by
merger or otherwise, on the date of such financial statements)
who have responsibility for financial and accounting matters,
and proving the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the pro
forma financial statements, nothing came to their attention
which caused them to believe that the pro forma financial
statements do not comply in form in all material respects with
the applicable accounting requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation
of such statements.
References to the Prospectus in this paragraph (f) include any
supplement thereto at the date of the letter.
(g) Prior to the Execution Time, the Company shall have
furnished to each Agent such further information, documents, certificates,
letters from accountants and opinions of counsel as the Agents may reasonably
request.
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to such Agents and their counsel, this Agreement and all
obligations of any Agent hereunder may be canceled at any time by the Agents.
Notice of such cancellation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall be
delivered at the office of XxXxxx Law Firm, P.A., counsel for the Company, 0000
Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxx Xxxxxxxx 00000, at the Execution
Time.
6. Conditions to the Obligations of the Purchaser.
The obligations of the Purchaser to purchase any Notes will be subject
to the accuracy of the representations and warranties on the part of the Company
herein as of the date of any related Terms Agreement and as of the Closing Date
for such Notes, to the performance and observance by the Company of all
covenants and agreements herein contained on its part to be performed and
observed and to the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceedings for that purpose shall have been instituted or threatened, or, to
the knowledge of the Company or any Agent, be contemplated by the Commission.
(b) If specified by any related Terms Agreement and except to
the extent modified by such Terms Agreement, the Purchaser shall have received,
appropriately updated, (i) a certificate of the Company, dated as of the Closing
Date, to the effect set forth in Section 5(e) (except that references to the
Prospectus shall be to the Prospectus as supplemented at the time of execution
of the Terms Agreement), (ii) the opinion of the General Counsel, or an
Associate General Counsel for the Company designated by the General Counsel,
dated as of the Closing Date, to the effect set forth in Section 5(b), (iii) the
opinion of XxXxxx Law Firm, P.A., counsel for the Company, dated as of the
Closing Date, to the effect set forth in Section 5(c), (iv) the opinion of
Xxxxxx Xxxx & Priest LLP, counsel for the Purchaser, dated as of the Closing
Date, to the effect set forth in Section 5(d), and (v) a letter of Xxxxxx
Xxxxxxxx LLP and/or Deloitte & Touche LLP, independent accountants for the
Company, dated as of the Closing Date, to the effect set forth in Section 5(f).
(c) Prior to the Closing Date, the Company shall have
furnished to the Purchaser such further information, certificates and documents
as the Purchaser may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement
and any Terms Agreement, or if any of the opinions and certificates mentioned
above or elsewhere in this Agreement or such Terms Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the Purchaser
and its counsel, such Terms Agreement and all obligations of the Purchaser
thereunder and with respect to the Notes subject thereto may be canceled at, or
at any time prior to, the respective Closing Date by the Purchaser. Notice of
such cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
7. Right of Person Who Agreed to Purchase to Refuse to Purchase.
(a) The Company agrees that any person who has agreed to
purchase and pay for any Note, including a Purchaser and any person who
purchases pursuant to a solicitation by any of the Agents, shall have the right
to refuse to purchase such Note if, at the Closing Date therefor, any condition
set forth in Section 5 or 6, as applicable, shall not be satisfied in all
material respects.
(b) The Company agrees that any person who has agreed to
purchase and pay for any Note pursuant to a solicitation by any of the Agents
shall have the right to refuse to purchase such Note if, subsequent to the
agreement to purchase such Note, any change, condition or development specified
in any of the Sections 9 (b) (i) through (v) shall have occurred (without regard
to any judgment of a Purchaser required therein) the effect of which is, in the
judgment of the Agent which presented the offer to purchase such Note, so
material and adverse as to make it impractical or inadvisable to proceed with
the delivery of such Note (it being understood that under no circumstance shall
any such Agent have any duty or obligation to exercise the judgment permitted to
be exercised under this Section 7(b) and Section 9(b)).
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each of
you, the directors, officers, employees and agents of each of you and each
person who controls each of you within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which you, they or any of you or them may become subject under
the Act, the Exchange Act or other federal or state statutory law or regulation,
at common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Notes as originally filed or
in any amendment thereof, or in the Prospectus or any preliminary Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon 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,
and agrees to reimburse each such indemnified party for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, as incurred;
provided, however, that (i) the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by any of you specifically for use in
connection with the preparation thereof, and (ii) such indemnity with respect to
the Prospectus or any preliminary Prospectus shall not inure to the benefit of
any of you (or any person controlling any of you) from whom the person asserting
any such loss, claim, damage or liability purchased the Notes which are the
subject thereof if such person did not receive a copy of the Prospectus (or the
Prospectus as supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of such Notes to such
person in any case where such delivery is required by the Act and the untrue
statement or omission of a material fact contained in the Prospectus or any
preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
supplemented). This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b) Each of you agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the Registration
Statement and each person who controls the Company within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
the Company to you, but only with reference to written information relating to
such of you furnished to the Company by such of you specifically for use in the
preparation of the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which you may otherwise
have. The Company acknowledges that the statements set forth in the third and
fourth paragraphs under the heading "Plan of Distribution" in the Prospectus,
constitute the only information furnished in writing by any of you for inclusion
in the documents referred to in the foregoing indemnity, and you confirm that
such statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 8. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by you in
the case of paragraph (a) of this Section 8, representing the indemnified
parties under such paragraph (a) who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) of this
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company on grounds of policy or otherwise, the
Company and each of you shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) to which the Company and any
of you may be subject in such proportion so that each of you is responsible for
that portion represented by the percentage that the aggregate commissions
received by such of you pursuant to Section 2 in connection with the Notes from
which such losses, claims, damages and liabilities arise (or, in the case of
Notes sold pursuant to a Terms Agreement, the aggregate commissions that would
have been received by such of you if such commissions had been payable), bears
to the aggregate principal amount of such Notes sold and the Company is
responsible for the balance; provided, however, that (y) in no case shall any of
you be responsible for any amount in excess of the commissions received by such
of you in connection with the Notes from which such losses, claims, damages and
liabilities arise (or, in the case of Notes sold pursuant to a Terms Agreement,
the aggregate commissions that would have been received by such of you if such
commissions had been payable) and (z) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls any
of you within the meaning of the Act shall have the same rights to contribution
as you and each person who controls the Company within the meaning of either the
Act or the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clause (z) of
this paragraph (d). Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this paragraph (d), notify such party or parties from
whom contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise than
under this paragraph (d).
9. Termination.
This Agreement will continue in effect until terminated as provided in
this Section 9. In the event of such termination, no party shall have any
liability to the other party hereto, except as provided in the fourth and sixth
paragraphs of Section 2(a), and in Sections 4(h), 8 and 10.
(a) This Agreement may be terminated by either the Company as
to any of you or by any of you insofar as this Agreement relates to such of you,
by giving written notice of such termination to such of you or the Company, as
the case may be. This Agreement shall so terminate at the close of business on
the first business day following the receipt of such notice by the party to whom
such notice is given.
(b) Each Terms Agreement (whether oral or written) shall be
subject to termination in the absolute discretion of the Purchaser, by notice
given to the Company prior to delivery of any payment for any Note to be
purchased thereunder, if prior to such time (i) there shall have occurred,
subsequent to the agreement to purchase such Note, any change, or any
development involving a prospective change, in or affecting the business or
properties of the Company and its subsidiaries the effect of which is, in the
judgment of the Purchaser, so material and adverse as to make it impractical or
inadvisable to proceed with the delivery of such Note, (ii) there shall have
been, subsequent to the agreement to purchase such Note, any decrease in the
rating of any of the Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Act) or any notice given of any intended or potential decrease in any such
rating or of a possible change in any such rating that does not indicate the
direction of the possible change, (iii) trading in the Company's Common Stock
shall have been suspended by the Commission or the New York Stock Exchange or
trading in securities generally on the New York Stock Exchange shall have been
suspended or limited or minimum prices shall have been established on such
Exchange, (iv) a banking moratorium shall have been declared either by federal
or New York state authorities, or (v) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets is such as to make it, in the judgment of the Purchaser, impracticable
or inadvisable to proceed with the offering or delivery of such Notes as
contemplated by the Prospectus (exclusive of any supplement thereto.)
