Exhibit 1(b)
CAROLINA POWER & LIGHT COMPANY
[Title of Senior Notes]
UNDERWRITING AGREEMENT
------------------------
-----------, ----
To the Representative named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Dear Sirs:
The undersigned Carolina Power & Light Company (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 herein
shall be deemed to mean the firm or corporation or the several firms or
corporations named in Schedule II hereto and any underwriter substituted as
provided in paragraph 6, and the term "Underwriter" shall be deemed to mean one
of such Underwriters. If the firm or firms listed in Schedule I hereto (the
"Representative") are the same as the firm or firms listed in Schedule II
hereto, then the terms "Underwriters" and "Representative", as used herein,
shall each be deemed to refer to such firm or firms. The Representative
represents that it has 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 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
Senior Notes of the designation, with the terms and in the amount specified in
Schedule I hereto (the "Securities") in one or more new series under a governing
indenture (the "Indenture") each between the Company and ___________________, as
trustee (the "Trustee"), in substantially the form heretofore delivered to the
Representative. Until the Release Date (as defined in the Indenture), the
Securities will be secured by one or more series of Senior Note Mortgage Bonds
(as defined in the Indenture) issued and delivered by the Company to the
Trustee. On the Release Date, the Securities will cease to be secured by the
Senior Note Mortgage Bonds and will become unsecured obligations of the Company.
The Senior Note Mortgage Bonds (the "New Bonds") securing the Securities will be
issued under the Company's Mortgage and Deed of Trust, dated as of May 1, 1940
with The Bank of New York (formerly Irving Trust Company) and Xxxxxxxxx X.
Xxxxxx (X. X. Xxxxxxxxxx, successor) as Trustees, as supplemented and as it will
be supplemented by a supplemental indenture relating to the New Bonds (the
"Supplemental Indenture" and together with the Mortgage and Deed of Trust as
supplemented, the "Mortgage") in substantially the form heretofore delivered to
the Representative.
3. Representations and Warranties of the Company. The Company represents
and warrants to each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-3 (No.
333-____) (the "Registration Statement") under the Securities Act of 1933,
as amended (the "Securities Act"), for the registration of up to an
aggregate of $1,500,000,000 of the Company's First Mortgage Bonds, Senior
Notes and Debt Securities (collectively, the "Registered Securities") in
unallocated amounts, as each is defined in the Registration Statement. As
of the date hereof, the Company has sold Registered Securities in the
aggregate amount of $_____________. The Registration Statement has been
declared effective by the Commission, and the Mortgage and Indenture have
each been qualified under the Trust Indenture Act of 1939 Act, as amended
(the "1939 Act"). The term "Registration Statement" shall be deemed to
include all amendments to the date hereof and all documents incorporated
by reference therein (the "Incorporated Documents"). The prospectus
included in the Registration Statement, as it is to be supplemented by a
prospectus supplement, dated on or about the date 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 the filing of any document under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), deemed
to be incorporated therein after the date hereof and prior to the
termination of the offering of the 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.
(b) 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 Prospectus which shall not have previously been
furnished to the Representative or of which the Representative shall not
previously have been advised or to which the Representative shall
reasonably object in writing and which has not been approved by the
Underwriter(s) or their counsel acting on behalf of the Underwriters.
(c) The Registration Statement, at the time and date it was declared
effective by the Commission, complied, and the Registration Statement, the
Prospectus, the Indenture and the Mortgage, at the date the Prospectus is
filed with, or transmitted for filing to, the Commission pursuant to Rule
424 under the Securities Act ("Rule 424") and at the Closing Date, will
comply, in all material respects, with the applicable provisions of the
Securities Act and the 1939 Act and the applicable rules and regulations
of the Commission thereunder; the Registration Statement, at the time and
date it was declared effective by the Commission, did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; and the Prospectus, at the date it is filed with, or
transmitted for filing to, the Commission pursuant to Rule 424 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 (c) shall not apply to statements or
omissions made in reliance upon and in conformity with information
furnished herein or in writing to the Company by the Representative
-2-
or by or on behalf of any Underwriter through the Representative expressly
for use in the Prospectus or to any statements in or omissions from the
Statements of Eligibility (Forms T-1 and T-2) of the Trustees under the
Mortgage and the Indenture. The Incorporated Documents, when they were
filed with the Commission, complied in all material respects with the
applicable requirements of the Exchange Act and the 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, when they are
filed with the Commission, comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder; and, when read together with the Registration
Statement 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.
