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EXHIBIT 1.1
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PIEDMONT NATURAL GAS COMPANY, INC.
DEBT SECURITIES
UNDERWRITING AGREEMENT
, 199
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As [Representative(s) of] the Several Underwriters,
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Gentlemen:
Piedmont Natural Gas Company, Inc., a North Carolina corporation (the
"Company"), confirms its agreement with the several Underwriters listed in
Schedule A hereto (the "Underwriters", which term may refer to a single
Underwriter if only one is listed in Schedule A) as follows:
1. DESCRIPTION OF SECURITIES. The Company proposes to issue
and sell to the several Underwriters securities of the title, amount and
particular terms set forth or referred to in Schedule B hereto ("Securities").
The Securities are to be issued under the 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 Company, the Predecessor Company and the Trustee (collectively, the
"Indenture").
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to, and agrees with, each Underwriter that:
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(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"). Two
registration statements on such form (with the file numbers set forth
in Schedule B hereto) with respect to the Securities, including a
prospectus, have been prepared by the Company in conformity with the
requirements of the Act, the Trust Indenture Act of 1939, as amended
("Trust Indenture Act") and the rules and regulations ("Rules and
Regulations") of the Securities and Exchange Commission ("Commission")
thereunder and filed with the Commission and have become effective.
Such registration statements and prospectus may have been amended or
supplemented prior to the date of this Agreement; any such amendment
or supplement was so prepared and filed, and any such amendment filed
after the effective date of the registration statement to which it
relates has become effective. No stop order suspending the
effectiveness of either registration statement has been issued, and no
proceeding for that purpose has been instituted or threatened by the
Commission. A prospectus supplement ("Prospectus Supplement") setting
forth the terms of the Securities and of their sale and distribution
has been or will be so prepared and will be filed pursuant to Rule
424(b) of the Rules and Regulations on or before the second business
day after the date hereof (or such earlier time as may be required by
the Rules and Regulations). Copies of such registration statements
and prospectus, any such amendment or supplement and all documents
incorporated by reference therein that were filed with the Commission
on or prior to the date of this Agreement (including one fully
executed copy of the registration statements and of each amendment
thereto for each of you and for counsel for the Underwriters) have
been delivered to you. Such registration statements, as they may have
heretofore been amended, are collectively referred to herein as the
"Registration Statements" and individually referred to herein as a
"Registration Statement", and the final form of prospectus included in
the Registration Statements, as supplemented by the Prospectus
Supplement, is referred to herein as the "Prospectus". Each form of
Prospectus, or Prospectus and Prospectus Supplement, if any,
heretofore made available for use in offering the Securities is
referred to herein as a "Preliminary Prospectus". Any reference
herein to a Registration Statement, the Prospectus, any amendment or
supplement thereto or any Preliminary Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein,
and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to a Registration Statement or Prospectus
shall be deemed to refer to and include the filing after the execution
hereof of any document with the Commission deemed to be incorporated
by reference therein.
(b) Each part of the Registration Statements, when such part
became or becomes effective, each Preliminary Prospectus (if any) on
the date of filing thereof with the Commission, and the Prospectus and
any amendment or supplement thereto, on the date of filing thereof
with the Commission and at the Closing Date (as hereinafter defined),
conformed or will conform in all material respects with the
requirements of the Act, the Trust Indenture Act and the Rules and
Regulations; each part of the Registration Statements, when such part
became or becomes effective, did not or will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated
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therein or necessary to make the statements therein not misleading;
each Preliminary Prospectus (if any), on the date of filing thereof
with the Commission, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission
and at the Closing Date, did not or will not include an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that
the foregoing shall not apply to statements in or omissions from any
such document in reliance upon, and in conformity with, written
information furnished to the Company by you, or by any Underwriter
through you, specifically for use in the preparation thereof. The
Indenture, including any amendment and supplement thereto, pursuant
to which the Securities will be issued, conforms, or, in the case of
any amendment or supplement filed after the date of this Agreement,
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 Company and its
subsidiaries set forth in the Registration Statements and Prospectus
fairly present the financial condition of the Company 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 Company 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 Company either directly or through wholly owned subsidiaries
free and clear of any perfected security interest and any other
security interests, 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, executed and delivered and constitutes, and the
Securities, when duly executed, authenticated, issued and delivered as
contemplated hereby and by the Indenture, will constitute, valid and
legally binding obligations of the Company enforceable in accordance
with their terms, subject, as to enforcement, to 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).
