CAROLINA POWER & LIGHT COMPANY d/b/a PROGRESS ENERGY CAROLINAS, INC. Preferred Stock1 UNDERWRITING AGREEMENT
Exhibit 1(d)
CAROLINA POWER & LIGHT COMPANY
d/b/a PROGRESS ENERGY CAROLINAS, INC.
d/b/a PROGRESS ENERGY CAROLINAS, INC.
Preferred Stock1
, 20__
To the Representative named in Schedule I hereto
of the Underwriters named in Section 1 herein
of the Underwriters named in Section 1 herein
Dear Ladies and Gentlemen:
The undersigned, Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. (the
“Company”), hereby confirms its agreement with each of the several Underwriters hereinafter named
as follows:
1. Underwriters and Representative. The term “Underwriters” as used in this
Underwriting Agreement (this “Agreement”) shall be deemed to mean the following firms, and any
underwriter substituted as provided in paragraph 7 hereof, and the term “Underwriter” shall be
deemed to mean one of such Underwriters:
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[ ]
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The term “Representative” as used herein shall be deemed to mean the firm or the firms named
in Schedule I hereto, collectively. If any firm or firms named as Representative in Schedule I
hereto are the only firm or firms serving as underwriters, then the terms “Underwriters” and
“Representative,” as used herein, shall each be deemed to refer to such firm or firms. If more
than one firm is named in Schedule I hereto, such firms represent, jointly and severally, that they
have been authorized by the Underwriters to execute this Agreement on their behalf and to act for
them as Representative in the manner herein provided. All obligations of the Underwriters
hereunder are several and not joint. If more than one firm is named as Representative in Schedule
I hereto, any action under or in respect of this Agreement may be taken by such firms jointly as
the Representative or by one of the firms acting on behalf of the Representative, and such action
will be binding upon all the Underwriters.
2. Description of Securities. The Company proposes to issue and sell to the several
Underwriters shares of its preferred stock (no par value) in the amount specified in
Schedule I hereto (the “Firm Shares”). The Company also proposes to issue and sell to the several
Underwriters not more than an additional shares of its preferred stock (no
| 1 | Class of preferred stock ($5 Preferred Stock, Serial Preferred Stock or Preferred Stock A) to be determined at time of offering. |
par value) (the “Option Shares”) if and to the extent the Representative shall have determined
to exercise, on behalf of the Underwriters, the right to purchase such shares of preferred stock
granted to the Underwriters in paragraph 4 hereof. The Firm Shares and the Option Shares are
hereinafter collectively referred to as the “Shares.” The shares of preferred stock (no par value)
of the Company to be outstanding after giving effect to the sales contemplated hereby are
hereinafter referred to as the “Preferred Stock.” The terms of the Shares will be set forth in an
amendment to the Company’s Restated Charter relating to the preferred stock (“Articles of
Amendment”) to be filed by the Company with the Secretary of State of the State of North Carolina
(“NCSOS”).
3. Representations and Warranties of the Company. The Company represents and warrants
to each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3, as amended (No. 333- ) (the “New
Registration Statement”) under the Securities Act of 1933, as amended (the “Securities
Act”), for the registration of up to an aggregate of $ principal amount of First
Mortgage Bonds, Senior Notes, Debt Securities and Preferred Stock in unallocated amounts.
The New Registration Statement also constituted post-effective amendment no. 1 to a
registration statement on Form S-3 (No. 333- ) (the “Post-Effective Amendment” and
together with the New Registration Statement, the “Registration Statement”) under the
Securities Act relating to an aggregate of $ principal amount of the Company’s
securities, which had been previously registered under the Securities Act but remained
unsold at the time the Post-Effective Amendment became effective. The Registration
Statement contained a combined prospectus for the sale of up to an aggregate of $
principal amount of the Company’s First Mortgage Bonds, Senior Notes, Debt Securities and
Preferred Stock (the “Registered Securities”) in unallocated amounts. The Registration
Statement was declared effective by the Commission on , 20_. As of the date
hereof, the Company has sold an aggregate of $ principal amount of the Registered
Securities. The term “Registration Statement” shall be deemed to include all amendments to
the date hereof and all documents incorporated by reference therein (the “Incorporated
Documents”). The base prospectus filed as part of the Registration Statement, in the form
in which it has most recently been filed with the Commission prior to the date of this
Agreement, is hereinafter called the “Basic Prospectus.” The Basic Prospectus included in
the Registration Statement, as supplemented by a preliminary prospectus supplement, dated
, 20___, relating to the Shares, and all prior amendments or supplements thereto
(other than amendments or supplements relating to Registered Securities other than the
Shares), including the Incorporated Documents, is hereinafter referred to as the
“Preliminary Prospectus.” The Preliminary Prospectus, as amended and supplemented,
including the Incorporated Documents, at or immediately prior to the Applicable Time (as
defined below) is hereinafter called the “Pricing Prospectus.” The Basic Prospectus
included in the Registration Statement, as it is to be supplemented by a prospectus
supplement, dated on the date hereof, substantially in the form delivered to the
Representative prior to the execution hereof, relating to the Shares (the “Prospectus
Supplement”) and all prior amendments or supplements thereto (other than amendments or
supplements relating to securities of the Company other than the
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Shares), including the Incorporated Documents, is hereinafter referred to as the
“Prospectus.” Any reference herein to the terms “amend,” “amendment” or “supplement” with
respect to the Registration Statement or the Prospectus shall be deemed to refer to and
include any post-effective amendment to the Registration Statement, any prospectus
supplement relating to the Securities filed with the Commission pursuant to Rule 424(b)
under the Securities Act and the filing of any document under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), deemed to be incorporated therein after the date
hereof and prior to the termination of the offering of the Shares by the Underwriters; and
any references herein to the terms “Registration Statement” or “Prospectus” at a date after
the filing of the Prospectus Supplement shall be deemed to refer to the Registration
Statement or the Prospectus, as the case may be, as each may be amended or supplemented
prior to such date.
For purposes of this Agreement, the “Applicable Time” is (New York City time)
on the date of this Agreement; the documents listed in Schedule II, taken together, are
collectively referred to as the “Pricing Disclosure Package.”
