PROGRESS ENERGY, INC. UNDERWRITING AGREEMENT
Exhibit 1
PROGRESS ENERGY, INC.
4.40% Senior Notes due 2021
January 18, 2011
To the Representative named in Schedule I hereto
of the Underwriters named in Schedule I hereto
of the Underwriters named in Schedule I hereto
Dear Ladies and Gentlemen:
The undersigned Progress Energy, Inc., (the “Company”) hereby confirms its agreement with each
of the several Underwriters hereinafter named as follows:
1. Underwriters and Representative. The term “Underwriters” as used in this
Underwriting Agreement (the “Agreement”) shall be deemed to mean the firm or the several firms
named in Schedule I hereto and any underwriter substituted as provided in paragraph 6
hereof, and the term “Underwriter” shall be deemed to mean any one of such Underwriters. If the
firm or firms listed as Representative in Schedule I hereto (individually and
collectively, the “Representative”) are the only firm or firms serving as underwriters, then the
terms “Underwriters” and “Representative,” as used herein, shall each be deemed to refer to such
firm or firms. Each Representative represents jointly and severally that they have been authorized
by the Underwriters to execute this Agreement on their behalf and to act for them in the manner
herein provided. All obligations of the Underwriters hereunder are several and not joint. If more
than one firm is named as Representative in Schedule I hereto, any action under or in
respect of this Agreement may be taken by such firms jointly as the Representative, or by one of
the firms acting on behalf of the Representative, and such action will be binding upon all the
Underwriters.
2. Description of Securities. The Company proposes to issue and sell its debt
securities of the designation, with the terms and in the amount specified in Schedule I
hereto and in the final term sheet filed with the Securities and Exchange Commission (the
“Commission”) pursuant to Rule 433(d) on the date hereof (the “Securities”) in one or more new
series under a governing indenture dated as of February 15, 2001 (the “Base Indenture”) between the
Company and The Bank of New York Mellon Trust Company, National Association, as successor trustee
(the “Trustee”), as supplemented and amended, and as further supplemented and amended an officer’s
certificate to be dated as of January 21, 2011 (the “Officer’s Certificate”; and the Base Indenture
as so supplemented, the “Indenture”), in substantially the form heretofore delivered to the
Representative.
3. Representations and Warranties of the Company. The Company represents and warrants
to each of the Underwriters that:
(a) The Company has filed with the Commission a registration statement on Form S-3, as
amended (No. 333-155418) (the “Registration Statement”), under the Securities Act of 1933,
as amended (the “Securities Act”), for the registration of an indeterminate amount of
Senior Debt Securities, Junior Subordinated Debentures, Common Stock, Preferred Stock, Stock
Purchase Contracts, Stock Purchase Units and Guarantees (collectively, the “Registered
Securities”). The Registration Statement was effective upon filing on November 18, 2008.
The term “Registration Statement” shall be deemed to include all amendments made by the
Company prior to the Applicable Time (defined below) and all documents filed by the Company
with the Commission and incorporated by reference therein (the “Incorporated Documents”).
The base prospectus filed by the Company as part of the Registration Statement, in the form
in which it has most recently been filed with the Commission prior to the date of this
Agreement, is hereinafter called the “Basic Prospectus.” The Basic Prospectus, as
supplemented by a preliminary prospectus supplement, dated January 18, 2011, relating to the
Securities, and all prior amendments or supplements thereto made by the Company (other than
amendments or supplements relating to the Registered Securities other than the Securities),
including the Incorporated Documents, is hereinafter referred to as the “Preliminary
Prospectus.” The Preliminary Prospectus, as amended and supplemented, including the
Incorporated Documents, at or immediately prior to the Applicable Time (as defined below) is
hereinafter called the “Pricing Prospectus.” The Basic Prospectus, as it is to be
supplemented by a prospectus supplement, dated on the date hereof, substantially in the form
delivered to the Representative prior to the execution hereof, relating to the Securities
(the “Prospectus Supplement”) and all prior amendments or supplements thereto (other than
amendments or supplements relating to securities of the Company other than the Securities),
including the Incorporated Documents, is hereinafter referred to as the “Prospectus.” Any
reference herein to the terms “amend,” “amendment” or “supplement” with respect to the
Registration Statement or the Prospectus shall be deemed to refer to and include any
post-effective amendment to the Registration Statement, any prospectus supplement relating
to the Securities filed with the Commission pursuant to Rule 424(b) under the Securities Act
and the filing of any document under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), deemed to be incorporated therein after the Applicable Time and prior to
the termination of the offering of the Securities by the Underwriters; and any references
herein to the terms “Registration Statement” or “Prospectus” at a date after the filing of
the Prospectus Supplement shall be deemed to refer to the Registration Statement or the
Prospectus, as the case may be, as each may be amended or supplemented prior to such date.
For purposes of this Agreement, the “Applicable Time” is 2:00 p.m. (New York City time)
on the date of this Agreement; the documents listed in Schedule II hereto, taken
together, as of the Applicable Time are collectively referred to as the “Pricing Disclosure
Package”; and all references to the Registration Statement, the Pricing Disclosure Package
or the Prospectus or any amendment or supplement thereto shall be deemed to include the copy
filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system (“XXXXX”).
(b) The Registration Statement, at each time and date it became, or is deemed to have
become, effective, complied, and the Registration Statement, the Prospectus and
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the Indenture, as of the date hereof and at the Closing Date (as defined herein), will
comply, in all material respects, with the applicable provisions of the Securities Act and
the Trust Indenture Act of 1939, as amended (the “1939 Act”), and the applicable
instructions, rules and regulations of the Commission thereunder; the Registration
Statement, at each time and date it became, or is deemed to have become, effective did not
contain an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading; the Pricing
Disclosure Package as of the Applicable Time did not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; and
the Prospectus, as of its date and at the Closing Date, will not contain an untrue statement
of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the foregoing representations and warranties in this
subparagraph (b) shall not apply to statements or omissions made in reliance upon and in
conformity with the information furnished herein or in writing to the Company by the
Representative or by or on behalf of any Underwriter through the Representative expressly
for use in the Prospectus or to any statements in or omissions from the Statement of
Eligibility (“Form T-1”) of the Trustee under the Indenture. The Incorporated Documents, at
the time they were each filed with the Commission, complied in all material respects with
the applicable requirements of the Exchange Act and the instructions, rules and regulations
of the Commission thereunder, and any documents so filed and incorporated by reference
subsequent to the date hereof and prior to the termination of the offering of the Securities
by the Underwriters will, at the time they are each filed with the Commission, comply in all
material respects with the requirements of the Exchange Act and the instructions, rules and
regulations of the Commission thereunder; and, when read together with the Registration
Statement, the Pricing Disclosure Package and the Prospectus, none of such documents
included or includes or will include any untrue statement of a material fact or omitted or
omits or will omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they were made,
not misleading. Each Permitted Free Writing Prospectus listed on Schedule II hereto
does not conflict in any material respect with the information contained in the Registration
Statement, the Pricing Disclosure Package or the Prospectus.
