Exhibit 1(c)
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CP&L ENERGY, INC.
Preferred Stock
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 to the
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several Underwriters _____ shares of its Series __ Preferred Stock in the amount
specified in Schedule I hereto (the Firm Shares). The Company also proposes to
issue and sell to the several Underwriters not more than an additional _______
shares of its Series __ Preferred Stock (the "Option Shares") if and to the
extent the Representative shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of Series __ Preferred Stock
granted to the Underwriters in paragraph 4 hereof. The Firm Shares and the
Option Shares are hereinafter collectively referred to as the Shares. The shares
preferred stock of the Company to be outstanding after giving effect to the
sales contemplated hereby are hereinafter referred to as the Preferred Stock.
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. 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 Shares (the "Prospectus Supplement"), and all prior
amendments or supplements thereto (other than amendments or supplements
relating to securities of the Company other than the Shares), including the
Incorporated Documents, is hereinafter referred to as the "Prospectus."
Any reference herein to the terms "amend, " "amendment" or "supplement"
with respect to the Registration Statement or the Prospectus shall be
deemed to refer to and include the filing of any document under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), deemed to
be incorporated therein after the date hereof and prior to the termination
of the offering of the Shares by the Underwriters; and any references
herein to the terms "Registration Statement" or "Prospectus" at a date
after the filing of the Prospectus Supplement shall be deemed to refer to
the Registration Statement or the Prospectus, as the case may be, as each
may be amended or supplemented prior to such date.
(b) Prior to the termination of the offering of the Shares, the
Company will not file any amendment to the Registration Statement or
supplement to the 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 and
the Prospectus, 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 (as defined herein), 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
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documents so filed and incorporated by reference subsequent to the date
hereof and prior to the termination of the offering of the Shares by the
Underwriters will, when they are filed with the Commission, comply in all
material respects with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder; and, when read together with
the Registration Statement and the Prospectus, none of such documents
included or includes or will include any untrue statement of a material
fact or omitted or omits or will omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(d) The financial statements incorporated by reference in the
Registration Statement present fairly the financial condition and
operations of the Company at the respective dates or for the respective
periods to which they apply; such financial statements have been prepared
in each case in accordance with generally accepted accounting principles
consistently applied throughout the periods involved; and ______________,
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; (iii) the Company has no material contingent
obligation that is not disclosed in the Registration Statement and
Prospectus; and (iv) there has been no dividend or distribution of any kind
declared, paid or made by the Company or, except for dividends paid to the
Company or other subsidiaries, any of its subsidiaries on any class of
capital stock or repurchase or redemption by the Company or any of its
subsidiaries of any class of capital stock..
(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 Shares conform in all material respects to the description
contained in the Prospectus.
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(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 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 Shares have been duly authorized by the Company and, when
issued and delivered in accordance with the terms of this Agreement, will
be validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights.
(m) The Preferred Stock (other than the Shares) is and, upon issuance
the Shares will be, listed on the New York Stock Exchange. The Company
will use its best efforts to complete listing of the Shares on the New York
Stock Exchange.
(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.
(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 Shares hereunder or the consummation of the
transactions herein contemplated, except such as have been already obtained
or as may be required under the Securities Act or state securities laws.
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4. Purchase and Sale.
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(a) On the basis of the representations, warranties and covenants
herein contained, but subject to the terms and conditions herein set forth,
the Company agrees to sell to each of the Underwriters, severally and not
jointly, and each such Underwriter agrees, severally and not jointly, to
purchase from the Company, the respective number of Shares set forth
opposite the name of such Underwriter in Schedule II hereto at a price of
$________ per share (the "Purchase Price").
