Exhibit 1
CAROLINA POWER & LIGHT COMPANY
Senior Notes, 7.50% Series Due April 1, 2005
UNDERWRITING AGREEMENT
April 5, 2000
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
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 Notes. The Company proposes to issue and sell its
Senior Notes of the designation, with the terms and in the amount specified in
Schedule I hereto (the "Notes") in one or more new series under a governing
indenture (together with any supplements, the "Senior Note Indenture") each
between the Company and The Bank of New York, as trustee (the "Senior Note
Trustee"), in substantially the form heretofore delivered to the Representative.
Until the Release Date (as defined in the Senior Note Indenture), the Notes will
be secured by one or more series of Senior Note First Mortgage Bonds (as defined
in the Senior Note Indenture) issued and delivered by the Company to the Senior
Note Trustee. On the Release Date, the Notes will cease to be secured by the
Senior Note First Mortgage Bonds and will become unsecured obligations of the
Company. The Senior Note First Mortgage Bonds securing the Notes will be issued
under the Company's 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
(Douglas J. MacInnes, successor) as Mortgage Trustees, as supplemented and as it
will be supplemented by a supplemental indenture relating to the Senior Note
First Mortgage Bonds (the "Sixty-eighth Supplemental Indenture" and together
with the Mortgage and Deed of Trust as supplemented, the "Mortgage") in
substantially the form heretofore delivered to the Representative.
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.
333-69237) (the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), for the registration of up to
an aggregate of $1,500,000,000 principal amount of the Company's First
Mortgage Bonds, Senior Notes and Debt Securities (collectively, the
"Registered Securities") in unallocated amounts, as each is defined in
the Registration Statement. As of the date hereof, the Company has sold
an aggregate of $900,000,000 principal amount of Registered Securities.
The Registration Statement has been declared effective by the
Commission, and the Mortgage and Senior Note Indenture have each been
qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act"). 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 prospectus
included in the Registration Statement, as it is to be supplemented by
a prospectus supplement, dated on or about the date hereof,
substantially in the form delivered to the Representative prior to the
execution hereof, relating to the Notes (the "Prospectus Supplement"),
and all prior amendments or supplements thereto (other than amendments
or supplements relating to securities of the Company other than the
Notes), 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 Notes by the
Underwriters, and any references herein to the terms "Registration
Statement" or "Prospectus" at a date after the filing of the Prospectus
Supplement shall be deemed to refer to the Registration Statement or
the Prospectus, as the case may be, as each may be amended or
supplemented prior to such date.
(b) Prior to the termination of the offering of the Notes, the
Company will not file any amendment to the Registration Statement or
supplement to the Prospectus which shall not have previously been
furnished to the Representative or of which the Representative shall
not previously have been advised or to which the Representative shall
reasonably object in writing and which has not been approved by the
Underwriter(s) or their counsel acting on behalf of the Underwriters.
(c) The Registration Statement, at the time and date it was
declared effective by the Commission, complied, and the Registration
Statement, the Prospectus, the Senior Note Indenture 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, will
not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the foregoing representations and warranties in
this subparagraph (c) shall not apply to statements or omissions made
in reliance upon and in conformity with information furnished herein or
in writing to the Company by the Representative or by or on behalf of
any Underwriter through the Representative expressly for use in the
Prospectus or to any statements in or omissions from the Statements of
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Eligibility (Forms T-1 and T-2) of the trustees under the Mortgage and
the Senior Note Indenture. The Incorporated Documents, when they were
filed with the Commission, complied in all material respects with the
applicable requirements of the Exchange Act and the rules and
regulations of the Commission thereunder, and any documents so filed
and incorporated by reference subsequent to the date hereof and prior
to the termination of the offering of the Notes 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 LLP, 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, financial condition
or prospects of the Company and its subsidiaries considered as a whole,
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 arising 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 Notes, 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 Senior Note First Mortgage Bonds, 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; provided,
however, that certain remedies, waivers and other provisions of the
Senior Note First Mortgage Bonds may not be enforceable, but such
unenforceability will not render the Senior Note First Mortgage Bonds
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 Senior Note First Mortgage Bonds or
(ii) the right of the Mortgage Trustees to exercise their right to
foreclose under the Mortgage.