(c) With respect to the Registration Statement, (i) the Registration Statement is an
“automatic shelf registration statement” (as defined in Rule 405 under the Securities Act),
(ii) the Company has not received from the Commission any notice pursuant to Rule 401(g)(2)
of the Securities Act objecting to the use of the automatic shelf registration statement and
(iii) the conditions for use of Form S-3, as set forth in the General Instructions thereof,
have been satisfied.
(d) (i) At the time of filing of the Registration Statement and (ii) at the time the
Company or any person acting on its behalf (within the meaning, for this clause only, of
Rule 163(c) under the Securities Act) made any offer relating to the Securities in reliance
on the exemption of Rule 163 under the Securities Act, the Company was a “well-known
seasoned issuer” (as defined in Rule 405 under the Securities Act).
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(e) The historical financial statements incorporated by reference in the Registration
Statement, the Pricing Prospectus and the Prospectus present fairly the financial condition
and operations of the Company and its subsidiaries as a whole at the respective dates or for
the respective periods to which they apply; such financial statements have been prepared in
each case in accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except that the quarterly financial statements, if any,
incorporated by reference from any Quarterly Reports on Form 10-Q contain condensed
footnotes prepared in accordance with applicable Exchange Act rules and regulations; and
Deloitte & Touche LLP, which has audited the financial statements, is an independent
registered public accounting firm as required by the Securities Act or the Exchange Act and
the rules and regulations of the Commission thereunder.
(f) Except as reflected in, or contemplated by, the Registration Statement and the
Pricing Disclosure Package, since the respective dates as of which information is given in
the Registration Statement and the Pricing Prospectus, and prior to the Closing Date, (i)
there has not been any material adverse change in the business, properties, results of
operations or financial condition of the Company and its subsidiaries, considered as a
whole; (ii) there has not been any material transaction entered into by the Company or any
of its significant subsidiaries (as such term is defined in Rule 1-01(w) of Regulation S-X)
of the Company (each a “Significant Subsidiary” and each of which is listed on Schedule
III hereto) other than transactions contemplated by the Registration Statement and the
Pricing Prospectus or transactions arising in the ordinary course of business; and (iii)
neither the Company nor its subsidiaries has any material contingent obligation that is not
disclosed in the Registration Statement and Pricing Disclosure Package that could likely
result in a material adverse change in the business, properties, results of operations or
financial condition of the Company and its subsidiaries, considered as a whole.
(g) The Company has full power and authority to execute, deliver and perform its
obligations under this Agreement. The execution and delivery of this Agreement, the
consummation of the transactions herein contemplated and the fulfillment of the terms hereof
on the part of the Company to be fulfilled have been duly authorized by all necessary
corporate action of the Company in accordance with the provisions of its articles of
incorporation, by-laws and applicable law.
(h) The consummation of the transactions herein contemplated and the fulfillment of the
terms hereof will not result in a breach of any of the terms or provisions of, or constitute
a default or Repayment Event (as defined below) under, the articles of incorporation or the
by-laws of the Company or any Significant Subsidiary, any applicable law or any indenture,
mortgage, deed of trust or other material agreement or instrument to which the Company or
any Significant Subsidiary is now a party, or any judgment, order, writ or decree of any
government or governmental authority or agency or court having jurisdiction over the Company
or any of its Significant Subsidiaries or any of their assets, properties or operations,
that, in the case of any such breach, default or Repayment Event, would have a material
adverse effect on the business, properties, results of operations or financial condition of
the Company and its subsidiaries
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considered as a whole. As used herein, a “Repayment Event” means any event or
condition which gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the Company or any
Significant Subsidiary of the Company.
(i) The Securities conform in all material respects to the description contained in the
Pricing Disclosure Package and the Prospectus.
(j) The Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of North Carolina; each Significant Subsidiary has
been duly incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its organization; each of the Company and each Significant
Subsidiary has corporate power and authority to own, lease and operate its properties and to
conduct its business as contemplated under this Agreement and the other agreements to which
it is a party; and each of the Company and each Significant Subsidiary is duly qualified as
a foreign corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify would not have a
material adverse effect on the business, properties, results of operations or financial
condition of the Company and its subsidiaries considered as a whole.
(k) The issued and outstanding capital stock of each Significant Subsidiary has been
duly authorized and validly issued and is fully paid and non-assessable; and the common
capital stock of each Significant Subsidiary is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equitable right.
(l) The Indenture (i) has been duly authorized, executed and delivered by the Company,
and, assuming due authorization, execution and delivery by the Trustee, constitutes a valid
and legally binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to (A) applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or similar laws affecting creditors’ rights generally and
(B) general principles of equity and any implied covenant of good faith and fair dealing
(regardless of whether such enforceability is considered in a proceeding at law or in equity
and except for the effect on enforceability of federal or state law limiting, delaying or
prohibiting the making of payments outside the United States); and (ii) conforms in all
material respects to the description thereof in the Pricing Disclosure Package and the
Prospectus. The Indenture has been qualified under the 0000 Xxx.
(m) The Securities have been duly authorized by the Company and, when issued and
authenticated in the manner provided for in the Indenture and delivered against payment of
the required consideration therefor, will constitute valid and legally binding obligations
of the Company, entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws
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affecting creditors’ rights generally and (ii) general principles of equity (regardless
of whether such enforceability is considered in a proceeding at law or in equity and except
for the effect on enforceability of federal or state law limiting, delaying or prohibiting
the making of payments outside the United States). Such Securities rank and will rank on a
parity with all unsecured and unsubordinated indebtedness of the Company.
(n) Neither the Company nor any of its Significant Subsidiaries is an “investment
company” within the meaning of the Investment Company Act of 1940, as amended (the “1940
Act”).
(o) Except as described in or contemplated by the Pricing Disclosure Package and the
Prospectus, there are no pending or, to the knowledge of the Company, threatened actions,
suits or proceedings (regulatory or otherwise) against or affecting the Company or any of
its subsidiaries or properties that are likely in the aggregate to result in any material
adverse change in the business, properties, results of operations or financial condition of
the Company and its subsidiaries considered as a whole, or that are likely in the aggregate
to materially and adversely affect the Indenture, the Securities or the consummation of this
Agreement or the transactions contemplated herein or therein.
(p) No filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations hereunder in connection with
the offering, issuance or sale of the Securities hereunder or the consummation of the
transactions herein contemplated or for the due execution, delivery or performance of the
Indenture by the Company, except such as have already been made or obtained or as may be
required under the Securities Act, state securities laws or the securities laws of any
jurisdiction outside the United States of America, and except for the qualification of the
Indenture under the 1939 Act.
(q) Neither the Company nor any of its subsidiaries is in violation of its articles of
incorporation or by-laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreements or instruments to which the
Company or any of its subsidiaries is a party or by which it or any of them may be bound or
to which any of the property or assets of the Company or any of them is subject except for
such defaults that would not result in a material adverse change in the business,
properties, results of operations or financial condition of the Company and its subsidiaries
considered as a whole.
