Exhibit 1
CAROLINA POWER & LIGHT COMPANY
d/b/a PROGRESS ENERGY CAROLINAS, INC.
First Mortgage Bonds
5.30% Series due 2019
UNDERWRITING AGREEMENT
January 8, 2009
To the Representative named in Schedule II hereto
of the Underwriters named in Schedule II hereto
Dear Ladies and Gentlemen:
The undersigned Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. (the
“Company”) hereby confirms its agreement with each of the several Underwriters hereinafter named as
follows:
1.
Underwriters and Representative
. The term “Underwriters” as used in this
Underwriting Agreement (the “Agreement”) shall be deemed to mean the firm or the several firms
named in Schedule II hereto 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 as Representatives in Schedule II hereto (individually and collectively, the
“Representative”) are the only firm or firms serving as underwriters, 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 as Representative in Schedule II 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 and
Schedule II hereto (the “Securities”), under its Mortgage and Deed of Trust, dated as of May 1,
1940, with The Bank of New York Mellon (formerly Irving Trust Company) and Frederick G. Herbst
(Douglas J. MacInnes, successor), as Trustees, as supplemented and as it will be further
supplemented by the Seventy-sixth Supplemental Indenture relating to the Securities (the
“Seventy-sixth Supplemental Indenture”), in substantially the form heretofore delivered to the
Representative, said Mortgage and Deed of Trust as supplemented and to be supplemented by the
Seventy-sixth Supplemental Indenture being hereinafter referred to as the “Mortgage.”
3.
Representations and Warranties of the Company
. The Company represents and warrants
to each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3, as amended (No. 333-155418-02) (the
“Registration Statement”) under the Securities Act of 1933, as amended (the “Securities
Act”), for the registration of an indeterminate amount of First Mortgage Bonds, Senior
Notes, Debt Securities and Preferred Stock (collectively, the “Registered Securities”). The
Registration Statement was effective on November 18, 2008. As of the date hereof, the
Company has not sold any Registered Securities. The term “Registration Statement” shall be
deemed to include all amendments made by the Company prior to the Applicable Time (defined
below) and all documents filed by the Company with the Commission and incorporated by
reference therein (the “Incorporated Documents”). The base prospectus filed by the Company
as part of the Registration Statement, in the form in which it has most recently been filed
with the Commission prior to the date of this Agreement, is hereinafter called the “Basic
Prospectus.” The Basic Prospectus included in the Registration Statement, as supplemented
by a preliminary prospectus supplement, dated January 8, 2009, relating to the Securities,
and all prior amendments or supplements thereto made by the Company (other than amendments
or supplements relating to the Registered Securities other than the Securities), including
the Incorporated Documents, is hereinafter referred to as the “Preliminary Prospectus.” The
Preliminary Prospectus, as amended and supplemented, including the Incorporated Documents at
or immediately prior to the Applicable Time (as defined below) is hereinafter called the
“Pricing Prospectus.” The Basic 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 any post-effective amendment to the Registration Statement, any prospectus
supplement relating to the Securities filed with the Commission pursuant to Rule 424(b)
under the Securities Act and 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.
For purposes of this Agreement, the “Applicable Time” is 12:45 p.m. (New York City
time) on the date of this Agreement; the information and documents listed in Schedule III
hereto, taken together, as of the Applicable Time are collectively referred to as the
“Pricing Disclosure Package”; and all references to the Registration Statement, the Pricing
Disclosure Package or the Prospectus or any amendment or supplement thereto
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shall be deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system (“EDGAR”).
(b) The Registration Statement, at each time and date it became, or is deemed to have
become, effective, complied, and the Registration Statement, the Prospectus and the
Mortgage, as of the date hereof and at the Closing Date, will comply, in all material
respects, with the applicable provisions of the Securities Act and the Trust Indenture Act
of 1939, as amended (the “1939 Act”), and the applicable instructions, rules and regulations
of the Commission thereunder; the Registration Statement, at each time and date it became,
or is deemed to have become, effective, 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; the Pricing Disclosure Package as of the Applicable Time
did 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 light of the circumstances under which
they were made, not misleading; and the Prospectus, as of its date and at the Closing Date,
will not contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the foregoing representations
and warranties in this subparagraph (b) shall not apply to statements or omissions made in
reliance upon and in conformity with information furnished herein or in writing to the
Company by the Representative or by or on behalf of any Underwriter through the
Representative expressly for use in the Prospectus or to any statements in or omissions from
the Statements of Eligibility (“Forms T-1 and T-2”) of the Trustees. The Incorporated
Documents, at the time they were each filed with the Commission, complied in all material
respects with the applicable requirements of the Exchange Act and the instructions, rules
and regulations of the Commission thereunder, and any documents so filed and incorporated by
reference subsequent to the date hereof and prior to the termination of the offering of the
Securities by the Underwriters will, at the time they are each filed with the Commission,
comply in all material respects with the requirements of the Exchange Act and the
instructions, rules and regulations of the Commission thereunder; and, when read together
with the Registration Statement, the Pricing Disclosure Package 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. Each Permitted Free Writing Prospectus listed on Schedule III
hereto does not conflict in any material respect with the information contained in the
Registration Statement, the Pricing Disclosure Package or the Prospectus.
(c) With respect to the Registration Statement, (i) the Registration Statement is an
“automatic shelf registration statement” (as defined in Rule 405 under the Securities Act),
(ii) the Company has not received from the Commission any notice pursuant to Rule 401(g)(2)
of the Securities Act objecting to the use of the automatic shelf registration statement and
(iii) the conditions for use of Form S-3, as set forth in the General Instructions thereof,
have been satisfied.
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(d) The Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of North Carolina; has corporate power and
authority to own, lease and operate its properties and to conduct its business as
contemplated under this Agreement and the other agreements to which it is a party; and is
duly qualified as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to so qualify would
not have a material adverse effect on the business, properties, results of operations or
financial condition of the Company.
(e) The historical financial statements incorporated by reference in the Registration
Statement, the Pricing Prospectus and the Prospectus present fairly the financial condition
and operations of the Company at the respective dates or for the respective periods to which
they apply; such financial statements have been prepared in each case in accordance with
generally accepted accounting principles consistently applied throughout the periods
involved, except that the quarterly financial statements, if any, incorporated by reference
from any Quarterly Reports on Form 10-Q contain condensed footnotes prepared in accordance
with applicable Exchange Act rules and regulations; and Deloitte & Touche LLP, which has
audited the financial statements is an independent registered public accounting firm as
required by the Securities Act or the Exchange Act and the rules and regulations of the
Commission thereunder.
(f) Except as reflected in, or contemplated by, the Registration Statement and the
Pricing Disclosure Package, since the respective dates as of which information is given in
the Registration Statement and the Pricing 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 the Pricing 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 Pricing Disclosure Package and the Prospectus that could likely result in a
material adverse change in the business, properties, results of operations or financial
condition of the Company.
(g) The Company has full power and authority to execute, deliver and perform its
obligations under this Agreement. The execution and delivery of this Agreement, the
consummation of the transactions herein contemplated and the fulfillment of the terms hereof
on the part of the Company to be fulfilled have been duly authorized by all necessary
corporate action of the Company in accordance with the provisions of its restated charter
(the “Charter”), by-laws and applicable law.
(h) 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 breach
of any terms or provisions of, or constitute a default under, any applicable law or any
indenture, mortgage, deed of trust or other material agreement or instrument to which the
Company is now a party or any judgment, order, writ or decree
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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.
(i) The Securities conform in all material respects to the description contained in the
Pricing Disclosure Package and the Prospectus.
(j) The Company has no subsidiaries that meet the definition of “significant
subsidiary” as defined in Section 210.1-02(w) of Regulation S-X promulgated under the
Securities Act.
(k) The Mortgage (i) has been duly authorized, executed and delivered by the Company
and, assuming due authorization, execution and delivery of the Seventy-sixth Supplemental
Indenture by the Trustees, constitutes a valid and legally binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject to (A)
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
similar laws affecting creditors’ rights generally and (B) general principles of equity and
any implied covenant of good faith and fair dealing (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 Mortgage may not be enforceable, but such unenforceability will not
render the Mortgage invalid as a whole or affect the judicial enforcement of (x) the
obligation of the Company to repay principal, together with the interest thereon as provided
in the Securities or (y) the rights of the Trustees to exercise their right to foreclose
under the Mortgage; and (ii) conforms in all material respects to the description thereof in
the Pricing Disclosure Package and the Prospectus. The Mortgage (including the
Seventy-sixth Supplemental Indenture upon due execution by the Company and the Trustees in
accordance with the Mortgage) has been qualified under the 1939 Act.
(l) The Securities have been duly authorized by the Company and, when authenticated in
the manner provided for in the Mortgage and delivered against payment of the required
consideration therefor, will constitute valid and legally binding obligations of the
Company, entitled to the benefits of the Mortgage 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).
(m) The Company is not an “investment company” within the meaning of the Investment
Company Act of 1940, as amended (the “1940 Act”).
(n) Except as described in or contemplated by the Pricing Disclosure Package and the
Prospectus, there are no pending actions, suits or proceedings (regulatory or
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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.
(o) No filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations hereunder in connection with
the offering, issuance or sale of the Securities hereunder or the consummation of the
transactions herein contemplated or for the due execution, delivery or performance of the
Mortgage by the Company, except such as have already been made or obtained or as may be
required under the Securities Act or state securities laws and except for the qualification
of the Seventy-sixth Supplemental Indenture under the 1939 Act.
4.
Purchase and Sale; Manner of Sale.
(a) On the basis of the representations, warranties and covenants herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to sell to each of the
Underwriters, severally and not jointly, and each such Underwriter agrees, severally and not
jointly, to purchase from the Company, the respective principal amount of Securities set forth
opposite the name of such Underwriter in Schedule II hereto at the purchase price set forth in
Schedule II hereto.
(b) The Underwriters agree to make promptly a bona fide public offering of the Securities to
the public for sale as set forth in the Pricing Disclosure Package, subject, however, to the terms
and conditions of this Agreement. The Underwriters agree that the information that they have
presented to investors at or prior to the execution of this Agreement is consistent in all material
respects with the information that is contained in the Pricing Disclosure Package.
(c) Each Underwriter, severally and not jointly, represents, warrants and agrees that
(i) it has complied and will comply with all applicable provisions of the Financial Services
and Markets Act 2000 (the “FSMA”) with respect to anything done by it in relation to the
Securities in, from or otherwise involving the United Kingdom; and (ii) it has only
communicated, or caused to be communicated, and will only communicate, or cause to be
communicated, any invitation or inducement to engage in investment activity (within the
meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of
the Securities in circumstances in which Section 21(1) of the FSMA does not apply to the
Company.
(d) In relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a “Relevant Member State”), each Underwriter,
severally and not jointly, represents, warrants and agrees that with effect from and
including the date on which the Prospectus Directive is implemented in that Relevant Member
State (the “Relevant Implementation Date”) it has not made and will
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not make an offer of Securities to the public in that Relevant Member State prior to
the publication of a prospectus in relation to the Securities which has been approved by the
competent authority in that Relevant Member State or, where appropriate, approved in another
Relevant Member State and notified to the competent authority in that Relevant Member State,
all in accordance with the Prospectus Directive, except that it may, with effect from and
including the Relevant Implementation Date, make an offer of Securities to the public in
that Relevant Member State at any time:
(i) to legal entities which are authorized or regulated to operate in the
financial markets or, if not so authorized or regulated, whose corporate purpose is
solely to invest in securities;
(ii) to any legal entity which has two or more of (1) an average of at least
250 employees during the last financial year; (2) a total balance sheet of more than
€
43,000,000 and (3) an annual net turnover of more than
€
50,000,000, as shown in its
last annual or consolidated accounts;
(iii) to fewer than 100 natural or legal persons (other than qualified
investors as defined in the Prospectus Directive) subject to obtaining the prior
consent of the Representatives for any such offer; or
(iv) in any other circumstances falling within Article 3(2) of the Prospectus
Directive;
provided that no such offer of Securities shall result in a requirement for the
publication by the Company or any Underwriter of a prospectus pursuant to Article 3
of the Prospectus Directive (or supplemental prospectus pursuant to Article 16 of
the Prospectus Directive).
For the purposes of this provision, the expression of an “offer of Securities to the
public” in relation to any Securities in any Relevant Member State means the communication
in any form and by any means of sufficient information on the terms of the offer and the
Securities to be offered so as to enable an investor to decide to purchase or subscribe for
the Securities, as the same may be varied in that Relevant Member State by any measure
implementing the Prospectus Directive in that Relevant Member State and the term “Prospectus
Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each
Relevant Member State.
5.
Free Writing Prospectuses.
(a) The Company represents and agrees that, without the prior consent of the
Representative, it has not made and will not make any offer relating to the Securities that
would constitute a “free writing prospectus” as defined in Rule 405 under the Act, other
than a Permitted Free Writing Prospectus; each Underwriter represents and agrees that,
without the prior consent of the Company and the Representative, it has not made and will
not make any offer relating to the Securities that would constitute a “free writing
prospectus,” as defined in Rule 405 under the Act, other than a Permitted Free Writing
Prospectus or a free writing prospectus that is not required to be filed by the
7
Company pursuant to Rule 433 under the Securities Act. Any such free writing prospectus the
use of which is consented to by the Company and the Representative is referred to herein as
a “Permitted Free Writing Prospectus.” The only Permitted Free Writing Prospectus as of the
time of this Agreement is the final term sheet referred to in paragraph 5(b) below.
(b) The Company agrees to file a final term sheet, in the form of Schedule I hereto and
approved by the Representative pursuant to Rule 433(d) under the Securities Act within the
time period prescribed by such Rule.
(c) The Company and the Underwriters have complied and will comply with the
requirements of Rule 164 and Rule 433 under the Securities Act applicable to any free
writing prospectus, including timely Commission filing where required and legending.
(d) The Company agrees that if at any time following issuance of a Permitted Free
Writing Prospectus any event occurred or occurs as a result of which such Permitted Free
Writing Prospectus would conflict in any material respect with the information in the
Registration Statement, the Pricing Prospectus or the Prospectus or include an untrue
statement of a material fact or omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances then prevailing, not misleading, the
Company will give prompt notice thereof to the Representative and, if requested by the
Representative, will prepare and furnish without charge to each Underwriter a Permitted Free
Writing Prospectus or other document which will correct such conflict, statement or
omission;
provided, however,
that this representation and warranty shall not apply to any
statements or omissions in a Permitted Free Writing Prospectus made in reliance upon and in
conformity with information furnished in writing to the Company by an Underwriter through
the Representative expressly for use therein.
6.
Time and Place of Closing; Default of Underwriters.