(h) 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
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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 subsidiaries or any
of their assets, properties or operations.
(i) The summaries of the terms of the Notes and the Senior
Note First Mortgage Bonds contained in the Registration Statement and
Prospectus fairly describe the provisions thereof required to be
described by the registration statement form.
(j) The Company does not have any significant subsidiaries as
defined in Rule 1-02 of Regulation S-X promulgated under the Securities
Act.
(k) Neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "1940 Act").
(l) Except as described in or contemplated by the Prospectus,
there are no pending actions, suits or proceedings against or affecting
the Company or any of its subsidiaries or properties which are likely
in the aggregate, to result in any material adverse change in the
business, property, financial condition or prospects of the Company and
its subsidiaries considered as a whole or which are likely in the
aggregate to materially and adversely affect the consummation of this
Agreement, the Senior Note Indenture, the Mortgage, the Notes, the
Senior Note First Mortgage Bonds 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 Senior Note Indenture and the
Mortgage by the Company, except such as have been already obtained or
as may be required under the Securities Act or state securities laws
and except for the qualification of the Indenture under the 1939 Act.
(n) The Senior Note Indenture and the Mortgage (A) have been
duly authorized, executed and delivered by the Company, and, assuming
due authorization, execution and delivery by the Trustee and the
Mortgage Trustees, respectively, constitute valid and legally binding
obligations of the Company, enforceable against the Company in
accordance with their terms, subject to (i) applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or similar
laws affecting creditor's rights generally and (ii) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity and except the effect on enforceability
of federal or state law limiting, delaying or prohibiting the making of
payments outside the United States); and (B) conform in all material
respects to the descriptions thereof in the Prospectus.
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 Notes set forth
opposite the name of such Underwriter in Schedule II hereto at the purchase
price set forth in Schedule I hereto.
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5. Reoffering by Underwriters. The Underwriters agree to make promptly
a bona fide public offering of the Notes 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 Notes shall be made at the place, time and
date specified in Schedule I hereto against delivery of the Notes at
the office of The Bank of New York, 101 Barclay Street, New York, New
York 10286, 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 Notes
shall be by wire transfer of immediately available funds against
delivery of the Notes to The Depository Trust Company or to The Bank of
New York, as custodian for The Depository Trust Company, in fully
registered global form registered in the name of Cede & Co., for the
respective accounts specified by the Representative not later than the
close of business on the business day prior to the Closing Date or such
other date and time not later than the Closing Date as agreed by The
Depository Trust Company or The Bank of New York. For the purpose of
expediting the checking of the certificates by the Representative, the
Company agrees to make the Notes 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 Notes 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 Notes 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
Notes to be purchased by such one or more Underwriters, the Company
shall immediately notify the Representative, and the remaining
Underwriters shall be obligated to take up and pay for (in addition to
the respective principal amount of the Notes set forth opposite their
respective names in Schedule II hereto) the principal amount of the
Notes 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 Notes 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 Notes which the defaulting Underwriter or
Underwriters agreed but failed to purchase. If any unpurchased Notes
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 Notes 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
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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 Notes 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 Notes other than the unpurchased Notes, 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 Notes which such Underwriter has agreed to
purchase as provided in paragraph 4 hereof), except as otherwise
provided in paragraph 7 and paragraph 8 hereof.
7. Covenants of the Company. The Company covenants with each
Underwriter 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
Notes. The Company will promptly deliver to the Representative and to
counsel for the Underwriters, to the extent not previously delivered,
one fully executed copy or one conformed copy, certified by an officer
of the Company, of the Registration Statement, as originally filed, and
of all amendments thereto, heretofore or hereafter made, (other than
those relating solely to securities other than the Notes), 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 Notes 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's counsel or the Underwriters' counsel 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 Notes, 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 Notes.
