1
$150,000,000
PIEDMONT NATURAL GAS COMPANY, INC.
MEDIUM-TERM NOTES, SERIES B
AGENCY AGREEMENT
________________, 1995
[Name and
Address of Agents]
Dear Sirs:
1. INTRODUCTION. Piedmont Natural Gas Company, Inc., a
North Carolina corporation (the "Issuer"), confirms its agreement with each of
you (individually, an "Agent" and collectively, the "Agents") with respect to
the issue and sale from time to time by the Issuer of up to $150,000,000
aggregate principal amount of its Medium-Term Notes, Series B, Due Not Less
Than Nine Months from Date of Issue registered under the registration
statements referred to in Section 2(a) (any such Medium-Term Notes, being
hereinafter referred to as the "Securities", which expression shall, if the
context so admits, include any permanent global Security). Securities may be
sold pursuant to Section 3 of this Agreement or as contemplated by Section 11
of this Agreement in an aggregate amount not to exceed the amount of Registered
Securities (as defined in Section 2(a) hereof) registered pursuant to such
registration statements reduced by the aggregate amount of any other Registered
Securities sold otherwise than pursuant to Sections 3 and 11 of this Agreement.
The Securities will be issued under the Indenture, dated
2
as of April 1, 1993, between Piedmont Natural Gas Company, Inc., a New York
corporation (the "Predecessor Company") and Citibank, N.A., as trustee (the
"Trustee"), as amended by the First Supplemental Indenture, dated as of
February 25, 1994, among the Issuer, the Predecessor Company and the Trustee
(collectively, the "Indenture").
The Securities shall have the terms described in the
Prospectus referred to in Section 2(a) as it may be amended or supplemented
from time to time, including any supplement to the Prospectus that sets forth
only the terms of a particular issue of the Securities (a "Pricing
Supplement"). Securities will be issued, and the terms thereof established,
from time to time by the Issuer in accordance with the Indenture and the
Procedures (as defined in Section 3(d) hereof).
2. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The
Issuer represents and warrants to, and agrees with, each Agent as follows:
(a) The Issuer meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations ("Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") and has filed with the
Commission two registration statements on such form (Nos. 33-60108 and
33-____ ), including a prospectus, relating to debt securities of the
Issuer, including the Securities (the "Registered Securities"), which
have become effective under the Act. Such registration statements, as
amended as of the Closing Date (as defined in Section 3(e) hereof),
are hereinafter referred to as the "Registration Statements", and the
prospectus included in such Registration Statements, as supplemented
as of the Closing Date, including all material incorporated by
reference therein, is hereinafter referred to as the "Prospectus".
Any reference in this Agreement to amending or supplementing the
Prospectus shall be deemed to include the filing of materials
incorporated by reference in the Prospectus after the Closing Date and
any reference in this Agreement to any amendment or supplement to the
Prospectus shall be deemed to include any such materials incorporated
by reference in the Prospectus after the Closing Date. The
Registration Statements, as may be amended or supplemented, meet the
requirements set forth in Rule 415(a)(1)(x) and (a)(2) under the Act
and comply in all material respects with said Rule.
(b) On the effective date of the registration statements
relating to the Registered Securities, such registration statements
conformed in all respects to the requirements of the Act, the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act") and the
Rules and Regulations and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
and on the Closing Date, the Registration Statements and the
Prospectus, and at each of the times of acceptance and of delivery
referred to in Section 6(a) hereof and at each of the times of
amendment or supplementing referred to in Section 6(b) hereof
2
3
(the Closing Date and each such time being herein sometimes referred
to as a "Representation Date"), the Registration Statements and the
Prospectus as then amended or supplemented will conform in all
material respects to the requirements of the Act, the Trust Indenture
Act and the Rules and Regulations, and neither of such documents will
include any untrue statement of a material fact or will omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading, except that the foregoing does
not apply to statements in or omissions from any of such documents
based upon written information furnished to the Issuer by any Agent
specifically for use therein. The Indenture, including any amendment
and supplements thereto, pursuant to which the Securities will be
issued, will conform with the requirements of the Trust Indenture Act
and the rules and regulations of the Commission thereunder.
(c) The financial statements of the Issuer and its
subsidiaries set forth in the Registration Statements and Prospectus
fairly present the financial condition of the Issuer and its
subsidiaries as of the dates indicated and the results of operations
and cash flows for the periods therein specified in conformity with
generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated therein).
(d) The Issuer and each of its significant subsidiaries within
the meaning of Regulation S-X (individually a "Subsidiary" and
collectively the "Subsidiaries") has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction in which it is chartered or organized, with full
corporate power and authority to own its properties and conduct its
business as described in the Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification wherein it
owns or leases material properties or conducts material business; and
all of the outstanding shares of capital stock of each Subsidiary have
been duly authorized and validly issued and are fully paid and
non-assessable, and, except as otherwise set forth in the Prospectus,
all outstanding shares of capital stock of the Subsidiaries are owned
by the Issuer either directly or through wholly owned subsidiaries
free and clear of any perfected security interest and any other
security interest, claims, liens or encumbrances.
(e) The Indenture and the Securities have been duly
authorized, the Indenture has been duly qualified under the Trust
Indenture Act and executed and delivered and constitutes, and the
Securities, when duly executed, authenticated, issued and delivered as
contemplated herein and in the Indenture, will constitute, valid and
legally binding obligations of the Issuer enforceable in accordance
with its terms, subject, as to enforcement, to applicable bankruptcy,
insolvency, moratorium, fraudulent conveyance, reorganization,
arrangement or other similar
3
4
laws now or hereafter in effect affecting the rights of creditors
generally and general principles of equity and rules of law governing
and limiting the availability of specific performance, injunctive
relief and other equitable remedies (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(f) There is no pending or threatened action, suit or
proceeding before any court or governmental agency, authority or body
or any arbitrator involving the Issuer or any of its subsidiaries of a
character required to be disclosed in the Registration Statements
which is not disclosed in the Prospectus, there is no statute required
to be described in the Prospectus that is not described as required,
and there is no franchise, contract or other document of a character
required to be described in the Registration Statements or Prospectus,
or to be filed as an exhibit, which is not described or filed as
required, and the descriptions in the Registration Statements and
Prospectus of statutes, legal and governmental proceedings, contracts
and other documents are accurate and fairly present the information
required to be shown.
(g) The Issuer's authorized equity capitalization is as set
forth in the Prospectus (if contained therein).
(h) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement in connection with the
issuance and sale of the Securities by the Issuer, except such as have
been obtained and made under the Act and the Trust Indenture Act and
as may be required under state securities laws and such other
approvals as have been obtained.
(i) The execution, delivery and performance of the Indenture
or this Agreement, the issue and sale of the Securities, the
consummation of the other transactions herein contemplated or the
fulfillment of the terms hereof will not conflict with, result in a
breach of, or constitute a default under the Articles of Incorporation
or By-laws of the Issuer or the terms of any indenture or other
agreement or instrument to which the Issuer or any of its subsidiaries
is a party or bound, or any statute, rule, order or regulation
applicable to the Issuer or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Issuer or any of its
subsidiaries; and the Issuer has full power and authority to
authorize, issue and sell the Securities as contemplated by this
Agreement.
(j) This Agreement has been duly authorized, executed and
delivered by the Issuer.
4
5
(k) The Issuer and its subsidiaries have all necessary
franchises or permits for natural gas operations in all communities
now served, except as set forth in the Registration Statements and
except where the failure to be so authorized by franchise or permit
does not materially affect the right of the Issuer or such subsidiary
to the use of its properties or the conduct of its business; and the
franchises of the Issuer and its subsidiaries referred to in the
Registration Statements are good and valid except for and subject only
to such defects as may be set forth or referred to in the Registration
Statements, and such others as do not materially affect the right of
the Issuer or such subsidiary to the use of its properties or the
conduct of its business, and said franchises impose no materially
burdensome restrictions.
(l) The Issuer is not a "holding company" or a "subsidiary
company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
3. APPOINTMENT AS AGENTS; AGREEMENT OF AGENTS;
SOLICITATIONS AS AGENTS.
(a) Subject to the terms and conditions stated herein, the
Issuer hereby appoints each of the Agents as an agent of the Issuer
for the purpose of soliciting or receiving offers to purchase the
Securities from the Issuer by others. So long as this Agreement shall
remain in effect with respect to any Agent, the Issuer shall not,
without the consent of any such Agent, solicit or accept offers to
purchase Securities otherwise than through one of the Agents (except
as contemplated by Section 11 hereof); provided, however, that,
subject to all of the terms and conditions of this Agreement and any
agreement contemplated by Section 11 hereof, the foregoing shall not
be construed to prevent the Issuer from selling at any time any
Registered Securities in a firm commitment underwriting pursuant to an
underwriting agreement that does not provide for a continuous offering
of such Registered Securities.
(b) On the basis of the representations and warranties
contained herein, but subject to the terms and conditions herein set
forth, each Agent agrees, as agent of the Issuer, to use its
reasonable best efforts when requested by the Issuer to solicit offers
to purchase the Securities upon the terms and conditions set forth in
the Prospectus, as from time to time amended or supplemented.
Upon receipt of notice from the Issuer as contemplated by
Section 4(b) hereof, each Agent shall suspend its solicitation of
offers to purchase Securities until such time as the Issuer shall have
furnished it with an amendment or supplement to the Registration
Statements or the Prospectus, as the case may be, contemplated by
Section 4(b) and shall have advised such Agent that such solicitation
may be resumed.
5
6
The Issuer reserves the right, in its sole discretion, to
instruct the Agents to suspend solicitation of offers to purchase the
Securities commencing at any time for any period of time or
permanently. As soon as reasonably practicable, but in any event not
later than one Business Day after receipt of notice from the Issuer,
the Agents will forthwith suspend solicitation of offers to purchase
Securities from the Issuer until such time as the Issuer has advised
the Agents that such solicitation may be resumed. For the purpose of
the foregoing sentence, "Business Day" shall mean any day that is not
a Saturday or Sunday, and that in The City of New York is not a day on
which banking institutions generally are authorized or obligated by
law or executive order to close.
The Agents are authorized to solicit offers to purchase
Securities as described in the Prospectus, as amended or supplemented
and only in a minimum aggregate amount of $100,000. Each Agent shall
communicate to the Issuer, orally or in writing, each reasonable offer
to purchase Securities received by it as agent. The Issuer shall have
the sole right to accept offers to purchase the Securities and may
reject any such offer, in whole or in part. Each Agent shall have the
right, in its discretion reasonably exercised, without notice to the
Issuer, to reject any offer to purchase Securities received by it, in
whole or in part, and any such rejection shall not be deemed a breach
of its agreement contained herein.
No Security which the Issuer has agreed to sell pursuant to
this Agreement shall be deemed to have been purchased and paid for, or
sold by the Issuer, until such Security shall have been delivered to
the purchaser thereof against payment by such purchaser.
(c) At the time of delivery of, and payment for, any
Securities sold by the Issuer as a result of a solicitation made by,
or offer to purchase received by, an Agent, the Issuer agrees to pay
such Agent a commission in accordance with the schedule set forth in
Exhibit A hereto.
(d) Administrative procedures respecting the sale of
Securities (the "Procedures") shall be agreed upon from time to time
by the Agents and the Issuer. The initial Procedures, which are set
forth in Exhibit B hereto, shall remain in effect until changed by
agreement among the Issuer and the Agents promptly confirmed in
writing. Each Agent and the Issuer agree to perform the respective
duties and obligations specifically provided to be performed by each
of them herein and in the Procedures. The Issuer will furnish to the
Trustee a copy of the Procedures as from time to time in effect, and
will furnish the Trustee a copy of the Procedures promptly after any
change therein.