(a) Payment for the Securities shall be made at the direction of the Company against
delivery of the Securities at the office of The Bank of New York Mellon, Corporate Trust
Department, 101 Barclay Street, Suite 8W, New York, New York, 10286 or such other place,
time and date as the Representative and the Company may agree. Such delivery and payment
shall occur at or about 11:00 A.M. on January 15, 2009, and is herein called the “Closing
Date.” Payment for the Securities shall be by wire transfer of immediately available funds
against delivery to The Depository Trust Company or to The Bank of New York Mellon, as
custodian for The Depository Trust Company, in fully registered global form registered in
the name of CEDE & Co., as nominee for The Depository Trust Company, for the respective
accounts specified by the Representative not later than the close of business on the
business day prior to the Closing Date or such other date and time not later than the
Closing Date as agreed by The Depository Trust Company or The Bank of New York Mellon. 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 3:00
P.M. New York City time, on the last
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full business day prior to the Closing Date at said office of The Bank of New York
Mellon.
(b) If one or more Underwriters shall, for any reason other than a reason permitted
hereunder, fail to take up and pay for the principal amount of the Securities to be
purchased by such one or more Underwriters, the Company shall immediately notify the
Representative, and the non-defaulting Underwriters shall be obligated to take up and pay
for (in addition to the respective principal amount of the Securities set forth opposite
their respective names in Schedule II hereto) the principal amount of Securities that such
defaulting Underwriter or Underwriters failed to take up and pay for, up to a principal
amount thereof equal to, in the case of each such remaining Underwriter, 10% of the
principal amount of all Securities. Each non-defaulting Underwriter shall do so on a
pro-rata basis according to the amounts set forth opposite the name of such non-defaulting
Underwriter in Schedule II hereto, 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 Financial Industry Regulatory Authority, Inc. (the
“Authority”) (or if not members of the Authority, who are not eligible for membership in the
Authority 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 the Authority’s Conduct Rules) and satisfactory to the Company,
to purchase or agree to purchase such unpurchased Securities on the terms herein set forth.
In any such case, either the Representative or the Company shall have the right to postpone
the Closing Date for a period not to exceed three full business days from the date agreed
upon in accordance with this paragraph 6, in order that the necessary changes in the
Registration Statement and Prospectus and any other documents and arrangements may be
effected. If (i) neither the non-defaulting Underwriters nor the Company has arranged for
the purchase of such unpurchased Securities by another party or parties as above provided
and (ii) the Company and the non-defaulting Underwriters have not mutually agreed to offer
and sell the Securities other than the unpurchased Securities, then this Agreement shall
terminate without any liability on the part of the Company or any Underwriter (other than an
Underwriter that shall have failed or refused, in accordance with the terms hereof, to
purchase and pay for the principal amount of the Securities that such Underwriter has agreed
to purchase as provided in paragraph 4 hereof), except as otherwise provided in paragraph 7
and paragraph 8 hereof.
7.
Covenants of the Company
. The Company covenants with each Underwriter that:
(a) As soon as reasonably possible after the execution and delivery of this Agreement,
the Company will file the Prospectus with the Commission pursuant to Rule 424 under the
Securities Act (“Rule 424”), setting forth, among other things, the necessary information
with respect to the terms of offering of the Securities and make any other required filings
pursuant to Rule 433 under the Securities Act. Upon request,
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the Company will promptly deliver to the Representative and to counsel for the
Underwriters, to the extent not previously delivered, one fully executed copy or one
conformed copy, certified by an officer of the Company, of the Registration Statement, as
originally filed, and of all amendments thereto, if any, heretofore or hereafter made (other
than those relating solely to Registered Securities other than the Securities), including
any post-effective amendment (in each case including all exhibits filed therewith and all
documents incorporated therein not previously furnished to the Representative), including
signed copies of each consent and certificate included therein or filed as an exhibit
thereto, and will deliver to the Representative for distribution to the Underwriters as many
conformed copies of the foregoing (excluding the exhibits, but including all documents
incorporated therein) as the Representative may reasonably request. The Company will also
send to the Underwriters as soon as practicable after the date of this Agreement and
thereafter from time to time as many copies of the Prospectus and the Preliminary Prospectus
as the Representative may reasonably request for the purposes required by the Securities
Act.
(b) During such period (not exceeding nine months) after the commencement of the
offering of the Securities as the Underwriters may be required by law to deliver a
Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Securities
Act), if any event relating to or affecting the Company, or of which the Company shall be
advised in writing by the Representative shall occur, which in the Company’s reasonable
opinion (after consultation with counsel for the Representative) should be set forth in a
supplement to or an amendment of the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances when it is delivered to a purchaser (or in lieu
thereof, the notice referred to in Rule 173(a) under the Securities Act), or if it is
necessary to amend the Prospectus to comply with the Securities Act, the Company will
forthwith at its expense prepare, file with the Commission 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 (or in lieu thereof, the notice referred to in Rule 173(a)
under the Securities Act) after the expiration of nine months after the commencement of the
offering of the Securities, the Company, upon the request of the Representative, will
furnish to the Representative, at the expense of such Underwriter, a reasonable quantity of
a supplemented or amended prospectus, or supplements or amendments to the Prospectus,
complying with Section 10(a) of the Securities Act.
(c) The Company will make generally available to its security holders, as soon as
reasonably practicable, but in any event not later than 16 months after the end of the
fiscal quarter in which the filing of the Prospectus pursuant to Rule 424 occurs, an
earnings statement (in form complying with the provisions of Section 11(a) of the Securities
Act, which need not be certified by independent public accountants) covering a period of
twelve months beginning not later than the first day of the Company’s fiscal quarter next
following the filing of the Prospectus pursuant to Rule 424.
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(d) The Company will use commercially reasonable efforts promptly to do and perform all
things to be done and performed by it hereunder prior to the Closing Date and to satisfy all
conditions precedent to the delivery by it of the Securities.
(e) As soon as reasonably possible after the Closing Date, the Company will cause the
Seventy-sixth Supplemental Indenture to be recorded in all recording offices in the States
of North Carolina and South Carolina in which the property intended to be subject to the
lien of the Mortgage is located.
(f) The Company will advise the Representative, or the Representative’s counsel,
promptly of the filing of the Prospectus pursuant to Rule 424 and of any amendment or
supplement to the Prospectus or Registration Statement or of official notice of institution
of proceedings for, or the entry of, a stop order suspending the effectiveness of the
Registration Statement and, if such a stop order should be entered, use commercially
reasonable efforts to obtain the prompt removal thereof.
(g) If at any time when Securities remain unsold by the Underwriters, the Company
receives from the Commission a notice pursuant to Rule 401(g)(2) of the Securities Act or
otherwise ceases to be eligible to use the automatic shelf registration statement form, the
Company will (i) promptly notify the Representatives, (ii) promptly file a new registration
statement or post-effective amendment on the proper form relating to the Securities, in a
form reasonably satisfactory to the Representatives, or take such other action, after
consultation with counsel, as the Company believes is appropriate, (iii) use commercially
reasonable efforts to cause any new registration statement or post-effective amendment that
may be filed pursuant to clause (ii) above, to be declared effective and (iv) promptly
notify the Representatives of any such effectiveness. The Company will take all other
commercially reasonable action as it deems appropriate to permit the public offering and
sale of the Securities to continue as contemplated in the registration statement that was
subject of the Rule 401(g)(2) notice or for which the Company has otherwise become
ineligible. References herein to the Registration Statement shall include such new
registration statement or post-effective amendment, as the case may be.
(h) The Company will use commercially reasonable 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.
(i) 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 Pricing Prospectus or
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.
11
8.
Payment of Expenses
. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (a) the printing and filing of the Registration
Statement and the printing of this Agreement, (b) the delivery of the Securities to the
Underwriters, (c) the fees and disbursements of the Company’s counsel and accountants, (d) the
expenses in connection with the qualification of the Securities under securities laws in accordance
with the provisions of paragraph 7(g) hereof, 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, (e) the printing and delivery to the Underwriters of copies of the Registration Statement
and all amendments thereto, the Preliminary Prospectus, any Permitted Free Writing Prospectus and
the Prospectus and any amendments or supplements thereto, (f) the printing and delivery to the
Underwriters of copies of the Blue Sky Survey and (g) the preparation, execution, filing and
recording by the Company of the Seventy-sixth Supplemental Indenture (such filing and recordation
to be promptly made after execution and delivery thereof to the Trustees under the Mortgage in the
counties in which the mortgaged property of the Company is located); and the Company will pay all
taxes, if any (but not including any transfer taxes), on the issue of the Securities and the filing
and recordation of the Seventy-sixth 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 and no
notice from the Commission pursuant to Rule 401(g)(2) of the Securities Act shall have been
received by the Company. 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, that no proceedings for such purpose are pending before or, to the knowledge of the
Company, threatened by the Commission and no notice from the Commission pursuant to Rule
401(g)(2) of the Securities Act has been received by the Company.
(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
12
Date there shall be in full force and effect, orders of the North Carolina Utilities
Commission and the Public Service Commission of South Carolina authorizing the issuance and
sale of the Securities, none of which shall contain any provision unacceptable to the
Representative by reason of its being materially adverse to the Company (it being understood
that no such order in effect on the date of this Agreement and heretofore furnished to the
Representative or counsel for the Underwriters contains any such unacceptable provision).
(c) At the Closing Date, the Representative shall receive favorable opinions, and, with
respect to clauses (vii) and (viii), assurance statements, from: (1) Hunton & Williams LLP,
counsel to the Company, which opinions or assurance statements, as the case may be, shall be
satisfactory in form and substance to counsel for the Underwriters, and (2) Dewey & LeBoeuf
LLP, counsel for the Underwriters, in each of which opinions (except Hunton & Williams LLP
as to matters of North Carolina law and except as to subdivisions (v) as to which Dewey &
LeBoeuf LLP need express no opinion) said counsel may rely as to all matters of North
Carolina and South Carolina law upon the opinions of David B. Fountain, Esq., Vice President
— Legal of Progress Energy Service Company LLC, acting as counsel to the Company, and
Nelson, Mullins, Riley & Scarborough, L.L.P., respectively, to the effect that:
(i) The Mortgage has been duly and validly authorized by all necessary
corporate action (with this opinion only required in the opinions of Hunton &
Williams LLP and Dewey & LeBoeuf LLP as to the supplemental indentures subsequent to
the Sixty-fourth Supplemental Indenture), has been duly and validly executed and
delivered by the Company (with this opinion required in the Hunton & Williams LLP
and Dewey & LeBoeuf LLP opinions only as to the Seventy-sixth 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 only
required in the opinions of Hunton & Williams LLP and Dewey & LeBoeuf LLP as to the
supplemental indentures subsequent to the Sixty-fourth Supplemental Indenture);
provided, however
, that certain remedies, waivers and other provisions of the
Mortgage may not be enforceable, but such unenforceability will not render the
Mortgage invalid as a whole or affect the judicial enforcement of (A) the obligation
of the Company to repay the principal, together with the interest thereon as
provided in the Securities or (B) the right of the Trustees to exercise their right
to foreclose under the Mortgage;
(ii) The Mortgage has been duly qualified under the 1939 Act;
(iii) Assuming authentication of the Securities by the Trustee in accordance
with the Mortgage and delivery of the Securities to and payment for the Securities
by the Underwriters, as provided in this Agreement, the Securities have been duly
and validly authorized, executed and delivered and are legal, valid and binding
obligations of the Company enforceable in accordance with their
13
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 Basic Prospectus under the caption “Description
of First Mortgage Bonds” and in the Pricing Prospectus 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;
(v) The statements made in the Pricing Prospectus and the Prospectus under the
caption “Material U.S. Federal Tax Considerations,” insofar as they purport to
constitute summaries of matters of U.S. federal income tax law or legal conclusions
with respect thereto, are accurate and complete in all material respects;
(vi) This Agreement has been duly and validly authorized, executed and
delivered by the Company;
(vii) The Registration Statement, at each time and date it was declared, or is
deemed to have become, effective by the Commission, and the Pricing Disclosure
Package and the Prospectus, as of their respective dates (except as to the financial
statements and schedules and notes thereto or other financial, numerical,
accounting, statistical or quantitative information (or the assumptions with respect
thereto) included or incorporated by reference therein or excluded therefrom and
that part of the Registration Statement that constitutes the Statements of
Eligibility on Form T-1 and Form T-2 upon which such opinions need not pass),
appeared on their face to respond in all material respects to the requirements of
the Securities Act and the 1939 Act and the applicable instructions, rules and
regulations of the Commission thereunder; and 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, the Pricing
Prospectus and the Prospectus pursuant to Item 12 of Form S-3 (except as to
financial statements and schedules and notes thereto or other financial, numerical,
accounting, statistical or quantitative information (or the assumptions with respect
thereto) included or incorporated by reference therein or excluded therefrom and
that part of the Registration Statement that constitutes the Statements of
Eligibility on Form T-1 and Form T-2, upon which such opinions need not pass), at
the time each was filed with the Commission, appeared on their face to respond in
all material respects to 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, such counsel has been
verbally advised by the staff of the Commission that no stop order suspending the
14
effectiveness of the Registration Statement has been issued and not withdrawn,
and no proceedings for a stop order with respect thereto have been instituted by the
Commission; and
(viii) Nothing has come to the attention of said counsel that would lead them
to believe that the Registration Statement, at each time and date it was declared,
or is deemed to have become, 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 Pricing Disclosure Package, as of the Applicable Time, included an
untrue statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which they
were made, not misleading or (y) the Prospectus, as of its date and, as amended or
supplemented, at the Closing Date, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were
made, not misleading (except as to financial statements, schedules and notes thereto
or other financial, numerical, accounting, statistical or quantitative information
(or the assumptions with respect thereto) included or incorporated by reference
therein or excluded therefrom and that part of the Registration Statement that
constitutes the Statements of Eligibility on Form T-1 and Form T-2, upon which such
opinions need not pass).