(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 Notes
for offer and sale under the Blue Sky or legal investment laws of such
jurisdictions as the Representative may designate, and will file and
make in each year such statements or reports as are or may be
reasonably required by the laws of such jurisdictions; provided,
however, that the Company shall not be required to qualify as a foreign
corporation or dealer in securities, or to file any general consents to
service of process under the laws of any jurisdiction.
8. Payment of Expenses. The Company will pay all expenses incident to
the 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 Notes 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 Notes 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 any Legality
Memorandum, such fees and disbursements not to exceed $5,000, (v) the printing
and delivery to the Underwriters of copies of the Registration Statement and all
amendments thereto, of the preliminary prospectuses, and of the Prospectus and
any amendments or supplements thereto, (vi) the printing and delivery to the
Underwriters of copies of the Blue Sky Survey and Legality Memorandum, (vii) the
preparation, execution, filing and recording by the Company of the Sixty-eighth
Supplemental Indenture (such filing and recordation to be promptly made, after
execution and delivery of such Sixty-eighth Supplemental Indenture to the
Mortgage Trustees under the Mortgage in the counties in which the mortgaged
property of the Company is located); and the Company will pay all taxes, if any
(but not including any transfer taxes), on the issue of the Notes and the filing
and recordation of the Sixty-eighth Supplemental Indenture, and (viii) any
filings required in order to perfect the interests of the Senior Note Trustee in
the Senior Note First Mortgage Bonds and the proceeds thereof.
The fees and disbursements of Underwriters' counsel shall be paid by
the Underwriters (subject, however, to the provisions of the preceding paragraph
requiring payment by the Company of fees and expenses not to exceed $5,000);
provided, however, that if this Agreement is terminated in accordance with the
provisions of paragraph 9, 10 or 12, 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
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Underwriters except as provided in paragraph 7 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 Notes 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, no
proceedings for that purpose shall be pending before, or, to the
knowledge of the Company, threatened by, the Commission on the Closing
Date; and the Representative shall have received, prior to payment for
the Notes, a certificate dated the Closing Date and signed by the
Chairman, President or a Vice President of the Company to the effect
that no such stop order is in effect and that no proceedings for such
purpose are pending before or, to the knowledge of the Company,
threatened by the Commission.
(b) At the time of execution of this Agreement, or such later
date as shall have been consented to by the Representative, there shall
have been issued and on the Closing Date there shall be in full force
and effect orders of the North Carolina Utilities Commission and the
South Carolina Public Service Commission authorizing the issuance and
sale of the Notes and the Senior Note First Mortgage Bonds, none of
which shall contain any provision unacceptable to the Representative by
reason of its being materially adverse to the Company (it being
understood that no such order in effect on the date of this Agreement
and heretofore furnished to the Representative or counsel for the
Underwriters, contains any such unacceptable provision).
(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) Winthrop, Stimson, Putnam & Roberts,
counsel for the Underwriters, in each of which opinions (except as to
subdivisions (viii) (as to documents incorporated by reference, at the
time they were filed with the Commission) and (x) of this subparagraph
(c), as to which Winthrop, Stimson, Putnam & Roberts need express no
opinion) said counsel (except Hunton & Williams as to North Carolina
law) may rely as to all matters of North Carolina and South Carolina
law upon the opinions of William D. Johnson, Esq., Senior Vice
President and Corporate Secretary for the Company, and Nelson Mullins
Riley & Scarborough, L.L.P., respectively, to the effect that:
(i) The Senior Note Indenture has been duly and
validly authorized by all necessary corporate action, has been
duly and validly executed and delivered, and is a valid and
binding obligation 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; provided, however, that certain
remedies, waivers and other provisions of the Senior Note
Indenture may not be enforceable, but such unenforceability
will not render the Senior Note Indenture 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 Notes or (ii) the right of the
Trustee to collect amounts due under the Senior Note First
Mortgage Bonds;
(ii) The Mortgage has been duly and validly
authorized by all necessary corporate action (with this