(b) The Registration Statement, at the time and date it was declared effective by the
Commission, complied, and the Registration Statement and the Prospectus, 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 applicable rules and
regulations of the Commission thereunder; the Registration Statement, at the time and date
it was declared effective by the Commission and as of the date hereof, did not contain an
untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; the Pricing Disclosure
Package as of the Applicable Time did not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and the Prospectus,
as of its date and at the Closing Date, will not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; provided,
however, that the foregoing representations and warranties in this subparagraph (b) shall
not apply to statements or omissions made in reliance upon and in conformity with the
Underwriter Information (as defined in paragraph 12(e)). The Incorporated Documents, at the
time 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 Shares by the Underwriters will,
at the time 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, the Pricing Prospectus, the
Permitted Free Writing Prospectuses (as defined in paragraph 6(a) hereof) and the
Prospectus, none of such documents included or includes or will include any untrue statement
of a material fact or omitted or omits or will omit to state any material fact required to
be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Each Permitted Free Writing
Prospectus listed on
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Schedule II does not conflict in any material respect with the information contained in
the Registration Statement, the Pricing Prospectus or the Prospectus.
(c) The Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of North Carolina; has corporate power and
authority to own, lease and operate its properties and to conduct its business as
contemplated under this Agreement and the other material agreements to which it is a party;
and is duly qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the failure to so
qualify would not have a material adverse effect on the business, properties, results of
operations or financial condition of the Company.
(d) The historical financial statements incorporated by reference in the Registration
Statement, the Pricing Prospectus and the Prospectus present fairly the financial condition
and operations of the Company at the respective dates or for the respective periods to which
they apply; such financial statements have been prepared in each case in accordance with
generally accepted accounting principles consistently applied throughout the periods
involved, except that the quarterly financial statements, if any, incorporated by reference
from any Quarterly Reports on Form 10-Q contain condensed footnotes prepared in accordance
with applicable Exchange Act rules and regulations; and Deloitte & Touche LLP, which has
audited certain of the financial statements is an independent registered public accounting
firm as required by the Securities Act or the Exchange Act and the rules and regulations of
the Commission thereunder.
(e) Except as reflected in, or contemplated by, the Registration Statement and the
Pricing Prospectus, since the respective dates as of which information is given in the
Registration Statement and the Pricing Prospectus, and prior to the Closing Date, (i) there
has not been any material adverse change in the business, properties, results of operations
or financial condition of the Company, (ii) there has not been any material transaction
entered into by the Company other than transactions contemplated by the Registration
Statement and the Pricing Prospectus or transactions arising in the ordinary course of
business and (iii) the Company has no material contingent obligation that is not disclosed
in the Registration Statement and the Pricing Prospectus that could likely result in a
material adverse change in the business, properties, results of operations or financial
condition of the Company.
(f) The Company has full power and authority to execute, deliver and perform its
obligations under this Agreement. The execution and delivery of this Agreement, the
consummation of the transactions herein contemplated and the fulfillment of the terms hereof
on the part of the Company to be fulfilled have been duly authorized by all necessary
corporate action of the Company in accordance with the provisions of its restated charter
(the “Charter”), by-laws and applicable law.
(g) The consummation of the transactions herein contemplated and the fulfillment of the
terms hereof will not result in a breach of any of the terms or provisions
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of, or constitute a default under, the Charter, the Company’s by-laws, applicable law
or any indenture, mortgage, deed of trust or other agreement or instrument to which the
Company is now a party or any judgment, order, writ or decree of any government or
governmental authority or agency or court having jurisdiction over the Company or any of its
assets, properties or operations that, in the case of any such breach or default, would have
a material adverse effect on the business, properties, results of operations or financial
condition of the Company.
(h) The Shares conform in all material respects to the description thereof contained in
the Pricing Disclosure Package and the Prospectus.
(i) The Company has no subsidiaries that meet the definition of “significant
subsidiary” as defined in Section 210.1-02(w) of Regulation S-X promulgated under the
Securities Act.
(j) The authorized capital stock of the Company is 300,000 shares of $5 preferred
stock, 20,000,000 shares of serial preferred stock, 5,000,000 shares of preferred stock A,
10,000,000 shares of preference stock and 100,000,000 shares of common stock, of which
shares of $5 preferred stock were issued and outstanding, shares of
serial preferred shares were issued and outstanding, shares of preferred stock A
were issued and outstanding, no shares of preference stock were issued and outstanding and
shares of common stock are issued and outstanding (except for subsequent
issuances, if any, pursuant to this Agreement, or pursuant to agreements or employee benefit
plans referred to in the Pricing Prospectus). The shares of issued and outstanding capital
stock of the Company have been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the Company were issued
in violation of the preemptive or other similar rights, if any, of any securityholder of the
Company.
(k) The issuance of the Shares has been duly authorized by the Company and, when issued
and delivered in accordance with the terms of this Agreement, will be validly issued, fully
paid and non-assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights. The Articles of Amendment have been duly authorized and
adopted by the Company and will be effective upon filing with the NCSOS.
(l) [The Shares will, upon issuance, be listed on the New York Stock Exchange.]
(m) The Company is not an “investment company” within the meaning of the Investment
Company Act of 1940, as amended (the “1940 Act”).
(n) Except as described in or contemplated by the Pricing Prospectus, there are no
pending or, to the knowledge of the Company, threatened actions, suits or proceedings
against or affecting the Company or its properties that are likely, in the aggregate, to
result in any material adverse change in the business, properties, results of operations or
financial condition of the Company or that are likely, in the aggregate, to
materially and adversely affect the consummation of this Agreement or the transactions
contemplated herein or therein.
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(o) No filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations hereunder in connection with
the offering, issuance or sale of the Shares hereunder or the consummation of the
transactions herein contemplated, except such as have already been made or obtained or as
may be required under the Securities Act or state securities laws.
(p) The Company is not in violation of its Charter 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 is a party or by which it may be bound
or to which any of the property or assets of the Company 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.
(q) Except as described in the Pricing 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, the Company is not 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 that
individually or in the aggregate is expected by the Company to result in a material adverse
effect in the business, properties, results of operations or financial condition of the
Company or which individually or in the aggregate is expected by the Company to materially
and adversely affect the consummation of this Agreement or the transactions contemplated
herein or therein.
(r) There are no persons with registration rights or other similar rights to have any
securities registered pursuant to the Registration Statement or otherwise registered by the
Company under the Securities Act.