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(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 Company or any of its subsidiaries of
a character required to be disclosed in the Registration Statements
which is not adequately 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 description 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 Company's authorized equity capitalization is as set
forth in the Prospectus (if contained therein).
(h) The execution, delivery and performance of the Indenture,
of this Agreement and of any Delayed Delivery Contracts (as
hereinafter defined), the issuance and sale of the Securities, the
consummation of the transactions herein contemplated and 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 Company or the terms of any indenture or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or bound, or any statute, rule, order or
regulation applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or any of its
subsidiaries; and the Company has full power and authority to
authorize, issue and sell the Securities as contemplated by this
Agreement.
(i) 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 Company, 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.
(j) This Agreement has been, and any Delayed Delivery
Contracts will be, duly authorized, executed and delivered by the
Company.
(k) The Company 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 Company or such subsidiary
to the use of its properties or the conduct of its business; and the
franchises of the Company 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
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Statements, and such others as do not materially affect the right of
the Company 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 Company 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. PURCHASE, SALE AND DELIVERY OF SECURITIES. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Company agrees to issue and
sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company, at the purchase price set forth in
Schedule B hereto, the amount of Securities set forth opposite the name of such
Underwriter in Schedule A hereto less the reduction for such Underwriter's
portion of any Contract Securities determined as provided below.
If so authorized in Schedule B hereto, the Underwriters may
solicit offers from investors of the types set forth in the Prospectus to
purchase Securities from the Company pursuant to delayed contracts ("Delayed
Delivery Contracts"). Such contracts shall be substantially in the form of
Exhibit I hereto but with such changes therein as the Company may approve.
Securities to be purchased pursuant to Delayed Delivery Contracts are herein
called "Contract Securities". When Delayed Delivery Contracts are authorized
in Schedule B, the Company will enter into a Delayed Delivery Contract in each
case where a sale of Contract Securities arranged through you has been approved
by the Company but, except as the Company may otherwise agree, such Delayed
Delivery Contracts must be for at least the minimum amount of Contract
Securities set forth in Schedule B hereto, and the aggregate amount of Contract
Securities may not exceed the amount set forth in such Schedule. The Company
will advise you not later than 10:00 A.M., New York City time, on the third
full business day preceding the Closing Date (or at such later time as you may
otherwise agree) of the sales of Contract Securities that have been so
approved. You and the other Underwriters will not have any responsibility in
respect of the validity or performance of Delayed Delivery Contracts.
The amount of Securities to be purchased by each Underwriter
as set forth in Schedule A hereto shall be reduced by an amount that shall bear
the same proportion to the total amount of Contract Securities as the amount of
Securities set forth opposite the name of such Underwriter bears to the total
amount of Securities set forth in Schedule A hereto, except to the extent that
you determine that such reduction shall be otherwise than in such proportion
and so advise the Company; provided, however, that the total amount of
Securities to be purchased by all Underwriters shall be the total amount of
Securities set forth in Schedule A hereto less the aggregate amount of Contract
Securities.
The Securities to be purchased by the Underwriters will be
delivered by the Company to you for the accounts of the several Underwriters at
the office specified in Schedule
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B hereto against payment of the purchase price therefor by the method, in the
funds, on the date and at the times specified in such Schedule B, or at such
other time not later than eight full business days thereafter as you and the
Company determine, such time being herein referred to as the "Closing Date".