opinion required in the Hunton & Williams opinion as to only
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the original Mortgage, the Sixty-fourth Supplemental
Indenture, and subsequent Supplemental Indentures), has been
duly and validly executed and delivered by the Company (with
this opinion required in the Hunton & Williams opinion as to
only the Sixty-fourth Supplemental Indenture and subsequent
Supplemental Indentures), 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; 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 Senior
Note First Mortgage Bonds or (ii) the right of the Mortgage
Trustees to exercise their right to foreclose under the
Mortgage;
(iii) The Mortgage and the Senior Note Indenture have been
duly qualified under the 1939 Act;
(iv) The Notes have been duly and validly authorized,
executed and delivered by the Company and, assuming
authentication by the Trustee (as defined in the Senior Note
Indenture) in accordance with the Senior Note Indenture and
delivery to and payment for the Notes by the Underwriters, as
provided in this Agreement, the Notes 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 the Notes are
entitled to the benefits of the security afforded by the
Senior Note Indenture and will be secured equally and ratably
with all other notes which may be issued under the Senior Note
Indenture except insofar as any sinking or other fund may
afford additional security for the notes of any particular
series;
(v) The Senior Note First Mortgage Bonds have been
duly and validly authorized, executed and delivered by the
Company and, assuming authentication by the Corporate Trustee
(as defined in the Mortgage) in accordance with the Mortgage
and delivery to and payment for the Notes by the Underwriters,
as provided in this Agreement, the Senior Note First Mortgage
Bonds 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 the Senior Note First Mortgage Bonds 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;
(vi) The statements made in the Prospectus under the
captions "Description of First Mortgage Bonds" and
"Description of Senior Notes" and in the Prospectus Supplement
under the caption "Description of the Notes" insofar as they
purport to constitute summaries of the documents referred to
therein, are correct in all material respects;
(vii) This Agreement has been duly and validly authorized,
executed and delivered by the Company;
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(viii) The Registration Statement, at the time and
date it was declared effective by the Commission, and the
Prospectus, at the time it was filed with, or transmitted for
filing to, the Commission pursuant to Rule 424 (except as to
the financial statements and other financial and statistical
data constituting a part thereof or incorporated by reference
therein, upon which such opinions need not pass), complied as
to form in all material respects with the requirements of the
Securities Act and the 1939 Act and the applicable
instructions, rules and regulations of the Commission
thereunder; the documents or portions thereof filed with the
Commission pursuant to the Exchange Act and deemed to be
incorporated by reference in the Registration Statement and
the Prospectus pursuant to Item 12 of Form S-3 (except as to
financial statements and other financial and statistical data
constituting a part thereof or incorporated by reference
therein, upon which such opinions need not pass), at the time
they were filed with the Commission, complied as to form in
all material respects with the requirements of the Exchange
Act and the applicable instructions, rules and regulations of
the Commission thereunder; the Registration Statement has
become effective under the Securities Act and, to the best of
the knowledge of said counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued
and not withdrawn and no proceedings for a stop order with
respect thereto are threatened or pending under Section 8 of
the Securities Act;
(ix) Nothing has come to the attention of said
counsel that would lead them to believe that the Registration
Statement, at the time and date it was declared effective by
the Commission, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Prospectus, at the time it was filed
with, or transmitted for filing to, the Commission pursuant to
Rule 424 or at the Closing Date, included or includes an
untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading (except as to financial
statements and other financial and statistical data
constituting a part of the Registration Statement or the
Prospectus or incorporated by reference therein, upon which
such opinions need not pass); and
(x) Orders have been entered by the North Carolina
Utilities Commission and the South Carolina Public Service
Commission authorizing the issuance and sale of the Notes and
the Senior Note First Mortgage Bonds, 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 (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 required for the consummation of the
transactions contemplated in this Agreement.