10. Representations and Indemnities to Survive.
The respective agreements, representations, warranties, indemnities and
other statements of the Company or its officers and of you set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of you or the Company or any of the
officers, directors or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Notes. The provisions of the fourth
and sixth paragraphs of Section 2(a) and of Sections 4(h) and 8 hereof shall
survive the termination or cancellation of this Agreement. The provisions of
this Agreement (including without limitation Section 7 hereof) applicable to any
purchase of a Note for which an agreement to purchase exists prior to the
termination hereof shall survive any termination of this Agreement.
11. Notices.
All communications hereunder will be in writing and effective only on
receipt, and, if sent to any of you, will be mailed, delivered, telecopied or
telegraphed and confirmed to such of you, at the address specified in Schedule I
hereto; or, if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at 0000 Xxxx Xxxxxx, Xxxxxxxx, Xxxxx Xxxxxxxx 00000, attention
of the General Counsel.
12. Successors.
This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors, directors, officers, employees,
agents and controlling persons and controlling persons referred to in Section 8
hereof, and, to the extent provided in Section 7, any person who has agreed to
purchase Notes, and no other person will have any right or obligation hereunder.
13. Applicable Law.
This Agreement will be governed by and construed in accordance with the
laws of the State of New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and you.
Very truly yours,
Public Service Company of North Carolina, Incorporated
By:
Its:
The foregoing Agreement is
hereby confirmed and accepted as of the date hereof.
Banc of America Securities LLC
By:
Its:
Credit Suisse First Boston Corporation
By:
Its:
UBS Warburg LLC
By:
Its:
EXHIBIT A
PUBLIC SERVICE COMPANY OF NORTH
CAROLINA, INCORPORATED
Medium-Term Note Administrative Procedures
_______________, 2001
The Medium-Term Notes, Due from Nine Months to Thirty Years from Date of
Issue in an aggregate principal amount of $150,000,000 (the "Notes") of Public
Service Company of North Carolina, Incorporated, a South Carolina corporation
(the "Company") are to be offered on a continuing basis. Banc of America
Securities LLC, Credit Suisse First Boston Corporation and UBS Warburg LLC, as
agents (each an "Agent," and collectively the "Agents"), have agreed to solicit
purchases of Notes issued in fully registered form. The Agents will not be
obligated to purchase Notes for their own account. The Notes are being sold
pursuant to a Selling Agency Agreement between the Company and the Agents dated
the date hereof (the "Agency Agreement"). The Notes will rank pari passu with
all other unsecured and unsubordinated debt of the Company and have been
registered with the Securities and Exchange Commission (the "Commission"). The
Notes will be issued under the Indenture dated as of January 1, 1996, as amended
and supplemented including particularly as supplemented by the Fourth
Supplemental Indenture dated as of ________ 1, 2001 (as so amended and
supplemented, the "Indenture"), between the Company, successor to Public Service
Company of North Carolina, Incorporated, a North Carolina corporation, and First
Union National Bank, formerly First Union National Bank of North Carolina, as
trustee (the "Trustee").
The Agency Agreement provides that Notes may also be purchased
by an Agent acting solely as principal and not as agent. In the event of any
such purchase, the functions of both the Agent and the beneficial owner under
the administrative procedures set forth below shall be performed by such Agent
acting solely as principal, unless otherwise agreed to between the Company and
such Agent acting as principal.
Each Note will be represented by either a Global Security (as
defined hereinafter) delivered to the Trustee, as agent for The Depository Trust
Company ("DTC"), and recorded in the book-entry system maintained by DTC (a
"Book-Entry Note") or a certificate delivered to the Holder thereof or a Person
designated by such Holder (a "Certificated Note"). Only Notes denominated and
payable in U.S. dollars may be issued as Book-Entry Notes. An owner of a
beneficial interest in a Book-Entry Note will not be entitled to receive a
certificate representing such Note.
The procedures to be followed during, and the specific terms
of, the solicitation of orders by the Agents and the sale as a result thereof by
the Company are explained below. Administrative and record-keeping
responsibilities will be handled for the Company by its Treasury Department. The
Company will advise the Agents and the Trustee in writing of those persons
handling administrative responsibilities with whom the Agents and the Trustee
are to communicate regarding orders to purchase Notes and the details of their
delivery.
Administrative procedures and specific terms of the offering
are explained below. Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof, as adjusted in accordance
with changes in DTC's operating requirements, and Certificated Notes will be
issued in accordance with the administrative procedures set forth in Part II
hereof. Unless otherwise defined herein, terms defined in the Indenture and the
Notes shall be used herein as therein defined. Notes for which interest is
calculated on the basis of a fixed interest rate, which may be zero, are
referred to herein as "Fixed Rate Notes." Notes for which interest is calculated
on the basis of a floating interest rate are referred to herein as "Floating
Rate Notes." To the extent the procedures set forth below conflict with the
provisions of the Notes, the Indenture, DTC's operating requirements or the
Agency Agreement, the relevant provisions of the Notes, the Indenture, DTC's
operating requirements and the Agency Agreement shall control.
All communications hereunder will be in writing and effective only upon
receipt, and, if sent, will be mailed, delivered, telecopied or telegraphed and
confirmed to the Agents and the Company at the following addresses:
If to the Company:
Public Service Company of
North Carolina, Incorporated
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
If to Banc of America Securities LLC:
Banc of America Securities LLC
Bank of America Corporate Center
000 Xxxxx Xxxxx Xxxxxx
XX0 000 00 00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
If to Credit Suisse First Boston Corporation:
Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Short and Medium Term Products Group
If to UBS Warburg LLC
UBS Warburg LLC
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
PART I
Administrative Procedures for
Book-Entry Notes
In connection with the qualification of the Book-Entry Notes
for eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions described
below, in accordance with its respective obligations under a Letter of
Representations from the Company and the Trustee to DTC and a Medium-Term Note
Certificate Agreement between the Trustee and DTC and its obligations as a
participant in DTC, including DTC's Same-Day Funds Settlement system ("SDFS").
Issuance: On any date of settlement (as defined under "Settlement" below)
for one or more Book-Entry Notes (each a "Settlement Date"), the
Company will issue a single global security in fully registered form
without coupons (a "Global Security") representing up to $400,000,000
principal amount of all such Book-Entry Notes that have the same
original issue date, original issue discount provisions, if any,
Interest Payment Dates, Regular Record Dates, Interest Payment Period,
redemption provisions, if any, Maturity Date, and, in the case of
Fixed Rate Notes, interest rate, in the case of Floating Rate Notes,
initial interest rate, Base Rate, Index Maturity, Interest Reset
Period, Interest Reset Dates, Spread or Spread Multiplier, if any,
minimum interest rate, if any, maximum interest rate, if any and, in
the case of a Floating Rate Book-Entry Note for which the Base Rate is
LIBOR, whether LIBOR Reuters, LIBOR Telerate or another LIBOR
reference is applicable to the Note and the Designated LIBOR Currency
(collectively, the "Terms"). Each Global Security will be dated and
issued as of the date of its authentication by the Trustee. Each
Global Security will bear an Original Issue Date, which will be (i)
with respect to an original Global Security (or any portion thereof),
the original issue date specified in such Global Security and (ii)
following a consolidation of Global Securities, with respect to the
Global Security resulting from such consolidation, the most recent
Interest Payment Date to which interest has been paid or duly provided
for on the predecessor Global Securities, regardless of the date of
authentication of such resulting Global Security. No Global Security
will represent (i) both Fixed Rate and Floating Rate Book- Entry Notes
or (ii) any Certificated Note.
Identification CUSIP Numbers: The Company has arranged with the CUSIP
Service Bureau (the "CUSIP Service Bureau") operated by Standard &
Poor's, a Division of The McGraw Hill Companies, Inc. ("S&P"), for the
reservation of a series of CUSIP numbers, which series consists of
approximately 900 CUSIP numbers and relates to Global Securities
representing Book-Entry Notes and book-entry medium-term notes issued
by the Company with other series designations. The Trustee, the
Company and DTC have obtained from the CUSIP Service Bureau a written
list of such reserved CUSIP numbers. The Company will assign CUSIP
numbers to Global Securities as described below under Settlement
Procedure "B." DTC will notify the CUSIP Service Bureau periodically
of the CUSIP numbers that the Company has assigned to Global
Securities. The Trustee will notify the Company at any time when fewer
than 100 of the reserved CUSIP numbers remain unassigned to Global
Securities, and, if it deems necessary, the Company will reserve
additional CUSIP numbers for assignment to Global Securities. Upon
obtaining such additional CUSIP numbers, the Company shall deliver a
list of such additional CUSIP numbers to the Trustee and DTC.