If Schedule B indicates that the Securities are to be delivered in definitive
form, such Securities shall be in such authorized denominations and registered
in such names as you may request upon at least two business days' prior notice
to the Company and will be made available for checking and packaging at the
office at which they are to be delivered at the Closing Date (or such other
office as may be specified for that purpose in Schedule B) at least one
business day prior to the Closing Date. If Schedule B indicates that the
Securities are to be delivered in global book-entry form, such Securities shall
be in the denominations specified in the applicable letter of representations
between the Company, the Trustee and The Depository Trust Company ("DTC"),
shall be registered in the name of DTC or a nominee of DTC and shall be made
available for checking at the office at which they are to be delivered at the
Closing Date (or such other office as may be specified for that purpose in
Schedule B) at least one business day prior to the Closing Date.
It is understood that you, acting individually and not in a
representative capacity, may (but shall not be obligated to) make payment to
the Company on behalf of any other Underwriter for Securities to be purchased
by such Underwriter. Any such payment by you shall not relieve any such
Underwriter of any of its obligations hereunder.
The Company will pay to you, at the Closing Date, for the
account of each Underwriter any commission or other compensation that is
specified in Schedule B hereto. Such payment will be made by certified or
official bank check or checks in New York Clearing House (next day) funds or,
if specified in Schedule B, may be deducted by you from the purchase price of
the Securities.
4. COVENANTS. The Company covenants and agrees with each
Underwriter that:
(a) The Company will cause the Prospectus Supplement to be
filed as required by Section 2(a) hereof (but only if you have not
reasonably objected thereto by notice to the Company after having been
furnished a copy a reasonable time prior to filing) and will notify
you promptly of such filing. During the period in which a prospectus
relating to the Securities is required to be delivered under the Act,
the Company will notify you promptly of the time when any subsequent
amendment to either Registration Statement has become effective or any
subsequent supplement to the Prospectus has been filed and of any
request by the Commission for any amendment or supplement to either
Registration Statement or the Prospectus or for additional
information; it will prepare and file with the Commission, promptly
upon your request, any amendments or supplements to the Registration
Statements or Prospectus that, in your reasonable opinion, may be
necessary or advisable in connection with the distribution of the
Securities by the Underwriters; it will file no amendment or
supplement to the Registration Statements or Prospectus (other than
any prospectus supplement relating to the offering of other securities
registered under
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the Registration Statements or any document required to be filed under
the Exchange Act that upon filing is deemed to be incorporated by
reference therein) to which you shall reasonably object by notice to
the Company after having been furnished a copy a reasonable time prior
to the filing; and it will furnish to you at or prior to the filing
thereof a copy of any such prospectus supplement or any document that
upon filing is deemed to be incorporated by reference in the
Registration Statements or Prospectus.
(b) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the
Commission of any stop order suspending the effectiveness of either
Registration Statement, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceeding for any such purpose; and
it will promptly use its best efforts to prevent the issuance of any
stop order or to obtain its withdrawal if such a stop order should be
issued.
(c) Within the time during which a prospectus relating to the
Securities is required to be delivered under the Act, the Company will
comply as far as it is able with all requirements imposed upon it by
the Act and by the Rules and Regulations, as from time to time in
force, so far as necessary to permit the continuance of sales of or
dealings in the Securities as contemplated by the provisions hereof
and the Prospectus. If during such period 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 a
material fact necessary to make the statements therein, in the light
of the circumstances then existing, not misleading, or if during such
period it is necessary to amend or supplement either Registration
Statement or the Prospectus to comply with the Act, the Company will
promptly notify you and will amend or supplement such Registration
Statement or the Prospectus (at the expense of the Company) so as to
correct such statement or omission or effect such compliance.
(d) The Company will use its best efforts to qualify the
Securities for sale under the securities laws of such jurisdictions as
you reasonably designate and to continue such qualifications in effect
so long as required for the distribution of the Securities, except
that the Company shall not be required in connection therewith to
qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction. The Company will also arrange
for the determination of the eligibility for investment of the
Securities under the laws of such jurisdictions as you reasonably
request.