(d) At the Closing Date, the Representative shall receive from David B. Fountain, Esq.,
Vice President — Legal 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),
(iii), (vi) and (viii) of subparagraph (c) of this paragraph 9 as the opinions required by
said subparagraph (c), and to the further effect that:
(i) The Company is a validly organized and existing corporation under the laws
of the State of North Carolina and is in good standing under the laws of the State
of North Carolina and is duly qualified to do business in the State of South
Carolina;
(ii) The Company is duly authorized by its Charter to conduct the business that
it is now conducting as set forth in the Pricing Disclosure Package and the
Prospectus;
(iii) The Company has valid and subsisting franchises, licenses and permits
adequate for the conduct of its business, except where the failure to hold such
franchises, licenses and permits would not have a material adverse effect on the
business, properties, results of operations or financial condition of the Company;
15
(iv) The Company has good and marketable title, with minor exceptions,
restrictions and reservations in conveyances, and defects that are of the nature
ordinarily found in properties of similar character and magnitude and that, in his
opinion, will not in any substantial way impair the security afforded by the
Mortgage, to all the properties described in the granting clauses of the Mortgage
and upon which the Mortgage purports to create a lien, except certain rights-of-way
over private property on which are located transmission and distribution lines
formerly owned by the Tide Water Power Company (merged into the Company on February
29, 1952), title to which can be perfected by condemnation proceedings. The
description in the Mortgage of the above-mentioned properties (including those
formerly owned by Tide Water Power Company) is legally sufficient to constitute the
Mortgage a lien upon said properties, including without limitation properties
hereafter acquired by the Company (other than those expressly excepted and reserved
therefrom). Said properties constitute substantially all the permanent physical
properties and franchises (other than those expressly excepted and reserved
therefrom) of the Company and are held by the Company free and clear of all liens
and encumbrances except the lien of the Mortgage and Excepted Encumbrances, as
defined in the Mortgage. The properties of the Company are subject to liens for
current taxes, which it is the practice of the Company to pay regularly and when
due. The Company has followed the practice generally of acquiring (A) certain
rights-of-way and easements and certain small parcels of fee property appurtenant
thereto and for use in conjunction therewith and (B) certain other properties of
small or inconsequential value, without an examination of title and, as to the title
to lands affected by said rights-of-way and easements, of not examining the title of
the lessor or grantor whenever the lands affected by such rights-of-way and
easements are not of such substantial value as in the opinion of the Company to
justify the expense attendant upon examination of titles in connection therewith.
In the opinion of said counsel, such practice of the Company is consistent with
sound economic practice and with the method followed by other companies engaged in
the same business and is reasonably adequate to assure the Company of good and
marketable title to all such property acquired by it. It is the opinion of said
counsel that any such conditions or defects as may be covered by the above recited
exceptions are not, except as to certain rights-of-way on which are located
transmission lines acquired from Tide Water Power Company, substantial and would not
materially interfere with the Company’s use of such properties or with its business
operations. The Company has the right of eminent domain in the States of North
Carolina and South Carolina under which it may, if necessary, perfect or obtain
title to privately owned land or acquire easements or rights-of-way required for use
or used by the Company in its public utility operations;
(v) The Company’s Mortgage and Deed of Trust dated as of May 1, 1940 and the
First through Seventy-fifth Supplemental Indentures thereto have been filed for
record both as a real estate mortgage and as a chattel mortgage or security interest
in all counties in the States of North Carolina and South Carolina in which any of
the property described in the Mortgage as subject thereunder to
16
the lien thereof is located; and the Seventy-sixth Supplemental Indenture
relating to the Securities is in proper form for filing for record both as a real
estate mortgage and as a security interest in all counties in the States of North
Carolina and South Carolina in which any of the property described therein or in the
Mortgage as subject to the lien of the Mortgage is located. By virtue of filing
financing statements with the Offices of the Secretaries of State of North Carolina
and South Carolina, the Trustees have a perfected security interest in that portion
of the collateral described therein to which Article 9 of the Uniform Commercial
Code of North Carolina or South Carolina is applicable and in which a security
interest is perfected by the central filing of a financing statement to perfect a
security interest in collateral of a transmitting utility under the UCC;
(vi) The Mortgage constitutes a valid, direct and first mortgage lien of record
upon all franchises and properties now owned by the Company (other than those
expressly excepted therefrom and other than those franchises and properties which
are not, individually or in the aggregate, material to the Company or the security
afforded by the Mortgage) situated in the States of North Carolina and South
Carolina, as described or referred to in the granting clauses of the Mortgage,
subject to the exceptions as to bankruptcy, insolvency and other laws stated in
subdivision (i) of subparagraph (c) above;
(vii) The issuance and sale of the Securities have been duly authorized by all
necessary corporate action on the part of the Company;
(viii) Orders have been entered by the North Carolina Utilities Commission and
the Public Service Commission of South Carolina authorizing the issuance and sale of
the Securities, and to the best of the knowledge of said counsel, said orders are
still in force and effect; and no further filing with, approval, authorization,
consent or other order of any public board or body (except such as have been
obtained under the Securities Act and as may be required under the state securities
or Blue Sky laws of any jurisdiction) is legally required for the consummation of
the transactions contemplated in this Agreement;
(ix) Except as described in or contemplated by the Pricing Disclosure Package
and the Prospectus, there are no pending actions, suits or proceedings (regulatory
or otherwise) against the Company or any properties that are likely, in the
aggregate, to result in any material adverse change in the business, properties,
results of operations or financial condition of the Company or that are likely, in
the aggregate, to materially and adversely affect the Mortgage, the Securities or
the consummation of this Agreement, or the transactions contemplated herein or
therein; and
(x) The consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not (A) 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 (B) result in a breach of any terms or provisions of, or constitute a
default
17
under, any applicable law, or any indenture, mortgage, deed of trust or other
material agreement or instrument to which the Company is now a party or any
judgment, order, writ or decree of any government or governmental authority or
agency or court having jurisdiction over the Company or any of its assets,
properties or operations that, in the case of any such breach or default, would have
a material adverse effect on business, properties, results of operations or
financial condition of the Company.
In said opinion such counsel may rely as to all matters of South Carolina law on the opinion
of Nelson, Mullins, Riley & Scarborough, L.L.P.
(e) At the Closing Date, the Representative shall receive from Nelson, Mullins, Riley &
Scarborough, L.L.P., Columbia, South Carolina, a favorable opinion in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company conducts its South Carolina retail operations subject to the
jurisdiction of the South Carolina Public Service Commission pursuant to South
Carolina Code Annotated, Sections 58-27-10 et seq. (1976 as amended);
(ii) The Company is duly qualified to transact business in the State of South
Carolina;
(iii) The Company’s Mortgage and Deed of Trust dated as of May 1, 1940, and the
First through the Seventy-fifth Supplemental Indentures thereto, have been recorded
and filed in such manner and in such places as may be required by law, in the State
of South Carolina, in order to fully preserve and protect the security of the
bondholders and all rights of the Trustees thereunder. By virtue of filing
financing statements with the Offices of the Secretaries of State of North Carolina
and South Carolina, the Trustees have a perfected security interest in that portion
of the collateral described therein to which Article 9 of the Uniform Commercial
Code of North Carolina or South Carolina is applicable and in which a security
interest is perfected by the central filing of a financing statement to perfect a
security interest in collateral of a transmitting utility under the UCC;
(iv) The Seventy-sixth Supplemental Indenture relating to the Securities is in
the proper form for the filing as a real estate mortgage and a security agreement in
all counties in the State of South Carolina where the Mortgage is filed and the
Seventy-sixth Supplemental Indenture is to be filed and upon such filing creates a
lien and/or security interest in that property located within such counties that is
described in the Mortgage or in the Seventy-sixth Supplemental Indenture as being
subject to the lien of the Mortgage (except that property which has been expressly
excepted from the lien in the Seventy-sixth Supplemental Indenture and the Mortgage,
as heretofore supplemented); and
(v) Said counsel has reviewed the opinion letter of even date therewith
addressed to you by David B. Fountain, Esq., Vice President — Legal of Progress
18
Energy Service Company, LLC, and said counsel concurs in the opinions which Mr.
Fountain has expressed therein insofar as they relate to the laws of the State of
South Carolina.
(f) The Representative shall have received on the date hereof and shall receive on the
Closing Date from Deloitte & Touche LLP a letter addressed to the Representative, on behalf
of the Underwriters, 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 Pricing Prospectus and the Prospectus.
(g) At the Closing Date, the Representative shall receive a certificate of the
Chairman, President, Treasurer or a Vice President of the Company, dated the Closing Date,
to the effect that the representations and warranties of the Company in this Agreement are
true and correct as of the Closing Date.
(h) Any Permitted Free Writing Prospectus, and any other material required pursuant to
Rule 433(d) under the Securities Act, shall have been filed by the Company with the
Commission within the applicable time periods prescribed by Rule 433.
(i) All legal proceedings taken in connection with the sale and delivery of the
Securities shall have been satisfactory in form and substance to counsel for the
Underwriters, and the Company, as of the Closing Date, shall be in compliance with any
governing orders of the North Carolina Utilities Commission and the Public Service
Commission of South Carolina, except where the failure to comply with such orders would not
be material to the offering or validity of the Securities.
In case any of the conditions specified above in this paragraph 9 shall not have been
fulfilled or waived by 2:00 P.M. on the Closing Date, this Agreement may be terminated by the
Representative by delivering written notice thereof to the Company. Any such termination shall be
without liability of any party to any other party except as otherwise provided in paragraphs 7 and
8 hereof.
10.
Conditions of the Company’s Obligations
. The obligations of the Company to
deliver the Securities shall be subject to the following conditions:
(a) No stop order suspending the effectiveness of the Registration Statement shall be
in effect on the Closing Date, and no proceedings for that purpose shall be pending before
or threatened by the Commission on the Closing Date.
(b) Prior to 12:00 Noon, New York time, on the day following the date of this
Agreement, or such later date as shall have been consented to by the Company, there shall
have been issued and on the Closing Date there shall be in full force and effect orders of
the North Carolina Utilities Commission and the Public Service Commission of South Carolina
authorizing the issuance and sale by the Company of the Securities, none of which shall not
contain any provision unacceptable to the Company by reason of its being materially adverse
to the Company (it being understood that no such order in effect as of the date of this
Agreement contains any such unacceptable provision).
19
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 Pricing Disclosure Package 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 in any free writing
prospectus used by the Company, 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
Pricing Disclosure Package or the Prospectus, or any amendment or supplement to any thereof,
or any free writing prospectus used by the Company, or arising out of, or based upon,
statements in or omissions from that part of the Registration Statement that shall
constitute the Statements of Eligibility under the 1939 Act (Form T-1 and Form T-2) of the
Trustees. The indemnity agreement of the Company contained in this paragraph 11 and the
representations and warranties of the Company contained in paragraph 3 hereof shall remain
operative and in full force and effect regardless of any investigation made by or on behalf
of any Underwriter, and such officer or director or any such controlling person and shall
survive the delivery of the Securities. The Underwriters agree to notify promptly the
Company, and each other Underwriter, of the commencement of any litigation or proceedings
against them or any of them, or any such officer or director or any such controlling person,
in connection with the sale of the Securities.
(b) Each Underwriter severally, and not jointly, agrees to indemnify and hold harmless
the Company, its officers who signed the Registration Statement and its directors, and each
person who controls the Company within the meaning of Section 15 of the Securities Act,
against any and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject and to reimburse each of them
20
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 Pricing Disclosure Package, 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
or the Pricing Disclosure Package 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 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,
21
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 includes an unconditional release of such other party
from all liability arising out of such claim.
(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
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
22
Section 11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this subparagraph
(d), each officer and director of each Underwriter and each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the Registration Statement
and each person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution
as the Company. The Underwriters’ respective obligations to contribute pursuant to this
subparagraph (d) are several in proportion to the principal amount 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
the Pricing Disclosure Package (other than information that may be separately provided by
Mitsubishi UFJ Securities International plc) were the following parts of the Preliminary
Prospectus section titled “Underwriting”: the second, third and fourth 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 delivering written notice thereof to the
Company, if on or after the date of this Agreement but prior to such time (a) there shall have
occurred any general suspension of trading in securities on The New York Stock Exchange, or there
shall have been established by The New York Stock Exchange or by the Commission or by any federal
or state agency or by the decision of any court, any limitation on prices for such trading or any
restrictions on the distribution of securities or (b) there shall have occurred any new outbreak of
hostilities including, but not limited to, 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
23
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, the Preliminary Prospectus or
Prospectus (other than an amendment or supplement relating solely to the activity of any
Underwriter or Underwriters) filed after the execution of this Agreement shall have materially
impaired the marketability of the Securities. Any termination hereof pursuant to this paragraph 12
shall be without liability of any party to any other party except as otherwise provided in
paragraphs 7 and 8.
13.
Miscellaneous
. The validity and interpretation of this Agreement shall be
governed by the laws of the State of New York. Unless otherwise specified, time of day refers to
New York City time. This Agreement shall inure to the benefit of, and be binding upon, the
Company, the several Underwriters, and with respect to the provisions of paragraph 11 hereof, the
officers and directors and each controlling person referred to in paragraph 11 hereof, and their
respective successors. Nothing in this Agreement is intended or shall be construed to give to any
other person, firm or corporation any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained. The term “successors” as used in this
Agreement shall not include any purchaser, as such purchaser, of any of the Securities from any of
the several Underwriters.
14.
Nature of Relationship
. The Company acknowledges and agrees that (a) in
connection with all aspects of each transaction contemplated by this Agreement, the Company and the
Underwriters have an arms length business relationship that creates no fiduciary duty on the part
of any party and each expressly disclaims any fiduciary relationship, (b) the Underwriters and
their respective affiliates may be engaged in a broad range of transactions that involve interests
that differ from those of the Company, (c) the Underwriters have not provided any legal,
accounting, regulatory or tax advice with respect to the offering contemplated hereby and the
Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it
deemed appropriate, and (d) any review by the Underwriters of the Company, the transactions
contemplated hereby or other matters relating to such transactions will be performed solely for the
benefit of the Underwriters and shall not be on behalf of the Company.
15.
Notices
. All communications hereunder shall be in writing or by telefax and, if
to the Underwriters, shall be mailed, transmitted by any standard form of telecommunication or
delivered to the Representative at Deutsche Bank Securities Inc., 50 Wall Street, New York, New
York 10005, Attention: Investment Grade Debt Syndicate Desk and Goldman, Sachs & Co., 85 Broad
Street, New York, New York 10004, Attention: Registration Department, 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, Vice President and Treasurer.
16.
Counterparts
. This Agreement may be simultaneously executed in counterparts, each
of which when so executed shall be deemed to be an original. Such counterparts shall together
constitute one and the same instrument.
17.
Defined Terms
. Unless otherwise defined herein, capitalized terms used in this
Agreement shall have the meanings assigned to them in the Registration Statement.
[The remainder of this page has been intentionally left blank.]
24
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.
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Very truly yours,
CAROLINA POWER & LIGHT COMPANY
d/b/a PROGRESS ENERGY CAROLINAS, INC.
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By:
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/s/ Thomas R. Sullivan
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Authorized Representative
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Accepted as of the date first
above written, as Underwriter
named in, and as the Representative
of the other Underwriters named in,
Schedule II attached to this Agreement
DEUTSCHE BANK SECURITIES INC.
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By:
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/s/ Ryan Montgomery
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Authorized Representative
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By:
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/s/
Ben Smilchensky
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Authorized Representative
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GOLDMAN, SACHS & CO.
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/s/
Goldman, Sachs & Co.
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Goldman, Sachs & Co.
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[Signature Page of PEC First Mortgage Bond Underwriting Agreement]
SCHEDULE I
Free Writing Prospectus Dated January 8, 2009
Registration Statement No. 333-155418-02
Filed Pursuant to Rule 433 of the Securities Act of 1933
FINAL TERM SHEET
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Issuer:
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Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc.