(r) Except as described in the Registration Statement, the Pricing Disclosure Package
and the Prospectus and except as would not, in the aggregate, result in a material adverse
change in the business, properties, results of operations or financial condition of the
Company and its subsidiaries considered as a whole, neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or administrative
interpretation thereof.
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(s) The Company’s internal control over financial reporting includes policies and
procedures that are designed to (i) provide for the maintenance of records that, in
reasonable detail, accurately and fairly reflect transactions concerning the assets of the
Company; (ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting
principles in the United States of America; (iii) provide reasonable assurance that receipts
and expenditures of the Company are being made only in accordance with authorizations of
management and directors of the Company; and (iv) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition of the
Company’s assets that could have a material effect on the financial statements.
(t) The Company employs disclosure controls and procedures that are designed to ensure
that information required to be disclosed by the Company in the reports that it files or
submits under the Exchange Act is accumulated and communicated to the Company’s management,
including its principal executive and principal financial officer, as appropriate, to allow
timely decisions regarding disclosure.
4. Purchase and Sale; Manner of Sale.
(a) On the basis of the representations, warranties and covenants herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to sell to each of the
Underwriters, severally and not jointly, and each such Underwriter agrees, severally and not
jointly, to purchase from the Company, the respective principal amount of Securities set forth
opposite the name of such Underwriter in Schedule I hereto at the purchase price set forth
in Schedule I hereto.
(b) The Underwriters agree to make promptly a bona fide public offering of the Securities to
the public for sale as set forth in the Pricing Disclosure Package, subject, however, to the terms
and conditions of this Agreement. The Underwriters agree that the information that they have
presented to investors at or prior to the execution of this Agreement is consistent in all material
respects with the information that is contained in the Pricing Disclosure Package.
(c) Each Underwriter, severally and not jointly, represents, warrants and agrees that (i) it
has complied and will comply with all applicable provisions of the Financial Services and Markets
Xxx 0000 of the United Kingdom, as amended (the “FSMA”) with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom; and (ii) it has only
communicated, or caused to be communicated, and will only communicate, or cause to be communicated,
any invitation or inducement to engage in investment activity (within the meaning of Section 21 of
the FSMA) received by it in connection with the issue or sale of the Securities in circumstances in
which Section 21(1) of the FSMA does not apply to the Company.
(d) In relation to each Member State of the European Economic Area that has implemented the
Prospectus Directive (each, a “Relevant Member State”), each Underwriter, severally and not
jointly, represents, warrants and agrees that with effect from and including the date on which the
Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation
Date”) it has not made and will not make an offer of Securities to the
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public in that Relevant Member State prior to the publication of a prospectus in relation to
the Securities which has been approved by the competent authority in that Relevant Member State or,
where appropriate, approved in another Relevant Member State and notified to the competent
authority in that Relevant Member State, all in accordance with the Prospectus Directive, except
that it may, with effect from and including the Relevant Implementation Date, make an offer of
Securities to the public in that Relevant Member State at any time:
(i) to legal entities that are authorized or regulated to operate in the financial markets or,
if not so authorized or regulated, whose corporate purpose is solely to invest in securities;
(ii) to any legal entity that has two or more of (1) an average of at least 250 employees
during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an
annual net turnover of more than €50,000,000, each as shown in its last annual or consolidated
accounts;
(iii) to fewer than 100 natural or legal persons (other than qualified investors as defined in
the Prospectus Directive) subject to obtaining the prior consent of the Representative for any such
offer; or
(iv) in any other circumstances falling within Article 3(2) of the Prospectus Directive;
provided that no such offer of Securities shall result in a requirement for the publication by
the Company or any Underwriter of a prospectus pursuant to Article 3 of the Prospectus Directive
(or to publish a supplement to a prospectus pursuant to Article 16 of the Prospectus Directive).
For the purposes of this provision, the expression of an “offer of Securities to the public”
in relation to any Securities in any Relevant Member State means the communication in any
form and by any means of sufficient information on the terms of the offer and the Securities
to be offered so as to enable an investor to decide to purchase or subscribe for the
Securities, as the same may be varied in that Relevant Member State by any measure
implementing the Prospectus Directive in that Relevant Member State and the term “Prospectus
Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each
Relevant Member State.
5. Free Writing Prospectuses.
(a) The Company represents and agrees that, without the prior consent of the
Representative, it has not made and will not make any offer relating to the Securities
that would constitute a “free writing prospectus” as defined in Rule 405 under the
Securities Act, other than a Permitted Free Writing Prospectus; each Underwriter
represents and agrees that, without the prior consent of the Company and the
Representative, it has not made and will not make any offer relating to the Securities
that would constitute a “free writing prospectus,” as defined in Rule 405 under the
Securities Act, other than a Permitted Free Writing Prospectus or a free writing
prospectus that is not required to be filed by the Company pursuant to Rule 433 under
the Securities Act. Any such free
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writing prospectus the use of which is consented to by the Company and the Representative is
referred to herein as a “Permitted Free Writing Prospectus”. The only Permitted Free
Writing Prospectus as of the time of this Agreement is the final term sheet referred to in
paragraph 5(b) below.
(b) The Company agrees to file a final term sheet, in the form previously provided to,
and approved by, the Representative pursuant to Rule 433(d) under the Securities Act within
the time period prescribed by such Rule.
(c) The Company and the Underwriters have complied and will comply with the
requirements of Rule 164 and Rule 433 under the Securities Act applicable to any free
writing prospectus, including timely Commission filing where required and legending.
(d) The Company agrees that if at any time following issuance of a Permitted Free
Writing Prospectus any event occurred or occurs as a result of which such Permitted Free
Writing Prospectus would conflict in any material respect with the information in the
Registration Statement, the Pricing Prospectus or the Prospectus or include an untrue
statement of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances then prevailing, not misleading,
the Company will give prompt notice thereof to the Representative and, if requested by the
Representative, will prepare and furnish without charge to each Underwriter a Permitted Free
Writing Prospectus or other document that will correct such conflict, statement or omission;
provided, however, that this representation and warranty shall not apply to any statements
or omissions in a Permitted Free Writing Prospectus made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter through the
Representative, expressly for use therein.
6. Time and Place of Closing; Default of Underwriters.
(a) Payment for the Securities shall be made at the direction of the Company against
delivery of the Securities at the office of The Bank of New York Mellon Trust Company,
National Association, 00000 Xxxxxxxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, or such other
place, time and date as the Representative and the Company may agree. Such delivery and
payment shall occur at or about 11:00 A.M. on January 21, 2011 and is herein called the
“Closing Date.” Payment for the Securities shall be by wire transfer of immediately
available funds against delivery to The Depository Trust Company or to The Bank of New York
Mellon Trust Company, National Association, as custodian for The Depository Trust Company,
in fully registered global form registered in the name of CEDE & Co., as nominee for The
Depository Trust Company, for the respective accounts specified by the Representative not
later than the close of business on the business day prior to the Closing Date or such other
date and time not later than the Closing Date as agreed by The Depository Trust Company or
The Bank of New York Mellon Trust Company, National Association. For the purpose of
expediting the checking of the certificates by the Representative, the Company agrees to
make the Securities available to the Representative not later than 3:00 P.M. New York City
time, on the last full business
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day prior to the Closing Date at said office of The Bank of New York Mellon Trust
Company, National Association.
