<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 16, 1995
REGISTRATION NO. 33-
POST-EFFECTIVE AMENDMENT NO. 2 TO REGISTRATION NO. 33-60108
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
AND
POST-EFFECTIVE AMENDMENT NO. 2
UNDER
THE SECURITIES ACT OF 1933
---------------------
PIEDMONT NATURAL GAS COMPANY, INC.
(Exact name of Registrant as specified in its charter)
---------------------
<TABLE>
<S> <C>
NORTH CAROLINA 56-0556998
(State or other jurisdiction of incorporation (I.R.S. Employer Identification No.)
or organization)
</TABLE>
1915 REXFORD ROAD
POST OFFICE BOX 33068
CHARLOTTE, NC 28233
(704) 364-3120
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
JOHN H. MAXHEIM
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PIEDMONT NATURAL GAS COMPANY, INC.
1915 REXFORD ROAD, CHARLOTTE, NC 28211
(704) 364-3120
(Name, address, including zip code, and telephone numbers, including area code,
of agent for service)
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WITH COPIES TO:
<TABLE>
<S> <C>
JERRY W. AMOS, ESQ. ARNOLD H. TRACY, ESQ.
AMOS & JEFFRIES, L.L.P. MUDGE ROSE GUTHRIE
SUITE 1230 ALEXANDER & FERDON
230 NORTH ELM STREET 180 MAIDEN LANE
GREENSBORO, NORTH CAROLINA 27401 NEW YORK, NEW YORK 10038
(910) 273-5569 (212) 510-7400
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined by
market conditions and other factors.
If the only securities being registered on this Form S-3 are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form S-3 are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. /X/
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2)(3) PRICE(2)(3) FEE
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<S> <C> <C> <C> <C>
Debt Securities.............. $130,000,000 100% $130,000,000 $44,827.59
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</TABLE>
(1) Plus such additional principal amount as may be necessary such that, if Debt
Securities are issued with an original issue discount, the aggregate initial
offering price of all Debt Securities will equal $130,000,000.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Excluding accrued interest and accrued amortization of discount, if any, to
the date of delivery.
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT AND POST-EFFECTIVE
AMENDMENT NO. 2 ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY THEIR
EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT AND POST-EFFECTIVE
AMENDMENT NO. 2 SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION
8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION
STATEMENT AND POST-EFFECTIVE AMENDMENT NO. 2 SHALL BECOME EFFECTIVE ON SUCH DATE
AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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* Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus included
in this registration statement is a combined prospectus and also relates to
Registration Statement No. 33-60108 previously filed by the registrant. This
registration statement, which is a new registration statement, also
constitutes Post-Effective Amendment No. 2 to Registration Statement No.
33-60108, and such Post-Effective Amendment No. 2 shall hereafter become
effective concurrently with the effectiveness of this registration statement.
This registration statement and the registration statement amended hereby are
collectively referred to herein as the "Registration Statement."
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
REGISTRATION STATEMENTS RELATING TO THESE SECURITIES HAVE BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME SUCH REGISTRATION
STATEMENTS BECOME EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE ANY OFFER
TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE
OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE
WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY STATE.
SUBJECT TO COMPLETION DATED MAY 16, 1995
PROSPECTUS
- ----------
PIEDMONT NATURAL GAS COMPANY, INC.
$150,000,000
DEBT SECURITIES
---------------------
Piedmont Natural Gas Company, Inc. (the "Company") intends to offer and
issue from time to time in one or more series up to $150,000,000 aggregate
principal amount of unsecured notes, debentures and other evidences of
indebtedness (the "Debt Securities"). The Debt Securities may be offered as
separate series in amounts, at prices and on terms to be determined when an
agreement to sell is made or at the time or times of sale, as the case may be,
and set forth in one or more supplements to this Prospectus (each, a "Prospectus
Supplement"), which will be delivered to the offerees.
The terms of each series of the Debt Securities, including, where
applicable, the specific designation, aggregate principal amount, authorized
denominations, interest rate or rates (which may be fixed or variable),
maturity, any premium, any interest payment dates, any optional or mandatory
redemption terms, the initial public offering price, the proceeds to the Company
and any other terms of the offering of such series will be set forth in one or
more Prospectus Supplements. Debt Securities may be issued with amounts payable
in respect of principal of or premium or interest on the Debt Securities
determined by reference to the value, rate or price of one or more specified
indices.
The Debt Securities may be sold (i) to or through underwriting syndicates
represented by managing underwriters, or by underwriters without a syndicate,
such underwriters to be designated at the time of sale; (ii) through agents
designated from time to time; or (iii) directly by the Company. See "Plan of
Distribution." The names of any underwriters or agents involved in the offering
and sale of the Debt Securities and any applicable commissions or discounts will
be set forth in the corresponding Prospectus Supplement. The net proceeds to the
Company from such sale also will be set forth in such Prospectus Supplement.
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by a Prospectus Supplement.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1995.
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "1934 Act") and in accordance therewith files reports,
proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information filed by the Company can be inspected and copied at the following
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional Offices of the
Commission: Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and 7 World Trade Center, Suite 1300, New York,
New York 10048. Copies of this material may also be obtained by mail from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Company's Common Stock is
listed on the New York Stock Exchange ("NYSE"), and reports, proxy statements
and other information concerning the Company may be inspected and copied at the
offices of the NYSE at 20 Broad Street, New York, New York 10005.
This Prospectus does not contain all of the information set forth in the
Registration Statements on Form S-3, of which this Prospectus is a part, and
exhibits relating thereto which the Company has filed with the Commission under
the Securities Act of 1933, as amended (the "1933 Act"). Reference is made to
such Registration Statements and to the exhibits relating thereto for further
information with respect to the Company and the Debt Securities offered hereby.
Statements contained herein concerning the provisions of documents are
necessarily summaries of such documents, and each statement is qualified in its
entirety by reference to the copy of the applicable document filed with the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, previously filed by the Company with the
Commission pursuant to Section 13 of the 1934 Act, are incorporated herein by
reference:
(a) Annual Report on Form 10-K for the year ended October 31, 1994;
(b) Quarterly Report on Form 10-Q for the quarter ended January 31,
1995; and
(c) Current Report on Form 8-K filed on February 27, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the 1934 Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Debt Securities hereby offered shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of the filing of such documents. The documents incorporated
or deemed to be incorporated herein by reference are sometimes hereinafter
called the "Incorporated Documents." Any statement contained herein or in the
Incorporated Documents shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein, in the
accompanying Prospectus Supplement or in any subsequently filed Incorporated
Document modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The information relating to the Company contained in this Prospectus does
not purport to be comprehensive and is based upon information contained in the
Incorporated Documents. Accordingly, the information contained herein should be
read together with the information contained in the Incorporated Documents.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY
BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS IS DELIVERED, UPON THE
WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE
INCORPORATED DOCUMENTS (OTHER THAN CERTAIN EXHIBITS TO SUCH DOCUMENTS WHICH ARE
NOT SPECIFICALLY INCORPORATED BY REFERENCE IN SUCH DOCUMENTS). REQUESTS FOR SUCH
COPIES SHOULD BE DIRECTED TO THE OFFICE OF THE SECRETARY, PIEDMONT NATURAL GAS
COMPANY, INC., 1915 REXFORD ROAD, POST OFFICE BOX 33068, CHARLOTTE, NORTH
CAROLINA 28233; TELEPHONE NUMBER (704) 364-3120.
2
<PAGE> 4
THE COMPANY
The Company is an energy and services company primarily engaged in the
transportation and sale of natural gas and the sale of propane to over 560,000
residential, commercial and industrial natural gas and propane customers in
North Carolina, South Carolina and Tennessee. The Company was incorporated in
1993 under the laws of the State of North Carolina under the name "PNG
Acquisition Company" for the purpose of changing the state of incorporation of
Piedmont Natural Gas Company, Inc., a New York corporation ("Old Piedmont"),
from New York to North Carolina, and has succeeded to all assets, rights,
liabilities and obligations of Old Piedmont as a result of the merger of Old
Piedmont with and into the Company effective as of March 1, 1994. The Company,
as the surviving corporation in the merger, changed its name immediately
following the effective time of the merger to "Piedmont Natural Gas Company,
Inc."
The principal executive offices of the Company are maintained at 1915
Rexford Road, Post Office Box 33068, Charlotte, North Carolina 28233; telephone
number (704) 364-3120.
The Company's utility operations serve over 512,000 natural gas customers.
The Company and its non-utility subsidiaries and divisions are also engaged in
acquiring, marketing and arranging for the transportation of natural gas to
large volume purchasers, in retailing residential and commercial gas appliances
and in the sale of propane and propane appliances to over 47,000 customers in
the Company's three-state service area.
In the Carolinas, the Company's service area is comprised of numerous
cities, towns and communities including Anderson, Greenville and Spartanburg in
South Carolina and Charlotte, Salisbury, Greensboro, Winston-Salem, High Point,
Burlington and the Hickory area in North Carolina. In Tennessee, the service
area is the Nashville metropolitan area, including portions of eight adjoining
counties. The Company's propane market is in and adjacent to its natural gas
markets in all three states. The Company is principally engaged in the gas
distribution industry and has no other reportable industry segments.
The Company's utility operations are subject to regulation by the North
Carolina Utilities Commission ("NCUC") and the Tennessee Public Service
Commission ("TPSC") as to the issuance of securities, and by those commissions
and by the Public Service Commission of South Carolina as to rates, service
area, adequacy of service, safety standards, extensions and abandonment of
facilities, accounting and depreciation. The Company is also subject to or
affected by various federal regulations.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the net
proceeds from the sale of the Debt Securities will be used for general corporate
purposes, including construction of additional facilities, the repayment of
short-term debt and working capital needs. Pending such use, the Company may
temporarily invest the net proceeds in investment grade securities. The Company
may, from time to time, engage in additional capital financing of a character
and in amounts to be determined by the Company in light of its needs at such
time or times and in light of prevailing market conditions. If the Company
elects at the time of an issuance of the Debt Securities to make different or
more specific use of proceeds other than that set forth herein, such use will be
described in the Prospectus Supplement.
3
<PAGE> 5
RATIO OF EARNINGS TO FIXED CHARGES
The following are the consolidated ratios of earnings to fixed charges for
the twelve-month period ended January 31, 1995, and each of the fiscal years of
the Company in the five-year period ended October 31, 1994:
<TABLE>
<CAPTION>
TWELVE MONTHS
ENDED YEARS ENDED OCTOBER 31
JANUARY 31, ----------------------------------------
1995 1994 1993 1992 1991 1990
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges (unaudited)(1)......... 3.01 2.91 3.28 3.16 2.19 2.58
</TABLE>
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(1) For purposes of computing the consolidated ratios, "earnings" represent the
Company's net income from continuing operations plus applicable income
taxes and fixed charges, and "fixed charges" represent interest expense,
amortization of debt discount, premium and expense, and a portion of lease
payments considered to represent an interest factor.
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate. The particular terms of the Debt Securities offered by any
Prospectus Supplement (the "Offered Securities") and the extent, if any, to
which such general provisions may apply to the Offered Securities will be
described in the Prospectus Supplement relating to such Offered Securities.
The Debt Securities will be issued under an Indenture dated as of April 1,
1993 between Old Piedmont and Citibank, N.A., as trustee (the "Trustee"), as
amended by the First Supplemental Indenture dated as of February 25, 1994, among
the Company, Old Piedmont and the Trustee (as so amended, the "Indenture"). The
Indenture has been filed as Exhibits 4.1 and 4.2 to the Registration Statements
of which this Prospectus is a part. The following summary of certain provisions
of the Indenture does not purport to be complete and is subject to and qualified
in its entirety by reference to the provisions of the Indenture. Whenever
particular sections or defined terms of the Indenture are referred to, it is
intended that such sections or defined items shall be incorporated herein by
reference. Unless otherwise indicated, capitalized terms shall have the meaning
ascribed to them in the Indenture.
GENERAL
The Debt Securities may be issued from time to time in one or more series.