(e) The Company will furnish to the Underwriters copies of the
Registration Statements, the Prospectus (including all documents
incorporated by reference therein) and all amendments and supplements
to the Registration Statements or Prospectus that are filed with the
Commission during the period in which a prospectus relating to the
Securities is required to be delivered under the Act (including all
documents filed with the Commission during such period that are deemed
to be incorporated by reference therein), in each case
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as soon as available and in such quantities as you may from time to
time reasonably request.
(f) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 15
months after the end of the Company's current fiscal quarter, an
earnings statement (which need not be audited) covering a 12-month
period beginning after the date upon which the Prospectus Supplement
is filed pursuant to Rule 424 under the Act that shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay
all authorized expenses incident to the performance of its obligations
hereunder, will pay the expenses of printing all documents relating to
the offering, and will reimburse the Underwriters for any expenses
(including fees and disbursements of counsel) incurred by them in
connection with the matters referred to in Section 4(d) hereof and the
preparation of memoranda relating thereto, for any filing fee of the
National Association of Securities Dealers, Inc. relating to the
Securities, for any fees charged by investment rating agencies for
rating the Securities and, if the Securities are issued in global
book-entry form, for any fees charged by DTC. If the sale of
Securities to be purchased by the several Underwriters as provided for
herein is not consummated by reason of any failure, refusal or
inability on the part of the Company to perform any agreement on its
part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the
Company is not fulfilled, the Company will reimburse the several
Underwriters for all reasonable out-of-pocket disbursements (including
fees and disbursements of counsel) incurred by the Underwriters in
connection with their investigation, preparing to market and marketing
the Securities or in contemplation of performing their obligations
hereunder. The Company shall not in any event be liable to any of the
Underwriters for loss of anticipated profits from the transactions
covered by this Agreement.
(h) The Company will apply the net proceeds from the sale of
the Securities as set forth in the Prospectus and Prospectus
Supplement.
(i) The Company will not, directly or indirectly, offer or
sell, or determine to offer or sell, any debt securities that are
substantially similar to the Securities (except under prior
contractual commitments) during the period beginning at the time of
execution of this Agreement and ending on the first business day after
the Closing Date without your prior written consent.
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5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations
of the several Underwriters to purchase and pay for Securities as provided
herein shall be subject to the accuracy, as of the date hereof and the Closing
Date (as if made at the Closing Date), of the representations and warranties of
the Company herein, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of either
Registration Statement shall have been issued and no proceeding for
that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, threatened by the Commission, and any
request of the Commission for additional information (to be included
in either Registration Statement or the Prospectus or otherwise) shall
have been complied with to your satisfaction.
(b) No Underwriter shall have advised the Company that either
Registration Statement or the Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact that in your
opinion is material, or omits to state a fact that in your opinion is
material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the
Registration Statements and the Prospectus, there shall not have been
any change, on a consolidated basis, in the capital stock, long-term
debt of the Company and its subsidiaries, or any adverse change, or
any development involving a prospective adverse change, in the
condition (financial or other), business, prospects, net worth or
results of operations of the Company and its subsidiaries, or any
change in the rating assigned to any securities of the Company, that,
in your judgment, makes it impractical or inadvisable to offer or
deliver the Securities on the terms and in the manner contemplated in
the Prospectus.