(d) The financial statements incorporated by reference in the
Registration Statement present fairly the financial condition and
operations of the Company at the respective dates or for the respective
periods to which they apply; such financial statements have been prepared
in each case in accordance with generally accepted accounting principles
consistently applied throughout the periods involved; and Deloitte &
Touche LLP, who have audited certain of the financial statements, are
independent public or independent certified public accountants as required
by the Securities Act or the Exchange Act and the rules and regulations of
the Commission thereunder.
(e) Except as reflected in, or contemplated by, the Registration
Statement and the Prospectus, since the respective dates as of which
information is given in the Registration Statement and Prospectus, and
prior to the Closing Date, there has not been any material adverse change
in the business, property, financial condition or prospects of the
Company, and since such dates and prior to the Closing Date, there has not
been any material transaction entered into by the Company other than
transactions contemplated by the Registration Statement and Prospectus and
transactions in the ordinary course of business. The Company has no
material contingent obligation which is not disclosed in the Registration
Statement and Prospectus.
(f) 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 charter (the "Charter"), by-laws
and applicable law, and the Securities, when issued and delivered as
provided herein, will constitute legal, valid and binding obligations of
the Company in accordance with their terms except as limited by
bankruptcy, insolvency or other laws affecting mortgagees' and other
creditors' rights and general equitable principles.
(g) The New Bonds, when issued and delivered as provided herein,
will constitute legal, valid and binding obligations of the Company in
accordance with their terms except as limited by bankruptcy, insolvency or
other laws affecting mortgagees' and other creditors' rights and general
equitable principles; provided, however, that certain remedies, waivers
and other provisions of the New Bonds may not be enforceable, but such
unenforceability will not render the New Bonds invalid as a whole or
affect the judicial enforcement of (i) the obligation of the Company to
repay the principal, together with the interest thereon as provided in the
New Bonds or (ii) the right of the Trustees to exercise their right to
foreclose under the Mortgage.
(h) The consummation of the transaction 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
-3-
default under, any indenture, mortgage, deed of trust or other agreement
or instrument to which the Company is now a party.
(i) The summaries of the terms of the Securities and the New Bonds
contained in the Registration Statement and Prospectus fairly describe the
provisions thereof required to be described by the registration statement
form.
4. Purchase and Sale. On the basis of the representations, warranties and
covenants herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to each of the Underwriters, severally and not
jointly, and each such Underwriter agrees, severally and not jointly, to
purchase from the Company, the respective principal amount of Securities set
forth opposite the name of such Underwriter in Schedule II hereto at the
purchase price set forth in Schedule I hereto.
5. Reoffering by Underwriters. The Underwriters agree to make promptly a
bona fide public offering of the Securities to the public for sale as set forth
in the Prospectus, subject, however, to the terms and conditions of this
Agreement.
6. Time and Place of Closing; Default of Underwriters.
(a) Payment for the Securities shall be made at the place, time and
date specified in Schedule I hereto against delivery of the Securities at
the office of [name and address of the Trustee], or such other place, time
and date as the Representative and the Company may agree. The hour and
date of such delivery and payment are herein called the "Closing Date".
Payment for the Securities shall be by wire transfer of immediately
available funds against delivery to The Depository Trust Company or to
______________________, as custodian for The Depository Trust Company, in
fully registered global form registered in the name of CEDE & Co., 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 ______________________. For the purpose of
expediting the checking of the certificates by the Representative, the
Company agrees to make the Securities available to the Representative not
later than 10 A.M., on the last full business day prior to the Closing
Date at said office of [the Trustee].
