Exhibit 1
[FORM OF UNDERWRITING AGREEMENT]
DEBT SECURITIES
UNDERWRITING AGREEMENT
PUBLIC SERVICE COMPANY OF NORTH CAROLINA,
INCORPORATED
X.X. Xxx 0000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
000 Xxx Xxxx, Xxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
[____________], 1999
Ladies and Gentlemen:
We (the "Representative") are acting on behalf of the underwriter or
underwriters (including ourselves) named in Schedule I (the "Underwriters"), and
we understand that Public Service Company of North Carolina, Incorporated, a
North Carolina corporation (the "Company"), proposes to issue and sell to the
Underwriters $[ ] aggregate principal amount of its [______]% Senior Debentures
due [_____] (the "Offered Securities"). The Offered Securities will be issued
pursuant to the provisions of the Indenture dated as of January 1, 1996 between
the Company and First Union National Bank of North Carolina, as trustee (the
"Trustee"), as heretofore supplemented and as it will be supplemented by a
supplemental indenture relating to the Offered Securities (said Indenture, as so
supplemented, the "Indenture").
If Schedule I names one person, firm or corporation, the term
"Underwriters" and the term "Representative," as used in this agreement (this
"Agreement" or the "Underwriting Agreement"), shall mean that person, firm or
corporation. All obligations of the Underwriters are several and not joint. The
use of the term "Underwriter" herein shall not be deemed to establish or admit
that a purchaser of the Offered Securities is an "underwriter" of the Offered
Securities as such term is defined in and used under the Securities Act of 1933,
as amended (the "Securities Act").
1. Representations and Warranties. The Company represents and
warrants to and agrees with 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 (Registration
Statement No. 33-65205), including a prospectus (the "1995 Registration
Statement"), for the registration of $125,000,000 aggregate principal amount of
the Company's senior unsecured debt securities, of which $25,000,000 aggregate
principal amount (comprising a portion of the Offered Securities) remains
unsold. The Company has also filed with the Commission a registration statement
on Form S-3 (Registration Statement No. 333-79107) (the "1999 Registration
Statement") for the registration of $125,000,000 aggregate principal amount of
the Company's senior unsecured debt securities, also comprising a portion of the
Offered Securities, and has filed with, or transmitted for filing to, or shall
promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "Prospectus Supplement") specifically relating to the
Offered Securities pursuant to Rule 424 under the Securities Act. The term
"Registration Statement" means, collectively, the 1995 Registration Statement
and the 1999 Registration Statement, in each case, including the exhibits
thereto, as amended to the date of this Agreement. The term "Basic Prospectus"
means the combined prospectus included in the 1999 Registration Statement and
relating, pursuant to Rule 429 under the Securities Act, to the Offered
Securities, as amended and supplemented to the date of this Agreement (exclusive
of any supplement to the prospectus relating solely to securities other than the
Offered Securities). The term "Prospectus" means the Basic Prospectus together
with the Prospectus Supplement. The term "preliminary prospectus" means a
preliminary prospectus supplement specifically relating to the Offered
Securities, together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus," "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"supplement," "amendment" and "amend" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(b) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(c) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder or pursuant to
said rules and regulations will be deemed to comply therewith; (ii) each part of
the Registration Statement, on the effective date, did not contain, and each
such part, as amended or supplemented, if applicable, will not contain any
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;
(iii) the Registration Statement, on the effective date, complied and the
Prospectus, when it is first filed with the Commission pursuant to Rule 424 and
when it is amended or supplemented, if applicable, will comply in all material
respects with the Securities Act and the applicable rules and regulations of the
Commission thereunder or pursuant to said rules and regulations will be deemed
to comply therewith; and (iv) the Prospectus does not, and when it is first
filed with the Commission pursuant to Rule 424 under the Securities Act and, as
amended or supplemented, if applicable, as of the Closing Date, will not,
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this Section 1(c) do not apply (A) to statements or
omissions in the Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter expressly for use therein or (B) to that part of the Registration
Statement that
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constitutes the Statement of Eligibility (Form T-l) under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), of the Trustee.
