Exhibit 1(b)
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CAROLINA POWER & LIGHT COMPANY
Senior Notes, ____% Series Due _______________
UNDERWRITING AGREEMENT
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_________________
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
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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 Notes. The Company proposes to issue and sell its Senior
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Notes of the designation, with the terms and in the amount specified in Schedule
I hereto (the "Notes") in one or more new series under a governing indenture
(together with any supplements, the "Senior Note Indenture") each between the
Company and The Bank of New York, as trustee (the "Senior Note Trustee"), in
substantially the form heretofore delivered to the Representative. Until the
Release Date (as defined in the Senior Note Indenture), the Notes will be
secured by one or more series of Senior Note First Mortgage Bonds (as defined in
the Senior Note Indenture) issued and delivered by the Company to the Senior
Note Trustee. On the Release Date, the Notes will cease to be secured by the
Senior Note First Mortgage Bonds and will become unsecured obligations of the
Company. The Senior Note First Mortgage Bonds securing the Notes 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 ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, successor) as Mortgage Trustees, as supplemented and as it
will be further supplemented by a supplemental indenture relating to the Senior
Note First Mortgage Bonds (the "Supplemental Indenture"), ) in substantially the
form heretofore delivered to the Representative, said Mortgage and Deed of Trust
as supplemented and to be supplemented by the Supplemental Indenture being
hereinafter referred to as the "Mortgage".
3. Representations and Warranties of the Company. The Company represents and
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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
$1,000,000,000 principal amount 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 an aggregate of $_______________
principal amount of Registered Securities. The Registration Statement has been
declared effective by the Commission, and the Mortgage and Senior Note
Indenture have each been qualified under the Trust Indenture Act of 1939, 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, substantially in the form
delivered to the Representative prior to the execution hereof, relating to the
Notes (the "Prospectus Supplement"), and all prior amendments or supplements
thereto (other than amendments or supplements relating to securities of the
Company other than the Notes), 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 Notes 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 Notes, 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 Senior Note 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
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by the Representative or by or on behalf of any Underwriter through the
Representative expressly for use in the Prospectus or to any statements in or
omissions from the Statements of Eligibility (Forms T-1 and T-2) of the
trustees under the Mortgage and the Senior Note 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 Notes 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 its
subsidiaries considered as a whole; 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 or transactions arising in the ordinary course of business. The
Company has no material contingent obligation that 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 Notes, 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 Senior Note First Mortgage 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 Senior Note First Mortgage Bonds may not
be enforceable, but such unenforceability will not render the Senior Note
First Mortgage 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 Senior Note First Mortgage Bonds or (ii)
the right of the Mortgage Trustees to exercise their right to foreclose under
the Mortgage.
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(h) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not result in a breach of any of the
terms or provisions of, or constitute a default 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
subsidiaries or any of their assets, properties or operations.
(i) The summaries of the terms of the Notes and the Senior Note First
Mortgage Bonds contained in the Registration Statement and Prospectus fairly
describe the provisions thereof required to be described by the registration
statement form.
(j) The Company does not have any significant subsidiaries as defined in
Rule 1-02 of Regulation S-X promulgated under the Securities Act.
(k) Neither the Company nor any of its subsidiaries is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended
(the "1940 Act").
(l) Except as described in or contemplated by the Prospectus, there are
no pending actions, suits or proceedings against or affecting the Company or
any of its subsidiaries or properties which are likely in the aggregate, to
result in any material adverse change in the financial condition, earnings,
business affairs, or business prospects of the Company and its subsidiaries
considered as a whole or which are likely in the aggregate to materially and
adversely affect the consummation of this Agreement, the Senior Note
Indenture, the Mortgage, the Notes, the Senior Note First Mortgage Bonds or
the transactions contemplated herein or therein.
(m) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority
or agency is necessary or required for the performance by the Company of its
obligations hereunder in connection with the offering, issuance or sale of the
Securities hereunder or the consummation of the transactions herein
contemplated or for the due execution, delivery or performance of the Senior
Note Indenture and the Mortgage by the Company, except such as have been
already obtained or as may be required under the Securities Act or state
securities laws and except for the qualification of the Indenture under the
1939 Act.
(n) The Senior Note Indenture and the Mortgage (A) have been duly
authorized, executed and delivered by the Company, and, assuming due
authorization, execution and delivery by the Trustee and the Mortgage
Trustees, respectively, constitute valid and legally binding obligations of
the Company, enforceable against the Company in accordance with their terms,
subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws affecting creditor's rights generally and
(ii) general principles of equity (regardless of whether such enforceability
is considered in a proceeding at law or in equity and except the effect on
enforceability of federal or state law limiting, delaying or prohibiting the
making of payments outside the United States); and (B) conform in all material
respects to the descriptions thereof in the Prospectus.
