CAROLINA POWER & LIGHT COMPANY d/b/a PROGRESS ENERGY CAROLINAS, INC. First Mortgage Bonds 5.25% Series due 2015 UNDERWRITING AGREEMENT
CAROLINA POWER & LIGHT COMPANY
d/b/a PROGRESS ENERGY CAROLINAS, INC.
d/b/a PROGRESS ENERGY CAROLINAS, INC.
First Mortgage Bonds
5.25% Series due 2015
5.25% Series due 2015
November 28, 2005
To the Representative named in Schedule I hereto
of the Underwriters named in Schedule II hereto
of the Underwriters named in Schedule II hereto
Dear Ladies and Gentlemen:
The undersigned Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. (the
“Company”) hereby confirms its agreement with each of the several Underwriters hereinafter named as
follows:
1. Underwriters and Representative. The term “Underwriters” as used herein shall be
deemed to mean the firm or the several firms named in Schedule II of this Underwriting Agreement
(the “Agreement”) and any underwriter substituted as provided in paragraph 6, and the term “Underwriter” shall be deemed to mean any one of such Underwriters. If the firm or
firms listed in Schedule I hereto (individually and collectively, 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. Each
Representative represents jointly and severally that they have 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 First
Mortgage Bonds of the designation, with the terms and in the amount specified in Schedule I hereto
(the “Securities”), under its Mortgage and Deed of Trust, dated as of May 1, 1940, with The Bank of
New York (formerly Irving Trust Company) and Xxxxxxxxx X. Xxxxxx (Xxxxxxx X. XxxXxxxx, successor),
as Trustees, as supplemented and as it will be further supplemented by the Seventy-fourth
Supplemental Indenture relating to the Securities (the “Seventy-fourth Supplemental Indenture”), in
substantially the form heretofore delivered to the Representative, said Mortgage and Deed of Trust
as supplemented and to be supplemented by the Seventy-fourth Supplemental Indenture being
hereinafter referred to as the “Mortgage.”
3. Representations and Warranties of the Company. The Company represents and warrants
to each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3, as amended (No. 333-103973) (the “New
Registration Statement”) under the Securities Act of 1933, as amended (the “Securities
Act”), for the registration of up to an aggregate of $1,000,000,000 principal amount of
First Mortgage Bonds, Senior Notes and Debt Securities in unallocated amounts. The New
Registration Statement also constituted post-effective amendment no. 1 to a registration
statement on Form S-3 (No. 333-58800) (the “Post-Effective Amendment” and together with the
New Registration Statement, the “Registration Statement”) under the Securities Act relating
to an aggregate of $500,000,000 principal amount of the Company’s securities, which had been
previously registered under the Securities Act but remained unsold at the time the
Post-Effective Amendment became effective. The Registration Statement contained a combined
prospectus for the sale of up to an aggregate of $1,500,000,000 principal amount of the
Company’s First Mortgage Bonds, Senior Notes and Debt Securities (the “Registered
Securities”) in unallocated amounts. The Registration Statement was declared effective by
the Commission on April 4, 2003. As of the date hereof, the Company has sold an aggregate
of $1,100,000,000 principal amount of the Registered Securities. The term “Registration
Statement” shall be deemed to include all amendments to the date hereof and all documents
incorporated by reference therein (the “Incorporated Documents”). The combined prospectus
included in the Registration Statement, as supplemented by a preliminary prospectus
supplement, dated November 28, 2005, relating to the Securities, and all prior amendments or
supplements thereto (other than amendments or supplements relating to Registered Securities
other than the Securities), including the Incorporated Documents, is hereinafter referred to as the “Preliminary Prospectus.” The combined prospectus included in the
Registration Statement, as it is to be supplemented by a prospectus supplement, dated on the
date hereof, substantially in the form delivered to the Representative prior to the
execution hereof, relating to the 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) The Registration Statement, at the time and date it was declared effective by the
Commission, complied, and the Registration Statement, the Prospectus and the Mortgage, as of
the date hereof and at the Closing Date, will comply, in all material respects, with the
applicable provisions of the Securities Act and the Trust Indenture Act of 1939, as amended
(the “1939 Act”), and the applicable instructions, rules and
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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, as of its date and at the Closing Date, will not contain an
untrue statement of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the foregoing representations and warranties in this
subparagraph (b) shall not apply to statements or omissions made in reliance upon and in
conformity with 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 Statements of
Eligibility (Forms T-1 and T-2) of the Trustees. The Incorporated Documents, at the time
they were filed with the Commission, complied in all material respects with the applicable
requirements of the Exchange Act and the instructions, 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, at the time they are filed with the Commission, comply in all material
respects with the requirements of the Exchange Act and the instructions, 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.