(d) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State of North
Carolina, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and to enter into and
perform its obligations under the Underwriting Agreement, the Indenture and the
Offered Securities. The Company is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole.
(e) Each subsidiary of the Company that is a corporation has
been duly incorporated and is validly existing as a corporation, and each
subsidiary of the Company that is a limited liability company has been duly
organized and is validly existing as a limited liability company, in each case,
in good standing under the laws of the jurisdiction of its incorporation or
organization, has the corporate or limited liability company (as the case may
be) power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole.
(f) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other laws affecting creditors' rights generally and by equitable principles of
general applicability (whether considered in a proceeding at law or in equity).
(g) The Offered Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Underwriters in accordance with the terms
of the Underwriting Agreement, will be entitled to the benefits of the
Indenture, and will be valid and binding obligations of the Company, enforceable
in accordance with their terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other laws affecting creditors' rights generally and by equitable
principles of general applicability (whether considered in a proceeding at law
or in equity).
(h) This Agreement has been duly authorized, executed and
delivered by the Company.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting Agreement,
the Indenture and the Offered Securities will not contravene, conflict with,
result in a breach of or constitute a default under any provision of (A)
applicable law, (B) the amended and restated charter or the by-laws of the
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Company, (C) any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any of its subsidiaries is a party that is
material to the Company and its subsidiaries, taken as a whole or (D) any
judgment, order or decree of any governmental body, agency or court applicable
to the Company or any subsidiary.
(j) The North Carolina Utilities Commission (the "NCUC") has
issued an appropriate order or orders with respect to the issuance and sale of
the Offered Securities in accordance with the Underwriting Agreement; such order
or orders are in full force and effect; the issuance and sale of the Offered
Securities are in conformity with the terms of such order or orders; and no
other authorization, approval or consent of any other governmental body or
agency is legally required for the issuance and sale of the Offered Securities
as contemplated by the Underwriting Agreement, except as may be required under
the state securities or Blue Sky laws in connection with the purchase and
distribution of the Offered Securities by the Underwriters.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus.
(l) All legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus are so described, and all statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement or the
Prospectus, or to be filed or incorporated by reference as exhibits to the
Registration Statement, are described, filed or incorporated as required.
(m) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act") and is
not a "holding company," as such term is defined in the Public Utility Holding
Company Act of 1935, as amended ("PUHCA").
(n) The Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or water, pollutants or
contaminants ("Environmental Laws"); (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses; and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.
(o) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the course of
which it identifies and evaluates associated costs
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and liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties). On the
basis of such review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
2. Public Offering. The Company is advised by the Representative that
the Underwriters propose to make a public offering of their respective portions
of the Offered Securities as soon after the Underwriting Agreement has been
entered into as in the Representative's judgment is advisable. The terms of the
public offering of the Offered Securities are set forth in the Prospectus.
3. Purchase and Delivery. Subject to the terms and conditions herein
set forth, the Company hereby agrees to sell and the Underwriters agree to
purchase, severally and not jointly, the respective principal amounts of Offered
Securities set forth opposite the name of such Underwriter in Schedule I hereto
at the purchase price set forth in Schedule II in the type of funds and method
of payment specified in Schedule II.
Delivery of the Offered Securities and payment of the purchase price
shall be made at the time, date and place indicated in Schedule II. The time and
date of such payment and delivery are hereinafter referred to as the Closing
Date.
The Offered Securities shall be delivered to the Underwriters in such
authorized denominations and registered in such names as the Representative
shall request in writing not less than one full business day prior to the date
of delivery. The Company agrees to make the Offered Securities available to the
Underwriters for checking not later than 2:30 P.M., New York time, on the last
business day preceding the Closing Date at such place as may be agreed upon
between the Representative and the Company.
