Exhibit 1(a)
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CP&L ENERGY, INC.
[Title of Debt Security]
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 CP&L Energy, Inc., (the "Company") hereby confirms its
agreement with each of the several Underwriters hereinafter named as follows:
1. Underwriters and Representative. The term "Underwriters" as used 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 hereof, and the term "Underwriter" shall be deemed to
mean one of such Underwriters. If the firm or firms listed in Schedule I hereto
(the "Representative") are the same as the firm or firms listed in Schedule II
hereto, then the terms "Underwriters" and "Representative," as used herein,
shall each be deemed to refer to such firm or firms. The Representative
represents that it has been authorized by the Underwriters to execute this
Agreement on their behalf and to act for them in the manner herein provided.
All obligations of the Underwriters hereunder are several and not joint. If
more than one firm is named in Schedule I hereto, any action under or in respect
of this Agreement may be taken by such firms jointly as the Representative or by
one of the firms acting on behalf of the Representative, and such action will be
binding upon all the Underwriters.
2. Description of Securities. The Company proposes to issue and sell its
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debt securities of the designation, with the terms and in the amount specified
in Schedule I hereto (the "Securities") in one or more new series under a
governing indenture (the "Indenture") between the Company and
______________________, as trustee (the "Trustee"), in substantially the form
heretofore delivered to the Representative.
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
$_______________of the Company's securities (the "Registered Securities") as
described in the Registration Statement. As of the date hereof, the
Company has sold Registered Securities in the aggregate amount of
$_____________. The Registration Statement has been declared effective by the
Commission, and the Indenture has been qualified under the Trust Indenture Act
of 1939 Act, as amended (the "1939 Act"). The term "Registration Statement"
shall be deemed to include all amendments thereto to the date hereof and all
documents incorporated by reference therein (the "Incorporated Documents").
The prospectus included in the Registration Statement, as it is to be
supplemented by a prospectus supplement, dated on or about the date hereof,
relating to the Securities (the "Prospectus Supplement"), and all prior
amendments or supplements thereto (other than amendments or supplements
relating to securities of the Company other than the Securities), including
the Incorporated Documents, is hereinafter referred to as the "Prospectus."
Any reference herein to the terms "amend, " "amendment" or "supplement" with
respect to the Registration Statement or the Prospectus shall be deemed to
refer to and include the filing of any document under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), deemed to be incorporated
therein after the date hereof and prior to the termination of the offering of
the Securities by the Underwriters; and any references herein to the terms
"Registration Statement" or "Prospectus" at a date after the filing of the
Prospectus Supplement shall be deemed to refer to the Registration Statement
or the Prospectus, as the case may be, as each may be amended or supplemented
prior to such date.
(b) Prior to the termination of the offering of the Securities, the
Company will not file any amendment to the Registration Statement or
supplement to the Prospectus which shall not have previously been furnished to
the Representative or of which the Representative shall not previously have
been advised or to which the Representative shall reasonably object in writing
and which has not been approved by the Underwriter(s) or their counsel acting
on behalf of the Underwriters.
(c) The Registration Statement, at the time and date it was declared
effective by the Commission, complied, and the Registration Statement, the
Prospectus and the Indenture, at the date the Prospectus is filed with, or
transmitted for filing to, the Commission pursuant to Rule 424 under the
Securities Act ("Rule 424") and at the Closing Date, will comply, in all
material respects, with the applicable provisions of the Securities Act and
the 1939 Act and the applicable rules and regulations of the Commission
thereunder; the Registration Statement, at the time and date it was declared
effective by the Commission, did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and the Prospectus,
at the date it is filed with, or transmitted for filing to, the Commission
pursuant to Rule 424 and at the Closing Date, will not contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the foregoing
representations and warranties in this subparagraph (c) shall not apply to
statements or omissions made in reliance upon and in conformity with
information furnished herein or in writing to the Company by the
Representative or by or on behalf of any Underwriter through the
Representative expressly for use in the Prospectus or to any statements in or
omissions from the Statement of Eligibility (Forms T-1) of the Trustee under
any Indenture. The Incorporated Documents, when they were filed with the
Commission, complied in all material respects with the applicable requirements
of the Exchange Act and the rules and regulations of the Commission
thereunder; and any documents so filed and incorporated by reference
subsequent to the date hereof and prior to the termination of the offering of
the Securities by the Underwriters will, when they are filed with the
Commission, comply in all material respects with the requirements of the
Exchange Act and
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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 ______________, 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, (i) there has been no material adverse change in the
financial condition, earnings, business affairs or business prospects of the
Company; (ii) there has been no material transaction entered into by the
Company or any of its subsidiaries other than transactions contemplated by the
Registration Statement and Prospectus or transactions arising in the ordinary
course of business; and (iii) the Company has no material contingent
obligation that is not disclosed in the Registration Statement and 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 articles of incorporation (the
"Articles"), by-laws and applicable law.