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Supplemental Indenture:
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Seventy-sixth Supplemental Indenture, dated as of January 1, 2009
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Format:
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SEC Registered
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Trade Date:
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January 8, 2009
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Settlement Date:
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January 15, 2009
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Security:
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First Mortgage Bonds, 5.30% Series due 2019
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Expected Ratings:
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A2 (Moody’s); A- (S&P); A+ (Fitch)
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Principal Amount:
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$600,000,000
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Date of Maturity:
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January 15, 2019
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Interest Rate:
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5.30%
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Interest Payment Dates:
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Payable semi-annually on January 15 and July 15, commencing July 15, 2009
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Public Offering Price:
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99.908% of the principal amount thereof
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Benchmark Treasury:
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3.75% UST due on November 15, 2018
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Benchmark Treasury Yield:
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2.462%
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Spread to Benchmark Treasury:
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+285 basis points
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Re-offer Yield:
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5.312%
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Redemption Terms:
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Redeemable prior to maturity, at any time in whole or from time to time in part, at the option of
the Company, at a make whole redemption price using the applicable Treasury rate plus 50 basis
points (as defined and described in further detail in the Prospectus Supplement)
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Joint Book-Running Managers:
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Deutsche Bank Securities Inc.
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Goldman, Sachs & Co.
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Co-Managers:
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Banc of America Securities LLC
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Mitsubishi UFJ Securities International plc
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BNY Mellon Capital Markets, LLC
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SunTrust Robinson Humphrey, Inc.
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BB&T Capital Markets, a division of Scott & Stringfellow, LLC
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Note: A securities rating is not a recommendation to buy, sell or hold securities and may be
subject to revision or withdrawal at any time.
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any
dealer participating in the offering will arrange to send you the prospectus if you request it by
calling Deutsche Bank Securities Inc. toll-free at 1-800-503-4611 or Goldman, Sachs & Co. toll-free
at 1-866-471-2526.
SCHEDULE II
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Principal Amount of
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Underwriters
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Securities
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Deutsche Bank Securities Inc.
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$
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195,000,000
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Goldman, Sachs & Co.
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$
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195,000,000
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Banc of America Securities LLC
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$
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60,000,000
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Mitsubishi UFJ Securities International plc
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$
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60,000,000
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BNY Mellon Capital Markets, LLC
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$
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48,000,000
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SunTrust Robinson Humphrey, Inc.
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$
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30,000,000
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BB&T Capital Markets, a division of Scott & Stringfellow, LLC
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$
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12,000,000
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Total
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$
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600,000,000
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Representatives:
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Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
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Purchase Price:
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99.258% of the principal amount thereof, plus
accrued interest, if any, from January 15, 2009,
if settlement occurs after that date.
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SCHEDULE III
PRICING DISCLOSURE PACKAGE
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1)
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Preliminary Prospectus Supplement dated January 8 2009(which
shall be deemed to include the Incorporated Documents)
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2)
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Permitted Free Writing Prospectuses
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a)
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Final Term Sheet attached as
Schedule I
hereto
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Exhibit 4
Counterpart __ of 120 Counterparts
CAROLINA POWER & LIGHT COMPANY
d/b/a PROGRESS ENERGY CAROLINAS, INC.
TO
THE BANK OF NEW YORK MELLON
(formerly The Bank of New York (formerly Irving Trust Company))
AND
DOUGLAS J. M
ac
INNES
(successor to Frederick G. Herbst, Richard H. West, J.A. Austin, E.J. McCabe, G. White,
D.W. May, J.A. Vaughan, Joseph J. Arney, Wafaa Orfy and W.T. Cunningham)
MING RYAN
(herein becoming successor to Douglas J. MacInnes)
as Trustees under Carolina Power &
Light Company’s Mortgage and Deed
of Trust, dated as of May 1, 1940
Seventy-sixth Supplemental Indenture
Providing among other things for
First Mortgage Bonds, 5.30% Series due 2019 (Eighty-seventh Series)
Dated as of January 1, 2009
Prepared by and Return to:
Hunton & Williams LLP (TSG)
Post Office Box 109
Raleigh, North Carolina 27602
SEVENTY-SIXTH SUPPLEMENTAL INDENTURE
INDENTURE
, dated as of January 1, 2009, by and between CAROLINA POWER & LIGHT COMPANY (d/b/a
PROGRESS ENERGY CAROLINAS, INC.), a corporation of the State of North Carolina, whose post office
address is 410 South Wilmington Street, Raleigh, North Carolina 27601-1768 (hereinafter sometimes
referred to as the “Company”), and THE BANK OF NEW YORK MELLON (formerly The Bank of New York
(formerly Irving Trust Company)), a corporation of the State of New York, whose post office address
is 101 Barclay Street, New York, New York 10286 (hereinafter sometimes referred to as the
“Corporate Trustee”), and MING RYAN (successor to Frederick G. Herbst, Richard H. West, J.A.
Austin, E.J. McCabe, G. White, D.W. May, J.A. Vaughan, Joseph J. Arney, Wafaa Orfy, W.T. Cunningham
and Douglas J. MacInnes),whose post office address is 101 Barclay Street, New York, New York 10286
(hereinafter sometimes referred to as the “Individual Trustee”; the Corporate Trustee and the
Individual Trustee being hereinafter together sometimes referred to as the “Trustees”), as Trustees
under the Mortgage and Deed of Trust, dated as of May 1, 1940 (hereinafter referred to as the
“Mortgage”), which Mortgage was executed and delivered by the Company to Irving Trust Company (now
The Bank of New York Mellon) and Frederick G. Herbst to secure the payment of bonds issued or to be
issued under and in accordance with the provisions of the Mortgage, reference to which Mortgage is
hereby made, this Indenture (hereinafter sometimes referred to as the “Seventy-sixth Supplemental
Indenture”) being supplemental thereto:
WHEREAS, the Mortgage was recorded in various Counties in the States of North Carolina and
South Carolina; and
WHEREAS, the Mortgage was indexed and cross-indexed in the real and chattel mortgage records
in various Counties in the States of North Carolina and South Carolina; and
WHEREAS, an instrument, dated as of June 25, 1945, was executed by the Company appointing
Richard H. West as Individual Trustee in succession to said Frederick G. Herbst (deceased) under
the Mortgage, and by Richard H. West accepting said appointment, which instrument was recorded in
various Counties in the States of North Carolina and South Carolina; and
WHEREAS, an instrument, dated as of December 12, 1957, was executed by the Company appointing
J.A. Austin as Individual Trustee in succession to said Richard H. West (resigned) under the
Mortgage, and by J.A. Austin accepting said appointment, which instrument was recorded in various
Counties in the States of North Carolina and South Carolina; and
WHEREAS, an instrument, dated as of April 15, 1966, was executed by the Company appointing
E.J. McCabe as Individual Trustee in succession to said J.A. Austin (resigned) under the Mortgage,
and by E.J. McCabe accepting said appointment, which instrument was recorded in various Counties in
the States of North Carolina and South Carolina; and
WHEREAS, by the Seventeenth Supplemental Indenture mentioned below, the Company, among other
things, appointed G. White as Individual Trustee in succession to said E.J. McCabe (resigned), and
G. White accepted said appointment; and
WHEREAS, by the Nineteenth Supplemental Indenture mentioned below, the Company, among other
things, appointed D.W. May as Individual Trustee in succession to said G. White (resigned), and
D.W. May accepted said appointment; and
2
WHEREAS, by the Thirty-fifth Supplemental Indenture mentioned below, the Company, among other
things, appointed J.A. Vaughan as Individual Trustee in succession to said D.W. May (resigned), and
J.A. Vaughan accepted said appointment; and
WHEREAS, an instrument, dated as of June 27, 1988, was executed by the Company appointing
Joseph J. Arney as Individual Trustee in succession to said J.A. Vaughan (resigned) under the
Mortgage, and by Joseph J. Arney accepting said appointment, which instrument was recorded in
various Counties in the States of North Carolina and South Carolina; and
WHEREAS, by the Forty-fifth Supplemental Indenture mentioned below, the Company, among other
things, appointed Wafaa Orfy as Individual Trustee in succession to said Joseph J. Arney
(resigned), and Wafaa Orfy accepted said appointment; and
WHEREAS, by the Forty-ninth Supplemental Indenture mentioned below, the Company, among other
things, appointed W.T. Cunningham as Individual Trustee in succession to said Wafaa Orfy
(resigned), and W.T. Cunningham accepted said appointment; and
WHEREAS, by the Sixty-sixth Supplemental Indenture mentioned below, the Company, among other
things, appointed Douglas J. MacInnes as Individual Trustee in succession to said W.T. Cunningham
(resigned), and Douglas J. MacInnes accepted said appointment; and
WHEREAS, such instruments were indexed and cross-indexed in the real and chattel mortgage
records in various Counties in the States of North Carolina and South Carolina; and
WHEREAS, effective January 1, 2003, the Company began doing business under the name Progress
Energy Carolinas, Inc., without changing the legal name of the Company; and certificates of doing
business by the Company under such name were recorded in all counties in the State of North
Carolina and South Carolina in which this Seventy-sixth Supplemental Indenture is to be recorded
and were filed and indexed and cross-indexed in the real property records in each of such counties;
and
WHEREAS, by the Seventy-second Supplemental Indenture mentioned below, the Company, among
other things, reserved the right, without any consent or other action by holders of the bonds of
the Eighty-first Series, the Eighty-second Series or of any subsequent series (which includes the
Eighty-seventh Series hereinafter referred to), to amend certain provisions of the Mortgage, as
supplemented, as provided in Article II of said Seventy-second Supplemental Indenture; and
WHEREAS, by the Mortgage, the Company covenanted that it would execute and deliver such
supplemental indenture or indentures and such further instruments and do such further acts as might
be necessary or proper to carry out more effectually the purposes of the Mortgage and to make
subject to the lien of the Mortgage any property thereafter acquired intended to be subject to the
lien thereof; and
WHEREAS, for said purposes, among others, the Company executed and delivered to the Trustees
the following supplemental indentures:
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Designation
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Dated as of
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First Supplemental Indenture
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January 1, 1949
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Second Supplemental Indenture
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December 1, 1949
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3
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Designation
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Dated as of
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Third Supplemental Indenture
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February 1, 1951
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Fourth Supplemental Indenture
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October 1, 1952
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Fifth Supplemental Indenture
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March 1, 1958
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Sixth Supplemental Indenture
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April 1, 1960
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Seventh Supplemental Indenture
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November 1, 1961
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Eighth Supplemental Indenture
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July 1, 1964
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Ninth Supplemental Indenture
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April 1, 1966
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Tenth Supplemental Indenture
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October 1, 1967
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Eleventh Supplemental Indenture
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October 1, 1968
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Twelfth Supplemental Indenture
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January 1, 1970
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Thirteenth Supplemental Indenture
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August 1, 1970
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Fourteenth Supplemental Indenture
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January 1, 1971
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Fifteenth Supplemental Indenture
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October 1, 1971
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Sixteenth Supplemental Indenture
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May 1, 1972
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Seventeenth Supplemental Indenture
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May 1, 1973
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Eighteenth Supplemental Indenture
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November 1, 1973
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Nineteenth Supplemental Indenture
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May 1, 1974
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Twentieth Supplemental Indenture
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December 1, 1974
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Twenty-first Supplemental Indenture
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April 15, 1975
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Twenty-second Supplemental Indenture
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October 1, 1977
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Twenty-third Supplemental Indenture
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June 1, 1978
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Twenty-fourth Supplemental Indenture
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May 15, 1979
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Twenty-fifth Supplemental Indenture
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November 1, 1979
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Twenty-sixth Supplemental Indenture
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November 1, 1979
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Twenty-seventh Supplemental Indenture
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April 1, 1980
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Twenty-eighth Supplemental Indenture
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October 1, 1980
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Twenty-ninth Supplemental Indenture
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October 1, 1980
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Thirtieth Supplemental Indenture
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December 1, 1982
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Thirty-first Supplemental Indenture
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March 15, 1983
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Thirty-second Supplemental Indenture