Although the amount of Debt Securities offered hereby will be limited to the
aggregate initial offering price described on the cover page of this Prospectus,
the Indenture does not contain any limitations on the amount of Debt Securities
that may be issued thereunder at any time or from time to time in one or more
series.
The Debt Securities will be unsecured obligations of the Company and will
rank equally and ratably with all other unsecured indebtedness of the Company.
As of April 30, 1995, the Company had issued and outstanding senior notes with
an aggregate principal amount of $188,000,000 and medium-term notes with an
aggregate principal amount of $130,000,000.
Reference is made to the applicable Prospectus Supplement for the specific
terms of the Offered Securities, including: (1) the specific title of the
Offered Securities; (2) any limit on the aggregate principal amount of the
Offered Securities; (3) the person to whom any interest on the Offered
Securities will be payable, if other than the person in whose name that Offered
Security is registered at the close of business on the record date for such
interest; (4) the date or dates on which the principal of the Offered Securities
is payable; (5) the rate or rates at which the Offered Securities will bear
interest, if any, or the formula pursuant to which such rate or rates will be
determined, and the date or dates from which any such interest will accrue, and
the date or dates for any interest payable; (6) the place or places where the
principal, premium (if any) and interest on the Offered Securities will be
payable, and the method of such payment; (7) the period or
4
<PAGE> 6
periods within which the price or prices at which and the terms and conditions
upon which the Offered Securities may be redeemed, in whole or in part, at the
option of the Company; (8) the obligation, if any, of the Company to purchase or
redeem the Offered Securities pursuant to any sinking fund or analogous
provision or at the option of holders thereof and the period or periods within
which, the price or prices at which and the terms and conditions upon which the
Offered Securities will be redeemed or purchased, in whole or in part, pursuant
to such obligation; (9) the denominations in which the Offered Securities will
be issuable, if other than denominations of $1,000 and any integral multiple
thereof; (10) if the amount of payments of principal, premium (if any) or
interest on the Offered Securities may be determined with reference to an index,
the manner in which such amounts shall be determined; (11) whether the Offered
Securities shall be issuable in whole or in part in the form of one or more
Global Securities (as defined under "Exchange Registration and Transfer") and,
if so, the securities depository or depositories for such Global Security or
Securities (the "Depository") and the circumstances under which any such Global
Security or Securities may be registered for transfer or exchange, or
authenticated and delivered, in the name of a person other than such Depository
or its nominee, other than as set forth in the Indenture; (12) if other than the
principal amount thereof, the portion of the principal amount of the Offered
Securities which shall be payable upon declaration of acceleration of the
maturity thereof; (13) any modification, amendment or addition to the covenants
of the Company; (14) whether the Offered Securities shall be subject to
defeasance or covenant defeasance, or such other means of satisfaction and
discharge as may be specified therein; (15) any additional Events of Default;
and (16) any other terms or provisions of the Offered Securities not
inconsistent with the provisions of the Indenture.
Debt Securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time of
issuance is below market rates. Special United States federal income tax
considerations applicable to Debt Securities issued at an original issue
discount are described under "Certain Federal Tax Considerations".
GLOBAL SECURITIES
The specific terms of the depository arrangements with respect to any Debt
Securities represented by a Global Security will be described in the applicable
Prospectus Supplement.
Debt Securities will be issuable only in fully registered form. Debt
Securities of a series may be represented, in whole or in part, by one or more
permanent global book-entry securities (each a "Global Security") in a
denomination or aggregate denomination equal to the portion of the aggregate
principal amount of Debt Securities of such series to be represented by such
Global Security. Any such Global Security shall bear the legend required by the
Indenture and may not be registered in the name of or transferred to a person
other than the Depository or its nominee unless (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository, or if the
Depository ceases to be a clearing agency registered under the 1934 Act, (ii)
the Company instructs the Trustee in accordance with the Indenture that the Debt
Securities represented by such Global Security shall be so exchangeable and the
transfer thereof so registerable, or (iii) there shall have occurred and be
continuing an Event of Default with respect to the Debt Securities of such
series.
EXCHANGE REGISTRATION AND TRANSFER
Debt Securities not represented by a Global Security may be presented for
exchange or registration of transfer (with the form of transfer endorsed thereon
duly executed) at the office or agency designated and maintained by the Company
for such purpose. Such Debt Securities may be exchanged for a like aggregate
principal amount of Debt Securities of other authorized denominations of such
series. The transfer of such Debt Securities may also be registered in registry
books kept at such office or agency (the "Debt Security Register"). No service
charge shall be made for any exchange or registration of transfer of such Debt
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
5
<PAGE> 7
The Company shall not be required to exchange or register a transfer of (i)
any Debt Securities of any series for a period of fifteen (15) days next
preceding the mailing of the notice of any redemption of such Debt Securities of
such series to be redeemed, or (ii) any such series selected, called or being
called for redemption except, in the case of any such series to be redeemed in
part, the portion thereof not to be so redeemed.
REDEMPTION
Any terms for the optional or mandatory redemption of the Debt Securities
will be set forth in the applicable Prospectus Supplement. Except as shall
otherwise be provided with respect to the Debt Securities redeemable at the
option of the holder, such Debt Securities will be redeemable only upon notice,
by mail, not less than thirty (30) nor more than sixty (60) days prior to the
date fixed for redemption and, if less than all of the Debt Securities of any
series are to be redeemed, the Trustee shall select the particular Debt
Securities to be redeemed in such manner as it deems fair and appropriate. If
less than all of the Debt Securities represented by a Global Security are to be
redeemed, the beneficial interest to be redeemed will be selected by the
Depository as described in the applicable Prospectus Supplement.
COVENANTS
The Indenture contains the covenants summarized below, which are applicable
so long as any of the Debt Securities are outstanding.
The Company will cause (or, with respect to property owned in common with
others, make reasonable effort to cause) all its properties used or useful in
the conduct of its business to be maintained and kept in good condition, repair
and working order and will cause (or, with respect to property owned in common
with others, make reasonable effort to cause) to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as, in the
judgment of the Company, may be necessary so that the business carried on in
conjunction therewith may be properly conducted; provided, however, that the
foregoing shall not prevent the Company from discontinuing, or causing the
discontinuance of, the operation and maintenance of any of its properties if
such discontinuance is, in the judgment of the Company, desirable in the conduct
of its business.
The Company will not create, assume or suffer to exist, and will not permit
any subsidiary to create, assume or suffer to exist, except in favor of the
Company, any mortgage, pledge or other lien or encumbrance of or upon any of its
properties or assets (including stock and other securities of subsidiaries)
without making effective provisions to secure equally and ratably the Debt
Securities then outstanding and other indebtedness entitled to be so secured,
except that the Company or a subsidiary, without so securing the Debt
Securities, may create, assume or suffer to exist (a) certain purchase money and
existing liens in connection with property acquisitions and the extension,
renewal or refunding of the same, (b) pledges of current assets, in the ordinary
course of business to secure current liabilities, (c) liens on property to
secure obligations to pay all or a part of the purchase price of such property
only out of or measured by oil or gas production or the proceeds thereof, or
liens upon production from oil and gas property or the proceeds of such
production, to secure obligations to pay all or part of the expenses of
exploration, drilling or development of such property only out of such
production or proceeds, (d) mechanics' or materialman's liens, certain good
faith deposits, deposits to secure public or statutory obligations, deposits to
secure, or in lieu of, surety, stay or appeal bonds, and deposits as security
for payment of taxes, assessments or similar charges and liens or security
interests created in connection with bid or completion bonds, (e) liens arising
by reason of deposits with, or the giving of security to, a governmental agency
as a condition to the transaction of business or the exercise of a privilege or
license, or to enable the Company or a subsidiary to maintain self-insurance or
participate in any funds established to cover any insurance risks in connection
with workmen's compensation, unemployment insurance, old age pension or other
social security, (f) pledges or assignments of accounts receivable, including
customers' installment paper, to banks or others (including to or by any
subsidiary which is principally engaged in the business of financing the
business of the Company and its subsidiaries) made in the ordinary course of
business, (g) liens of taxes or assessments for the current year or not due or
being contested in good faith and against which an adequate reserve has been
established, (h) judgments or liens the finality of which is being contested and
execution on which is stayed, (i) assessments or similar encumbrances the
existence of
6
<PAGE> 8
which does not impair the use of the property subject thereto for the purposes
for which it was acquired, (j) certain landlords' liens so long as the rent
secured thereby is not in default, and (k) liens on the assets of any limited
liability company organized under a limited liability company act of any state
which limited liability company is treated as a partnership for federal income
tax purposes.
Subject to the provisions described under "Consolidation, Merger or Sale",
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence, rights (charter and
statutory) and franchises of the Company and its subsidiaries; provided,
however, that the Company shall not be required to preserve, or cause any
subsidiary to preserve, any such right or franchise or to keep in full force and
effect the corporate existence of any subsidiary if, in the judgment of the
Company, preservation thereof is no longer desirable in the conduct of the
business of the Company and the loss thereof is not disadvantageous in any
material respect to the holders of any series of Debt Securities.
CONSOLIDATION, MERGER OR SALE
The Company will not consolidate with or merge into any other corporation
or sell or convey all or substantially all of its assets to any person, firm or
corporation unless (i) either the Company shall be the continuing corporation,
or the successor corporation (if other than the Company) shall be a corporation
organized and existing under the laws of the United States of America or a state
thereof or the District of Columbia and such corporation shall expressly assume,
by supplemental indenture, the due and punctual payment of the principal,
premium (if any) and interest on all the Debt Securities and the performance of
all of the covenants of the Company under the Indenture, (ii) the Company or
such successor corporation, as the case may be, shall not, immediately after
such merger or consolidation, or such sale or conveyance, be in default in the
performance of any such covenant or condition, and (iii) the Company will have
delivered to the Trustee an Opinion of Counsel as provided in the Indenture.
PAYMENT AND PAYING AGENT
The principal, premium (if any) and interest (if any) on Debt Securities
not represented by a Global Security shall be payable in New York Clearing House
Funds at the office or agency of the Paying Agent or Paying Agents as the
Company may designate from time to time, provided that, at the option of the
Company, interest may be paid by check mailed to the holders entitled thereto at
their last addresses as they appear in the Debt Security Register.
The Trustee is initially designated as the Company's sole Paying Agent and
the principal corporate trust office of Citibank, N.A., in the Borough of
Manhattan, the City of New York, is initially designated as the office where the
Debt Securities may be presented for payment, for the registration of transfer
and for exchange and where notices and demands to or upon the Company in respect
of the Debt Securities or of the Indenture may be served.
Unless otherwise indicated in the applicable Prospectus Supplement,
interest payments shall be made to the person in whose name any Debt Security is
registered at the close of business on the record date with respect to an
interest payment date.
All moneys paid by the Company to a Paying Agent for the payment of
principal, premium (if any) or interest on any Debt Security of any series which
remain unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will be repaid to the Company, and
the holder of such Debt Security will thereafter look only to the Company for
payment thereof.
DEFAULTS AND RIGHTS OF ACCELERATION
The following are Events of Default under the Indenture with respect to a
particular series of Debt Securities:
(a) default in the payment of the principal or premium (if any) on any
of the Debt Securities of such series when due and payable;
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(b) default in the payment of any installment of interest upon any of
the Debt Securities of such series when due and payable, and continuance of
such default for a period of thirty (30) days;
(c) default in the payment of any sinking or purchase fund payment or
analogous obligation when due and payable;
(d) failure to observe or perform any other covenants or agreements of
the Company for a period of ninety (90) days after written notice of such
failure has been given as provided in the Indenture;
(e) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company (including a default with
respect to Debt Securities of any series other than that series) or under
any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any indebtedness for money borrowed
by the Company (including the Indenture) whether such indebtedness now
exists or shall hereafter be created, which default shall constitute a
failure to pay in excess of $50,000,000 principal amount of such
indebtedness when due and payable after the expiration of any applicable
grace period with respect thereto or shall have resulted in an excess of
$50,000,000 of principal amount of such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise have
become due and payable, without such indebtedness having been discharged,
or such acceleration having been rescinded or annulled, within a period of
ten (10) days after there shall have been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the holders of at least 25% in principal amount of the outstanding Debt
Securities of that series a written notice specifying such default and
requiring the Company to cause such indebtedness to be discharged or cause
such acceleration to be rescinded or annulled and stating that such notice
is a "Notice of Default" thereunder; or
(f) certain events in bankruptcy, insolvency or other similar
occurrences.