(g) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not result in a breach of any of the
terms or provisions of, or constitute a default under, the Articles, the
Company's by-laws, applicable law or any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or any significant
subsidiary (as such term is defined in Rule 1-01(w) of Regulation S-X) of the
Company (each a "Significant Subsidiary" and each of which is listed on
Schedule III hereto) 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.
(h) The Securities conform in all material respects to the description
contained in the Prospectus.
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of North Carolina;
each Significant Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
organization; each of the Company and each Significant Subsidiary has
corporate power and authority to own, lease and operate its properties and to
conduct its business as contemplated under this Agreement and the other
agreements to which it is a party; and each of the Company and each
Significant Subsidiary is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is
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required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not have a
material adverse effect on the financial condition, earnings, business affairs
or business prospects of the Company and its subsidiaries considered as a
whole.
(j) The outstanding capital stock of the Company has been duly authorized
and validly issued and is fully paid and non-assessable and is not subject to
preemptive or other similar rights.
(k) The issued and outstanding capital stock of each Significant
Subsidiary has been duly authorized and validly issued and is fully paid and
non-assessable; and the common capital stock of each Significant Subsidiary is
owned by the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equitable
right.
(l) The Indenture (A) has been duly authorized, executed and delivered by
the Company, and, assuming due authorization, execution and delivery by the
Trustee, constitutes a valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to (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) conforms in all
material respects to the description thereof in the Prospectus.
(m) The Securities have been duly authorized by the Company and, when
issued and authenticated in the manner provided for in the Indenture and
delivered against payment of the required consideration therefor, will
constitute valid and legally binding obligations of the Company, entitled to
the benefits of the Indenture and enforceable against the Company in
accordance with their terms, subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transferor or similar laws affecting
creditors' rights generally and (ii) general principles of equity (regardless
of whether such enforceability is considered in a proceeding at law or in
equity and except the effect on enforceability of federal or state law
limiting, delaying or prohibiting the making of payments outside the United
States). Such Securities rank and will rank on a parity with all unsecured and
unsubordinated indebtedness of the Company that is outstanding on the date
hereof.
(n) 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").
(o) 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 or the transactions
contemplated herein or therein.
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(p) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority
or agency is necessary or required for the performance by the Company of its
obligations hereunder in connection with the offering, issuance or sale of the
Securities hereunder or the consummation of the transactions herein
contemplated or for the due execution, delivery or performance of the
Indenture by the Company, except such as have 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.
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 the Underwriters, severally and not
jointly, and each such Underwriter agrees, severally and not jointly, to
purchase from the Company, the respective principal amount of Securities set
forth opposite the name of such Underwriter in Schedule II hereto at the
purchase price set forth in Schedule I hereto.
5. Reoffering by Underwriters. The Underwriters agree to make promptly a
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bona fide public offering of the Securities to the public for sale as set forth
in the Prospectus, subject, however, to the terms and conditions of this
Agreement.
6. Time and Place of Closing; Default of Underwriters.
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(a) Payment for the Securities shall be made at the place, time and date
specified in Schedule I hereto against delivery of the Securities at the
office of ________________ [name and address of the Trustee], or such other
place, time and date as the Representative and the Company may agree. The hour
and date of such delivery and payment are herein called the "Closing Date."