6
7
(e) The documents required to be delivered by Section 5 hereof
shall be delivered at the office of Mudge Rose Guthrie Alexander &
Ferdon, 180 Maiden Lane, New York, New York 10038, not later than
10:00 A.M., New York City time, on the date of this Agreement or at
such later time as may be mutually agreed by the Issuer and the
Agents, which in no event shall be later than the time at which the
Agents commence solicitation of purchases of Securities hereunder,
such time and date being herein called the "Closing Date".
(f) Each Agent agrees to keep and maintain confidential any
information provided by the Issuer pursuant to the second sentence of
Section 4(c) or Section 4(g) and known by such Agent to be non-public,
until such information is announced or otherwise disclosed to the
general public.
4. CERTAIN AGREEMENTS OF THE ISSUER. The Issuer agrees
with the Agents that it will furnish to Mudge Rose Guthrie Alexander & Ferdon,
counsel for the Agents, four (4) signed copies of the registration statements
relating to the Registered Securities, including all exhibits, in the form that
they became effective and of all amendments thereto and that, in connection
with each offering of Securities,
(a) The Issuer will advise each Agent promptly of any proposal
to amend or supplement the Registration Statements or the Prospectus
and will afford the Agents a reasonable opportunity to comment on any
such proposed amendment or supplement (other than any Pricing
Supplement that relates to Securities not purchased through or by such
Agent); and the Issuer will also advise each Agent of the filing and
effectiveness of any such amendment or supplement and of the
institution by the Commission of any stop order proceedings in respect
of the Registration Statements or of any part thereof and will use its
best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act and no suspension
of solicitation of offers to purchase Securities pursuant to Section
3(b) or this Section 4(b) shall be in effect (any such time and any
time when either any Agent shall own any Securities with the intention
of reselling them or the Issuer has accepted an offer to purchase
Securities but the related settlement has not occurred being referred
to herein as a "Marketing Time"), any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading, or if it is
necessary at any such time to amend the Prospectus to comply with the
Act, the Issuer will promptly notify each Agent to suspend
solicitation of offers to purchase the Securities; and if the Issuer
shall decide to amend or supplement the Registration Statements or the
Prospectus, it will promptly advise each Agent by telephone (with
confirmation in writing) and,
7
8
subject to the provisions of subsection (a) of this Section, will
promptly prepare and file with the Commission an amendment or
supplement which will correct such statement or omission or an
amendment which will effect such compliance and will supply any such
amended or supplemented Prospectus to such Agent in such quantities as
such Agent may reasonably request. Notwithstanding the foregoing, if,
at the time any such event occurs or it becomes necessary to amend the
Prospectus to comply with the Act, any Agent shall own any of the
Securities with the intention of reselling them, or the Issuer has
accepted an offer to purchase Securities but the related settlement
has not occurred, the Issuer, subject to the provisions of subsection
(a) of this Section, will promptly prepare and file with the
Commission an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance and will supply any such amended or supplemented Prospectus
to such Agent in such quantities as such Agent may reasonably request.
Neither the Agents' consent to, nor their delivery of, any such
amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 5.
(c) The Issuer will file promptly all documents required to be
filed with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). In addition, on or prior to the date on which the
Issuer makes any announcement to the general public concerning
earnings or concerning any other event which is required to be
described, or which the Issuer proposes to describe, in a document
filed pursuant to the Exchange Act, the Issuer will furnish the
information contained or to be contained in such announcement to each
Agent, confirmed in writing and, subject to the provisions of
subsections (a) and (b) of this Section, will cause the Prospectus to
be amended or supplemented to reflect the information contained in
such announcement. The Issuer also will furnish each Agent with
copies of all other press releases or announcements to the general
public. The Issuer will immediately notify each Agent of any
downgrading in the rating of the Securities or any other debt
securities of the Issuer or any proposal to downgrade the rating of
the Securities or any other debt securities of the Issuer by any
"nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act), or any public announcement
that any such organization has under surveillance or review its rating
of any debt securities of the Issuer (other than an announcement with
positive implications of a possible upgrading, and no implication of a
possible downgrading of such rating), as soon as the Issuer learns of
such downgrading, proposal to downgrade or public announcement.
(d) As soon as practicable, after the date of each acceptance
by the Issuer of an offer to purchase Securities hereunder, but in any
event not later than the Applicable Availability Date (as defined
below), the Issuer will make generally available to its
security-holders an earnings statement covering a period of at least
12 months beginning after the Applicable Effective Date (as defined
below) which
8
9
will satisfy the provisions of Section 11(a) of the Act and Rule 158
thereunder. For the purpose of the preceding sentence only,
"Applicable Effective Date" means the latest of (i) the effective date
of the registration statements relating to the Registered Securities,
(ii) the effective date of the most recent post-effective amendment to
such registration statements to become effective prior to the date of
such acceptance, and (iii) the date of filing of the Issuer's most
recent Annual Report on Form 10-K filed with the Commission prior to
the date of such acceptance, and "Applicable Availability Date" means
(A) the 45th day after the end of the fourth fiscal quarter following
the fiscal quarter that includes the Applicable Effective Date or (B)
if such fourth fiscal quarter is the last quarter of the Issuer's
fiscal year, the 90th day after the end of such fourth fiscal quarter.
(e) The Issuer will furnish to each Agent copies of the
Registration Statements, including all exhibits, the Prospectus and
all amendments and supplements to such documents (including any
Pricing Supplement), in each case as soon as available and in such
quantities as are reasonably requested.
(f) The Issuer will arrange for the qualification of the
Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as the Agents
designate and will continue such qualifications in effect so long as
required for the distribution; provided, however, that in connection
therewith the Issuer shall not be required to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified other than the State of New York or to file a
general consent to service of process in any jurisdiction.
(g) So long as any Securities are outstanding, the Issuer will
furnish to the Agents, (i) as soon as practicable after the end of
each fiscal year, a copy of its annual report to stockholders for such
year, (ii) as soon as available, a copy of each report or definitive
proxy statement of the Issuer filed with the Commission under the
Exchange Act or mailed to stockholders, and (iii) from time to time,
such other information concerning the Issuer as the Agents may
reasonably request; provided, however, that the Issuer need furnish
exhibits to the reports specified in clause (ii) only to the extent
requested by the Agents.
(h) The Issuer will pay all expenses incident to the
performance of its obligations under this Agreement or any agreement
contemplated by Section 11 hereof and will reimburse each Agent for
any expenses (including reasonable fees and disbursements of counsel)
incurred by it in connection with qualification of the Securities for
sale and determination of their eligibility for investment under the
laws of such jurisdictions as such Agent may designate and the
printing of memoranda relating thereto, for any fees charged by
investment rating agencies for the rating of the Securities, for any
filing fee of the National Association of Securities Dealers, Inc.
relating to the Securities, for expenses incurred by each
9
10
Agent in distributing the Prospectus and all supplements thereto
(including any Pricing Supplement), for costs incurred by each Agent
in advertising any offering of Securities and for each Agent's
reasonable expenses (including the reasonable fees and disbursements
of counsel to the Agents) incurred in connection with the
establishment or maintenance of the program contemplated by this
Agreement or otherwise in connection with the activities of the Agents
under this Agreement.
5. CONDITIONS OF OBLIGATIONS. The obligation of each
Agent, as agent of the Issuer, under this Agreement at any time to solicit
offers to purchase the Securities is subject to the accuracy, on the date
hereof, on each Representation Date and on the date of each such solicitation,
of the representations and warranties of the Issuer herein, to the accuracy, on
each such date, of the statements of the Issuer's officers made pursuant to the
provisions hereof, to the performance, on or prior to each such date, by the
Issuer of its obligations hereunder, and to each of the following additional
conditions precedent:
(a) The Prospectus, as amended or supplemented as of any
Representation Date or date of such solicitation, as the case may be,
shall have been filed with the Commission in accordance with the Rules
and Regulations and no stop order suspending the effectiveness of the
Registration Statements or of any part thereof shall have been issued
and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Issuer or any Agent, shall be contemplated by the
Commission.
(b) Neither the Registration Statements nor the Prospectus, as
amended or supplemented as of any Representation Date or date of such
solicitation, as the case may be, shall contain any untrue statement
of fact which, in the opinion of any Agent, is material or omit to
state a fact which, in the opinion of any Agent, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading, other than any statement contained in, or
other matter omitted from, the Registration Statements or Prospectus
in reliance upon, and in conformity with, information furnished in
writing by the Agents to the Issuer expressly for use in the
Registration Statements or Prospectus.
(c) There shall not have occurred (i) any change, or any
development involving a prospective change, in or affecting
particularly the business or properties of the Issuer and its
subsidiaries on a consolidated basis which, in the judgment of such
Agent, makes it impracticable or inadvisable to proceed with the
soliciting of offers to purchase the Securities as contemplated by the
Registration Statement or the Prospectus, (ii) any downgrading in the
rating of the Securities or any other debt securities of the Issuer by
any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act), or any public
announcement that any such organization has under surveillance or
review its rating of any debt securities of the Issuer (other than any
announcement with positive implications of a possible upgrading, and
no
10
11
implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the
Issuer on any exchange or in the over-the-counter market if, in the
judgment of such Agent, any such event or any condition giving rise
thereto or existing concurrently therewith makes it impracticable or
inadvisable to proceed with the solicitation of offers to purchase, or
sales of, Securities on the terms and in the manner contemplated by
the applicable Pricing Supplement and the Prospectus; (iv) any banking
moratorium declared by Federal or New York authorities; or (v) any
outbreak or escalation of hostilities, any declaration of war by
Congress or any other substantial national or international calamity
or emergency if, in the judgment of such Agent, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with solicitations of offers to
purchase, or sales of, Securities on the terms and in the manner
contemplated by the applicable Pricing Supplement and the Prospectus.