The Indenture provides that if an Event of Default described in clause (a),
(b), (c), (d) or (e) shall have occurred and is continuing, and in each and
every such case, unless the principal amount of all the Debt Securities of such
series shall have already become due and payable, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Debt
Securities of all series affected thereby then outstanding, by notice in writing
to the Company (and to the Trustee if given by securityholders) may declare the
principal amount of all the Debt Securities (or, with respect to Discount Debt
Securities, as defined below under "Certain Federal Tax Considerations", such
lesser amount as may be specified in the terms of such Debt Securities) affected
thereby to be due and payable immediately, or, if an Event of Default described
in clause (f) shall have occurred and is continuing, and unless the principal of
all the Debt Securities of such series shall have already become due and
payable, either the Trustee or the holders of not less than 25% in aggregate
principal amount of all the Debt Securities then outstanding, by notice in
writing to the Company (and to the Trustee if given by securityholders), may
declare the principal of all the Debt Securities (or, with respect to Discount
Debt Securities, such lesser amount as may be specified in the terms of such
Debt Securities) to be due and payable immediately. Upon certain conditions,
such declarations may be annulled and certain past defaults may be waived by the
holders of a majority of the principal amount of outstanding Debt Securities of
such series. For information as to waiver of defaults, see "Meetings;
Modification of the Indenture; Waiver."
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance.
Under the Indenture, the Trustee must give to the holders of each series of
Debt Securities notice of all uncured defaults with respect to such series
within ninety (90) days after the occurrence of such a default; provided that,
except in the case of default in the payment of principal, premium (if any) or
interest on any of the Debt Securities, the Trustee shall be protected in
withholding such notice if it in good faith determines that the withholding of
such notice is in the interests of the holders of the Debt Securities of such
series.
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MEETINGS; MODIFICATION OF THE INDENTURE; WAIVER
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than 66 2/3% in aggregate principal
amount of all series of the Debt Securities to be affected at the time
outstanding under the Indenture (voting as one class), to enter indentures
supplemental to or modifying the Indenture or the rights of the holders of such
Debt Securities, except that no such modification shall (a) extend the fixed
maturity, reduce the principal amount or redemption premium (if any) or reduce
the rate or extend the time of payment of interest on any Debt Security without
the consent of the holder of each Debt Security so affected; or (b) reduce the
percentage in principal amount of the outstanding Debt Securities, the consent
of whose holders is required for any such modification, without the consent of
the holders of all Debt Securities then outstanding.
Without the consent of any holders of Debt Securities, the Company and the
Trustee may enter into one or more supplemental indentures (which shall conform
to the provisions of the Trust Indenture Act as in force at the date of the
execution thereof) for any of the following purposes:
(a) to evidence the succession of another corporation to the Company,
or successive successions and the assumption by the successor corporation
of the covenants, agreements and obligations of the Company pursuant to
Article Eleven of the Indenture;
(b) to add to the covenants of the Company for the protection of the
holders of the Debt Securities, and to make the occurrence, or the
occurrence or continuance, of a default in any of such additions, an Event
of Default permitting the enforcement of all remedies provided in the
Indenture, with such period of grace, if any, and subject to such
conditions as such supplemental indenture may provide;
(c) to provide for the issuance under this Indenture of Debt
Securities, whether or not then outstanding, in coupon form (including Debt
Securities registrable as to principal only) and to provide for
exchangeability of such Debt Securities with Debt Securities issued
hereunder in fully registered form and to make all appropriate changes for
such purpose;
(d) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualification of the
Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted, and to add to the Indenture such other
provisions as may be expressly permitted by the Trust Indenture Act,
excluding, however, the provisions referred to in Section 316(a)(2) of the
Trust Indenture Act or any corresponding provision in any similar federal
statute hereafter enacted;
(e) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee;
(f) to evidence and provide for the acceptance and appointment
hereunder of a successor trustee with respect to the Debt Securities of one
or more series and to add or change any provisions of the Indenture as
shall be necessary to provide for or facilitate the administration of the
trusts by more than one trustee;
(g) to change or eliminate any provision of the Indenture or to add
any new provision to the Indenture; provided that if such change,
elimination or addition will adversely affect the interests of the holders
of the Debt Securities of any series in any material respect, such change,
elimination or addition will become effective with respect to such series
only when there is no Debt Security of such series remaining outstanding
under the Indenture;
(h) to provide collateral security for the Debt Securities;
(i) to change any place where (1) the principal, premium (if any) and
interest on Debt Securities of any series shall be payable; (2) any Debt
Securities of any series may be surrendered for registration of transfer;
(3) Debt Securities of any series may be surrendered for exchange; and (4)
notices and demands to or upon the Company in respect of the Debt
Securities of any series and the Indenture may be served; and
(j) to establish the form or terms of Debt Securities of any series as
permitted by the Indenture.
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The Trustee is authorized by the Indenture to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
indenture which adversely affects the Trustee's own rights, duties or immunities
under the Indenture or otherwise. No supplemental indenture shall be effective
as against the Trustee unless and until the Trustee has duly executed and
delivered the same.
The Indenture contains provisions for convening meetings of the holders of
Debt Securities of a series. A meeting may be called at any time by the Trustee,
and also by the Company or the holders of at least 25% in aggregate principal
amount of the outstanding Debt Securities of any series if the Trustee fails to
call the meeting upon request of the Company or such holders. Notice of every
meeting of securityholders, setting forth the time and place in the Borough of
Manhattan, the City of New York, of such meeting and in general terms the action
proposed, shall be mailed to all holders of Debt Securities of the applicable
series as the names and addresses of such holders appear on the Debt Security
Register.
Each holder of Debt Securities of a series with respect to which a meeting
is being held (or such holder's proxy) shall be entitled to one vote for each
$1,000 outstanding principal amount of Debt Securities held (or represented) by
him. The vote upon any resolution submitted to any meeting of securityholders
shall be by written ballot.
The holders of a majority in principal amount of the outstanding Debt
Securities of all series affected thereby (voting as one class) may waive
compliance by the Company of covenants or conditions provided for in the
Indenture. The holders of a majority in principal amount of the outstanding Debt
Securities of each series may, on behalf of the holders of all the Debt
Securities of such series, waive any past default under the Indenture, except a
default (1) in the payment of principal, premium (if any) or interest on any
Debt Security of such series, or (2) in respect of a covenant or provision of
the Indenture which cannot be modified or amended without the consent of the
holder of each outstanding Debt Security affected.
COLLECTION OF INDEBTEDNESS, ETC.
The Indenture also provides that in the event of a failure by the Company
to make payment of principal, premium, interest, or any mandatory sinking fund
requirements on the Debt Securities (and in the case of payment of interest or
any mandatory sinking fund payment, such failure to pay shall have continued for
thirty (30) days) the Company will, upon demand of the Trustee, pay to it, for
the benefit of the holders of the Debt Securities, the whole amount then due and
payable on the Debt Securities for principal or premium (if any) and interest,
with interest on the overdue principal and, to the extent payment of interest
shall be legally enforceable, upon overdue installments of interest at the rate
borne by the Debt Securities. The Indenture further provides that if the Company
fails to pay such amount forthwith upon such demand, the Trustee may, among
other things, institute a judicial proceeding for the collection thereof.
However, the Indenture provides that notwithstanding any other provision of the
Indenture, the holder of any Debt Security shall have the right to institute
suit for the enforcement of any payment of principal and interest on such Debt
Security on the respective stated maturities expressed in such Debt Security and
that such right shall not be impaired without the consent of such holder.
The holders of a majority in principal amount of the Debt Securities of
each series then outstanding under the Indenture shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee; provided, that the holders shall have offered to the Trustee
reasonable indemnity against expenses and liabilities.
SATISFACTION AND DISCHARGE
Under the terms of the Indenture, the Company may satisfy and discharge its
obligations under the Indenture if, at any time, (1) the Company shall have
delivered to the Trustee for cancellation all Debt Securities of any series
theretofore authenticated or (2) all such Debt Securities of such series not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become
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due and payable within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Company shall deposit or cause to be deposited with the
Trustee as trust funds (a) an amount of money which will be sufficient, or (b)
Government Obligations, the principal and interest on which when due, without
any regard to reinvestment thereof, will provide monies which will be
sufficient, or (c) a combination of (a) and (b) which will be sufficient, to pay
at maturity or upon redemption all Debt Securities of such series not
theretofore delivered to the Trustee for cancellation, including principal,
premium (if any) and interest due or to become due to such date of maturity or
date fixed for redemption, as the case may be.
If the conditions of either (1) or (2) above are satisfied, the Company
shall also pay or cause to be paid all other sums payable by the Company under
the Indenture with respect to such series, and then the Indenture shall cease to
be of further effect with respect to the Debt Securities of such series, and the
Trustee, on demand of and at the cost and expense of the Company, shall execute
proper instruments acknowledging satisfaction of and discharging the Indenture
with respect to the Debt Securities of such series. The Company agrees to
reimburse the Trustee for any costs or expenses thereafter reasonably and
properly incurred by the Trustee in connection with the Indenture or the Debt
Securities of such series.
In addition, under the Indenture the Company will be discharged from any
and all obligations in respect of the Debt Securities of any series (except in
each case for certain obligations to register the transfer or exchange of Debt
Securities, replace stolen, lost or mutilated Debt Securities, maintain paying
agencies and hold moneys for payment in trust) if the Company deposits with the
Trustee, in trust, money, Government Obligations, or a combination thereof, in
an amount sufficient to pay all the principal (including any mandatory sinking
fund payments) of, and interest on, Debt Securities of such series on the dates
such payments are due in accordance with the terms of such Debt Securities. Such
defeasance and discharge will become effective after the Company has, among
other things, delivered to the Trustee an opinion of counsel to the effect that
the deposit and related defeasance would not cause the holders of the Debt
Securities of such series to recognize income, gain or loss for federal income
tax purposes, or a copy of a ruling or other formal statement or action to such
effect received from or published by the United States Internal Revenue Service
(the "IRS").
NOTICES
Any notice or demand required or permitted to be given or served by the
Trustee or by the holders of Debt Securities to or on the Company may be given
or served by postage prepaid first class mail addressed (until another address
is filed by the Company with the Trustee) as follows: Piedmont Natural Gas
Company, Inc., 1915 Rexford Road, Post Office Box 33068, Charlotte, North
Carolina 28233, Attention: Ted C. Coble, Vice President and Treasurer and
Assistant Secretary.
Any notice, direction, request or demand by any securityholder to or upon
the Trustee shall be deemed to have been sufficiently given or made, if given or
made in writing at the principal corporate trust office of the Trustee in the
Borough of Manhattan, the City of New York.
Any notice to be given to the securityholders of the Debt Securities will
be given by mail to the addresses of such holders as they appear in the Debt
Security Register.
TITLE
The Company, the Trustee and any agent of the Company or the Trustee may
deem the person in whose name such Debt Security shall be registered upon the
books of the Company (which, in the case of Debt Securities represented by a
Global Security, shall be the Depository or its nominee) to be the absolute
owner of such Debt Security (whether or not such Debt Security shall be overdue
and notwithstanding any notation of ownership or other writing thereon), for the
purpose of receiving payment and for all other purposes.
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REPLACEMENT OF DEBT SECURITIES
In case any Debt Security shall become mutilated or be destroyed, lost or
stolen, the Company, in the case of a mutilated Debt Security shall, and in the
case of a lost, stolen or destroyed Debt Security may in its discretion, provide
a new Debt Security of the same series. The applicant for a substituted Debt
Security shall furnish to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish evidence of the
destruction, loss or theft of such Debt Security and of the ownership thereof.