(c) The Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of North Carolina; has corporate power and
authority to own, lease and operate its properties and to conduct its business as
contemplated under this Agreement and the other agreements to which it is a party; and is
duly qualified as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to so qualify would
not have a material adverse effect on the business, properties, results of operations or
financial condition of the Company.
(d) The historical financial statements incorporated by reference in the Registration
Statement and the Prospectus present fairly the financial condition and operations of the
Company at the respective dates or for the respective periods to which they apply; such
financial statements have been prepared in each case in accordance with generally accepted
accounting principles consistently applied throughout the periods involved, except that the
quarterly financial statements, if any, incorporated by reference from any Quarterly Reports
on Form 10-Q contain condensed footnotes prepared in accordance with applicable Exchange Act
rules and regulations; and Deloitte & Touche LLP, which has audited certain of the financial
statements is an independent registered public accounting firm as required by the Securities
Act or the Exchange Act and the rules and regulations of the Commission thereunder.
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(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 not been any material
adverse change in the business, properties, results of operations or financial condition of
the Company, (ii) there has not been any material transaction entered into by the Company
other than transactions contemplated by the Registration Statement and 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 that could likely result in a material adverse change in the business,
properties, results of operations or financial condition of the Company.
(f) The Company has full power and authority to execute, deliver and perform its
obligations under this Agreement. The execution and delivery of this Agreement, the
consummation of the transactions herein contemplated and the fulfillment of the terms hereof
on the part of the Company to be fulfilled have been duly authorized by all necessary
corporate action of the Company in accordance with the provisions of its restated charter
(the “Charter”), by-laws and applicable law; and the Securities, when issued and delivered
as provided herein, will constitute legal, valid and binding obligations of the Company in
accordance with their terms subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws affecting mortgagees’ and
other 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 for
the effect on enforceability of federal or state law limiting, delaying or prohibiting the
making of payments outside the United States); provided, however, that certain remedies, waivers and other provisions of the Securities may not
be enforceable, but such unenforceability will not render the Securities invalid as a whole
or affect the judicial enforcement of (i) the obligation of the Company to repay the
principal, together with the interest thereon as provided in the Securities or (ii) the
right of the Trustees to exercise their right to foreclose under the Mortgage.
(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 Charter, the Company’s by-laws, applicable law or any indenture,
mortgage, deed of trust or other agreement or instrument to which the Company is now a party
or any judgment, order, writ or decree of any government or governmental authority or agency
or court having jurisdiction over the Company or any of its assets, properties or operations
that, in the case of any such breach or default, would have a material adverse effect on the
business, properties, results of operations or financial condition of the Company.
(h) The Securities conform in all material respects to the description contained in the
Prospectus.
(i) The Company has no subsidiaries that meet the definition of “significant
subsidiary” as defined in Section 210.1-02(w) of Regulation S-X promulgated under the
Securities Act.
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(j) The Mortgage (A) has been duly authorized, executed and delivered by the Company,
and, assuming due authorization, execution and delivery of the Seventy-fourth Supplemental
Indenture by the Trustees, 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 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 for 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. The Mortgage has been
qualified under the 1939 Act.
(k) The Company is not an “investment company” within the meaning of the Investment
Company Act of 1940, as amended (the “1940 Act”).
(l) Except as described in or contemplated by the Prospectus, there are no pending
actions, suits or proceedings (regulatory or otherwise) against or affecting the Company or
its properties that are likely in the aggregate to result in any material adverse change in
the business, properties, results of operations or financial condition of the Company, or
that are likely in the aggregate to materially and adversely affect the Mortgage, the
Securities or the consummation of this Agreement or the transactions contemplated herein or
therein.
(m) No filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations hereunder in connection with
the offering, issuance or sale of the Securities hereunder or the consummation of the
transactions herein contemplated or for the due execution, delivery or performance of the
Mortgage by the Company, except such as have already been made or obtained or as may be
required under the Securities Act or state securities laws and except for the qualification
of the Mortgage under the 1939 Act.
4. Purchase and Sale. 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 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 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.
(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 The Bank
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of New York,
Corporate Trust Department, 000 Xxxxxxx Xxxxxx, Xxxxx 0X, Xxx Xxxx, Xxx Xxxx, 00000 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 to The
Depository Trust Company or to The Bank of New York, as custodian for The Depository Trust
Company, in fully registered global form registered in the name of CEDE & Co., as nominee
for The Depository Trust Company, for the respective accounts specified by the
Representative not later than the close of business on the business day prior to the Closing
Date or such other date and time not later than the Closing Date as agreed by The Depository
Trust Company or The Bank of New York. For the purpose of expediting the checking of the
certificates by the Representative, the Company agrees to make the Securities available to
the Representative not later than 10:00 A.M. New York time, on the last full business day
prior to the Closing Date at said office of The Bank of New York.