(d) At the Closing Date, the Agents shall have received an
opinion, dated the Closing Date, of Amos & Jeffries, L.L.P., counsel
for the Issuer, to the effect that:
(i) The Issuer and each of its Subsidiaries has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it
is chartered or organized, with full corporate power and
authority to own its properties and conduct its business as
described in the Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing
under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or
conducts material business; and all of the outstanding shares
of capital stock of each Subsidiary have been duly authorized
and validly issued and are fully paid and non-assessable, and,
except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the Subsidiaries are
owned by the Issuer either directly or through wholly owned
subsidiaries free and clear of any perfected security interest
and, to the best knowledge of such counsel, any other security
interest, claims, liens or encumbrances;
(ii) The Indenture has been duly authorized, executed
and delivered by the Issuer and has been duly qualified under
the Trust Indenture Act and constitutes a valid and legally
binding obligation of the Issuer enforceable in accordance
with its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization, arrangement or other similar laws now or
hereafter in effect affecting the rights of creditors
generally and general principles of
11
12
equity and rules of law governing and limiting the
availability of specific performance, injunctive relief and
other equitable remedies (regardless of whether such
enforceability is considered in a proceeding in equity or at
law);
(iii) Any series of Securities established on or
prior to the date of such opinion has been duly authorized and
established in conformity with the Indenture, and, when the
terms of a particular Security and of its issuance and sale
have been duly authorized and established by all necessary
corporate action in conformity with the Indenture, and such
Security has been duly completed, executed, authenticated and
issued in accordance with the Indenture and delivered against
payment as contemplated by this Agreement, such Security will
constitute a valid and legally binding obligation of the
Issuer enforceable in accordance with its terms, subject, as
to enforcement, to applicable bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization, arrangement
or other similar laws now or hereafter in effect affecting the
rights of creditors generally and general principles of equity
and rules of law governing and limiting the availability of
specific performance, injunctive relief and other equitable
remedies (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and the
Securities, when so issued and delivered and sold, will
conform, in all material respects, to the description thereof
contained in the Prospectus, it being understood that such
counsel may assume that at the time of the issuance, sale and
delivery of each Security (a) the authorization of such series
will not have been modified or rescinded and there will not
have occurred any change in law affecting the validity,
legally binding character or enforceability of such Security,
and (b) that neither of the issuance, sale and delivery of any
Security, nor any of the terms of such Security, nor
compliance by the Issuer with such terms, will violate any
then applicable law, any agreement or instrument then binding
upon the Issuer or any restriction then imposed by any court
or governmental body having jurisdiction over the Issuer;
(iv) To the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Issuer or any of its subsidiaries of
a character required to be disclosed in the Registration
Statements by Item 103 of Regulation S-K which is not
disclosed in the Prospectus, there is no statute required to
be described in the Prospectus that is not described as
required, and there is no franchise, contract or other
document of a character required to be described in the
Registration Statements or Prospectus, or to be filed as an
exhibit, which is not described or filed as required; and the
descriptions in the Registration
12
13
Statements and Prospectus of statutes, legal and governmental
proceedings, contracts and other documents are accurate and
fairly present the information required to be shown;
(v) The Registration Statements have become effective
under the Act, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) under the Act
specified in such opinion on the date specified therein, and,
to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statements or
of any part thereof has been issued and no proceedings for
that purpose have been instituted or are pending or
contemplated under the Act, and the registration statements
relating to the Registered Securities, as of its effective
date, the Registration Statements and the Prospectus, as of
the Closing Date, and any amendment or supplement thereto, as
of its date, complied as to form in all material respects with
the requirements of the Act, the Trust Indenture Act and the
Rules and Regulations; such counsel has no reason to believe
that the registration statements relating to the Registered
Securities, as of its effective date, or the Registration
Statements or the Prospectus, or any amendment or supplement,
as of their respective effective or issue dates and at the
Closing Date, contained any untrue statement of a material
fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; it being understood that such counsel need express
no opinion as to the financial statements or other financial
or statistical data contained in the Registration Statements
or the Prospectus;
(vi) The Issuer's authorized equity capitalization is
as set forth in the Prospectus (if contained therein);
(vii) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated by this
Agreement in connection with the issuance and sale of the
Securities by the Issuer, except such as have been obtained
and made under the Act and the Trust Indenture Act and as may
be required under state securities laws and such other
approvals (specified in such opinion) as have been obtained
(it being understood that such counsel may assume with respect
to each particular Security that the inclusion of any
alternative or additional terms in such Security that are not
currently specified in the forms of Securities examined by
such counsel would not require the Issuer to obtain any
regulatory consent, authorization or approval or make any
regulatory filing in order for the Issuer to issue, sell and
deliver such Security);
13
14
(viii) The execution, delivery and performance of the
Indenture or this Agreement, the issue and sale of the
Securities, the consummation of the other transactions herein
contemplated or the fulfillment of the terms hereof will not
conflict with, result in a breach of, or constitute a default
under the Articles of Incorporation or By-laws of the Issuer
or the terms of any indenture or other agreement or instrument
known to such counsel and to which the Issuer or any of its
subsidiaries is a party or bound, or any statute, rule, order
or regulation known to such counsel to be applicable to the
Issuer or any of its subsidiaries of any court, regulatory
body, administrative agency, governmental body or arbitrator
having jurisdiction over the Issuer or any of its
subsidiaries; and the Issuer has full power and authority to
authorize, issue and sell the Securities as contemplated by
this Agreement (it being understood that such counsel may
assume with respect to each particular Security that the
inclusion of any alternative or additional terms in such
Security that are not currently specified in the forms of
Securities examined by such counsel will not cause the
issuance, sale or delivery of such Security, the terms of such
Security, or the compliance by the Issuer with such terms, to
violate any of the court orders or laws specified in this
paragraph or to result in a default under or a breach of any
of the agreements specified in this paragraph);
(ix) This Agreement has been duly authorized,
executed and delivered by the Issuer;
(x) The Issuer and its subsidiaries have all
necessary franchises or permits for natural gas operations in
all communities now served, except as set forth in the
Registration Statements and except where the failure to be so
authorized by franchise or permit does not, in the opinion of
such counsel, materially affect the right of the Issuer or
such subsidiary to the use of its properties or the conduct of
its business; and the franchises of the Issuer and its
subsidiaries referred to in the Registration Statements are
good and valid except for and subject only to such defects as
may be set forth or referred to in the Registration
Statements, and such others as do not, in the opinion of such
counsel, materially affect the right of the Issuer or such
subsidiary to the use of its properties or the conduct of its
business, and said franchises impose no materially burdensome
restrictions; and
(xi) To the best knowledge of such counsel, the
Issuer is not a "holding company" or a "subsidiary company" of
a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
14
15
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of the State of South
Carolina and Tennessee, to the extent they deem proper and specified
in such opinion, upon the opinion of other counsel of good standing
whom they believe to be reliable and who are satisfactory to the
Agents and (B) as to matters of fact, to the extent they deem proper,
on certificates of responsible officers of the Issuer and public
officials. A copy of any such opinion of other counsel shall be
delivered to the Agents.
(e) At the Closing Date, the Agents shall have received a
certificate, dated the Closing Date, of the President or any Vice
President and a principal financial or accounting officer of the
Issuer in which such officers, shall state that, to the best of their
knowledge after reasonable investigation, (i) the representations and
warranties of the Issuer in this Agreement are true and correct, (ii)
the Issuer has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date, (iii) no stop order suspending the
effectiveness of the Registration Statements or of any part thereof
has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission, and (iv) subsequent
to the date of the most recent financial statements included or
incorporated by reference in the Prospectus, there has been no
material adverse change in the financial position or results of
operations of the Issuer and its subsidiaries, except as set forth in
or contemplated by the Prospectus.
(f) At the Closing Date, the Agents shall have received a
letter, dated the Closing Date, of Deloitte & Touche, confirming that
they are independent public accountants within the meaning of the Act
and the applicable published Rules and Regulations thereunder and
stating in effect that:
(i) In their opinion, the financial statements and
schedules examined by them and included in the Registration
Statements and Prospectus comply in form in all material
respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations;
(ii) On the basis of a reading of the latest
available interim financial statements of the Issuer; carrying
out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of
the minutes of the meetings of the stockholders, directors and
the audit committee of the Company and Subsidiaries; and
inquiries of officials of the Issuer who have responsibility
for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them
to believe that:
15
16
(A) the unaudited consolidated financial
statements, if any, included in the Prospectus do not
comply in form in all material respects with the
applicable accounting requirements of the Act and the
related published Rules and Regulations or any
material modification should be made to such
unaudited consolidated financial statements for them
to be in conformity with generally accepted
accounting principles;
(B) the unaudited capsule information, if
any, included in the Prospectus does not agree with
the amounts set forth in the unaudited consolidated
financial statements from which such capsule
information was derived or was not determined on a
basis substantially consistent with that of the
audited financial statements included in the
Prospectus;
(C) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than five days
prior to the Closing Date, there was any change in
the capital stock (except for the issuance of common
stock under the Company's Employee Stock Purchase
Plan and Dividend Reinvestment and Stock Purchase
Plan) or any increase in short-term indebtedness or
long-term debt of the Issuer and consolidated
subsidiaries or, at the date of the latest available
balance sheet read by such accountants, there was any
increase in consolidated net current liabilities or
any decrease in consolidated net assets, as compared
with amounts shown on the latest balance sheet
included in the Prospectus; or
(D) for the period from the date of the
latest income statement included in the Prospectus to
the closing date of the latest available income
statement read by such accountants there were any
decreases, as compared with the corresponding period
of the previous year, in consolidated operating
revenues, utility operating income, or net income, or
in the ratio of earnings to fixed charges;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter; and
16
17
(iii) They have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Prospectus (in each
case to the extent that such dollar amounts, percentages and
other financial information are derived from the general
accounting records of the Issuer and its subsidiaries subject
to the internal controls of the Issuer's accounting system or
are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a
reading of such general accounting records and other
procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in
such letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included
in the Prospectus for purposes of this subsection.
(g) The Agents shall have received from Mudge Rose Guthrie
Alexander & Ferdon, counsel for the Agents, such opinion or opinions,
dated the Closing Date, with respect to the incorporation of the
Issuer, the validity of the Securities, the Registration Statements,
the Prospectus, the conclusions of law set forth under the caption
"United States Taxation" in the Prospectus and other related matters
as they may require, and the Issuer shall have furnished to such
counsel such documents as they request for the purpose of enabling
them to pass upon such matters. In rendering such opinion, Mudge Rose
Guthrie Alexander & Ferdon may rely as to the matters relating to
state regulatory consents and approvals upon the opinion of Amos &
Jeffries, L.L.P., counsel for the Issuer.
(h) Subsequent to the execution of this Agreement (1) the
Issuer shall not have received notice that either Moody's Investors
Service Inc. ("Moody's"), Standard & Poor's Ratings Group, a division
of McGraw-Hill, Inc. ("S&P") or Duff and Phelps ("D&P") intends to
reduce, or is considering a reduction in, the ratings of any of the
Issuer's debt securities unless Moody's, S&P's or D&P's intention to
so reduce or consideration of such a reduction is then publicly known
and (2) the Issuer's debt securities shall be rated as investment
grade debt by Moody's, S&P and D&P.
The Issuer will furnish the Agents with such conformed copies
of such opinions, certificates, letters and documents as they may
reasonably request.
6. ADDITIONAL COVENANTS OF THE ISSUER. The Issuer
agrees that:
17
18
(a) Each acceptance by the Issuer of an offer for the purchase
of Securities shall be deemed to be an affirmation that its
representations and warranties contained in this Agreement are true
and correct at the time of such acceptance and a covenant that such
representations and warranties will be true and correct at the time of
delivery to the purchaser of the Securities as though made at and as
of each such time, it being understood that such representations and
warranties shall relate to the Registration Statements and the
Prospectus as amended or supplemented at each such time. Each such
acceptance by the Issuer of an offer for the purchase of Securities
shall be deemed to constitute an additional representation, warranty
and agreement by the Issuer that, as of the settlement date for the
sale of such Securities, after giving effect to the issuance of such
Securities, of any other Securities to be issued on or prior to such
settlement date and of any other Registered Securities to be issued
and sold by the Issuer on or prior to such settlement date, the
aggregate amount of Registered Securities (including any Securities)
which have been issued and sold by the Issuer will not exceed the
amount of Registered Securities registered pursuant to the
Registration Statements.
(b) Each time that the Registration Statements or the
Prospectus shall be amended or supplemented (other than by a Pricing
Supplement), the Issuer shall, (A) concurrently with such amendment or
supplement, if such amendment or supplement shall occur during a
Marketing Time, or (B) at or immediately prior to commencement of the
next Marketing Time if such amendment or supplement shall not occur
during a Marketing Time, furnish the Agents with a certificate, dated
the date of delivery thereof, of the President or any Vice President
and a principal financial or accounting officer of the Issuer, in form
satisfactory to the Agents, to the effect that the statements
contained in the certificate covering the matters set forth in Section
5(e) hereof which was last furnished to the Agents are true and
correct at the time of such amendment or supplement, as though made at
and as of such time or, in lieu of such certificate, a certificate of
the same tenor as the certificate referred to in Section
5(e); provided, however, that any certificate furnished under this
Section 6(b) shall relate to the Registration Statements and the
Prospectus as amended or supplemented at the time of delivery of such
certificate and, in the case of the matters set forth in clause (ii)
of Section 5(e), to the time of delivery of such certificate.