4. Purchase and Sale.
(a) On the basis of the representations, warranties and covenants herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to sell to each of
the Underwriters, severally and not jointly, and each such Underwriter agrees, severally and
not jointly, to purchase from the Company, the respective number of Shares set forth
opposite the name of such Underwriter below at a price of $ per share (the “Purchase
Price”).
| Underwriter | Number of Shares | |||
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Total |
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(b) On the basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, the Company agrees to sell to the Underwriters the
Option Shares, and the Underwriters shall have a right to purchase, severally and not
jointly, the Option Shares at the Purchase Price. Option Shares may be purchased as
provided in this paragraph 4 in whole or in part from time to time, on the Closing Date and
up to two times thereafter as provided herein, solely for the purpose of covering
overallotments made in connection with the offering of the Firm Shares. If any Option
Shares are to be purchased, each Underwriter agrees, severally and not jointly, to purchase
the number of Option Shares (subject to such adjustments to eliminate fractional shares as
the Representative may determine) that bears approximately the same proportion to the total
number of Option Shares to be purchased as the number of Firm Shares set forth in paragraph
4(a) opposite the name of such Underwriter bears to the total number of Firm Shares.
(c) The Company hereby agrees that, without the prior written consent of the
Representative, it will not during the period ending ___days after the date of this
Agreement (i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or warrant for
the sale of or otherwise transfer or dispose of, directly or indirectly, or to register or
announce the sale or offering of any shares of preferred stock of the Company or any
securities convertible into or exercisable or exchangeable for such preferred stock or (ii)
enter into any swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequences of ownership of such preferred
stock, whether any such swap or transaction described in clause (i) or (ii) above is to be
settled by delivery of such preferred stock or such other securities, in cash or otherwise.
(d) The foregoing subparagraph (c) shall not apply to (i) the Shares to be sold
hereunder; (ii) the issuance by the Company of shares of preferred stock upon the exercise
of an option or warrant or the conversion of a security outstanding on the date hereof of
which the Underwriters have been advised in writing and to which the Representative has
consented; and (iii) agreements or arrangements in connection with acquisition transactions
involving the issuance or sale of shares of preferred stock or relating to options, rights,
warrants or any securities convertible into or exercisable or exchangeable for shares of
preferred stock, where the acquisition transactions are consummated more than ___days after
the date of the Prospectus.
5. Reoffering by Underwriters. The Underwriters agree to make promptly a bona fide
public offering of the Shares to the public for sale as set forth in the Prospectus, subject,
however, to the terms and conditions of this Agreement. The Underwriters agree that (i) no sales
of the Shares will occur before investors are presented with the information that is contained in
the Pricing Disclosure Package and (ii) such information that is presented to investors is
consistent with the information that is contained in the Pricing Disclosure Package.
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6. Free Writing Prospectuses.
(a) The Company represents and agrees that, without the prior consent of the
Representative, it has not made and will not make any offer relating to the Shares that
would constitute a “free writing prospectus” as defined in Rule 405 under the Act, other
than a Permitted Free Writing Prospectus; each Underwriter represents and agrees that,
without the prior consent of the Company and the Representative, it has not made and will
not make any offer relating to the Securities that would constitute a “free writing
prospectus,” as defined in Rule 405 under the Act, other than a Permitted Free Writing
Prospectus or a free writing prospectus that is not required to be filed by the Company
pursuant to Rule 433 under the Securities Act (an “Underwriter Free Writing Prospectus”).
Any such free writing prospectus the use of which is consented to by the Company and the
Representative is referred to herein as a “Permitted Free Writing Prospectus”. The only
Permitted Free Writing Prospectus as of the time of this Agreement is the pricing term sheet
referred to in paragraph 6(b) below.
(b) The Company agrees to file a pricing term sheet, in the form of Schedule I hereto
and approved by the Representative pursuant to Rule 433(d) under the Securities Act within
the time period prescribed by such Rule.
(c) The Company and the Underwriters have complied and will comply with the
requirements of Rule 433 under the Securities Act applicable to any free writing prospectus,
including timely Commission filing where required and legending.
(d) The Company agrees that if at any time following issuance of a Permitted Free
Writing Prospectus any event occurred or occurs as a result of which such Permitted Free
Writing Prospectus would conflict in any material respect with the information in the
Registration Statement, the Pricing Prospectus or the Prospectus or include an untrue
statement of a material fact or omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances then prevailing, not misleading, the
Company will give prompt notice thereof to the Representative and, if requested by the
Representative, will prepare and furnish without charge to each Underwriter a Permitted Free
Writing Prospectus or other document which will correct such conflict, statement or
omission; provided, however, that this representation and warranty shall not apply to any
statements or omissions in a Permitted Free Writing Prospectus made in reliance upon and in
conformity with information furnished in writing to the Company by an Underwriter through
the Representative, expressly for use therein.
7. Time and Place of Closing; Default of Underwriters.
(a) Payment for the Firm Shares shall be made at the office of Hunton & Xxxxxxxx LLP,
located at 000 Xxxxxxxxxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000 on the date specified
in Schedule I hereto against delivery of the Shares to the office of the Representative, or
such other place and date as the Representative and the Company may agree. Payment for the
Firm Shares shall be by wire transfer of immediately available funds against delivery of the
Firm Shares to the Representative or upon its order at the office of the Representative, at
10:00 A.M., New York City time, on the third business day (unless postponed in accordance
with the provisions of this Agreement) following the date of this Agreement, or if pricing
takes place after 4:30 P.M. New York City time, on
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the fourth business day following the date of this Agreement (unless postponed in
accordance with the provisions of this Agreement), or at such other time on the same or such
other earlier date, as shall be agreed upon by the Representative and the Company. The hour
and date of such delivery and payment are herein referred to as the “Closing Date.”
(b) Payment for all or any portion of the Option Shares shall be made from time to time
by or on behalf of the several Underwriters by the wire transfer of immediately available
funds to the Company’s account. Such payment shall be made upon delivery of such Option
Shares to the Representative or upon its order at the office of the Representative, at 10:00
A.M., New York City time, on the third business day (unless postponed in accordance with the
provisions of this Agreement) following the giving of the notice described below, but in no
event on more than two such dates in addition to the Closing Date, each as shall be
designated in written notices from the Representative to the Company of the Representative’s
determination, on behalf of the Underwriters, to purchase a number, specified in said
notices, of Option Shares, or on such other date as shall be agreed upon by the
Representative and the Company. The time and date of any such payments are hereinafter
referred to as an “Option Closing Date” (the Closing Date or any Option Closing Date, as
applicable, is hereinafter referred to as the “Relevant Closing Date”). The notices of a
determination to exercise the option to purchase all or any portion of the Option Shares and
of an Option Closing Date may be given at any time within 30 days after the date of this
Agreement.