(b) If one or more 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 non-defaulting 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 Securities that such
defaulting Underwriter or Underwriters failed to take up and pay for, up to a principal
amount thereof equal to 10% of the principal amount of all Securities, each non-defaulting Underwriter shall do so on a pro rata basis according to the amounts set
forth opposite the name of such non-defaulting Underwriter in Schedule II, and such
non-defaulting Underwriters shall have the right, within 24 hours of receipt of such notice,
either to take up and pay for (in such proportion as may be agreed upon among them), or to
substitute another Underwriter or Underwriters, satisfactory to the Company, to take up and
pay for the remaining principal amount of the Securities that 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 Conduct Rules) 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
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(other than an Underwriter that shall have failed or refused, in accordance with
the terms hereof, to purchase and pay for the principal amount of the Securities that 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 that:
(a) As soon as reasonably possible after the execution and delivery of this Agreement,
the Company will file the Prospectus with the Commission pursuant to Rule 424 under the
Securities Act (“Rule 424”), setting forth, among other things, the necessary information
with respect to the terms of offering of the Securities. Upon request, the Company will
promptly deliver to the Representative and to counsel for the Underwriters, to the extent
not previously delivered, one fully executed copy or one conformed copy, certified by an
officer of the Company, of the Registration Statement, as originally filed, and of all
amendments thereto, if any, heretofore or hereafter made (other than those relating solely
to Registered Securities other than the 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 and the
Preliminary 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 writing by the Representative shall occur, which in the Company’s reasonable
opinion (after consultation with counsel for the Representative) 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 that 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
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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
earnings 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) As soon as reasonably possible after the Closing Date, the Company will cause the
Seventy-fourth Supplemental Indenture to be recorded in all recording offices in the States
of North Carolina and South Carolina in which the property intended to be subject to the
lien of the Mortgage is located.
(f) The Company will advise the Representative, or the Representative’s counsel,
promptly of the filing of the Prospectus pursuant to Rule 424 and of any amendment or
supplement to the Prospectus or Registration Statement or of official notice of institution
of proceedings for, or the entry of, a stop order suspending the effectiveness of the Registration Statement and, if such a stop order should be
entered, use its best efforts to obtain the prompt removal thereof.
(g) 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.
(h) 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.
8. Payment of Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the printing and filing of the Registration
Statement and the printing of this Agreement, (ii) the delivery of the 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
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accordance
with the provisions of paragraph 7(g), including filing fees and the fees and disbursements of
counsel for the Underwriters in connection therewith, such fees and disbursements not to exceed
$7,500, (v) the printing and delivery to the Underwriters of copies of the Registration Statement
and all amendments thereto, of the preliminary 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 (vii) the preparation, execution, filing and recording by the Company of
the Seventy-fourth Supplemental Indenture (such filing and recordation to be promptly made after
execution and delivery of the Seventy-fourth Supplemental Indenture to the Trustees under the
Mortgage in the counties in which the mortgaged property of the Company is located); and the
Company will pay all taxes, if any (but not including any transfer taxes), on the issue of the
Securities and the filing and recordation of the Seventy-fourth Supplemental Indenture. The fees
and disbursements of Underwriters’ counsel shall be paid by the Underwriters (subject, however, to
the provisions of this paragraph 8 requiring payment by the Company of fees and disbursements not
to exceed $7,500); 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
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, Treasurer or a Vice President of the
Company to the effect that no such stop order is in effect and that no proceedings for such
purpose are pending before or, to the knowledge of the Company, threatened by the
Commission.
(b) At the time of execution of this Agreement, or such later date as shall have been
consented to by the Representative, there shall have been issued, and on the Closing Date
there shall be in full force and effect, orders of the North Carolina Utilities Commission
and the Public Service Commission of South Carolina authorizing the issuance and sale of the
Securities, none of which shall contain any provision unacceptable to the Representative by
reason of its being materially adverse to the Company (it being understood that no such
order in effect on the date of this Agreement and heretofore furnished to the Representative
or counsel for the Underwriters contains any such unacceptable provision).