(d) At the Closing Date, the Representative shall receive from
William D. Johnson, Esq., Senior Vice President and Corporate Secretary
for the Company, a favorable opinion in form and substance satisfactory
to counsel for the Underwriters, to the same effect with respect to the
matters enumerated in subdivisions (i) through (vii) and subdivisions
(ix) and (x) 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 duly qualified to do
10
business as an electrical utility 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 and subsisting
franchises, licenses and permits free from burdensome
restrictions and adequate for the conduct of its business;
(iv) 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 upon said properties. 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;
(v) The Company's Mortgage and Deed of Trust dated as
of May 1, 1940 and the First through the Sixty-seventh
Supplemental Indentures thereto have been recorded and filed
in such manner and in such places as may be required by law in
order fully to preserve and protect the security of the
bondholders and all rights of the Mortgage Trustees
thereunder; and the Sixty-eighth Supplemental Indenture
relating to the Senior Note First Mortgage Bonds 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
(except as any therein or in the
11
Mortgage are expressly excepted) described therein or in the
Mortgage as subject to the lien of the Mortgage is located;
(vi) 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 (ii) of
subparagraph (c) above;
(vii) The issuance and sale of the Notes and the
issuance and delivery of the Senior Note First Mortgage Bonds
have been duly authorized by all necessary corporate action on
the part of the Company;
(viii) Except as described in or contemplated by the
Prospectus, there are no pending actions, suits or proceedings
against or affecting the Company or any of its subsidiaries or
properties which are likely, in the aggregate, to result in
any material adverse change in the business, property,
financial condition, earnings, business affairs, or business
prospects of the Company and its subsidiaries considered as a
whole or which are likely, in the aggregate, to materially and
adversely affect the consummation of this Agreement, the
Senior Note Indenture, the Notes or the transactions
contemplated herein or therein; and
(ix) 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 subsidiaries or
any of their assets, properties or operations.
In said opinion such counsel may rely as to all matters of South Carolina law
(except as to subdivisions (iii), (iv) and (vi) of this subparagraph (d)) on the
opinion of Nelson Mullins Riley & Scarborough, L.L.P., and as to all matters of
New York law on the opinion of Hunton & Williams.
(e) At the Closing Date, the Representative shall receive
from Nelson Mullins Riley & Scarborough, L.L.P., a favorable opinion
in form and substance satisfactory to counsel for the Underwriters, to
the effect that:
(i) The Company is an electrical utility engaged in
the business of generating, transmitting, distributing and
selling electric power to the general public in the States of
South Carolina and North Carolina. The Company conducts its
South Carolina retail operations subject to the jurisdiction
of the South Carolina Public Service Commission pursuant to
South Carolina Code Annotated, Sections 58-27-10 et seq. (1976
as amended);
(ii) The Company is duly qualified to transact business
in the State of South Carolina;
(iii) The Company's Mortgage and Deed of Trust dated
as of May 1, 1940 and the First through the Sixty-seventh
Supplemental Indentures thereto have been
12
recorded and filed in such manner and in such places as may
be required by law, in the State of South Carolina, in order
fully to preserve and protect the security of the bondholders
and all rights of the Mortgage Trustees thereunder;
(iv) The Sixty-eighth Supplemental Indenture relating
to the Senior Note First Mortgage Bonds 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 South
Carolina 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;
(v) They have reviewed the opinion letter of even
date therewith addressed to you by William D. Johnson, Esq.,
Senior Vice President and Corporate Secretary for the Company,
and they concur, insofar as they relate to the laws of the
State of South Carolina, with the opinions that he has
expressed therein corresponding with subdivisions (ii) and (x)
of subparagraph (c) of this paragraph 9, and subdivisions (i)
and (vi) of subparagraph (d) of this paragraph 9; and
(f) At the Closing Date, the Representative shall have
received from Deloitte & Touche LLP a letter, dated the Closing Date,
confirming that they are independent certified public accountants
within the meaning of the Securities Act and the Exchange Act, and of
the applicable published rules and regulations thereunder, and stating
in effect that: (i) in their opinion, the audited financial statements
incorporated by reference in the Registration Statement comply as to
form in all material respects with the applicable accounting
requirements of the Securities Act or the Exchange Act, as applicable,
and of the published rules and regulations thereunder; (ii) based on
the performance of the procedures specified by the American Institute
of Certified Public Accountants for review of interim financial
information as described in Statement on Auditing Standards ("SAS") No.
