Exhibit 1
CAROLINA POWER & LIGHT COMPANY
First Mortgage Bonds
UNDERWRITING AGREEMENT
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January 12, 1994
To the Representative named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Dear Sirs:
The undersigned Carolina Power & Light Company (the "Company") hereby
confirms its agreement with each of the several Underwriters hereinafter
named as follows:
1. Underwriters and Representative. The term "Underwriters" as used
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herein shall be deemed to mean the firm or corporation or the several firms
or corporations named in Schedule II hereto and any underwriter substituted
as provided in paragraph 6 and the term "Underwriter" shall be deemed to
mean one of such Underwriters. If the firm or firms listed in Schedule I
hereto (the "Representative") are the same as the firm or firms listed in
Schedule II hereto, then the terms "Underwriters" and "Representative", as
used herein, shall each be deemed to refer to such firm or firms. The
Representative represents that it has been authorized by the Underwriters
to execute this Agreement on their behalf and to act for them in the manner
herein provided. All obligations of the Underwriters hereunder are several
and not joint. If more than one firm is named in Schedule I hereto, any
action under or in respect of this Agreement may be taken by such firms
jointly as the Representative or by one of the firms acting on behalf of
the Representative and such action will be binding upon all the
Underwriters.
2. Description of Securities. The Company proposes to issue and
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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 Frederick G. Herbst (W. T.
Cunningham, successor), as Trustees, as supplemented and as it will be
further supplemented by a Supplemental Indenture relating to the Securities
(the "Supplemental Indenture"), in substantially the form heretofore
delivered to the Representative, said Mortgage and Deed of Trust as
supplemented and to be supplemented by the Supplemental Indenture being
hereinafter referred to as the "Mortgage".
3. Representations and Warranties of the Company. The Company
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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
(No. 33-50597), including a combined prospectus ("registration
statement No. 33-50597"), for the registration of the Securities under
the Securities Act of 1933, as amended (the "Securities Act"), and the
qualification of the Mortgage under the Trust Indenture Act of 1939,
as amended (the "1939 Act"). Registration statement No. 33-50597 has
been declared effective by the Commission and the Mortgage has been
qualified under the 1939 Act. The Company has also filed with the
Commission a registration statement on Form S-3 (No.33-60014)
("registration statement No. 33-60014"), which was declared effective
by the Commission on March 31, 1993, for the registration of
$400,000,000 principal amount of First Mortgage Bonds, of which an
aggregate of $300,000,000 principal amount has been previously issued.
Registration statement No. 33-50597, as amended to the date hereof,
together with the registration statement No. 33-60014 as amended to
the date hereof, including, in each case, the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act (the "Incorporated Documents"), is hereinafter
collectively referred to as the "Registration Statement". The
combined prospectus forming a part of the registration statement No.
33-50597, as it is to be supplemented by a prospectus supplement,
dated on or about the date hereof, relating to the Securities, and all
prior amendments or supplements thereto (other than amendments or
supplements relating to First Mortgage Bonds 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 date
hereof shall be deemed to refer to the Registration Statement or the
Prospectus, as the case may be, as each may be amended or supplemented
to such date.
(b) Prior to the termination of the offering of the Securities,
the Company will not file any amendment to the Registration Statement
or supplement to the Prospectus which shall not have previously been
furnished to the Representative or of which the Representative shall
not previously have been advised or to which the Representative shall
reasonably object in writing and which has not been approved by
Winthrop, Stimson, Putnam & Roberts, who are acting as counsel on
behalf of the Underwriters.