Payment for the Securities shall be by wire transfer of immediately available
funds against delivery of the Securities to The Depository Trust Company or to
_________________, as custodian for The Depository Trust Company, in fully
registered global form registered in the name of Cede & Co., for the
respective accounts specified by the Representative not later than the close
of business on the business day prior to the Closing Date or such other date
and time not later than the Closing Date as agreed by The Depository Trust
Company or _____________________. For the purpose of expediting the checking
of the certificates by the Representative, the Company agrees to make the
Securities available to the Representative not later than 10:00 A.M., on the
last full business day prior to the Closing Date at said office of
________________ [the Trustee].
(b) If one or more of the Underwriters shall, for any reason permitted
hereunder, cancel its obligation to purchase hereunder and to take up and pay
for the principal amount of the Securities to be purchased by such one or more
Underwriters, the Company shall immediately notify the Representative, and the
remaining Underwriters shall have the right, within 24 hours of receipt of
such notice, either to take up and pay for (in such proportion as may be
agreed upon among them) or to substitute another Underwriter or Underwriters,
satisfactory to the Company, to take up and pay for the principal amount of
the Securities which such one or more Underwriters did not purchase. If one or
more Underwriters shall, for any reason other than a reason permitted
hereunder, fail to take up and pay for the principal amount of the Securities
to be purchased by such one or more Underwriters, the Company shall
immediately notify the Representative, and the remaining Underwriters shall be
obligated to take up and pay for (in addition to the respective principal
amount of the Securities set forth opposite their respective names in Schedule
II hereto) the principal amount of the Securities which such defaulting
Underwriter or Underwriters failed to take up and pay for, up to a principal
amount thereof equal
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to, in the case of each such remaining Underwriter, 10% of the principal
amount of the Securities 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 Securities which
the defaulting Underwriter or Underwriters agreed but failed to purchase. If
any unpurchased Securities still remain, then the Company or the
Representative shall be entitled to an additional period of 24 hours within
which to procure another party or parties, members of the National Association
of Securities Dealers, Inc. (or if not members of such Association, who are
not eligible for membership in said Association and who agree (i) to make no
sales within the United States, its territories or its possessions or to
persons who are citizens thereof or residents therein and (ii) in making sales
to comply with said Association's Rules of Fair Practice) and satisfactory to
the Company, to purchase or agree to purchase such unpurchased Securities on
the terms herein set forth. In any such case either the Representative or the
Company shall have the right to postpone the Closing Date for a period not to
exceed three full business days from the date agreed upon in accordance with
this paragraph 6, in order that the necessary changes in the Registration
Statement and Prospectus and any other documents and arrangements may be
effected. If (i) neither the non-defaulting Underwriters nor the Company has
arranged for the purchase of such unpurchased Securities by another party or
parties as above provided and (ii) the Company and the non-defaulting
Underwriters have not mutually agreed to offer and sell the Securities other
than the unpurchased Securities, then this Agreement shall terminate without
any liability on the part of the Company or any Underwriter (other than an
Underwriter which shall have failed or refused, in accordance with the terms
hereof, to purchase and pay for the principal amount of the Securities which
such Underwriter has agreed to purchase as provided in paragraph 4 hereof),
except as otherwise provided in paragraph 7 and paragraph 8 hereof.
7. Covenants of the Company. The Company covenants with each Underwriter
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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 Securities. The Company will promptly
deliver to the Representative and to counsel for the Underwriters, to the
extent not previously delivered, one fully executed copy or one conformed
copy, certified by an officer of the Company, of the Registration Statement,
as originally filed, and of all amendments thereto, heretofore or hereafter
made, (other than those relating solely to securities other than the
Securities), including any post-effective amendment (in each case including
all exhibits filed therewith and all documents incorporated therein not
previously furnished to the Representative), including signed copies of each
consent and certificate included therein or filed as an exhibit thereto, and
will deliver to the Representative for distribution to the Underwriters as
many conformed copies of the foregoing (excluding the exhibits, but including
all documents incorporated therein) as the Representative may reasonably
request. The Company will also send to the Underwriters as soon as practicable
after the date of this Agreement and thereafter from time to time as many
copies of the Prospectus as the Representative may reasonably request for the
purposes required by the Securities Act.