(c) On the Relevant Closing Date, the Company shall deliver, or cause to be delivered a
credit representing the Firm Shares or the Option Shares, as the case may be, to an account
or accounts at The Depository Trust Company as designated by the Representative for the
accounts of the Representative and the several Underwriters against the irrevocable release
of a wire transfer of immediately available funds for the amount of the purchase price
therefor. Time shall be of the essence, and delivery at the time and place specified in
this Agreement is a further condition to the obligations of the Underwriters.
(d) If one or more Underwriters shall, for any reason other than a reason permitted
hereunder, fail to take up and pay for the number of Shares to be purchased by such one or
more Underwriters, the Company shall immediately notify the Representative, and the
non-defaulting Underwriters shall be obligated to take up and pay for (in addition to the
respective number of Shares set forth opposite their respective names in paragraph 4 hereof)
the number of Shares that such defaulting Underwriter or Underwriters failed to take up and
pay for, up to 10% of the aggregate number of Shares to be purchased on the Relevant Closing
Date, and each non-defaulting Underwriter shall do so on a pro rata basis according to the
number of Shares set forth opposite the name of such non-defaulting Underwriter in paragraph
4 hereof, 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 number of Shares that the defaulting
Underwriter or Underwriters agreed but failed to purchase. If any unpurchased Shares still
remain, then the Company or the
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Representative shall be entitled to an additional period of 24 hours within which to
procure another party or parties, members of the National Association of Securities Dealers,
Inc. (or if not members of such Association, who are not eligible for membership in said
Association and who agree (i) to make no sales within the United States, its territories or
its possessions or to persons who are citizens thereof or residents therein and (ii) in
making sales to comply with said Association’s Conduct Rules) and satisfactory to the
Company, to purchase or agree to purchase such unpurchased Shares on the terms herein set
forth. In any such case, either the Representative or the Company shall have the right to
postpone the Relevant Closing Date for a period not to exceed three full business days from
the date agreed upon in accordance with this paragraph 7, in order that the necessary
changes in the Registration Statement and Prospectus and any other documents and
arrangements may be effected. If (i) neither the non-defaulting Underwriters nor the
Company has arranged for the purchase of such unpurchased Shares by another party or parties
as above provided and (ii) the Company and the non-defaulting Underwriters have not mutually
agreed to offer and sell the Shares other than the unpurchased Shares, then this Agreement,
or the obligations of the several Underwriters to purchase Option Shares on a date which is
after the Closing Date, as the case may be, shall terminate without any liability on the
part of the Company or any Underwriter (other than an Underwriter that shall have failed or
refused, for any reason not permitted hereunder, to purchase and pay for the number of
Shares that such Underwriter has agreed to purchase as provided in paragraph 4 hereof),
except as otherwise provided in paragraph 8 and paragraph 9 hereof.
8. Covenants of the Company. The Company covenants with each Underwriter that:
(a) As soon as reasonably possible after the execution and delivery of this Agreement,
the Company will file the Prospectus with the Commission pursuant to Rule 424 under the
Securities Act (“Rule 424”), setting forth, among other things, the necessary information
with respect to the terms of offering of the Shares and make any other required filing
pursuant to Rule 433 under the Securities Act. Upon request, the Company will promptly
deliver to the Representative and to counsel for the Underwriters, to the extent not
previously delivered, one fully executed copy or one conformed copy, certified by an officer
of the Company, of the Registration Statement, as originally filed, and of all amendments
thereto, if any, heretofore or hereafter made, (other than those relating solely to
Registered Securities other than the Shares), including any post-effective amendment (in
each case including all exhibits filed therewith and all documents incorporated therein not
previously furnished to the Representative), including signed copies of each consent and
certificate included therein or filed as an exhibit thereto, and will deliver to the
Representative for distribution to the Underwriters as many conformed copies of the
foregoing (excluding the exhibits, but including all documents incorporated therein) as the
Representative may reasonably request. The Company will also send to the Underwriters as
soon as practicable after the date of this Agreement and thereafter from time to time as
many copies of the Prospectus and the Preliminary Prospectus as the Representative may
reasonably request for the purposes required by the Securities Act.
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(b) During such period (not exceeding nine months) after the commencement of the
offering of the Shares as the Underwriters may be required by law to deliver a Prospectus,
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 Underwriters, 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 Shares, the Company,
upon the request of the Representative, will furnish to the Representative, at the expense
of such Underwriter, a reasonable quantity of a supplemented or amended prospectus, or
supplements or amendments to the Prospectus, complying with Section 10(a) of the Securities
Act.
(c) The Company will make generally available to its security holders, as soon as
reasonably practicable, but in any event not later than 16 months after the end of the
fiscal quarter in which the filing of the Prospectus pursuant to Rule 424 occurs, an earning
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 Relevant Closing Date and to satisfy all
conditions precedent to the delivery by it of the Shares.
(e) The Company will advise the Representative, or its counsel, promptly of the filing
of the Prospectus pursuant to Rule 424 and of any amendment or supplement to the Prospectus
or Registration Statement or of official notice of institution of proceedings for, or the
entry of, a stop order suspending the effectiveness of the Registration Statement and, if
such a stop order should be entered, use its best efforts to obtain the prompt removal
thereof.
(f) The Company will use its best efforts to qualify the Shares, as may be required,
for offer and sale under the Blue Sky or legal investment laws of such jurisdictions as the
Representative may designate, and will file and make in each year such statements or reports
as are or may be reasonably required by the laws of such jurisdictions; provided, however,
that the Company shall not be required to qualify as a foreign corporation or dealer in
securities, or to file any general consents to service of process under the laws of any
jurisdiction.
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(g) Prior to the termination of the offering of the Shares, the Company will not file
any amendment to the Registration Statement or supplement to the Pricing Prospectus or the
Prospectus (in each case other than amendments or supplements relating to Registered
Securities other than the Shares) which shall not have previously been furnished to the
Representative or of which the Representative shall not previously have been advised or to
which the Representative shall reasonably object in writing and which has not been approved
by the Representative or its counsel.
(h) The Company will file the Articles of Amendment with the FSOS on or prior to the
Closing Date.