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(c) At the Closing Date, the Representative shall receive favorable opinions from: (1)
Hunton & Xxxxxxxx LLP, counsel to the Company, which opinion shall be satisfactory in form
and substance to counsel for the Underwriters, and (2) Xxxxx Xxxxxxxxxx LLP, counsel for the
Underwriters, in each of which opinions (except Hunton & Xxxxxxxx LLP as to matters of North
Carolina law and except as to subdivision (vi) (as to documents incorporated by reference,
at the time they were filed with the Commission) as to which Xxxxx Xxxxxxxxxx LLP need
express no opinion) said counsel may rely as to all matters of North Carolina and South
Carolina law upon the opinions of Xxxxx X. Xxxxxxxx, Esq., Vice President of Progress Energy
Service Company LLC, acting as counsel to the Company, and Nelson, Mullins, Xxxxx &
Scarborough, L.L.P., respectively, to the effect that:
(i) The Mortgage has been duly and validly authorized by all necessary
corporate action, has been duly and validly executed and delivered by the Company,
and is a valid and binding mortgage of the Company enforceable in accordance with
its terms, except as limited by bankruptcy, insolvency or other laws affecting
mortgagees’ and other creditors’ rights and general equitable principles and any
implied covenant of good faith and fair dealing (with this opinion only required in
the opinions of Hunton & Xxxxxxxx LLP and Xxxxx Xxxxxxxxxx LLP as to the
supplemental indentures subsequent to the Sixty-fourth Supplemental Indenture);
provided, however, that certain remedies, waivers and other provisions of the
Mortgage may not be enforceable, but such unenforceability will not render the
Mortgage invalid as a whole or affect the judicial enforcement of (i) the obligation
of the Company to repay the principal, together with the interest thereon as provided in the Securities or (ii) the
right of the Trustees to exercise their right to foreclose under the Mortgage;
(ii) The Mortgage has been duly qualified under the 1939 Act;
(iii) Assuming authentication of the Securities by the Trustee in accordance
with the Mortgage and delivery of the Securities 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 mortgagees’ and other
creditors’ rights and general equitable principles and any implied covenant of good
faith and fair dealings, and are entitled to the benefits of the security afforded
by the Mortgage, and are secured equally and ratably with all other bonds
outstanding under the Mortgage except insofar as any sinking or other fund may
afford additional security for the bonds of any particular series;
(iv) The statements made in the Prospectus under the caption “Description of
First Mortgage Bonds” and in the Prospectus Supplement under the captions “Certain
Terms of the Bonds” and “Description of First Mortgage Bonds,” insofar as they
purport to constitute summaries of the documents referred to therein, are accurate
summaries in all material respects;
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(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 Preliminary Prospectus and the Prospectus, as of their
respective dates (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, the
Preliminary Prospectus and the Prospectus pursuant to Item 12 of Form S-3 (except as
to financial statements and other financial and statistical data constituting a part
thereof or incorporated by reference therein and that part of the Registration
Statement that constitutes the Statements of Eligibility on Form T-1 and Form T-2,
upon which such opinions need not pass), at the time they were filed with the
Commission, complied as to form in all material respects with the requirements of
the Exchange Act and the applicable 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; and
(vii) Nothing has come to the attention of said counsel that would lead them to
believe that the Registration Statement, at the time and date it was declared
effective by the Commission, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; and nothing has come to the attention of said
counsel that would lead them to believe that (x) the Preliminary Prospectus, as of
its date, included an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or (y) the Prospectus, as
of its date and, as amended or supplemented, at the Closing Date, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except as to financial
statements and other financial and statistical data constituting a part of the
Registration Statement, the Preliminary Prospectus or the Prospectus or incorporated
by reference therein and that part of the Registration Statement that constitutes
the Statements of Eligibility on Form T-1 and Form T-2, upon which such opinions
need not pass);
(d) At the Closing Date, the Representative shall receive from Xxxxx X. Xxxxxxxx, Esq.,
Vice President of Progress Energy Service Company, LLC, acting as
11
counsel to the Company, a
favorable opinion in form and substance satisfactory to counsel for the Underwriters, to the
same effect with respect to the matters enumerated in subdivisions (i), (iii), (v) and
subdivision (vii) of subparagraph (c) of this paragraph 9 as the opinions required by said
subparagraph (c), and to the further effect that:
(i) The Company is a validly organized and existing corporation under the laws
of the State of North Carolina and is in good standing under the laws of the State
of North Carolina and is duly qualified to do business in the State of South
Carolina;
(ii) The Company is duly authorized by its Charter to conduct the business that
it is now conducting as set forth in the Prospectus;
(iii) The Company has valid and subsisting franchises, licenses and permits
adequate for the conduct of its business, except where the failure to hold such
franchises, licenses and permits would not have a material adverse effect on the
business, properties, results of operations or financial condition of the Company;
(iv) The Company has good and marketable title, with minor exceptions,
restrictions and reservations in conveyances, and defects that are of the nature
ordinarily found in properties of similar character and magnitude and that, in his
opinion, will not in any substantial way impair the security afforded by the Mortgage, to all the properties described in the granting clauses of the
Mortgage and upon which the Mortgage purports to create a lien, except certain