4. Purchase and Sale. On the basis of the representations, warranties and
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covenants herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to each of
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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 Notes 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
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bona fide public offering of the Notes 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.
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(a) Payment for the Notes shall be made at the place, time and date
specified in Schedule I hereto against delivery of the Notes at the office of
The Bank of New York, Corporate Trust Department, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 Notes 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 The Bank of New York. For the purpose of expediting the
checking of the certificates by the Representative, the Company agrees to make
the Notes available to the Representative not later than 10:00 A.M., on the
last full business day prior to the Closing Date at said office of The Bank of
New York.
(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 Notes 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 Notes 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 Notes 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 Notes set
forth opposite their respective names in Schedule II hereto) the principal
amount of the Notes 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, 10% of the principal amount of the Notes
set forth opposite the name of such remaining Underwriter in said Schedule II,
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 Notes which the defaulting Underwriter or
Underwriters agreed but failed to purchase. If any unpurchased Notes 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
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Company, to purchase or agree to purchase such unpurchased Notes on the terms
herein set forth. In any such case either the Representative or the Company
shall have the right to postpone the Closing Date for a period not to exceed
three full business days from the date agreed upon in accordance with this
paragraph 6, in order that the necessary changes in the Registration Statement
and Prospectus and any other documents and arrangements may be effected. If
(i) neither the non-defaulting Underwriters nor the Company has arranged for
the purchase of such unpurchased Notes 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 Notes other than the unpurchased Notes,
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 Notes 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
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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 Notes. 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 Notes),
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 Notes 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 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 Notes,
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.
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(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 Closing Date and
to satisfy all conditions precedent to the delivery by it of the Notes.
(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 Notes 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.
8. Payment of Expenses. The Company will pay all expenses incident to the
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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 Notes 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 Notes 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 the Supplemental Indenture to the Mortgage Trustees under the
Mortgage 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 Notes and the filing and recordation of the
Supplemental Indenture, and (viii) any filings required in order to perfect the
interests of the Senior Note Trustee in the Senior Note First Mortgage Bonds and
the proceeds thereof. The fees and disbursements of Underwriters' counsel
shall be paid by the Underwriters (subject, however, to the provisions of this
paragraph 8 requiring payment by the Company of fees and 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 paragraph 7 and in this paragraph 8. The
Company shall not in any event be liable to any of the Underwriters for damages
on account of the loss of anticipated profit.
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9. Conditions of Underwriters' Obligations. The several obligations of the
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Underwriters to purchase and pay for the Notes shall be subject to the accuracy
of the representations and warranties on the part of the Company as of the date
hereof and the Closing Date, to the performance by the Company of its
obligations to be performed hereunder prior to the Closing Date, and to the
following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date and no proceedings for that
purpose shall be pending before, or, to the Company's knowledge, threatened
by, the Commission on the Closing Date; and the Representative shall have
received, prior to payment for the Notes, 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 Notes and the
Senior Note First Mortgage 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 & ▇▇▇▇▇▇▇▇, 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 (except as to subdivisions (viii) (as to documents
incorporated by reference, at the time they were filed with the Commission)
and (x) of this subparagraph (c), as to which __________________________ need
express no opinion) said counsel (except Hunton & ▇▇▇▇▇▇▇▇ as to North
Carolina law) may rely as to all matters of North Carolina and South Carolina
law upon the opinions of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President of Progress Energy
Service Company, counsel to the Company, and ________________ [South Carolina
counsel], respectively, to the effect that:
(i) The Senior Note 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 legally binding obligation of
the Company enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws affecting the rights of mortgagees
and other creditors, and by general equitable principles and any implied
covenant of good faith and fair dealings; provided, however, that certain
remedies, waivers and other provisions of the Senior Note Indenture may
not be enforceable, but such unenforceability will not render the Senior
Note Indenture 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 Notes or (ii) the right of the
Trustee to collect amounts due under the Senior Note First Mortgage Bonds;
(ii) The Mortgage has been duly and validly authorized by all
necessary corporate action (with this opinion required in only the Hunton
& ▇▇▇▇▇▇▇▇ opinion as to the original Mortgage, the Sixty-fourth
Supplemental Indenture, and subsequent Supplemental Indentures), has been
duly and validly executed and delivered by the