4. Conditions to Closing. The several obligations of the Underwriters
hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date,
(i) no downgrading shall have occurred and no notice
shall have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(ii) no change, and no development involving a
prospective change, shall have occurred in the condition, financial or
otherwise, or in the earnings, business or operations, of the Company
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus, that, in the judgment of Xxxxxx Xxxxxxx & Co. Incorporated,
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is material and adverse and that makes it, in the judgment of Xxxxxx
Xxxxxxx & Co. Incorporated, impracticable to market the Offered
Securities on the terms and in the manner contemplated in the
Prospectus; and
(iii) the Company shall have obtained an appropriate order
or orders of the NCUC authorizing the issuance, sale and delivery of
the Offered Securities as contemplated by this Agreement, which order
or orders at the Closing Date shall be in full force and effect and
shall not be contested or the subject of review or appeal.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company to the effect set forth in clause (a)(i) and (iii) above and that the
representations and warranties of the Company contained in this Agreement are
true and correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied on or before the Closing Date.
(c) The Representative shall have received on the Closing Date
an opinion dated the Closing Date of McGuire, Woods, Battle & Xxxxxx LLP,
special counsel to the Company, to the effect that
(i) the Indenture has been duly qualified under the
Trust Indenture Act and is a valid and binding agreement of the
Company, enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether considered in a
proceeding at law or in equity);
(ii) the Offered Securities, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the
terms of the Underwriting Agreement, will be entitled to the benefits
of the Indenture and will be valid and binding obligations of the
Company, in each case enforceable in accordance with their respective
terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether considered in a proceeding at law or in equity);
(iii) the execution and delivery by the Company of, and
the performance by the Company of its obligations under, the
Underwriting Agreement, the Indenture and the Offered Securities will
not contravene, conflict with, result in a breach of or constitute a
default under any provision of (A) applicable law (assuming compliance
with all applicable state securities or Blue Sky laws), (B) to the best
of such counsel's knowledge after due inquiry, any indenture, mortgage,
deed of trust or other agreement or instrument to which the Company or
any of its subsidiaries is a party that is material to the Company and
its subsidiaries, taken as a whole or (C) to the best of such counsel's
knowledge after due inquiry, any judgment, order or decree of any
governmental body, agency or court applicable to the Company or any
subsidiary;
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(iv) no authorization, approval or consent of any other
governmental body or agency is legally required for the issuance and
sale of the Offered Securities as contemplated by the Underwriting
Agreement, except (A) as may be required under the state securities or
Blue Sky laws in connection with the purchase and distribution of the
Offered Securities by the Underwriters, (B) registration of the Offered
Securities under the Securities Act and (C) as may be required by any
securities exchange on which the Offered Securities may be listed;
(v) the statements in the Prospectus under the captions
"Description of Debentures," "Description of Debt Securities,"
"Underwriting" and "Plan of Distribution," in each case insofar as such
statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the information called
for with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein;
(vi) to the best of such counsel's knowledge after due
inquiry, such counsel does not know of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed or incorporated
by reference as exhibits to the Registration Statement that are not
described, filed or incorporated as required;
(vii) the Company is not (A) an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act or (B) a "holding company," as
such term is defined in PUHCA;
(viii) the Registration Statement has become and is
effective under the Securities Act, and, to the best of such counsel's
knowledge, in the case of McGuire, Woods, Battle & Xxxxxx LLP's
opinion, based solely on their inquiries with the Commission and the
Company, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for a stop order with
respect thereto are pending or threatened under Section 8(d) of the
Securities Act; and
(ix) such counsel (A) is of the opinion that (except for
financial statements and schedules and other financial and statistical
data contained or incorporated by reference therein, as to which such
counsel need not express any opinion) each document, if any, filed
pursuant to the Exchange Act and incorporated by reference in the
Prospectus complied when so filed as to form in all material respects
with the Exchange Act and the applicable rules and regulations of the
Commission thereunder, (B) believes that (except for financial
statements and schedules and other financial and statistical data
contained or incorporated by reference therein, as to which such
counsel need not express any belief and except for that part of the
Registration Statement that constitutes the Form T-l heretofore
referred to) each part of the Registration Statement, on the effective
date, did not, and, as of the date such opinion is delivered, does not
contain any 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, (C) is of the opinion that the
Registration Statement, on the effective date, and the Prospectus, when
it was first filed with the Commission pursuant to Rule 424 under the
Securities Act (in each case, except
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for financial statements and schedules and other financial and
statistical data included or incorporated by reference therein, as to
which such counsel need not express any opinion), complied as to form
in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (D) believes
that (except for financial statements and schedules and other financial
or statistical data contained or incorporated by reference therein, as
to which such counsel need not express any belief) the Prospectus, when
it was first filed with the Commission pursuant to Rule 424 under the
Securities Act, did not and as of the date such opinion is delivered,
does not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
In rendering such opinion, McGuire, Woods, Battle & Xxxxxx LLP may limit the
matters set forth therein to those involving the application of the laws of the
State of New York and the federal laws of the United States of America.