rights-of-way over private property on which are located transmission and
distribution lines formerly owned by the Tide Water Power Company (merged into the
Company on February 29, 1952), title to which can be perfected by condemnation
proceedings. The description in the Mortgage of the above-mentioned properties
(including those formerly owned by Tide Water Power Company) is legally sufficient
to constitute the Mortgage a lien upon said properties, including without limitation
properties hereafter acquired by the Company (other than those expressly excepted
and reserved therefrom). Said properties constitute substantially all the permanent
physical properties and franchises (other than those expressly excepted and reserved
therefrom) of the Company and are held by the Company free and clear of all liens
and encumbrances except the lien of the Mortgage and Excepted Encumbrances, as
defined in the Mortgage. The Company has followed the practice generally of
acquiring (i) certain rights-of-way and easements and certain small parcels of fee
property appurtenant thereto and for use in conjunction therewith and (ii) certain
other properties of small or inconsequential value, without an examination of title
and, as to the title to lands affected by said rights-of-way and easements, of not
examining the title of the lessor or grantor whenever the lands affected by such
rights-of-way and easements are not of such substantial value as in the opinion of
the Company to justify the expense attendant upon examination of titles in
connection therewith. In the opinion of said counsel, such practice of the Company
is consistent with sound economic practice and with the method
12
followed by other
companies engaged in the same business and is reasonably adequate to assure the
Company of good and marketable title to all such property acquired by it. It is the
opinion of said counsel that any such conditions or defects as may be covered by the
above recited exceptions are not, except as to certain rights-of-way on which are
located transmission lines acquired from Tide Water Power Company, substantial and
would not materially interfere with the Company’s use of such properties or with its
business operations. The Company has the right of eminent domain in the States of
North Carolina and South Carolina under which it may, if necessary, perfect or
obtain title to privately owned land or acquire easements or rights-of-way required
for use or used by the Company in its public utility operations;
(v) The Company’s Mortgage and Deed of Trust dated as of May 1, 1940 and the
First through the Seventy-third Supplemental Indentures thereto have been filed for
record both as a real estate mortgage and as a chattel mortgage or security interest
in all counties in the States of North Carolina and South Carolina in which any of
the property described in the Mortgage as subject thereunder to the lien thereof is
located; and the Seventy-fourth Supplemental Indenture relating to the Securities is
in proper form for filing for record both as a real estate mortgage and as a
security interest in all counties in the States of North Carolina and South Carolina
in which any of the property described therein or in the Mortgage as subject to the
lien of the Mortgage is located. By virtue of filing financing statements with the
Offices of the Secretaries of State of North Carolina and South Carolina, the Trustees have a perfected security interest in that
portion of the collateral described therein to which Article 9 of the Uniform
Commercial Code of North Carolina or South Carolina is applicable and in which a
security interest is perfected by the central filing of a financing statement to
perfect a security interest in collateral of a transmitting utility under the UCC;
(vi) The Mortgage constitutes a valid, direct and first mortgage lien of record
upon all franchises and properties now owned by the Company (other than those
expressly excepted therefrom and other than those franchises and properties which
are not, individually or in the aggregate, material to the Company or the security
afforded by the Mortgage) situated in the States of North Carolina and South
Carolina, as described or referred to in the granting clauses of the Mortgage,
subject to the exceptions as to bankruptcy, insolvency and other laws stated in
subdivision (i) of subparagraph (c) above;
(vii) The issuance and sale of the Securities have been duly authorized by all
necessary corporate action on the part of the Company;
(viii) Orders have been entered by the North Carolina Utilities Commission and
the Public Service Commission of South Carolina authorizing the issuance and sale of
the Securities, and to the best of the knowledge of said counsel, said orders are
still in force and effect; and no further filing with, approval, authorization,
consent or other order of any public board or body (except such as have been
obtained under the Securities Act and as may be
13
required under the state securities
or Blue Sky laws of any jurisdiction) is legally required for the consummation of
the transactions contemplated in this Agreement;
(ix) Except as described in or contemplated by the Prospectus, there are no
pending actions, suits or proceedings (regulatory or otherwise) against the Company
or any properties that are likely, in the aggregate, to result in any material
adverse change in the business, properties, results of operations or financial
condition of the Company or that are likely, in the aggregate, to materially and
adversely affect the Mortgage, the Securities or the consummation of this Agreement,
or the transactions contemplated herein or therein; and
(x) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not (i) result in a breach of any of the terms
or provisions of, or constitute a default under, the Charter or the Company’s
by-laws or (ii) result in a material breach of any terms or provisions of, or
constitute a default under, any applicable law, indenture, mortgage, deed of trust
or other agreement or instrument to which the Company is now a party or any
judgment, order, writ or decree of any government or governmental authority or
agency or court having jurisdiction over the Company or any of its assets,
properties or operations that, in the case of any such breach or default, would have
a material adverse effect on business, properties, results of operations or
financial condition of the Company.