The Company may require the payment of a sum sufficient to cover any tax,
governmental charge or other charges that may be imposed in relation to the
issuance of a substituted Debt Security and in addition a further sum not
exceeding two dollars for each Debt Security so issued in substitution.
GOVERNING LAW
The Indenture is and the Debt Securities will be governed by, and construed
in accordance with, the laws of the State of New York.
CONCERNING THE TRUSTEE
Subject to the provisions of the Indenture relating to its duties, the
Trustee will be under no obligation to expend or risk its own funds or to incur
any personal financial liability in the performance of its duties under the
Indenture, or to exercise any of its rights or powers under the Indenture, if
there are reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Subject to such provisions, the holders of a majority in principal amount of
the Debt Securities then outstanding will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee under the Indenture, or exercising any trust or power conferred on the
Trustee.
Citibank, N.A., Trustee under the Indenture, has commercial banking
relationships with the Company. Citibank, N.A., is an affiliate of Citicorp
Securities, Inc., which is one of the agents for the Company's medium-term note
program.
CERTAIN FEDERAL TAX CONSIDERATIONS
The following summary of the principal Federal income tax consequences of
the purchase, ownership and disposition of the Debt Securities is based upon the
Internal Revenue Code of 1986, as amended (the "Code"), its legislative history,
existing and proposed regulations thereunder, published rulings and court
decisions, all as currently in effect and all subject to change at any time,
perhaps with retroactive effect. It deals only with Debt Securities held as
capital assets by initial purchasers (unless otherwise specified) and does not
purport to deal with purchasers in special tax situations, such as foreign
corporations, nonresident aliens, financial institutions, tax-exempt
organizations, insurance companies, regulated investment companies, dealers in
securities or currencies, persons holding Debt Securities as a hedge against
currency risks or as a position in a "straddle" for tax purposes, or persons
whose functional currency (as defined in section 985 of the Code) is not the
United States dollar. Prospective purchasers of the Debt Securities should
consult their own tax advisors concerning the application of Federal income tax
laws to their particular situations as well as any consequences of the purchase,
ownership and disposition of the Debt Securities arising under the laws of any
other taxing jurisdiction.
PAYMENTS OF INTEREST. Generally, payments of interest on a Debt Security
will be taxable to a holder as ordinary interest income at the time such
payments are accrued or are received, in accordance with the holder's regular
method of accounting for Federal income tax purposes.
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ORIGINAL ISSUE DISCOUNT
GENERAL. The following summary is a general discussion of the Federal
income tax consequences to holders of the purchase, ownership and disposition of
Debt Securities issued with original issue discount ("Discount Debt
Securities").
For Federal income tax purposes, original issue discount is the excess of
the stated redemption price at maturity of a Debt Security over its issue price,
if such excess equals or exceeds a de minimis amount (generally defined as 1/4
of 1-percent of the Debt Security's stated redemption price at maturity
multiplied by the number of complete years to its maturity from the issue date).
The issue price of each Debt Security in an issue of Debt Securities is the
first price at which a substantial amount of such issue of Debt Securities has
been sold (ignoring sales to bond houses, brokers, or similar persons or
organizations acting in the capacity of underwriters, placement agents, or
wholesalers). The stated redemption price at maturity of a Debt Security
generally is the sum of all payments provided by the Debt Security other than
"qualified stated interest" payments. The term "qualified stated interest"
generally means stated interest that is unconditionally payable in cash or
property (other than debt instruments of the issuer) at least annually at a
single fixed rate.
Generally, if a Debt Security bears interest for one or more accrual
periods at a rate below the rate applicable for the remaining term of such Debt
Security (e.g., Debt Securities with teaser rates or interest holidays), then
for purposes of determining whether the Debt Security has original issue
discount exceeding a de minimis amount, the Debt Security's stated redemption
price at maturity is treated as equal to the Debt Security's issue price plus
the greater of "foregone interest" or the excess of the Debt Security's stated
principal amount over its issue price. The amount of "foregone interest" is the
amount of additional stated interest that would be required to be payable on the
Debt Security during the period of the teaser rate, holiday or shortfall so that
all stated interest would be qualified stated interest.
Payments of qualified stated interest on a Debt Security are taxable to a
holder as ordinary interest income at the time such payments are accrued or are
received, in accordance with the holder's regular method of tax accounting. A
holder of a Discount Debt Security having a maturity of more than one year from
the date of issue must include original issue discount in income as ordinary
interest for Federal income tax purposes as it accrues under a constant yield
method in advance of receipt of the cash payments attributable to such income,
regardless of such holder's regular method of tax accounting. In general, the
amount of original issue discount included in income by the initial holder of a
Discount Debt Security is the sum of the daily portions of original issue
discount with respect to such Discount Debt Security for each day during the
taxable year on which such holder held such Discount Debt Security. The "daily
portions" of original issue discount on any Discount Debt Security are
determined by allocating to each day in an accrual period a ratable portion of
the original issue discount allocable to that accrual period. An "accrual
period" may be of any length and the accrual periods may vary in length over the
term of the Discount Debt Security as long as (i) each accrual period is no
longer than one year, and (ii) each scheduled payment of principal or interest
occurs either on the final day of an accrual period or on the first day of an
accrual period. The amount of original issue discount allocable to each accrual
period is generally equal to the difference between (i) the product of the
Discount Debt Security's adjusted issue price at the beginning of such accrual
period and its yield to maturity (determined on the basis of compounding at the
close of each accrual period and appropriately adjusted to take into account the
length of the particular accrual period) and (ii) the amount of any qualified
stated interest payments allocable to such accrual period. The "adjusted issue
price" of a Discount Debt Security at the beginning of the first accrual period
is simply the issue price. Thereafter, the "adjusted issue price" of a Discount
Debt Security is the sum of the issue price plus the amount of original issue
discount previously includible in the gross income of the holder reduced by the
amount of any payment previously made on the Discount Debt Security other than a
payment of qualified stated interest. Under these rules, holders generally will
have to include in income increasingly greater amounts of original issue
discount in successive accrual periods.
ACQUISITION PREMIUM. A holder who purchases a Discount Debt Security for
an amount that is greater than its adjusted issue price as of the purchase date
and less than or equal to the sum of all amounts payable on the Discount Debt
Security after the purchase date, other than payments of qualified stated
interest, will be
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considered to have purchased the Discount Debt Security at an "acquisition
premium." Under the acquisition premium rules, the amount of original issue
discount which a holder must include in its gross income with respect to such
Discount Debt Security for any taxable year (or portion thereof in which the
holder holds the Discount Debt Security) will be reduced by an amount which
would be the daily portion for such day multiplied by the acquisition premium
fraction. The numerator of the "acquisition premium fraction" is the excess of
the holder's adjusted basis in the Debt Security immediately after its purchase
over the adjusted issue price of the Debt Security, and the denominator is the
sum of the daily portions for such Debt Security for all days after the date of
purchase and ending on the stated maturity date (i.e., the total original issue
discount remaining on the Debt Security).
Alternatively, rather than applying the acquisition premium fraction to
reduce the daily portion of accrued original issue discount, a holder of a Debt
Security may elect to compute original issue discount by treating the purchase
as a purchase at original issuance and applying the mechanics of the constant
yield method. Prior to making this election, holders of Debt Securities should
consult their own tax advisors concerning the potential Federal income tax
consequences to their particular situations.
DEBT SECURITIES SUBJECT TO CONTINGENCIES. In general, if a Debt Security
provides for an alternative payment schedule or schedules applicable upon the
occurrence of a contingency or contingencies and the timing and amounts of the
payments that comprise each payment schedule are known as of the issue date,
then the yield to maturity of the Debt Security is determined by assuming that
the payments will be made according to the Debt Security's stated payment
schedule. If based on all of the facts and circumstances as of the issue date,
it is more likely than not that the Debt Security's stated payment schedule will
not occur, then the yield to maturity of the Debt Security is computed on the
payment schedule most likely to occur.
Generally, special rules apply for determining the yield to maturity on
Debt Securities which are subject to certain options. If the Company has an
unconditional option or options to redeem a Debt Security or the holder has an
unconditional option or options to cause the Debt Security to be repurchased,
then (i) in the case of an option or options of the Company, the Company will be
deemed to exercise or not exercise an option or combination of options in a
manner that minimizes the yield on the Debt Security, and (ii) in the case of an
option or options of the holder, the holder will be deemed to exercise or not
exercise an option or combination of options in a manner that maximizes the
yield on the Debt Security.
If a contingency (including the exercise of an option) actually occurs, or
does not occur, contrary to the assumptions made pursuant to the rules described
above ("a change in circumstances"), then, solely for purposes of the accrual of
original issue discount, the yield to maturity of the Debt Security is
redetermined by treating the Debt Security as reissued on the date of the change
of circumstances for an amount equal to its adjusted issue price on that date.
ELECTION TO TREAT ALL INTEREST AS ORIGINAL ISSUE DISCOUNT. A holder of a
Debt Security may elect to include in gross income all interest that accrues on
the Debt Security by using the constant yield method described in "Original
Issue Discount -- General" with certain modifications. For the purposes of this
election, interest includes stated interest, acquisition discount, original
issue discount, de minimis original issue discount, market discount, de minimis
market discount, and unstated interest, as adjusted by any amortizable bond
premium or acquisition premium.
In applying the constant yield method to a Debt Security with respect to
which this election has been made, (a) the issue price of the Debt Security will
equal the electing holder's adjusted basis on the Debt Security immediately
after acquisition, (b) the issue date of the Debt Security will be the date of
acquisition by the electing holder, and (c) no payments on the Debt Security
will be treated as payments of qualified stated interest. The election must be
made for the taxable year in which the holder acquires the Debt Security and
will generally apply only to the Debt Security (or Debt Securities) identified
by the holder in a statement attached to the holder's timely filed Federal
income tax return. The election may not be revoked without the consent of the
IRS. If a holder makes the election with respect to a Debt Security with
"amortizable bond premium" (as described in "Amortizable Premium"), then the
electing holder is deemed to have elected to apply amortizable bond premium
against interest with respect to all debt instruments with amortizable bond
premium (other than debt instruments the interest on which is excludible from
gross income) held by the
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electing holder as of the beginning of the taxable year in which the Debt
Security (with respect to which the election is made) is acquired or thereafter
acquired. The deemed election with respect to amortizable bond premium may not
be revoked without the consent of the IRS.
If the election to apply the constant yield method to all interest on a
Debt Security is made with respect to a "Market Discount Debt Security" (as
described in "Market Discount"), the electing holder will be deemed to have made
an election to include market discount in income currently over the life of all
debt instruments acquired during the first taxable year the election applies and
all subsequent tax years. The election to currently include market discount in
income may not be revoked without the consent of the IRS. Prior to making an
election to treat all income of a Debt Security (or other debt instrument) as
original issue discount, holders should consult with their own tax advisors as
to the consequences resulting from such an election with respect to their own
particular situations.
VARIABLE RATE DEBT INSTRUMENTS
Generally, floating rate Debt Securities and indexed Debt Securities
("Variable Debt Securities") are subject to special rules whereby a Variable
Debt Security will qualify as a "variable rate debt instrument" if (a) its issue
price does not exceed the total noncontingent principal payments due under the
Variable Debt Security by more than an amount equal to the lesser of (i) 0.015
multiplied by the product of the total noncontingent principal payments and the
number of complete years to maturity from the issue date or (ii) 15-percent of
the total noncontingent principal payments, (b) it provides for stated interest,
paid or compounded at least annually, at (i) one or more qualified floating
rates, (ii) a single fixed rate and one or more qualified floating rates, (iii)
a single objective rate, or (iv) a single fixed rate and a single objective rate
that is a qualified inverse floating rate, and (c) a qualified floating rate or
objective rate in effect at any time during the term of the Debt Security is set
at a current value of that rate (i.e., the value of the rate on any day that is
no earlier than 3 months prior to the first day on which the value is in effect
and no later than 1 year following that first day).