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March 15, 1983
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Thirty-third Supplemental Indenture
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December 1, 1983
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Thirty-fourth Supplemental Indenture
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December 15, 1983
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Thirty-fifth Supplemental Indenture
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April 1, 1984
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Thirty-sixth Supplemental Indenture
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June 1, 1984
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Thirty-seventh Supplemental Indenture
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June 1, 1984
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Thirty-eighth Supplemental Indenture
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June 1, 1984
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Thirty-ninth Supplemental Indenture
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April 1, 1985
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Fortieth Supplemental Indenture
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October 1, 1985
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Forty-first Supplemental Indenture
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March 1, 1986
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Forty-second Supplemental Indenture
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July 1, 1986
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Forty-third Supplemental Indenture
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January 1, 1987
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Forty-fourth Supplemental Indenture
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December 1, 1987
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Forty-fifth Supplemental Indenture
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September 1, 1988
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Forty-sixth Supplemental Indenture
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April 1, 1989
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Forty-seventh Supplemental Indenture
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August 1, 1989
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Forty-eighth Supplemental Indenture
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November 15, 1990
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Forty-ninth Supplemental Indenture
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November 15, 1990
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Fiftieth Supplemental Indenture
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February 15, 1991
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Fifty-first Supplemental Indenture
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April 1, 1991
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Fifty-second Supplemental Indenture
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September 15, 1991
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4
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Designation
|
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Dated as of
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Fifty-third Supplemental Indenture
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January 1, 1992
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Fifty-fourth Supplemental Indenture
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April 15, 1992
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Fifty-fifth Supplemental Indenture
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July 1, 1992
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Fifty-sixth Supplemental Indenture
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October 1, 1992
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Fifty-seventh Supplemental Indenture
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February 1, 1993
|
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Fifty-eighth Supplemental Indenture
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March 1, 1993
|
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Fifty-ninth Supplemental Indenture
|
|
July 1, 1993
|
|
Sixtieth Supplemental Indenture
|
|
July 1, 1993
|
|
Sixty-first Supplemental Indenture
|
|
August 15, 1993
|
|
Sixty-second Supplemental Indenture
|
|
January 15, 1994
|
|
Sixty-third Supplemental Indenture
|
|
May 1, 1994
|
|
Sixty-fourth Supplemental Indenture
|
|
August 15, 1997
|
|
Sixty-fifth Supplemental Indenture
|
|
April 1, 1998
|
|
Sixty-sixth Supplemental Indenture
|
|
March 1, 1999
|
|
Sixty-seventh Supplemental Indenture
|
|
March 1, 2000
|
|
Sixty-eighth Supplemental Indenture
|
|
April 1, 2000
|
|
Sixty-ninth Supplemental Indenture
|
|
June 1, 2000
|
|
Seventieth Supplemental Indenture
|
|
July 1, 2000
|
|
Seventy-first Supplemental Indenture
|
|
February 1, 2002
|
|
Seventy-second Supplemental Indenture
|
|
September 1, 2003
|
|
Seventy-third Supplemental Indenture
|
|
March 1, 2005
|
|
Seventy-fourth Supplemental Indenture
|
|
November 1, 2005
|
|
Seventy-fifth Supplemental Indenture
|
|
March 1, 2008
|
which supplemental indentures (other than said Sixty-fifth Supplemental Indenture and said
Sixty-seventh Supplemental Indenture) were recorded in various Counties in the States of North
Carolina and South Carolina, and were indexed and cross-indexed in the real and chattel mortgage or
security interest records in various Counties in the States of North Carolina and South Carolina;
and
WHEREAS, no recording or filing of said Sixty-fifth Supplemental Indenture in any manner or
place is required by law in order to fully preserve and protect the security of the bondholders and
all rights of the Trustees or is necessary to make effective the lien intended to be created by the
Mortgage or said Sixty-fifth Supplemental Indenture; and said Sixty-seventh Supplemental Indenture
was recorded only in Rowan County, North Carolina to make subject to the lien of the Mortgage, as
supplemented, certain property of the Company located in said County intended to be subject to the
lien of the Mortgage, as supplemented, all in accordance with Section 42 of the Mortgage; and
WHEREAS, the Mortgage and said First through Seventy-fifth Supplemental Indentures (other than
said Sixty-fifth and said Sixty-seventh Supplemental Indentures) were or are to be recorded in all
Counties in the States of North Carolina and South Carolina in which this Seventy-sixth
Supplemental Indenture is to be recorded; and
WHEREAS, in addition to the property described in the Mortgage, as heretofore supplemented,
the Company has acquired certain other property, rights and interests in property; and
WHEREAS, the Company has heretofore issued, in accordance with the provisions of the Mortgage,
as supplemented, the following series of First Mortgage Bonds:
5
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Principal
|
|
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Principal
|
|
|
|
|
Amount
|
|
|
Amount
|
|
|
Series
|
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Issued
|
|
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Outstanding
|
|
|
|
|
|
|
|
|
|
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3-3/4% Series due 1965
|
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$
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46,000,000
|
|
|
None
|
|
3-1/8% Series due 1979
|
|
|
20,100,000
|
|
|
None
|
|
3-1/4% Series due 1979
|
|
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43,930,000
|
|
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None
|
|
2-7/8% Series due 1981
|
|
|
15,000,000
|
|
|
None
|
|
3-1/2% Series due 1982
|
|
|
20,000,000
|
|
|
None
|
|
4-1/8% Series due 1988
|
|
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20,000,000
|
|
|
None
|
|
4-7/8% Series due 1990
|
|
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25,000,000
|
|
|
None
|
|
4-1/2% Series due 1991
|
|
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25,000,000
|
|
|
None
|
|
4-1/2% Series due 1994
|
|
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30,000,000
|
|
|
None
|
|
5-1/8% Series due 1996
|
|
|
30,000,000
|
|
|
None
|
|
6-3/8% Series due 1997
|
|
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40,000,000
|
|
|
None
|
|
6-7/8% Series due 1998
|
|
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40,000,000
|
|
|
None
|
|
8-3/4% Series due 2000
|
|
|
40,000,000
|
|
|
None
|
|
8-3/4% Series due August 1, 2000
|
|
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50,000,000
|
|
|
None
|
|
7-3/8% Series due 2001
|
|
|
65,000,000
|
|
|
None
|
|
7-3/4% Series due October 1, 2001
|
|
|
70,000,000
|
|
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None
|
|
7-3/4% Series due 2002
|
|
|
100,000,000
|
|
|
None
|
|
7-3/4% Series due 2003
|
|
|
100,000,000
|
|
|
None
|
|
8-1/8% Series due November 1, 2003
|
|
|
100,000,000
|
|
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None
|
|
9-3/4% Series due 2004
|
|
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125,000,000
|
|
|
None
|
|
11-1/8% Series due 1994
|
|
|
50,000,000
|
|
|
None
|
|
11% Series due April 15, 1984
|
|
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100,000,000
|
|
|
None
|
|
8-1/2% Series due October 1, 2007
|
|
|
100,000,000
|
|
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None
|
|
9-1/4% Series due June 1, 2008
|
|
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100,000,000
|
|
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None
|
|
10-1/2% Series due May 15, 2009
|
|
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125,000,000
|
|
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None
|
|
12-1/4% Series due November 1, 2009
|
|
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100,000,000
|
|
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None
|
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Pollution Control Series A
|
|
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63,000,000
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None
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14-1/8% Series due April 1, 1987
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125,000,000
|
|
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None
|
|
Pollution Control Series B
|
|
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50,000,000
|
|
|
None
|
|
Pollution Control Series C
|
|
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6,000,000
|
|
|
None
|
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11-5/8% Series due December 1, 1992
|
|
|
100,000,000
|
|
|
None
|
|
Pollution Control Series D
|
|
|
48,485,000
|
|
|
None
|
|
Pollution Control Series E
|
|
|
5,970,000
|
|
|
None
|
|
12-7/8% Series due December 1, 2013
|
|
|
100,000,000
|
|
|
None
|
|
Pollution Control Series F
|
|
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34,700,000
|
|
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None
|
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13-3/8% Series due April 1, 1994
|
|
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100,000,000
|
|
|
None
|
|
Pollution Control Series G
|
|
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122,615,000
|
|
|
None
|
|
Pollution Control Series H
|
|
|
70,000,000
|
|
|
None
|
|
Pollution Control Series I
|
|
|
70,000,000
|
|
|
None
|
|
Pollution Control Series J
|
|
|
6,385,000
|
|
|
None
|
|
Pollution Control Series K
|
|
|
2,580,000
|
|
|
None
|
|
Extendible Series due April 1, 1995
|
|
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125,000,000
|
|
|
None
|
|
11-3/4% Series due October 1, 2015
|
|
|
100,000,000
|
|
|
None
|
|
8-7/8% Series due March 1, 2016
|
|
|
100,000,000
|
|
|
None
|
|
8-1/8% Series due July 1, 1996
|
|
|
125,000,000
|
|
|
None
|
|
8-1/2% Series due January 1, 2017
|
|
|
100,000,000
|
|
|
None
|
|
9.174% Series due December 1, 1992
|
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100,000,000
|
|
|
None
|
6
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|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
Principal
|
|
|
|
|
Amount
|
|
|
Amount
|
|
|
Series
|
|
Issued
|
|
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Outstanding
|
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9% Series due September 1, 1993
|
|
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100,000,000
|
|
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None
|
|
9.60% Series due April 1, 1991
|
|
|
100,000,000
|
|
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None
|
|
Secured Medium-Term Notes, Series A
|
|
|
200,000,000
|
|
|
None
|
|
8-1/8% Series due November 15, 1993
|
|
|
100,000,000
|
|
|
None
|
|
Secured Medium-Term Notes, Series B
|
|
|
100,000,000
|
|
|
None
|
|
8-7/8% Series due February 15, 2021
|
|
|
125,000,000
|
|
|
None
|
|
9% Series due April 1, 2022
|
|
|
100,000,000
|
|
|
None
|
|
8-5/8% Series due September 15, 2021
|
|
|
100,000,000
|
|
|
$
|
100,000,000
|
|
|
5.20% Series due January 1, 1995
|
|
|
125,000,000
|
|
|
None
|
|
7-7/8% Series due April 15, 2004
|
|
|
150,000,000
|
|
|
None
|
|
8.20% Series due July 1, 2022
|
|
|
150,000,000
|
|
|
None
|
|
6-3/4% Series due October 1, 2002
|
|
|
100,000,000
|
|
|
None
|
|
6-1/8% Series due February 1, 2000
|
|
|
150,000,000
|
|
|
None
|
|
7-1/2% Series due March 1, 2023
|
|
|
150,000,000
|
|
|
None
|
|
5-3/8% Series due July 1, 1998
|
|
|
100,000,000
|
|
|
None
|
|
Secured Medium-Term Notes, Series C
|
|
|
200,000,000
|
|
|
None
|
|
6-7/8% Series due August 15, 2023
|
|
|
100,000,000
|
|
|
None
|
|
5-7/8% Series due January 15, 2004
|
|
|
150,000,000
|
|
|
None
|
|
Pollution Control Series L
|
|
|
72,600,000
|
|
|
|
72,600,000
|
|
|
Pollution Control Series M
|
|
|
50,000,000
|
|
|
|
50,000,000
|
|
|
6.80% Series due August 15, 2007
|
|
|
200,000,000
|
|
|
None
|
|
5.95% Senior Note Series due
March 1, 2009
|
|
|
400,000,000
|
|
|
|
400,000,000
|
|
|
7.50% Senior Note Series due
April 1, 2005
|
|
|
300,000,000
|
|
|
None
|
|
Pollution Control Series N
|
|
|
67,300,000
|
|
|
|
67,300,000
|
|
|
Pollution Control Series O
|
|
|
55,640,000
|
|
|
|
55,640,000
|
|
|
Pollution
Control Series P
|
|
|
50,000,000
|
|
|
|
50,000,000
|
|
|
Pollution Control Series Q
|
|
|
50,000,000
|
|
|
|
50,000,000
|
|
|
Pollution Control Series R
|
|
|
45,600,000
|
|
|
|
45,600,000
|
|
|
Pollution Control Series S
|
|
|
41,700,000
|
|
|
|
41,700,000
|
|
|
Pollution Control Series T
|
|
|
50,000,000
|
|
|
|
50,000,000
|
|
|
Pollution Control Series U
|
|
|
50,000,000
|
|
|
|
50,000,000
|
|
|
Pollution Control Series V
|
|
|
87,400,000
|
|
|
|
87,400,000
|
|
|
Pollution Control Series W
|
|
|
48,485,000
|
|
|
|
48,485,000
|
|
|
5.125% Series due 2013
|
|
|
400,000,000
|
|
|
|
400,000,000
|
|
|
6.125% Series due 2033
|
|
|
200,000,000
|
|
|
|
200,000,000
|
|
|
5.15% Series due 2015
|
|
|
300,000,000
|
|
|
|
300,000,000
|
|
|
5.70% Series due 2035
|
|
|
200,000,000
|
|
|
|
200,000,000
|
|
|
5.25% Series due 2015
|
|
|
400,000,000
|
|
|
|
400,000,000
|
|
|
6.30% Series due 2038
|
|
|
325,000,000
|
|
|
|
325,000,000
|
|
which bonds are herein sometimes referred to as bonds of the First through Eighty-sixth Series,
respectively; and
WHEREAS, Section 8 of the Mortgage provides that the form of each series of bonds (other than
the First Series) issued thereunder and of the coupons to be attached to coupon bonds of such
series shall be established by Resolution of the Board of Directors of the Company and that the
form of such series, as established by said Board of Directors, shall specify the descriptive title
of the bonds and various other terms thereof, and may also contain such provisions not
7
inconsistent with the provisions of the Mortgage as said Board of Directors may, in its discretion,
cause to be inserted therein expressing or referring to the terms and conditions upon which
such bonds are to be issued and/or secured under the Mortgage; and
WHEREAS, Section 120 of the Mortgage provides, among other things, that any power, privilege
or right expressly or impliedly reserved to or in any way conferred upon the Company by any
provision of the Mortgage, whether such power, privilege or right is in any way restricted or is
unrestricted, may be in whole or in part waived or surrendered or subjected to any restriction if
at the time unrestricted or to additional restriction if already restricted, and the Company may
enter into any further covenants, limitations or restrictions for the benefit of any one or more
series of bonds issued thereunder, or the Company may cure any ambiguity contained therein, or in
any supplemental indenture, or may establish the terms and provisions of any series of bonds other
than said First Series, by an instrument in writing executed and acknowledged by the Company in
such manner as would be necessary to entitle a conveyance of real estate to record in all of the
states in which any property at the time subject to the lien of the Mortgage shall be situated; and
WHEREAS, the Company now desires to create a new series of bonds and to add to its covenants
and agreements contained in the Mortgage, as heretofore supplemented, certain other covenants and
agreements to be observed by it; and
WHEREAS, the execution and delivery by the Company of this Seventy-sixth Supplemental
Indenture, and the terms of the bonds of the Eighty-seventh Series, hereinafter referred to, have
been duly authorized by the Board of Directors of the Company by appropriate resolutions of said
Board of Directors;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the undersigned Douglas J. MacInnes hereby gives written notice to the Company that he
hereby resigns as Individual Trustee under the Mortgage, such resignation to take effect at the
close of business on January 14th, 2009, unless previously a successor Individual Trustee shall
have been appointed as provided in the Mortgage, in which event such resignation shall take effect
immediately on the appointment of such successor Individual Trustee.
That, pursuant to Section 102 of the Mortgage, and by order of its Board of Directors, the
undersigned Carolina Power & Light Company hereby appoints Ming Ryan as successor Individual
Trustee under the Mortgage, subject to the conditions in Article XVII thereof expressed, effective
at the close of business on January 14th, 2009.
That the undersigned Ming Ryan, a citizen of the United States of America, hereby accepts her
said appointment by Carolina Power & Light Company as successor Individual Trustee under the
Mortgage.
That the undersigned Douglas J. MacInnes hereby acknowledges receipt of an executed
counterpart of this instrument.
That the undersigned Carolina Power & Light Company will proceed with the publication of the
notice of resignation and notice of appointment, as provided respectively in Sections 101 and 102
of the Mortgage, in substantially the forms provided in Exhibit A hereto annexed.