In said opinion such counsel may rely as to all matters of South Carolina law on the opinion
of Nelson, Mullins, Xxxxx & Scarborough, L.L.P.
(e) At the Closing Date, the Representative shall receive from Nelson, Mullins, Xxxxx &
Xxxxxxxxxxx, L.L.P., Columbia, South Carolina, a favorable opinion in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company is an electrical utility engaged in the business of generating,
transmitting, distributing and selling electric power to the general public in the
States of South Carolina and North Carolina, and the Company conducts its South
Carolina retail operations subject to the jurisdiction of the South Carolina Public
Service Commission pursuant to South Carolina Code Annotated, Sections 58-27-10 et
seq. (1976 as amended);
(ii) The Company is duly qualified to transact business in the State of South
Carolina;
(iii) The Company’s Mortgage and Deed of Trust dated as of May 1, 1940, and the
First through the Seventy-third Supplemental Indentures thereto, have been recorded
and filed in such manner and in such places as may be required by law, in the State
of South Carolina, in order to fully preserve and protect the security of the
bondholders and all rights of the Trustees thereunder. By virtue of filing
financing statements with the Offices of the Secretaries of State
14
of North Carolina
and South Carolina, the Trustees have a perfected security interest in that portion
of the collateral described therein to which Article 9 of the Uniform Commercial
Code of North Carolina or South Carolina is applicable and in which a security
interest is perfected by the central filing of a financing statement to perfect a
security interest in collateral of a transmitting utility under the UCC;
(iv) The Seventy-fourth Supplemental Indenture relating to the Securities is in
the proper form for the filing as a real estate mortgage and a security agreement in
all counties in the State of South Carolina where the Mortgage is filed and the
Seventy-fourth Supplemental Indenture is to be filed and upon such filing creates a
lien and/or security interest in that property located within such counties that is
described in the Mortgage or in the Seventy-fourth Supplemental Indenture as being
subject to the lien of the Mortgage (except that property which has been expressly
excepted from the lien in the Seventy-fourth Supplemental Indenture and the
Mortgage, as heretofore supplemented); and
(v) Said counsel has reviewed the opinion letter of even date therewith
addressed to you by Xxxxx X. Xxxxxxxx, Esq., Vice President of Progress Energy
Service Company, LLC, and said counsel concurs in the opinions which Xx. Xxxxxxxx
has expressed therein insofar as they relate to the laws of the State of South
Carolina.
(f) The Representative shall have received on the date hereof and shall receive on the
Closing Date from Deloitte & Touche LLP, a letter addressed to the Representative containing
statements and information of the type ordinarily included in accountants’ SAS 72 “comfort
letters” to underwriters with respect to the audit reports, financial statements and certain
financial information contained in or incorporated by reference into the Prospectus.
(g) At the Closing Date, the Representative shall receive a certificate of the
Chairman, President, Treasurer or a Vice President of the Company, dated the Closing Date,
to the effect that the representations and warranties of the Company in this Agreement are
true and correct as of the Closing Date.
(h) 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, and the Company, as of the Closing Date, shall be in compliance with any
governing orders of the North Carolina Utilities Commission and the Public Service
Commission of South Carolina, except where the failure to comply with such orders would not
be material to the offering or validity of the Securities.
In case any of the conditions specified above in this paragraph 9 shall not have been
fulfilled or waived by 2:00 P.M. on the Closing Date, this Agreement may be terminated by the
Representative by delivering written notice thereof to the Company. Any such termination shall be
without liability of any party to any other party except as otherwise provided in paragraphs 7 and
8 hereof.
15
10. Conditions of the Company’s Obligations. The obligations of the Company to
deliver the Securities shall be subject to the following conditions:
(a) No stop order suspending the effectiveness of the Registration Statement shall be
in effect on the Closing Date, and no proceedings for that purpose shall be pending before
or threatened by the Commission on the Closing Date.
(b) Prior to 12:00 Noon, New York time, on the day following the date of this
Agreement, or such later date as shall have been consented to by the Company, there shall
have been issued and on the Closing Date there shall be in full force and effect orders of
the North Carolina Utilities Commission and the Public Service Commission of South Carolina
authorizing the issuance and sale by the Company of the Securities, none of which shall not
contain any provision unacceptable to the Company by reason of its being materially adverse
to the Company (it being understood that no such order in effect as of the date of this
Agreement contains any such unacceptable provision).