(b) If one or more Underwriters shall, for any reason other than a reason permitted
hereunder, fail to take up and pay for the principal amount of the Securities of any series
to be purchased by such one or more Underwriters, the Company shall immediately notify the
Representative, and the non-defaulting Underwriters shall be obligated to take up and pay
for (in addition to the respective principal amount of the Securities of such series set
forth opposite their respective names in Schedule I hereto) the principal amount of
the Securities of such series that such defaulting Underwriter or Underwriters failed to
take up and pay for, up to a principal amount thereof equal to, in the case of each such
non-defaulting Underwriter, 10% of the principal amount of the Securities of such series.
Each non-defaulting Underwriter shall do so on a pro-rata basis according to the amounts set
forth opposite the name of such non-defaulting Underwriter in Schedule I hereto, and
such non-defaulting Underwriters shall have the right, within 24 hours of receipt of such
notice, either to take up and pay for (in such proportion as may be agreed upon among them),
or to substitute another Underwriter or Underwriters, satisfactory to the Company, to take
up and pay for, the remaining principal amount of the Securities that the defaulting
Underwriter or Underwriters agreed but failed to purchase. If any unpurchased Securities
still remain, then the Company or the Representative shall be entitled to an additional
period of 24 hours within which to procure another party or parties, members of the
Financial Industry Regulatory Authority, Inc. (the “Authority”) (or if not members of the
Authority, who are not eligible for membership in the Authority and who agree (i) to make no
sales within the United States, its territories or its possessions or to persons who are
citizens thereof or residents therein and (ii) in making sales to comply with the
Authority’s Conduct Rules) and satisfactory to the Company, to purchase or agree to purchase
such unpurchased Securities on the terms herein set forth. In any such case, either the
Representative or the Company shall have the right to postpone the Closing Date for a period
not to exceed three full business days from the date agreed upon in accordance with this
paragraph 6, in order that the necessary changes in the Registration Statement and
Prospectus and any other documents and arrangements may be effected. If (i) neither the
non-defaulting Underwriters nor the Company has arranged for the purchase of such
unpurchased Securities by another party or parties as above provided and (ii) the Company
and the non-defaulting Underwriters have not mutually agreed to offer and sell the
Securities other than the unpurchased Securities, then this Agreement shall terminate
without any liability on the part of the Company or any Underwriter (other than an
Underwriter that shall have failed or refused, in accordance with the terms hereof, to
purchase and pay for the principal amount of the Securities that such Underwriter has agreed
to purchase as provided in paragraph 4 hereof), except as otherwise provided in paragraph 7
and paragraph 8 hereof.
7. Covenants of the Company. The Company covenants with each Underwriter that:
(a) As soon as reasonably possible after the execution and delivery of this Agreement,
the Company will file the Prospectus with the Commission pursuant to Rule 424 under the
Securities Act (“Rule 424”), setting forth, among other things, the necessary information
with respect to the terms of offering of the Securities and make
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any other required filings pursuant to Rule 433 under the Securities Act. Upon
request, the Company will promptly deliver to the Representative and to counsel for the
Underwriters, to the extent not previously delivered, one fully executed copy or one
conformed copy, certified by an officer of the Company, of the Registration Statement, as
originally filed, and of all amendments thereto, if any, heretofore or hereafter made (other
than those relating solely to Registered Securities other than the Securities), including
any post-effective amendment (in each case including all exhibits filed therewith and all
documents incorporated therein not previously furnished to the Representative), including
signed copies of each consent and certificate included therein or filed as an exhibit
thereto, and will deliver to the Representative for distribution to the Underwriters as many
conformed copies of the foregoing (excluding the exhibits, but including all documents
incorporated therein) as the Representative may reasonably request. The Company will also
send to the Underwriters as soon as practicable after the date of this Agreement and
thereafter from time to time as many copies of the Prospectus and the Preliminary Prospectus
as the Representative may reasonably request for the purposes required by the Securities
Act.
(b) During such period (not exceeding nine months) after the commencement of the
offering of the Securities as the Underwriters may be required by law to deliver a
Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Securities
Act), if any event relating to or affecting the Company, or of which the Company shall be
advised in writing by the Representative shall occur, which in the Company’s reasonable
opinion (after consultation with counsel for the Representative) should be set forth in a
supplement to or an amendment of the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances when it is delivered to a purchaser (or in lieu
thereof, the notice referred to in Rule 173(a) under the Securities Act), or if it is
necessary to amend the Prospectus to comply with the Securities Act, the Company will
forthwith at its expense prepare, file with the Commission and furnish to the Underwriters
and dealers named by the Representative a reasonable number of copies of a supplement or
supplements or an amendment or amendments to the Prospectus that will supplement or amend
the Prospectus so that as supplemented or amended it will comply with the Securities Act and
will not contain any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading. In case any Underwriter is
required to deliver a Prospectus (or in lieu thereof, the notice referred to in Rule 173(a)
under the Securities Act) after the expiration of nine months after the commencement of the
offering of the Securities, the Company, upon the request of the Representative, will
furnish to the Representative, at the expense of such Underwriter, a reasonable quantity of
a supplemented or amended prospectus, or supplements or amendments to the Prospectus,
complying with Section 10(a) of the Securities Act.
(c) The Company will make generally available to its security holders, as soon as
reasonably practicable, but in any event not later than 16 months after the end of the
fiscal quarter in which the filing of the Prospectus pursuant to Rule 424 occurs, an
earnings statement (in form complying with the provisions of Section 11(a) of the Securities
Act, which need not be certified by independent public accountants) covering a
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period of twelve months beginning not later than the first day of the Company’s fiscal
quarter next following the filing of the Prospectus pursuant to Rule 424.
(d) The Company will use commercially reasonable efforts promptly to do and perform all
things to be done and performed by it hereunder prior to the Closing Date and to satisfy all
conditions precedent to the delivery by it of the Securities.
(e) The Company will advise the Representative, or the Representative’s counsel,
promptly of the filing of the Prospectus pursuant to Rule 424 and of any amendment or
supplement to the Prospectus or Registration Statement or of official notice of institution
of proceedings for, or the entry of, a stop order suspending the effectiveness of the
Registration Statement and, if such a stop order should be entered, use commercially
reasonable efforts to obtain the prompt removal thereof.