Registration: Global Securities will be issued only in fully registered
form without coupons. Each Global Security will be registered in the
name of CEDE & CO., as nominee for DTC, on the securities register for
the Notes maintained under the Indenture. The beneficial owner of a
Book-Entry Note (or one or more indirect participants in DTC
designated by such owner) will designate one or more participants in
DTC (with respect to such Book-Entry Note, the "Participants") to act
as agent or agents for such owner in connection with the book-entry
system maintained by DTC, and DTC will record in book-entry form, in
accordance with instructions provided by such Participants, a credit
balance with respect to such beneficial owner in such Book-Entry Note
in the account of such Participants. The ownership interest of such
beneficial owner (or such participant) in such Book-Entry Note will be
recorded through the records of such Participants or through the
separate records of such Participants and one or more indirect
participants in DTC.
Transfers: Transfers of a Book-Entry Note will be accomplished by book
entries made by DTC and, in turn, by Participants (and in certain
cases, one or more indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP Service Bureau at
any time a written notice of consolidation (a copy of which shall be
attached to the resulting Global Security described below) specifying
(i) the CUSIP numbers of two or more Outstanding Global Securities
that represent (A) Fixed Rate Book-Entry Notes having the same Terms
and for which interest has been paid to the same date or (B) Floating
Rate Book-Entry Notes having the same Terms and for which interest has
been paid to the same date, (ii) a date, occurring at least thirty
days after such written notice is delivered and at least thirty days
before the next Interest Payment Date for such Book-Entry Notes, on
which such Global Securities shall be exchanged for a single
replacement Global Security and (iii) a new CUSIP number, obtained
from the Company, to be assigned to such replacement Global Security.
Upon receipt of such a notice, DTC will send to its participants
(including the Trustee) a written reorganization notice to the effect
that such exchange will occur on such date. Prior to the specified
exchange date, the Trustee will deliver to the CUSIP Service Bureau a
written notice setting forth such exchange date and such new CUSIP
number and stating that, as of such exchange date, the CUSIP numbers
of the Global Securities to be exchanged will no longer be valid. On
the specified exchange date, the Trustee will exchange such Global
Securities for a single Global Security bearing the new CUSIP number
and the CUSIP numbers of the exchanged Global Securities will, in
accordance with CUSIP Service Bureau procedures, be canceled and not
immediately reassigned. Notwithstanding the foregoing, if the Global
Securities to be exchanged exceed $400,000,000 in aggregate principal
amount, one Global Security will be authenticated and issued to
represent each $400,000,000 of principal amount of the exchanged
Global Securities and an additional Global Security will be
authenticated and issued to represent any remaining principal amount
of such Global Securities (see "Denominations" below).
Maturities: Each Book-Entry Note will mature on a date not less than nine
months nor more than thirty years after the settlement date for such
Note.
Notice of Repayment Terms: With respect to each Book-Entry Note that is
repayable at the option of the Holder, the Trustee will furnish DTC on
the settlement date pertaining to such Note a notice setting forth the
terms of such repayment option. Such terms shall include the start
date and end dates of the first exercise period, the purchase date
following such first exercise period, the frequency that such exercise
periods shall occur (i.e., quarterly, semi-annually, annually, bi-
annually, etc.) and if the repayment option expires before maturity,
the same information (except frequency) concerning the last exercise
period. It is understood that the exercise period shall be at least
fifteen calendar days long and that the purchase date shall be at
least seven calendar days after the last day of the exercise period.
Denominations: Book-Entry Notes will be issued in principal amounts of
$1,000 or any amount in excess thereof that is an integral multiple of
$1,000. Global Securities will be denominated in principal amounts not
in excess of $400,000,000. If one or more Book-Entry Notes having an
aggregate principal amount in excess of $400,000,000 would, but for
the preceding sentence, be represented by a single Global Security,
then one Global Security will be authenticated and issued to represent
each $400,000,000 principal amount of such Book-Entry Note or Notes
and an additional Global Security will be authenticated and issued to
represent any remaining principal amount of such Book-Entry Note or
Notes. In such a case, each of the Global Securities representing such
Book-Entry Note or Notes shall be assigned the same CUSIP number.
Interest: General. Interest, if any, on each Book-Entry Note will accrue
from the original issue date for the first interest period or the last
date to which interest has been paid, if any, for each subsequent
interest period, on the Global Security representing such Book-Entry
Note, and will be calculated and paid in the manner described in such
Book-Entry Note and in the Prospectus (as defined in the Agency
Agreement), as supplemented by the applicable Pricing Supplement.
Unless otherwise specified therein, each payment of interest on a
Book-Entry Note will include interest accrued to but excluding the
Interest Payment Date (provided that, in the case of Floating Rate
Book-Entry Notes which reset daily or weekly, interest payments will
include accrued interest to and including the Regular Record Date
immediately preceding the Interest Payment Date) or to but excluding
Maturity (other than a Maturity of a Fixed Rate Book-Entry Note
occurring on the thirty-first day of a month, in which case such
payment of interest will include interest accrued to but excluding the
thirtieth day of such month). Interest payable at the Maturity of a
Book-Entry Note will be payable to the Person to whom the principal of
such Note is payable. S&P will use the information received in the
pending deposit message described under Settlement Procedure "C" below
in order to include the amount of any interest payable and certain
other information regarding the related Global Security in the
appropriate (daily or weekly) bond report published by S&P.
Regular Record Dates. The Regular Record Date with respect to any
Interest Payment Date shall be the date fifteen calendar days
immediately preceding such Interest Payment Date (unless otherwise
specified pursuant to Settlement Procedure "A" below).
Interest Payment Dates on Fixed Rate Book-Entry Notes. Unless
otherwise specified pursuant to Settlement Procedure "A" below,
interest payments on Fixed Rate Book-Entry Notes will be made
semi-annually on [April] 1, and [October] 1 of each year and at
Maturity; provided, however, that in the case of a Fixed Rate
Book-Entry Note issued between a Regular Record Date and an Interest
Payment Date, the first interest payment will be made on the Interest
Payment Date following the next succeeding Regular Record Date to the
Person in whose name such Note is registered on the Regular Record
Date for such succeeding Interest Payment Date.
Interest Payment Dates on Floating Rate Book-Entry Notes. Interest
payments will be made on Floating Rate Book-Entry Notes monthly,
quarterly, semi-annually or annually. Unless otherwise agreed upon,
interest will be payable, in the case of Floating Rate Book-Entry
Notes with a monthly Interest Payment Period, on the third Wednesday
of each month; with a quarterly Interest Payment Period, on the third
Wednesday of March, June, September and December of each year; with a
semi-annual Interest Payment Period on the third Wednesday of the two
months specified pursuant to Settlement Procedure "A" below; and with
an annual Interest Payment Period, on the third Wednesday of the month
specified pursuant to Settlement Procedure "A" below; provided,
however, that if an Interest Payment Date for a Floating Rate
Book-Entry Note would otherwise be a day that is not a Business Day
with respect to such Floating Rate Book-Entry Note, such Interest
Payment Date will be the next succeeding Business Day with respect to
such Floating Rate Book-Entry Note, except in the case of a Floating
Rate Book-Entry Note for which the Base Rate is LIBOR, if such
Business Day is in the next succeeding calendar month, such Interest
Payment Date will be the immediately preceding Business Day; and
provided further, that in the case of a Floating Rate Book-Entry Note
issued between a Regular Record Date and an Interest Payment Date, the
first interest payment will be made on the Interest Payment Date
following the next succeeding Regular Record Date to the Person in
whose name such Note is registered on the Regular Record Date for such
succeeding Interest Payment Date.
Notice of Interest Payment and Regular Record Dates. At the request of the
Company the Trustee will deliver to the Company and DTC a written list
of Regular Record Dates and Interest Payment Dates that will occur
with respect to Book-Entry Notes during the six-month period beginning
on such first Business Day. Promptly after each Interest Determination
Date for Floating Rate Book-Entry Notes, the Trustee, as Calculation
Agent, will notify S&P of the interest rates determined on such
Interest Determination Date. Calculation of Interest: Fixed Rate
Book-Entry Notes. Interest on Fixed Rate Book-Entry Notes (including
interest for partial periods) will be calculated on the basis of a
360-day year of twelve 30-day months.