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Company (with this opinion required in only the Hunton & ▇▇▇▇▇▇▇▇ 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 and any implied covenant of good faith
and fair dealing; 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 Senior
Note First Mortgage Bonds or (ii) the right of the Mortgage Trustees to
exercise their right to foreclose under the Mortgage;
(iii) The Mortgage and the Senior Note Indenture have been duly
qualified under the 1939 Act;
(iv) Assuming authentication of the Notes by the Trustee in
accordance with the Senior Note Indenture, and delivery of the Notes to
and payment for the Notes by the Underwriters, as provided in this
Agreement, the Notes have been duly and validly authorized, executed and
delivered and are legal, valid and binding obligations of the Company
enforceable in accordance with their terms, except as limited by
bankruptcy, insolvency or other laws affecting the rights of mortgagees
and other creditors, and by general equitable principles and any implied
covenant of good faith and fair dealings, and are entitled to the benefits
of the Senior Note Indenture and will be secured equally and ratably with
all other notes which may be issued under the Senior Note Indenture except
insofar as any sinking or other fund may afford additional security for
the notes of any particular series;
(v) The Senior Note First Mortgage Bonds have been duly and
validly authorized, executed and delivered by the Company and, assuming
authentication by the Corporate Trustee (as defined in the Mortgage) in
accordance with the Mortgage and delivery to and payment for the Notes by
the Underwriters, as provided in this Agreement, the Senior Note First
Mortgage 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, and the Senior Note
First Mortgage 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;
(vi) The statements made in the Prospectus under the captions
"Description of First Mortgage Bonds" and "Description of Senior Notes"
and in the Prospectus Supplement under the caption "Description of the
Notes" insofar as they purport to constitute summaries of the documents
referred to therein, are correct in all material respects;
(vii) This Agreement has been duly and validly authorized, executed
and delivered by the Company;
(viii) 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
-9-
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
the 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 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;
(ix) 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, 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); and
(x) Orders have been entered by the North Carolina Utilities
Commission and the South Carolina Public Service Commission authorizing
the issuance and sale of the Notes and the Senior Note First Mortgage
Bonds, 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.
(d) At the Closing Date, the Representative shall receive from ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Vice President of Progress Energy Service Company, counsel to 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 (vii) and subdivisions (ix) and (x) 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
under the laws of the State of North Carolina and is duly qualified to do
business as an electrical utility and is doing business in that state and
in the State of South Carolina;
-10-
(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 and adequate for the conduct of its business;
(iv) 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;
(v) The Company's Mortgage and Deed of Trust dated as of May 1,
1940 and the First through the Seventieth 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 Mortgage Trustees thereunder; and the
Supplemental Indenture relating to the Senior Note First Mortgage 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 States of North Carolina and
South Carolina in which any of the property (except as any therein or in
the Mortgage are expressly excepted) described therein or in the Mortgage
as subject to the lien of the Mortgage is located;
-11-
(vi) 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;
(vii) The issuance and sale of the Notes and the issuance and
delivery of the Senior Note First Mortgage Bonds have been duly authorized
by all necessary corporate action on the part of the Company;
(viii) Except as described in or contemplated by the Prospectus,
there are no pending actions, suits or proceedings against or affecting
the Company or any of its subsidiaries or properties which are likely, in
the aggregate, to result in any material adverse change in the business,
property, financial condition, earnings, business affairs, or business
prospects of the Company and its subsidiaries considered as a whole or
which are likely, in the aggregate, to materially and adversely affect the
consummation of this Agreement, the Senior Note Indenture, the Notes or
the transactions contemplated herein or therein; and
(ix) The consummation of the transactions herein contemplated and
the fulfillment of the terms hereof will not result in a breach of any of
the terms or provisions of, or constitute a default 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 subsidiaries or any of their assets, properties or operations.
In said opinion such counsel may rely as to all matters of South Carolina law
(except as to subdivisions (iii), (iv) and (vi) of this subparagraph (d)) on the
opinion of _________________________ and as to all matters of New York law on
the opinion of Hunton & ▇▇▇▇▇▇▇▇.
(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. 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 engage in the business in
which it is engaged in the State of South Carolina;
(iii) The Company's Mortgage and Deed of Trust dated as of May 1,
1940 and the First through the Seventieth Supplemental Indentures thereto
have been recorded and filed in such manner and in such places as may be
required by law, in the State of South Carolina, in order fully to
preserve and protect the security of the bondholders and all rights of the
Mortgage Trustees thereunder;
-12-
(iv) The Supplemental Indenture relating to the Senior Note First
Mortgage 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 (except as any therein or in
the Mortgage, are expressly excepted) described therein or in the Mortgage
as subject to the lien of the Mortgage is located; and
(v) They have reviewed the opinion letter of even date therewith
addressed to you by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President of Progress Energy
Service Company, counsel to 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 Closing Date, the Representative shall have received from
Deloitte & Touche LLP a letter, dated 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 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 accounting 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 three business days prior to the date of the
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 the 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 Notes shall have been satisfactory in form and substance to counsel for
the Underwriters.