A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
Variable Debt Security is denominated. Although a multiple of a qualified
floating rate will generally not itself constitute a qualified floating rate, a
variable rate equal to the product of a qualified floating rate and a fixed
multiple that is greater than zero but not more than 1.35 will constitute a
qualified floating rate. A variable rate equal to the product of a qualified
floating rate and a fixed multiple that is greater than zero but not more than
1.35, increased or decreased by a fixed rate, will also constitute a qualified
floating rate. In addition, two or more qualified floating rates that can
reasonably be expected to have approximately the same values throughout the term
of the Variable Debt Security together will constitute a single qualified
floating rate. Two or more qualified floating rates will be conclusively
presumed to meet the requirements of the previous sentence if the values of all
rates on the issue date are within 25 basis points of each other. A variable
rate is not a qualified floating rate if it is subject to certain restrictions
(including caps, floors, governors, or other similar restrictions) unless,
generally, such restrictions are fixed throughout the term of the Debt Security
or are not reasonably expected to significantly affect the yield on the Debt
Security.
An "objective rate" is a rate other than a qualified floating rate that is
determined using a single fixed formula and which is based upon (i) one or more
qualified floating rates, (ii) one or more rates where each rate would be a
qualified floating rate for a debt instrument denominated in a currency other
than the currency in which the Variable Debt Security is denominated, (iii)
either the yield or changes in the price of one or more items of actively traded
personal property (other than stock or debt of the issuer or a related party),
or (iv) a combination of objective rates. Despite the foregoing, a variable rate
of interest on a Variable Debt Security will not constitute an objective rate if
it is reasonably expected that the average value of such rate during the first
half of the Variable Debt Security's term will be either significantly less than
or significantly greater than the average value of the rate during the final
half of the Variable Debt Security's term. A "qualified inverse floating rate"
is any objective rate where such rate is equal to a fixed rate minus a qualified
floating rate, as long as variations in the rate can reasonably be expected to
inversely reflect contemporaneous
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<PAGE> 17
variations in the cost of newly borrowed funds (disregarding yield restrictions
such as caps, floors or governors).
Generally, if a Variable Debt Security provides for stated interest at a
fixed rate for an initial period of less than one year followed by a variable
rate that is either a qualified floating rate or an objective rate for a
subsequent period, and the value of the variable rate on the Variable Debt
Security's issue date is intended to approximate the fixed rate, then the fixed
rate and the variable rate together will constitute either a single qualified
floating rate or objective rate, as the case may be. A fixed rate and a variable
rate will be conclusively presumed to meet the previous requirements if the
value of the variable rate on the issue date of the Variable Debt Security does
not differ from the value of the fixed rate by more than 25 basis points.
If a Variable Debt Security provides for stated interest at a single
qualified floating rate or objective rate that is unconditionally payable in
cash or in property (other than debt instruments of the issuer) at least
annually, then (a) all stated interest with respect to the Debt Security is
qualified stated interest, and (b) the amount of original issue discount, if
any, is determined under the general original issue discount rules (as described
in "Original Issue Discount -- General") by assuming that the variable rate is a
fixed rate equal to (i) in the case of a qualified floating rate or qualified
inverse floating rate, the value, as of the issue date, of the qualified
floating rate or qualified inverse floating rate, or (ii) in the case of an
objective rate (other than a qualified inverse floating rate), a fixed rate that
reflects the yield that is reasonably expected for the Debt Security.
If a Variable Debt Security does not provide for stated interest at a
single qualified floating rate or objective rate, or at a single fixed rate
(other than at a single fixed rate for an initial period), the amount of
qualified stated interest and original issue discount on the Debt Security are
generally determined by (i) determining a fixed rate substitute for each
variable rate provided under the Variable Debt Security (generally, the value of
each variable rate as of the issue date or, in the case of an objective rate
that is not a qualified inverse floating rate, a rate that reflects the yield
that is reasonably expected for the Debt Security), (ii) constructing the
equivalent fixed rate debt instrument (using the fixed rate substitute described
above), (iii) determining the amount of qualified stated interest and original
issue discount with respect to the equivalent fixed rate debt instrument (by
applying the general original issue discount rules as described in "Original
Issue Discount -- General"), and (iv) making the appropriate adjustments for
actual variable rates during the applicable accrual period.
If a Variable Debt Security provides for stated interest either at one or
more qualified floating rates or at a qualified inverse floating rate and in
addition provides for stated interest at a single fixed rate (other than a
single fixed rate for an initial period), the amount of interest and original
issue discount are determined as in the immediately preceding paragraph with the
modification that the Variable Debt Security is treated, for purposes of the
first three steps of the determination, as if it provided for a qualified
floating rate (or qualified inverse floating rate, if the Debt Security provides
for a qualified inverse floating rate) rather than the fixed rate. The qualified
floating rate (or qualified inverse floating rate) replacing the fixed rate must
be such that the fair market value of the Debt Security as of the issue date
would be approximately the same as the fair market value of an otherwise
identical debt instrument that provides for a qualified floating rate (or
qualified inverse floating rate) rather than a fixed rate.
CONTINGENT DEBT INSTRUMENTS
On December 16, 1994 the Treasury Department proposed new Regulations
concerning the proper tax treatment of contingent payment debt instruments. The
newly proposed Regulations supersede the prior Proposed Original Issue Discount
Regulations of 1986 and the Treasury Regulations of 1991 relating to the
treatment of contingent payment debt instruments. The proposed effective date of
the newly proposed Regulations is 60 days after the date that the Regulations
are finalized. Until such time as the proposed Regulations become effective, the
treatment of contingent payment debt obligations appears to be governed by
general Federal income tax principles. Holders of Debt Securities should consult
their own tax advisors concerning the appropriate treatment of Debt Securities
classified as contingent payment debt instruments.
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<PAGE> 18
SHORT TERM DEBT SECURITIES
Generally, a cash basis holder of "Short-Term Debt Securities" (i.e., Debt
Securities having a fixed maturity date not more than 1 year from the date of
issue) is not required to accrue original issue discount for Federal income tax
purposes unless it elects to do so. An election by a cash basis holder applies
to all short-term obligations acquired on or after the beginning of the first
taxable year to which the election applies, and for all subsequent taxable years
unless the consent is secured from the IRS to revoke the election. Accrual basis
holders and certain other holders, including banks, regulated investment
companies, dealers in securities, common trust funds, holders who hold
Short-Term Debt Securities as part of certain identified hedging transactions,
certain pass-through entities and cash basis holders who so elect, are required
to accrue original issue discount on Short-Term Debt Securities on either a
straight-line basis or, at the election of the holder, under the constant yield
method (based on daily compounding). In the case of a holder not required and
not electing to include original issue discount in income currently, any gain
realized on the sale or retirement of the Short-Term Debt Security will be
ordinary income to the extent of the original issue discount accrued on a
straight-line basis (unless an election is made to accrue the original issue
discount under the constant yield method) through the date of sale or
retirement. Holders who are not required and do not elect to accrue original
issue discount on Short-Term Debt Securities will be required to defer
deductions for interest on borrowings allocable to Short-Term Debt Securities in
an amount not exceeding the deferred income until the deferred income is
realized.
MARKET DISCOUNT
A Debt Security, other than a Short-Term Debt Security, will be treated as
purchased at a market discount (a "Market Discount Debt Security") if the amount
for which a holder purchased the Debt Security is less than (i) the Debt
Security's issue price (as determined above under "Original Issue Discount --
General"), (ii) the Debt Security's stated redemption price at maturity (in the
case of a subsequent purchaser), or (iii) the Debt Security's "revised issue
price" (in the case of a Discount Debt Security), and such excess is greater
than or equal to 1/4 of 1-percent of such Debt Security's stated redemption
price at maturity multiplied by the number of complete years to the Debt
Security's maturity. If such excess is not sufficient to cause the Debt Security
to be a Market Discount Debt Security, then such excess constitutes de minimis
market discount. The Code provides that, for these purposes, the "revised issue
price" of a Debt Security generally equals its issue price, increased by the
amount of original issue discount that has accrued over the term of the Debt
Security.
Any gain recognized on the retirement or disposition of a Market Discount
Debt Security will be treated as ordinary income to the extent that such gain
does not exceed the accrued market discount on such Debt Security.
Alternatively, a holder of a Market Discount Debt Security may elect to include
market discount in income over the life of the Debt Security. Such election
shall apply to all debt instruments with market discount acquired by the
electing holder during the first taxable year to which the election applies and
all subsequent tax years. This election may not be revoked without the consent
of the IRS.
Market discount on a Market Discount Debt Security will accrue on a
straight-line basis unless the holder elects to accrue such market discount
using a constant yield method. Such an election shall apply only to the Debt
Security with respect to which it is made and may not be revoked. A holder of a
Market Discount Debt Security that does not elect to include market discount in
income currently generally will be required to defer deductions for interest in
borrowings allocable to such Debt Security in an amount not exceeding the
accrued market discount on such Debt Security until the maturity or disposition
of such Debt Security.
AMORTIZABLE PREMIUM
Generally, if a holder purchases a Debt Security for an amount that is
greater than the sum of all amounts payable on the Debt Security after the
purchase date other than payments of qualified stated interest, such holder will
be considered to have purchased the Debt Security with "amortizable bond
premium" equal in amount to such excess. A holder of such a Debt Security may
elect to amortize such premium using a constant yield method over the remaining
term of the Debt Security and may offset interest otherwise required
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<PAGE> 19
to be included in respect of the Debt Security during any taxable year by the
amortized amount of such excess for the taxable year. However, if the Debt
Security may be optionally redeemed after the holder acquires it at a price in
excess of its stated redemption price at maturity, special rules would apply
which could result in a deferral of the amortization of some bond premium until
later in the term of the Debt Security. Any election to amortize bond premium
with respect to any Debt Security (or general debt obligation) applies to all
taxable debt obligations held by the holder at the beginning of the first
taxable year to which the election applies and to all debt obligations
thereafter acquired in all subsequent tax years. The election may not be revoked
without the consent of the IRS.
DISPOSITION OF A DEBT SECURITY
Except as discussed above, upon the sale, exchange or retirement of a Debt
Security, a holder generally will recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange or retirement
(other than amounts representing accrued and unpaid interest) and such holder's
adjusted tax basis in the Debt Security. A holder's adjusted tax basis in a Debt
Security generally will equal such holder's initial investment in the Debt
Security increased by any original issue discount included in income and any
accrued market discount included in income, decreased by the amount of any
payments that are not deemed qualified stated interest payments and amortizable
bond premium applied to reduce interest with respect to such Debt Security. Such
gain or loss generally will be long-term capital gain or loss if the Debt
Security were held for more than one year.
BACKUP WITHHOLDING
Backup withholding of Federal income tax at a rate of 31% may apply to
payments made in respect of the Debt Securities to registered owners who are not
"exempt recipients" and who fail to provide certain identifying information
(such as the registered owner's tax identification number ("TIN")) in the
required manner. Generally, individuals are not exempt recipients, whereas
corporations and certain other entities generally are exempt recipients.
Payments made in respect of the Debt Securities to a holder must be reported to
the IRS, unless the holder is an exempt recipient or establishes an exemption.
In addition, upon the sale of a Debt Security to (or through) a broker, the
broker must withhold 31% of the entire purchase price, unless either (i) the
broker determines that the seller is a corporation or other exempt recipient or
(ii) the seller provides, in the required manner, certain identifying
information. Such a sale must also be reported by the broker to the IRS, unless
the broker determines that the seller is an exempt recipient.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's Federal income tax provided the required information is
furnished to the IRS.
PLAN OF DISTRIBUTION
The Debt Securities may be sold (i) to or through underwriting syndicates
represented by managing underwriters, or by underwriters without a syndicate,
such underwriters to be designated at the time of sale; (ii) through agents
designated from time to time; or (iii) directly by the Company. The applicable
Prospectus Supplement will set forth the terms of the offering of the Debt
Securities, including the name or names of any underwriters or agents, the
purchase price of such Debt Securities and the proceeds to the Company from such
sales, any underwriting discounts, agency commissions and other items
constituting underwriters' or agents' compensation, any initial public offering
price, any discounts or concessions to be allowed or reallowed or paid to
dealers and the securities exchanges, if any, on which such Debt Securities may
be listed.