Floating Rate Book-Entry Notes. Interest rates on Floating Rate
Book-Entry Notes will be determined as set forth in the form of Notes.
Interest on Floating Rate Book-Entry Notes, except as otherwise set
forth therein, will be calculated on the basis of actual days elapsed
and a year of 360 days, except that in the case of a Floating Rate
Book-Entry Note for which the Base Rate is Treasury Rate, interest
will be calculated on the basis of the actual number of days in the
year. Payments of Principal and Interest: Payment of Interest Only.
Promptly after each Regular Record Date, the Trustee will deliver to
the Company and DTC a written notice setting forth, by CUSIP number,
the amount of interest to be paid on each Global Security on the
following Interest Payment Date (other than an Interest Payment Date
coinciding with Maturity) and the total of such amounts. DTC will
confirm the amount payable on each Global Security on such Interest
Payment Date by reference to the appropriate (daily or weekly) bond
reports published by S&P. The Company will pay to the Trustee, as
paying agent, the total amount of interest due on such Interest
Payment Date (other than at Maturity), and the Trustee will pay such
amount to DTC, at the times and in the manner set forth below under
"Manner of Payment." If any Interest Payment Date for a Book-Entry
Note is not a Business Day, the payment due on such day shall be made
on the next succeeding Business Day and no interest shall accrue on
such payment for the period from and after such Interest Payment Date,
except that in the case of an Interest Payment Date on a Floating Rate
Note for which the Base Rate is LIBOR, if such Business Day is in the
succeeding calendar month, such Interest Payment Date will be the
preceding Business Day.
Payments at Maturity. On or about the first Business Day of each
month, the Trustee will deliver to the Company and DTC a written list
of principal and interest to be paid on each Global Security maturing
(on a Maturity or Redemption Date or otherwise) in the following
month. The Company and DTC will confirm the amounts of such principal
and interest payments with respect to each such Global Security on or
about the fifth Business Day preceding the Maturity of such Global
Security. On or before Maturity, the Company will pay to the Trustee,
as paying agent, the principal amount of such Global Security,
together with interest due at such Maturity. The Trustee will pay such
amount to DTC at the times and in the manner set forth below under
"Manner of Payment." If any Maturity of a Global Security representing
Book-Entry Notes is not a Business Day, the payment due on such day
shall be made on the next succeeding Business Day and no interest
shall accrue on such payment for the period from and after such
Maturity. Promptly after payment to DTC of the principal and interest
due at Maturity of such Global Security, the Trustee will cancel such
Global Security in accordance with the Indenture and so advise the
Company.
Manner of Payment. The total amount of any principal and interest due
on Global Securities on any Interest Payment Date or at Maturity shall
be paid by the Company to the Trustee in immediately available funds
no later than 9:30 A.M. (New York City time) on such date. The Company
will make such payment on such Global Securities by instructing the
Trustee to withdraw funds from an account maintained by the Company at
the Trustee or by wire transfer to the Trustee. The Company will
confirm any such instructions in writing to the Trustee. On each
payment date the Trustee will pay DTC in accordance with DTC's
standard procedures. On each Interest Payment Date (other than at
Maturity), interest payments shall be made to DTC, in funds available
for immediate use by DTC, in accordance with existing arrangements
between the Trustee and DTC. On each such date, DTC will pay, in
accordance with its SDFS operating procedures then in effect, such
amounts in funds available for immediate use to the respective
Participants in whose names the Book-Entry Notes represented by such
Global Securities are recorded in the book-entry system maintained by
DTC. Neither the Company (as issuer or as paying agent) nor the
Trustee shall have any direct responsibility or liability for the
payment by DTC to such Participants of the principal of and interest
on the Book-Entry Notes.
Withholding Taxes. The amount of any taxes required under applicable law to
be withheld from any interest payment on a Book-Entry Note will be
determined and withheld by the Participant, indirect participant in
DTC or other Person responsible for forwarding payments and materials
directly to the beneficial owner of such Note.
Procedure for Setting and Posting: The Company and the Agents will discuss
from time to time the aggregate principal amount of, the issuance
price of, and the interest rates to be borne by, Book-Entry Notes that
may be sold as a result of the solicitation of orders by the Agents.
If the Company decides to set prices of, and rates borne by, any
Book-Entry Notes in respect of which the Agents are to solicit orders
(the setting of such prices and rates to be referred to herein as
"posting") or if the Company decides to change prices or rates
previously posted by it, it will promptly advise the Agents of the
prices and rates to be posted.
Acceptance and Rejection of Orders: Unless otherwise instructed by the
Company, each Agent will advise the Company promptly by telephone of
all orders to purchase Book-Entry Notes received by such Agent, other
than those rejected by it in whole or in part in the reasonable
exercise of its discretion. Unless otherwise agreed by the Company and
the Agents, the Company has the right to accept orders to purchase
Book-Entry Notes and may reject any such orders in whole or in part.
Preparation of Pricing Supplement: If any order to purchase a Book-Entry
Note is accepted by or on behalf of the Company, the Company will
prepare a pricing supplement (a "Pricing Supplement") reflecting the
terms of such Book-Entry Note and will arrange to have the Pricing
Supplement filed with the Commission in accordance with the applicable
paragraph of Rule 424(b) under the Act and will supply ten copies
thereof (and additional copies if requested) to the Agent which
presented the order (the "Presenting Agent"). The Presenting Agent
will cause a Prospectus and Pricing Supplement to be delivered to the
purchaser of such Book-Entry Note.
In each instance that a Pricing Supplement is prepared, the Presenting
Agent will affix the Pricing Supplement to Prospectuses prior to their
use. Outdated Pricing Supplements (other than those retained for
files) will be destroyed.
Suspension of Solicitation; Amendment or Supplement: Subject to the
Company's representations, warranties and covenants contained in the
Agency Agreement, the Company may instruct the Agents to suspend at
any time, for any period of time or permanently, the solicitation of
orders to purchase Book-Entry Notes. Upon receipt of such
instructions, the Agents will forthwith suspend solicitation until
such time as the Company has advised them that such solicitation may
be resumed.
In the event that at the time the Company suspends solicitation of
purchases there shall be any orders outstanding for settlement, the
Company will promptly advise the Agents and the Trustee whether such
orders may be settled and whether copies of the Prospectus as in
effect at the time of the suspension, together with the appropriate
Pricing Supplement, may be delivered in connection with the settlement
of such orders. The Company will have the sole responsibility for such
decision and for any arrangements that may be made in the event that
the Company determines that such orders may not be settled or that
copies of such Prospectus may not be so delivered.
If the Company decides to amend or supplement the Registration
Statement (as defined in the Agency Agreement) or the Prospectus, it
will promptly advise the Agents and furnish the Agents with the
proposed amendment or supplement and with such certificates and
opinions as are required, all to the extent required by and in
accordance with the terms of the Agency Agreement. Subject to the
provisions of the Agency Agreement, the Company may file with the
Commission any such supplement to the Prospectus relating to the
Notes. The Company will provide the Agents and the Trustee with copies
of any such supplement, and confirm to the Agents that such supplement
has been filed with the Commission pursuant to the applicable
paragraph of Rule 424(b).
Procedures For Rate Changes: When the Company has determined to change the
interest rates of Book-Entry Notes being offered, it will promptly
advise the Agents and the Agents will forthwith suspend solicitation
of orders. The Agents will telephone the Company with recommendations
as to the changed interest rates. At such time as the Company has
advised the Agents of the new interest rates, the Agents may resume
solicitation of orders. Until such time only "indications of interest"
may be recorded. Within two Business Days after any sale of Book-Entry
Notes, the Company will file with the Commission a Pricing Supplement
to the Prospectus relating to such Book- Entry Notes that reflects the
applicable interest rates and other terms and will deliver copies of
such Pricing Supplement to the Agents.