(f) If at any time when Securities remain unsold by the Underwriters, the Company
receives from the Commission a notice pursuant to Rule 401(g)(2) of the Securities Act or
otherwise ceases to be eligible to use the automatic shelf registration statement form, the
Company will (i) promptly notify the Representative, (ii) promptly file a new registration
statement or post-effective amendment on the proper form relating to the Securities, in a
form reasonably satisfactory to the Representative, or take such other action, after
consultation with counsel, as the Company believes is appropriate, (iii) use commercially
reasonable efforts to cause any new registration statement or post-effective amendment that
may be filed pursuant to clause (ii) above, to be declared effective and (iv) promptly
notify the Representative of any such effectiveness. The Company will take all other
commercially reasonable action as it deems appropriate to permit the public offering and
sale of the Securities to continue as contemplated in the registration statement that was
subject of the Rule 401(g)(2) notice or for which the Company has otherwise become
ineligible. References herein to the Registration Statement shall include such new
registration statement or post-effective amendment, as the case may be.
(g) The Company will use commercially reasonable efforts to qualify the Securities, as
may be required, for offer and sale under the Blue Sky or legal investment laws of such
jurisdictions as the Representative may designate, and will file and make in each year such
statements or reports as are or may be reasonably required by the laws of such
jurisdictions; provided, however, that the Company shall not be required to qualify as a
foreign corporation or dealer in securities, or to file any general consents to service of
process, under the laws of any jurisdiction.
(h) Prior to the termination of the offering of the Securities, the Company will not
file any amendment to the Registration Statement or supplement to the Pricing Prospectus or
the Prospectus that shall not have previously been furnished to the Representative or of
which the Representative shall not previously have been advised or to which the
Representative shall reasonably object in writing and which has not been approved by the
Representative or its counsel, acting on behalf of the Underwriters.
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8. Payment of Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (a) the printing and filing of the Registration
Statement and the printing of this Agreement, (b) the delivery of the Securities to the
Underwriters, (c) the fees and disbursements of the Company’s counsel and accountants, (d) the
expenses in connection with the qualification of the Securities under securities laws in accordance
with the provisions of paragraph 7(g) hereof, including filing fees and the fees and disbursements
of counsel for the Underwriters in connection therewith, such fees and disbursements not to exceed
$7,500, (e) the printing and delivery to the Underwriters of copies of the Registration Statement
and all amendments thereto, the Preliminary Prospectus, any Permitted Free Writing Prospectus and
the Prospectus and any amendments or supplements thereto, (f) the printing and delivery to the
Underwriters of copies of the Blue Sky Survey, and (g) the preparation and execution by the Company
of the Indenture; and the Company will pay all taxes, if any (but not including any transfer
taxes), on the issue of the Securities.
The fees and disbursements of Underwriters’ counsel shall be paid by the Underwriters
(subject, however, to the provisions of this paragraph 8 requiring payment by the Company of fees
and disbursements not to exceed $7,500); provided, however, that if this Agreement is terminated in
accordance with the provisions of paragraph 9, 10 or 12 hereof, the Company shall reimburse the
Representative for the account of the Underwriters for the fees and disbursements of Underwriters’
counsel. The Company shall not be required to pay any amount for any expenses of the
Representative or of any other of the Underwriters except as provided in paragraph 7 hereof and in
this paragraph 8. The Company shall not in any event be liable to any of the Underwriters for
damages on account of the loss of anticipated profit.
9. Conditions of Underwriters’ Obligations. The several obligations of the
Underwriters to purchase and pay for the Securities shall be subject to the accuracy of the
representations and warranties on the part of the Company as of the date hereof and the Closing
Date, to the performance by the Company of its obligations to be performed hereunder prior to the
Closing Date, and to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration Statement shall be
in effect on the Closing Date; and no proceedings for that purpose shall be pending before,
or, to the Company’s knowledge, threatened by, the Commission on the Closing Date and no
notice from the Commission pursuant to Rule 401(g)(2) of the Securities Act shall have been
received by the Company. The Representative shall have received, prior to payment for the
Securities, a certificate dated the Closing Date and signed by the Chairman, President,
Treasurer or a Vice President of the Company to the effect that no such stop order is in
effect, that no proceedings for such purpose are pending before or, to the knowledge of the
Company, threatened by the Commission and no notice from the Commission pursuant to Rule
401(g)(2) of the Securities Act has been received by the Company.
(b) At the Closing Date, the Representative shall receive favorable opinions, and, with
respect to clauses vii and viii, assurance statements from: (1) Hunton & Xxxxxxxx LLP,
counsel to the Company, which opinions or assurance statements, as the case may be, shall be
satisfactory in form and substance to counsel for the Underwriters, and (2) Xxxxx & XxXxxxx
LLP, counsel for the Underwriters, in each of which opinions
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(except Hunton & Xxxxxxxx LLP as to matters of North Carolina law and except as to
subdivision (v) as to which Xxxxx & XxXxxxx LLP need express no opinion) said counsel may
rely as to all matters of North Carolina law upon the opinion of Xxxxx X. Xxxxxxxx, Esq.,
Vice President of Progress Energy Service Company, LLC and counsel to the Company, to the
effect that:
(i) The Indenture has been duly and validly authorized by all necessary
corporate action, has been duly and validly executed and delivered by the Company,
and is a valid and legally binding obligation of the Company enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency or other laws
affecting other creditors’ rights, and general equitable principles and any implied
covenant of good faith and fair dealing;
(ii) The Indenture has been duly qualified under the 1939 Act;
(iii) Assuming authentication of the Securities by the Trustee in accordance
with the Indenture and delivery of the Securities to and payment for the Securities
by the Underwriters, as provided in this Agreement, the Securities have been duly
and validly authorized, executed and delivered and are legal, valid and binding
obligations of the Company enforceable in accordance with their terms, except as
limited by bankruptcy, insolvency or other laws affecting other creditors’ rights
and general equitable principles and any implied covenant of good faith and fair
dealings, and are entitled to the benefits of the Indenture;
(iv) The statements made in the Basic Prospectus under the caption “Description
of Debt Securities” and in the Pricing Prospectus under the caption “Description of
the Senior Notes,” insofar as they purport to constitute summaries of the documents
referred to therein, are accurate summaries in all material respects;
(v) The statements made in the Pricing Prospectus and the Prospectus under the
caption “Material U.S. Federal Tax Considerations,” insofar as they purport to
constitute summaries of matters of U.S. federal income tax or legal conclusions with
respect thereto, are accurate and complete in all material respects;
(vi) This Agreement has been duly and validly authorized, executed and
delivered by the Company;
(vii) The Registration Statement, at each time and date it was declared, or is
deemed to have become, effective by the Commission, and the Pricing Disclosure
Package and the Prospectus, as of their respective dates (except as to the financial
statements and schedules and notes thereto or other financial, numerical,
accounting, statistical or quantitative information (or the assumptions with respect
thereto) included in or incorporated by reference therein, or excluded therefrom and
that part of the Registration Statement that constitutes the Statement of
Eligibility on Form T-1, upon which such opinions need not pass),
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appeared on their face to respond in all material respects to the requirements
of the Securities Act and the 1939 Act and the applicable instructions, rules and
regulations of the Commission thereunder; and the documents or portions thereof
filed with the Commission pursuant to the Exchange Act and deemed to be incorporated
by reference in the Registration Statement, the Preliminary Prospectus, the Pricing
Prospectus and the Prospectus pursuant to Item 12 of Form S-3 (except as to the
financial statements and schedules and notes thereto or other financial, numerical,
accounting, statistical or quantitative information (or the assumptions with respect
thereto) included in or incorporated by reference therein, or excluded therefrom,
and that part of the Registration Statement that constitutes the Statement of
Eligibility on Form T-1, upon which such opinions need not pass), at the time each
was filed with the Commission, appeared on their face to respond in all material
respects to the requirements of the Exchange Act and the applicable instructions,
rules and regulations of the Commission thereunder; the Registration Statement was
effective upon filing under the Securities Act and, such counsel has been verbally
advised by the staff of the Commission that no stop order suspending the
effectiveness of the Registration Statement has been issued and not withdrawn, and
no proceedings for a stop order with respect thereto have been instituted by the
Commission; and
(viii) Nothing has come to the attention of said counsel that would lead them
to believe, that the Registration Statement, at each time and date it was declared,
or is deemed to have become, effective by the Commission, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
nothing has come to the attention of said counsel that would lead them to believe
that (x) the Pricing Disclosure Package, as of the Applicable Time, included an
untrue statement of a material fact or omitted 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 or (y) the Prospectus, as of its date and, as amended
or supplemented, at the Closing Date, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were
made, not misleading (except as to financial statements, schedules and notes thereto
or other financial, numerical, accounting, statistical or quantitative information
(or the assumptions with respect thereto) included in or incorporated by reference
therein, or excluded therefrom, and that part of the Registration Statement that
constitutes the Statement of Eligibility on Form T-1, upon which such opinions need
not pass).