If underwriters are used in the sale, the Debt Securities will be acquired
by the underwriters for their own accounts and may be resold from time to time
in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale. Such
Debt Securities may be offered to the public either through underwriting
syndicates represented by managing underwriters or by
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underwriters without a syndicate, all of which underwriters in either case will
be designated in the Prospectus Supplement corresponding to such offering.
Unless otherwise set forth in the applicable Prospectus Supplement, under the
terms of the underwriting agreement, the obligations of the underwriters to
purchase such Debt Securities will be subject to certain conditions precedent,
and the underwriters will be obligated to purchase all of such Debt Securities
if any are purchased. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
The Debt Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of the Debt Securities with respect to which this Prospectus is delivered
will be named, and any commission payable by the Company to such agent will be
set forth, in the corresponding Prospectus Supplement. Unless otherwise
indicated in the corresponding Prospectus Supplement, any such agent will be
acting on a reasonable best-efforts basis for the period of its appointment.
If so indicated in the applicable Prospectus Supplement, the Company may
authorize underwriters or agents to solicit offers by certain institutions to
purchase Debt Securities from the Company at the public offering price set forth
in such Prospectus Supplement pursuant to delayed delivery contracts ("Delayed
Delivery Contracts") providing for payment and delivery on the future date or
dates stated in the Prospectus Supplement. The amount of Debt Securities to be
sold under each Delayed Delivery Contract and the aggregate amount of Debt
Securities to be sold under all Delayed Delivery Contracts will be set forth in
the Prospectus Supplement. Institutions with which Delayed Delivery Contracts,
when authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies and educational and charitable
institutions, but shall in all cases be subject to the approval of the Company
in its sole discretion. The obligations of the purchaser under any Delayed
Delivery Contract to pay for and take delivery of Debt Securities will not be
subject to any conditions except that (i) the purchase of Debt Securities by
such institution shall not at the time of delivery be prohibited under the laws
of any jurisdiction to which such institution is subject; and (ii) any related
sale of Debt Securities to underwriters shall have occurred. A commission set
forth in the applicable Prospectus Supplement will be paid to underwriters or
agents soliciting purchases of Debt Securities pursuant to Delayed Delivery
Contracts accepted by the Company. The underwriters or agents will not have any
responsibility in respect of the validity or performance of Delayed Delivery
Contracts.
All Debt Securities will be new issues of securities with no established
trading market. Any underwriters to whom Debt Securities are sold by the Company
for public offering and sale may make a market in such Debt Securities, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given as to the liquidity
of the trading market for any Debt Securities.
Underwriters and agents may be entitled under agreements entered into with
the Company to indemnification by the Company against certain civil liabilities,
including liabilities under the 1933 Act, or to contribution with respect to
payments which the underwriters or agents may be required to make in respect
thereof and to reimbursement by the Company for certain expenses. Underwriters
and agents also may be customers of, engage in transactions with, or perform
other services for the Company in the ordinary course of business.
LEGAL OPINIONS
The validity of the Debt Securities will be passed upon for the Company by
Amos & Jeffries, L.L.P., P.O. Box 787, Greensboro, North Carolina 27402. Jerry
W. Amos, a partner in that law firm and General Counsel to and a Director of the
Company, beneficially owned 43,707 shares of the Company's Common Stock as of
May 1, 1995.
Certain legal matters in connection with the issuance of the Debt
Securities will be passed upon for any underwriters or agents by Mudge Rose
Guthrie Alexander & Ferdon, 180 Maiden Lane, New York, New York 10038.
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EXPERTS
The consolidated financial statements and the related financial statement
schedule incorporated in this Prospectus by reference from the Company's Annual
Report on Form 10-K for the year ended October 31, 1994, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports which
are incorporated herein by reference, and have been so incorporated in reliance
upon the reports of such firm, given upon their authority as experts in auditing
and accounting.
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PART II. INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be paid by the
Registrant in connection with the sale and distribution of the Debt Securities
being registered hereby, other than underwriting or broker dealer fees,
discounts and commissions. All amounts are estimated except for the Securities
Act registration fee.
<TABLE>
<S> <C>
Securities Act registration fee............................... $ 44,827.59
Printing and engraving........................................ 35,000.00
Legal fees and expenses....................................... 75,000.00
Accounting fees and expenses.................................. 25,000.00
Rating agency fees............................................ 68,000.00
Blue Sky fees and expenses.................................... 7,000.00
Trustee's Fees and Expenses................................... 5,000.00
Miscellaneous expenses........................................ 10,000.00
-----------
Total.................................................... $269,827.59
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The following provisions of the North Carolina Business Corporation Act
govern indemnification of officers and directors of the Company:
SECTION 55-8-50. POLICY STATEMENT AND DEFINITIONS. (a) It is the
public policy of this State to enable corporations organized under this
Chapter to attract and maintain responsible, qualified directors, officers,
employees and agents, and, to that end, to permit corporations organized
under this Chapter to allocate the risk of personal liability of directors,
officers, employees and agents through indemnification and insurance as
authorized in this Part.
(b) Definitions in this Part:
(1) "Corporation" includes any domestic or foreign corporation
absorbed in a merger which, if its separate existence had continued,
would have had the obligation or power to indemnify its directors,
officers, employees, or agents, so that a person who would have been
entitled to receive or request indemnification from such corporation if
its separate existence had continued shall stand in the same position
under this Part with respect to the surviving corporation.
(2) "Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation, is
or was serving at the corporation's request as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan,
or other enterprise. A director is considered to be serving an employee
benefit plan at the corporation's request if his duties to the
corporation also impose duties on, or otherwise involve services by, him
to the plan or to participants in or beneficiaries of the plan.
"Director" includes, unless the context requires otherwise, the estate
or personal representative of a director.
(3) "Expenses" means expenses of every kind incurred in defending a
proceeding, including counsel fees.
(4) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an
employee benefit plan), or reasonable expenses incurred with respect to
a proceeding.
(4a) "Officer," "employee," or "agent" includes, unless the context
requires otherwise, the estate or personal representative of a person
who acted in that capacity.
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(5) "Official capacity" means (i) when used with respect to a
director, the office of director in a corporation; and (ii) when used
with respect to an individual other than a director, as contemplated in
G.S. 55-8-56, the office in a corporation held by the officer or the
employment or agency relationship undertaken by the employee or agent on
behalf of the corporation. "Official capacity" does not include service
for any other foreign or domestic corporation or any partnership, joint
venture, trust, employee benefit plan, or other enterprise.
(6) "Party" includes an individual who was, is, or is threatened to
be made a named defendant or respondent in a proceeding.
(7) "Proceeding" means any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
SECTION 55-8-51. AUTHORITY TO INDEMNIFY. (a) Except as provided in
subsection (d), a corporation may indemnify an individual made a party to a
proceeding because he is or was a director against liability incurred in
the proceeding if:
(1) He conducted himself in good faith; and
(2) He reasonably believed (i) in the case of conduct in his
official capacity with the corporation, that his conduct was in its best
interests; and (ii) in all other cases, that his conduct was at least
not opposed to its best interests; and
(3) In the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful.
(b) A director's conduct with respect to an employee benefit plan for
a purpose he reasonably believed to be in the interests of the participants
in and beneficiaries of the plan is conduct that satisfies the requirement
of subsection (a)(2)(ii).
(c) The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of no contest or its equivalent is not, of
itself, determinative that the director did not meet the standard of
conduct described in this section.
(d) A corporation may not indemnify a director under this section:
(1) In connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the
corporation; or
(2) In connection with any other proceeding charging improper
personal benefit to him, whether or not involving action in his official
capacity, in which he was adjudged liable on the basis that personal
benefit was improperly received by him.
(e) Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation that is concluded without
a final adjudication on the issue of liability is limited to reasonable
expenses incurred in connection with the proceeding.
(f) The authorization, approval or favorable recommendation by the
board of directors of a corporation of indemnification, as permitted by
this section, shall not be deemed an act or corporate transaction in which
a director has a conflict of interest, and no such indemnification shall be
void or voidable on such ground.
SECTION 55-8-52. MANDATORY INDEMNIFICATION. Unless limited by its
articles of incorporation, a corporation shall indemnify a director who was
wholly successful, on the merits or otherwise, in the defense of any
proceeding to which he was a party because he is or was a director of the
corporation against reasonable expenses incurred by him in connection with
the proceeding.
SECTION 55-8-53. ADVANCE FOR EXPENSES. Expenses incurred by a
director in defending a proceeding may be paid by the corporation in
advance of the final disposition of such proceeding as authorized by the
board of directors in the specific case or as authorized or required under
any provision in the articles of
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incorporation or bylaws or by any applicable resolution or contract upon
receipt of an undertaking by or on behalf of the director to repay such
amount unless it shall ultimately be determined that he is entitled to be
indemnified by the corporation against such expenses.
SECTION 55-8-54. COURT-ORDERED INDEMNIFICATION. Unless a
corporation's articles of incorporation provide otherwise, a director of
the corporation who is a party to a proceeding may apply for
indemnification to the court conducting the proceeding or to another court
of competent jurisdiction. On receipt of an application, the court after
giving any notice the court considers necessary may order indemnification
if it determines:
(1) The director is entitled to mandatory indemnification under
G.S. 55-8-52, in which case the court shall also order the corporation
to pay the director's reasonable expenses incurred to obtain
court-ordered indemnification; or
(2) The director is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or
not he met the standard of conduct set forth in G.S. 55-8-51 or was
adjudged liable as described in G.S. 55-8-51(d), but if he was adjudged
so liable his indemnification is limited to reasonable expenses
incurred.
SECTION 55-8-55. DETERMINATION AND AUTHORIZATION OF
INDEMNIFICATION. (a) A corporation may not indemnify a director under G.S.
55-8-51 unless authorized in the specific case after a determination has
been made that indemnification of the director is permissible in the
circumstances because he has met the standard of conduct set forth in G.S.
55-8-51.
(b) The determination shall be made:
(1) By the board of directors by majority vote of a quorum
consisting of directors not at the time parties to the proceeding;
(2) If a quorum cannot be obtained under subdivision (1), by
majority vote of a committee duly designated by the board of directors
(in which designation directors who are parties may participate),
consisting solely of two or more directors not at the time parties to
the proceeding;
(3) By special legal counsel (i) selected by the board of directors
or its committee in the manner prescribed in subdivision (1) or (2); or
(ii) if a quorum of the board of directors cannot be obtained under
subdivision (1) and a committee cannot be designated under subdivision
(2), selected by majority vote of the full board of directors (in which
selection directors who are parties may participate); or
(4) By the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the proceeding may
not be voted on the determination.
(c) Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible, except that if the
determination is made by special legal counsel, authorization of
indemnification and evaluation as to reasonableness of expenses shall be
made by those entitled under subsection (b)(3) to select counsel.
SECTION 55-8-56. INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND
AGENTS. Unless a corporation's articles of incorporation provide
otherwise:
(1) An officer of the corporation is entitled to mandatory
indemnification under G.S. 55-8-52, and is entitled to apply for the
court-ordered indemnification under G.S. 55-8-54, in each case to the
same extent as a director;
(2) The corporation may indemnify and advance expenses under this
Part to an officer, employee, or agent of the corporation to the same
extent as to a director; and
(3) A corporation may also indemnify and advance expenses to an
officer, employee, or agent who is not a director to the extent,
consistent with public policy, that may be provided by its articles of
incorporation, bylaws, general or specific action of its board of
directors, or contract.