Delivery of Prospectus: A copy of the Prospectus and, where applicable, a
Pricing Supplement, relating to a Book-Entry Note, must accompany or
precede the earliest of any written offer by any Agent of such
Book-Entry Note, confirmation of the purchase of such Book-Entry Note,
or payment for such Book-Entry Note by its purchaser. If notice of a
change in the terms of the Book-Entry Notes is received by the Agents
between the time an order for a Book-Entry Note is placed and the time
written confirmation thereof is sent by the Presenting Agent to a
customer or his agent, such confirmation shall be accompanied by a
Prospectus and Pricing Supplement setting forth the terms in effect
when the order was placed. Subject to "Suspension of Solicitation;
Amendment or Supplement" above, the Presenting Agent timely will
deliver a Prospectus and Pricing Supplement as herein described with
respect to each Book-Entry Note sold by it. The Company will make such
delivery if such Book-Entry Note is sold directly by the Company to a
purchaser (other than an Agent).
Confirmation: For each order to purchase a Book-Entry Note solicited by any
Agent and accepted by or on behalf of the Company, the Presenting
Agent will issue a confirmation to the purchaser, with a copy to the
Company, setting forth the details set forth above and delivery and
payment instructions.
Settlement: The receipt by the Company of immediately available funds in
payment for a Book-Entry Note and the authentication and issuance of
the Global Security representing such Book-Entry Note shall constitute
"settlement" with respect to such Book-Entry Note. All orders accepted
by the Company will be settled on the third Business Day following the
date of sale of such Book-Entry Note pursuant to the timetable for
settlement set forth below unless the Company, the Trustee and the
purchaser agree to settlement on another day which shall be no earlier
than the next Business Day following the date of sale.
Settlement Procedures: Settlement Procedures with regard to each Book-Entry
Note sold by the Company through any Agent, as agent, shall be as
follows:
A. The Presenting Agent will advise the Company by telephone of
the following settlement information:
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed Rate Book-Entry Note, the
interest rate or, in the case of a Floating Rate
Book-Entry Note, the Base Rate, initial interest rate
(if known at such time), Index Maturity, Interest Reset
Period, Interest Reset Dates, Spread or Spread
Multiplier (if any), minimum interest rate (if any),
maximum interest rate (if any) and, in the case of a
Floating Rate Book-Entry Note for which the Base Rate
is LIBOR, whether LIBOR Reuters, LIBOR Telerate or
another LIBOR reference is applicable to the Notes and
the Designated LIBOR Currency.
4. Interest Payment Dates, Regular Record Dates (if other
than the dates fifteen calendar days preceding such
Interest Payment Dates), the Interest Payment Period,
Interest Determination Dates, the Calculation Dates and
the Calculation Agent.
5. Redemption provisions, if any.
6. Settlement date.
7. Price.
8. Presenting Agent's commission, determined as provided
in Section 2 of the Agency Agreement.
B. The Company will assign a CUSIP number to the Global
Security representing such Book-Entry Note and then advise
the Trustee by telephone (confirmed in writing at any time
on the same date) or electronic transmission of the
information set forth in Settlement Procedure "A" above,
such CUSIP number and the name of the Presenting Agent. The
Company will also notify the Presenting Agent by telephone
of such CUSIP number as soon as practicable. Each such
communication by the Company shall constitute a
representation and warranty by the Company to the Trustee
and the Agents that (i) such Book-Entry Note is then, and at
the time of issuance and sale thereof will be, duly
authorized for issuance and sale by the Company, (ii) such
Book-Entry Note, and the Global Security representing such
Book-Entry Note, will conform with the terms of the
Indenture, and (iii) after giving effect to the issuance of
such Book-Entry Note and any other Notes to be issued on or
prior to the settlement date for the sale of such Book-Entry
Note, the aggregate amount of Securities which have been
issued and sold by the Company will not exceed the amount of
Notes registered under the Registration Statement. Such
confirmation shall constitute a Company Order to the Trustee
for the authentication of such Global Security and shall be
deemed to satisfy the requirements set forth in the third
paragraph of Section 3.3 of the Indenture.
C. The Trustee will enter a pending deposit message through
DTC's Participant Terminal System providing the following
settlement information to DTC (which shall route such
information to S&P) and the Presenting Agent:
1. The information set forth in Settlement Procedure "A."
2. Identification as a Fixed Rate Book-Entry Note or a
Floating Rate Book-Entry Note.
3. Initial Interest Payment Date for such Book-Entry Note,
number of days by which such date succeeds the related
Regular Record Date (or, in the case of Floating Rate
Notes which reset daily or weekly, the date five
calendar days immediately preceding the Interest
Payment Date) and amount of interest payable on such
Interest Payment Date (which amount shall be confirmed
by the Trustee).
4. The Interest Payment Period.
5. CUSIP number of the Global Security representing such
Book-Entry Note.
6. Whether such Global Security will represent any other
Book-Entry Note (to the extent known at such time).
D. To the extent the Company has not already done so, the
Company will deliver to the Trustee a Global Security in a
form that has been approved by the Company, the Agents and
the Trustee.
E. The Trustee will complete such Book-Entry Note, stamp the
appropriate legend, as instructed by DTC, if not already set
forth thereon, and authenticate the Global Security
representing such Book-Entry Note.
F. DTC will credit such Book-Entry Note to the Trustee's
participant account at DTC.
G. The Trustee will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC to (i) debit
such Book-Entry Note to the Trustee's participant account
and credit such Book-Entry Note to the Presenting Agent's
participant account and (ii) debit the Presenting Agent's
settlement account and credit the Trustee's settlement
account for an amount equal to the price of such Book-Entry
Note less the Presenting Agent's commission. The entry of
such a deliver order shall constitute a representation and
warranty by the Trustee to DTC that (i) the Global Security
representing such Book-Entry Note has been issued and
authenticated and (ii) the Trustee is holding such Global
Security pursuant to the Medium-Term Note Certificate
Agreement between the Trustee and DTC.
H. The Presenting Agent will enter an SDFS deliver order
through DTC's Participant Terminal System instructing DTC
(i) to debit such Book-Entry Note to the Presenting Agent's
participant account and credit such Book-Entry Note to the
participant accounts of the Participants with respect to
such Book-Entry Note and (ii) to debit the settlement
accounts of such Participants and credit the settlement
account of the Presenting Agent for an amount equal to the
price of such Book-Entry Note.
I. Transfers of funds in accordance with SDFS deliver orders
described in Settlement Procedures "G" and "H" will be
settled in accordance with SDFS operating procedures in
effect on the settlement date.
X. The Trustee will, upon receipt of funds from the Agent in
accordance with Settlement Procedure "G," wire transfer to
the account of the Company maintained at First Union
National Bank funds available for immediate use in the
amount transferred to the Trustee in accordance with
Settlement Procedure "G."
K. The Presenting Agent will confirm the purchase of such
Book-Entry Note to the purchaser either by transmitting to
the Participants with respect to such Book-Entry Note a
confirmation order or orders through DTC's institutional
delivery system or by mailing a written confirmation to such
purchaser.
Settlement Procedures Timetable: For orders of Book-Entry Notes solicited
by any Agent and accepted by the Company for settlement on the first
Business Day after the sale date, Settlement Procedures "A" through
"K" set forth above shall be completed as soon as possible but not
later than the respective times (New York City time) set forth below:
Settlement
Procedure Time
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on the Business Day before
settlement
E 9:00 A.M. on Settlement Date
F 10:00 A.M. on Settlement Date
G-H 2:00 P.M. on Settlement Date
I 4:45 P.M. on Settlement Date
J-K 5:00 P.M. on Settlement Date
If a sale is to be settled more than one Business Day after the
sale date, Settlement Procedures "A," "B" and "C" shall be
completed as soon as practicable but no later than 11:00 A.M. and
12:00 Noon on the first Business Day after the sale date and no
later than 2:00 P.M. on the Business Day before the settlement
date, respectively. If the initial interest rate for a Floating
Rate Book-Entry Note has not been determined at the time that
Settlement Procedure "A" is completed, Settlement Procedures "B"
and "C" shall be completed as soon as such rate has been
determined but no later than 12:00 Noon and 2:00 P.M.,
respectively, on the Business Day before the settlement date.
Settlement Procedure "I" is subject to extension in accordance
with any extension of Fedwire closing deadlines and in the other
events specified in SDFS operating procedures in effect on the
settlement date.
