FLORIDA POWER CORPORATION
d/b/a PROGRESS ENERGY FLORIDA, INC.
First Mortgage Bonds
4.80% Series due 2013
5.90% Series due 2033
UNDERWRITING AGREEMENT
February 18, 2003
To the Representative named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Dear Ladies and Gentlemen:
The undersigned Florida Power Corporation d/b/a Progress Energy
Florida, 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 Indenture,
dated as of January 1, 1944, with First Chicago Trust Company of New York, as
successor Trustee, as supplemented by the Seventh, Eighth, Sixteenth,
Twenty-Ninth, Thirty-Eighth and Fortieth supplemental indentures, and as it will
be further supplemented by the Forty-First Supplemental Indenture relating to
the Securities (the "Supplemental Indenture"), in substantially the form
heretofore delivered to the Representative, said Indenture as supplemented by
the Seventh, Eighth, Sixteenth, Twenty-Ninth, Thirty-Eighth and Fortieth
supplemental indentures, and to be supplemented by the 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:
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(a) The Company has filed with the Securities and
Exchange Commission (the "Commission") a Registration Statement on Form
S-3 (No. 333-63204) (the "New Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), for the
registration of up to an aggregate of $380,000,000 principal amount of
First Mortgage Bonds and Debt Securities in unallocated amounts. The
New Registration Statement also constituted Post-Effective Amendment
No. 1 to three other Registration Statements on Form S-3, each as set
forth on Schedule I (collectively, the "Post-Effective Amendments" and
together with the New Registration Statement, the "Registration
Statement") under the Securities Act relating to an aggregate of
$620,000,000 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 Amendments became effective. The
Registration Statement contained a combined prospectus for the sale of
$1,000,000,000 of the Company's First Mortgage Bonds and Debt
Securities (the "Registered Securities") in unallocated amounts, as
each is defined in the Registration Statement. The Registration
Statement was declared effective by the Commission on June 26, 2001. As
of the date hereof, the Company has sold Registered Securities in an
aggregate principal amount of $300,000,000. 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 February 18, 2003, 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, 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 Trust Indenture
Act of 1939, as amended (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
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contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Prospectus, at the date it
is filed with, or transmitted for filing to, the Commission pursuant to
Rule 424 and at the Closing Date, will not contain an untrue statement
of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
foregoing representations and warranties in this subparagraph (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 Statement of Eligibility (Form
T-1) of the Trustee. 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.
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Florida; 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 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 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 any accounting firms that have audited any 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.
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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 articles of incorporation, as amended (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 Trustee to exercise its 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 does not have any significant
subsidiaries as defined in Rule 1-02 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 Supplemental Indenture by the Trustee,
constitutes a valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject
to (i) applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws affecting 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 Indenture 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 Indenture 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 of each series 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 First
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Chicago Trust Company of New York, 151 West 51st Street, 5th Floor, New
York, New York 10019, 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 First Chicago
Trust Company 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 First Chicago Trust Company 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 First
Chicago Trust Company 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 of any series 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 of such series set forth opposite their respective
names in Schedule II hereto) the principal amount of such series that
the Securities that 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 non-defaulting Underwriter, 10% of the principal
amount of the Securities of such series set forth opposite the name of
such non-defaulting Underwriter in said 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,
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then this Agreement shall terminate without any liability on the part
of the Company or any Underwriter (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, 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,
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 opinion of
the Company or 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 supplements or amendments to the Prospectus, complying
with Section 10(a) of the Securities Act.
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(c) The Company will make generally available to its
security holders, as soon as reasonably practicable, but in any event
not later than 16 months after the end of the fiscal quarter in which
the filing of the Prospectus pursuant to Rule 424 occurs, an earning
statement (in form complying with the provisions of Section 11(a) of
the Securities Act, which need not be certified by independent public
accountants) covering a period of twelve months beginning not later
than the first day of the Company's fiscal quarter next following the
filing of the Prospectus pursuant to Rule 424.
(d) The Company will use its best efforts promptly to do
and perform all things to be done and performed by it hereunder prior
to the Closing Date and to satisfy all conditions precedent to the
delivery by it of the Securities.
(e) As soon as reasonably possible after the Closing
Date, the Company will cause the Supplemental Indenture to be recorded
in all recording offices in the State of Florida 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 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
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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 Supplemental
Indenture (such filing and recordation to be promptly made after execution and
delivery of the Supplemental Indenture to the Trustee 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 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, an order of the Florida Public Service Commission
authorizing the issuance and sale of the Securities, which shall not
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).