That the Company, in consideration of the premises and of One Dollar to it duly paid by the
Trustees at or before the ensealing and delivery of these presents, the receipt whereof is hereby
acknowledged, and in further evidence of assurance of the estate, title and rights of the Trustees
8
and in order further to secure the payment of both the principal of and interest and premium, if
any, on the bonds from time to time issued under the Mortgage, according to their tenor and
effect and the performance of all the provisions of the Mortgage (including any instruments
supplemental thereto and any modification made as in the Mortgage provided) and of said bonds,
hereby grants, bargains, sells, releases, conveys, assigns, transfers, mortgages, pledges, sets
over and confirms (subject, however, to Excepted Encumbrances as defined in Section 6 of the
Mortgage) unto The Bank of New York Mellon and Douglas J. MacInnes, as Trustees under the Mortgage,
and to their successor or successors in said trust, and to said Trustees and their successors and
assigns forever, all the following described properties of the Company:
All electric generating plants, stations, transmission lines, and electric
distribution systems, including permanent improvements, extensions or additions to or about
such electrical plants, stations, transmission lines and distribution systems of the
Company; all dams, power houses, power sites, buildings, generators, reservoirs, pipe
lines, flumes, structures and works; all substations, transformers, switchboards, towers,
poles, wires, insulators, and other appliances and equipment, and the Company’s rights or
interests in the land upon which the same are situated, and all other property, real or
personal, forming a part of or appertaining to, or used, occupied or enjoyed in connection
with said generating plants, stations, transmission lines, and distribution systems;
together with all rights of way, easements, permits, privileges, franchises and rights for
or related to the construction, maintenance, or operation thereof, through, over, under or
upon any public streets or highways, or the public lands of the United States, or of any
State or other lands; and all water appropriations and water rights, permits and
privileges; including all property, real, personal, and mixed, acquired by the Company
after the date of the execution and delivery of the Mortgage, in addition to property
covered by the above-mentioned supplemental indentures (except any herein or in the
Mortgage, as heretofore supplemented, expressly excepted), now owned or, subject to the
provisions of Section 87 of the Mortgage, hereafter acquired by the Company and wheresoever
situated, including (without in anywise limiting or impairing by the enumeration of the
same the scope and intent of the foregoing or of any general description contained in this
Seventy-sixth Supplemental Indenture) all lands, power sites, flowage rights, water rights,
flumes, raceways, dams, rights of way and roads; all steam and power houses, gas plants,
street lighting systems, standards and other equipment incidental thereto, telephone, radio
and television systems, air-conditioning systems and equipment incidental thereto, water
works, steam heat and hot water plants, lines, service and supply systems, bridges,
culverts, tracts, ice or refrigeration plants and equipment, street and interurban
railway systems, offices, buildings and other structures and the equipment thereof; all
machinery, engines, boilers, dynamos, electric and gas machines, regulators, meters,
transformers, generators, motors, electrical, gas and mechanical appliances, conduits,
cables, water, steam heat, gas or other pipes, gas mains and pipes, service pipes,
fittings, valves and connections, pole and transmission lines, wires, cables, tools,
implements, apparatus, furniture, chattels and choses in action; all municipal and other
franchises, consents or permits; all lines for the transmission and distribution of
electric current, gas, steam heat or water for any purpose including poles, wires, cables,
pipes, conduits, ducts and all apparatus for use in connection therewith; all real estate,
lands, easements, servitudes, licenses, permits, franchises, privileges, rights of way and
other rights in or relating to real estate or the occupancy of the same and (except as
herein or in the Mortgage, as heretofore supplemented, expressly excepted) all the right,
title and interest of the Company in and to all other property of any kind or nature
appertaining to and/or used and/or occupied and/or enjoyed in connection with any property
hereinbefore or in the Mortgage, as heretofore supplemented, described.
9
TOGETHER WITH all and singular the tenements, hereditaments and appurtenances belonging or in
anywise appertaining to the aforesaid property or any part thereof, with the reversion and
reversions, remainder and remainders and (subject to the provisions of Section 57 of the Mortgage)
the tolls, rents, revenues, issues, earnings, income, product and profits thereof, and all the
estate, right, title and interest and claim whatsoever, at law as well as in equity, which the
Company now has or may hereafter acquire in and to the aforesaid property and franchises and every
part and parcel thereof.
IT IS HEREBY AGREED by the Company that, subject to the provisions of Section 87 of the
Mortgage, all the property, rights and franchises acquired by the Company after the date hereof
(except any herein or in the Mortgage, as heretofore supplemented, expressly excepted) shall be and
are as fully granted and conveyed hereby and as fully embraced within the lien hereof and the lien
of the Mortgage as if such property, rights and franchises were now owned by the Company and were
specifically described herein and conveyed hereby.
PROVIDED THAT the following are not and are not intended to be now or hereafter granted,
bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged, set over or
confirmed hereunder and are hereby expressly excepted from the lien and operation of this
Seventy-sixth Supplemental Indenture and from the lien and operation of the Mortgage, namely: (1)
cash, shares of stock and obligations (including bonds, notes and other securities) not hereafter
specifically pledged, paid, deposited or delivered under the Mortgage or covenanted so to be; (2)
merchandise, equipment, materials or supplies held for the purpose of sale in the usual course of
business and fuel, oil and similar materials and supplies consumable in the operation of any
properties of the Company; rolling stock, buses, motor coaches, vehicles and automobiles; (3)
bills, notes and accounts receivable, and all contracts, leases and operating agreements not
specifically pledged under the Mortgage, as heretofore supplemented, or this Seventy-sixth
Supplemental Indenture or covenanted so to be; (4) electric energy and other materials or products
generated, manufactured, produced or purchased by the Company for sale, distribution or use in the
ordinary course of its business; and (5) any property and rights heretofore released from the lien
of the Mortgage; provided, however, that the property and rights expressly excepted from the lien
and operation of the Mortgage and this Seventy-sixth Supplemental Indenture in the above
subdivisions (2) and (3) shall (to the extent permitted by law) cease to be so excepted in the
event and as of the date that either or both of the Trustees or a receiver or trustee shall enter
upon and take possession of the Mortgaged and Pledged Property in the manner provided in Article
XII of the Mortgage by reason of the occurrence of a Default as defined in said Article XII.
TO HAVE AND TO HOLD all such properties, real, personal and mixed, granted, bargained, sold,
released, conveyed, assigned, transferred, mortgaged, pledged, set over or confirmed by the Company
as aforesaid, or intended so to be, unto the Trustees, their successors and assigns forever.
IN TRUST NEVERTHELESS, for the same purposes and upon the same terms, trusts and conditions
and subject to and with the same provisos and covenants as are set forth in the Mortgage, as
heretofore supplemented, this Seventy-sixth Supplemental Indenture being supplemental to the
Mortgage.
AND IT IS HEREBY COVENANTED by the Company that all the terms, conditions, provisos, covenants
and provisions contained in the Mortgage, as heretofore supplemented, shall affect and apply to the
property hereinbefore described and conveyed and to the estate, rights, obligations and duties of
the Company and the Trustees and the beneficiaries of the trust with respect to said property, and
to the Trustees and their successors as Trustees of said property in the same manner and with the
same effect as if the said property had been owned by the Company at
10
the time of the execution of the Mortgage and had been specifically and at length described in
and conveyed to the Trustees by the Mortgage as a part of the property therein stated to be
conveyed.
The Company further covenants and agrees to and with the Trustees and their successor or
successors in such trust under the Mortgage as follows:
ARTICLE I
EIGHTY-SEVENTH SERIES OF BONDS
SECTION 1(A). There shall be a series of bonds designated “5.30% Series due 2019” (herein
sometimes referred to as the “Eighty-seventh Series”), each of which shall also bear the
descriptive title “First Mortgage Bond”, and the form thereof, which shall be established by
Resolution of the Board of Directors of the Company, shall contain suitable provisions with respect
to the matters hereinafter in this Section specified. Bonds of the Eighty-seventh Series shall be
initially issued in the aggregate principal amount of $600,000,000, mature on January 15, 2019,
bear interest at the rate of 5.30% per annum, payable from January 15, 2009, if the date of said
bonds is on or prior to January 15, 2009, or, if the date of said bonds is after January 15, 2009,
from the July 15 or January 15 next preceding the date of said bonds, and thereafter semi-annually
on January 15 and July 15 of each year, be issued as fully registered bonds in the denominations of
Two Thousand Dollars and, at the option of the Company, in any integral multiple of One Thousand
Dollars in excess thereof (the exercise of such option to be evidenced by the execution and
delivery thereof) and be dated as in Section 10 of the Mortgage provided, the principal of and
interest on each said bond to be payable at the office or agency of the Company in the Borough of
Manhattan, The City of New York, in such coin or currency of the United States of America as at the
time of payment is legal tender for public and private debts.
Interest on bonds of the Eighty-seventh Series will be computed on the basis of a 360-day year
comprised of twelve 30-day months. If a due date for the payment of interest or principal falls on
a day that is not a business day, then the payment will be made on the next succeeding business
day, and no interest will accrue on the amounts payable for the period from and after the original
due date and until the next business day. The term “business day” means any day other than a
Saturday or Sunday or day on which banking institutions in The City of New York are required or
authorized to close.
(B) The bonds of the Eighty-seventh Series shall be redeemable at the option of the Company
or with the Proceeds of Released Property in whole at any time, or in part from time to time, prior
to maturity, upon notice as provided in Sections 52 and 54 of the Mortgage (given by mail at least
30 days and not more than 90 days prior to the date fixed for redemption (the “Redemption Date”)),
at a redemption price (sometimes hereinafter referred to as the “Make-Whole Redemption Price”)
equal to the greater of (i) 100% of the principal amount of the bonds then outstanding to be
redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal and
interest thereon from the Redemption Date to the maturity date, computed by discounting such
payments, in each case, to the Redemption Date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus 50 basis points, plus in each case
accrued interest on the principal amount thereof to the Redemption Date. On and after the
Redemption Date, unless the Company defaults in the payment of the Make-Whole Redemption Price and
interest accrued thereon to such date, interest on the bonds of the Eighty-seventh Series, or the
portions of them so called for redemption, shall cease to accrue.
“Treasury Rate” means, with respect to any Redemption Date, the rate per annum equal to the
semiannual equivalent yield to actual or interpolated maturity (on a day count basis) of the
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Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption
Date.
“Comparable Treasury Issue” means the United States Treasury security or securities selected
by an Independent Investment Banker and having an actual or interpolated maturity comparable to the
remaining term of the bonds of the Eighty-seventh Series to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the bonds of the
Eighty-seventh Series.
“Comparable Treasury Price” means, with respect to any Redemption Date, the average of the
Reference Treasury Dealer Quotations for such Redemption Date.
“Independent Investment Banker,” means one of the Reference Treasury Dealers appointed by the
Company.
“Reference Treasury Dealer,” means (i) either Deutsche Bank Securities Inc. or Goldman, Sachs
& Co. and (ii) one additional primary U.S. Government securities dealer in The City of New York
(each a “primary treasury dealer”) selected by the Company. If any Reference Treasury Dealer shall
cease to be a primary treasury dealer, the Company will substitute another primary treasury dealer
for that dealer.
“Reference Treasury Dealer Quotations,” means, with respect to each Reference Treasury Dealer
and any Redemption Date, the average, as determined by the Company, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Company by such Reference Treasury Dealer at 3:30 p.m., New York time, on
the third business day preceding such Redemption Date.
In case of a redemption of only a part of the bonds of the Eighty-seventh Series, the
Corporate Trustee shall draw by lot, in such manner as it deems appropriate, the particular bonds
of the Eighty-seventh Series, or portions of them, to be redeemed.
The Company shall deliver to the Corporate Trustee promptly upon its calculation thereof, but
in any event prior to any Redemption Date for the bonds of the Eighty-seventh Series, a
Treasurer’s Certificate setting forth its calculation of the Make-Whole Redemption Price applicable
to such redemption. The Corporate Trustee shall be under no duty to inquire into, may conclusively
presume the correctness of, and shall be fully protected in relying upon the Company’s calculation
of any Make-Whole Redemption Price of the bonds of the Eighty-seventh Series.
In lieu of stating the Make-Whole Redemption Price, notices of redemption of the bonds of the
Eighty-seventh Series shall state substantially the following: “The redemption price of the bonds
to be redeemed shall equal the greater of (i) 100% of the principal amount of the bonds then
outstanding to be redeemed or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon from the Redemption Date to the maturity date, computed
by discounting such payments, in each case, to the Redemption Date on a semiannual basis (assuming
a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the
Seventy-sixth Supplemental Indenture) plus 50 basis points, plus in each case accrued interest on
the principal amount thereof to the Redemption Date.”
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Except as provided herein, Article X of the Mortgage, as heretofore supplemented, shall apply
to redemptions of bonds of the Eighty-seventh Series.
(C) At the option of the registered owner, any bonds of the Eighty-seventh Series, upon
surrender thereof for cancellation at the office or agency of the Company in the Borough of
Manhattan, The City of New York, shall be exchangeable for a like aggregate principal amount of
bonds of the same series of other authorized denominations. The bonds of the Eighty-seventh Series
may bear such legends as may be necessary to comply with any law or with any rules or regulations
made pursuant thereto or with the rules or regulations of any stock exchange or to conform to usage
or agreement with respect thereto.
Bonds of the Eighty-seventh Series shall be transferable upon the surrender thereof for
cancellation, together with a written instrument of transfer in form approved by the registrar duly
executed by the registered owner or by his duly authorized attorney, at the office or agency of the
Company in the Borough of Manhattan, The City of New York.
Upon any exchange or transfer of bonds of the Eighty-seventh Series, the Company may make a
charge therefor sufficient to reimburse it for any tax or taxes or other governmental charge
required to be paid by the Company, as provided in Section 12 of the Mortgage, but the Company
hereby waives any right to make a charge in addition thereto for any exchange or transfer of bonds
of said Series.
(D) The bonds of the Eighty-seventh Series shall be issued in registered form without coupons
and shall be issued initially in the form of one or more global bonds (hereinafter sometimes each
such global bond referred to as an “Eighty-seventh Series Global Bond”) to or on behalf of The
Depository Trust Company (hereinafter sometimes referred to as “DTC”), as depositary therefor, and
registered in the name of such depositary or its nominee. Any bonds of the Eighty-seventh Series to
be issued or transferred to, or to be held by or on behalf of DTC as such depositary or such
nominee (or any successor of such depositary or nominee) for such purpose shall bear the depositary
legends as required or otherwise agreed to by the Corporate Trustee and the Company, and in the
case of a successor depositary, such legend or legends as such depositary and/or the Company shall
require and to which each shall agree, in each case such agreement to be confirmed in writing to
the Corporate Trustee. Notwithstanding any other provision in this Seventy-sixth Supplemental
Indenture, payment of interest on the bonds of the Eighty-seventh Series may be made at the option
of the Company by check mailed to the registered holders thereof at their registered address, and,
that with respect to an Eighty-seventh Series Global Bond, the Company may make payments of
principal of, the Make-Whole Redemption Price, if applicable, and interest on such Eighty-seventh
Series Global Bond pursuant to and in accordance with such arrangements as are agreed upon by the
Company and the depositary for such Eighty-seventh Series Global Bond.
Except as otherwise provided by this Seventy-sixth Supplemental Indenture, an Eighty-seventh
Series Global Bond may be transferred, in whole but not in part and in the manner provided in the
Mortgage, only to a nominee of the depositary for such Eighty-seventh Series Global Bond, or to the
depositary, or to a successor depositary for such Eighty-seventh Series Global Bond selected or
approved by the Company, or to a nominee of such successor depositary.
If at any time the depositary for an Eighty-seventh Series Global Bond notifies the Company
that it is unwilling or unable to continue as the depositary for such Eighty-seventh Series Global
Bond or if at any time the depositary for an Eighty-seventh Series Global Bond shall no longer be
eligible or in good standing under any applicable statute or regulation, the Company shall appoint
a successor depositary with respect to such Eighty-seventh Series Global Bond. If a
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successor depositary for such Eighty-seventh Series Global Bond is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company will execute, and the Corporate Trustee, upon receipt of a Company
request for the authentication and delivery of bonds of the Eighty-seventh Series in the form of
definitive certificates in exchange for such Eighty-seventh Series Global Bond, will authenticate
and deliver, without service charge, bonds of the Eighty-seventh Series in the form of definitive
certificates of like tenor and terms in an aggregate principal amount equal to the principal amount
of the Eighty-seventh Series Global Bond in exchange for such Eighty-seventh Series Global Bond.