(c) The Registration Statement, at the time and date it was
declared effective by the Commission, complied and the Registration
Statement, the Prospectus and the Mortgage, at the date the Prospectus
is filed with, or transmitted for filing to, the Commission pursuant
to Rule 424 under the Securities Act ("Rule 424") and at the Closing
Date, will comply in all material respects, with the applicable
provisions of the Securities Act and the 1939 Act and the applicable
rules and regulations of the Commission thereunder; the Registration
Statement, at the time and date it was declared effective by the
Commission, did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and the
Prospectus, at the date it is filed with, or transmitted for filing
to, the Commission pursuant to Rule 424 and at the Closing Date, did
not and 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 Registration
Statement or the Prospectus or to any statements in or omissions from
the Statements of Eligibility (Forms T-1 and T-2) of the Trustees
under the Mortgage. The Incorporated Documents, when they were filed
with the Commission, complied in all material respects with the
applicable requirements of the Exchange Act and the rules and
regulations of the Commission thereunder, and any documents so filed
and incorporated by reference subsequent to the date hereof and prior
to the termination of the offering of the Securities by the
Underwriters will, when they are filed with the Commission, comply in
all material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder; and, when read
together with the Registration Statement and the Prospectus, none of
such documents included or includes or will include any untrue
statement of a material fact or omitted or omits or will omit to state
any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
(d) The financial statements incorporated by reference in the
Registration Statement present fairly the financial condition and
operations of the Company at the respective dates or for the
respective periods to which they apply; such financial statements have
been prepared in each case in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved; and Deloitte & Touche, who have audited certain of the
financial statements, are independent public or independent certified
public accountants as required by the Securities Act or the Exchange
Act and the rules and regulations of the Commission thereunder.
(e) Except as reflected in, or contemplated by, the Registration
Statement and the Prospectus, since the respective dates as of which
information is given in the Registration Statement and Prospectus, and
prior to the Closing Date, there has not been any material adverse
change in the business, property or financial condition of the Company
and since such dates and prior to the Closing Date, there has not been
any material transaction entered into by the Company other than
transactions contemplated by the Registration Statement and Prospectus
and transactions in the ordinary course of business. The Company has
no material contingent obligation which is not disclosed in the
Registration Statement and Prospectus.
(f) The consummation of the transactions herein contemplated and
the fulfillment of the terms hereof on the part of the Company to be
fulfilled have been duly authorized by all necessary corporate action
of the Company in accordance with the provisions of its charter (the
"Charter"), by-laws and applicable law, and the Securities, when
issued and delivered as provided herein, will constitute legal, valid
and binding obligations of the Company in accordance with their terms
except as limited by bankruptcy, insolvency or other laws affecting
mortgagees' and other creditors' rights and general equitable
principles.
(g) The consummation of the transaction 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, any
indenture, mortgage, deed of trust or other agreement or instrument to
which the Company is now a party.
(h) The summary of the terms of the Securities contained in the
Registration Statement and Prospectus fairly describes the provisions
thereof required to be described by the registration statement form.
4. Purchase and Sale. On the basis of the representations,
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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
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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.
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(a) Payment for the Securities shall be made at the place, time
and date specified in Schedule I hereto against delivery of the
Securities at the office of The Bank of New York, Corporate Trust
Department, 101 Barclay Street, New York, New York, 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 certified or
official bank check or checks in New York Clearing House or similar
next day funds against delivery to the Representative for the
respective accounts of the Underwriters of certificates for the
Securities to be purchased by them. Certificates for the Securities
shall be delivered to the Representative for the respective accounts
of the Underwriters in such names and denominations as the
Representative shall specify not later than the close of business on
the third full business day before the Closing Date. 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 A.M., on the last full business day
prior to the Closing Date at said office of The Bank of New York.
(b) If one or more of the Underwriters shall, for any reason
permitted hereunder, cancel its obligation to purchase hereunder and
to take up and pay for the principal amount of the Securities to be
purchased by such one or more Underwriters, the Company shall
immediately notify the Representative, and the remaining Underwriters
shall have the right, within 24 hours of receipt of such notice,
either to take up and pay for (in such proportion as may be agreed
upon among them) or to substitute another Underwriter or Underwriters,
satisfactory to the Company, to take up and pay for the principal
amount of the Securities which such one or more Underwriters did not
purchase. If one or more Underwriters shall, for any reason other
than a reason permitted hereunder, fail to take up and pay for the