(b) During such period (not exceeding nine months) after the commencement
of the offering of the Securities as the Underwriters may be required by law
to deliver a Prospectus, if any event relating to or affecting the Company, or
of which the Company shall be advised in
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writing by the Representative shall occur, which in the Company's opinion
should be set forth in a supplement to or an amendment of the Prospectus in
order to make the Prospectus not misleading in the light of the circumstances
when it is delivered to a purchaser, or if it is necessary to amend the
Prospectus to comply with the Securities Act, the Company will forthwith at
its expense prepare and furnish to the Underwriters and dealers named by the
Representative a reasonable number of copies of a supplement or supplements or
an amendment or amendments to the Prospectus which will supplement or amend
the Prospectus so that as supplemented or amended it will comply with the
Securities Act and will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances when the Prospectus is delivered to
a purchaser, not misleading. In case any Underwriter is required to deliver a
Prospectus after the expiration of nine months after the commencement of the
offering of the Securities, the Company, upon the request of the
Representative, will furnish to the Representative, at the expense of such
Underwriter, a reasonable quantity of a supplemented or amended prospectus, or
supplements or amendments to the Prospectus, complying with Section 10(a) of
the Securities Act.
(c) The Company will make generally available to its security holders, as
soon as reasonably practicable, but in any event not later than 16 months
after the end of the fiscal quarter in which the filing of the Prospectus
pursuant to Rule 424 occurs, an 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 Securities.
(e) The Company will advise the Representative promptly of the filing of
the Prospectus pursuant to Rule 424 and of any amendment or supplement to the
Prospectus or Registration Statement or of official notice of institution of
proceedings for, or the entry of, a stop order suspending the effectiveness of
the Registration Statement and, if such a stop order should be entered, use
its best efforts to obtain the prompt removal thereof.
(f) The Company will use its best efforts to qualify the Securities, as
may be required, for offer and sale under the Blue Sky or legal investment
laws of such jurisdictions as the Representative may designate, and will file
and make in each year such statements or reports as are or may be reasonably
required by the laws of such jurisdictions; provided, however, that the
Company shall not be required to qualify as a foreign corporation or dealer in
securities, or to file any general consents to service of process under the
laws of any jurisdiction.
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 Securities to the Underwriters, (iii) the fees and
disbursements of the Company's counsel and accountants, (iv) the expenses in
connection with the qualification of the Securities under securities laws in
accordance with the provisions of subparagraph (f) of paragraph 7 hereof,
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
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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, and (vii) the preparation, execution, filing and recording by the
Company of the Indenture (such filing and recordation to be promptly made, after
execution and delivery of such Indenture to the Trustee under the Indenture in
the counties in which the mortgaged property of the Company is located); and the
Company will pay all taxes, if any (but not including any transfer taxes), on
the issue of the Securities and the filing and recordation of the Indenture.
The fees and disbursements of Underwriters' counsel shall be paid by the
Underwriters (subject, however, to the provisions of the preceding paragraph
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 hereof, the Company shall reimburse the
Representative for the account of the Underwriters for the fees and
disbursements of Underwriters' counsel. The Company shall not be required to
pay any amount for any expenses of the Representative or of any other of the
Underwriters except as provided in paragraph 7 hereof and in this paragraph 8.
The Company shall not in any event be liable to any of the Underwriters for
damages on account of the loss of anticipated profit.
9. Conditions of Underwriters' Obligations. The several obligations of the
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Underwriters to purchase and pay for the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company as of
the date hereof and the Closing Date, to the performance by the Company of its
obligations to be performed hereunder prior to the Closing Date, and to the
following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date; and no proceedings for that
purpose shall be pending before, or, to the Company's knowledge, threatened
by, the Commission on the Closing Date. The Representative shall have
received, prior to payment for the Securities, a certificate dated the Closing
Date and signed by the Chairman, President or a Vice President of the Company
to the effect that no such stop order is in effect and that no proceedings for
such purpose are pending before or, to the knowledge of the Company,
threatened by the Commission.