If settlement of a Book-Entry Note is rescheduled or canceled,
the Trustee will deliver to DTC, through DTC's Participant
Terminal System, a cancellation message to such effect by no
later than 2:00 P.M. on the Business Day immediately preceding
the scheduled settlement date.
Failure to Settle: If the Trustee fails to enter an SDFS deliver order with
respect to a Book-Entry Note pursuant to Settlement Procedure "G," the
Trustee may deliver to DTC, through DTC's Participant Terminal System,
as soon as practicable, a withdrawal message instructing DTC to debit
such Book-Entry Note to the Trustee's participant account. DTC will
process the withdrawal message, provided that the Trustee's
participant account contains a principal amount of the Global Security
representing such Book-Entry Note that is at least equal to the
principal amount to be debited. If a withdrawal message is processed
with respect to all the Book-Entry Notes represented by a Global
Security, the Trustee will cancel such Global Security in accordance
with the Indenture and so advise the Company and will make appropriate
entries in its records. The CUSIP number assigned to such Global
Security shall, in accordance with CUSIP Service Bureau procedures, be
canceled and not immediately reassigned. If a withdrawal message is
processed with respect to one or more, but not all, of the Book-Entry
Notes represented by a Global Security, the Trustee will exchange such
Book-Entry Note for two Global Securities, one of which shall
represent such Book-Entry Notes and shall be canceled immediately
after issuance and the other of which shall represent the other
Book-Entry Notes previously represented by the surrendered Global
Security and shall bear the CUSIP number of the surrendered Global
Security.
If the purchase price for any Book-Entry Note is not timely paid to
the Participants with respect to such Note by the beneficial purchaser
thereof (or a Person, including an indirect participant in DTC, acting
on behalf of such purchaser), such Participants and, in turn, the
Presenting Agent may enter SDFS deliver orders through DTC's
Participant Terminal System reversing the orders entered pursuant to
Settlement Procedures "G" and "H," respectively. Thereafter, the
Trustee will deliver the withdrawal message and take the related
actions described in the preceding paragraph. If such failure shall
have occurred for any reason other than a default by the Presenting
Agent in the performance of its obligations hereunder and under the
Agency Agreement, then the Company will reimburse the Presenting Agent
or the Trustee, as applicable, on an equitable basis for the loss of
the use of the funds during the period when they were credited to the
account of the Company.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Note, DTC may take any actions in accordance with its
SDFS operating procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the Book-Entry
Notes to have been represented by a Global Security, the Trustee will
provide, in accordance with Settlement Procedure "E," for the
authentication and issuance of a Global Security representing the
other Book-Entry Notes to have been represented by such Global
Security and will make appropriate entries in its records.
Trustee Not to Risk Funds: Nothing herein shall be deemed to require the
Trustee to risk or expend its own funds in connection with any payment
to the Company, DTC, the Agents or the purchaser, it being understood
by all parties that payments made by the Trustee to the Company, DTC,
the Agents or the purchaser shall be made only to the extent that
funds are provided to the Trustee for such purpose.
Authenticity of Signatures: The Company will cause the Trustee to furnish
to the Company and the Agents from time to time with the specimen
signatures of each of the Trustee's officers, employees or agents who
has been authorized by the Trustee to authenticate Book-Entry Notes,
but no Agent will have any obligation or liability to the Company or
the Trustee in respect to the authenticity of the signature of any
officer, employee or agent of the Company or the Trustee on any
Book-Entry Note.
Payment of Expenses: Each Agent shall forward to the Company, on a monthly
basis, a statement of the out-of-pocket expenses incurred by such
Agent during that month that are reimbursable to it pursuant to the
terms of the Agency Agreement. The Company will remit payment to the
Agents currently on a monthly basis.
Advertising Costs: The Company will determine with the Agents the amount of
advertising that may be appropriate in soliciting offers to purchase
the Book-Entry Notes. Advertising expenses will be paid by the
Company.
Periodic Statements from the Trustee: Periodically, the Trustee will send
to the Company a statement setting forth the principal amount of
Book-Entry Notes Outstanding as of that date.
PART II
Administrative Procedures for Certificated Notes
The Trustee will serve as registrar and transfer agent in connection with
the Certificated Notes.
Issuance: Each Certificated Note will be dated and issued as of the date of
its authentication by the Trustee. Each Certificated Note will bear an
Original Issue Date, which will be (i) with respect to an original
Certificated Note (or any portion thereof), its original issuance date
(which will be the settlement date) and (ii) with respect to any
Certificated Note (or portion thereof) issued subsequently upon
transfer or exchange of a Certificated Note or in lieu of a destroyed,
lost or stolen Certificated Note, the Original Issue Date of the
predecessor Certificated Note, regardless of the date of
authentication of such subsequently issued Certificated Note.
Registration: Certificated Notes will be issued only in fully registered
form without coupons.
Transfers and Exchanges: A Certificated Note may be presented for transfer
or exchange at the principal corporate trust office in the City of
Charlotte, North Carolina of the Trustee. Certificated Notes will be
exchangeable for other Certificated Notes having identical terms but
different authorized denominations without service charge.
Certificated Notes will not be exchangeable for Book-Entry Notes.
Maturities: Each Certificated Note will mature on a date not less than nine
months nor more than thirty years after the Settlement Date for such
Note.
Denominations: The denomination of any Certificated Note denominated in
U.S. dollars will be a minimum of $1,000 or any amount in excess
thereof that is an integral multiple of $1,000. The authorized
denominations of Certified Notes denominated in any other currency
will be specified pursuant to "Settlement Procedures" below.
Interest: General. Interest, if any, on each Certificated Note will accrue
from the original issue date for the first interest period or the last
date to which interest has been paid, if any, for each subsequent
interest period, and will be calculated and paid in the manner
described in such Note and in the Prospectus, as supplemented by the
applicable Pricing Supplement. Unless otherwise specified therein,
each payment of interest on a Certificated Note will include interest
accrued to but excluding the Interest Payment Date (provided that, in
the case of Certificated Notes which reset daily or weekly, interest
payments will include accrued interest to and including the Regular
Record Date immediately preceding the Interest Payment Date) or to but
excluding Maturity (other than a Maturity of a Fixed Rate Certificated
Note occurring on the thirty-first day of a month, in which case such
payment of interest will include interest accrued to but excluding the
thirtieth day of such month).
Regular Record Dates. The Regular Record Dates with respect to any
Interest Payment Date shall be the date fifteen calendar days
immediately preceding such Interest Payment Date (unless otherwise
specified pursuant to Settlement Procedure "A" below).
FixedRate Certificated Notes. Unless otherwise specified pursuant to
Settlement Procedure "A" below, interest payments on Fixed Rate
Certificated Notes will be made semi-annually on [April] 1 and
[October] 1 of each year and at Maturity; provided, however, that in
the case of a Fixed Rate Certificated Note issued between a Regular
Record Date and an Interest Payment Date, the first interest payment
will be made on the Interest Payment Date following the next
succeeding Regular Record Date to the Person in whose name such Note
is registered on the Regular Record Date for such succeeding Interest
Payment Date.
Floating Rate Certificated Notes. Interest payments will be made on
Floating Rate Certificated Notes monthly, quarterly, semi-annually or
annually. Interest will be payable, in the case of Floating Rate
Certificated Notes with a monthly Interest Payment Period, on the
third Wednesday of each month; with a quarterly Interest Payment
Period, on the third Wednesday of March, June, September and December
of each year; with a semi-annual Interest Payment Period, on the third
Wednesday of the two months specified pursuant to Settlement Procedure
"A" below; and with an annual Interest Payment Period, on the third
Wednesday of the month specified pursuant to Settlement Procedure "A"
below; provided, however, that if an Interest Payment Date for a
Floating Rate Certificated Note would otherwise be a day that is not a
Business Day with respect to such Floating Rate Certificated Note,
such Interest Payment Date will be the next succeeding Business Day
with respect to such Floating Rate Certificated Note, except in the
case of a Floating Rate Certificated Note for which the Base Rate is
LIBOR, if such Business Day is in the next succeeding calendar month,
such Interest Payment Date will be the immediately preceding Business
Day; and provided further, that in the case of a Floating Rate
Certificated Note issued between a Regular Record Date and an Interest
Payment Date, the first interest payment will be made on the Interest
Payment Date following the next succeeding Regular Record Date to the
Person in whose name such Note is registered on the Regular Record
Date for such succeeding Interest Payment Date. Calculation of
Interest: Fixed Rate Certificated Note. Interest on Fixed Rate
Certificated Notes (including interest for partial periods) will be
calculated on the basis of a 360-day year of twelve 30-day months.