(d) You shall have received the opinion of Amos & Jeffries,
L.L.P., counsel for the Company, dated the Closing Date, to the effect
that:
(i) The Company 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
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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 Company 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 and the Securities have been duly
authorized, the Indenture has been duly qualified under the
Trust Indenture Act, executed and delivered, the Securities
purchased by the Underwriters have been duly executed,
authenticated, issued and delivered, and the Indenture and
such Securities constitute, and any Contract Securities, when
executed, authenticated, issued and delivered in the manner
provided in the Indenture and the Delayed Delivery Contracts,
will constitute, valid and legally binding obligations of the
Company, 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);
(iii) 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 Company 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 Statements and Prospectus of
statutes, legal and governmental proceedings, contracts and
other documents are accurate and fairly present the
information required to be shown;
(iv) 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;
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(v) Each part of the Registration Statements, when
such part became effective, and the Prospectus and any
amendment or supplement thereto, on the date of filing thereof
with the Commission and at the Closing 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 either any part of
the Registration Statements, when such part became effective,
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading or
that the Prospectus and any amendment or supplement thereto,
on the date of filing thereof with the Commission or at the
Closing Date, included an 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 included in any of the documents mentioned
in this clause;
(vi) The Company'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 Company, 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;
(viii) The execution, delivery and performance of the
Indenture, this Agreement or any Delayed Delivery Contracts,
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 Company or the terms of any
indenture or other agreement or instrument known to such
counsel and to which the Company 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 Company or any
of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its subsidiaries; and
the Company has full power and authority to authorize, issue
and sell the Securities as contemplated by this Agreement;
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(ix) This Agreement and any Delayed Delivery
Contracts have been duly authorized, executed and delivered by
the Company.
(x) The Company 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 Company or
such Subsidiary to the use of its properties or the conduct of
its business; and the franchises of the Company 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 Company 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
Company 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.
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
Underwriters and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and
public officials. A copy of any such opinion of other counsel shall
be delivered to the Underwriters.
(e) You shall have received from Coudert Brothers, counsel for
the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity
of the Securities, the Registration Statements, the Prospectus and
other related matters as you reasonably may request, and such counsel
shall have received such papers and information as they request to
enable them to pass upon such matters. In rendering their opinion,
such counsel may rely upon the opinion of Amos & Jeffries, L.L.P.,
referred to above as to all matters governed by North Carolina law.
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(f) At or prior to the time of execution of this Agreement and
at the Closing Date, you shall have received a letter from Deloitte &
Touche LLP, dated the date of delivery thereof, to the effect set
forth in Exhibit II hereto.
(g) You shall have received from the Company a certificate,
signed by the Chairman, the President or a Vice President, and by the
principal financial or accounting officer, of the Company, dated the
Closing Date, to the effect that, to the best of their knowledge based
upon reasonable investigation:
(i) The representations and warranties of the
Company in this Agreement are true and correct, as if made at
and as of the Closing Date, and the Company has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing
Date;
(ii) No stop order suspending the effectiveness of
either Registration Statement has been issued, and no
proceeding for that purpose has been instituted or is
threatened, by the Commission; and
(iii) Since the date of this Agreement, there has
occurred no event required to be set forth in an amendment or
supplement to the Registration Statements or Prospectus that
has not been so set forth and there has been no document
required to be filed under the Exchange Act and the rules and
regulations of the Commission thereunder that upon such filing
would be deemed to be incorporated by reference in the
Prospectus that has not been so filed.
(h) The Company shall have furnished to you such further
certificates and documents as you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you. The Company will furnish you with such conformed copies of
such opinions, certificates, letters and other documents as you shall
reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter 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 an
untrue statement or alleged untrue statement of a material fact contained in
any part of the Registration Statements when such part became effective, or in
either Registration Statement, any Preliminary Prospectus, the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon 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 Underwriter for any legal or other expenses reasonably
incurred by it in connection with
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investigating or defending against such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Company shall
not be liable in any such 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 therein in reliance upon
and in conformity with written information furnished to the Company by you, or
by any Underwriter through you, specifically for use in the preparation
thereof.