(b) At the Closing Date, the Representative shall receive favorable
opinions from (1) Hunton & ▇▇▇▇▇▇▇▇, of counsel to the Company, which opinion
shall be satisfactory in form and substance to counsel for the Underwriters,
and (2) ______________, counsel for the Underwriters (which counsel may rely
as to all matters of North Carolina law upon the opinions of ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq., Senior Vice President and Corporate Secretary for the Company)
to the effect that:
(i) the Indenture has been duly and validly authorized by all
necessary corporate action, has been duly and validly executed and
delivered, 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;
(ii) the Indenture has been duly qualified under the 1939 Act;
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(iii) assuming authentication by the Trustee in accordance with the
Indenture and delivery to and payment for the Securities by the
Underwriters, as provided in this Agreement, the Securities have been duly
and validly authorized, executed and delivered and are legal, valid and
binding obligations of the Company enforceable in accordance with their
terms, except as limited by bankruptcy, insolvency or other laws affecting
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 Indenture;
(iv) the statements made in the Prospectus under the caption
"Description of Debt Securities" 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;
(v) this Agreement has been duly and validly authorized, executed
and delivered by the Company;
(vi) the Registration Statement, at the time and date it was
declared effective by the Commission, and the Prospectus, at the time it
was filed with, or transmitted for filing to, the Commission pursuant to
Rule 424, (except as to the financial statements and other financial and
statistical data constituting a part thereof or incorporated by reference
therein, upon which such opinions need not pass), complied as to form in
all material respects with the requirements of the Securities Act and the
1939 Act and the applicable instructions, rules and regulations of the
Commission thereunder; the documents or portions thereof filed with the
Commission pursuant to the Exchange Act and deemed to be incorporated by
reference in 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;
(vii) nothing has come to the attention of said counsel that would
lead them to believe that the Registration Statement, at the time and date
it was declared effective by the Commission, 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
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(viii) an appropriate order of the Commission with respect to the sale
of the Securities under the Public Utility Holding Company Act of 1935, as
amended (the "Holding Company Act"), has been issued, and such order
remains in effect at this date and constitutes valid and sufficient
authorization for the sale of the Securities as contemplated by this
Agreement; and no approval or consent by any public regulatory body, other
than such order and notification of effectiveness by the Commission, is
legally required in connection with the sale of the Securities as
contemplated by this Agreement (except to the extent that compliance with
the provisions of securities or blue sky laws of certain states may be
required in connection with the sale of the Securities in such states) and
the carrying out of the provisions of this Agreement.
(c) At the Closing Date, the Representative shall receive from ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq., Senior Vice President and Corporate Secretary for the Company,
a favorable opinion in form and substance satisfactory to counsel for the
Underwriters, to the same effect with respect to the matters enumerated in
subdivisions (i) through (v) and subdivision (vii) of subparagraph (b) of this
paragraph 9 as the opinions required by said subparagraph (b), and to the
further effect that:
(i) the Company is a validly organized and existing corporation and
is in good standing under the laws of the State of North Carolina; each
Significant Subsidiary is a validly organized and existing corporation and
is in good standing under the laws of the jurisdiction of its
organization; and the Company and each of its subsidiaries is qualified as
a foreign corporation in each state where the failure to be so qualified
would have a material adverse effect on the Company and its subsidiaries
considered as a whole;
(ii) each of the Company and each Significant Subsidiary is duly
authorized by its articles of incorporation to conduct the business which
it is now conducting as set forth in the Prospectus;
(iii) the issuance and sale of the Securities have been duly
authorized by all necessary corporate action on the part of the Company;
(iv) except as described in or contemplated by the Prospectus, there
are no pending actions, suits or proceedings against or affecting the
Company or any Significant Subsidiary 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 or the transactions contemplated herein or therein; and
(v) the consummation of the transactions herein contemplated and
the fulfillment of the terms hereof will not result in a breach of any of
the terms or provisions of, or constitute a default under, the Articles,
the Company's by-laws, applicable law or any indenture, mortgage, deed of
trust or other agreement or instrument to which the Company or any
Significant Subsidiary is now a party or any judgment, order, writ or
decree of any government or governmental authority or agency or court
having jurisdiction over the Company or any of its subsidiaries or any of
their assets, properties or operations.