In case any of the conditions specified in this paragraph 10 shall not have been fulfilled at
the Closing Date, this Agreement may be terminated by the Company by 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, each officer
and director of each Underwriter and each person who controls any Underwriter within the
meaning of Section 15 of the Securities Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject and to
reimburse each such Underwriter, each such officer and director, and each such controlling
person for any legal or other expenses (including to the extent hereinafter provided,
reasonable counsel fees) incurred by them, when and as incurred, in connection with
investigating any such losses, claims, damages or liabilities or in connection with
defending any actions, insofar as such losses, claims, damages, liabilities, expenses or
actions arise out of or are based upon any untrue statement, or alleged untrue statement, of
a material fact contained in the Registration Statement, the Preliminary Prospectus 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 expressly for use in
the Registration Statement, the Preliminary Prospectus or the Prospectus, or any amendment
or supplement to any thereof, or arising out of, or based upon, statements in or omissions
from that part of the Registration Statement that shall constitute the Statements of
Eligibility under the 1939
16
Act (Form T-1 and Form T-2) of the Trustees, 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, and such officer or
director 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
officer or director or any such controlling person, in connection with the sale of the
Securities.
(b) Each Underwriter severally, and not jointly, agrees to indemnify and hold harmless
the Company, its officers who signed the Registration Statement and its directors, and each
person who controls the Company within the meaning of Section 15 of the Securities Act,
against any and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject and to reimburse each of them for any legal or other
expenses (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them, when and as incurred, in connection with investigating
any such losses, claims, damages, or liabilities, or in connection with defending any
actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out
of or are based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Preliminary Prospectus 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 expressly for use in the Registration Statement, the Preliminary
Prospectus or the Prospectus or any amendment or supplement to any thereof. The indemnity
agreement of all the respective Underwriters contained in this paragraph 11 shall remain
operative and in full force and effect regardless of any investigation made by or on behalf
of the Company or any other Underwriter, or any such officer or director 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 or directors, or any person
controlling it as aforesaid, in respect of which indemnity may be sought on
17
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 that 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 that it or they may have to the indemnified party otherwise than
on account of such indemnity agreement. In case such notice of any such action shall be so
given, such indemnifying party shall be entitled to participate at its own expense in the
defense or, if it so elects, to assume (in conjunction with any other indemnifying parties)
the defense of such action, in which event such defense shall be conducted by counsel chosen
by such indemnifying party (or parties) and satisfactory to the indemnified party or parties
who shall be defendant or defendants in such action, and such defendant or defendants shall
bear the fees and expenses of any additional counsel retained by them; but if the
indemnifying party shall elect not to assume the defense of such action, such indemnifying
parties will reimburse such indemnified party or parties for the reasonable fees and
expenses of any counsel retained by them, as such expenses are incurred; provided, however,
if the defendants (including any impleaded parties) in any such action include both the
indemnified party and the indemnifying party, and counsel for the indemnified party shall
have concluded, in its reasonable judgment, that there may be a conflict of interest
involved in the representation by such counsel of both the indemnifying party and the indemnified
party, the indemnified party or parties shall have the right to select separate counsel,
satisfactory to the indemnifying party, to participate in the defense of such action on
behalf of such indemnified party or parties (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one separate counsel
(in addition to one local counsel) representing the indemnified parties who are parties to
such action). Each of the Company and the several Underwriters agrees that without the
other party’s prior written consent, which consent shall not be unreasonably withheld, it
will not settle, compromise or consent to the entry of any judgment in any claim in respect
of which indemnification may be sought under the indemnification provisions of this
Agreement, unless such settlement, compromise or consent (i) includes an unconditional
release of such other party from all liability arising out of such claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to act by or on
behalf of such other party.
(d) If the indemnification provided for in subparagraphs (a) or (b) above is for any
reason unavailable to or insufficient to hold harmless an indemnified party in respect of
any losses, liabilities, claims, damages or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount of such losses, liabilities,
claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company, on
the one hand, and the Underwriters, on the other hand, from the offering of the 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
18
benefits referred to in clause (i) above but also the relative fault of the Company, on the
one hand, and of the Underwriters, on the other hand, in connection with the statements or
omissions that resulted in such losses, 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 that does not
take account of the equitable considerations referred to above in this subparagraph (d).
The rights of contribution contained in this Section 11 shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any Underwriter of
the Company and shall survive delivery of the Securities. 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 officer and director of each underwriter and 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 expressly for use in the Registration Statement and
Prospectus were the following parts of the section titled “Underwriting”: the third
paragraph, the third sentence of the fourth paragraph, the fifth paragraph, the sixth
paragraph, the seventh paragraph and the eighth paragraph.