principal amount of the Securities to be purchased my such one or more
Underwriters, the Company shall immediately notify the Representative,
and the remaining Underwriters shall be obligated to take up and pay
for (in addition to the respective principal amount of the Securities
set forth opposite their respective names in Schedule II hereto), the
principal amount of the Securities which such defaulting Underwriter
or Underwriters failed to take up and pay for, up to a principal
amount thereof equal to, in the case of each such remaining
Underwriter, ten percent (10%) of the principal amount of the
Securities set forth opposite the name of such remaining Underwriter
in said Schedule II, and such remaining Underwriters shall have the
right, within 24 hours of receipt of such notice, either to take up
and pay for (in such proportion as may be agreed upon among them), or
to substitute another Underwriter or Underwriters, satisfactory to the
Company, to take up and pay for, the remaining principal amount of the
Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase. If any unpurchased Securities still remain, then
the Company or the Representative shall be entitled to an additional
period of 24 hours within which to procure another party or parties,
members of the National Association of Securities Dealers, Inc. (or if
not members of such Association, who are not eligible for membership
in said Association and who agree (i) to make no sales within the
United States, its territories or its possessions or to persons who
are citizens thereof or residents therein and (ii) in making sales to
comply with said Association's Rules of Fair Practice) and
satisfactory to the Company, to purchase or agree to purchase such
unpurchased Securities on the terms herein set forth. In any such
case either the Representative or the Company shall have the right to
postpone the Closing Date for a period not to exceed three full
business days from the date agreed upon in accordance with this
paragraph 6, in order that the necessary changes in the Registration
Statement and Prospectus and any other documents and arrangements may
be effected. If the Representative and the Company shall fail to
procure a satisfactory party or parties as above provided to purchase
or agree to purchase such unpurchased Securities, then the Company may
either (i) require the remaining Underwriters to purchase the
principal amount of Securities which they are obligated to purchase
hereunder or (ii) terminate this Agreement by giving prompt notice to
the Representative. In the event that 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 the Company has not elected to require the non-defaulting
Underwriters to purchase the principal amount of Securities which they
are obligated to purchase hereunder, then this Agreement shall
terminate without any liability on the part of the Company or any
Underwriter (other than an Underwriter which shall have failed or
refused, in accordance with the terms hereof, to purchase and pay for
the principal amount of the Securities which such Underwriter has
agreed to purchase as provided in paragraph 4 hereof), except as
otherwise provided in paragraph 7 and paragraph 8 hereof.
7. Covenants of the Company. The Company covenants with
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each Underwriter that:
(a) As soon as possible after the execution and delivery of
this Agreement, the Company will file the Prospectus with the
Commission pursuant to Rule 424, setting forth, among other things,
the necessary information with respect to the terms of offering of the
Securities. The Company will promptly deliver to the Representative
and to counsel for the Underwriters one fully executed copy or one
conformed copy, certified by an officer of the Company, of
registration statement No. 33-50597 and one fully executed copy or one
conformed copy certified by an officer of the Company, of registration
statement No. 33-60014, each as originally filed and of all amendments
thereto, heretofore or hereafter made, which relate to the Securities,
including any post-effective amendment (in each case including all
exhibits filed therewith and all documents incorporated therein not
previously furnished to the Representative), including signed copies
of each consent and certificate included therein or filed as an
exhibit thereto, and will deliver to the Representative for
distribution to the Underwriters as many conformed copies of the
foregoing (excluding the exhibits, but including all documents
incorporated therein) as the Representative may reasonably request.
The Company will also send to the Underwriters as soon as practicable
after the date of this Agreement and thereafter from time to time as
many copies of the Prospectus as the Representative may reasonably
request for the purposes required by the Securities Act.
(b) During such period (not exceeding nine months) after the
commencement of the offering of the Securities as the Underwriters may
be required by law to deliver a Prospectus, if any event relating to
or affecting the Company, or of which the Company shall be advised in
writing by the Representative shall occur, which in the Company's
opinion should be set forth in a supplement to or an amendment of the
Prospectus in order to make the Prospectus not misleading in the light
of the circumstances when it is delivered to a purchaser, or if it is
necessary to amend the Prospectus to comply with the Securities Act,
the Company will forthwith at its expense prepare and furnish to the
Underwriters and dealers named by the Representative a reasonable
number of copies of a supplement or supplements or an amendment or
amendments to the Prospectus which will supplement or amend the
Prospectus so that as supplemented or amended it will comply with the
Securities Act and will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading. In case any
Underwriter is required to deliver a Prospectus after the expiration
of nine months after the commencement of the offering of the
Securities, the Company, upon the request of the Representative, will
furnish to the Representative, at the expense of such Underwriter, a
reasonable quantity of a supplemented or amended prospectus, or
supplements or amendments to the Prospectus, complying with Section
10(a) of the Securities Act.