(c) At the Closing Date, the Representative shall receive
favorable opinions from: (1) Hunton & Williams, counsel to the Company,
which opinion shall be satisfactory in form and substance to counsel
for the Underwriters, and (2) Dewey Ballantine LLP, counsel for the
Underwriters, in each of which opinions (except as to subdivision (vi)
(as to documents incorporated by reference, at the time they were filed
with the Commission) as to which Dewey Ballantine LLP need express no
opinion) said
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counsel may rely as to all matters of Florida law upon the opinion of
R. Alexander Glenn, Associate General Counsel of Progress Energy
Service Company LLC, acting as Counsel to the Company, to the effect
that:
(i) The Mortgage has been duly and validly
authorized by all necessary corporate action (with this
opinion required in the Hunton & Williams and Dewey Ballantine
LLP opinions only as to the original Indenture dated as of
January 1, 1944 and the Supplemental Indentures subsequent to,
but not including, the Thirty-Eighth Supplemental Indenture),
has been duly and validly executed and delivered by the
Company (with this opinion required in the Hunton & Williams
and Dewey Ballantine LLP opinions only as to the original
Indenture dated as of January 1, 1944 and the Supplemental
Indentures subsequent to, but not including, the Thirty-Eighth
Supplemental Indenture), 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 required in the Hunton &
Williams and Dewey Ballantine LLP opinions only as to the
original Indenture dated as of January 1, 1944 and the
Supplemental Indentures subsequent to, but not including, the
Thirty-Eighth 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 Trustee to exercise
its 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, at the time each
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, 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 Statement of Eligibility on Form T-1, upon
which such opinions need not pass), at the time they were
filed with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act and the
applicable instructions, rules and regulations of the
Commission thereunder; the Registration Statement has become
effective under the Securities Act and, to the best of the
knowledge of said counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued
and not withdrawn, and no proceedings for a stop order with
respect thereto are threatened or pending under Section 8 of
the Securities Act;
(vii) Nothing has come to the attention of said
counsel that would lead them to believe that the Registration
Statement, at the time and date it was declared effective by
the Commission, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading; and nothing has come to the attention of said
counsel that would lead them to believe that (x) the
Preliminary Prospectus, at the time it was filed with, or
transmitted for filing to, the Commission pursuant to Rule
424, 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, at
the time it was filed with, or transmitted for filing to, the
Commission pursuant to Rule 424 or, 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 Statement of Eligibility on Form T-1,
upon which such opinions need not pass);
11
(d) At the Closing Date, the Representative shall receive
from R. Alexander Glenn, Associate General Counsel of Progress Energy
Service Company, LLC, acting as 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) through (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 Florida;
(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 is an electrical utility engaged
in the business of generating, transmitting, distributing and
selling electric power to the general public in the State of
Florida;
(iv) 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;
(v) 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. The description
in the Mortgage of the above-mentioned properties 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 properties of the Company are subject to liens
for current taxes, which it is the practice of the Company to
pay regularly as and when due. The Company has easements for
rights-of-way adequate for the operations and maintenance of
its transmission and distribution lines that are not
constructed upon public highways. 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
12
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 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 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
State of Florida 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 Mortgage has been recorded and filed in
such manner and in such places as may be required by law in
order fully to preserve and protect, in all material respects,
the security of the bondholders and all rights of the Trustee
thereunder; 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 State of Florida in which any of the property
(except as any therein or in the Mortgage are expressly
excepted) described therein or in the Mortgage as subject to
the lien of the Mortgage is located and, upon such recording,
the Supplemental Indenture will constitute adequate record
notice to perfect the lien of the Mortgage, and preserve and
protect, in all material respects, the security of the
bondholders and all rights of the Trustee, as to all mortgaged
and pledged property acquired by the Company subsequent to the
recording of the Fortieth Supplemental Indenture and prior to
the recording of the Supplemental Indenture;
(vii) 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 State of Florida, 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 on the
part of the Company;
(ix) An order has been entered by the Florida
Public Service Commission authorizing the issuance and sale of
the Securities, and to the best of the knowledge of said
counsel, said order is 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 required under
the state securities or Blue Sky laws of any jurisdiction) is
legally
13
required for the consummation of the transactions contemplated
in this Agreement;
(x) 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
(xi) 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.
(e) The Representative shall have received on the date
hereof and shall receive on the Closing Date from each of Deloitte &
Touche LLP and KPMG 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.
(f) 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.
(g) 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 order of
the Florida Public Service Commission, except where the failure to
comply with such order 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.
14
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 an order of
the Florida Public Service Commission authorizing the issuance and sale
by the Company of the Securities, which shall not contain any provision
unacceptable to the Company by reason of its being materially adverse
to the Company (it being understood that the 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 Statement of
Eligibility under the 1939
15
Act (Form T-1) of the Trustee, 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 and directors,
and each person who controls the Company within the meaning of Section
15 of the Securities Act, against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may
become subject 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 account of
any indemnity agreement contained herein, it will promptly give written
16
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
benefits referred to in clause (i) above but also the relative fault of
the Company, on the
17
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 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 second, third
and fourth sentences of the second paragraph, the third sentence of the
third paragraph, all of the fourth paragraph, and all of the fifth
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 any federal or state agency or by the decision of any court, any
limitation on prices for such
18
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. 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 410 South Wilmington Street, Raleigh, North Carolina 27601,
Attention: Thomas R. Sullivan, 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.