(c) At the Closing Date, the Representative shall receive from Xxxxx X. Xxxxxxxx, Esq.,
Vice President of Progress Energy Service Company, LLC and counsel to the Company, a
favorable opinion and/or assurance statement in form and substance satisfactory to counsel
for the Underwriters, to the same effect with respect to the matters enumerated in
subdivisions (i), (iii), (vi) and (viii) of subparagraph (b) of this paragraph 9 as the
opinions required by said subparagraph (b), and to the further effect that:
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(i) The Company has been incorporated, is a validly organized and existing
corporation and is in good standing under the laws of the State of North Carolina;
each Significant Subsidiary is a validly organized and existing corporation and is
in good standing under the laws of the jurisdiction of its organization; and the
Company and each of its subsidiaries is qualified as a foreign corporation in each
state where the failure to be so qualified would have a material adverse effect on
the Company and its subsidiaries considered as a whole;
(ii) each of the Company and each Significant Subsidiary is duly authorized by
its articles of incorporation to conduct the business which it is now conducting as
set forth in the Pricing Disclosure Package and the Prospectus;
(iii) The issuance and sale of the Securities have been duly authorized by all
necessary corporate action on the part of the Company;
(iv) Except as described in or contemplated by the Pricing Disclosure Package
and the Prospectus, there are no pending actions, suits or proceedings (regulatory
or otherwise) against the Company or any Significant Subsidiary that are likely, in
the aggregate, to result in any material adverse change in the business, properties,
results of operations or financial condition of the Company and its subsidiaries
considered as a whole or that are likely, in the aggregate, to materially and
adversely affect the Securities, the consummation of this Agreement or the
transactions contemplated herein or therein;
(v) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not result in a breach of any of the terms or
provisions of, or constitute a default or Repayment Event under, the articles of
incorporation or by-laws of the Company or any Significant Subsidiary, applicable
law, or any indenture, mortgage, deed of trust or other material agreement or
instrument to which the Company or any Significant Subsidiary is now a party or any
judgment, order, writ or decree of any government or governmental authority or
agency or court having jurisdiction over the Company or any of its subsidiaries or
any of their assets, properties or operations that, in the case of any such breach,
default or Repayment Event, would have a material adverse effect on the business,
properties, results of operations or financial condition of the Company and its
subsidiaries considered as a whole; and
(vi) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of any court or governmental authority or
agency is necessary or required for the performance by the Company of its
obligations hereunder in connection with the offering, issuance or sale of the
Securities hereunder or the consummation of the transactions herein contemplated or
for the due execution, delivery or performance of the Indenture by the Company,
except such as have been already obtained or as may be required under the Securities
Act, state securities laws or the securities laws of any jurisdiction
-16-
outside the United States of America, and except for the qualification of the
Indenture under the 1939 Act.
(d) The Representative shall have received on the date hereof and shall receive on the
Closing Date from Deloitte & Touche LLP a letter addressed to the Representative, on behalf
of the Underwriters, containing statements and information of the type ordinarily included
in accountants’ SAS 72 “comfort letters” to underwriters with respect to the audit reports,
financial statements and certain financial information contained in or incorporated by
reference into the Pricing Prospectus and the Prospectus.
(e) At the Closing Date, the Representative shall receive a certificate of the
Chairman, President, Treasurer or a Vice President of the Company, dated the Closing Date,
to the effect that the representations and warranties of the Company in this Agreement are
true and correct as of the Closing Date.
(f) Any Permitted Free Writing Prospectus, and any other material required pursuant to
Rule 433(d) under the Securities Act, shall have been filed by the Company with the
Commission within the applicable time periods prescribed by Rule 433.
(g) All legal proceedings taken in connection with the sale and delivery of the
Securities shall have been satisfactory in form and substance to counsel for the
Underwriters.
In case any of the conditions specified above in this paragraph 9 shall not have been
fulfilled or waived by 2:00 P.M. New York City time on the Closing Date, this Agreement may be
terminated by the Representative by delivering written notice thereof to the Company. Any such
termination shall be without liability of any party to any other party except as otherwise provided
in paragraphs 7 and 8 hereof.
10. Conditions of the Company’s Obligations. The obligations of the Company to
deliver the Securities shall be subject to the following condition. No stop order suspending the
effectiveness of the Registration Statement shall be in effect on the Closing Date, and no
proceedings for that purpose shall be pending before or threatened by the Commission on the Closing
Date.
In case the condition specified in this paragraph 10 shall not have been fulfilled at the
Closing Date, this Agreement may be terminated by the Company by delivering written notice thereof
to the Representative. Any such termination shall be without liability of any party to any other
party except as otherwise provided in paragraphs 7 and 8 hereof.
11. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter, each officer
and director of each Underwriter and each person who controls any Underwriter within the
meaning of Section 15 of the Securities Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject and to
reimburse each such Underwriter, each such officer and director, and each such controlling
person for any legal or other expenses (including to the extent
-17-
hereinafter provided, reasonable counsel fees) incurred by them, when and as incurred,
in connection with investigating any such losses, claims, damages or liabilities or in
connection with defending any actions, insofar as such losses, claims, damages, liabilities,
expenses or actions arise out of or are based upon any untrue statement, or alleged untrue
statement, of a material fact contained in the Registration Statement, the Pricing
Disclosure Package or the Prospectus, or in the Registration Statement or Prospectus as
amended or supplemented (if any amendments or supplements thereto shall have been
furnished), or in any issuer free writing prospectus (as defined in Rule 433(h) under the
Securities Act), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading;
provided, however, that the indemnity agreement contained in this paragraph 11 shall not
apply to any such losses, claims, damages, liabilities, expenses or actions arising out of,
or based upon any such untrue statement or alleged untrue statement, or any such omission or
alleged omission, if such statement or omission was made in reliance upon and in conformity
with the information furnished herein or in writing to the Company by any Underwriter
through the Representative expressly for use in the Registration Statement, the Pricing
Disclosure Package or the Prospectus, or any amendment or supplement to any thereof, or
any free writing prospectus used by the Company or arising out of, or based upon,
statements in or omissions from that part of the Registration Statement that shall
constitute the Statement of Eligibility under the 1939 Act (Form T-1) of the Trustee under
the Indenture. The indemnity agreement of the Company contained in this paragraph 11 and
the representations and warranties of the Company contained in paragraph 3 hereof shall
remain operative and in full force and effect regardless of any investigation made by or on
behalf of any Underwriter and any such officer or director or any such controlling person
and shall survive the delivery of the Securities. The Underwriters agree to notify promptly
the Company, and each other Underwriter, of the commencement of any litigation or
proceedings against them or any of them, or any such officer or director, or any such
controlling person, in connection with the sale of the Securities.
(b) Each Underwriter severally, and not jointly, agrees to indemnify and hold harmless
the Company, its officers who signed the Registration Statement and its directors, and each
person who controls the Company within the meaning of Section 15 of the Securities Act,
against any and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject and to reimburse each of them for any legal or other
expenses (including, to the extent hereinafter provided, reasonable counsel fees) incurred
by them, when and as incurred, in connection with investigating any such losses, claims,
damages, or liabilities, or in connection with defending any actions, insofar as such
losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Pricing Disclosure Package, the Prospectus as amended or
supplemented (if any amendments or supplements thereto shall have been furnished), or the
omission or alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, if such statement or omission
was made in reliance upon and in conformity with information furnished herein or in writing
to the Company by such Underwriter or through the Representative on behalf of such
Underwriter expressly for use in the Registration
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Statement or the Pricing Disclosure Package or any amendment or supplement to any
thereof. The indemnity agreement of all the respective Underwriters contained in this
paragraph 11 shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Company or any other Underwriter, or any such
officer or director or any such controlling person, and shall survive the delivery of the
Securities. The Company agrees promptly to notify the Representative of the commencement of
any litigation or proceedings against the Company or any of its officers or directors, or
any such controlling person, in connection with the sale of the Securities.
(c) The Company and each of the Underwriters agree that, upon the receipt of notice of
the commencement of any action against it, its officers or directors, or any person
controlling it as aforesaid, in respect of which indemnity may be sought on account of any
indemnity agreement contained herein, it will promptly give written notice of the
commencement thereof to the party or parties against whom indemnity shall be sought
hereunder. The Company and each of the Underwriters agree that the notification required by
the preceding sentence shall be a material term of this Agreement. The omission so to
notify such indemnifying party or parties of any such action shall relieve such indemnifying
party or parties from any liability that it or they may have to the indemnified party on
account of any indemnity agreement contained herein if such indemnifying party was
materially prejudiced by such omission, but shall not relieve such indemnifying party or
parties from any liability that it or they may have to the indemnified party otherwise than
on account of such indemnity agreement. In case such notice of any such action shall be so
given, such indemnifying party shall be entitled to participate at its own expense in the
defense or, if it so elects, to assume (in conjunction with any other indemnifying parties)
the defense of such action, in which event such defense shall be conducted by counsel chosen
by such indemnifying party (or parties) and satisfactory to the indemnified party or parties
who shall be defendant or defendants in such action, and such defendant or defendants shall
bear the fees and expenses of any additional counsel retained by them; but if the
indemnifying party shall elect not to assume the defense of such action, such indemnifying
parties will reimburse such indemnified party or parties for the reasonable fees and
expenses of any counsel retained by them, as such expenses are incurred; provided, however,
if the defendants (including any impleaded parties) in any such action include both the
indemnified party and the indemnifying party, and counsel for the indemnified party shall
have concluded, in its reasonable judgment, that there may be a conflict of interest
involved in the representation by such counsel of both the indemnifying party and the
indemnified party, the indemnified party or parties shall have the right to select separate
counsel, satisfactory to the indemnifying party, to participate in the defense of such
action on behalf of such indemnified party or parties (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than one separate
counsel (in addition to one local counsel) representing the indemnified parties who are
parties to such action). Each of the Company and the several Underwriters agrees that
without the other party’s prior written consent, which consent shall not be unreasonably
withheld, it will not settle, compromise or consent to the entry of any judgment in any
claim in respect of which indemnification may be sought under the indemnification provisions
of this Agreement,
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unless such settlement, compromise or consent includes an unconditional release of such
other party from all liability arising out of such claim.
(d) If the indemnification provided for in subparagraphs (a) or (b) above is for any
reason unavailable to or insufficient to hold harmless an indemnified party in respect of
any losses, liabilities, claims, damages or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount of such losses, liabilities,
claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company, on
the one hand, and the Underwriters, on the other hand, from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the Company, on the
one hand, and of the Underwriters, on the other hand, in connection with the statements or
omissions that resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations. The relative benefits received by the Company,
on the one hand, and the Underwriters, on the other hand, in connection with the offering of
the Securities pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities pursuant to this
Agreement (before deducting expenses) received by the Company and the total underwriting
discount received by the Underwriters, in each case as set forth on the cover of the
Prospectus, bear to the aggregate initial public offering price of the Securities as set
forth on such cover. The relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company or by the
Underwriters and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution pursuant to this
subparagraph (d) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to above in this subparagraph (d).
The rights of contribution contained in this Section 11 shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any Underwriter or
the Company and shall survive delivery of the Securities. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this subparagraph (d), each officer and director of each
Underwriter and each person, if any, who controls an Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Company. The Underwriters’
respective obligations to contribute pursuant to this subparagraph (d) are several in
proportion to the principal
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amount of Securities set forth opposite their respective names in Schedule I
hereto and not joint.
(e) For purposes of this paragraph 11, it is understood and agreed that the only
information provided by the Underwriters expressly for use in the Registration Statement and
the Pricing Disclosure Package were the following parts of the Preliminary Prospectus
section titled “Underwriting”: the second, third and fourth sentences of the second
paragraph, the third sentence of the third paragraph and all of the fourth paragraph.