(c) The Company will make generally available to its security
holders, as soon as reasonably practicable, but in any event not later
than 16 months after the end of the fiscal quarter in which the filing
of the Prospectus pursuant to Rule 424 occurs, an 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) The Company will advise the Representative promptly of the
filing of the Prospectus pursuant to Rule 424 and of any amendment or
supplement to the Prospectus or Registration Statement or of official
notice of institution of proceedings for, or the entry of, a stop
order suspending the effectiveness of the Registration Statement and,
if such a stop order should be entered, use its best efforts to obtain
the prompt removal thereof.
(f) The Company will use its best efforts to qualify the
Securities, 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. The fees and disbursements of Winthrop, Stimson, Putnam
& Roberts, who are acting as counsel on behalf of the Underwriters for
the purposes of this Agreement, shall be paid by the Underwriters
(subject, however, to the provisions of paragraph 8 requiring payment
by the Company of fees and expenses not to exceed $5,000); provided,
however, that if this Agreement is terminated in accordance with the
provisions of paragraph 9, 10 or 12, the Company shall reimburse the
Representative for the account of the Underwriters for the amount of
such counsel fees and disbursements. 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 this paragraph
7 and in 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.
8. Payment of Expenses. The Company will pay all expenses
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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 accordance with the provisions of
paragraph 7(f), including filing fees and the fees and disbursements of
counsel for the Underwriters in connection therewith, and in connection
with the preparation of the Blue Sky Survey and Legality Memorandum, such
fees and disbursements not to exceed $5,000, (v) the printing and delivery
to the Underwriters of copies of the Registration Statement and all
amendments thereto, of the preliminary prospectuses, and of the Prospectus
and any amendments or supplements thereto, (vi) the printing and delivery
to the Underwriters of copies of the Blue Sky Survey and Legality
Memorandum, and (vii) the preparation, execution, filing and recording by
the Company of the Supplemental Indenture relating to the Securities (such
filing and recordation to be promptly made, after execution and delivery of
the Supplemental Indenture to the Trustees, 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 Supplemental Indenture.
9. Conditions of Underwriters' Obligations. The several obligations
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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, 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 threatened
by, the Commission on the Closing Date, and the Representative shall
have received, prior to payment for the Securities, a certificate
dated the Closing Date and signed by the Chairman, President or a Vice
President of the Company to the effect that no such stop order is in
effect and that no proceedings for such purpose are pending before or,
to the knowledge of the Company, threatened by the Commission.
(b) Prior to 12 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 Representative, there shall have been issued and
on the Closing Date there shall be in full force and effect orders of
the North Carolina Utilities Commission and the South Carolina Public
Service Commission authorizing the issuance and sale of the
Securities, none of which shall contain any provision unacceptable to
the Representative by reason of its being materially adverse to the
Company (it bring understood that no such order in effect on the date
of this Agreement and heretofore furnished to the Representative or to
Winthrop, Stimson, Putnam & Roberts, Counsel for the Underwriters,
contains any such unacceptable provision).
(c) At the Closing Date, the Representative shall receive
favorable opinions from: (1) Reid & Priest, of counsel to the Company,
which opinion shall be satisfactory in form and substance to Winthrop,
Stimson, Putnam & Roberts, Counsel for the Underwriters, and (2)
Winthrop, Stimson, Putnam & Roberts, in each of which opinions said
counsel may rely as to all matters of North Carolina and South
Carolina law upon the opinions of Richard E. Jones, Esq., Senior Vice
President, General Counsel and Secretary for the Company, and Messrs.
Paulling & James, 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, 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;
(ii) The Mortgage has been duly qualified under the
1939 Act;
(iii) The Securities 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, are entitled to the benefit 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
captions "Description of the New Bonds" and "Certain Terms of the
Offered Bonds", insofar as they purport to constitute summaries
of the documents referred to therein, constitute accurate
summaries of the terms of such documents 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, and at the
Closing Date is, effective under the Securities Act and, to the
best of the knowledge of said counsel, 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);
(viii) Orders have been entered by the North Carolina
Utilities Commission and the South Carolina Public Service
Commission 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 approval,
authorization, consent or other order of any public board or body
(other than in connection or in compliance with the provisions of
the blue sky laws of any jurisdiction) is legally required for
the issuance and sale of the Securities.