19
16. 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.]
20
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,
FLORIDA POWER CORPORATION
d/b/a PROGRESS ENERGY FLORIDA, INC.
By: /s/ Peter M. Scott III
-------------------------------
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.
BANC ONE CAPITAL MARKETS, INC.
By: /s/ C. Victor Manny
-------------------------------------
Authorized Representative
SALOMON SMITH BARNEY INC.
By: /s/ Howard Hiller
-------------------------------------
Authorized Representative
WACHOVIA SECURITIES, INC.
By: /s/ Keith Mauney
-------------------------------------
Authorized Representative
21
SCHEDULE I
Underwriting Agreement dated February 18, 2003
Registration Statement Nos.: 333-63204 and pre-effective amendment no. 1
thereto, with respect to the $380,000,000
aggregate principal amount of the Company's
First Mortgage Bonds and Debt Securities,
which also constitutes Post-Effective
Amendment No. 1 to Registration Statement
Nos. 33-55273, 33-62210 and 333-29897, each
discussed in further detail below.
Post-Effective Amendment No. 1 to
Registration Statement No. 33-55273, with
respect to the $250,000,000 aggregate
principal amount of the Company's First
Mortgage Bonds and Debt Securities.
Post-Effective Amendment No. 1 to
Registration Statement No. 33-62210, with
respect to the $120,000,000 aggregate
principal amount of the Company's First
Mortgage Bonds and Debt Securities,
$50,000,000 of which were subsequently sold
on July 18, 2001.
Post-Effective Amendment No. 1 to
Registration Statement No. 333-29897, with
respect to the $250,000,000 aggregate
principal amount of the Company's First
Mortgage Bonds and Debt Securities, all of
which were subsequently sold on July 18,
2001.
Representative and Addresses:
Banc One Capital Markets, Inc.
1 Bank One Plaza
Chicago, IL 60670
Attention: Structuring and Execution
Salomon Smith Barney Inc.
388 Greenwich Street
New York, NY 10013
Attention: Peter Kind - Global Power
Investment Banking
Wachovia Securities, Inc.
One First Union Center, TW-8
301 South College Street
Charlotte, NC 28288
Attention: Jim Williams - Debt Capital
Markets
Supplemental Indenture: Forty-First, dated as of February 1, 2003
Designation: First Mortgage Bonds, 4.80% Series due 2013
Principal Amount: $425,000,000
Date of Maturity: March 1, 2013
22
Interest Rate: 4.80% per annum, payable
March 1 and September 1 of each year,
commencing September 1, 2003.
Purchase Price: 98.994% of the principal
amount thereof, plus no accrued interest to
the date of payment and delivery.
Public Offering Price: 99.644% of the
principal amount thereof, plus no accrued
interest to the date of payment and
delivery.
Designation: First Mortgage Bonds, 5.90% Series due 2033
Principal Amount: $225,000,000
Date of Maturity: March 1, 2033
Interest Rate: 5.90% per annum, payable
March 1 and September 1 of each year,
commencing September 1, 2003.
Purchase Price: 98.871% of the principal
amount thereof, plus no accrued interest to
the date of payment and delivery.
Public Offering Price: 99.746% of the
principal amount thereof, plus no accrued
interest to the date of payment and
delivery.
Redemption Terms of Each
Series: Optional -- redeemable prior to maturity, in
whole or 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).
Special -- redeemable prior to maturity, in
whole but not in part, upon the occurrence
of specific events, 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: February 21, 2003
Hunton & Williams
One Hannover Square, 14th Floor
Raleigh, North Carolina 27601
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SCHEDULE II
PRINCIPAL AMOUNT OF
-------------------
UNDERWRITER 2013 BONDS 2033 BONDS
----------- ---------- ----------
Banc One Capital Markets, Inc.......................... $110,500,000 $ 58,500,000
Salomon Smith Barney Inc............................... $110,500,000 $ 58,500,000
Wachovia Securities, Inc............................... $110,500,000 $ 58,500,000
Mellon Financial Markets LLC........................... $ 29,750,000 $ 15,750,000
SunTrust Capital Markets, Inc.......................... $ 29,750,000 $ 15,750,000
BNY Capital Markets, Inc............................... $ 25,500,000 $ 13,500,000
M.R. Beal & Company.................................... $ 8,500,000 $ 4,500,000
------------ ------------
TOTAL............................................ $425,000,000 $225,000,000
24