-13-
In case any of the conditions specified above in this paragraph 9 shall not
have been fulfilled or waived by 2:00 P.M. on the Closing Date, this Agreement
may be terminated by the Representative by delivering written notice thereof to
the Company. Any such termination shall be without liability of any party to
any other party except as otherwise provided in paragraphs 7 and 8.
10. Conditions of the Company's Obligations. The obligations of the Company
---------------------------------------
to deliver the Notes and the Senior Note First Mortgage 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 12:00 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 Notes and the Senior Note First Mortgage Bonds, none of
which shall 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 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, 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, any preliminary
prospectus or the Prospectus, or any amendment or supplement to any 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 Mortgage Trustees
under the Mortgage and the Senior Note Trustee under the Senior
-14-
Note 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
Notes 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 misstatement. 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 Notes.
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, and not jointly, agrees to indemnify and
hold harmless the Company, its officers 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 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, 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, any preliminary prospectus or the Prospectus as
amended or supplemented (if any amendments or supplements thereto shall have
been furnished), or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, if such statement or omission was made in
reliance upon and in conformity with information furnished herein or in
writing to the Company by such Underwriter or through the Representative on
behalf of such Underwriter for use in the Registration Statement, any
preliminary prospectus or the Prospectus or any amendment or supplement to any
thereof. The indemnity agreement of all the respective Underwriters contained
in this paragraph 11 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Company or any
other Underwriter, or any such controlling person, and shall survive the
delivery of the Notes. 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 Notes.
(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 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
-15-
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 representing
the indemnified parties who are parties to such action).
(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
Notes pursuant to this Agreement or (ii) if the allocation provided by clause
(i) is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, on the one hand, and of the
Underwriters, on the other hand, in connection with the statements or
omissions 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 Notes pursuant to this
Agreement shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Notes 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
Notes 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 paragraph (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). 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
-16-
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 Notes set forth
opposite their respective names in Schedule II hereto and not joint.
(e) For purposes of this paragraph 11, it is understood and agreed that
the only information provided by the Underwriters for inclusion in the
Registration Statement and Prospectus was as follows:
_________________________________________.
12. Termination Date of this Agreement. This Agreement may be terminated by
----------------------------------
the Representative at any time prior to the Closing Date by delivering written
notice thereof to the Company, if on or after the date of this Agreement but
prior to such time (a) there shall have occurred any general suspension of
trading in securities on the New York Stock Exchange, or there shall have been
established by the New York Stock Exchange or by the Commission or by any
federal or state agency or by the decision of any court any limitation on prices
for such trading or any restrictions on the distribution of securities, or (b)
there shall have occurred any new outbreak of hostilities, including, but not
limited to, an escalation of hostilities which existed prior to the date of this
Agreement or any 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 Notes, 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 Notes and the delivery of the
Notes 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 Notes, the Senior
Note First Mortgage Bonds or any of the Company's other outstanding debt, the
effect of which in the reasonable judgment of the Representative, makes it
impracticable or inadvisable to consummate the sale of the Notes and the
delivery of the Notes 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 Notes. 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 ____________________. 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 Notes from any of the several Underwriters.
-17-
14. 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 the address set forth
in Schedule I hereto and if to the Company, shall be mailed or delivered to it
at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of
_______________________.
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.
[The remainder of this page has been intentionally left blank.]
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If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed duplicate hereof whereupon it
will become a binding agreement between the Company and the several Underwriters
in accordance with its terms.
Very truly yours,
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:
---------------------------------------
Authorized Representative
-19-
SCHEDULE I
Underwriting Agreement dated ________________________
Registration Statement No. 333-_____________
Representative and Addresses:
_______________________________
_______________________________
_______________________________
Attention: ______________________
with a copy of any notice pursuant to Section 11(a) to:
_______________________________
_______________________________
_______________________________
Attention: Legal Department
Designation: Senior Notes, _____% Series Due ____________________
Principal Amount: $________________________
Secured by: First Mortgage Bonds, _______% Senior Note Series Due
_______
Indenture: Indenture (For Senior Notes) dated as of March 1, 1999,
as previously supplemented, and Second Supplemental
Indenture, dated as of April 1, 2000, to Indenture (For
Senior Notes)
Date of Maturity: ______________________
Interest Rate: _______% per annum, payable __________ and _________ of
each year, commencing ______________________.
Record Dates: ___________________ and ___________________, commencing
______________________________.
Purchase Price: __________% of the principal amount thereof.
Public Offering Price: __________% of the principal amount thereof.
Redemption Terms:
Closing Date and Location:
___________________
Hunton & ▇▇▇▇▇▇▇▇
One ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-20-
SCHEDULE II
Underwriters Principal Amount
------------ ----------------
TOTAL.................... $
=
-21-