(d) The Representative shall have received on the Closing Date
an opinion dated the Closing Date of J. Xxxx Xxxxxxx, Esq., Corporate Counsel
and Secretary of the Company, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of North Carolina, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus and
is duly qualified and in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole;
(ii) each subsidiary of the Company that is a corporation
has been duly incorporated and is validly existing as a corporation,
and each subsidiary of the Company that is a limited liability company
has been duly organized and is validly existing as a limited liability
company, in each case, in good standing under the laws of the
jurisdiction of its organization, has the corporate or limited
liability company (as the case may be) power and authority to own its
property and to conduct its business as described in the Prospectus and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(iii) the Offered Securities have been duly authorized,
and this Agreement and the Indenture have been duly authorized,
executed and delivered, by the Company;
(iv) to the best of such counsel's knowledge after due
inquiry, such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the
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Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not
so described;
(v) the statements (A) in the Registration Statement
under Item 15, (B) in "Item 3 - Legal Proceedings" of the Company's
most recent annual report on Form 10-K incorporated by reference in the
Prospectus and (C) in "Item 1 - Legal Proceedings" of Part II of the
Company's quarterly reports on Form 10-Q filed since such annual
report, and (D) in the Company's current report on Form 8-K filed
February 22, 1999, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to such
legal matters, documents and proceedings and fairly summarize the
matters referred to therein;
(vi) NCUC has issued an appropriate order or orders with
respect to the issuance and sale of the Offered Securities in
accordance with the Underwriting Agreement; such order or orders are in
full force and effect and are sufficient to authorize such issuance and
sale as contemplated by the Agreement; the issuance and sale of the
Offered Securities are in conformity with the terms of such order or
orders; no challenge to or appeal of such order or orders after the
date of issuance of the Offered Securities can affect the validity of
the Offered Securities; and
(vii) the execution and delivery by the Company of, and
its performance of its obligations under, each of this Agreement, the
Indenture and the Offered Securities will not contravene, conflict
with, result in a breach of or constitute a default under any provision
of the Company's Amended and Restated Charter or Amended and Restated
By-Laws.
Such opinion shall also cover the matters referred to in
paragraph (c), other than clause (vii) thereof.
In rendering such opinion, J. Xxxx Xxxxxxx may limit the matters set forth
therein to those involving the application of the laws of the State of North
Carolina and the federal laws of the United States of America.
(e) The Representative shall have received on the Closing Date
an opinion dated the Closing Date of Winthrop, Stimson, Xxxxxx & Xxxxxxx,
counsel for the Underwriters, covering the matters referred to in subparagraphs
(i), (ii), (v), (viii) and (ix) (but only as to the matters referred to in
clauses (B), (C) and (D) thereof) of paragraph (c) above.
As to matters of North Carolina law, Winthrop, Stimson, Xxxxxx &
Xxxxxxx may rely upon the opinion of even date herewith of J. Xxxx Xxxxxxx.