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SECTION 55-8-57. ADDITIONAL INDEMNIFICATION AND INSURANCE. (a) In
addition to and separate and apart from the indemnification provided for in
G.S. 55-8-51, 55-8-52, 55-8-54, 55-8-55 and 55-8-56, a corporation may in
its articles of incorporation or bylaws or by contract or resolution
indemnify or agree to indemnify any one or more of its directors, officers,
employees, or agents against liability and expenses in any proceeding
(including without limitation a proceeding brought by or on behalf of the
corporation itself) arising out of their status as such or their activities
in any of the foregoing capacities; provided, however, that a corporation
may not indemnify or agree to indemnify a person against liability or
expenses he may incur on account of his activities which were at the time
taken known or believed by him to be clearly in conflict with the best
interests of the corporation. A corporation may likewise and to the same
extent indemnify or agree to indemnify any person who, at the request of
the corporation, is or was serving as a director, officer, partner,
trustee, employee, or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise or as a trustee or
administrator under an employee benefit plan. Any provision in any articles
of incorporation, bylaw, contract, or resolution permitted under this
section may include provisions for recovery from the corporation of
reasonable costs, expenses, and attorneys' fees in connection with the
enforcement of rights to indemnification granted therein and may further
include provisions establishing reasonable procedures for determining and
enforcing the rights granted therein.
(b) The authorization, adoption, approval, or favorable recommendation
by the board of directors of a public corporation of any provision in any
articles of incorporation, bylaw, contract or resolution, as permitted in
this section, shall not be deemed an act of corporate transaction in which
a director has a conflict of interest, and no such articles of
incorporation or bylaw provision or contract or resolution shall be void or
voidable on such grounds. The authorization, adoption, approval, or
favorable recommendation by the board of directors of a nonpublic
corporation of any provision in any articles of incorporation, bylaw,
contract or resolution, as permitted in this section, which occurred prior
to July 1, 1990, shall not be deemed an act or corporate transaction in
which a director has a conflict of interest, and no such articles of
incorporation, bylaws provision, contract or resolution shall be void or
voidable on such grounds. Except as permitted in G.S. 55-8-31, no such
bylaw, contract, or resolution not adopted, authorized, approved or
ratified by shareholders shall be effective as to claims made or
liabilities asserted against any director prior to its adoption,
authorization, or approval by the board of directors.
(c) A corporation may purchase and maintain insurance on behalf of an
individual who is or was a director, officer, employee, or agent of the
corporation, or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of another foreign
or domestic corporation, partnership, joint venture, trust, employee
benefit plan, or other enterprise, against liability asserted against or
incurred by him in that capacity or arising from his status as a director,
officer, employee, or agent, whether or not the corporation would have
power to indemnify him against the same liability under any provision of
this Chapter.
SECTION 55-8-58. APPLICATION OF PART. (a) If articles of
incorporation limit indemnification or advance for expenses,
indemnification and advance for expenses are valid only to the extent
consistent with the articles.
(b) This Part does not limit a corporation's power to pay or reimburse
expenses incurred by a director in connection with his appearance as a
witness in a proceeding at a time when he has not been made a named
defendant or respondent to the proceeding.
(c) This Part shall not affect rights or liabilities arising out of
acts or omissions occurring before July 1, 1990.
The Company's By-Laws provide that the Company shall indemnify and hold
harmless its directors, and officers of the Company who are also directors or
who are designated by the Board of Directors from time to time as indemnified
officers ("indemnified officers") against any obligation to pay any judgment,
settlement, penalty, fine (including any excise tax assessed with respect to an
employee benefit plan) and reasonable expenses, including but not limited to
attorneys' fees of opposing parties ("Liabilities") and for any expenses
incurred with respect to any threatened, pending or completed action, suit or
proceeding, whether civil,
II-4
<PAGE> 26
criminal, administrative or investigative, whether formal or informal, and any
appeal therein (and any inquiry or investigation that could lead to such a
proceeding) (a "Proceeding"), including any Proceeding brought by or on behalf
of the Company itself, arising out of their status as directors or officers of
the Company. The Company shall also indemnify its directors and indemnified
officers for their service at the Company's request as a director, officer,
partner, trustee, employee or agent or another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise. The Company shall
not, however, indemnify a director or indemnified officer against Liabilities or
expenses incurred on account of activities of such person that at the time taken
were known or believed by him or her, or a reasonable person would have or
should have known, to be clearly in conflict with the best interests of the
Company, The By-Laws further provide that the Company shall indemnify each
director and indemnified officer for his or her reasonable costs, expenses and
attorneys' fees incurred in connection with the enforcement of the rights to
indemnification granted therein, if it is determined that such director or
indemnified officer is entitled to indemnification thereunder.
The Company's Articles of Incorporation, as amended, contain the following
provisions:
ARTICLE 8: A director of the Corporation shall not be personally
liable to the Corporation or any of its shareholders for monetary damages
for any breach of duty as a director, except for liability with respect to
(i) acts or omissions not made in good faith that the director at the time
of such breach knew or believed were in conflict with the best interests of
the Corporation, (ii) any liability under N.C.G.S. sec. 55-8-33 (liability
for unlawful distributions), (iii) any transaction from which such director
derived an improper personal benefit, or (iv) acts or omissions occurring
prior to the date on which this Article 8 became effective. As used herein,
the term, "improper personal benefit" does not include a director's
compensation or other incidental benefit for or on account of service as a
director, officer, employee, independent contractor, attorney or consultant
of the Corporation. If the North Carolina General Statutes are amended
after approval by the Corporation's shareholders of this Article 8 to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the North
Carolina General Statutes, as so amended. No amendment or repeal of the
provisions of this Article 8 shall apply to or have an effect on the
liability or alleged liability of any director of the Corporation for or
with respect to any act or failure to act on the part of such director
occurring prior to such amendment or repeal. The provisions of this Article
8 shall not be deemed to limit or preclude indemnification of a director by
the Corporation for any liability which has not been eliminated by the
provisions of this Article 8.
The Company has obtained and maintains a policy for directors' and
officers' liability insurance. The policy is designed to protect the Company in
the event it is required to pay any amounts to its directors and officers as
indemnification against loss arising from certain civil claims, including
certain claims under the 1933 Act, which might be made against its directors and
officers by reason of any alleged "breach of duty," neglect, error,
misstatement, misleading statement, omission or other act done or wrongfully
attempted, while acting in their respective capacities as directors or officers
of the Company.
Reference is made to the form of Underwriting Agreement and Agency
Agreement filed as Exhibits 1.1 and 1.2 hereto which contain provisions for
indemnification of the Company, its directors, officers, and any controlling
persons by underwriters against certain liabilities for information furnished by
such underwriters expressly for use in this Registration Statement.
II-5
<PAGE> 27
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement
1.2 Form of Agency Agreement
4.1 Indenture dated as of April 1, 1993, between Piedmont Natural Gas Company, Inc., and
Citibank, N.A., as Trustee
4.2 First Supplemental Indenture dated as of February 25, 1994, between PNG Acquisition
Company, Piedmont Natural Gas Company, Inc., and Citibank, N.A., as Trustee
4.3 Form of Debt Security*
4.4 Form of Master Global Note*
5.1 Opinion of Amos & Jeffries, L.L.P., regarding legality of securities being registered
12.1 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Amos & Jeffries, L.L.P. (included in Exhibit 5.1)
23.2 Independent Auditors' Consent
24.1 Powers of Attorney
25.1 Statement of Eligibility of Trustee on Form T-1
</TABLE>
- ---------------
* The Company will file any forms of Debt Securities not previously so filed in
a current report on Form 8-K.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
A. Post-Effective Amendments
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the Registration Statement;
provided, however, that the undertakings set forth in paragraphs (1)(i) and
(1)(ii) above do not apply if the registration statement is on Form S-3 or
Form S-8, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this Registration Statement.
(2) That for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment of
any of the securities being registered which remain unsold at the termination of
the offering.
B. Filings Incorporating Subsequent Documents by Reference
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is
II-6
<PAGE> 28
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Indemnification
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-7
<PAGE> 29
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement and post-effective amendment No. 2 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Charlotte, State of North
Carolina, on the 16th day of May, 1995.
PIEDMONT NATURAL GAS COMPANY, INC.
By: /s/ JOHN H. MAXHEIM
------------------------------------
John H. Maxheim
Chairman of the Board,
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement and post-effective amendment No. 2 have been signed by
the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- --------------------------------------------- ------------------------ ---------------------
<C> <S> <C>
/s/ JOHN H. MAXHEIM Director, Chairman of May 16, 1995
- --------------------------------------------- the Board, President
John H. Maxheim and Chief Executive
Officer
/s/ TED C. COBLE Vice President, May 16, 1995
- --------------------------------------------- Treasurer and
Ted C. Coble Assistant Secretary
(Principal Financial
Officer)
/s/ BARRY L. GUY Vice President and May 16, 1995
- --------------------------------------------- Controller (Principal
Barry L. Guy Accounting Officer)
JERRY W. AMOS* Director May 16, 1995
- ---------------------------------------------
Jerry W. Amos
Director
- ---------------------------------------------
C.M. Butler III
SAM J. DIGIOVANNI* Director May 16, 1995
- ---------------------------------------------
Sam J. DiGiovanni
MURIEL W. HELMS* Director May 16, 1995
- ---------------------------------------------
Muriel W. Helms
JOHN F. MCNAIR III* Director May 16, 1995
- ---------------------------------------------
John F. McNair III
Director
- ---------------------------------------------
Walter S. Montgomery, Jr.
</TABLE>
II-8
<PAGE> 30
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- --------------------------------------------- ------------------------ ---------------------
<C> <S> <C>
DONALD S. RUSSELL, JR.* Director May 16, 1995
- ---------------------------------------------
Donald S. Russell, Jr.
JOHN E. SIMKINS, JR.* Director May 16, 1995
- ---------------------------------------------
John E. Simkins, Jr.
*By: /s/ DAVID J. DZURICKY
- ---------------------------------------------
David J. Dzuricky
(Attorney-in-Fact)
</TABLE>
II-9
<PAGE> 31
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION SEQUENTIAL
- ----------- ------------------------------------------------------------------------ ----------
<C> <S> <C>
1.1 Form of Underwriting Agreement
1.2 Form of Agency Agreement
4.1 Indenture dated as of April 1, 1993, between Piedmont Natural Gas
Company, Inc., and Citibank, N.A., as Trustee
4.2 First Supplemental Indenture dated as of February 25, 1994, between PNG
Acquisition Company, Piedmont Natural Gas Company, Inc., and Citibank,
N.A., as Trustee
4.3 Form of Debt Security
4.4 Form of Master Global Note
5.1 Opinion of Amos & Jeffries, L.L.P., regarding legality of securities
being registered
12.1 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Amos & Jeffries, L.L.P. (included in Exhibit 5.1)
23.2 Independent Auditors' Consent
24.1 Powers of Attorney
25.1 Statement of Eligibility of Trustee on Form T-1
</TABLE>
<PAGE> 1
EXHIBIT 1.1
<PAGE> 2
PIEDMONT NATURAL GAS COMPANY, INC.
DEBT SECURITIES
UNDERWRITING AGREEMENT
, 199
----------- -- -
- --------------------------------
- --------------------------------
As [Representative(s) of] the Several Underwriters,
----------------------
----------------------
----------------------
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:
<PAGE> 3
(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
2
<PAGE> 4
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).
3
<PAGE> 5
(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
4
<PAGE> 6
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
5
<PAGE> 7
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
6
<PAGE> 8
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
7
<PAGE> 9
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.
8
<PAGE> 10
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
9
<PAGE> 11
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;
10
<PAGE> 12
(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;
11
<PAGE> 13
(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 Mudge Rose Guthrie Alexander
& Ferdon, 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.
12
<PAGE> 14
(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
13
<PAGE> 15
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 shall not relieve it 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
<PAGE> 16
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
15
<PAGE> 17
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
<PAGE> 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: T. 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.
17
<PAGE> 19
12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
18
<PAGE> 20
_________________
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:
19
<PAGE> 21
SCHEDULE A
<TABLE>
<CAPTION>
Amount of
Securities
to be
Underwriter Purchased
----------- -----------
<S> <C>
-------------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . .$
===================
</TABLE>
<PAGE> 22
SCHEDULE B
Registration Statement No. 33-60108 and 33-
-----
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:
<PAGE> 23
Other terms:
22
<PAGE> 24
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:
<TABLE>
<CAPTION>
DELIVERY DATE AMOUNT
<S> <C>
------------- ----------
------------- ----------
</TABLE>
<PAGE> 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.