Floating Rate Certificated Notes. Interest rates on Floating Rate
Certificated Notes will be determined as set forth in the form of
Notes. Interest on Floating Rate Certificated Notes, except as
otherwise set forth therein, will be calculated on the basis of actual
days elapsed and a year of 360 days, except that in the case of a
Floating Rate Certificated Note for which the Base Rate is Treasury
Rate, interest will be calculated on the basis of the actual number of
days in the year.
Payments of Principal and Interest: The Trustee will pay the principal
amount of each Certificated Note at Maturity upon presentation of such
Certificated Note to the Trustee (unless otherwise specified in the
applicable Pricing Supplement). Such payment, together with payment of
interest due at Maturity of such Certificated Note, will be made in
funds available for immediate use by the Trustee and in turn by the
Holder of such Certificated Note. Certificated Notes presented to the
Trustee at Maturity for payment will be canceled by the Trustee in
accordance with the Indenture. All interest payments on a Certificated
Note (other than interest due at Maturity) will be made by check drawn
on the Trustee (or another Person appointed by the Trustee) and mailed
by the Trustee to the Person entitled thereto as provided in such Note
and the Indenture (unless otherwise specified in the applicable
Pricing Supplement).
The Trustee will be responsible for reporting interest paid on
Certificated Notes, and where applicable, withholding taxes on such
interest payments, as may be required by law.
If any Interest Payment Date for or the Maturity of a Certificated
Note is not a Business Day, the payment due on such day shall be made
on the next succeeding Business Day and no interest shall accrue on
such payment for the period from and after such Interest Payment Date
or Maturity, as the case may be, except that in the case of an
Interest Payment Date on a Floating Rate Certificated Note for which
the Base Rate is LIBOR, if such Business Day is in the succeeding
calendar month, such Interest Payment Date will be the preceding
Business Day.
Procedure for Rate Setting and Posting: The Company and the Agents will
discuss from time to time the aggregate principal amount of, the
issuance price of, and the interest rates to be borne by, Notes that
may be sold as a result of the solicitation of orders by the Agents.
If the Company decides to set prices of, and rates borne by, any Notes
in respect of which the Agents are to solicit orders (the setting of
such prices and rates to be referred to herein as "posting") or if the
Company decides to change prices or rates previously posted by it, it
will promptly advise the Agents of the prices and rates to be posted.
Acceptance and Rejection of Orders: Unless otherwise instructed by the
Company, each Agent will advise the Company promptly by telephone of
all orders to purchase Certificated Notes received by such Agent,
other than those rejected by it in whole or in part in the reasonable
exercise of its discretion. Unless otherwise agreed by the Company and
the Agents, the Company has the sole right to accept orders to
purchase Certificated Notes and may reject any such orders in whole or
in part.
Preparation of Pricing Supplement: If any order to purchase a Certificated
Note is accepted by or on behalf of the Company, the Company will
prepare a Pricing Supplement reflecting the terms of such Certificated
Note and will arrange to have the Pricing Supplement filed with the
Commission in accordance with the applicable paragraph of Rule 424(b)
under the Act and will supply ten copies thereof (and additional
copies if requested) to the Presenting Agent. The Presenting Agent
will cause a Prospectus and Pricing Supplement to be delivered to the
purchaser of such Certificated Note.
In each instance that a Pricing Supplement is prepared, the Presenting
Agent will affix the Pricing Supplement to Prospectuses prior to their
use. Outdated Pricing Supplements (other than those retained for
files) will be destroyed.
Suspension of Solicitation; Amendment or Supplement: Subject to the
Company's representations, warranties and covenants contained in the
Agency Agreement, the Company may instruct the Agents to suspend at
any time for any period of time or permanently, the solicitation of
orders to purchase Certificated Notes. Upon receipt of such
instructions, the Agents will forthwith suspend solicitation until
such time as the Company has advised them that such solicitation may
be resumed.
In the event that at the time the Company suspends solicitation of
purchases there shall be any orders outstanding for settlement, the
Company will promptly advise the Agents and the Trustee whether such
orders may be settled and whether copies of the Prospectus as in
effect at the time of the suspension, together with the appropriate
Pricing Supplement, may be delivered in connection with the settlement
of such orders. The Company will have the sole responsibility for such
decision and for any arrangements that may be made in the event that
the Company determines that such orders may not be settled or that
copies of such Prospectus may not be so delivered.
If the Company decides to amend or supplement the Registration
Statement or the Prospectus, it will promptly advise the Agents and
furnish the Agents with the proposed amendment or supplement and with
such certificates and opinions as are required, all to the extent
required by and in accordance with the terms of the Agency Agreement.
Subject to the provisions of the Agency Agreement, the Company may
file with the Commission any supplement to the Prospectus relating to
the Notes. The Company will provide the Agents and the Trustee with
copies of any such supplement, and confirm to the Agents that such
supplement has been filed with the Commission pursuant to the
applicable paragraph of Rule 424(b).
Procedure for Rate Changes: When the Company has determined to change the
interest rates of Certificated Notes being offered, it will promptly
advise the Agents and the Agents will forthwith suspend solicitation
of orders. The Agents will telephone the Company with recommendations
as to the changed interest rates. At such time as the Company has
advised the Agents of the new interest rates, the Agents may resume
solicitation of orders. Until such time only "indications of interest"
may be recorded. Within two Business Days after any sale of Notes, the
Company will file with the Commission a Pricing Supplement to the
Prospectus relating to such Notes that reflects the applicable
interest rates and other terms and will deliver copies of such Pricing
Supplement to the Agents.
Delivery of Prospectus: A copy of the Prospectus and, where applicable, a
Pricing Supplement, relating to a Certificated Note, must accompany or
precede the earliest of any written offer by any Agent of such
Certificated Note, confirmation of the purchase of such Certificated
Note, or payment for such Certificated Note by its purchaser. If
notice of a change in the terms of the Certificated Notes is received
by the Agents between the time an order for a Certificated Note is
placed and the time written confirmation thereof is sent by the
Presenting Agent to a customer or his agent, such confirmation shall
be accompanied by a Prospectus and Pricing Supplement setting forth
the terms in effect when the order was placed. Subject to "Suspension
of Solicitation; Amendment or Supplement" above, the Presenting Agent
timely will deliver a Prospectus and Pricing Supplement as herein
described with respect to each Certificated Note sold by it. The
Company will make such delivery if such Certificated Note is sold
directly by the Company to a purchaser (other than any Agent).
Confirmation: For each order to purchase a Certificated Note solicited by
any Agent and accepted by or on behalf of the Company, the Presenting
Agent will issue a confirmation to the purchaser, with a copy to the
Company, setting forth the details set forth above and delivery and
payment instructions.
Settlement: The receipt by the Company of immediately available funds in
exchange for an authenticated Certificated Note delivered to the
Presenting Agent and the Presenting Agent's delivery of such
Certificated Note against receipt of immediately available funds
shall, with respect to such Certificated Note, constitute
"settlement." All orders accepted by the Company will be settled on
the fifth Business Day following the date of sale pursuant to the
timetable for settlement set forth below, unless the Company, the
Trustee and the purchaser agree to settlement on another day which
shall be no earlier than the next Business Day following the date of
sale; provided, however, that the Trustee shall not, without its prior
written consent, be required to deliver in excess of 300 certificates
evidencing Certificated Notes in any one of the three business days
following the date of sale.
Settlement Procedures: Settlement Procedures with regard to each
Certificated Note sold by the Company through any Agent, as
agent, shall be as follows:
A. The Presenting Agent will advise the Company by telephone of
the following settlement information:
1. Name in which such Certificated Note is to be
registered ("Registered Owner").
2. Address of the Registered Owner and address for payment of
principal and interest.
3. Taxpayer identification number of the Registered Owner (if
available).