9. Payment of Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the printing and filing of the Registration
Statement and the printing of this Agreement, (ii) the delivery of the Shares to the Underwriters,
(iii) the fees and disbursements of the Company’s counsel and accountants, (iv) the expenses in
connection with the qualification of the Shares under securities laws in accordance with the
provisions of subparagraph (f) of paragraph 8 hereof, including filing fees and the fees and
disbursements of counsel for the Underwriters in connection therewith, such fees and disbursements
(excluding filing fees) not to exceed $7,500, (v) the printing and delivery to the Underwriters of
copies of the Registration Statement and all amendments thereto, of the Preliminary Prospectus, any
Permitted Free Writing Prospectus and of the Prospectus and any amendments or supplements thereto
and (vi) the printing and delivery to the Underwriters of copies of the Blue Sky Survey, if any;
and the Company will pay all taxes, if any (but not including any transfer taxes), on the issue of
the Shares.
The fees and disbursements of Underwriters’ counsel shall be paid by the Underwriters
(subject, however, to the provisions of clause (iv) of the preceding paragraph requiring payment by
the Company of certain fees and disbursements (excluding filing fees) not to exceed $7,500);
provided, however, that if this Agreement is terminated in accordance with the provisions of
paragraph 10, 11 or 13 hereof, the Company shall reimburse the Representative for the account of
the Underwriters for the reasonable and documented 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 8 hereof and in this paragraph 9.
The Company shall not in any event be liable to any of the Underwriters for damages on account of
the loss of anticipated profit.
10. Conditions of Underwriters’ Obligations. The several obligations of the
Underwriters to purchase and pay for the Shares shall be subject to the accuracy of the
representations and warranties on the part of the Company as of the date hereof and the Closing
Date, to the performance by the Company of its obligations to be performed hereunder prior to the
Closing Date, and to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration Statement shall be
in effect on the Closing Date; and no proceedings for that purpose shall be pending before,
or, to the Company’s knowledge, threatened by, the Commission on the Closing Date. The
Representative shall have received, prior to payment for the Shares, a certificate dated the
Closing Date and signed by the Chairman, President, Treasurer or a
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Vice President of the Company to the effect that no such stop order is in effect and
that no proceedings for such purpose are pending before or, to the knowledge of the Company,
threatened by the Commission.
(b) At the time of execution of this Agreement, or such later date as shall have been
consented to by the Representative, there shall have been issued, and on the Closing Date
there shall be in full force and effect, orders of the North Carolina Utilities Commission
and the Public Service Commission of South Carolina authorizing the issuance and sale of the
Shares, none of which shall contain any provision unacceptable to the Representative by
reason of its being materially adverse to the Company (it being agreed that no such order in
effect on the date of this Agreement and heretofore furnished to the Representative or
counsel for the Underwriters contains any such unacceptable provision).
(c) At the Closing Date, the Representative shall receive favorable opinions from: (1)
Hunton & Xxxxxxxx LLP, counsel to the Company, which opinion shall be satisfactory in form
and substance to counsel for the Underwriters, and (2) Xxxxx Xxxxxxxxxx LLP, counsel for the
Underwriters, in each of which opinions (except Hunton & Xxxxxxxx LLP as to matters of North
Carolina law and except as to subdivision (vi) (as to documents incorporated by reference,
at the time they were filed with the Commission) as to which Xxxxx Xxxxxxxxxx LLP need
express no opinion) said counsel may rely as to all matters of North Carolina and South
Carolina law upon the opinions of Xxxxx X. Xxxxxxxx, Esq., Vice President of Progress Energy
Service Company LLC, acting as counsel to the Company, [and South Carolina counsel],
respectively, to the effect that:
(i) assuming delivery to and payment for the Shares by the Underwriters, as
provided in this Agreement, the Shares will be validly issued, fully paid and
non-assessable;
(ii) the shareholders of the Company are not entitled to statutory preemptive
or, to such counsel’s knowledge, other similar contractual rights to subscribe for
the Shares, [and the Shares have been duly authorized for listing on the New York
Stock Exchange];
(iii) the form of the certificates for the Shares conforms in all material
respects to the requirements of the North Carolina Business Corporation Act [and the
New York Stock Exchange];
(iv) the statements made in the Prospectus under the caption “Description of
Preferred Stock,” insofar as they purport to constitute summaries of the documents
referred to therein, are accurate summaries in all material respects;
(v) this Agreement has been duly and validly authorized, executed and delivered
by the Company;
(vi) the Registration Statement, at the time and date it was declared effective
by the Commission and as of the date hereof, the Preliminary
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Prospectus, the Pricing Prospectus, the Permitted Free Writing Prospectuses and
the Prospectus, at the time each was filed with, or transmitted for filing to, the
Commission pursuant to Rule 424 (except as to the financial statements and other
financial and statistical data constituting a part thereof or incorporated by
reference therein, upon which such opinions need not pass), complied as to form in
all material respects with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder; the documents or portions
thereof filed with the Commission pursuant to the Exchange Act and deemed to be
incorporated by reference in the Registration Statement, the Preliminary Prospectus,
the Pricing Prospectus and the Prospectus pursuant to Item 12 of Form S-3 (except as
to financial statements and other financial and statistical data constituting a part
thereof or incorporated by reference therein and that part of the Registration
Statement that constitutes Statements of Eligibility on Form T-1 and Form T-2, upon
which such opinions need not pass), at the time they were filed with the Commission,
complied as to form in all material respects with the requirements of the Exchange
Act and the applicable rules and regulations of the Commission thereunder; the
Registration Statement has become effective under the Securities Act and, to the
best of the knowledge of said counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued and not withdrawn and no proceedings for
a stop order with respect thereto are threatened or pending under Section 8 of the
Securities Act; and
(vii) nothing has come to the attention of said counsel that would lead them to
believe that the Registration Statement, at the time and date it was declared
effective by the Commission and as of the date hereof, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and nothing has come to
the attention of said counsel that would lead them to believe that (x) the Pricing
Disclosure Package, as of the Applicable Time, included an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not
misleading or (y) the Prospectus, as of its date and, as amended or supplemented, at
the Closing Date, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (except, in each case, as to financial statements and other financial and
statistical data constituting a part of the Registration Statement, the Pricing
Disclosure Package or the Prospectus or incorporated by reference therein and that
part of the Registration Statement that constitutes the Statements of Eligibility on
Form T-1 and Form T-2, upon which such opinions need not pass);
provided, however, that Xxxxx Xxxxxxxxxx LLP will not provide the opinion contained in
subparagraphs (b)(ii) or (b)(iii) (as to the requirements of the North Carolina Business
Corporation Act) of this paragraph 10.