(c) At each Representation Date referred to in Section 6(b),
the Issuer shall (A) concurrently if such Representation Date shall
occur during a Marketing Time, or (B) at or immediately prior to
commencement of the next Marketing Time if such Representation Date
shall not occur during a Marketing Time, furnish the Agents with a
written opinion or opinions, dated the date of such Representation
Date, of counsel for the Issuer, in form satisfactory to the Agents,
to the effect set forth in Section 5(d) hereof; provided, however,
that to the extent appropriate such opinion or opinions may reconfirm
matters set forth in a prior
18
19
opinion delivered under Section 5(d) or this Section 6(c); provided
further, however, that any opinion or opinions furnished under this
Section 6(c) shall relate to the Registration Statements and the
Prospectus as amended or supplemented at the time of delivery of such
opinion or opinions and shall state that the Securities sold in the
relevant Applicable Period have been duly executed, authenticated,
issued and delivered and constitute valid and legally binding
obligations of the Issuer enforceable in accordance with their terms,
subject, as to enforcement, to applicable bankruptcy, insolvency,
moratorium, reorganization, arrangement or other similar laws now or
hereafter in effect affecting the rights of creditors generally and
general principles of equity and rules of law governing and limiting
the availability of specific performance, injunctive relief and other
equitable remedies (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and conform to the
description thereof contained in the Prospectus as amended or
supplemented at the relevant settlement date or dates for the sale of
such Securities. For the purpose of this Section 6(c), "Applicable
Period" shall mean with respect to any opinion delivered pursuant to
this Section 6(c) the period commencing on the date of the most recent
prior opinion delivered under Section 5(d) or this Section 6(c) and
ending on the date of delivery of the opinion to be delivered pursuant
to this Section 6(c).
(d) At each Representation Date referred to in Section 6(b) on
which the Registration Statements or the Prospectus shall be amended
or supplemented to include additional financial information, the
Issuer shall cause Deloitte & Touche (A) concurrently if such
Representation Date shall occur during a Marketing time, or (B) at or
immediately prior to commencement of the next Marketing Time if such
Representation Date shall not occur during a Marketing Time, to
furnish the Agents with a letter, addressed jointly to the Issuer and
the Agents and dated the date of delivery of such letter, in form and
substance satisfactory to the Agents, to the effect set forth in
Section 5(f) hereof; provided, however, that to the extent appropriate
such letter may reconfirm matters set forth in a prior letter
delivered by Deloitte & Touche pursuant to Section 5(f) or this
Section 6(d); provided further, however, that any letter furnished
under this Section 6(d) shall relate to the Registration Statements
and the Prospectus as amended or supplemented at the time of deliver
of such letter, with such changes as may be necessary to reflect
changes in the financial statements and other information derived
from the accounting records of the Issuer.
(e) On each settlement date for the sale of Securities, the
Issuer shall, if requested by the Agent that solicited or received the
offer to purchase any Securities being delivered on such settlement
date, furnish such Agent with a written opinion or opinions, dated the
date of delivery thereof, of counsel for the Issuer, in form
satisfactory to such Agent, to the effect set forth in clauses (i),
(ii) and (iii) of Section 5(d) hereof; provided, however, that any
opinion furnished
19
20
under this Section 6(e) shall relate to the Prospectus as amended or
supplemented at such settlement date and shall state that the
Securities being sold by the Issuer on such settlement date, when
delivered against payment therefor as contemplated by this Agreement,
will have been duly executed, authenticated, issued and delivered and
will constitute valid and legally binding obligations of the Issuer
enforceable in accordance with their terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, moratorium,
reorganization, arrangement or other similar laws now or hereafter in
effect affecting the rights of creditors generally and general
principles of equity and rules of law governing and limiting the
availability of specific performance, injunctive relief and other
equitable remedies (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and will conform to
the description thereof contained in the Prospectus as amended or
supplemented at such settlement date.
(f) The Issuer agrees that any obligation of a person who has
agreed to purchase Securities to make payment for and take delivery of
such Securities shall be subject to (i) the accuracy, on the related
settlement date fixed pursuant to the Procedures, of the Issuer's
representation and warranty deemed to be made to the Agents pursuant
to the last sentence of subsection (a) of this Section 6, and (ii) the
satisfaction, on such settlement date, of each of the conditions set
forth in Sections 5(a), (b) and (c), it being understood that under no
circumstance shall any Agent have any duty or obligation to exercise
the judgment permitted under Section 5(b) or (c) on behalf of any such
person.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Issuer will indemnify and hold harmless each Agent
against any losses, claims, damages or liabilities, joint or several,
to which such Agent may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the
Registration Statements, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, 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, and will
reimburse each Agent for any legal or other expenses reasonably
incurred by such Agent in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Issuer will not be liable to such
Agent in any case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any
of such documents in reliance upon and in conformity with written
information furnished to the Issuer by such Agent specifically for use
therein, unless such loss, claim, damage or liability arises out of
the offer or sale
20
21
of Securities occurring after such Agent has notified the Issuer in
writing that such information should no longer be used therein.
(b) Each Agent will indemnify and hold harmless the Issuer
against any losses, claims, damages or liabilities to which the Issuer
may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statements, the Prospectus or any amendment or supplement thereto, or
any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information
furnished to the Issuer by such Agent specifically for use therein,
and will reimburse any legal or other expenses reasonably incurred by
the Issuer in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are
incurred, unless such loss, claim, damage or liability arises out of
the offer or sale of Securities occurring after the Agent has notified
the Issuer in writing that such information should no longer be used
therein. The Issuer acknowledges that the statements set forth in the
last paragraph of the cover page and under the heading "Plan of
Distribution" in any preliminary Prospectus and the Prospectus
constitute the only information furnished in writing by or on behalf
of such Agent for inclusion in the documents referred to in the
forgoing indemnity, and you confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under subsection (a) or (b) above,
notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise
than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to appoint counsel satisfactory to such indemnified
party to represent the indemnified party in such action; provided,
however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such
indemnified
21
22
party of its election so to appoint counsel to defend such action and
approval by the indemnified party of such counsel, the indemnifying
party will not be liable to such indemnified party under this Section
7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i)
the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (plus any local
counsel), approved by the Agents in the case of paragraph (a) of this
Section 7, representing the indemnified parties under such paragraph
(a) who are parties to such action), (ii) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice
of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party; and except that, if clause (i) or
(iii) is applicable, such liability shall be only in respect of the
counsel referred to in such clause (i) or (iii).
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Issuer on the one hand and any Agent on the
other from the offering pursuant to this Agreement of the Securities
which are the subject of the action or (ii) if the allocation provided
by clause (i) above 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
Issuer on the one hand and any Agent on the other in connection with
the statements or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Issuer on the
one hand and any Agent on the other shall be deemed to be in the same
proportions as the total net proceeds from the offering pursuant to
this Agreement of the Securities which are the subject of the action
(before deducting expenses) received by the Issuer bear to the total
discounts and commissions received by such Agent from the offering of
such Securities pursuant to this Agreement. The relative fault shall
be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information
supplied by the Issuer or such Agent and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Issuer and each Agent agree
that it would not be just and equitable if contribution pursuant to
this subsection (d) were determined by pro rata allocation (even if
the Agents were
22
23
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid by an
indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any action or claim which is the subject of this subsection
(d). Notwithstanding the provisions of this subsection (d), no Agent
shall be required to contribute any amount in excess of the amount by
which the total price at which the Securities which are the subject of
the action and which were distributed to the public through it
pursuant to this Agreement or upon resale of Securities purchased by
it from the Issuer exceeds the amount of any damages which such Agent
has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of each
Agent in this subsection (d) to contribute are several, in the same
proportion which the amount of the Securities which are the subject of
the action and which were distributed to the public through such Agent
pursuant to this Agreement bears to the total amount of such
Securities distributed to the public through all of the Agents
pursuant to this Agreement, and not joint.
(e) The obligations of the Issuer under this Section 7 shall
be in addition to any liability which the Issuer may otherwise have
and shall extend, upon the same terms and conditions, to each person,
if any, who controls each Agent within the meaning of the Act; and the
obligations of each Agent under this Section 7 shall be in addition to
any liability which each Agent may otherwise have and shall extend,
upon the same terms and conditions, to each director of the Issuer
(including any person who, with his consent, is named in the
Registration Statements as about to become a director of the Issuer),
to each officer of the Issuer who has signed the Registration
Statements and to each person, if any, who controls the Issuer within
the meaning of the Act.
8. STATUS OF EACH AGENT. In soliciting offers to
purchase the Securities from the Issuer pursuant to this Agreement and in
assuming its other obligations hereunder (other than offers to purchase
pursuant to Section 11), each Agent is acting individually and not jointly and
is acting solely as agent for the Issuer and not as principal. Each Agent will
use its reasonable best efforts to assist the Issuer in obtaining performance
by each purchaser whose offer to purchase Securities from the Issuer has been
solicited by such Agent and accepted by the Issuer, but such Agent shall have
no liability to the Issuer in the event any such purchase is not consummated
for any reason. If the Issuer shall default on its obligations to deliver
Securities to a purchaser whose offer it has accepted, the Issuer (i) shall
hold the Agents harmless against any loss, claim or damage arising from or as a
result of such default by the Issuer, and (ii) in
23
24
particular, shall pay to the Agents any commission to which they would be
entitled in connection with such sale.
9. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS.
The respective indemnities, agreements, representations, warranties and other
statements of the Issuer or its officers and of the Agents set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Agent, the Issuer or any of their respective representatives, officers
or directors or any controlling person and will survive delivery of and payment
for the Securities. If this Agreement is terminated pursuant to Section 10 or
for any other reason, the Issuer shall remain responsible for the expenses to
be paid or reimbursed by it pursuant to Section 4(h) and the obligations of the
Issuer under Sections 4(d) and 4(g) and the respective obligations of the
Issuer and the Agents pursuant to Section 7 shall remain in effect. In
addition, if any such termination shall occur either (i) at a time when any
Agent shall own any of the Securities acquired pursuant to Section 11 hereof
and shall have informed the Issuer of its intention of reselling them or (ii)
after the Issuer has accepted an offer to purchase Securities and prior to the
related settlement, the obligations of the Issuer under the last sentence of
Section 4(b), under Sections 4(a), 4(c), 4(e) and 4(f) and, in the case of a
termination occurring as described in (ii) above, under Sections 3(c), 6(a),
6(e) and 6(f) and under the last sentence of Section 8, shall also remain in
effect.
10. TERMINATION. This Agreement may be terminated for
any reason at any time by the Issuer as to any Agent or by such Agent insofar
as this Agreement relates to such Agent, upon the giving of one day's written
notice of such termination to the other parties hereto. Any settlement with
respect to Securities placed by an Agent occurring after termination of this
Agreement shall be made in accordance with the Procedures and each Agent
agrees, if requested by the Issuer, to take the steps therein provided to be
taken by such Agent in connection with such settlement.
11. PURCHASES AS PRINCIPAL. From time to time, any Agent
may agree with the Issuer to purchase Securities from the Issuer as principal
and (unless the Issuer and such Agent may otherwise agree) such purchase shall
be made in accordance with the terms of a separate agreement (a "Purchase
Agreement") in the form attached hereto as Exhibit C (or any such other form as
may be agreed to between the Issuer and such Agent) with such additional
provisions relating to the terms of the Securities and of the purchase and sale
(and, if applicable, resale) thereof as shall be set forth in the Purchase
Information delivered pursuant to the Procedures, and such Agent's compensation
shall, unless otherwise agreed between the Issuer and such Agent, be the amount
thereof set forth in the Pricing Supplement. For the purposes of Section 12 of
this Agreement the term "Purchaser" shall refer to each of you acting solely as
principal hereunder and not as agent.