(b) If one or more of the Underwriters shall, for any reason
permitted hereunder, cancel its obligation to purchase hereunder and to
take up and pay for the principal amount of the Securities to be purchased
by such one or more Underwriters, the Company shall immediately notify the
Representative, and the remaining 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 principal amount of the Securities which such one or
more Underwriters did not purchase. If one or more Underwriters shall, for
any reason other than a reason permitted hereunder, fail to take up and
pay for the principal amount of the Securities to be purchased by such one
or more Underwriters, the Company shall immediately notify the
Representative, and the remaining Underwriters shall be obligated to take
up and pay for (in addition to the respective principal amount of the
Securities set forth opposite their respective names in Schedule II
hereto) the principal amount of the Securities which such defaulting
Underwriter or Underwriters failed to take up and pay for, up to a
principal amount thereof equal to, in the case of each such remaining
Underwriter, ten percent (10%) of the principal amount of the Securities
set forth opposite the name of such remaining Underwriter in said Schedule
II,
-4-
and such remaining Underwriters shall have the right, within 24 hours of
receipt of such notice, either to take up and pay for (in such proportion
as may be agreed upon among them), or to substitute another Underwriter or
Underwriters, satisfactory to the Company, to take up and pay for, the
remaining principal amount of the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase. If any
unpurchased Securities still remain, then the Company or the
Representative shall be entitled to an additional period of 24 hours
within which to procure another party or parties, members of the National
Association of Securities Dealers, Inc. (or if not members of such
Association, who are not eligible for membership in said Association and
who agree (i) to make no sales within the United States, its territories
or its possessions or to persons who are citizens thereof or residents
therein and (ii) in making sales to comply with said Association's Rules
of Fair Practice) 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
the Representative and the Company shall fail to procure a satisfactory
party or parties as above provided to purchase or agree to purchase such
unpurchased Securities, then the Company may either (i) require the
remaining Underwriters to purchase the principal amount of Securities
which they are obligated to purchase hereunder or (ii) terminate this
Agreement by giving prompt notice to the Representative. In the event that
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 the Company has not elected to require the
non-defaulting Underwriters to purchase the principal amount of Securities
which they are obligated to purchase hereunder, then this Agreement shall
terminate without any liability on the part of the Company or any
Underwriter (other than an Underwriter which shall have failed or refused,
in accordance with the terms hereof, to purchase and pay for the principal
amount of the Securities which such Underwriter has agreed to purchase as
provided in paragraph 4 hereof), except as otherwise provided in paragraph
7 and paragraph 8 hereof.
7. Covenants of the Company. The Company covenants with each Underwriter
that:
(a) As soon as possible after the execution and delivery of this
Agreement, the Company will file the Prospectus with the Commission
pursuant to Rule 424, setting forth, among other things, the necessary
information with respect to the terms of offering of the Securities. 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, heretofore or hereafter made, (other than those relating solely
to 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 as the Representative may reasonably
request for the purposes required by the Securities Act.
(b) During such period (not exceeding nine months) after the
commencement of the offering of the Securities as the Underwriters may be
required by law to deliver a Prospectus, if
-5-
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 opinion should be set forth in a supplement to or an
amendment of the Prospectus in order to make the Prospectus not misleading
in the light of the circumstances when it is delivered to a purchaser, or
if it is necessary to amend the Prospectus to comply with the Securities
Act, the Company will forthwith at its expense prepare and furnish to the
Underwriters and dealers named by the Representative a reasonable number
of copies of a supplement or supplements or an amendment or amendments to
the Prospectus which will supplement or amend the Prospectus so that as
supplemented or amended it will comply with the Securities Act and will
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading. In case any Underwriter is required to deliver
a Prospectus after the expiration of nine months after the commencement of
the offering of the Securities, the Company, upon the request of the
Representative, will furnish to the Representative, at the expense of such
Underwriter, a reasonable quantity of a supplemented or amended
prospectus, or supplements or amendments to the Prospectus, complying with
Section 10(a) of the Securities Act.
(c) The Company will make generally available to its security
holders, as soon as reasonably practicable, but in any event not later
than 16 months after the end of the fiscal quarter in which the filing of
the Prospectus pursuant to Rule 424 occurs, an earnings statement (in form
complying with the provisions of Section 11(a) of the Securities Act,
which need not be certified by independent public accountants) covering a
period of twelve months beginning not later than the first day of the
Company's fiscal quarter next following the filing of the Prospectus
pursuant to Rule 424.
(d) The Company will use its best efforts promptly to do and perform
all things to be done and performed by it hereunder prior to the Closing
Date and to satisfy all conditions precedent to the delivery by it of the
Securities.
(e) The Company will advise the Representative promptly of the
filing of the Prospectus pursuant to Rule 424 and of any amendment or
supplement to the Prospectus or Registration Statement or of official
notice of institution of proceedings for, or the entry of, a stop order
suspending the effectiveness of the Registration Statement and, if such a
stop order should be entered, use its best efforts to obtain the prompt
removal thereof.
(f) The Company will use its best efforts to qualify the Securities,
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. The fees and disbursements of
Underwriters' counsel shall be paid by the Underwriters (subject, however,
to the provisions of paragraph 8 requiring payment by the Company of fees
and expenses not to exceed $5,000); provided, however, that if this
Agreement is terminated in accordance with the provisions of paragraph 9,
10 or 12, 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 this paragraph 7 and in paragraph 8. The Company shall not
-6-
in any event be liable to any of the Underwriters for damages on account
of the loss of anticipated profit.