(d) At the Closing Date, the Representative shall receive from
Richard E. Jones, Esq., Senior Vice President, General Counsel and
Secretary for the Company, a favorable opinion in form and substance
satisfactory to Winthrop, Stimson, Putnam & Roberts, Counsel for the
Underwriters, to the same effect with respect to the matters
enumerated in subdivisions (i) through (v) and subdivisions (vii) and
(viii) 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 and is in good standing under the laws of the State
of North Carolina and is qualified to do business and is doing
business in that State and in the State of South Carolina;
(ii) The Company is duly authorized by its Charter to
conduct the business which it is now conducting as set forth in
the Prospectus;
(iii) The Company has valid franchises, licenses and permits
free from burdensome restrictions and adequate for the conduct of
its business;
(iv) The information contained in the Prospectus, which is
stated therein to have been made in reliance upon the opinion of
said counsel, has been reviewed by said counsel and is correct;
(v) The Company has good and marketable title, with minor
exceptions, restrictions and reservations in conveyances, and
defects, which are of the nature ordinarily found in properties
of similar character and magnitude, and which, in his opinion,
cannot in any substantial way impair the security afforded by the
Mortgage, to all the properties described in the granting clauses
of the Mortgage and upon which the Mortgage purports to create a
lien, except certain rights-of-way over private property on which
are located transmission and distribution lines formerly owned by
the Tide Water Power Company (merged into the Company on February
29, 1952), title to which can be perfected by condemnation
proceedings. The description in the Mortgage of the
above-mentioned properties (including those formerly owned by
Tide Water Power Company) is legally sufficient to constitute the
Mortgage a lien thereon. Said properties constitute
substantially all the permanent physical properties and
franchises of the Company and are held by the Company free and
clear of all liens and encumbrances except the lien of the
Mortgage and Excepted Encumbrances, as defined in the Mortgage.
The Company has followed the practice generally of purchasing
rights-of-way and easements and certain small parcels of fee
property appurtenant thereto and for use in conjunction
therewith, and certain other properties of small or
inconsequential value, without an examination of title and, as to
the title to lands affected by rights-of-way and easements, of
not examining the title of the lessor or grantor whenever the
lands affected by such rights-of-way and easements are not of
such substantial value as in the opinion of the Company to
justify the expense attendant upon examination of titles in
connection therewith. In his opinion such practice of the
Company is consistent with good practice and with the method
followed by other companies engaged in the same business and is
reasonably adequate to assure the Company of good and marketable
title to all such property acquired by it. It is his opinion
that any such conditions or defects as may be covered by the
above recited exceptions are not, except as to certain
rights-of-way on which are located transmission lines acquired
from Tide Water Power Company, substantial and would not
interfere with the Company's business operations. The Company
has the right of eminent domain in the States of North Carolina
and South Carolina under which it may, if necessary, perfect or
obtain title to privately owned land or acquire easements or
rights-of-way required for use or used by the Company in its
public utility operations;
(vi) The Company's Mortgage and Deed of Trust dated
as of May 1, 1940 and the First through the Sixty-first
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 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;
(vii) The Mortgage constitutes a valid first mortgage
lien of record upon all the franchises and properties now owned
by the Company (other than those expressly excepted therefrom)
situated in the States of North Carolina and South Carolina, as
described or referred to in the granting clauses of the Mortgage,
subject to the exceptions as to bankruptcy, insolvency and other
laws stated in subdivision (i) of subparagraph (c) above;
(viii) The issuance and sale of the Securities have
been duly authorized by all necessary corporate action the part
of the Company.
In said opinion such counsel may rely as to all matters of South
Carolina law on the opinion of Messrs. Paulling & James.