24
25
12. CONDITIONS TO THE OBLIGATIONS OF A PURCHASER. The
obligations of a Purchaser to purchase Securities pursuant to any Purchase
Agreement will be subject to the accuracy of the representations and warranties
on the part of the Issuer herein as of the date of the respective Purchase
Agreement and as of the settlement date for the sale of such Securities, to the
performance and observance by the Issuer of all covenants and agreements herein
and therein contained on its part to be performed and observed and to the
following additional conditions precedent:
(a) No stop order suspending the effectiveness of the
Registration Statements, as amended from time to time, shall
have been issued and no proceedings for that purpose shall
have been instituted or threatened.
(b) Except to the extent modified by the respective
Purchase Agreement, the Purchaser shall have received,
appropriately updated in a manner consistent with Section 5
hereof, (i) a certificate of the Issuer, dated as of the
settlement date, to the effect set forth in Section 5(e), (ii)
the opinion or opinions of Amos & Jeffries, L.L.P., counsel to
the Issuer, dated as of the settlement date, to the effect set
forth in Section 5(d),(iii) the opinion of Mudge Rose Guthrie
Alexander & Ferdon, counsel for the Purchaser, dated as of the
settlement date, to the effect set forth in Section 5(g) and
(iv) letter of Deloitte & Touche, dated as of the settlement
date, to the effect set forth in Section 5(f).
(c) The conditions set forth in Section 5(c) shall
have been satisfied.
(d) Prior to the settlement date, the Issuer shall
have furnished to the Purchaser such further information,
certificates and documents as the Purchaser may reasonably
request.
(e) Subsequent to the execution of any Purchase
Agreement, there shall not have been any decrease in the
ratings of any of the Issuer's debt securities by Moody's, S&P
or D&P.
If any of the conditions specified in this Section 12 shall
not have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in the Purchase Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Purchaser and its counsel,
the Purchase Agreement and all obligations of the Purchaser thereunder may be
canceled at, or at any time prior to, the respective settlement date by the
Purchaser. Notice of such cancellation shall be given to the Issuer in writing
or by telephone or transmitted by any standard form of telecommunication
confirmed in writing.
25
26
13. NOTICES. Except as otherwise provided herein, all
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to ________________ shall be directed to it at
_____________________________________, Attention: ____________________________;
notices to ______________________________ shall be directed to it at
_____________________________________________, Attention: _____________________
_____________________; notices to _____________________________________ shall
be directed to it at ________________________________________________,
Attention: __________________________________________; and notices to the
Issuer shall be directed to it at 1915 Rexford Road, Charlotte, North Carolina
28211, Attention: Ted C. Coble, Vice President and Treasurer; or in the case of
any party hereto, to such other address or person as such party shall specify to
each other party by a notice given in accordance with the provisions of this
Section 13. Any such notice shall take effect at the time of receipt.
14. SUCCESSORS. This Agreement will inure to the benefit
of and be binding upon the parties hereto, their respective successors and
assigns, the officers and directors and controlling persons referred to in
Section 7 and, to the extent provided in Section 6(f), any person who has
agreed to purchase Securities from the Issuer, and no other person will have
any right or obligation hereunder.
15. GOVERNING LAW; COUNTERPARTS. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such executed counterparts shall
together constitute one and the same Agreement.
26
27
If the foregoing correctly sets forth our agreement, please
indicate your acceptance hereof in the space provided for that purpose below.
Very truly yours,
PIEDMONT NATURAL GAS COMPANY, INC.
By:_________________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of the
date first above written:
[ ]
By: _____________________________
Name:
Title:
[ ]
By: _____________________________
Name:
Title:
[ ]
By: _____________________________
Name:
Title:
27
28
EXHIBIT A
The Issuer agrees to pay each Agent a commission equal to the
following percentage of the principal amount of Securities sold to purchasers
solicited by such Agent:
Commission Rate
(as a percentage of
Term principal amount)
---- -----------------
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150
From 18 months to less than 2 years .200
From 2 years to less than 3 years .250
From 3 years to less than 4 years .350
From 4 years to less than 5 years .450
From 5 years to less than 6 years .500
From 6 years to less than 7 years .550
From 7 years to less than 10 years .600
From 10 years to less than 15 years .625
From 15 years to less than 20 years .700
From 20 years to 30 years .750
Greater than 30 years To be determined
at the time of sale
29
EXHIBIT B
ADMINISTRATIVE PROCEDURES
The Medium-Term Notes, Series B due nine months or more from
their issue date (the "Notes") are to be offered on a continuing basis by
Piedmont Natural Gas Company, Inc., a North Carolina corporation (the
"Issuer"). _________________________, ___________________________ and
__________________________________, as agents (individually, an "Agent" and
collectively, the "Agents"), have each agreed to use reasonable best efforts to
solicit offers to purchase the Notes. No Agent will be obligated to purchase
Notes for its own account. The Notes are being sold pursuant to an Agency
Agreement, dated ___________, 1995 (the "Agency Agreement"), among the Issuer
and the Agents, and will be issued pursuant to an Indenture, dated as of April
1, 1993, between Piedmont Natural Gas Company, Inc., a New York corporation
(the "Predecessor Company") and Citibank, N.A., as trustee (the "Trustee"), as
amended by the First Supplemental Indenture, dated as of February 25, 1994,
among the Issuer, the Predecessor Company and the Trustee (collectively, the
"Indenture"). The Notes will rank equally and ratably with all other unsecured
and unsubordinated indebtedness of the Issuer and will have been registered
with the Securities and Exchange Commission (the "Commission"). For a
description of the terms of the Notes and the offering and sale thereof, see
the sections entitled "Description of Notes" and "Plan of Distribution of
Notes" in the Prospectus Supplement relating to the Notes, dated
______________, 1995, attached hereto and hereinafter referred to as the
"Prospectus Supplement", and the sections entitled "Description of Debt
Securities", "United States Taxation" and "Plan of Distribution" in the
Prospectus relating to the Notes, dated _____________, 1995, attached hereto
and hereinafter referred to as the "Prospectus".
Unless otherwise specified in the applicable Pricing
Supplement, the Notes will be issued in book-entry form (each, a "Book-Entry
Note") and will be represented by a fully registered master global note
certificate (the "Master Global Note"). The Master Global Note shall be in a
form approved by the Issuer, the Agents, The Depository Trust Company ("DTC")
and the Trustee. Prior to the issuance of any Notes, the Trustee shall
authenticate the Master Global Note and hold it as custodian for DTC. Except
under the limited circumstances described in the Indenture, beneficial owners
of Book-Entry Notes will not be entitled to receive a certificate representing
such Notes.
At the option of the Issuer, Notes may also be issued in
certificated form. Prior to accepting any offer to purchase Notes in
certificated form, the Issuer shall deliver to the Trustee an adequate supply
of duly executed certificated Notes.
B-1
30
Administrative procedures and specific terms of the offering
are explained below -- Part I indicating procedures applicable to all Notes,
Part II indicating specific procedures for Book-Entry Notes, and Part III
indicating specific procedures for Notes issued in certificated form.
Administrative and record keeping responsibilities will be handled for the
Issuer by its Treasury Department. The Issuer will advise the Agents in
writing of those persons handling administrative responsibilities with whom the
Agents are to communicate regarding offers to purchase Notes and the details of
their delivery.
Unless otherwise defined herein, terms defined in the
Indenture (or any applicable Board Resolution referred to therein related to
the Notes) shall be used herein as therein defined.
PART I: ADMINISTRATIVE PROCEDURES APPLICABLE TO ALL NOTES
ISSUE DATE
Each Note will be dated the date of its authentication. Each
Note will also bear an original issue date (the "Issue Date") which, with
respect to any such Note (or portion thereof), shall mean the date of its
original issuance and shall be specified therein. The Issue Date will remain
the same for all Notes subsequently issued upon transfer, exchange or
substitution of a Note, regardless of their dates of authentication.
PRICE TO PUBLIC; DENOMINATIONS; REGISTRATION
Except as otherwise specified in a Pricing Supplement, each
Note will be issued at 100% of principal amount. The minimum denominations of
the Notes will be $100,000 and integral multiples of $1,000 in excess thereof.
Notes will be issued only in fully registered form.
MATURITIES; MINIMUM PURCHASE; CALCULATION OF INTEREST
Each Note will mature on a date, selected by the purchaser and
agreed to by the Issuer, which will be nine months or more from its Issue Date.
The minimum aggregate amount of Notes which may be offered to any purchaser
will be $100,000.
Interest on each interest-bearing Note will be calculated and
paid in the manner described in such Note and in the Prospectus Supplement and
the applicable Pricing Supplement. Unless otherwise set forth therein,
interest on Fixed Rate Notes (including interest for partial periods) will be
calculated on the basis of a 360-day year of twelve 30-day months and will not
accrue on the 31st day of any month. Interest on Floating Rate Notes, except
as otherwise set forth therein, will be calculated on the basis of actual days
elapsed and a year of 360 days, except that in the case of a Floating Rate Note
for which the Base Rate is the Treasury Rate, interest will be calculated on
the basis of the actual number of days in the year.
B-2
31
REDEMPTION/REPAYMENT
If indicated in the applicable Pricing Supplement, the Notes
of a particular tenor will be subject to redemption in whole or in part
(subject to applicable minimum denominations), at the option of the Issuer on
and after an initial redemption date as set forth in the applicable Pricing
Supplement and in the applicable Note. The redemption price will be set forth
in the applicable Pricing Supplement and in the applicable Note.
If indicated in the applicable Pricing Supplement, the Notes
of a particular tenor will be subject to repayment at the option of the holders
therefore in accordance with the terms of the Notes on a repayment date as set
forth in the applicable Pricing Supplement and in the applicable Note. The
repayment date or dates and repayment price will be set forth in the applicable
Pricing Supplement and in the applicable Note.
PROCEDURES FOR ESTABLISHING THE TERMS OF THE NOTES
The Issuer and the Agents will discuss from time to time the
rates to be borne by the Notes that may be sold as a result of the solicitation
of offers by the Agents. Once any Agent has recorded any indication of
interest in Notes upon certain terms, and communicated with the Issuer, if the
Issuer plans to accept an offer to purchase Notes upon such terms, it will
prepare a Pricing Supplement to the Prospectus, as then amended or
supplemented, reflecting the terms of such Notes and, after approval from the
Agents, will arrange to have the Pricing Supplement filed via EDGAR with the
Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933, as
amended, no later than the fifth Business Day following the earlier of the date
of determination of the settlement information described below or the date such
Pricing Supplement is first used. The Issuer will supply at least 10 copies of
the Prospectus, as then amended or supplemented, and bearing such Pricing
Supplement, to the Agent who presented the offer (the "Presenting Agent"). No
settlements with respect to Notes upon such terms may occur prior to such
filing and the Agents will not, prior to such filing, mail confirmations to
customers who have offered to purchase Notes upon such terms. After such
filing, sales, mailing or confirmations and settlements may occur with respect
to Notes upon such terms, subject to the provisions of "Delivery of Prospectus"
below.
If the Issuer decides to post rates and a decision has been
reached to change interest rates, the Issuer will promptly notify each Agent.
Each Agent will forthwith suspend solicitation of purchases. At that time, the
Agents will recommend and the Issuer will establish rates to be so "posted".
Following establishment of posted rates and prior to the transmitting or filing
described in the preceding paragraph, the Agents may only record indications of
interest in purchasing Notes at the posted rates. Once any Agent has recorded
any indication of interest in Notes at the posted rates and communicated with
the Issuer, if the Issuer plans to accept an offer at the posted rate, it will
prepare a Pricing Supplement reflecting such posted rates and, after approval
from the Agents, will arrange to have the Pricing Supplement filed via EDGAR
with the Commission and will supply at least 10 copies of the Prospectus, as
then amended or supplemented, and bearing such Pricing Supplement, to the
Presenting Agent at the address
B-3
32
listed on Annex A attached hereto. No settlements at the posted rates may
occur prior to such filing and the Agents will not, prior to such filing, mail
confirmations to customers who have offered to purchase Notes at the posted
rates. After such filing, sales, mailing of confirmations and settlements may
resume, subject to the provisions of "Delivery of Prospectus" below.