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the
Company 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 an untrue statement or alleged untrue statement of a material
fact contained in any part of the Registration Statements when such part became
effective, or in either Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or arise out of or are based
upon 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, 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 therein in reliance upon and in conformity with written information
furnished to the Company by you, or by such Underwriter through you,
specifically for use in the preparation thereof, and will reimburse the Company
for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending against any such loss, claim,
damage, liability or action as such expenses are incurred. The Company
acknowledges that the statements set forth in the penultimate paragraph of the
cover page, under the heading "Plan of Distribution" in any Preliminary
Prospectus and the Prospectus and under the heading "Underwriting" in the
Prospectus Supplement constitute the only information furnished in writing by
or on behalf of such Underwriters 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
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party (i) shall not relieve it from any liability which it may
have to any indemnified party under such subsection unless and to the extent
such failure prejudices the indemnifying party of substantial rights or
defenses and (ii) shall not relieve it, in any event, from any liability that
it may have to any indemnified party otherwise than under such subsection. In
case any such action shall be brought against any indemnified party, and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall 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 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
14
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liable to such indemnified party under this Section 6 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 Underwriters in the case of paragraph (a) of this Section 6,
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 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, 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 Company on the one hand and the Underwriters on the other from the
offering of the Securities 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 Company on the one hand and the Underwriters on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering of the Securities (before deducting
expenses) received by the Company bear to the total compensation or profit
(before deducting expenses) received or realized by the Underwriters from the
purchase and resale, or underwriting, of the Securities. 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 Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were to be determined by pro rata
allocations (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the first sentence of 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 against any action or claim that is the subject of this subsection
(d). Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the
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amount of any damages that such Underwriter 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 Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 6 shall
be in addition to any liability that the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 6 shall be in addition to any liability
that the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each director of the Company (including any
person who, with his consent, is named in the Registration Statements as about
to become a director of the Company), to each officer of the Company who has
signed the Registration Statements and to each person, if any, who controls the
Company within the meaning of the Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the several
Underwriters contained in Section 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling persons, or the Company or any of its officers,
directors or any controlling persons, and shall survive delivery of and payment
for the Securities.
8. SUBSTITUTION OF UNDERWRITERS. (a) If any Underwriter or
Underwriters shall fail to take up and pay for the amount of Securities agreed
by such Underwriter or Underwriters to be purchased hereunder, upon tender of
such Securities in accordance with the terms hereof, and the amount of
Securities not purchased does not aggregate more than 10% of the total amount
of Securities set forth in Schedule A hereto, the remaining Underwriters shall
be obligated to take up and pay for (in proportion to their respective
underwriting obligations hereunder as set forth in Schedule A hereto except as
may otherwise be determined by you) the Securities that the withdrawing or
defaulting Underwriter or Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up
and pay for the amount of Securities agreed by such Underwriter or Underwriters
to be purchased hereunder, upon tender of such Securities in accordance with
the terms hereof, and the amount of Securities not purchased aggregates more
than 10% of the total amount of Securities set forth in Schedule A hereto, and
arrangements satisfactory to you and the Company for the purchase of such
Securities by other persons are not made within 36 hours thereafter, this
Agreement shall terminate. In the event of any such termination the Company
shall not be under any liability to any Underwriter (except to the extent
provided in Section 4(g) and Section 6 hereof) nor shall any Underwriter (other
than an Underwriter who shall have failed, otherwise than for some reason
permitted under this Agreement, to purchase the amount of Securities agreed by
such Underwriter to be purchased
16
18
hereunder) be under any liability to the Company (except to the extent provided
in Section 6 hereof).
9. TERMINATION. You shall have the right by giving notice as
hereinafter specified at any time at or prior to the Closing Date, to terminate
this Agreement if (i) the Company shall have failed, refused or been unable, at
or prior to the Closing Date, to perform any agreement on its part to be
performed hereunder, (ii) any other condition of the Underwriters' obligations
hereunder is not fulfilled, (iii) trading of securities generally on the New
York Stock Exchange shall have been suspended, or minimum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been required on such exchange, (iv) a banking moratorium shall have been
declared by Federal or New York authorities, or (v) any outbreak or escalation
of hostilities, declaration of war by Congress, any other substantial national
or international calamity or emergency shall have occurred since the execution
of this Agreement that, in your judgment, makes it impractical or inadvisable
to proceed with the completion of the sale of and payment for the Securities to
be purchased by the Underwriters. Any such termination shall be without
liability of any party to any other party except that the provisions of Section
4(g) and Section 6 hereof shall at all times be effective. If you elect to
terminate this Agreement as provided in this Section, the Company shall be
notified promptly by you by telephone, telex or telecopy, confirmed by letter.