With respect to the subparagraph (ix) of paragraph (c) above, McGuire,
Woods, Battle & Xxxxxx LLP, special counsel to the Company, may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and review and discussion of the contents thereof (including the documents
incorporated by reference therein), but are without independent check or
verification, except as specified. With respect to clauses (B), (C) and (D) of
subparagraph (ix) of
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paragraph (c) above, Winthrop, Stimson, Xxxxxx & Xxxxxxx may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
(but not including documents incorporated therein by reference) and review and
discussion of the contents thereof (including documents incorporated therein by
reference) but are without independent check or verification, except as
specified.
The opinions of McGuire, Woods, Battle & Xxxxxx LLP, special
counsel to the Company, described in paragraph (c) above and of J. Xxxx Xxxxxxx,
Esq., Vice-President - Corporate Counsel and Secretary, described in paragraph
(d) above, shall be rendered to the Representative at the request of the Company
and shall so state therein.
(f) The Representative shall have received on the date of this
Agreement a letter, dated the date of this Agreement, in form and substance
satisfactory to the Representative, from Xxxxxx Xxxxxxxx LLP, the Company's
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in or incorporated by reference into the Prospectus.
(g) The Representative shall have received on the Closing Date
a letter, dated the Closing Date, in form and substance satisfactory to the
Representative, from Xxxxxx Xxxxxxxx LLP, the Company's independent public
accountants, to the effect that such accountants reaffirm, as of the Closing
Date, and as though made on the Closing Date, the statements made in the letter
furnished by such accountants pursuant to Section 4(e), except that the
specified date referred to therein shall be a date not more than five business
days prior to the Closing Date.
(h) On the Closing Date, Standard & Poor's Ratings Services
and Xxxxx'x Investors Service, Inc. shall have publicly assigned to the Offered
Securities ratings of A- and A2, respectively, which ratings shall be in full
force and effect on the Closing Date.
5. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants as follows:
(a) To furnish the Representative, without charge, a signed
copy of the Registration Statement (including exhibits thereto) and to deliver
to each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and, during the period mentioned in paragraph (c)
below, as many copies of the Prospectus, any documents incorporated by reference
therein and any supplements and amendments thereto or to the Registration
Statement as the Underwriters may reasonably request.
(b) To cause the Prospectus to be filed with the Commission
pursuant to and in compliance with Rule 424 under the Securities Act.
(c) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to the Representative a copy of each
such proposed amendment or supplement and not to file any such proposed
amendment or supplement to which the Representative reasonably objects.
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(d) If, during such period after the first date of the public
offering of the Offered Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in connection
with sales by an Underwriter or dealer, any event shall occur or condition exist
as a result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriters, it is necessary to amend or supplement the
Prospectus to comply with law, forthwith to prepare, file with the Commission
and furnish, at its own expense, to the Underwriters, and to the dealers (whose
names and addresses the Representative will furnish to the Company) to which
Offered Securities may have been sold by the Representative on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus,
as amended or supplemented, will comply with applicable law.
(e) To endeavor to qualify the Offered Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Representative shall reasonably request and to maintain such qualification for
as long as the Representative shall reasonably request.
(f) To make generally available to the Company's security
holders and to the Representative as soon as practicable an earning statement
covering a twelve month period beginning on the first day of the first full
fiscal quarter after the date of the Underwriting Agreement, which earning
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and the rules and regulations of the Commission thereunder. If such fiscal
quarter is the last fiscal quarter of the Company's fiscal year, such earning
statement shall be made available not later than 90 days after the close of the
period covered thereby and in all other cases shall be made available not later
than 45 days after the close of the period covered thereby.