Outdated Pricing Supplements, and copies of the Prospectus to
which they are attached (other than those retained for files), will be
destroyed.
SUSPENSION OF SOLICITATION; AMENDMENT OR SUPPLEMENT
As provided in the Agency Agreement, the Issuer may instruct
the Agents to suspend solicitation of offers to purchase at any time. As soon
as reasonably practicable, but in no event later than one Business Day after
notice from the Issuer, the Agents will each forthwith suspend solicitation
until such time as the Issuer has advised them that solicitation of offers to
purchase may be resumed.
If the Agents receive the notice from the Issuer contemplated
by Section 3(b) or 4(b) of the Agency Agreement, they will promptly suspend
solicitation and will only resume solicitation as provided in the Agency
Agreement. If the Issuer is required, pursuant to the second sentence of
Section 4(b) of the Agency Agreement, to prepare an amendment or supplement, it
will promptly furnish each Agent with the proposed amendment or supplement; if
the Issuer decides to amend or supplement the Registration Statements or the
Prospectus relating to the Notes, it will promptly advise each Agent and will
furnish each Agent with the proposed amendment or supplement in accordance with
the terms of the Agency Agreement. The Issuer will file such amendment or
supplement with the Commission, provide the Agents with copies of any such
amendment or supplement, confirm to the Agents that such amendment or
supplement has been filed with the Commission and advise the Agents that
solicitation may be resumed.
Any such suspension shall not affect the Issuer's obligations
under the Agency Agreement; and in the event that at the time the Issuer
suspends solicitation of offers to purchase there shall be any offers already
accepted by the Issuer outstanding for settlement, the Issuer will have the
sole responsibility for fulfilling such obligations. The Issuer will in
addition promptly advise the Agents and the Trustee if such offers are not to
be settled and if copies of the Prospectus as in effect at the time of the
suspension may not be delivered in connection with the settlement of such
offers.
ACCEPTANCE OF OFFERS
Each Agent will promptly advise the Issuer, at its option
orally or in writing, of each reasonable offer to purchase Notes received by
it, other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, without notice to the Issuer, reject any offer received
by it, in whole or in part. The Issuer will have the sole right to accept
offers to purchase Notes and may reject any such offer, in whole or in part.
Prior to accepting any offer
B-4
33
the Issuer will have the specific terms of the Notes approved by the Finance
Committee of the Board of Directors. If the Issuer accepts or rejects an
offer, in whole or in part, the Issuer will promptly notify the Presenting
Agent.
CONFIRMATION
For each accepted offer, the Presenting Agent will issue a
confirmation to the purchaser, with a separate confirmation to the Issuer's
Treasury Department, setting forth the Purchase Information (as defined under
"Details for Settlement" in Part II for Book-Entry Notes and in Part III for
certificated Notes) and delivery and payment instructions; provided, however,
that, in the case of the confirmation issued to the purchaser, no confirmation
shall be delivered to the purchaser prior to the delivery of the Prospectus
referred to below.
DELIVERY OF PROSPECTUS
A copy of the Prospectus as most recently amended or
supplemented on the date of delivery thereof (except as provided below) must be
delivered to a purchaser prior to or simultaneously with the earlier of
delivery of (i) the written confirmation provided for above, and (ii) any Note
purchased by such purchaser. (For this purpose, entry of a Same Day Funds
Settlement System ("SDFS") delivery order through DTC's Participant Terminal
System to credit a Book-Entry Note to the account of a Participant purchasing,
or acting for the purchaser of a Book-Entry Note, shall be deemed to constitute
delivery of such Book-Entry Note). Subject to the foregoing, it is anticipated
that delivery of the Prospectus, confirmation and Notes to the purchaser will
be made simultaneously at settlement. The Issuer shall ensure that the
Presenting Agent receives copies of the Prospectus and each amendment or
supplement thereto (including appropriate Pricing Supplements) in such
quantities and within such time limits as will enable the Presenting Agent to
deliver such confirmation or Note to a purchaser as contemplated by these
procedures and in compliance with the first sentence of this paragraph. If,
since the date of acceptance of a purchaser's offer, the Prospectus shall have
been supplemented solely to reflect any sale of Notes on terms different from
those agreed to between the Issuer and such purchaser or a change in posted
rates not applicable to such purchaser, such purchaser shall not receive the
Prospectus as supplemented by such new supplement, but shall receive the
Prospectus as supplemented to reflect the terms of the Notes being purchased by
such purchaser and otherwise as most recently amended or supplemented on the
date of delivery of the Prospectus.
AUTHENTICITY OF SIGNATURES
The Issuer will cause the Trustee to furnish the Agents from
time to time with the specimen signatures of each of the Trustee's officers,
employees or agents who have been authorized by the Trustee to authenticate
Notes, but no Agent will have any obligation or liability to the Issuer or the
Trustee in respect of the authenticity of the signature of any officer,
employee or agent of the Issuer or the Trustee on any Note or Master Global
Note.
B-5
34
ADVERTISING EXPENSES
The Issuer will determine with the Agents the amount of
advertising that may be appropriate in offering the Notes. Advertising
expenses will be paid by the Issuer.
BUSINESS DAY
"Business Day" means any day which is not a Saturday or Sunday
and is not a day on which banking institutions are generally authorized or
obligated by law or executive order to close in The City of New York and, with
respect to LIBOR notes, any day on which dealings in deposits in U.S. Dollars
are transacted in the London interbank market.
TRUSTEE NOT TO RISK FUNDS
Nothing herein shall be deemed to require the Trustee to risk
or expend its own funds in connection with any payment made to the Issuer, the
Agents, DTC, or to the holder of any Note, it being understood by all parties
that payments made by the Trustee to the Issuer, the Agents, DTC, or to the
holder of any Note shall be made only to the extent that funds are provided to
the Trustee for such purpose.
PART II: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes
for eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions described
below, in accordance with its obligations under a Letter of Representations
(the "Letter") from the Issuer and the Trustee to DTC dated as of ____________,
1995 and a Medium-Term Note Certificate Agreement (the "MTN Certificate
Agreement") between the Trustee and DTC dated as of _____________ and its
obligations as a participant in DTC, including DTC's SDFS.
ISSUANCE
All Book-Entry Notes will be represented initially by a single
Master Global Note in fully registered form without coupons. The Master Global
Note will be dated and issued as of the date of its authentication by the
Trustee. The Master Global Note will not represent any Note in certificated
form.
IDENTIFICATION NUMBERS
The Issuer has arranged with the CUSIP Service Bureau of
Standard & Poor's Corporation (the "CUSIP Service Bureau") for the reservation
of a series of CUSIP numbers (including tranche numbers), such series
consisting of approximately 900 CUSIP numbers and relating to Book-Entry Notes.
The Issuer has obtained from the CUSIP Service Bureau a written list of such
reserved CUSIP numbers and has delivered such list to the Trustee and DTC. The
B-6
35
Trustee will assign CUSIP numbers serially to Book-Entry Notes as described
below under Settlement Procedure "C". DTC will notify the CUSIP Service Bureau
periodically of the CUSIP numbers that the Trustee has assigned to Book-Entry
Notes. The Trustee will notify the Issuer at any time when fewer than 100 of
the reserved CUSIP numbers remain unassigned to Book-Entry Notes; and the
Issuer will reserve 900 additional CUSIP numbers for assignment to Book-Entry
Notes. Upon obtaining such additional CUSIP numbers, the Issuer shall deliver
a list of such additional CUSIP numbers to the Trustee and DTC.
REGISTRATION
The Master Global Note will be registered in the name of Cede
& Co., as nominee for DTC, on the Debt Security Register maintained under the
Indenture. The beneficial owner of a Book-Entry Note (or one or more indirect
participants in DTC designated by such owner) will designate one or more
participants in DTC (the "Participants") to act as agent or agents for such
owner with respect to such Book-Entry Note in connection with the book-entry
system maintained by DTC, and DTC will record in book-entry form, in accordance
with instructions provided by such Participants, a credit balance with respect
to such Book-Entry Note in the account of such Participants. The ownership
interest of such beneficial owner in such Book-Entry Note will be recorded
through the records of such Participants or through the separate records of
such Participants and one or more indirect participants in DTC. So long as
Cede & Co. is the registered owner of the Master Global Note, DTC will be
considered the sole owner and holder of the Book-Entry Notes represented by the
Master Global Note for all purposes under the Indenture.
TRANSFERS
Transfers of beneficial interest in a Book-Entry Note will be
accomplished by book entries made by DTC and, in turn, by Participants (and, in
certain cases, one or more indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such Note.
EXCHANGES
The Trustee may upon notice to the Issuer deliver to DTC and
the CUSIP Service Bureau at any time a written notice of consolidation
specifying (i) the CUSIP numbers of two or more outstanding Book-Entry Notes
having the same interest rate, Stated Maturity and other terms, and for which
interest (if any) has been paid to the same date, (ii) a date, occurring at
least thirty days after such written notice is delivered and at least thirty
days before the next Interest Payment Date (if any) for such Notes, on which
such Book-Entry Notes shall be exchanged for a single replacement Book-Entry
Note, and (iii) a new CUSIP number to be assigned to such replacement
Book-Entry Note. Upon receipt of such a notice, DTC will send to its
Participants (including the Trustee) a written reorganization notice to the
effect that such exchange will occur on such date. Prior to the specified
exchange date, the Trustee will deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and the new
B-7
36
CUSIP number and stating that, as of such exchange date, the CUSIP numbers of
the Book-Entry Notes to be exchanged will no longer be valid. On the specified
exchange date, the Trustee will exchange such Book-Entry Notes for a single
Book-Entry Note bearing the new CUSIP number and a new Original Issue Date,
which shall be the most recent Interest Payment Date to which interest has been
paid or duly provided for on the predecessor Book-Entry Notes, and the CUSIP
numbers of the exchanged Book-Entry Notes will, in accordance with CUSIP
Service Bureau procedures, be cancelled and not immediately reassigned.
REDEMPTION
The Trustee will comply with the terms of the Letter with
regard to redemptions of the Book-Entry Notes. In the case of Book-Entry Notes
stated by their terms to be redeemable prior to Stated Maturity, at least 60
calendar days before the date fixed for redemption (the "Redemption Date"), the
Issuer shall notify the Trustee of the Issuer's election to redeem such
Book-Entry Notes in whole or in part and the principal amount of such
Book-Entry Notes to be so redeemed. At least 30 calendar days but not more
than 60 days prior to the Redemption Date, the Trustee shall notify DTC of the
Issuer's election to redeem such Book-Entry Notes. The Trustee shall notify
the Issuer and DTC of the CUSIP numbers of the particular Book-Entry Notes to
be redeemed either in whole or in part. The Issuer, the Trustee and DTC will
confirm the amounts of such principal and any premium and interest payable with
respect to each such Book-Entry Note on or about the fifth Business Day
preceding the Redemption Date of such Book-Entry Note. The Issuer will pay the
Trustee, in accordance with the terms of the Indenture, the amount necessary to
redeem each such Book-Entry Note or the applicable portion of each such
Book-Entry Note. The Trustee will pay such amount to DTC at the times and in
the manner set forth herein. Promptly after payment to DTC of the amount due
on the Redemption Date for such Book-Entry Note, the Trustee shall make the
appropriate entry on its records to cancel any such Book-Entry Note redeemed in
whole and shall deliver an appropriate debit advice to the Issuer. If a
Book-Entry Note is to be redeemed in part, the Trustee will make the
appropriate entry on its records to cancel the portion of such Book-Entry Note
to be redeemed and the remaining portion of such Book-Entry Note shall bear the
same CUSIP number.