Such bonds of the Eighty-seventh Series will be issued to and registered in the name of such person
or persons as are specified by the depositary.
The Company may at any time and in its sole discretion determine that any bonds of the
Eighty-seventh Series issued or issuable in the form of one or more Eighty-seventh Series Global
Bonds shall no longer be represented by such Eighty-seventh Series Global Bond or Bonds. In any
such event the Company will execute, and the Corporate Trustee, upon receipt of a Company order for
the authentication and delivery of bonds of the Eighty-seventh Series in the form of definitive
certificates in exchange in whole or in part for such Eighty-seventh Series Global Bond or Bonds,
will authenticate and deliver, without service charge, to each person specified by the depositary,
bonds of the Eighty-seventh Series in the form of definitive certificates of like tenor and terms
in an aggregate principal amount equal to the principal amount of such Eighty-seventh Series
Global Bond or the aggregate principal amount of such Eighty-seventh Series Global Bonds in
exchange for such Eighty-seventh Series Global Bond or Bonds.
If the Company so elects in a Treasurer’s Certificate, the depositary may surrender bonds of
the Eighty-seventh Series issued in the form of an Eighty-seventh Series Global Bond in exchange in
whole or in part for bonds of the Eighty-seventh Series in the form of definitive certificates of
like tenor and terms on such terms as are acceptable to the Company and such depositary. Thereupon
the Company shall execute, and the Corporate Trustee shall authenticate and deliver, without
service charge, (i) to each person specified by such depositary a new bond or bonds of the
Eighty-seventh Series of like tenor and terms and any authorized denomination as requested by such
person in aggregate principal amount equal to and in exchange for such person’s beneficial interest
in the Eighty-seventh Series Global Bond; and (ii) to such depositary a new Eighty-seventh Series
Global Bond of like tenor and terms and in an authorized denomination equal to the difference, if
any, between the principal amount of the surrendered Eighty-seventh Series Global Bond and the
aggregate principal amount of bonds of the Eighty-seventh Series delivered to holders thereof.
In any exchange provided for in any of the preceding three paragraphs, the Company shall
execute and the Corporate Trustee shall authenticate and deliver bonds of the Eighty-seventh Series
in the form of definitive certificates in authorized denominations. Upon the exchange of the entire
principal amount of an Eighty-seventh Series Global Bond for bonds of the Eighty-seventh Series in
the form of definitive certificates, such Eighty-seventh Series Global Bond shall be canceled by
the Corporate Trustee. Except as provided in the immediately preceding paragraph, bonds of the
Eighty-seventh Series issued in exchange for an Eighty-seventh Series Global Bond shall be
registered in such names and in such authorized denominations as the depositary for such
Eighty-seventh Series Global Bond, acting pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Corporate Trustee. Provided that the Company and the
Corporate Trustee have so agreed, the Corporate Trustee shall deliver such bonds of the
Eighty-seventh Series to the persons in whose names the bonds of the Eighty-seventh Series are so
to be registered.
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Any endorsement of an Eighty-seventh Series Global Bond to reflect the principal amount
thereof, or any increase or decrease in such principal amount, shall be made in such manner and by
such person or persons as shall be specified in or pursuant to any applicable letter of
representations or other arrangement entered into with, or procedures of, the depositary with
respect to such Eighty-seventh Series Global Bond or in a Company request. Subject to the terms of
the Mortgage, the Corporate Trustee shall deliver and redeliver any such Eighty-seventh Series
Global Bond in the manner and upon instructions given by the person or persons specified in or
pursuant to any applicable letter of representations or other arrangement entered into with, or
procedures of, the depositary with respect to such Eighty-seventh Series Global Bond or in any
applicable Company request. If a Company request is so delivered, any instructions by the Company
with respect to such Eighty-seventh Series Global Bond contained therein shall be in writing but
need not be accompanied by or contained in a Treasurer’s Certificate and need not be accompanied by
an opinion of counsel.
The depositary or, if there be one, its nominee, shall be the holder of an Eighty-seventh
Series Global Bond for all purposes under the Mortgage and the bonds of the Eighty-seventh Series
and beneficial owners with respect to such Eighty-seventh Series Global Bond shall hold their
interests pursuant to applicable procedures of such depositary. The Company, the Corporate
Trustee, any bond registrar, any paying agent and any other agent of the Company or the Corporate
Trustee shall be entitled to deal with such depositary for all purposes of the Mortgage relating to
such Eighty-seventh Series Global Bond (including the payment of principal, the Make-Whole
Redemption Price, if applicable, and interest and the giving of instructions or directions by or to
the beneficial owners of such Eighty-seventh Series Global Bond as the sole holder of such
Eighty-seventh Series Global Bond and shall have no obligations to the beneficial owners thereof
(including any direct or indirect participants in such depositary)). None of the Company, the
Corporate Trustee, any paying agent, any bond registrar or any other agent of the Company or the
Corporate Trustee shall have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests of a beneficial owner in or
pursuant to any applicable letter of representations or other arrangement or transaction entered
into with, or procedures of, the depositary with respect to such Eighty-seventh Series Global Bond
or for maintaining, supervising or reviewing any records relating to such beneficial ownership
interests, or for any acts or omissions of a depositary.
ARTICLE II
RESERVATION OF AMENDMENTS TO CERTAIN PROVISIONS OF THE MORTGAGE
SECTION 2. The Company reserves the right, without any consent or other action by holders of
bonds of the Eighty-seventh Series or of any subsequently created series, to amend the Mortgage, as
supplemented, as follows:
To amend, so as to restate in its entirety, Section 126 of the Mortgage as follows:
SECTION 126. The date of maturity of this Indenture shall be May
1, 2140, and all bonds to be issued hereunder shall mature not later
than such date, provided, however, that nothing in this Section shall
affect or limit to any extent the right of the Company to issue any
bonds secured hereby having a maturity date or dates earlier than May
1, 2140 or affect or limit to any extent any of the rights or remedies
of the Trustees or bondholders to enforce the provisions of this
Indenture or of the bonds by foreclosure of this Indenture or
otherwise, at any time or times prior to May 1, 2140.
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SECTION 3. The Company reserved in Section 4 of the Seventy-second Supplemental Indenture the
right, without any consent or other action by holders of bonds of the Eighty-first Series, the
Eighty-second Series or any subsequently created series (which includes the Eighty-seventh Series),
to amend the Mortgage, as supplemented, so as to add the words “ten-sevenths of” at the beginning
of subdivision (b) of clause (B) of Section 4 of the Mortgage.
SECTION 4. The Company reserved in Section 5 of the Seventy-second Supplemental Indenture the
right, without any consent or other action by holders of bonds of the Eighty-first Series, the
Eighty-second Series or any subsequently created series (which includes the Eighty-seventh Series),
to amend the Mortgage, as supplemented, so as to replace the phrase “within the fifteen (15)
calendar months” on the second and third lines of clause (A) of Section 7 of the Mortgage with the
phrase “within the eighteen (18) calendar months”.
SECTION 5. The Company reserved in Section 6 of the Seventy-second Supplemental Indenture the
right, without any consent or other action by holders of bonds of the Eighty-first Series, the
Eighty-second Series or any subsequently created series (which includes the Eighty-seventh Series),
to amend the Mortgage, as supplemented, so as to delete the word “and” at the end of subdivision
(3) of the excepted property clause on page 121 of the Mortgage and to add a subdivision (5) to
such clause immediately after the phrase “ordinary course of its business;” to read “and (5) any
property which does not constitute Property Additions, Funded Property or Funded Cash, as
hereinafter defined;”.
SECTION 6. The Company reserved in Section 7 of the Seventy-second Supplemental Indenture the
right, without any consent or other action by holders of bonds of the Eighty-first Series, the
Eighty-second Series or any subsequently created series (which includes the Eighty-seventh Series),
to amend the Mortgage, as supplemented, as follows:
To amend subsection 3(a) of Section 59 of the Mortgage to read in its entirety as
follows:
“(a) a description in reasonable detail of the property to be
released;”
To amend subsection 3(b) of Section 59 of the Mortgage to read in its
entirety as follows:
“(b) (i) the Fair Value and (ii) the Cost (or as to Property
Additions constituting Funded Property of which the Fair Value to the
Company at the time the same became Funded Property was less than the
Cost as determined pursuant to Section 4 hereof, then such Fair Value
in lieu of Cost), in the opinion of the signers, of the property to be
released; and the Cost (or as to Property Additions constituting Funded
Property of which the Fair Value to the Company at the time the same
became Funded Property was less than the Cost as determined pursuant to
Section 4 hereof, then such Fair Value in lieu of Cost), in the opinion
of the signers, of any portion thereof that is Funded Property;”
To amend subsection (4) of Section 59 of the Mortgage by replacing the first six
lines thereof with the following:
16
“(4) an amount in cash, to be held by the Corporate Trustee as
part of the Mortgaged and Pledged Property, equivalent to the amount,
if any, by which the Cost (or as to Property Additions constituting
Funded Property of which the Fair Value to the Company at the time the
same became Funded Property was less than the Cost as determined
pursuant to Section 4 hereof, then such Fair Value in lieu of Cost) of
the property to be released, as specified in the Engineer’s Certificate
provided for in subdivision (3) above, exceeds the aggregate of the
following items:”
SECTION 7. The Company reserved in Section 8 of the Seventy-second Supplemental Indenture the
right, without any consent or other action by holders of bonds of the Eighty-first Series, the
Eighty-second Series or any subsequently created series (which includes the Eighty-seventh Series),
to amend the Mortgage, as supplemented, so as to add the words “an amount equal to ten-sevenths of”
at the beginning of the first sentence of subsection (4)(c) of Section 59 of the Mortgage.
SECTION 8. The Company reserved in Section 9 of the Seventy-second Supplemental Indenture the
right, without any consent or other action by holders of bonds of the Eighty-first Series, the
Eighty-second Series or any subsequently created series (which includes the Eighty-seventh Series),
to amend the Mortgage, as supplemented, as follows:
To amend Section 60 of the Mortgage by inserting “(I)” before the word “Unless” in
the first line thereof, and by adding the following subsection (II) at the end of Section
60:
“(II) Unless the Company is in default in the payment of the interest on
any bonds then Outstanding hereunder or one or more of the Defaults defined in
Section 65 hereof shall have occurred and be continuing, the Company may obtain
the release of any of the Mortgaged and Pledged Property that is not Funded
Property, except cash then held by the Corporate Trustee (provided, however,
that Prior Lien Bonds deposited with the Corporate Trustee shall not be released
or surrendered except as provided in Article IX hereof and obligations secured
by purchase money mortgage deposited with the Corporate Trustee shall not be
released except as provided in Section 61 hereof), and the Corporate Trustee
shall release all its right, title and interest in and to the same from the Lien
hereof upon application of the Company and receipt by the Corporate Trustee of
the following (in lieu of complying with the requirements of Section 59 hereof):
(1) a Treasurer’s Certificate describing in reasonable detail the property
to be released and requesting such release, and stating:
(a) that the Company is not in default in the payment of interest
on any bonds then Outstanding hereunder and that none of the Defaults
defined in Section 65 hereof have occurred and are continuing;
(b) that the property to be released is not Funded Property; and
(c) that (except in any case where a governmental body or agency
has exercised a right to order the Company to divest itself of
17
such property) such release is in the opinion of the signers
desirable in the conduct of the business of the Company;
(2) an Engineer’s Certificate, made and dated not more than ninety (90)
days prior to the date of such application, stating:
(a) a description of the property to be released;
(b) the Fair Value, in the opinion of the signers, of the property
(or securities) to be released;
(c) that in the opinion of the signers such release will not
impair the security under this Indenture in contravention of the
provisions hereof; and
(d) that the Company has Property Additions constituting property
that is not Funded Property (not including any Property Additions to be
released) of a Cost or Fair Value to the Company (whichever is less) of
not less than one dollar ($1) (after making any deductions and any
additions pursuant to the provisions of Section 4 hereof) after
deducting the Cost of the property (or securities) to be released;
(3) an Opinion of Counsel stating the signer’s opinion to the effect that,
on the delivery to the Corporate Trustee of the certificates and other
documents, if any, specified in such Opinion of Counsel, the conditions required
by this Indenture precedent to the action requested by the Company to be taken
by the Corporate Trustee have been complied with; and
(4) in case the Corporate Trustee is requested to release any franchise,
an Opinion of Counsel complying with the requirements of Section 121 hereof and
stating that in the opinion of the signer thereof such release will not impair
to any material extent the right of the Company to operate any of its remaining
properties.”
ARTICLE III
DIVIDEND COVENANT
SECTION 9. The Company covenants and agrees that, so long as any of the bonds of the
Eighty-seventh Series remain Outstanding, the Company will not declare or pay any dividends upon
its common stock (other than dividends in common stock) or make any other distributions on its
common stock or purchase or otherwise retire any shares of its common stock, unless immediately
after such declaration, payment, purchase, retirement or distribution (hereinafter in this Section
referred to as “Restricted Payments”), and giving effect thereto, the amount arrived at by adding
(a) the aggregate amount of all such Restricted Payments (other than the dividend of
fifty cents ($.50) per share declared on December 8, 1948 and paid on February 1, 1949 to
holders of Common Stock) made by the Company during the period from December 31, 1948, to
and including the effective date of the Restricted Payment in respect of which the
determination is being made, plus
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(b) an amount equal to the aggregate amount of cumulative dividends for such period
(whether or not paid) on all preferred stock of the Company from time to time outstanding
during such period, at the rate or rates borne by such preferred stock, plus
(c) an amount equal to the amount, if any, by which fifteen per centum (15%) of the
Gross Operating Revenues of the Company for such period shall exceed the aggregate amount
during such period expended and/or accrued on its books for maintenance and/or appropriated
on its books out of income for property retirement, in each case in respect of the
Mortgaged and Pledged Property and/or automotive equipment used primarily in the electric
utility business of the Company (but excluding any provisions for amortization of any
amounts included in utility plant acquisition adjustment accounts or utility plant
adjustment accounts),
will not exceed the amount of the aggregate net income of the Company for said period available for
dividends (computed and ascertained in accordance with sound accounting practice, on a cumulative
basis, including the making of proper deductions for any deficits occurring during any part of such
period), plus $3,000,000.
The Company further covenants and agrees that not later than May 1 of each year beginning with
the year 2009 it will furnish to the Corporate Trustee a Treasurer’s Certificate stating whether or
not the Company has fully observed the restrictions imposed upon it by the covenant contained in
this Section 9.