4. Principal amount.
5. Maturity Date.
6. In the case of a Fixed Rate Certificated Note, the
interest rate or, in the case of a Floating Rate
Certificated Note, the initial interest rate (if known
at such time), Base Rate, Index Maturity, Interest
Reset Period, Interest Reset Dates, Spread or Spread
Multiplier (if any), minimum interest rate (if any),
maximum interest rate (if any) and, in the case of a
Floating Rate certified Note for which the Base Rate is
LIBOR, whether LIBOR Reuters, LIBOR Telerate or another
LIBOR reference is applicable to the Notes and the
Designated LIBOR Currency.
7. Interest Payment Dates, Regular Record Dates (if other than
the dates fifteen calendar days preceding such Interest
Payment Dates), the Interest Payment Period, the Calculation
Dates and the Calculation Agent.
8. Redemption provisions, if any.
9. Settlement date.
10. Price (including currency).
11. Presenting Agent's commission, determined as provided in
Section 2 of the Agency Agreement.
12. Manner of payment at Maturity (if other than upon
presentation of Notes to the Trustee) and Interest (if other
than by check).
B. The Company will advise the Trustee by telephone
(confirmed in writing at any time on the sale date) or
electronic transmission of the information set forth in
Settlement Procedure "A" above and the name of the
Presenting Agent. Each such communication by the
Company shall constitute a representation and warranty
by the Company to the Trustee and the Agents that (i)
such Certificated Note is then, and at the time of
issuance and sale thereof will be, duly authorized for
issuance and sale by the Company, (ii) such
Certificated Note will conform with the terms of the
Indenture, and (iii) after giving effect to the
issuance of such Certificated Note and any other Notes
to be issued on or prior to the settlement date for the
sale of such Certificated Note, the aggregate amount of
Notes which have been issued and sold by the Company
will not exceed the amount of Notes registered under
the Registration Statement. Such confirmation shall
constitute a Company Order to the Trustee for the
authentication of such Certificated Note and shall be
deemed to satisfy the requirements set forth in the
third paragraph of Section 3.3 of the Indenture.
C. The Company will deliver to the Trustee a pre-printed four-ply
packet for such Certificated Note, which packet will contain the
following documents in forms that have been approved by the
Company, the Agents and the Trustee:
1. Certificated Note with customer confirmation.
2. Stub One - For Trustee.
3. Stub Two - For Agent.
4. Stub Three - For the Company.
D. The Trustee will complete such Certificated Note and will
authenticate such Certificated Note and deliver it (with the
confirmation) and Stubs One and Two to the Presenting Agent, and
the Presenting Agent will acknowledge receipt of the Note by
stamping or otherwise marking Stub One and returning it to the
Trustee. Such delivery will be made only against such
acknowledgment of receipt and evidence that instructions have
been given by the Presenting Agent for payment to the account of
the Company at First Union National Bank in funds available for
immediate use, of an amount equal to the price of such
Certificated Note less the Presenting Agent's commission. In the
event that the instructions given by the Presenting Agent for
payment to the account of the Company are revoked, the Company
will as promptly as possible wire transfer to the account of the
Presenting Agent an amount of immediately available funds equal
to the amount of such payment made.
E. The Presenting Agent will deliver such Certificated Note (with
The confirmation) to the customer or the customer's trust bank
Against payment in immediately payable funds. The Presenting
Agent Xxxx obtain the acknowledgement of receipt of such
Certificated Note by retaining Stub Two.
F. The Trustee will send Stub Three to the Company by first-class
mail.
Settlement Procedures Timetable: For orders of Certificated Notes solicited
by any Agent, as agent, and accepted by the Company, Settlement
Procedures "A" through "F" set forth above shall be completed on or
before the respective times (New York City time) set forth below:
Settlement
Procedure Time
A 2:00 P.M. on the Business Day before settlement
B-C 3:00 P.M. on the Business Day before settlement
D 2:15 P.M. on Settlement Date
E 3:00 P.M. on Settlement Date
F 5:00 P.M. on Settlement Date
Failure to Settle: If a purchaser fails to accept delivery of and make
payment for any Certificated Note, the Presenting Agent will notify
the Company and the Trustee by telephone and return such Certificated
Note to the Trustee. Upon receipt of such notice, the Company will
immediately wire transfer to the account of the Presenting Agent an
amount equal to the amount previously credited to the account of
Company in respect of such Certificated Note. Such wire transfer will
be made on the Settlement Date, if possible, and in any event not
later than the Business Day following the Settlement Date. If the
failure shall have occurred for any reason other than a default by the
Presenting Agent in the performance of its obligations hereunder and
under the Agency Agreement, then the Company will reimburse the
Presenting Agent or the Trustee, as appropriate, on an equitable basis
for its loss of the use of the funds during the period when they were
credited to the account of the Company. Immediately upon receipt of
the Certificated Note in respect of which such failure occurred, the
Trustee will cancel such Certificated Note in accordance with the
Indenture and so advise the Company, and will make appropriate entries
in its records.
Trustee Not to Risk Funds: Nothing herein shall be deemed to require the
Trustee to risk or expend its own funds in connection with any payment
to the Company, the Agents or the purchaser, it being understood by
all parties that payments made by the Trustee to the Company, the
Agents or the purchaser shall be made only to the extent that funds
are provided to the Trustee for such purpose.
Authenticity of Signatures: The Company will cause the Trustee to furnish
to the Agents from time to time with the specimen signatures of each
of the Trustee's officers, employees or agents who has been authorized
by the Trustee to authenticate Certificated Notes, but neither the
Trustee nor any Agent will have any obligation or liability to the
Company or the Trustee in respect of the authenticity of the signature
of any officer, employee or agent of the Company or the Trustee on any
Certificated Note.
Payment of Expenses: Each Agent shall forward to the Company, on a monthly
basis, a statement of the out-of-pocket expenses incurred by such
Agent during that month that are reimbursable to it pursuant to the
terms of the Agency Agreement. The Company will remit payment to the
Agents currently on a monthly basis.
Advertising Costs: The Company will determine with the Agents the amount of
advertising that may be appropriate in soliciting orders to purchase
the Certificated Notes. Advertising expenses will be paid by the
Company.
Periodic Statements from the Trustee: Periodically, the Trustee will send
to the Company a statement setting forth the principal amount of
Certificated Notes outstanding as of that date.
B-2
EXHIBIT B
PUBLIC SERVICE COMPANY OF NORTH
CAROLINA, INCORPORATED
Medium-Term Notes
Due from Nine Months to Thirty Years
from Date of Issue
TERMS AGREEMENT
-----------------, ------
Attention:
Subject in all respects to the terms and conditions of the Selling
Agency Agreement (the "Agreement") dated ____________, 2001, among Banc of
America Securities LLC, Credit Suisse First Boston Corporation and UBS Warburg
LLC and you, the undersigned agrees to purchase the following Notes of:
Aggregate Principal Amount:
Interest Rate:
Date of Maturity:
If Fixed Rate Notes -
Interest Rate:
Interest Payment Period:
Interest Payment Dates:
Regular Record Dates:
If Floating Rate Notes -
Initial Interest Rate:
Base Rate: Index Maturity:
Spread: Spread Multiplier:
Minimum Interest Rate, if any:
Maximum Interest Rate, if any:
Interest Reset Period:
Interest Reset Dates:
Interest Payment Period:
Interest Payment Dates:
Regular Record Dates:
[Redemption Dates and Prices:]
[Repayment Dates and Prices:]
Purchase Price: % of Principal Amount [plus accrued
interest from _______________, ______]
Purchase Date and Time:
Place for Delivery of Notes
and Payment Therefor:
Method of Payment:
Modification, if any, in the requirements to deliver the documents specified in
Section 6(b) of the Agreement:
Period during which additional Notes may not be sold pursuant to Section 4(m) of
the Agreement:
[Purchaser]
By: _______________________________
Accepted:
By: ____________________________
Title: _______________________
SCHEDULE I
The Company agrees to pay each Agent a commission equal to the
following percentage of the principal amount of each Note sold by such Agent:
Maturity Range of Notes amount Percentage of Principal
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years up to and including 30 years .750%
Address for Notice to you:
Notices to Banc of America Securities LLC shall be directed to it at Bank
of America Corporate Center, 000 Xxxxx Xxxxx Xxxxxx; XX0 000 00 00, Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000.
Notices to Credit Suisse First Boston Corporation shall be directed to it
at Xxxxxx Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Attention: Short and Medium
Term Products Group.
Notices to UBS Warburg LLC shall be directed to it at 000 Xxxxxxxxxx
Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000.