10. NOTICES. All notices or communications hereunder shall
be in writing and if sent to you shall be mailed, delivered, telexed or
telecopied and confirmed to you at the address set forth for that purpose in
Schedule B hereto, or if sent to the Company, shall be mailed, delivered,
telexed or telecopied and confirmed to the Company at 1915 Rexford Road,
Charlotte, North Carolina 28211, Attention: Ted C. Coble, Vice President and
Treasurer. Notice to any Underwriter pursuant to Section 6 hereof shall be
mailed, delivered, telexed or telecopied and confirmed to such Underwriter's
address as it appears in such Underwriter's questionnaire or other notice
furnished to the Company in writing for the purpose of communications
hereunder. Any party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new address for
such purpose.
11. PARTIES. This Agreement shall inure to the benefit of
and be binding upon the Company and the Underwriters and their respective
successors and the controlling persons, officers and directors referred to in
Section 6 hereof, and no other person will have any right or obligation
hereunder. No purchaser of any Securities from any Underwriter shall be
construed a successor or assign by reason merely of such purchase.
In all dealings with the Company under this Agreement, you
shall act on behalf of each of the several Underwriters, and any action under
this Agreement taken by you or by any one of you designated in Schedule B
hereto will be binding upon all the Underwriters.
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12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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_________________
If the foregoing correctly sets forth the understanding
between the Company and the several Underwriters, please so indicate in the
space provided below for that purpose, whereupon this letter shall constitute a
binding agreement between the Company and the several Underwriters.
Alternatively, the execution of this Agreement by the Company and its
acceptance by or on behalf of the Underwriters may be evidenced by an exchange
of telecopied or other written communications.
Very truly yours,
PIEDMONT NATURAL GAS COMPANY, INC.
By
------------------------------
Name:
Title:
ACCEPTED as of the date first above
written [on behalf of ourselves and as
Representative(s) of the other Underwriters
named in Schedule A hereto].
[Name(s) of Representative(s)]
By
-------------------------------
By
-----------------------------
Name:
Title:
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SCHEDULE A
Amount of
Securities
to be
Underwriter Purchased
----------- -----------
-------------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . .$
===================
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SCHEDULE B
Registration Statement No. 33-59369 and 333-
-----
Titles of Securities:
Amounts of Securities:
Purchase Price:
Delayed Delivery:
Closing-
Office for delivery of Securities:
Office for payment for Securities:
Date and time of Closing:
Method of Payment:
Type of Funds:
Underwriting Commission/Discount-
Amount:
Method of payment:
Address for notices per Section 10:
Name of Underwriter to act per Section 11:
Form of Securities:
Particular terms of the Securities-
Interest:
Maturity:
23
Other terms:
22
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EXHIBIT I
PIEDMONT NATURAL GAS COMPANY, INC.
[Title of Securities]
DELAYED DELIVERY CONTRACT
, 199
----------------- -- -
Piedmont Natural Gas Company, Inc.
c/o
---------------------------------
[As Representative of the Several Underwriters,]
---------------------
---------------------
---------------------
Gentlemen:
The undersigned hereby agrees to purchase from Piedmont
Natural Gas Company, Inc. (the "Company"), and the Company agrees to sell to
the undersigned, [If one delayed closing, insert -- as of the date hereof, for
delivery on __________, 199_ (the "Delivery Date")] $__________ principal
amount of the Company's _______________ (the "Securities"), offered by the
Company's Prospectus relating thereto, receipt of a copy of which is hereby
acknowledged, at a purchase price of ___% of the principal amount thereof plus
accrued interest, if any, from _________ to the Delivery Date and on the
further terms and conditions set forth in this contract.