8. Payment of Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the printing
and filing of the Registration Statement and the printing of this Agreement,
(ii) the delivery of the Securities to the Underwriters, (iii) the fees and
disbursements of the Company's counsel and accountants, (iv) the expenses in
connection with the qualification of the Securities under securities laws in
accordance with the provisions of paragraph 7(f), including filing fees and the
fees and disbursements of counsel for the Underwriters in connection therewith,
and in connection with the preparation of the Blue Sky Survey and any Legality
Memorandum, such fees and disbursements not to exceed $5,000, (v) the printing
and delivery to the Underwriters of copies of the Registration Statement and all
amendments thereto, of the preliminary prospectuses, and of the Prospectus and
any amendments or supplements thereto, (vi) the printing and delivery to the
Underwriters of copies of the Blue Sky Survey and Legality Memorandum, (vii) the
preparation, execution, filing and recording by the Company of the Supplemental
Indenture (such filing and recordation to be promptly made, after execution and
delivery of such Supplemental Indenture to the Trustees under the Mortgage and
Indenture in the counties in which the mortgaged property of the Company is
located); and the Company will pay all taxes, if any (but not including any
transfer taxes), on the issue of the Securities and the filing and recordation
of the Supplemental Indenture, and (viii) any filings required in order to
perfect the interests of the Trustee in the New Bonds and the proceeds thereof.
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, 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 threatened by, the Commission on
the Closing Date, and the Representative shall have received, prior to
payment for the Securities, a certificate dated the Closing Date and
signed by the Chairman, President or a Vice President of the Company to
the effect that no such stop order is in effect and that no proceedings
for such purpose are pending before or, to the knowledge of the Company,
threatened by the Commission.
(b) At the time of execution of this Agreement, or such later date
as shall have been consented to by the Representative, there shall have
been issued and on the Closing Date there shall be in full force and
effect orders of the North Carolina Utilities Commission and the South
Carolina Public Service Commission authorizing the issuance and sale of
the Securities and the New Bonds, none of which shall contain any
provision unacceptable to the Representative by reason of its being
materially adverse to the Company (it being understood that no such order
in effect on the date of this Agreement and heretofore furnished to the
Representative or counsel for the Underwriters, contains any such
unacceptable provision).
(c) At the Closing Date, the Representative shall receive favorable
opinions from: (1) Hunton & Xxxxxxxx, of counsel to the Company, which
opinion shall be satisfactory in form and substance to counsel for the
Underwriters, and (2) counsel for the Underwriters, in each of which
opinions said counsel (except Hunton & Xxxxxxxx as to North Carolina law)
may rely as to all matters of North Carolina and South Carolina law upon
the opinions of Xxxxxxx X. Xxxxxxx,
-7-
Esq., Vice President-Legal and Secretary for the Company, and [South
Carolina counsel], respectively, 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, and is a valid and binding obligation of the Company
enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws affecting mortgagees' and other
creditors' rights and general equitable principles;
(ii) The Mortgage has been duly and validly authorized by all
necessary corporate action (with this opinion only required in the
Hunton & Xxxxxxxx opinion as to the original Mortgage, the
Sixty-Fourth Supplemental Indenture, and subsequent Supplemental
Indentures), has been duly and validly executed and delivered (with
this opinion only required in the Hunton & Xxxxxxxx opinion as to
the Sixty-Fourth Supplemental Indenture and subsequent Supplemental
Indentures), and is a valid and binding mortgage of the Company
enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws affecting mortgagees' and other
creditors' rights and general equitable principles; provided,
however, that certain remedies, waivers and other provisions of the
Mortgage may not be enforceable, but such unenforceability will not
render the Mortgage invalid as a whole or affect the judicial
enforcement of (i) the obligation of the Company to repay the
principal, together with the interest thereon as provided in the New
Bonds or (ii) the right of the Trustees to exercise their right to
foreclose under the Mortgage;
(iii) The Mortgage and the Indenture have been duly qualified
under the 1939 Act;
(iv) Assuming authentication by the Trustees in accordance
with the Mortgage and the Indenture and delivery to and payment for
the Securities by the Underwriters, as provided in this Agreement,
the Securities and the New Bonds are legal, valid and binding
obligations of the Company enforceable in accordance with their
terms, except as limited by bankruptcy, insolvency or other laws
affecting mortgagees' and other creditors' rights and general
equitable principles, the Securities are entitled to the benefit of
the security afforded by the Indenture and are secured equally and
ratably with all other Senior Notes issued under the Indenture