DENOMINATIONS
Book-Entry Notes will be issued in principal amounts of
$100,000 or any amount in excess thereof that is an integral multiple of
$1,000.
INTEREST
Standard & Poor's Corporation will use the information
received in the pending deposit message described under Settlement Procedure
"C" to include the amount of any interest payable and certain other information
regarding the related Book-Entry Note in the appropriate daily or weekly bond
report published by Standard & Poor's Corporation.
B-8
37
PAYMENTS OF PRINCIPAL AND INTEREST
(a) Payments of Interest Only. Promptly after each Record
Date, the Trustee will deliver to the Issuer and DTC a written notice
specifying by CUSIP number the amount of interest to be paid on each Book-Entry
Note on the following Interest Payment Date (other than an Interest Payment
Date coinciding with Maturity) and the total of such amounts. DTC will confirm
the amount payable on each Book-Entry Note on such Interest Payment Date by
reference to the daily or weekly bond reports published by Standard & Poor's
Corporation. The Issuer will pay to the Trustee the total amount of interest
due on such Interest Payment Date (other than at Maturity), and the Trustee
will pay such amount to DTC at the times and in the manner set forth below
under "Manner of Payment".
(b) Payments at Maturity. On or about the first Business Day
of each month, the Trustee will deliver to the Issuer and DTC a written list of
principal, premium, if any, and interest to be paid on each Book-Entry Note
maturing in the following month. The Issuer, the Trustee and DTC will confirm
the amounts of such principal, premium, if any, and interest payments with
respect to each such Book-Entry Note on or about the fifth Business Day
preceding the Maturity of such Book-Entry Note. The Issuer will pay to the
Trustee, as the paying agent, and the Trustee in turn will pay to DTC, the
principal amount of and premium, if any, on such Book-Entry Note, together with
interest due at such Maturity at the times and in the manner set forth below
under "Manner of Payment". Promptly after payment to DTC of the principal and
interest and premium due at the Maturity of such Book-Entry Note, the Trustee
will make the appropriate entry on its records to cancel such Book-Entry Note
and shall deliver an appropriate debit advice to the Issuer.
(c) Manner of Payment. The total amount of any principal,
premium, if any, and interest due on Book-Entry Notes on any Interest Payment
Date or at Maturity shall be paid by the Issuer to the Trustee in funds
available for use by the Trustee as of 9:30 a.m., New York City time, on such
date. The Issuer will make such payment on such Book-Entry Notes by wire
transfer to the Trustee. The Issuer will confirm instructions regarding
payment in writing to the Trustee. Prior to 10:00 a.m., New York City time, on
each maturity date or as soon as possible thereafter, following receipt of such
funds from the Issuer, the Trustee will pay by wire transfer (using Fedwire
message entry instructions in a form previously specified by DTC) to an account
at the Federal Reserve Bank of New York previously specified by DTC, in funds
available for immediate use by DTC, each payment of principal, premium, if any,
and interest due on Book-Entry Notes on any maturity date. On each Interest
Payment Date, interest payment shall be made to DTC in same day funds in
accordance with existing arrangements between the Trustee and DTC. Thereafter,
on each such date, DTC will pay, in accordance with its SDFS operating
procedures then in effect, such amounts in funds available for immediate use to
the respective Participants in whose names the Book-Entry Notes are recorded in
the book-entry system maintained by DTC. NEITHER THE ISSUER NOR THE TRUSTEE
SHALL HAVE ANY DIRECT RESPONSIBILITY OR LIABILITY FOR THE PAYMENT BY DTC TO
SUCH PARTICIPANTS OF THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON THE
BOOK-ENTRY NOTES.
B-9
38
(d) Withholding Taxes. The amount of any taxes required under
applicable law to be withheld from any interest payment on a Book-Entry Note
will be determined and withheld by the Participant, indirect participant in DTC
or other person responsible for forwarding payments and materials directly to
the beneficial owner of such Note.
SETTLEMENT
The receipt by the Issuer of immediately available funds in
payment for a Book-Entry Note and entry by the Presenting Agent of an SDFS
deliver order through DTC's Participant Terminal System to credit such Note to
the account of a Participant purchasing, or acting for the purchase of, such
Note, shall constitute "settlement" with respect to such Note. All orders
accepted by the Issuer will be settled from one to five Business Days from the
date of the sale pursuant to the timetable for settlement set forth below
unless the Issuer and the purchaser agree to settlement on a later date.
DETAILS FOR SETTLEMENT
For each offer accepted by the Issuer, the Presenting Agent
will communicate to the Issuer's Treasury Department by telephone, electronic
or facsimile transmission or other acceptable means, the following information
(the "Purchase Information"):
1. Principal amount of each Note (in authorized
denominations) to be purchased.
2. Issue price, interest rate if fixed or Initial
Interest Rate and interest rate basis if floating,
Spread or Spread Multiplier, maximum or minimum
interest rates, interest calculation dates, Index
Maturity, Interest Determination Date, Interest Reset
Date, interest rate reset period, interest payment
period, Record Dates and Interest Payment Dates (as
such capitalized terms are defined in either the
Indenture or the Prospectus Supplement), in each
case, to the extent applicable.
3. Any index to determine the amounts of payments of
principal and any premium and interest.
4. Maturity of each Note.
5. Redemption, repayment or sinking fund provisions, if
any, of each Note.
6. If an Original Issue Discount Note, the Yield to
Maturity and the initial accrual period of original
issue discount.
B-10
39
7. Issue Date of each Note.
8. Settlement date for each Note.
9. Presenting Agent's commission (to be paid in the form
of a discount from the proceeds remitted to the
Issuer upon settlement).
The Issue Date of, and the settlement date for, Notes will be
the same.
SETTLEMENT PROCEDURES
Settlement Procedures with regard to each Book-Entry Note sold
by the Issuer through an Agent shall be as follows:
A. The Presenting Agent will advise the Issuer by telephone of the
Purchase Information with respect to each Book-Entry Note to be
issued.
B. The Issuer will advise the Trustee by electronic or facsimile
transmission or by another mutually acceptable method of the
information set forth in Settlement Procedure "A" above and the name
of the Presenting Agent.
C. The Trustee will assign a CUSIP number to such Book-Entry Note and
advise the Issuer by telephone of such CUSIP number. The Trustee will
enter a pending deposit message through DTC's Participant Terminal
System, providing the following settlement information to DTC (which
shall route such information to Standard & Poor's Corporation and
Interactive Data Corporation) and the Presenting Agent.
1. The applicable information set forth in Settlement Procedure
"A".
2. Initial Interest Payment Date for such Book-Entry Note, number
of days by which such date succeeds the Record Date and the
amount of interest payable on such Interest Payment Date per
$1,000 principal amount of Book-Entry Notes.
3. CUSIP number of such Book-Entry Note.
4. Whether such CUSIP number will be assigned to any other
Book-Entry Note (to the extent known at such time).
5. Interest payment periods.
6. Numbers of the participant accounts maintained by DTC on
behalf of the Trustee and the Presenting Agent.
B-11
40
D. DTC will credit such Book-Entry Note to the Trustee's participant
account at DTC.
E. The Trustee will enter an SDFS deliver order through DTC's Participant
Terminal System, with respect to each Book-Entry Note to be issued,
instructing DTC to (i) debit such Book-Entry Note to the Trustee's
participant account and credit such Book-Entry Note to the Presenting
Agent's participant account and (ii) debit the Presenting Agent's
settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Book-Entry Note less such Agent's
commission. The entry of such a deliver order shall constitute a
representation and warranty by the Trustee to DTC that (i) the Master
Global Note has been delivered and authenticated and (ii) the Trustee
is holding such Master Global Note pursuant to the MTN Certificate
Agreement.
F. The Presenting Agent will enter an SDFS deliver order through DTC's
Participant Terminal System, with respect to each Book-Entry Note to
be issued, instructing DTC (i) to debit such Book-Entry Note to the
Presenting Agent's participant account and credit such Book-Entry Note
to the participant accounts of the Participant with respect to such
Book-Entry Note and (ii) to debit the settlement accounts of such
Participant and credit the settlement account of the Presenting Agent
for an amount equal to the price of such Book-Entry Note.
G. Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "E" and "F" will be settled in accordance with
SDFS operating procedures in effect on the settlement date.
H. The Trustee, upon confirming receipt of such funds, will credit the
amount transferred to the Trustee in accordance with Settlement
Procedure "E", in funds available for immediate use, to a bank account
of the Issuer at the Trustee.
I. The Presenting Agent will confirm the purchase of each Book-Entry Note
to the purchaser either by transmitting to the Participant with
respect to such Book-Entry Note a confirmation order or orders through
DTC's institutional delivery system or by mailing a written
confirmation to such purchaser.
SETTLEMENT PROCEDURES TIMETABLE
For orders of Book-Entry Notes solicited by an Agent, and
accepted by the Issuer for settlement on the first Business Day after the sale
date, Settlement Procedures "A" through "I" set forth above shall be completed
as soon as possible but not later than the respective times (New York City
time) set forth below:
B-12
41
Settlement
Procedure Time
--------- ----
A-B 11:00 a.m. on the sale date
C 2:00 p.m. on the sale date
D 10:00 a.m. on settlement date
E-F 2:00 p.m. on settlement date
G 4:45 p.m. on settlement date
H-I 5:00 p.m. on settlement date
If a sale is to be settled more than one Business Day after
the sale date, Settlement Procedures "A", "B" and "C" shall be completed as
soon as practicable but not later than the times specified above on the first
Business Day after the sale date. In connection with a sale which is to be
settled more than one Business Day after the sale date, if the initial interest
rate for a Floating Rate Note is not known at the time that Settlement
Procedure "A" is completed, Settlement Procedures "B" and "C" shall be
completed as soon as such rates have been determined, but no later than 11:00
a.m. and 2:00 p.m., respectively, on the second Business Day before the
settlement date. Settlement Procedures "G" and "H" are subject to extension in
accordance with any extension of Fedwire closing deadlines and in the other
events specified in the SDFS operating procedures in effect on the settlement
date.
If settlement of a Book-Entry Note is rescheduled or
cancelled, the Issuer shall notify the Trustee, and upon receipt of such
notice, the Trustee will deliver to DTC, through DTC's Participant Terminal
System, a cancellation message to such effect by no later than 2:00 p.m., New
York City time, on the Business Day immediately preceding the scheduled
settlement date.
FAILURE TO SETTLE
If the Trustee has not entered an SDFS deliver order with
respect to a Book-Entry Note pursuant to Settlement Procedure "E", then upon
written request (which may be evidenced by facsimile transmission) of the
Issuer, the Trustee shall deliver to DTC, through DTC's Participation Terminal
System, as soon as practicable, but no later than 2:00 p.m. on any Business
Day, a withdrawal message instructing DTC to debit such Book-Entry Note to the
Trustee's participant account. DTC will process the withdrawal message,
provided that the Trustee's participant account contains a principal amount of
such Book-Entry Notes that is at least equal to the principal amount to be
debited. The Trustee will make appropriate entries in the Trustee's records
and so advise the Issuer. If withdrawal messages are processed with respect to
all the Book-Entry Notes identified by a single CUSIP number, the CUSIP number
assigned to such Book-Entry Notes shall, in accordance with CUSIP Service
Bureau procedures, be cancelled and not immediately reassigned.
If the purchase price for any Book-Entry Note is not timely
paid to the
B-13
42
Participants with respect to such Book-Entry Note by the beneficial purchaser
thereof (or a person, including an indirect participant in DTC, acting on
behalf of such purchaser), such Participant and, in turn the Presenting Agent
for such Book-Entry Note may enter an SDFS deliver order through DTC's
Participant Terminal System debiting such Book-Entry Note to such Agent's
participant account and crediting such Book-Entry Note free to the participant
account of the Trustee and shall notify the Trustee and the Issuer thereof.