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(d) At the Closing Date, the Representative shall receive from Xxxxx X. Xxxxxxxx, Esq.,
Vice President of Progress Energy Service Company, LLC, acting as counsel 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 (v) and
subdivision (vii) of subparagraph (c) of this paragraph 10 as the opinions required by said
subparagraph (c), and to the further effect that:
(i) the Company is a validly organized and existing corporation under the laws
of the State of North Carolina and is in good standing under the laws of the State
of North Carolina and is duly qualified to do business in the State of South
Carolina;
(ii) the Company is duly authorized by its Charter to conduct the business
which it is now conducting as set forth in the Prospectus; the Company has valid and
subsisting franchises, licenses and permits adequate for the conduct of its
business, except where the failure to hold such franchises, licenses and permits
would not have a material adverse effect on the business, properties, results of
operations or financial condition of the Company;
(iii) the issuance and sale of the Shares have been duly authorized by all
necessary corporate action on the part of the Company; the Articles of Amendment
have been duly authorized and adopted by the Company and will be effective upon
filing with the NCSOS.
(iv) the authorized capital stock of the Company is 300,000 shares of $5
preferred stock, 20,000,000 shares of serial preferred stock, 5,000,000 shares of
preferred stock A, 10,000,000 shares of preference stock and 100,000,000 shares of
common stock; the shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued and are fully paid and non-assessable; and
none of the outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any securityholder of the
Company to subscribe for such stock;
(v) Orders have been entered by the North Carolina Utilities Commission and the
Public Service Commission of South Carolina authorizing the issuance and sale of the
Shares, and to the best of the knowledge of said counsel, said orders are still in
force and effect; and no further filing with, approval, authorization, consent or
other order of any public board or body (except such as have been obtained under the
Securities Act and as may be required under the state securities or Blue Sky laws of
any jurisdiction) is legally required for the consummation of the transactions
contemplated in this Agreement;
(vi) to the best of his knowledge, there are no persons with registration
rights or other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the Securities
Act;
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(vii) except as described in or contemplated by the Prospectus, there are no
pending actions, suits or proceedings (regulatory or otherwise) against the Company
or any of its properties which are likely in the aggregate to result in any material
adverse change in the business, properties, results of operations or financial
condition of the Company or which are likely in the aggregate, to materially and
adversely affect the consummation of this Agreement or the transactions contemplated
herein or therein;
(viii) the consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not (i) result in a breach of any of the terms
or provisions of, or constitute a default under, the Charter or the Company’s
by-laws or (ii) result in a material breach of any terms or provisions of, or
constitute a default under, any applicable law, indenture, mortgage, deed of trust
or other agreement or instrument to which the Company is now a party or any
judgment, order, writ or decree of any government or governmental authority or
agency or court having jurisdiction over the Company or any of its assets,
properties or operations that, in the case of any such breach or default, would have
a material adverse effect on business, properties, results of operations or
financial condition of the Company; and
In said opinion such counsel may rely as to all matters of South Carolina law on the opinion
of [South Carolina counsel].
(e) At the Closing Date, the Representative shall receive from [South Carolina
counsel], a favorable opinion in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Company is an electrical utility engaged in the business of generating,
transmitting, distributing and selling electric power to the general public in the
States of South Carolina and North Carolina, and the Company conducts its South
Carolina retail operations subject to the jurisdiction of the South Carolina Public
Service Commission pursuant to South Carolina Code Annotated, Sections 58-27-10 et
seq. (1976 as amended);
(ii) The Company is duly qualified to transact business in the State of South
Carolina;
(f) The Representative shall have received on the date hereof and shall receive on the
Closing Date from Deloitte & Touche LLP, a letter addressed to the Representative containing
statements and information of the type ordinarily included in accountants’ SAS 72 “comfort
letters” to underwriters with respect to the audit reports, financial statements and certain
financial information contained in or incorporated by reference into the Prospectus.
(g) At the Closing Date, the Representative shall receive a certificate of the
Chairman, President, Treasurer or a Vice President of the Company, dated the Closing
Date, to the effect that the representations and warranties of the Company in this
Agreement are true and correct as of the Closing Date.
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(h) The Permitted Free Writing Prospectus, and any other material required pursuant to
Rule 433(d) under the Securities Act, shall have been filed by the Company with the
Commission within the applicable time periods prescribed by Rule 433.
(i) All legal proceedings taken in connection with the sale and delivery of the Shares
shall have been satisfactory in form and substance to counsel for the Underwriters and the
Company, as of the Closing Date, shall be in compliance with any governing orders of the
North Carolina Utilities Commission and the Public Service Commission of South Carolina,
except where the failure to comply with such orders would not be material to the offering or
validity of the Shares.
(j) [At the Closing Date, the Shares shall have been approved for listing on the New
York Stock Exchange, subject only to official notice of issuance.]
(k) At the date of this Agreement, the Representative shall have received an agreement
substantially in the form of Exhibit A to Schedule III hereto signed by the persons listed
on Schedule III hereto.
(l) If the Underwriters exercise their option provided in paragraph 4(b) hereof to
purchase all or any portion of the Option Shares, the representations and warranties of the
Company contained herein and the statements in any certificates furnished by the Company
hereunder shall be true and correct as of each Option Closing Date and, at each Option
Closing Date, the Representative shall have received:
(i) Officers’ Certificate. A certificate, dated such Option Closing
Date, of the Chairman, President, Treasurer or a Vice President of the Company
confirming that the certificates delivered at the Closing Date pursuant to
paragraphs 10(a) and 10(g) hereof remain true and correct as of such Option Closing
Date.
(ii) Opinion of Counsel for the Company. The favorable opinion of
Hunton & Xxxxxxxx LLP, of counsel to the Company, together with the favorable
opinion of Xxxxx X. Xxxxxxxx, Esq., [and South Carolina Counsel], each in form and
substance satisfactory to counsel for the Underwriters, dated such Option Closing
Date, relating to the Option Shares to be purchased on such Option Closing Date and
otherwise to the same effect as the opinions required by paragraphs 10(c), 10(d) and
10(e), respectively, hereof.
(iii) Opinion of Counsel for the Underwriters. The favorable opinion
of Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, dated such Option Closing
Date, relating to the Option Shares to be purchased on such Option Closing Date and
otherwise to the same effect as the opinion required by paragraph 10(c) hereof.
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(iv) Bring-down Comfort Letter. A letter from Deloitte & Touche LLP,
in form and substance satisfactory to the Representative and dated such Option
Closing Date, substantially in the same form and substance as the letters furnished
to the Representative pursuant to paragraph 10(f) hereof, except that the “specified
date” in the letter furnished pursuant to this paragraph shall be a date not more
than three days prior to such Option Closing Date.