(g) During the period beginning on the date of this Agreement
and continuing to and including the Closing Date, without the prior written
consent of Xxxxxx Xxxxxxx & Co. Incorporated, not to (1) 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 to purchase, lend or
otherwise transfer or dispose of, directly or indirectly, any debt securities of
the Company or warrants to purchase debt securities of the Company substantially
similar to the Offered Securities or any securities convertible into or
exercisable or exchangeable therefor (other than (i) the Offered Securities,
(ii) commercial paper issued in the ordinary course of business and (iii) other
debt securities evidencing commercial bank loans) or (2) enter into any swap or
similar arrangement that transfers, in whole or part, the economic consequences
of ownership of any of the foregoing, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of the Offered Securities
or such other securities, in cash or otherwise.
(h) Whether or not any sale of the Offered Securities is
consummated, to pay all expenses incident to the performance of its obligations
under the Underwriting Agreement, including: (i) the preparation and filing of
the Registration Statement and the Prospectus and all amendments and supplements
thereto, (ii) the preparation, issuance and delivery of the Offered Securities,
(iii) the fees and disbursements of the Company's counsel and accountants and of
the Trustee and its counsel, (iv) the qualification of the Offered Securities
under securities or Blue
11
Sky laws in accordance with the provisions of Section 5(e), including filing
fees and the fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of any Blue Sky
Memoranda, (v) the printing and delivery to the Underwriters in quantities as
hereinabove stated of copies of the Registration Statement and all amendments
thereto and of the Prospectus and any amendments or supplements thereto, (vi)
any fees charged by rating agencies for the rating of the Offered Securities,
(vii) the fees and expenses, if any, incurred with respect to any filing with
the National Association of Securities Dealers, Inc. and (viii) all document
production charges and expenses of counsel to the Underwriters (but not
including their fees for professional services) in connection with the
preparation of this Agreement.
6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Underwriter or any such
controlling person in connection with investigating or defending any such action
or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representative expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Representative expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such
12
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by the
Representative, in the case of parties indemnified pursuant to paragraph (a)
above, and by the Company, in the case of parties indemnified pursuant to
paragraph (b) above. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (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 Offered Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, 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 Offered Securities
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of such Offered Securities (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus Supplement, bear to the aggregate public offering price
of the Offered Securities. The relative fault of the Company on the one hand and
of 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 the omission or alleged omission to state a material fact relates to
13
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 Underwriters' respective obligations to
contribute pursuant to this Section 6 are several in proportion to the
respective principal amounts of the Offered Securities they have purchased
hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 6 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Offered
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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. The remedies provided for in this Section 6 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
7. Termination. This Agreement shall be subject to termination, by
notice given by the Representative to the Company, if (a) after the execution
and delivery of the Underwriting Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Nasdaq
National Market, the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities or (iv)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment of
Xxxxxx Xxxxxxx & Co. Incorporated, is material and adverse and (b) in the case
of any of the events specified in clauses (a)(i) through (iv), such event,
singly or together with any other such event, makes it, in the judgment of
Xxxxxx Xxxxxxx & Co. Incorporated, impracticable to market the Offered
Securities on the terms and in the manner contemplated in the Prospectus. This
Agreement may also be terminated at any time prior to the Closing Date if in the
judgment of Xxxxxx Xxxxxxx & Co. Incorporated the subject matter of any
amendment or supplement to the Registration Statement or Prospectus prepared and
furnished by the Company reflects a material adverse change in the business,
properties or financial condition of the Company which renders it either
inadvisable to proceed with such offering, if any, or inadvisable to proceed
with the delivery of the Offered Securities to be purchased hereunder.