(b) On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, the Company agrees
to sell to the Underwriters the Option Shares, and the Underwriters shall
have a one-time right to purchase, severally and not jointly, all or part
of _______ Option Shares at the Purchase Price. Option Shares may be
purchased as provided in this paragraph 4 solely for the purpose of
covering over- allotments made in connection with the offering of the Firm
Shares. If any Option Shares are to be purchased, each Underwriter agrees,
severally and not jointly, to purchase the number of Option Shares (subject
to such adjustments to eliminate fractional shares as the Representative
may determine) that bears approximately the same proportion to the total
number of Option Shares to be purchased as the number of Firm Shares set
forth in Schedule II hereto opposite the name of such Underwriter bears to
the total number of Firm Shares.
(c) The Company hereby agrees that, without the prior written consent
of the Representative, it will not during the period ending 60 days after
the date of the Prospectus (i) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise transfer
or dispose of, directly or indirectly, or to register or announce the sale
or offering of any shares of Preferred Stock of the Company or any
securities convertible into or exercisable or exchangeable for such
Preferred Stock or (ii) enter into any agreement that transfers, in whole
or in part, the economic consequences of ownership of such Preferred Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of such Preferred Stock or such other securities in
cash or otherwise.
(d) The foregoing subparagraph (c) shall not apply to (i) the Shares
to be sold hereunder or (i) the issuance by the Company of shares of
Preferred Stock upon the exercise of an option or warrant or the conversion
of a security outstanding on the date hereof of which the Underwriters have
been advised in writing.
5. Reoffering by Underwriters. The Underwriters agree to make promptly a
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bona fide public offering of the Shares to the public for sale as set forth in
the Prospectus, subject, however, to the terms and conditions of this Agreement.
The Company is further advised by the Underwriters that the Shares are to be
offered by the Underwriters to the public initially at $______ a share (the
"Public Offering Price") and to certain dealers selected by the Representatives
at a price that represents a concession not in excess of $____ a share under the
Public Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $____ a share, to any Underwriter or to
certain other dealers. It is understood that after such initial offering the
several Underwriters reserve the right to vary the offering price and further
reserve the right to withdraw, cancel or modify such offering without notice.
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6. Time and Place of Closing; Default of Underwriters.
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(a) Payment for the Firm Shares shall be made at the place, time and
date specified in Schedule I hereto against delivery of the Shares to the
office of the Representative, or such other place, time and date as the
Representative and the Company may agree. Payment for the Firm Shares
shall be by wire transfer of immediately available funds against delivery
of the Firm Shares to the Representative or upon its order at the office of
the Representative, at 10:00 A.M., New York City time, on the third
business day (unless postponed in accordance with the provisions of
paragraph 12 hereof) following the date of this Agreement, or if pricing
takes place after 4:30 P.M. New York City time, on the fourth business day
following the date of this Agreement (unless postponed in accordance with
the provisions of paragraph 12 hereof), or at such other time on the same
or such other earlier date, as shall be agreed upon by the Representative
and the Company. The hour and date of such delivery and payment are herein
referred to as the "Closing Date."
(b) Payment for any Option Shares shall be made by or on behalf of the
several Underwriters by the wire transfer of immediately available funds to
the Company's account. Such payment shall be made upon delivery of the
Option Shares to the Representative or upon its order at the office of the
Representative, at 10:00 A.M., New York City time, on such date (which may
be the same as the Closing Date but shall in no event be earlier than the
Closing Date nor later than ten business days after the giving of the
notice hereinafter referred to) as shall be designated in a written notice
from the Representative to the Company of the Representative's
determination, on behalf of the Underwriters, to purchase a number,
specified in said notice, of Option Shares, or on such other date, in any
event not later than ______ 200__, as shall be agreed upon by the
Representative and the Company. The time and date of such payment are
hereinafter referred to as the "Option Closing Date" (the Closing Date or
the Option Closing Date, as applicable, is hereinafter referred to as the
"Relevant Closing Date"). The notice of the determination to exercise the
option to purchase Option Shares and of the Option Closing Date may be
given at any time within 30 days after the date of this Agreement.