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
19
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, significant escalation of hostilities that existed prior
to the date of this Agreement, or any national or international calamity or crisis, or any material
adverse change in the financial markets of the United States, the effect of which outbreak,
escalation, calamity or crisis, or material adverse change 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 shall
have sustained a substantial loss by fire, flood, accident or other calamity that 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 or
(e) there shall have been declared, by either federal or New York authorities, a general banking
moratorium. 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.
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. Nature of Relationship. The Company acknowledges and agrees that (i) in
connection with all aspects of each transaction contemplated by this Underwriting Agreement, the
Company and the Underwriters have an arms length business relationship that creates no fiduciary
duty on the part of any party and each expressly disclaims any fiduciary relationship, (ii) the
Underwriters and their respective affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Company, (iii) the Underwriters have not provided
any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby
and the Company has consulted its own legal, accounting, regulatory and
20
tax advisors to the extent
it deemed appropriate, and (iv) any review by the Underwriters of the Company, the transactions
contemplated hereby or other matters relating to such transactions will be performed solely for the
benefit of the Underwriters and shall not be on behalf of the Company.
15. 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 000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx
00000, Attention: Xxxxxx X. Xxxxxxxx, Treasurer.
16. 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.
17. Defined Terms. Unless otherwise defined herein, capitalized terms used in this
Underwriting Agreement shall have the meanings assigned to them in the Registration Statement.
[The remainder of this page has been intentionally left blank]
21
If the foregoing is in accordance with your understanding of our agreement, kindly sign
and return to the Company the enclosed duplicate hereof whereupon it will become a binding
agreement between the Company and the several Underwriters in accordance with its terms.
Very truly yours, | |||||
CAROLINA POWER & LIGHT COMPANY | |||||
d/b/a PROGRESS ENERGY CAROLINAS, INC. | |||||
By: | /s/ Xxxxxx X. Xxxxxxxx | ||||
Xxxxxx X. Xxxxxxxx | |||||
Vice President and Treasurer |
Accepted as of the date first
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named in, Schedule II.
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named in, Schedule II.
X.X. XXXXXX SECURITIES INC. | |||
By:
|
/s/ Xxxxxx Xxxxxxxxx | ||
Authorized Representative | |||
WACHOVIA CAPITAL MARKETS, LLC | |||
By:
|
/s/ Xxx Xxxxxxxx | ||
Authorized Representative |
[Signature Page of First Mortgage Bond Underwriting Agreement]
SCHEDULE I
Underwriting Agreement dated November 28, 2005 | ||
Representatives and Addresses:
|
X.X. Xxxxxx Securities Inc. | |
000 Xxxx Xxxxxx | ||
Xxx Xxxx, Xxx Xxxx 00000 | ||
Attention: High Grade Syndicate Desk – 8th Floor | ||
Wachovia Capital Markets, LLC | ||
One Wachovia Center, DC-7 | ||
000 Xxxxx Xxxxxxx Xxxxxx | ||
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 | ||
Attention: Syndicate Desk | ||
Supplemental Indenture:
|
Seventy-fourth Supplemental Indenture, dated as of November 1, 2005 | |
Designation:
|
First Mortgage Bonds, 5.25% Series due 2015 | |
Principal Amount: $400,000,000 | ||
Date of Maturity: December 15, 2015 | ||
Interest Rate: 5.25% per annum, payable June 15 and December 15 of each year, commencing June 15, 2006. | ||
Purchase Price: 99.008% of the principal amount thereof, plus accrued interest, if any, from November 30, 2005, if settlement occurs after that date. | ||
Public Offering Price: 99.658% of the principal amount thereof, plus accrued interest, if any, from November 30, 2005, if settlement occurs after that date. | ||
Redemption Terms:
|
Optional — redeemable prior to maturity, at any time in whole or from time to time in part, at the option of the Company at a make-whole redemption price (as defined and described in further detail in the Prospectus Supplement). | |
Closing Date and Location:
|
November 30, 2005 | |
Hunton & Xxxxxxxx LLP | ||
Xxx Xxxx xx Xxxxxxx Xxxxx, 00xx Xxxxx | ||
Xxxxxxx, Xxxxx Xxxxxxxx 00000 |
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SCHEDULE II
Underwriter | Principal Amount | |||
X.X. Xxxxxx Securities Inc. |
$ | 130,000,000 | ||
Wachovia Capital Markets, LLC |
130,000,000 | |||
Lazard Capital Markets LLC |
40,000,000 | |||
Greenwich Capital Markets, Inc. |
40,000,000 | |||
BNY Capital Markets, Inc. |
20,000,000 | |||
Deutsche Bank Securities Inc. |
20,000,000 | |||
Xxxxxxx, Xxxxx & Co. |
20,000,000 | |||
Total |
$ | 400,000,000 | ||
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