-10-
(d) At the Closing Date, the Representative shall have received from
______________ 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 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 _________________
[employee benefit plans], or for changes or decreases that are described in
the letter; and (iii) covering such other matters as the Representative
shall reasonably request.
(e) 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.
(f) All legal proceedings taken in connection with the sale and
delivery of the Securities shall have been satisfactory in form and
substance to counsel for the Underwriters.
(g) At the Closing Date an order or orders of the Commission pursuant
to the Holding Company Act permitting the issuance and sale of the
Securities shall be in full force and effect and all provisions of such
order or orders heretofore entered are deemed acceptable to the
Representative and the Company, and all provisions of such order or orders
hereafter entered shall be deemed acceptable to the Representative and the
Company unless within 24 hours after receiving a copy of any such order
either shall give notice to the other to the effect that such order
contains an unacceptable provision.
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
-11-
delivering written notice thereof to the Company. Any such termination shall be
without liability of any party to any other party except as otherwise provided
in paragraphs 7 and 8 hereof.
10. Conditions of the Company's Obligations. The obligations of the
---------------------------------------
Company to deliver the Securities shall be subject to the conditions set forth
in the first sentence of subparagraph (a) of paragraph 9 hereof and in
subparagraph (g) of paragraph 9 hereof. In case these conditions 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 hereof.
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 either thereof, or arising
out of, or based upon, statements in or omissions from that part of the
Registration Statement which shall constitute the Statement of Eligibility
under the 1939 Act (Forms T-1) of the Trustee under the Indenture, and
provided, further, that the indemnity agreement contained in this paragraph
11 shall not inure to the benefit of any Underwriter (or of any person
controlling such Underwriter) on account of any such losses, claims,
damages, liabilities, expenses or actions arising from the sale of the
Securities to any person if a copy of the Prospectus (excluding documents
incorporated by reference therein) shall not have been given or sent to
such person by or on behalf of such Underwriter with or prior to the
written confirmation of the sale involved, unless such Prospectus failed to
correct the omission or 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 Securities. The Underwriters agree to notify
promptly the Company, and each other Underwriter, of the commencement of
any litigation or proceedings against them or any of them, or any such
controlling person, in connection with the sale of the Securities.
-12-
(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 either
thereof. The indemnity agreement of all the respective Underwriters
contained in this paragraph 11 shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Company
or any other Underwriter, or any such controlling person, and shall survive
the delivery of the Securities. The Company agrees promptly to notify the
Representative of the commencement of any litigation or proceedings against
the Company or any of its officers or directors, or any such controlling
person, in connection with the sale of the Securities.
(c) The Company and each of the Underwriters agree that, upon the
receipt of notice of the commencement of any action against it, its
officers and directors, or any person controlling it as aforesaid, in
respect of which indemnity may be sought on account of any indemnity
agreement contained herein, it will promptly give written notice of the
commencement thereof to the party or parties against whom indemnity shall
be sought hereunder. The Company and each of the Underwriters agree that
the notification required by the preceding sentence shall be a material
term of this Agreement. The omission so to notify such indemnifying party
or parties of any such action shall relieve such indemnifying party or
parties from any liability which it or they may have to the indemnified
party on account of any indemnity agreement contained herein if such
indemnifying party was materially prejudiced by such omission, but shall
not relieve such indemnifying party or parties from any liability which it
or they may have to the indemnified party otherwise than on account of such
indemnity agreement. In case such notice of any such action shall be so
given, such indemnifying party shall be entitled to participate at its own
expense in the defense or, if it so elects, to assume (in conjunction with
any other indemnifying parties) the defense of such action, in which event
such defense shall be conducted by counsel chosen by such indemnifying
party (or parties) and satisfactory to the indemnified party or parties who
shall be defendant or defendants in such action, and such defendant or
defendants shall bear the fees and expenses of any additional counsel
retained by them; but if the indemnifying party shall elect not to assume
the defense of such action, such indemnifying parties will reimburse such
indemnified party or parties for the reasonable fees and expenses of any
counsel retained by them, as such expenses are incurred; provided, however,
if the defendants (including any impleaded parties) in any such action
include both the indemnified party and the indemnifying party, and counsel
for the indemnified party shall have concluded, in its reasonable judgment,
that there may be a conflict of interest involved in the representation by
such counsel of both the indemnifying party and the
-13-
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 Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company,
on the one hand, and of the Underwriters, on the other hand, in connection
with the statements or omissions 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 Securities pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount
received by the Underwriters, in each case as set forth on the cover of the
Prospectus, bear to the aggregate initial public offering price of the
Securities as set forth on such cover. The relative fault of the Company,
on the one hand, and the Underwriters, on the other hand, shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by the Company or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this subparagraph (d) were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation 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 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 Securities 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 the Prospectus was as follows:
________________________________________________.
-14-
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 Securities, or (c) the
Company or any Significant Subsidiary shall have sustained a substantial loss by
fire, flood, accident or other calamity which renders it impracticable, in the
reasonable judgment of the Representative, to consummate the sale of the
Securities and the delivery of the Securities by the several Underwriters at the
initial public offering price or (d) there shall have been any downgrading or
any notice of any intended or potential downgrading in the rating accorded the
Company's securities by any "nationally recognized statistical rating
organization" as that term is defined by the Commission for the purposes of
Securities Act Rule 436(g)(2), or any such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of the Securities or any of the Company's other
outstanding debt, the effect of which, in the reasonable judgment of the
Representative, makes it impracticable or inadvisable to consummate the sale of
the Securities and the delivery of the Securities by the several Underwriters at
the initial public offering price. This Agreement may also be terminated at any
time prior to the Closing Date if in the reasonable judgment of the
Representative the subject matter of any amendment or supplement to the
Registration Statement or Prospectus (other than an amendment or supplement
relating solely to the activity of any Underwriter or Underwriters) filed after
the execution of this Agreement shall have materially impaired the marketability
of the Securities. Any termination hereof pursuant to this paragraph 12 shall be
without liability of any party to any other party except as otherwise provided
in paragraphs 7 and 8 hereof.
13. Miscellaneous. The validity and interpretation of this Agreement shall be
-------------
governed by the laws of the State of New York. Unless otherwise specified, time
of day refers to New York City time. This Agreement shall inure to the benefit
of, and be binding upon, the Company, the several Underwriters, and with respect
to the provisions of paragraph 11 hereof, the officers and directors and each
controlling person referred to in paragraph 11 hereof, and their respective
successors. Nothing in this Agreement is intended or shall be construed to give
to any other person, firm or corporation any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained.
The term "successors" as used in this Agreement shall not include any purchaser,
as such purchaser, of any of the Securities from any of the several
Underwriters.
14. 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.
-15-
16. Defined Terms. Unless otherwise defined herein, capitalized terms used in
-------------
this Agreement shall have the meanings assigned to them in the Registration
Statement.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company the enclosed duplicate hereof whereupon it
will become a binding agreement between the Company and the several Underwriters
in accordance with its terms.
Very truly yours,
CP&L ENERGY, INC.
By: ______________________________
Authorized Representative
Accepted as of the date first
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named in, Schedule II.
[NAME OF REPRESENTATIVE]
By ___________________________
-16-
SCHEDULE I
Underwriting Agreement dated ___________, ____
Registration Statement No. 333-_____
Representative and Address:
Designation: [Title of debt securities]
Principal Amount: $___________
Indenture dated as of _________, ____
Date of Maturity: ___________, ____
Interest Rate: ____% per annum, payable ________ __ and __________ __ of each
year, commencing ____________, ____.
Purchase Price: _____% of the principal amount thereof, plus accrued interest
from _______________ to the date of payment and delivery.
Public Offering Price: ____% of the principal amount thereof, plus accrued
interest from ___________ to the date of payment and delivery.
Redemption Terms:
Closing Date and Location: _______________, 200__; Hunton & ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
-17-
SCHEDULE II
Underwriters Principal Amount
------------ ----------------
TOTAL..............................
-18-
SCHEDULE III
Significant Subsidiaries
------------------------
-19-