71, Interim Financial Information, on the unaudited financial
statements incorporated by reference in the Registration Statement,
inquiries of officials of the Company responsible for financial and
accounting matters and reading the minutes of meetings of the Board of
Directors, of the Executive Committee of the Board of Directors and of
the shareholders, nothing came to their attention that caused them to
believe that (A) the unaudited financial statements incorporated by
reference in the Registration Statement do not comply as to form in all
material respects with the applicable accounting requirements of the
Securities Act or the Exchange Act, as applicable, and the published
rules and regulations thereunder or any material modifications should
be made for them to be in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the
most recent audited financial statements incorporated by reference in
the Registration Statement; or (B) at the date of the latest available
interim balance sheet read by them and at a subsequent date not more
than three business days prior to the date of the letter, there was any
change in the capital stock or long-term debt of the Company, or at the
date of the latest available interim balance sheet read by them, there
was any decrease in net assets as compared with the amount shown on the
most recent balance sheet incorporated by reference in the Registration
Statement, except for changes or decreases that the Registration
Statement discloses have occurred or may occur, for declarations of
dividends, for common stock sales under the Automatic Dividend
Reinvestment and Customer Stock Ownership Plan and Stock
Purchase-Savings Plan, or for changes or decreases that are described
in the 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
13
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 Notes shall have been satisfactory in form and
substance to 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 Notes and the Senior Note First Mortgage Bonds 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 Notes and the
Senior Note First Mortgage Bonds, 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
(when and as incurred) in connection with investigating any such
losses, claims, damages or liabilities or in connection with defending
any actions, insofar as such losses, claims, damages, liabilities,
expenses or actions arise out of or are based upon any untrue
statement, or alleged untrue statement, of a material fact contained in
the Registration Statement, any preliminary prospectus or the
Prospectus, or in the Registration Statement or Prospectus as amended
or supplemented (if any amendments or supplements thereto shall have
been furnished), or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the
indemnity agreement contained in this paragraph 11 shall not apply to
any such losses, claims, damages, liabilities, expenses or actions
arising out of, or based upon any such untrue statement or alleged
untrue statement, or any such omission or alleged omission, if such
statement or omission was made in reliance upon
14
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 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 Mortgage Trustees under the Mortgage and the
Senior Note Trustee under the Senior Note Indenture, and provided,
further, that the indemnity agreement contained in this paragraph
11 shall not inure to the benefit of any Underwriter (or of any person
controlling such Underwriter) on account of any such losses, claims,
damages, liabilities, expenses or actions arising from the sale of the
Notes to any person if a copy of the Prospectus (excluding documents
incorporated by reference therein) shall not have been given or sent to
such person by or on behalf of such Underwriter with or prior to the
written confirmation of the sale involved, unless such Prospectus
failed to correct the omission or misstatement. The indemnity agreement
of the Company contained in this paragraph 11 and the representations
and warranties of the Company contained in paragraph 3 hereof shall
remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any such
controlling person and shall survive the delivery of the Notes.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, its officers and directors,
and each person who controls the Company within the meaning of Section
15 of the Securities Act, against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act or under any other statute or
common law, and to reimburse each of them for any legal or other
expenses (including, to the extent hereinafter provided, reasonable
counsel fees) incurred by them (when and as incurred) in connection
with investigating any such losses, claims, damages, or liabilities, or
in connection with defending any actions, insofar as such losses,
claims, damages, liabilities, expenses or actions arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement 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 and in conformity with information
furnished herein or in writing to the Company by such Underwriter
through the Representative 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 Notes.
(c) The Company and each of the Underwriters agree that, upon
the receipt of notice of the commencement of any action against it, its
officers and directors, or any person controlling it as aforesaid, in
respect of which indemnity may be sought on account of any indemnity
agreement contained herein, it will promptly give written notice of the
commencement thereof to the party or parties against whom indemnity
shall be sought hereunder. The Company and each of the Underwriters
agree that the notification required by the preceding sentence shall be
a material term of this Agreement. The omission so to notify such
indemnifying party or parties of any such action shall relieve such
indemnifying party or parties from any liability which it or they may
have to the indemnified party on account of any indemnity agreement
contained herein 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
15
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 in any such action
include both the indemnified party and the indemnifying party and
counsel for the indemnified party shall have reasonably concluded that
there may be a conflict of interest involved in the representation by
one 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).