[If two or more delayed closings, insert - The undersigned
will purchase from the Company as of the date hereof, for delivery on the dates
set forth below, Securities in the amounts set forth below:
DELIVERY DATE AMOUNT
------------- ----------
------------- ----------
25
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Securities that the undersigned has agreed to
purchase for delivery on a Delivery Date shall be made to the Company by
[certified or official bank check] [wire transfer] of [next day] [immediately
available] funds [payable to the order of the Company] [to the Company's
account at ________] on that Delivery Date upon delivery to the undersigned of
the Securities to be purchased by the undersigned for delivery on that Delivery
Date in [definitive] [book-entry] form [and in such denominations and
registered in such names as the undersigned may designate by written or
telecopied communication addressed to the Company not less than five full
business days prior to that Delivery Date. If no request is received, the
Securities will be registered in the name of the undersigned and issued in a
denomination equal to the total amount of Securities to be purchased by the
undersigned on that Delivery Date.]
The obligation of the Company to make delivery of and accept
payment for, and the obligation of the undersigned to take delivery of and make
payment for, Securities on a Delivery Date shall be subject only to the
conditions that (1) investment in the Securities shall not at that Delivery
Date be prohibited under the laws of any jurisdiction in the United States to
which the undersigned is subject, which investment the undersigned represents
is not prohibited on the date hereof, and (2) the Company shall have sold to
the Underwriters the amount of Securities to be sold to them pursuant to the
Underwriting Agreement referred to in the Prospectus mentioned above.
Promptly after completion of the sale to the Underwriters, the
Company will mail or deliver to the undersigned at its address set forth below
notice to such effect, accompanied by a copy of the opinion of counsel for the
Company delivered to the Underwriters in connection therewith.
This contract will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
It is understood that the acceptance of this contract and any
other similar contracts is in the Company's sole discretion and, without
limiting the foregoing, need not be on a first-come, first-served basis. If
this contract is acceptable to the Company, it is requested that the Company
sign the form of acceptance below and mail or deliver one of the counterparts
hereof to the undersigned at its address set forth below. This will become a
binding contract between the Company and the undersigned when such counterpart
is so mailed or delivered.
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This contract shall be governed by, and construed in
accordance with, the laws of the State of New York.
Very truly yours,
[Name of Purchaser]
By
--------------------------------
Name:
Title:
----------------------------------
----------------------------------
(Address of Purchaser)
Accepted, as of the above date.
PIEDMONT NATURAL GAS COMPANY, INC.
By
--------------------------------
Name:
Title:
3
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EXHIBIT II
1. They are independent certified public accountants
with respect to the Company and its subsidiaries within the meaning of the Act
and the Rules and Regulations.
2. In their opinion, the financial statements and any
schedules audited by them and included or incorporated by reference in the
Registration Statements and Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the published rules and regulations of the Commission
thereunder.
3. They have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of interim
financial information as described in SAS 71, Interim Financial Information, on
the unaudited financial statements included in the Company's Quarterly Reports
on Form 10-Q incorporated by reference in the Prospectus.
4. On the basis of a reading of the latest unaudited
financial statements made available by the Company and its subsidiaries;
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 the Subsidiaries; and inquiries of certain
officials of the Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries, nothing came to their attention
which caused them to believe that:
(A) any material modifications should be made to the unaudited
financial statements, if any, included or incorporated by
reference in the Prospectus, for them to be in conformity with
generally accepted accounting principles;
(B) the unaudited financial statements, if any, included or
incorporated by reference in the Prospectus do not comply as
to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act and the
published rules and regulations of the Commission thereunder;
(C) 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;
(D) 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 date of
28
such letter, there was any change in the capital stock (except
for the issuance of Common Stock under the Company's Employee
Stock Purchase Plan, Executive Long-Term Incentive Plan and
Dividend Reinvestment and Stock Purchase Plan) or any increase
in short-term indebtedness or consolidated long-term debt or
any decrease in total common stock equity of the Company 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
(E) for the period from the date of the latest income statement
included in the Prospectus to the 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;
except in all cases set forth in clauses (D) and (E) above for changes,
increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter.
5. 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 Company and its subsidiaries subject to the internal
controls of the Company'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. References to the Prospectus in
this Exhibit II include any supplement thereto at the date of the letter.
2