ARTICLE IV
CERTAIN PROVISIONS WITH RESPECT TO FUTURE ADVANCES
SECTION 10. Upon the filing of this Seventy-sixth Supplemental Indenture for record in all
counties in which the Mortgaged and Pledged Property is located, and until a further indenture or
indentures supplemental to the Mortgage shall be executed and delivered by the Company to the
Trustees pursuant to authorization by the Board of Directors of the Company and filed for record in
all counties in which the Mortgaged and Pledged Property is located further increasing or
decreasing the amount of future advances which may be secured by the Mortgage, as supplemented, the
Mortgage, as supplemented, may secure future advances and other indebtedness and sums not to exceed
in the aggregate $2,500,000,000, in addition to $3,593,725,000 in aggregate principal amount of
bonds to be Outstanding at the time of such filing, and all such advances and other indebtedness
and sums shall be secured by the Mortgage, as supplemented, equally, to the same extent and with
the same priority, as the amount originally advanced on the security of the Mortgage, namely,
$46,000,000, and such advances and other indebtedness and sums may be made or become owing and may
be repaid and again made or become owing and the amount so stated shall be considered only as the
total amount of such advances and other indebtedness and sums as may be outstanding at one time.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 11. Subject to any amendments provided for in this Seventy-sixth Supplemental
Indenture, the terms defined in the Mortgage, as heretofore supplemented, shall, for all purposes
of this Seventy-sixth Supplemental Indenture, have the meanings specified in the Mortgage, as
heretofore supplemented.
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SECTION 12. The Trustees hereby accept the trusts herein declared, provided, created or
supplemented and agree to perform the same upon the terms and conditions herein and in the
Mortgage, as heretofore supplemented, set forth and upon the following terms and conditions:
The Trustees shall not be responsible in any manner whatsoever for or in respect
of the validity or sufficiency of this Seventy-sixth Supplemental Indenture or for or
in respect of the recitals contained herein, all of which recitals are made by the
Company solely. In general each and every term and condition contained in Article XVI
of the Mortgage shall apply to and form part of this Seventy-sixth Supplemental
Indenture with the same force and effect as if the same were herein set forth in full
with such omissions, variations and insertions, if any, as may be appropriate to make
the same conform to the provisions of this Seventy-sixth Supplemental Indenture.
SECTION 13. Subject to the provisions of Article XV and Article XVI of the Mortgage, whenever
in this Seventy-sixth Supplemental Indenture either of the parties hereto is named or referred to,
this shall be deemed to include the successors or assigns of such party, and all the covenants and
agreements in this Seventy-sixth Supplemental Indenture contained by or on behalf of the Company or
by or on behalf of the Trustees shall bind and inure to the benefit of the respective successors
and assigns of such parties whether so expressed or not.
SECTION 14. Nothing in this Seventy-sixth Supplemental Indenture, expressed or implied, is
intended, or shall be construed, to confer upon, or to give to, any person, firm or corporation,
other than the parties hereto and the holders of the Outstanding bonds and coupons, any right,
remedy or claim under or by reason of this Seventy-sixth Supplemental Indenture or any covenant,
condition, stipulation, promise or agreement hereof, and all the covenants, conditions,
stipulations, promises and agreements in this Seventy-sixth Supplemental Indenture contained by or
on behalf of the Company shall be for the sole and exclusive benefit of the parties hereto, and of
the holders of the Outstanding bonds and coupons.
SECTION 15. This Seventy-sixth Supplemental Indenture shall be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
[
Signatures on the Following Pages
]
20
The laws of South Carolina provide that in any real estate foreclosure proceeding a defendant
against whom a personal judgment is taken or asked may within thirty days after the sale of the
mortgaged property apply to the court for an order of appraisal. The statutory appraisal value as
approved by the court would be substituted for the high bid and may decrease the amount of any
deficiency owing in connection with the transaction.
THE COMPANY HEREBY WAIVES AND
RELINQUISHES THE STATUTORY APPRAISAL RIGHTS, WHICH MEANS THE HIGH BID AT THE JUDICIAL FORECLOSURE
SALE WILL BE APPLIED TO THE DEBT REGARDLESS OF ANY APPRAISED VALUE OF THE MORTGAGED PROPERTY
.
IN WITNESS WHEREOF, Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. has
caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by
its President or one of its Vice Presidents or its Treasurer and its corporate seal to be attested
by its Secretary or one of its Assistant Secretaries, and The Bank of New York Mellon has caused
its corporate name to be hereunto affixed, and this instrument to be signed and sealed by one of
its Vice Presidents or Assistant Vice Presidents, and its corporate seal to be attested by one of
its Vice Presidents, Assistant Vice Presidents or Assistant Secretaries and Douglas J. MacInnes
(who is resigning as Individual Trustee effective at the close of business on January 14, 2009) has
hereunto set his hand and affixed his seal, and Ming Ryan (who is appointed as successor Individual
Trustee effective as of the close of business on January 14, 2009) has hereunto set her hand and
seal, all as of the day and year first above written.
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CAROLINA POWER & LIGHT COMPANY d/b/a
PROGRESS ENERGY CAROLINAS, INC.
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By:
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/s/ Thomas R. Sullivan
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Thomas R. Sullivan
Vice President and Treasurer
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Executed, sealed and delivered by
CAROLINA POWER & LIGHT COMPANY
d/b/a PROGRESS ENERGY CAROLINAS, INC.
by Thomas R. Sullivan,
one of its Vice Presidents, and
attested by Patricia Kornegay-Timmons,
one of its Assistant Secretaries, in the
presence of:
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ATTEST:
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/s/ Patricia Kornegay-Timmons
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Patricia Kornegay-Timmons
Assistant Secretary
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/s/
Kate A. Mercer
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Kate A. Mercer
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/s/
Patricia M. Rodenburg
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Patricia M. Rodenburg
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[Trustees’ Signature Page Follows]
21
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THE BANK OF NEW YORK MELLON,
as Trustee
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By:
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/s/ L. O’Brien
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L. O’Brien
Vice President
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Executed, sealed and delivered
by THE BANK OF NEW YORK
MELLON, as Trustee, by L. O’Brien,
one of its Vice Presidents,
and attested by Francine Kincaid,
one of its Vice Presidents, in the
presence of:
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ATTEST:
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/s/ Francine Kincaid
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Francine Kincaid
Vice President
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/s/
Geovanni Barris
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Geovanni Barris
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/s/
Josip Antolos
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Josip Antolos
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/s/ Douglas J. MacInnes
(L.S.)
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DOUGLAS J. M
ac
INNES
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Executed, sealed and delivered by DOUGLAS
J. M
ac
INNES in the presence of:
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/s/
Geovanni Barris
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Geovanni Barris
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/s/
Josip Antolos
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Josip Antolos
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/s/ Ming Ryan
(L.S.)
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MING RYAN
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Executed, sealed and delivered by MING
RYAN in the presence of:
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/s/
Geovanni Barris
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Geovanni Barris
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/s/
Josip Antolos
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Josip Antolos
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[Trustees’ Signature Page]
[Seventy-sixth Supplemental Indenture dated as of January 1, 2009
to the Carolina Power & Light Company Mortgage and Deed of Trust
dated as of May 1, 1940]
22
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STATE OF NORTH CAROLINA
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)
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)
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SS.:
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COUNTY OF WAKE
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)
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This 15th day of January, A.D. 2009, personally came before me, Denise P. deVivero, a Notary
Public,
Thomas R. Sullivan
, who, being by me duly sworn, acknowledged before me that he is
Vice President and Treasurer of CAROLINA POWER & LIGHT COMPANY d/b/a PROGRESS ENERGY CAROLINAS,
INC., and that the seal affixed to the foregoing instrument in writing is the corporate seal of
said company, and that said writing was signed and sealed by him in behalf of said corporation by
its authority duly given. And the said
Thomas R. Sullivan
acknowledged the said writing
to be the act and deed of said corporation.
On the 15th day of January, in the year of 2009, before me personally came
Thomas R.
Sullivan
, to me known, who, being by me duly sworn, did depose and say that he resides at 104
Agassi Court, Cary, North Carolina 27511; that he is Vice President and Treasurer of CAROLINA POWER
& LIGHT COMPANY d/b/a PROGRESS ENERGY CAROLINAS, INC., one of the corporations described in and
which executed the above instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of
Directors of said corporation, and that he signed his name thereto by like order.
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/s/ Denise P. deVivero
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Denise P. deVivero
Notary Public
, State of North Carolina
Wake County
My Commission Expires: July 30, 2010
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STATE OF NORTH CAROLINA
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)
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)
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SS.:
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COUNTY OF WAKE
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)
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This 15th day of January, A.D. 2009, personally came before me, Denise P. deVivero, a Notary
Public,
Patricia Kornegay-Timmons
, who, being by me duly sworn, acknowledged before me
that she is the Assistant Secretary of CAROLINA POWER & LIGHT COMPANY d/b/a PROGRESS ENERGY
CAROLINAS, INC., and that the seal affixed to the foregoing instrument in writing is the corporate
seal of said company, and that said writing was signed and attested by her on behalf of said
corporation by its authority duly given.
On the 15th day of January, in the year of 2009, before me personally came
Patricia
Kornegay-Timmons
, to me known, who, being by me duly sworn, did depose and say that she
resides at 9404 Gabe Court, Raleigh, North Carolina 27613; that she is the Assistant Secretary of
CAROLINA POWER & LIGHT COMPANY d/b/a PROGRESS ENERGY CAROLINAS, INC., one of the corporations
described in and which executed the above instrument; that she knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of
the Board of Directors of said corporation, and that she signed and attested her name thereto by
the authority of the Board of Directors of said corporation.
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/s/ Denise P. deVivero
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Denise P. deVivero
Notary Public
, State of North Carolina
Wake County
My Commission Expires: July 30, 2010
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STATE OF NEW YORK
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)
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)
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SS.:
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COUNTY OF NEW YORK
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)
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On January 12, 2009 before me, the undersigned, personally appeared L. O’BRIEN, personally
known to me or proved to me on the basis of satisfactory evidence to be the individual whose name
is subscribed to the within instrument and acknowledged to me that he signed the same in his
capacity as a Vice President of THE BANK OF NEW YORK MELLON, a New York banking corporation, as
Trustee, and that by his signature on the instrument, the individual, or the person upon behalf of
which the individual acted, signed the instrument.
I, Carlos R. Luciano, a Notary Public of the State of New York, certify that L. O’BRIEN
personally came before me this day and acknowledged that he is a Vice President of THE BANK OF NEW
YORK MELLON, a New York banking corporation, as Trustee, and that he, as Vice President, being
authorized to do so, signed the foregoing on behalf of the corporation.
Witness my hand and official seal, this the 12th day of January 2009.
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/s/ Carlos R. Luciano
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Carlos R. Luciano
Notary Public, State of New York
No. 41-4765897
Qualified in Queens County
Commission Expires April 30, 2010
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STATE OF NEW YORK
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)
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)
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SS.:
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COUNTY OF NEW YORK
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)
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On January 12, 2009 before me, the undersigned, personally appeared FRANCINE KINCAID,
personally known to me or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that she signed and
attested the same in her capacity as a Vice President of THE BANK OF NEW YORK MELLON, a New York
banking corporation, as Trustee, and that by her signature on the instrument, the individual, or
the person upon behalf of which the individual acted, signed and attested the instrument.
I, Carlos R. Luciano, a Notary Public of the State of New York, certify that FRANCINE KINCAID
personally came before me this day and acknowledged that she is a Vice President of THE BANK OF NEW
YORK MELLON, a New York banking corporation, as Trustee, and that she, as Vice President, being
authorized to do so, signed and attested the foregoing on behalf of the corporation.
Witness my hand and official seal, this the 12th day of January, 2009.
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/s/ Carlos R. Luciano
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Carlos R. Luciano
Notary Public, State of New York
No. 41-4765897
Qualified in Queens County
Commission Expires April 30, 2010
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24
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STATE OF NEW YORK
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)
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)
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SS:
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COUNTY OF NEW YORK
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)
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On January 12, 2009 before me, the undersigned, personally appeared DOUGLAS J.
M
ac
INNES, personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity as resigning Individual Trustee, and that by his signature on the
instrument, the individual, or the person upon behalf of which the individual acted, executed the
instrument.
I, Carlos R. Luciano, a Notary Public of the State of New York, do hereby certify that DOUGLAS
J. M
ac
INNES, as resigning Individual Trustee, personally appeared before me this day and
acknowledged the due execution of the foregoing instrument.
Witness my hand and official seal, this the 12th day of January, 2009.
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/s/ Carlos R. Luciano
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Carlos R. Luciano
Notary Public, State of New York
No. 41-4765897
Qualified in Queens County
Commission Expires April 30, 2010
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STATE OF NEW YORK
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)
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)
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SS:
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COUNTY OF NEW YORK
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)
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On January 12, 2009 before me, the undersigned, personally appeared MING RYAN, personally
known to me or proved to me on the basis of satisfactory evidence to be the individual whose name
is subscribed to the within instrument and acknowledged to me that she executed the same in her
capacity as successor Individual Trustee, and that by her signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed the instrument.
I, Carlos R. Luciano, a Notary Public of the State of New York, do hereby certify that MING
RYAN, as successor Individual Trustee, personally appeared before me this day and acknowledged the
due execution of the foregoing instrument.
Witness my hand and official seal, this the 12th day of January, 2009.
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/s/ Carlos R. Luciano
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Carlos R. Luciano
Notary Public, State of New York
No. 41-4765897
Qualified in Queens County
Commission Expires April 30, 2010
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EXHIBIT A
NOTICE OF RESIGNATION OF INDIVIDUAL TRUSTEE
NOTICE IS HEREBY GIVEN that the undersigned
Douglas J. MacInnes
has resigned as
successor Individual Trustee under the Mortgage and Deed of Trust, dated as of May 1, 1940, as
amended, of Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. to Irving Trust
Company (now The Bank of New York Mellon) and Frederick G. Herbst (Richard H. West, J. A. Austin,
E. J. McCabe, G. White,
D. W.
May,
J. A. Vaughan, Joseph J. Arney, Wafaa Orfey, W. T. Cunningham,
and Douglas J. MacInnes, successors), as Trustees, such resignation having taken effect at the
close of business on January 14, 2009.
Dated: January 15, 2009
Douglas
J. MacInnes
NOTICE OF APPOINTMENT OF SUCCESSOR
INDIVIDUAL TRUSTEE
NOTICE IS HEREBY GIVEN that the undersigned Carolina Power & Light Company d/b/a Progress
Energy Carolinas, Inc. has received notice of and accepted the foregoing resignation of Douglas J.
MacInnes as Individual Trustee under its said Mortgage and Deed of Trust, dated as of May 1, 1940,
as amended, and that, as provided in said Mortgage and Deed of Trust, the undersigned has appointed
Ming Ryan
as successor Individual Trustee thereunder, effective at the close of business
on January 14, 2009.
Dated: January 15, 2009
Carolina Power & Light Company
d/b/a
Progress Energy Carolinas, Inc.