(e) At the Closing Date, the Representative shall receive from
Messrs. Paulling & James, Darlington, South Carolina, a favorable
opinion in form and substance satisfactory to Winthrop, Stimson,
Putnam & Roberts, Counsel for the Underwriters, to the effect that:
(i) The Company is duly qualified to engage in the business
in which it is engaged in the State of South Carolina;
(ii) The Company has good and sufficient title to all the
properties in South Carolina now owned by it and described in and
as subject to the lien of the Mortgage (except possibly certain
transmission line rights-of-way, titles to which may be subject
to defects and irregularities which can be cured, if necessary,
under the eminent domain laws of South Carolina), subject only to
Excepted Encumbrances, as defined in the Mortgage, and to minor
defects and irregularities customarily found in properties of
like size and character and which, in their opinion, do not
materially impair the use of the property affected thereby in the
operation of the business of the Company; the description of said
properties set forth in the Mortgage is adequate to constitute
the Mortgage a lien thereon; the Mortgage constitutes a valid,
direct first mortgage lien upon said properties, which include
substantially all the permanent physical properties and
franchises of the Company in South Carolina (other than those
expressly excepted), subject only to the exceptions enumerated
above;
(iii) The Company holds valid and subsisting franchises,
licenses and permits in South Carolina authorizing it to carry on
the utility business in which it is engaged in South Carolina;
and
(iv) They have reviewed the opinion letter of even date
therewith addressed to you by Richard E. Jones, Esq., Senior Vice
President, General Counsel and Secretary for the Company, and
they concur in the opinions which he has expressed therein
insofar as they relate to the laws of the State of South
Carolina.
(f) At the time of execution of this Agreement and at the
Closing Date, the Representative shall have received from Deloitte &
Touche letters, dated respectively the date of this Agreement and 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, included in the
Company's quarterly reports on Form 10-Q for the quarters ended March
31, 1993, June 30, 1993 and September 30, 1993 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 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 five days prior to the date of each such letter, there was any
change in the capital stock or long-term debt of the Company, or at
the date of the latest available interim balance sheet read by them,
there was any decrease in net assets as compared with the amount shown
on the most recent balance sheet incorporated by reference in the
Registration Statement, except for changes or decreases that the
Registration Statement discloses have occurred or may occur, for
declarations of dividends, for common stock sales under the Automatic
Dividend Reinvestment and Customer Stock Ownership Plan and Stock
Purchase-Savings Plan, or for changes or decreases that are described
in such letter; and (iii) covering such other matters as the
Representative shall reasonably request.
(g) At the Closing Date, the Representative shall receive a
certificate of the Chairman, President or a Vice President of the
Company, dated the Closing Date, to the effect that the
representations and warranties of the Company in this Agreement are
true and correct as of the Closing Date.
(h) All legal proceedings taken in connection with the sale and
delivery of the Securities shall have been satisfactory in form and
substance to Winthrop, Stimson, Putnam & Roberts, Counsel for the
Underwriters.
In case any of the conditions specified above in this paragraph 9
shall not have been fulfilled at the Closing Date, this Agreement may be
terminated by the Representative by mailing or delivering written notice
thereof to the Company. Any such termination shall be without liability of
any party to any other party except as otherwise provided in paragraphs 7
and 8.
10. Conditions of the Company's Obligations. The obligations of the
---------------------------------------
Company to deliver the 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 Noon, New York Time, on the day following the
date of this Agreement, or such later date as shall have been
consented to by the Company, there shall have been issued and on the
Closing Date there shall be in full force and effect orders of the
North Carolina Utilities Commission and the South Carolina Public
Service Commission authorizing the issuance and sale by the Company of
the Securities, none of which shall contain any provision unacceptable
to the Company by reason of its being materially adverse to the
Company (it being understood that no such order in effect as of the
date of this Agreement contains any such unacceptable provision).
In case any of the conditions specified in this paragraph 10 shall not
have been fulfilled at the Closing Date, this Agreement may be terminated
by the Company by mailing or delivering written notice thereof to the
Representative. Any such termination shall be without liability of any
party to any other party except as otherwise provided in paragraphs 7 and
8.
11. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person who controls any Underwriter within the
meaning of Section 15 of the Securities Act against any and all
losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Securities Act or
under any other statute or common law and to reimburse each such
Underwriter and controlling person for any legal or other expenses
(including to the extent hereinafter provided, reasonable counsel
fees) incurred by them 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 information furnished
herein or in writing to the Company by any Underwriter or through the
Representative on behalf of such Underwriter for use in the
Registration Statement or 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 Statements of Eligibility under the 1939 Act (Forms T-1
and T-2) of the Trustees under the Mortgage, 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. The indemnity
agreement of the Company contained in this paragraph 11 and the
representations and warranties of the Company contained in paragraph 3
hereof shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any Underwriter or any
such controlling person and shall survive the delivery of the
Securities. The Underwriters agree to notify promptly the Company,
and each other Underwriter, of the commencement of any litigation or
proceedings against them or any of them, or any such controlling
person, in connection with the sale of the Securities.