In case any of the conditions specified above in this paragraph 10 shall not have been
fulfilled or waived by 2:00 P.M. on the Relevant Closing Date, this Agreement or, in the case of
any condition to the purchase of Option Shares, on a date which is after the Closing Date, the
obligations of the several Underwriters to purchase the relevant Option Shares, may be terminated
by the Representative by delivering written notice thereof to the Company. Any such termination
shall be without liability of any party to any other party except as otherwise provided in
paragraphs 8 and 9 hereof.
11. Conditions of the Company’s Obligations. The obligations of the Company to
deliver the Shares on the Relevant Closing Date shall be subject to the conditions set forth in the
first sentence of subparagraph (a) of paragraph 10 hereof and in subparagraph (b) of paragraph 10
hereof. In case these conditions shall not have been fulfilled at the Relevant 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 8 and 9 hereof.
12. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter, each officer
and director of each Underwriter and each person who controls any Underwriter within the
meaning of Section 15 of the Securities Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject and to
reimburse each such Underwriter, each such officer and director and each such controlling
person for any legal or other expenses (including to the extent hereinafter provided,
reasonable counsel fees) incurred by them, when and as incurred, in connection with
investigating any such losses, claims, damages or liabilities or in connection with
defending any actions, insofar as such losses, claims, damages, liabilities, expenses or
actions arise out of or are based upon any untrue statement, or alleged untrue statement, of
a material fact contained in the Registration Statement, the Preliminary Prospectus, the
Pricing Prospectus, the Permitted Free Writing Prospectuses or the Prospectus, or in the
Registration Statement or Prospectus as amended or supplemented (if any amendments or
supplements thereto shall have been furnished), or in any free writing prospectus used by
the Company other than a Permitted Free Writing Prospectus, or the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that the indemnity agreement
contained in this paragraph 12 shall not apply to any such losses, claims, damages,
liabilities, expenses or actions arising out of, or based upon any such untrue statement or
alleged untrue statement, or any such omission or alleged omission, if such statement or
omission was made in reliance upon and in conformity with the Underwriter Information and
provided, further, that the indemnity
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agreement contained in this paragraph 12 shall not inure to the benefit of any
Underwriter (or of any person controlling such Underwriter) on account of any such losses,
claims, damages, liabilities, expenses or actions arising from the sale of the Shares to any
person if a copy of the Permitted Free Writing Prospectus or Prospectus (excluding documents
incorporated by reference therein) shall not have been given or sent to such person by or on
behalf of such Underwriter at or prior to entry into the contract of sale, unless such
Prospectus or Permitted Free Writing Prospectus failed to correct the omission or
misstatement. The indemnity agreement of the Company contained in this paragraph 12 and the
representations and warranties of the Company contained in paragraph 3 hereof shall remain
operative and in full force and effect regardless of any investigation made by or on behalf
of any Underwriter or any such officer or director or any such controlling person and shall
survive the delivery of the Shares. The Underwriters agree to notify promptly the Company,
and each other Underwriter, of the commencement of any litigation or proceedings against
them or any of them, or any such controlling person, in connection with the sale of the
Shares.
(b) Each Underwriter severally, and not jointly, agrees to indemnify and hold harmless
the Company, its officers who signed the Registration Statement and directors, and each
person who controls the Company within the meaning of Section 15 of the Securities Act
against any and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject and to reimburse each of them for any legal or other
expenses (including, to the extent hereinafter provided, reasonable counsel fees) incurred
by them, when and as incurred, in connection with investigating any such losses, claims,
damages, or liabilities, or in connection with defending any actions, insofar as such
losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Preliminary Prospectus, the Pricing Prospectus, the Permitted
Free Writing Prospectuses or the Prospectus as amended or supplemented (if any amendments or
supplements thereto shall have been furnished), or any Underwriter Free Writing Prospectus
used by such Underwriter (but only to the extent that the content of such Underwriter Free
Writing Prospectus that is subject to indemnification is materially inconsistent with the
information contained in the Permitted Free Writing Prospectus or the Prospectus) or the
omission or alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, if such statement or omission
was made in reliance upon and in conformity with Underwriter Information. The indemnity
agreement of all the respective Underwriters contained in this paragraph 12 shall remain
operative and in full force and effect regardless of any investigation made by or on behalf
of the Company or any other Underwriter, or any such controlling person, and shall survive
the delivery of the Shares. The Company agrees promptly to notify the Representative of the
commencement of any litigation or proceedings against the Company or any of its officers or
directors, or any such controlling person, in connection with the sale of the Shares.
(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
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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 which 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 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 (including any impleaded
parties) in any such action include both the indemnified party and the indemnifying party,
and counsel for the indemnified party shall have concluded, in its reasonable judgment, that
there may be a conflict of interest involved in the representation by such counsel of both
the indemnifying party and the indemnified party, the indemnified party or parties shall
have the right to select separate counsel, satisfactory to the indemnifying party, to
participate in the defense of such action on behalf of such indemnified party or parties (it
being understood, however, that the indemnifying party shall not be liable for the expenses
of more than one separate counsel (in addition to one local counsel) representing the
indemnified parties who are parties to such action). Each of the Company and the several
Underwriters agrees that without the other party’s prior written consent, which consent
shall not be unreasonably withheld, it will not settle, compromise or consent to the entry
of any judgment in any claim in respect of which indemnification may be sought under the
indemnification provisions of this Agreement, unless such settlement, compromise or consent
(i) includes an unconditional release of such other party from all liability arising out of
such claim and (ii) does not include a statement as to or an admission of fault, culpability
or a failure to act by or on behalf of such other party.
(d) If the indemnification provided for in subparagraphs (a) or (b) above is for any
reason unavailable to or insufficient to hold harmless an indemnified party in respect of
any losses, liabilities, claims, damages or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount of such losses, liabilities,
claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company, on
the one hand, and the Underwriters, on the other hand, from the offering of the Shares
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
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one hand, and of the Underwriters, on the other hand, in connection with the statements
or omissions or alleged statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable considerations. The
relative benefits received by the Company, on the one hand, and the Underwriters, on the
other hand, in connection with the offering of the Shares pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds from the
offering of the Shares pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus, bear to the aggregate initial public offering
price of the Shares as set forth on such cover. The relative fault of the Company, on the
one hand, and the Underwriters, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if contribution pursuant
to this subparagraph (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this subparagraph (d).