14
8. Defaulting Underwriters. If, on the Closing Date, any one or more of
the Underwriters shall fail or refuse to purchase the Offered Securities that it
has or they have agreed to purchase hereunder on such date, and the aggregate
amount of Offered Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate amount of the Offered Securities to be purchased on such date, the
other Underwriters shall be obligated severally in the proportions that the
amount of Offered Securities set forth opposite their respective names in the
Underwriting Agreement bears to the aggregate amount of the Offered Securities
set forth opposite the names of all such non-defaulting Underwriters, or in such
other proportions as the Representative may specify, to purchase the Offered
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided that in no event shall the amount
of the Offered Securities that any Underwriter has agreed to purchase pursuant
to this Agreement be increased pursuant to this Section 8 by an amount in excess
of one-ninth of such amount of the Offered Securities without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase the Offered Securities that it has
or they have agreed to purchase and the aggregate amount of the Offered
Securities with respect to which such default occurs is more than one-tenth of
the aggregate amount of the Offered Securities to be purchased on such date, and
arrangements satisfactory to the Representative and the Company for the purchase
of such Offered Securities are not made within 36 hours after such default, the
Underwriting Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either the
Representative or the Company shall have the right to postpone the Closing Date
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under the Underwriting Agreement.
If the Underwriting Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of the Underwriting
Agreement, or if for any reason the Company shall be unable to perform its
obligations under the Underwriting Agreement, the Company will reimburse the
Underwriters or such Underwriters as have so terminated the Underwriting
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Underwriters in connection with the Underwriting Agreement or the offering
of the Offered Securities.
9. Representations and Indemnities to Survive. The respective indemnity
and contribution agreements and the representations, warranties and other
statements of the Company, its officers and the Underwriters set forth in the
Underwriting Agreement will remain in full force and effect, regardless of any
termination of the Underwriting Agreement, any investigation made by or on
behalf of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Section 6 and delivery of and payment for the
Offered Securities.
10. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 6, and no
other person will have any right or obligation hereunder.
15
11. Counterparts. The Underwriting Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
12. Applicable Law. The Underwriting Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
13. Headings. The headings of the sections of the Underwriting
Agreement have been inserted for convenience of reference only and shall not be
deemed a part of the Underwriting Agreement.
14. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telecopied and confirmed
to Xxxxxx Xxxxxxx & Co. Incorporated at 0000 Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attn: Managing Director - Debt Syndicate, Telecopy No: (212)
761-0783, or, if sent to the Company, will be mailed, delivered or telecopied
and confirmed to it at X.X. Xxx 0000, Xxxxxxxx, Xxxxx Xxxxxxxx 00000-0000 000
Xxx Xxxx, Xxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attn: Xx. Xxxx X. Xxxxx, Vice
President - Finance, Telecopy No: (000) 000-0000.
15. Effective Date. As used herein, the term "effective date" shall
mean the later of (i) the date the Registration Statement (or the most recent
post-effective amendment thereto) was declared effective by the Commission under
the Securities Act and (ii) the date the Company's most recent Annual Report on
Form 10-K was filed with the Commission pursuant to the Exchange Act.
16
Please confirm your agreement by having an authorized officer sign a
copy of the Underwriting Agreement in the space set forth below.
Very truly yours,
XXXXXX XXXXXXX & CO. INCORPORATED
By:______________________________
Name:
Title:
Accepted, [ ]
PUBLIC SERVICE COMPANY OF NORTH CAROLINA,
INCORPORATED
By:_________________________________
Name:
Title:
17
Schedule I
Principal Amount
Name of Underwriter of Offered Securities
------------------- ----------------------
Xxxxxx Xxxxxxx & Co. Incorporated .. . . . . . . . . . . . . $[ ]
Schedule II
Underwriting Agreement dated [ ]
Registration Statement No. 33-65205, 333-79107
Representative and Address:
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Securities: Senior Debentures
Designation: [ ]% Senior Debentures due [ ]
Principal Amount: $[ ]
Supplemental Indenture dated as of: [ ]
Date of Maturity: [ ]
Interest Rate: [ ]%
Purchase Price: [ ]% [plus accrued interest, if any, from [ ]]
Public Offering Price: [ ]% [plus accrued interest, if any, from [ ]]
Type of Funds/Method of Payment: Immediately Available Funds/Wire Transfer
Closing Date and Location: [ ], at the offices of McGuire, Woods, Battle &
Xxxxxx LLP or at such other location as is agreed upon by the parties hereto.