[(c) Certificates for the Firm Shares and Option Shares shall be in
definitive form and registered in such names and in such denominations as
the Representative shall request in writing not later than one full
business day prior to the Relevant Closing Date. The certificates
evidencing the Firm Shares and Option Shares shall be delivered to the
Representative on the Relevant Closing Date for the respective accounts of
the several Underwriters, with any transfer taxes payable in connection
with the transfer of the Shares to the Underwriters duly paid, against
payment of the Purchase Price therefor.
OR
(c) On the Relevant Closing Date, the Company shall deliver, or cause
to be delivered a credit representing the Firm Shares or the Option Shares,
as the case may be, to an account or accounts at The Depository Trust
Company as designated by the Representative for the accounts of the
Representative and the several Underwriters against the irrevocable release
of a wire transfer of immediately available funds for the amount of the
purchase price therefor. Time shall be of the essence, and delivery at the
time and place specified in this Agreement is a further condition to the
obligations of the Underwriters.]
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(d) If, on the Relevant Closing Date 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 number of Shares 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 number of Shares 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 number of
Shares 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 number of Shares
set forth opposite their respective names in Schedule II hereto) the number
of Shares which such defaulting Underwriter or Underwriters failed to take
up and pay for, up to a number thereof equal to, in the case of each such
remaining Underwriter, 10% of the number of Shares 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 number
of Shares which the defaulting Underwriter or Underwriters agreed but
failed to purchase. If any unpurchased Shares 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 Shares 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 Shares by another party or parties as above provided and
(ii) the Company and the non-defaulting Underwriters have not mutually
agreed to offer and sell the Shares other than the unpurchased Shares, then
this Agreement 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 number of Shares 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 Shares. 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 Shares), including any post-effective amendment
(in each case including all
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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 Shares as the Underwriters may be
required by law to deliver a Prospectus, if any event relating to or
affecting the Company, or of which the Company shall be advised in writing
by the Representative shall occur, which in the Company's 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 Shares, the
Company, upon the request of the Representative, will furnish to the
Representative, at the expense of such Underwriter, a reasonable quantity
of a supplemented or amended prospectus, or supplements or amendments to
the Prospectus, complying with Section 10(a) of the Securities Act.
(c) The Company will make generally available to its security
holders, as soon as reasonably practicable, but in any event not later than
16 months after the end of the fiscal quarter in which the filing of the
Prospectus pursuant to Rule 424 occurs, an earning statement (in form
complying with the provisions of Section 11(a) of the Securities Act, which
need not be certified by independent public accountants) covering a period
of twelve months beginning not later than the first day of the Company's
fiscal quarter next following the filing of the Prospectus pursuant to Rule
424.
(d) The Company will use its best efforts promptly to do and perform
all things to be done and performed by it hereunder prior to the Closing
Date and to satisfy all conditions precedent to the delivery by it of the
Shares.
(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 Shares, as
may be required, for offer and sale under the Blue Sky or legal investment
laws of such jurisdictions as the Representative may designate, and will
file and make in each year such statements or reports as
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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 Shares to the Underwriters, (iii) the fees and
disbursements of the Company's counsel and accountants, (iv) the expenses in
connection with the qualification of the Shares under securities laws in
accordance with the provisions of subparagraph (f) of paragraph 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 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
and (vi) the printing and delivery to the Underwriters of copies of the Blue Sky
Survey and Legality Memorandum; and the Company will pay all taxes, if any (but
not including any transfer taxes), on the issue of the Shares.