12. Termination Date of this Agreement. This Agreement may be terminated by the
Representative at any time prior to the Closing Date by delivering written notice thereof to the
Company, if on or after the date of this Agreement but prior to such time (a) there shall have
occurred any general suspension of trading in securities on The New York Stock Exchange, or there
shall have been established by The New York Stock Exchange or by the Commission or by any federal
or state agency or by the decision of any court any limitation on prices for such trading or any
restrictions on the distribution of securities, or (b) there shall have occurred any new outbreak
of hostilities, including, but not limited to, significant escalation of hostilities that existed
on or prior to the date of this Agreement, or any national or international calamity or crisis, or
any material adverse change in the financial markets of the United States, the effect of which
outbreak, escalation, calamity or crisis, or material adverse change in the financial markets of
the United States shall be such as to make it impracticable, in the reasonable judgment of the
Representative, for the Underwriters to enforce contracts for the sale of the Securities, or (c)
the Company or any Significant Subsidiary shall have sustained a substantial loss by fire, flood,
accident or other calamity that renders it impracticable, in the reasonable judgment of the
Representative, to consummate the sale of the Securities and the delivery of the Securities by the
several Underwriters at the initial public offering price, or (d) there shall have been any
downgrading or any notice of any intended or potential downgrading in the rating accorded the
Company’s securities by any “nationally recognized statistical rating organization” as that term is
defined by the Commission for the purposes of Securities Act Rule 436(g)(2), or any such
organization shall have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of the Securities or any of the Company’s other outstanding debt,
the effect of which, in the reasonable judgment of the Representative, makes it impracticable or
inadvisable to consummate the sale of the Securities and the delivery of the Securities by the
several Underwriters at the initial public offering price or (e) there shall have been declared, by
either federal or New York authorities, a general banking moratorium. This Agreement may also be
terminated at any time prior to the Closing Date if, in the reasonable judgment of the
Representative, the subject matter of any amendment or supplement to the Registration Statement,
the Preliminary Prospectus or Prospectus (other than an amendment or supplement relating solely to
the activity of any Underwriter or Underwriters) filed after the execution of this Agreement shall
have materially impaired the marketability of the Securities. Any termination hereof pursuant to
this paragraph 12 shall be without liability of any party to any other party except as otherwise
provided in paragraphs 7 and 8 hereof.
13. Miscellaneous. The validity and interpretation of this Agreement shall be
governed by the laws of the State of New York. Unless otherwise specified, time of day refers to
New York City time. This Agreement shall inure to the benefit of, and be binding upon, the
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Company, the several Underwriters, and with respect to the provisions of paragraph 11 hereof,
the officers and directors and each controlling person referred to in paragraph 11 hereof, and
their respective successors. Nothing in this Agreement is intended or shall be construed to give
to any other person, firm or corporation any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. The term “successors” as used in this
Agreement shall not include any purchaser, as such purchaser, of any of the Securities from any of
the several Underwriters.
14. Nature of Relationship. The Company acknowledges and agrees that (a) in
connection with all aspects of each transaction contemplated by this Agreement, the Company and the
Underwriters have an arms length business relationship that creates no fiduciary duty on the part
of any party and each expressly disclaims any fiduciary relationship, (b) the Underwriters and
their respective affiliates may be engaged in a broad range of transactions that involve interests
that differ from those of the Company, (c) the Underwriters have not provided any legal,
accounting, regulatory or tax advice with respect to the offering contemplated hereby and the
Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it
deemed appropriate, and (d) any review by the Underwriters or the Company, the transactions
contemplated hereby or other matters relating to such transactions will be performed solely for the
benefit of the Underwriters and shall not be on behalf of the Company.
15. Notices. All communications hereunder shall be in writing or by telefax and, if to the
Underwriters, shall be mailed, transmitted by any standard form of telecommunication or delivered
to the Representative at Deutsche Bank Securities Inc., 00 Xxxx Xxxxxx Xxx Xxxx, XX 00000,
Attention: Debt Capital Markets Syndicate (fax 000-000-0000), Xxxxxx Xxxxxxx & Co. Incorporated,
0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attention: Investment Banking Division (fax
000-000-0000) and Xxxxx Fargo Securities, LLC, 000 X. Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000,
Attention: Transaction Management (fax 000-000-0000), and if to the Company, shall be mailed or
delivered to it at 000 X. Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000-0000, attention of
Xxxxxx X. Xxxxx, Treasurer.
16. Counterparts. This Agreement may be simultaneously executed in counterparts, each
of which when so executed shall be deemed to be an original. Such counterparts shall together
constitute one and the same instrument.
17. Defined Terms. Unless otherwise defined herein, capitalized terms used in this
Agreement shall have the meanings assigned to them in the Registration Statement.
[The remainder of this page has been intentionally left blank.]
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If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Company the enclosed duplicate hereof whereupon it will become a binding agreement
between the Company and the several Underwriters in accordance with its terms.
| Very truly yours, PROGRESS ENERGY, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Authorized Representative | ||||
Accepted as of the date first
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named in,
Schedule I attached to this Agreement
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named in,
Schedule I attached to this Agreement
| DEUTSCHE BANK SECURITIES INC. |
||||
| By: | /s/ Xxxxxxx Xxxxxx, Director | |||
| Authorized Representative | ||||
| By: | /s/ Xxxx Xxxxxx, Director | |||
| Authorized Representative | ||||
| XXXXXX XXXXXXX & CO. INCORPORATED |
||||
| By: | /s/ Yurij Slyz | |||
| Authorized Representative | ||||
| XXXXX FARGO SECURITIES, LLC |
||||
| By: | /s/ Xxxxxxx Xxxxxx | |||
| Authorized Representative | ||||
[Signature Page for the Senior Notes Underwriting Agreement]
SCHEDULE I
| Principal Amount | ||||
| Underwriters | of Securities | |||
Deutsche Bank Securities Inc. |
$ | 125,000,000 | ||
Xxxxxx Xxxxxxx & Co. Incorporated |
125,000,000 | |||
Xxxxx Fargo Securities, LLC |
125,000,000 | |||
BB&T Capital Markets, a division of
Xxxxx & Xxxxxxxxxxxx, LLC |
25,000,000 | |||
BBVA Securities Inc. |
20,000,000 | |||
Comerica Securities, Inc. |
20,000,000 | |||
RBC Capital Markets, LLC |
20,000,000 | |||
TD Securities (USA) LLC |
20,000,000 | |||
U.S. Bancorp Investments, Inc. |
20,000,000 | |||
Total |
$ | 500,000,000 | ||
Representative(s):
|
Deutsche Bank Securities Inc. Xxxxxx Xxxxxxx & Co. Incorporated Xxxxx Fargo Securities, LLC |
|
Issuer:
|
Progress Energy, Inc. | |
Designation:
|
4.40% Senior Notes due 2021 | |
Aggregate Principal Amount:
|
$500,000,000 | |
Maturity Date:
|
January 15, 2021 | |
Purchase Price:
|
98.9830% of the principal amount of the Securities, plus accrued interest, if any, from January 21, 2011, if settlement occurs after that date. |
SCHEDULE II
PRICING DISCLOSURE PACKAGE
| 1) | Preliminary Prospectus Supplement dated January 18, 2011 (which shall be deemed to include the Incorporated Documents) | |
| 2) | Permitted Free Writing Prospectuses |
| a) | Final Term Sheet dated January 18, 2011 (as filed with the Commission on the date hereof) |
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SCHEDULE III
SIGNIFICANT SUBSIDIARIES
| 1. | Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. | |
| 2. | Florida Power Corporation d/b/a Progress Energy Florida, Inc. | |
| 3. | Florida Progress Corporation |