except insofar as any sinking or other fund may afford additional
security for the Senior Notes of any particular series, and the New
Bonds are entitled to the benefits of the security afforded by the
Mortgage, and are secured equally and ratably with all other bonds
outstanding under the Mortgage except insofar as any sinking or
other fund may afford additional security for the bonds of any
particular series;
(v) The statements made in the Prospectus under the captions
"Description of First Mortgage Bonds" and "Description of Senior
Notes" and in the Prospectus Supplement titled "Description of the
Offered Securities" insofar as they purport to constitute summaries
of the documents referred to therein, are correct in all material
respects;
(vi) This Agreement has been duly and validly authorized,
executed and delivered by the Company;
-8-
(vii) The Registration Statement, at the time and date it was
declared effective by the Commission, and the Prospectus, at the
time it was filed with, or transmitted for filing to, the Commission
pursuant to Rule 424, (except as to the financial statements and
other financial and statistical data constituting a part thereof or
incorporated by reference therein, upon which such opinions need not
pass), complied as to form in all material respects with the
requirements of the Securities Act and the 1939 Act and the
applicable instructions, rules and regulations of the Commission
thereunder; the documents or portions thereof filed with the
Commission pursuant to the Exchange Act and deemed to be
incorporated by reference in each Registration Statement and the
Prospectus pursuant to Item 12 of Form S-3 (except as to financial
statements and other financial and statistical data constituting a
part thereof or incorporated by reference therein, upon which such
opinions need not pass), at the time they were filed with the
Commission, complied as to form in all material respects with the
requirements of the Exchange Act and the applicable instructions,
rules and regulations of the Commission thereunder; the Registration
Statement has become effective under the Securities Act and, to the
best of the knowledge of said counsel, no proceedings for a stop
order with respect thereto are threatened or pending under Section 8
of the Securities Act;
(viii) Nothing has come to the attention of said counsel that
would lead them to believe that either Registration Statement, at
the time and date it was declared 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 or that the Prospectus, at the
time it was filed with, or transmitted for filing to, the Commission
pursuant to Rule 424 or at the Closing Date, included or includes an
untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading (except as to financial statements and other financial
and statistical data constituting a part of the Registration
Statement or the Prospectus or incorporated by reference therein,
upon which such opinions need not pass);
(ix) Orders have been entered by the North Carolina Utilities
Commission and the South Carolina Public Service Commission
authorizing the issuance and sale of the Securities and the New
Bonds, and to the best of the knowledge of said counsel, said orders
are still in force and effect; and no further approval,
authorization, consent or other order of any public board or body
(except such as have been obtained under the Securities Act and as
may be required under the state securities or Blue Sky laws of any
jurisdiction) is legally required for the consummation of the
transactions contemplated in this Agreement.
(d) At the Closing Date, the Representative shall receive from
Xxxxxxx X. Xxxxxxx, Esq., Vice President and Secretary for the Company, a
favorable opinion in form and substance satisfactory to counsel for the
Underwriters, to the same effect with respect to the matters enumerated in
subdivisions (i) through (vi) and subdivisions (viii) and (ix) of
subparagraph (c) of this paragraph 9 as the opinions required by said
subparagraph (c), and to the further effect that:
(i) The Company is a validly organized and existing
corporation and is in good standing under the laws of the State of
North Carolina and is duly qualified to do business and is doing
business in that State and in the State of South Carolina;
-9-
(ii) The Company is duly authorized by its Charter to conduct
the business which it is now conducting as set forth in the
Prospectus;
(iii) The Company has valid and subsisting franchises,
licenses and permits free from burdensome restrictions and adequate
for the conduct of its business;
(iv) The information contained in the Prospectus, which is
stated therein to have been made in reliance upon the opinion of
said counsel has been reviewed by said counsel and is correct;
(v) The Company has good and marketable title, with minor
exceptions, restrictions and reservations in conveyances, and
defects, which are of the nature ordinarily found in properties of
similar character and magnitude, and which, in his opinion, cannot
in any substantial way impair the security afforded by the Mortgage,
to all the properties described in the granting clauses of the
Mortgage and upon which the Mortgage purports to create a lien,
except certain rights-of-way over private property on which are
located transmission and distribution lines formerly owned by the
Tide Water Power Company (merged into the Company on February 29,
1952), title to which can be perfected by condemnation proceedings.