(b) Each Underwriter agrees to indemnify and hold harmless the
Company, its officers and directors, each other Underwriter, and each
person who controls any thereof 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 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 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, if such statement or omission was
made in reliance upon 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 or
the Prospectus or any amendment or supplement to either thereof. The
indemnity agreement of all the respective Underwriters contained in
this paragraph 11 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Company or
any other Underwriter, or any such controlling person, and shall
survive the delivery of the Securities. The Company agrees promptly
to notify the Representative of the commencement of any litigation or
proceedings against the Company or any of its officers or directors,
or any such controlling person, in connection with the sale of the
Securities.
(c) The Company and each of the Underwriters agree that, upon
the receipt of notice of the commencement of any action against it,
its officers and directors, or any person controlling it as aforesaid,
in respect of which indemnity may be sought on account of any
indemnity agreement contained herein, it will promptly give written
notice of the commencement thereof to the party or parties against
whom indemnity shall be sought hereunder. The 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 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;
provided, however, if the defendants in any such action include both
the indemnified party and the indemnifying party and counsel for the
indemnifying party shall have reasonably concluded that there may be a
conflict of interest involved in the representation by such counsel
of both the indemnifying party and the indemnified party, the
indemnified party or parties shall have the right to select separate
counsel, satisfactory to the indemnifying party, to participate in the
defense of such action on behalf of such indemnified party or parties
(it being understood, however, that the indemnifying party shall not
be liable for the expenses of more than one separate counsel
representing the indemnified parties who are parties to such action).
12. Termination Date of this Agreement. This Agreement may be
----------------------------------
terminated by the Representative at any time prior to the Closing Date by
mailing or delivering written notice thereof to the Company, if prior to
such time (a) there shall have occurred any general suspension of trading
in securities on the New York or Pacific Stock Exchange, or there shall
have been established by the New York or Pacific 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 other
national or international calamity or crisis, the effect of which on the
financial markets of the United States shall be such as to make it
impracticable, in the reasonable judgment of the Representative, for the
Underwriters to enforce contracts for the sale of the Securities, or (c)
the Company shall have sustained a substantial loss by fire, flood,
accident or other calamity which renders it impracticable, in the
reasonable judgment of the Representative, to consummate the sale of the
Securities and the delivery of the Securities by the several Underwriters
at the initial public offering price. 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) 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, 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 Securities from any of the several
Underwriters.
14. Notices. All communications hereunder shall be in writing or
-------
by telegram 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 411 Fayetteville Street, Raleigh, North
Carolina 27601-1748, attention of M. S. Glass, Treasurer.
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.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed duplicate
hereof whereupon it will become a binding agreement between the Company and
the several Underwriters in accordance with its terms.
Very truly yours,
CAROLINA POWER & LIGHT COMPANY
By: \s\ Robert J. Reger, Jr.
--------------------------
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.
PRUDENTIAL SECURITIES INCORPORATED
By: \s\ Stacy Hallis
-----------------------
SCHEDULE I
Underwriting Agreement dated January 12, 1994
Registration Statements No. 33-50597 and No. 33-60014
Representative and Address:
Prudential Securities Incorporated
One Seaport Plaza, 29th Floor
New York, NY 10292
Securities: First Mortgage Bonds
Designation: 5 7/8% Series due January 15, 2004
Principal Amount: $150,000,000
Supplemental Indenture dated as of January 15, 1994
Date of Maturity: January 15, 2004
Interest Rate: 5 7/8% per annum, payable January 15 and July l5
of each year, commencing July 15, 1994.
Purchase Price: 98.863% of the principal amount thereof,
plus accrued interest from January 15, 1994 to the date of
payment and delivery.
Public Offering Price: 99.069% of the principal amount thereof,
plus accrued interest from January 15, 1994 to the date of
payment and delivery.
Closing Date and Location:
January 19, 1994
Reid & Priest
40 West 57th Street
New York, N.Y. 10019
SCHEDULE II
Underwriters Principal Amount
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Prudential Securities Incorporated $ 75,000,000
Citicorp Scurities, Inc. $ 25,000,000
Paine Webber Incorporated $ 25,000,000
Salomon Brothers Inc $ 25,000,000
TOTAL $150,000,000
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