The rights of contribution contained in this paragraph 12 shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of any
Underwriter or the Company and shall survive delivery of the Shares. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this subparagraph (d), each person, if any, who controls
an Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution
as the Company. The Underwriters’ respective obligations to contribute pursuant to this
subparagraph (d) are several in proportion to the number of Shares set forth opposite their
respective names in paragraph 4 hereof and not joint.
(e) For purposes of this paragraph 12, it is understood and agreed that the
“Underwriter Information” is the information provided in the paragraphs under
“Underwriting” in the Preliminary Prospectus, the Pricing Prospectus, the Permitted Free
Writing Prospectus or the Prospectus Supplement.
13. Termination Date of this Agreement. This Agreement, or the obligations of the
several Underwriters to purchase Option Shares on a date which is after the Closing Date, may be
terminated by the Representative at any time prior to the Relevant Closing Date by delivering
written notice thereof to the Company, if on or after the date of this Agreement but prior to such
time (a) there shall have occurred any general suspension of trading in securities on the New York
Stock Exchange, or there shall have been established by the New York Stock Exchange or by the
Commission or by any federal or state agency or by the decision of any court any
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limitation on prices for such trading or any restrictions on the distribution of securities,
or (b) there shall have occurred any new outbreak of hostilities, including, but not limited to,
significant escalation of hostilities that existed prior to the date of this Agreement, or any
national or international calamity or crisis, or any material adverse change in the financial
markets of the United States, the effect of which outbreak, escalation, calamity, crisis or
material adverse change, 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 Shares, 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 Shares and the delivery of the Shares by the several Underwriters at the initial public
offering price or (d) there shall have been any downgrading or any notice of any intended or
potential downgrading in the rating accorded the Company’s securities by any “nationally recognized
statistical rating organization” as that term is defined by the Commission for the purposes of
Securities Act Rule 436(g)(2), or any such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating of the Shares or any
of the Company’s outstanding debt, the effect of which, in the reasonable judgment of the
Representative, makes it impracticable or inadvisable to consummate the sale of the Shares and the
delivery of the Shares by the several Underwriters at the initial public offering price or (e)
there shall have been declared, by either federal or New York authorities, a general banking
moratorium. This Agreement (or such obligation to purchase Option Shares) may also be terminated
at any time prior to the Relevant Closing Date if, in the reasonable judgment of the
Representative, the subject matter of any amendment or supplement to the Registration Statement,
the Pricing Prospectus or Prospectus (other than an amendment or supplement relating solely to the
activity of any Underwriter or Underwriters) filed after the execution of this Agreement but prior
to such Relevant Closing Date shall have materially impaired the marketability of the Shares. Any
termination hereof pursuant to this paragraph 13 shall be without liability of any party to any
other party except as otherwise provided in paragraphs 8 and 9 hereof.
14. Miscellaneous. The validity and interpretation of this Agreement shall be
governed by the laws of the State of New York. Unless otherwise specified, time of day refers to
New York City time. This Agreement shall inure to the benefit of, and be binding upon, the
Company, the several Underwriters, and with respect to the provisions of paragraph 12 hereof, the
officers and directors and each controlling person referred to in paragraph 12 hereof, and their
respective successors. Nothing in this Agreement is intended or shall be construed to give to any
other person, firm or corporation any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained. The term “successors” as used in this
Agreement shall not include any purchaser, as such purchaser, of any of the Shares from any of the
several Underwriters.
15. Nature of Relationship. The Company acknowledges and agrees that (i) in
connection with all aspects of each transaction contemplated by this Agreement, the Company and the
Underwriters have an arms length business relationship that creates no fiduciary duty on the part
of any party and each expressly disclaims any fiduciary relationship, (ii) the Underwriters and
their respective affiliates may be engaged in a broad range of transactions that involve interests
that differ from those of the Company, (iii) the Underwriters have not provided any legal,
accounting, regulatory or tax advice with respect to the offering contemplated hereby
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and the Company has consulted its own legal, accounting, regulatory and tax advisors to the
extent it deemed appropriate, and (iv) any review by the Underwriters of the Company, the
transactions contemplated hereby or other matters relating to such transactions will be performed
solely for the benefit of the Underwriters and shall not be on behalf of the Company.
16. Notices. All communications hereunder shall be in writing or by telefax and, if
to the Underwriters, shall be mailed, transmitted by any standard form of telecommunication or
delivered to the Representative at , and if to the Company, shall be mailed or delivered
to it at 000 X. Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000-0000, attention of Xxxxxx X.
Xxxxxxxx, Treasurer.
17. Counterparts. This Agreement may be simultaneously executed in counterparts, each
of which when so executed shall be deemed to be an original. Such counterparts shall together
constitute one and the same instrument.
18. Defined Terms. Unless otherwise defined herein, capitalized terms used in this
Agreement shall have the meanings assigned to them in the Registration Statement.
[Remainder of page 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, CAROLINA POWER & LIGHT COMPANY d/b/a PROGRESS ENERGY CAROLINAS, INC. |
||||
| 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,
Section 1 of this Agreement.
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named in,
Section 1 of this Agreement.
[REPRESENTATIVE]
By: |
||
| Name: | ||
| Title: |
[Signature Page for the Preferred Stock Underwriting Agreement]
SCHEDULE I
Pricing Term Sheet
Underwriting Agreement dated , 20
Representative(s):
Designation: Preferred Stock
Listing:
Amount: shares
Purchase Price: $ per share
Public Offering Price: $ per share.
Redemption Terms:
Settlement Date: , 20 ;
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
XXXXX on the SEC Web site at xxx.xxx.xxx (and more specifically, at the URL link
xxxx://xxx.xxx/xxx-xxx/xxxxxx-xxxxx?xxxxxxxxxxxxxxxxxxxxxx&XXXx&xxxxxxxx&Xxxxxx&XXXx&xxxxxxxxxxxxx&x
ction=getcompany). Alternatively, the issuer, any underwriter or any dealer participating in the
offering will arrange to send you the prospectus if you request it by calling toll-free at
1-8[xx-xxx-xxxx].
SCHEDULE II
Pricing Disclosure Package
| 1) | Prospectus dated , 20 | |
| 2) | Preliminary Prospectus Supplement dated , 20 (which shall be deemed to include the Incorporated Documents) | |
| 3) | Permitted Free Writing Prospectuses |
| a) | Pricing Term Sheet attached as Schedule I hereto |
SCHEDULE III
Persons Executing Lock-Up Agreements
Exhibit A
[Form of Lock-Up Agreement]