The description in the Mortgage of the above-mentioned properties
(including those formerly owned by Tide Water Power Company) is
legally sufficient to constitute the Mortgage a lien upon said
properties. Said properties constitute substantially all the
permanent physical properties and franchises of the Company and are
held by the Company free and clear of all liens and encumbrances
except the lien of the Mortgage and Excepted Encumbrances, as
defined in the Mortgage. The Company has followed the practice
generally of purchasing rights-of-way and easements and certain
small parcels of fee property appurtenant thereto and for use in
conjunction therewith, and certain other properties of small or
inconsequential value, without an examination of title and, as to
the title to lands affected by rights-of-way and easements, of not
examining the title of the lessor or grantor whenever the lands
affected by such rights-of-way and easements are not of such
substantial value as in the opinion of the Company to justify the
expense attendant upon examination of titles in connection
therewith. In his opinion such practice of the Company is consistent
with good practice and with the method followed by other companies
engaged in the same business and is reasonably adequate to assure
the Company of good and marketable title to all such property
acquired by it. It is his opinion that any such conditions or
defects as may be covered by the above recited exceptions are not,
except as to certain rights-of-way on which are located transmission
lines acquired from Tide Water Power Company, substantial and would
not interfere with the Company's business operations. The Company
has the right of eminent domain in the States of North Carolina and
South Carolina under which it may, if necessary, perfect or obtain
title to privately owned land or acquire easements or rights-of-way
required for use or used by the Company in its public utility
operations;
(vi) The Company's Mortgage and Deed of Trust dated as of May
1, 1940 and the First through the Sixty-fifth Supplemental
Indentures thereto have been recorded and filed in such manner and
in such places as may be required by law in order fully to preserve
and protect the security of the bondholders and all rights of the
Trustees thereunder; and the Supplemental Indenture relating to the
Securities is in proper form for filing for record both as a real
estate mortgage and as a security interest in all
-10-
counties in the States of North Carolina and South Carolina in which
any of the property described therein or in the Mortgage as subject
to the lien of the Mortgage is located;
(vii) The Mortgage constitutes a valid first mortgage lien of
record upon all the franchises and properties now owned by the
Company (other than those expressly excepted therefrom) situated in
the States of North Carolina and South Carolina, as described or
referred to in the granting clauses of the Mortgage, subject to the
exceptions as to bankruptcy, insolvency and other laws stated in
subdivision (ii) of subparagraph (c) above; and
(viii) The issuance and sale of the Securities and the
issuance and delivery of the New Bonds have been duly authorized by
all necessary corporate action on the part of the Company.
In said opinion such counsel may rely as to all matters of South Carolina law
(except as to paragraph (v)) on the opinion of [South Carolina counsel].
(e) At the Closing Date, the Representative shall receive from
[South Carolina counsel], a favorable opinion in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company is duly qualified to engage in the business in
which it is engaged in the State of South Carolina;
(ii) The Company's Mortgage and Deed of Trust dated as of May
1, 1940 and the First through the Sixty-fifth Supplemental
Indentures thereto have been recorded and filed in such manner and
in such places as may be required by law in order fully to preserve
and protect the security of the bondholders and all rights of the
Trustees thereunder; and the Supplemental Indenture relating to the
New Bonds is in proper form for filing for record both as a real
estate mortgage and as a security interest in all counties in the
State of South Carolina in which any of the property described
therein or in the Mortgage as subject to the lien of the Mortgage is
located;
(iii) The Company holds valid and subsisting franchises,
licenses and permits in South Carolina authorizing it to carry on
the utility business in which it is engaged in South Carolina; and
(iv) They have reviewed the opinion letter of even date
therewith addressed to you by Xxxxxxx X. Xxxxxxx, Esq., Vice
President and Secretary for the Company, and they concur in the
opinions which he has expressed therein insofar as they relate to
the laws of the State of South Carolina.
(f) At the time of execution of this Agreement and at the Closing
Date, the Representative shall have received from Deloitte & Touche LLP
letters, dated respectively the date of this Agreement and the Closing
Date, confirming that they are independent certified public accountants
within the meaning of the Securities Act and the Exchange Act, and of the
applicable published rules and regulations thereunder, and stating in
effect that: (i) in their opinion, the audited financial statements
incorporated by reference in the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of
the
-11-
Securities Act or the Exchange Act, as applicable, and of the published
rules and regulations thereunder; (ii) based on the performance of the
procedures specified by the American Institute of Certified Public
Accountants for review of interim financial information as described in
Statement on Auditing Standards ("SAS") No. 71, Interim Financial
Information, on the unaudited financial statements incorporated by
reference in the Registration Statement, inquiries of officials of the
Company responsible for financial and accounting matters and reading the
minutes of meetings of the Board of Directors, of the Executive Committee
of the Board of Directors and of the shareholders, nothing came to their
attention that caused them to believe that (A) the unaudited financial
statements incorporated by reference in the Registration Statement do not
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act or the Exchange Act, as applicable, and
the published rules and regulations thereunder or any material
modifications should be made for them to be in conformity with generally
accepted principles applied on a basis substantially consistent with that
of the most recent audited financial statements incorporated by reference
in the Registration Statement; or (B) at the date of the latest available
interim balance sheet read by them and at a subsequent date not more than
five days prior to the date of each such letter, there was any change in
the capital stock or long-term debt of the Company, or at the date of the
latest available interim balance sheet read by them, there was any
decrease in net assets as compared with the amount shown on the most
recent balance sheet incorporated by reference in the Registration
Statement, except for changes or decreases that the Registration Statement
discloses have occurred or may occur, for declarations of dividends, for
common stock sales under the Automatic Dividend Reinvestment and Customer
Stock Ownership Plan and Stock Purchase-Savings Plan, or for changes or
decreases that are described in such letter; and (iii) covering such other
matters as the Representative shall reasonably request.