(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 Notes
pursuant to this Agreement or (ii) if the allocation provided by clause
(i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company, on the one
hand, and of the Underwriters, on the other hand, in connection with
the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the
one hand, and the Underwriters, on the other hand, in connection with
the offering of the Notes pursuant to this Agreement shall be deemed to
be in the same respective proportions as the total net proceeds from
the offering of the Notes 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 Notes 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 paragraph (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this
paragraph (d). No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (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
16
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
paragraph (d) are several in proportion to the number of Notes set
forth opposite their respective names in Schedule II hereto and not
joint.
(e) For purposes of this paragraph 11, it is understood and
agreed that the only information provided by the Underwriters for
inclusion in the Prospectus were the following parts of the section of
the Prospectus Supplement titled "Underwriting": the last three
sentences of the second paragraph, the third sentence of the third
paragraph, and all of the fourth paragraph.
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 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 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 Notes, 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 Notes and the delivery of the Notes 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 Notes, the Senior Note First Mortgage Bonds 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 Notes and the delivery of the Notes by the several
Underwriters at the initial public offering price. This Agreement may also be
terminated at any time prior to the Closing Date if in the reasonable judgment
of the Representative the subject matter of any amendment or supplement to the
Registration Statement or Prospectus (other than an amendment or supplement
relating solely to the activity of any Underwriter or Underwriters) filed after
the execution of this Agreement shall have materially impaired the marketability
of the Notes. 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.
17
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 Notes 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 411 Fayetteville Street, Raleigh, North Carolina 27601-1748,
attention of Mark F. Mulhern, 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.
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.]
18
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/ Mark F. Mulhhern
--------------------------------------
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.
CHASE SECURITIES INC.
By: /S/ Robert Gelnaw
---------------------------------------
Authorized Representative
BANC ONE CAPITAL MARKETS, INC.
By: /S/ Katherine Cokic
---------------------------------------
Authorized Representative
19
SCHEDULE I
Underwriting Agreement dated April 5, 2000
Registration Statement No. 333-69237
Representative and Addresses:
Chase Securities Inc.
270 Park Avenue, 8th Floor
New York, New York 10017-2070
Attention: Peter Madonia
with a copy of any notice pursuant to Section 11(a) to:
One Chase Manhattan Plaza
26th Floor
New York, New York 10081
Attention: Legal Department
Banc One Capital Markets, Inc.
1 Bank One Plaza, IL1-0595
Chicago, Illinois 60670
Attention: Evonne Taylor
Designation: Senior Notes, 7.50% Series Due April 1, 2005
Principal Amount: $300,000,000
Secured by: First Mortgage Bonds, 7.50% Senior Note Series Due
April 1, 2005
Indenture: Indenture (For Senior Notes) dated as of March 1,
1999, as previously supplemented, and Second
Supplemental Indenture, dated as of April 1, 2000,
to Indenture (For Senior Notes)
Date of Maturity: April 1, 2005
Interest Rate: 7.50% per annum, payable April 1 and October 1 of
each year, commencing October 1, 2000.
Record Dates: March 15 and September 15, commencing September 15,
2000.
Purchase Price: 99.187% of the principal amount thereof.
Public Offering Price: 99.787% of the principal amount thereof.
Redemption Terms: Redeemable prior to maturity at the option of
the Company at the greater of (i) the outstanding
principal amount or (ii) the present value of the
remaining payments, computed by discounting at the
Treasury Yield plus 25 basis points (as defined, and
described in further detail, in the Prospectus
Supplement).
20
Closing Date and Location:
April 11, 2000
Hunton & Williams
One Hannover Square, 14th Floor
Raleigh, North Carolina 27601
21
SCHEDULE II
Underwriters Principal Amount
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Banc One Capital Markets, Inc. $ 82,500,000
Chase Securities Inc. $ 82,500,000
First Union Securities, Inc. $ 45,000,000
J.P. Morgan Securities Inc. $ 45,000,000
Wachovia Securities, Inc. $ 45,000,000
TOTAL............... $300,000,000
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