Thereafter, the Trustee, (i) will immediately notify the Issuer, once the
Trustee has confirmed that such Book-Entry Note has been credited to its
participant account, and the Issuer shall immediately transfer by Fedwire (in
immediately available funds) to the Presenting Agent an amount equal to the
price of such Book-Entry Note which was previously sent by wire transfer to the
account of the Issuer maintained at the Trustee in accordance with Settlement
Procedure "H", and (ii) the Trustee will deliver the withdrawal message and
take the related actions described in the preceding paragraph. The Presenting
Agent will not be entitled to any commission with respect to any Book-Entry Note
which the purchaser does not accept and make payment for. Such debits and
credits will be made on the settlement date, if possible, and in any event not
later than 5:00 p.m. on the following Business Day. If such failure shall have
occurred for any reason other than failure by the Presenting Agent to perform
its obligations hereunder or under the Agency Agreement, the Issuer will
reimburse the Presenting Agent on an equitable basis for its loss of the use of
funds during the period when the funds were credited to the account of the
Issuer.
Notwithstanding the foregoing, upon any failure to settle with
respect to a Book-Entry Note, DTC may take any actions in accordance with its
SDFS operating procedures then in effect.
PART III: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
INTEREST PAYMENTS
On the fifth Business Day immediately preceding each Interest
Payment Date, the Trustee will furnish the Issuer with the total amount of the
interest payments to be paid on such Interest Payment Date. The Trustee will
provide monthly to the Issuer's Treasury Department a list of the principal and
interest to be paid on Notes maturing in the next succeeding month. The
Trustee will assume responsibility for withholding taxes on interest paid as
required by law to the extent holders have not produced a taxpayer
identification number (TIN).
PAYMENT AT MATURITY
Upon presentation of each Note at Maturity, the Trustee (or a
duly authorized Paying Agent) will pay the principal amount thereof, together
with any premium and accrued interest due at maturity. Such payment will be
made in immediately available funds, provided that the Note is presented in
time for the Trustee (or any such Paying Agent) to make payment in such funds
in accordance with its normal procedures. The Issuer will provide the Trustee
(and any such Paying Agent) with funds available for immediate use for such
purpose. Notes presented at Maturity will be cancelled by the Trustee as
provided in the Indenture.
B-14
43
DETERMINATION OF SETTLEMENT DATE
The receipt of immediately available funds by the Issuer from
the Presenting Agent in payment for a Note and the authentication and issuance
of such Note shall, with respect to such Note, constitute "settlement". All
offers accepted by the Issuer will be settled on the fifth Business Day next
succeeding the date of receipt unless otherwise agreed by any purchaser, the
Issuer and the Trustee. The settlement date shall be specified upon receipt of
an offer. Prior to 3:00 p.m., New York City time, on the Business Day prior to
the settlement date, the Issuer will instruct the Trustee to authenticate and
deliver the Notes no later than 2:15 p.m., New York City time, on the
settlement day.
DETAILS FOR SETTLEMENT
For each offer accepted by the Issuer, the Presenting Agent
will communicate to the Issuer's Treasury Department by telephone, electronic
or facsimile transmission or other acceptable means, the Purchase Information
prior to 3:00 p.m., New York City time, on the Business Day prior to the
applicable settlement date. For certificated Notes "Purchase Information"
shall refer to the terms of the Notes described under "Details of Settlement"
in Part II and the following additional information:
1. Exact name in which the Note or Notes are to be
registered (the "registered owner").
2. Exact address of the registered owner and, if
different, the address for delivery, notices and
payment of principal and premium and interest.
3. Taxpayer Identification Number (TIN) of the
registered owner.
4. Delivery address for each Note.
The Issue Date of, and the settlement date for, Notes will be
the same. Before accepting any offer to purchase Notes to be settled in less
than three Business Days, the Issuer will verify that the Trustee will have
adequate time to prepare and authenticate the Notes.
Immediately after receiving the details for each offer from
the Presenting Agent (but in no event later than 3:00 p.m. on the Business Day
prior to the settlement date for such Notes), the Issuer will, after recording
the details and any necessary calculations, communicate the Purchase
Information by electronic or facsimile transmission or other acceptable means,
to the Trustee. The Trustee will assign to and enter on each Note a
transaction number.
B-15
44
SETTLEMENT; NOTE DELIVERIES AND CASH PAYMENT
Upon the receipt of appropriate documentation and instructions
from the Issuer the Trustee will cause the Notes to be completed and
authenticated and hold the Notes for delivery against confirmation from the
Issuer of receipt of payment.
The Trustee will deliver the Notes in accordance with
instructions from the Issuer, to the Presenting Agent, as the Issuer's agent,
for the benefit of the purchaser against receipt therefor by stamping the
delivery receipt with the date and time received and returned. If the
Presenting Agent in any instance advances its own funds, the Issuer shall not
use any of the proceeds of such sale to acquire securities.
The Presenting Agent, as the Issuer's agent, will deliver the
Notes (with the written confirmation provided for in Part I above) to the
purchaser thereof against payment therefor by such purchaser. Delivery of any
confirmation or Note will be made in compliance with "Delivery of Prospectus"
in Part I.
FAILS
In the event that a purchaser shall fail to accept delivery of
and make payment for a Note on the settlement date, the Presenting Agent will
notify the Trustee and the Issuer by telephone, confirmed in writing. If such
Note has been delivered to the Presenting Agent, as the Issuer's agent, the
Presenting Agent shall return such Note to the Trustee. If funds have been
advanced by the Presenting Agent for the purchase of such Note, the Issuer
will, immediately upon receipt of confirmation from the Trustee of receipt of
such Note, debit its account for the amount so advanced and shall refund the
payment previously made by the Presenting Agent in immediately available funds.
Such payments will be made on the settlement date for such Note, if possible,
and in any event not later than the Business Day following such settlement
date. If any failure described in this paragraph shall have occurred for any
reason other than the failure of the Presenting Agent to provide the Purchase
Information to the Issuer or to provide a confirmation to the purchaser, the
Issuer will reimburse the Presenting Agent on an equitable basis for its loss
of the use of funds during the period when they were credited to the account of
the Issuer.
Immediately upon receipt of the Note in respect of which the
fail occurred, the Trustee will cause the Debt Security Registrar to make
appropriate entries to reflect the fact that the Note was never issued and the
Note will be cancelled and disposed of as provided in the Indenture.
B-16
45
ANNEX A
Agents' Addresses for
Delivery of the Prospectus
with the Pricing Supplement
Name and
Address of Agents
B-17
46
EXHIBIT C
PURCHASE AGREEMENT
__________, 199_
Piedmont Natural Gas Company, Inc.
1915 Rexford Road
Charlotte, North Carolina 28211
Attention: Ted C. Coble, Vice President
and Treasurer
The undersigned agrees to purchase the following principal
amount of the Securities described in the Agency Agreement dated ____________,
1995 (the "Agency Agreement"):
Principal Amount $
--------------------
Interest Rate %
----
Maturity Date
--------------------
Discount % of Principal Amount
-----
Price to be paid to Issuer
(in immediately
available funds) $
--------------------
Commission to Agent $
--------------------
Settlement Date , 199_
--------------------
Except as otherwise expressly provided herein, all terms used
herein which are defined in the Agency Agreement shall have the same meanings
as in the Agency Agreement. The terms Agent and Agents, as used in the Agency
Agreement, shall be deemed to refer only to the undersigned for purposes of
this Agreement.
This Agreement incorporates by reference all of the provisions
of the Agency Agreement, (including any amendment entered into pursuant thereto
by the Issuer and the undersigned Agent, to the extent applicable), except
provisions of the Agency Agreement relating specifically to solicitation by the
Agents, as Agents, and except that (i) the last sentence of Section 7(d) shall
not be applicable; and (ii) the term "this Agreement", as used in Section 7(d)
of the Agency Agreement, shall be deemed to refer to this Agreement (and not
the Agency Agreement) except that in the fifth sentence such term shall be
deemed to refer to the Agency Agreement. [Insert other appropriate changes.]
You and we agree to perform, to the extent
C-1
47
applicable, our respective duties and obligations specifically provided to be
performed by each of us in the Procedures.
Our obligation to purchase Securities hereunder is subject to
the accuracy on the above Settlement Date of your representations and
warranties contained in Section 2 of the Agency Agreement (it being understood
that such representations and warranties shall be deemed to be made as of the
date of this Purchase Agreement and references to the Registration Statement
and Prospectus shall be deemed to relate to the Registration Statement and the
Prospectus as amended at such Settlement Date specified above) and to your
performance and observance of all covenants and agreements contained in
Sections 4 and 6 thereof. Our obligation hereunder is also subject to the
following conditions:
(a) the satisfaction, at such Settlement Date, of each of
the conditions set forth in subsections (a) and (b) and (d) through
(g) of Section 5 of the Agency Agreement (it being understood that
each document so required to be delivered shall be dated such
Settlement Date and that each such condition and the statements
contained in each such document that relate to the Registration
Statement or the Prospectus shall be deemed to relate to the
Registration Statement or the Prospectus, as the case may be, as
amended or supplemented as of the date hereof and at the time of
settlement on such Settlement Date and except that the opinion
described in Section 5(d) shall be modified so as to state that the
Securities being sold on such Settlement Date, when delivered against
payment therefor as provided in the Indenture and this Agreement, will
have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Issuer
enforceable in accordance with their terms, subject only to the
exceptions as to enforcement set forth in clause (iii) of Section 5(d)
of the Agency Agreement, and will conform to the description thereof
contained in the Prospectus as amended or supplemented at such
Settlement Date; and
(b) there shall not have occurred between the date hereof
and the above Settlement Date (i) any change, or any development
involving a prospective change, in or affecting particularly the
business or properties of the Issuer or its subsidiaries which, in our
judgment, materially impairs the investment quality of the Securities;
(ii) any downgrading in the rating of the Securities of any other debt
securities of the Issuer by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act), or any public announcement that any such organization has under
surveillance or review its rating of the Securities or any other debt
securities of the Issuer (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any suspension or limitation of
trading in securities generally on the New York Stock Exchange, or any
setting of minimum prices for trading on such exchange, or any
suspension of trading of any securities of the Issuer on any exchange
or in the over-the-counter market if, in our judgment, any such event
or any condition giving rise thereto or existing concurrently
therewith makes it impracticable or inadvisable to proceed with the
solicitation of offers to purchase, or sales of, Securities on the
terms and in the manner contemplated by the
C-2
48
applicable Pricing Supplement and the Prospectus; (iv) any banking
moratorium declared by Federal or New York authorities; or (v) any
outbreak or escalation of hostilities, any declaration of war by
Congress or any other substantial national or international calamity
or emergency if, in our judgment, the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the sale of and payment for
the Securities on the terms and in the manner contemplated applicable
Pricing Supplement and the Prospectus.
In further consideration of our agreement hereunder, you agree
that between the date hereof and the above Settlement Date, you will not offer
or sell, or enter into any agreement to sell, any debt securities of the Issuer
in the United States, other than sales of Securities, borrowings under your
revolving credit agreements and lines of credit, the private placement of
securities and issuances of your commercial paper.
[Insert appropriate provisions as agreed to between the
parties hereto regarding responsibility for expenses.]
If for any reason our purchase of the above Securities is not
consummated, the respective obligations of you and the undersigned pursuant to
Section 7 shall remain in effect.
C-3
49
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all such executed counterparts shall together constitute one and
the same Agreement.
[INSERT NAME OF PURCHASER]
By:___________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
PIEDMONT NATURAL GAS COMPANY, INC.
By:_______________________________
Name:
Title:
C-4