The fees and disbursements of Underwriters' counsel shall be paid by the
Underwriters (subject, however, to the provisions of 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
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the Underwriters to purchase and pay for the Shares shall be subject to the
accuracy of the representations and warranties on the part of the Company as of
the date hereof and the Closing Date, to the performance by the Company of its
obligations to be performed hereunder prior to the Closing Date, and to the
following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect on the Closing Date; and no proceedings for
that purpose shall be pending before, or, to the Company's knowledge,
threatened by, the Commission on the Closing Date. The Representative shall
have received, prior to payment for the Shares, a certificate dated the
Closing Date and signed by the Chairman, President 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) assuming delivery to and payment for the Shares by the
Underwriters, as provided in this Agreement, the Shares are validly
issued, fully paid and non-assessable;
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(ii) the Shares are not subject to any preemptive or similar
rights and have been duly authorized for listing on the New York Stock
Exchange;
(iii) the form of the certificates for the Shares conforms in all
material respects to the requirements of the North Carolina Business
Corporation Act and the New York Stock Exchange;
(iv) the statements made in the Prospectus under the captions
"DESCRIPTION OF CAPITAL STOCK--Preferred Stock" and in the Prospectus
Supplement under the caption "Description of the Shares," 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 Shares 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 Shares 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
Shares 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
Shares 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 Shares 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.
-11-
(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 Preferred 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 Shares 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
Shares 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
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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 Shares 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 any
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 Shares
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 Shares. The
Underwriters agree to notify promptly the Company, and each other Underwriter,
of the commencement of any litigation or proceedings against them or any of
them, or any such controlling person, in connection with the sale of the
Shares.
-13-
(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 Shares. The Company agrees promptly to notify the
Representative of the commencement of any litigation or proceedings against
the Company or any of its officers or directors, or any such controlling
person, in connection with the sale of the Shares.
(c) The Company and each of the Underwriters agree that, upon the
receipt of notice of the commencement of any action against it, its
officers and directors, or any person controlling it as aforesaid, in
respect of which indemnity may be sought on account of any indemnity
agreement contained herein, it will promptly give written 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
-14-
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 Shares pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company,
on the 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 Shares pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of the Shares pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount
received by the Underwriters, in each case as set forth on the cover of the
Prospectus, bear to the aggregate initial public offering price of the
Shares as set forth on such cover. The relative fault of the Company, on
the one hand, and the Underwriters, on the other hand, shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this subparagraph (d) were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to above in
this subparagraph (d). No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this subparagraph (d), each
person, if any, who controls an Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this subparagraph (d) are
several in proportion to the number of Shares set forth opposite their
respective names in 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:________________.
-15-
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 Shares, 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 Shares
and the delivery of the Shares by the several Underwriters at the initial public
offering price or (d) there shall have been any downgrading or any notice of any
intended or potential downgrading in the rating accorded the Company's
securities by any "nationally recognized statistical rating organization" as
that term is defined by the Commission for the purposes of Securities Act Rule
436(g)(2), or any such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating of
the Shares or any of the Company's 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 Shares and the delivery of the Shares
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 Shares. 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, and their respective
successors. Nothing in this Agreement is intended or shall be construed to give
to any other person, firm or corporation any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained.
The term "successors" as used in this Agreement shall not include any purchaser,
as such purchaser, of any of the Shares from any of the several Underwriters.
14. Notices. All communications hereunder shall be in writing or by telefax
-------
and, if to the Underwriters, shall be mailed, transmitted by any standard form
of telecommunication or delivered to the Representative at the address set forth
in Schedule I hereto and if to the Company, shall be mailed or delivered to it
at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of
___________________.
15. Counterparts. This Agreement may be simultaneously executed in
------------
counterparts, each of which when so executed shall be deemed to be an original.
Such counterparts shall together constitute one and the same instrument.
-16-
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 ___________________________
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SCHEDULE I
Underwriting Agreement dated ___________, ____
Registration Statement No. 333-_____
Representative and Address:
Designation: Preferred Stock
Amount: _____ shares
Purchase Price: $____ per share
Public Offering Price: $ ____ per share.
Closing Date and Location: _______________, 200_; Hunton & ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SCHEDULE II
Number of Firm Shares
---------------------
Underwriters to be Purchased
------------ ---------------
TOTAL...................................
SCHEDULE III
Significant Subsidiaries
------------------------