(g) At the Closing Date, the Representative shall receive a
certificate of the Chairman, President or a Vice President of the Company,
dated the Closing Date, to the effect that the representations and
warranties of the Company in this Agreement are true and correct as of the
Closing Date.
(h) All legal proceedings taken in connection with the sale and
delivery of the Securities shall have been satisfactory in form and
substance to counsel for the Underwriters.
In case any of the conditions specified above in this paragraph 9 shall
not have been fulfilled at the Closing Date, this Agreement may be terminated by
the Representative by mailing or 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.
10. Conditions of the Company's Obligations. The obligations of the
Company to deliver the Securities and the New Bonds shall be subject to the
following conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date, and no proceedings for
that purpose shall be pending before or threatened by the Commission on
the Closing Date.
(b) Prior to 12 Noon, New York Time, on the day following the date
of this Agreement, or such later date as shall have been consented to by
the Company, there shall have been issued and on the Closing Date there
shall be in full force and effect orders of the North Carolina Utilities
Commission and the South Carolina Public Service Commission authorizing
the issuance and sale by the Company of the Securities and the New Bonds,
none of which shall
-12-
contain any provision unacceptable to the Company by reason of its being
materially adverse to the Company (it being understood that no such order
in effect as of the date of this Agreement contains any such unacceptable
provision).
In case any of the conditions specified in this paragraph 10 shall not
have been fulfilled at the Closing Date, this Agreement may be terminated by the
Company by mailing or delivering written notice thereof to the Representative.
Any such termination shall be without liability of any party to any other party
except as otherwise provided in paragraphs 7 and 8.
11. Indemnification.
(a) The Company agrees to indemnify and hold harmless 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 under the Securities Act or under any other
statute or common law and to reimburse each such Underwriter and
controlling person for any legal or other expenses (including to the
extent hereinafter provided, reasonable counsel fees) incurred by them 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, any preliminary
prospectus 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 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 information furnished
herein or in writing to the Company by any Underwriter through the
Representative for use in the Registration Statement or Prospectus, or any
amendment or supplement to either thereof, or arising out of, or based
upon, statements in or omissions from that part of the Registration
Statement which shall constitute the Statements of Eligibility under the
1939 Act (Forms T-1 and T-2) of the Trustees under the Mortgage and the
Trustee under the Indenture, and provided, further, that the indemnity
agreement contained in this paragraph 11 shall not inure to the benefit of
any Underwriter (or of any person controlling such Underwriter) on account
of any such losses, claims, damages, liabilities, expenses or actions
arising from the sale of the Securities to any person if a copy of the
Prospectus (excluding documents incorporated by reference therein) shall
not have been given or sent to such person by or on behalf of such
Underwriter with or prior to the written confirmation of the sale
involved, unless such Prospectus failed to correct the omission or
statement. The indemnity agreement of the Company contained in this
paragraph 11 and the representations and warranties of the Company
contained in paragraph 3 hereof shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any
Underwriter or any such 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 controlling person,
in connection with the sale of the Securities.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its officers and directors, and each person who controls the
Company within the meaning of
-13-
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 under the Securities Act or under any other statute or
common law, and to reimburse each of them for any legal or other expenses
(including, to the extent hereinafter provided, reasonable counsel fees)
incurred by them 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 or
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 through
the Representative for use in the Registration Statement or the Prospectus
or any amendment or supplement to either 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 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 and directors, or any person controlling it as aforesaid, in
respect of which indemnity may be sought on account of any indemnity
agreement contained herein, it will promptly give written notice of the
commencement thereof to the party or parties against whom indemnity shall
be sought hereunder. The Company and each of the Underwriters agree that
the notification realized 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 which it or they may have to the indemnified
party on account of any indemnity agreement contained herein but shall not
relieve such indemnifying party or parties from any liability which 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 in any such action include both the indemnified
party and the indemnifying party and counsel for the indemnifying party
shall have reasonably concluded 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 representing the indemnified parties who are parties
to such action).
-14-
(d) If the indemnification provided for in subparagraphs (a) or (b)
above shall be unenforceable under applicable law by an indemnified party,
each indemnifying party agrees to contribute to such indemnified party
with respect to any and all losses, claims, damages, liabilities and
expenses for which each indemnification provided for in such subparagraphs
(a) or (b) shall be unenforceable, in such proportion as shall be
appropriate to reflect the relative fault of each indemnifying party on
the one hand and the indemnified party on the other in connection with the
statements or omissions which have resulted in such losses, claims,
damages, liabilities, and expenses, as well as any other relevant
equitable considerations; provided, however, that no indemnified party
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act), shall be entitled to contribution from any
indemnifying party not guilty of such fraudulent misrepresentation.
Relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or the indemnified party
and each such party's relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission.
The Company and each of the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subparagraph 11(d) were to
be determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
above. The Underwriters' respective obligations to contribute pursuant to
this subparagraph 11(d) are several and not joint.
(e) For purposes of this paragraph 11, it is understood and agreed
that [_______________________________] constitute the only information
provided by the Underwriters for inclusion in the Registration Statement
and the Prospectus.
12. Termination Date of this Agreement. This Agreement may be terminated
by the Representative at any time prior to the Closing Date by mailing or
delivering written notice thereof to the Company, if prior to such time (a)
there shall have occurred any general suspension of trading in securities on the
New York or Pacific Stock Exchange, or there shall have been established by the
New York or Pacific Stock Exchange or by the Commission or by any federal or
state agency or by the decision of any court any limitation on prices for such
trading or any restrictions on the distribution of securities, or (b) there
shall have occurred any new outbreak of hostilities, including, but not limited
to, an escalation of hostilities which existed prior to the date of this
Agreement, or other national or international calamity or crisis, the effect of
which on the financial markets of the United States shall be such as to make it
impracticable, in the reasonable judgment of the Representative, for the
Underwriters to enforce contracts for the sale of the Securities, or (c) the
Company shall have sustained a substantial loss by fire, flood, accident or
other calamity which renders it impracticable, in the reasonable judgment of the
Representative, to consummate the sale of the Securities and the delivery of the
Securities by the several Underwriters at the initial public offering price or
(d) there shall have been any downgrading or any notice of any intended or
potential downgrading in the rating accorded the Company's securities by any
"nationally recognized statistical rating organization" as that term is defined
by the Commission for the purposes of Securities Act Rule 436(g)(2), that, 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.
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 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.
-15-
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.
13. Miscellaneous. The validity and interpretation of this Agreement shall
be governed by the laws of the State of New York. Unless otherwise specified,
time of day refers to New York City time. This Agreement shall inure to the
benefit of, and be binding upon, the Company, the several Underwriters, and with
respect to the provisions of paragraph 11, the officers and directors and each
controlling person referred to in paragraph 11, 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. Notices. All communications hereunder shall be in writing or by
telegram and, if to the Underwriters, shall be mailed, transmitted by any
standard form of telecommunication or delivered to the Representative at the
address set forth in Schedule I hereto and if to the Company, shall be mailed or
delivered to it at 000 Xxxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000-0000,
attention of Xxxx X. Xxxxxxx, Treasurer.
15. 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.
16. Defined Terms. Unless otherwise defined herein, capitalized terms used
in this Underwriting Agreement shall have the meanings assigned to them in the
Registration Statement.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed duplicate hereof
whereupon it will become a binding agreement between the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
CAROLINA POWER & LIGHT COMPANY
By:
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 II.
[NAME OF REPRESENTATIVE]
By
SCHEDULE I
Underwriting Agreement dated ___________, ____
Registration Statements No. 333-________
Representative and Address:
Designation: [Title of Securities]
Principal Amount: $___________
Secured by: __________________
Indenture dated as of _________, ____
Date of Maturity: ___________, ____
Interest Rate: ____% per annum, payable ___________ __ and ___________ __ of
each year, commencing ____________, ____.
Purchase Price: _____% of the principal amount thereof, plus accrued interest
from _______________ to the date of payment and delivery.
Public Offering Price: ____% of the principal amount thereof, plus accrued
interest from ____________ to the date of payment and delivery.
Redemption Terms:
Closing Date and Location:
---------------, ----
Hunton & Xxxxxxxx
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
SCHEDULE II
Underwriters Principal Amount
------------ ----------------
TOTAL.............................