2
<PAGE> 26
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
<PAGE> 27
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
<PAGE> 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 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
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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
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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
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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);
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<PAGE> 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.
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<PAGE> 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:
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(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
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<PAGE> 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:
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(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
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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
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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
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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
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<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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:
<TABLE>
<CAPTION>
Commission Rate
(as a percentage of
Term principal amount)
---- -----------------
<S> <C>
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
</TABLE>
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 41
<TABLE>
<CAPTION>
Settlement
Procedure Time
--------- ----
<S> <C> <C>
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
</TABLE>
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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 45
ANNEX A
Agents' Addresses for
Delivery of the Prospectus
with the Pricing Supplement
Name and
Address of Agents
B-17
<PAGE> 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"):
<TABLE>
<S> <C>
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_
--------------------
</TABLE>
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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 1
Exhibit 4.1
PIEDMONT NATURAL GAS COMPANY, INC.
and
CITIBANK, N.A., Trustee
____________
INDENTURE
Dated as of April 1, 1993
____________
Debt Securities
<PAGE> 2
CROSS-REFERENCE SHEET*
between
Provisions of Sections 310 through 318 of the Trust Indenture Act of 1939, as
amended, and the within Indenture between Piedmont Natural Gas Company, Inc.
and Citibank, N.A., as Trustee:
_______________
<TABLE>
<CAPTION>
SECTION OF ACT SECTION OF INDENTURE
<S> <C>
310(a)(1) and (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.09
310(a)(3) and (4) . . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
310(b) (except for (iii)) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08
310(b)(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10(b)(3)
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.13(a)
311(a) last paragraph . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.13(c)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.13(b)
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.01 and 5.02(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.02(b)
312(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.02(c)
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04(a)
313(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
313(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04(b)
313(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04(c)
313(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04(d)
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.03 and 4.04
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
314(c)(1) and (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.04
314(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.04
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
315(a), (c) and (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.14
315(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.14
316(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12
316(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Omitted
316(a) last sentence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.05
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.02
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.03 and 6.04
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.03(a)
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.06
</TABLE>
________________________________
* This Cross-Reference Sheet is not part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
PAGE
<S> <C>
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . 2
Book-Entry Debt Security . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company Request, Company Order
and Company Consent . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Officer . . . . . . . . . . . . . . . . . . . . . 3
Debt Security Register . . . . . . . . . . . . . . . . . . . . . 3
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Depository . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . 3
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . 4
Original Issue Discount Debt Securities . . . . . . . . . . . . . 4
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . 6
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . 6
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE TWO
ISSUE, EXECUTION, REGISTRATION AND EXCHANGE OF DEBT SECURITIES
SECTION 2.01. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . 6
SECTION 2.02. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
__________________________
* The Table of Contents is not part of the Indenture.
3
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 2.03 Form of Legend for Book-Entry
Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.04. Form and Delivery of Debt Securities . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.05. Denominations; Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.06. Execution of Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.07. Registration; Exchange and Registration
of Transfer of Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.08. Temporary Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.09. Mutilated, Destroyed, Lost or Stolen
Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.10. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.11. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE THREE
REDEMPTION OF DEBT SECURITIES
SECTION 3.01. Redemption of Debt Securities;
Applicability of Section . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.02. Notice of Redemption; Selection
of Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.03. Payment of Debt Securities Called
for Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.04. Redemption Suspended During Event
of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE FOUR
PARTICULAR COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . 19
SECTION 4.02. Offices for Notices and Payments, etc. . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.03. Provisions as to Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.04. Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.05. Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
4
<PAGE> 5
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 4.06. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.07. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.08. Waiver of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.09. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE FIVE
SECURITYHOLDER LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 5.01. Securityholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.02. Preservation and Disclosure of Lists . . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.03. Reports by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.04. Reports by the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE SIX
REMEDIES
SECTION 6.01. Events of Default; Acceleration of Maturity . . . . . . . . . . . . . . . . . 30
SECTION 6.02. Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.03. Collection of Indebtedness and Suits
for Enforcement by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.04. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6.05. Trustee May Enforce Claims Without
Possession of Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.06. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.07. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.08. Unconditional Right of Securityholders
to Receive Principal and Interest . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.09. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.10. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>
5
<PAGE> 6
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 6.11. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.12. Control by Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.13. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.14. Undertaking the Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.15. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE SEVEN
CONCERNING THE TRUSTEE
SECTION 7.01. Duties and Responsibilities of Trustee . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.02. Reliance on Documents, Opinions, etc. . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.03. No Responsibility for Recitals, etc. . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.04. Ownership of Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.05. Moneys to be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.06. Compensation and Expenses of Trustee . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.07. Officers' Certificate as Evidence . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 7.08. Disqualifications; Conflicting Interest
of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 7.09. Eligibility of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 7.10. Resignation or Removal of Trustee . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 7.11. Acceptance by Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 7.12. Successor by Merger, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.13. Limitations on Rights of Trustee
as Creditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.14. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE EIGHT
CONCERNING THE SECURITYHOLDERS
SECTION 8.01. Action by Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . 59
</TABLE>
6
<PAGE> 7
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 8.02 Record Date for Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.03. Proof of Execution by Securityholders . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.04. Who Are Deemed Absolute Owners . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.05. Company-Owned Debt Securities Disregarded . . . . . . . . . . . . . . . . . . 60
SECTION 8.06. Revocation of Consents; Future
Securityholders Bound . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE NINE
SECURITYHOLDERS' MEETINGS
SECTION 9.01. Purposes of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 9.02. Call of Meeting by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.03. Record Date for Securityholders' Meeting . . . . . . . . . . . . . . . . . . . 62
SECTION 9.04. Call of Meeting by Company or
Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.05. Qualifications for Voting . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 9.06. Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 9.07. Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE TEN
SUPPLEMENTAL INDENTURES
SECTION 10.01. Supplemental Indentures without Consent
of Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.02. Supplemental Indentures with Consent
of Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.03. Compliance with Trust Indenture Act;
Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.04. Notation on Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . 67
</TABLE>
7
<PAGE> 8
<TABLE>
<CAPTION>
PAGE
ARTICLE ELEVEN
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
<S> <C> <C>
SECTION 11.01. Company May Consolidate, etc.,
on Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 11.02. Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 11.03. Opinion of Counsel and Officers'
Certificate to be Given Trustee . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE TWELVE
SINKING FUNDS
SECTION 12.01. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 12.02. Satisfaction of Sinking Fund Payments
with Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 12.03. Redemption of Debt Securities
for Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 13.01. Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 13.02. Deposited Moneys to be Held in Trust
by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 13.03. Paying Agent to Repay Moneys Held . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 13.04. Return of Unclaimed Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 13.05. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 14.01. Indenture and Debt Securities Solely
Corporate Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
</TABLE>
8
<PAGE> 9
<TABLE>
<CAPTION>
PAGE
ARTICLE FIFTEEN
MISCELLANEOUS PROVISIONS
<S> <C> <C>
SECTION 15.01. Benefits of Indenture Restricted to
Parties and Securityholders . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 15.02. Provisions Binding on Company's Successors . . . . . . . . . . . . . . . . . . 74
SECTION 15.03. Addresses for Notices, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 15.04. Evidence of Compliance with Conditions
Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 15.05. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 15.06. Trust Indenture Act to Control . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 15.07. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 15.08. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 15.09. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
ACCEPTANCE OF TRUST BY TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
</TABLE>
9
<PAGE> 10
THIS INDENTURE, dated as of the 1st day of April, 1993 between
PIEDMONT NATURAL GAS COMPANY, INC., a corporation duly organized and existing
under the laws of the State of New York (the "Company"), and CITIBANK, N.A., a
national banking association duly organized and existing under the laws of the
United States (the "Trustee", which term shall include any successor trustee
appointed pursuant to Article Seven of this Indenture).
W I T N E S S E T H:
WHEREAS, the Company deems it necessary to issue from time to time for
its lawful purposes securities (hereinafter called the "Debt Securities")
evidencing its unsecured indebtedness and has fully authorized the execution
and delivery of this Indenture to provide for the issuance of the Debt
Securities in one or more series, unlimited as to principal amount, to bear
such rates of interest, to mature at such time or times, and to have such other
provisions as shall be fixed as hereinafter provided; and
WHEREAS, the Company represents that all acts and things necessary to
constitute these presents a valid indenture and agreement according to its
terms have been done and performed, and the execution of this Indenture has in
all respects been duly authorized, and the Company, in the exercise of legal
right and power in it vested, is executing this Indenture;
NOW, THEREFORE, in order to declare the terms and conditions upon
which the Debt Securities are to be authenticated, issued and received, and in
consideration of the premises, of the purchase and acceptance of the Debt
Securities by the holders thereof and of the sum of One Dollar to it duly paid
by the Trustee at the execution of these presents, the receipt of which is
hereby acknowledged, the Company covenants and agrees with the Trustee, for the
equal and proportionate benefit of the respective holders from time to time of
the Debt Securities, as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. DEFINITIONS.
The terms defined in this Section 1.01 (except as herein otherwise
expressly provided or unless the content otherwise clearly requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section. All other terms used in
this Indenture which are defined in the Trustee Indenture Act of 1939, as
amended (the "Trust Indenture Act"), or which are by reference therein defined
in the Securities Act of 1933, as amended (the "1933 Act"), shall have the
meanings (except as herein otherwise expressly
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provided or unless the context otherwise clearly requires) assigned to such
terms in the Trust Indenture Act or in the 1933 Act as in force at the date of
this Indenture as originally executed.
BOARD OF DIRECTORS:
The term "Board of Directors" or "Board" shall mean the Board of
Directors of the Company or any duly authorized and empowered committee of such
Board.
BOARD RESOLUTION:
The term "Board Resolution" shall mean a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
BOOK-ENTRY DEBT SECURITY:
The term "Book-Entry Debt Security" shall mean a Debt Security bearing
the legend specified in Section 2.03, evidencing all or part of the Debt
Securities of a series and registered in the name of the Depository or its
nominee.
BUSINESS DAY:
The term "business day" shall mean any day which is not a Saturday, a
Sunday or a day on which banks and trust companies in New York, New York, or
Charlotte, North Carolina, are authorized or obligated by law, regulation or
executive order to remain closed.
CAPITAL STOCK:
The term "Capital Stock" shall mean, as to shares of a particular
corporation, outstanding shares of stock of any class, whether now or hereafter
authorized, irrespective of whether such class shall be limited to a fixed sum
or percentage in respect of the rights of the holders thereof to participate in
dividends and in the distribution of assets upon the voluntary liquidation,
dissolution or winding up of such corporation.
COMPANY:
The term "Company" shall mean the person named as the "Company" in the
first paragraph of this instrument until a successor corporation shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor corporation.
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COMPANY REQUEST, COMPANY ORDER AND COMPANY CONSENT:
The terms "Company Request", "Company Order" and "Company Consent"
shall mean, respectively, a written request, order or consent signed in the
name of the Company by its Chairman of the Board, President, Chief Executive
Officer, Executive Vice President, Senior Vice President or any Vice President,
or Principal Financial Officer, and by its Principal Accounting Officer,
Controller, any Assistant Controller, Secretary or any Assistant Secretary, and
delivered to the Trustee.
CORPORATE TRUST OFFICE
The term "Corporate Trust Office" shall mean the principal corporate
trust office of the Trustee, at which at any particular time its corporate
trust business shall be administered, which office on the date of execution of
this Indenture is located at 120 Wall Street, 13th Floor, New York, New York,
10043, except that with respect to presentation of Debt Securities for payment
or for registration of transfer or exchange, such term shall mean the office or
agency of the Trustee at which, at any particular time, its corporate agency
business shall be conducted which office or agency on the date of execution of
this Indenture is located at 111 Wall Street, 5th Floor, New York, New York,
10043.
DEBT SECURITY REGISTER:
The terms "Debt Security Register" and "Debt Security Registrar" shall
have the respective meanings specified in Section 2.07.
DEFAULT:
The term "Default" shall mean an event or condition which with the
giving of notice or the passage of time or both would become an Event of
Default.
DEPOSITORY:
The term "Depository" shall mean, with respect to the Debt Securities
of any series issuable or issued in whole or in part in the form of one or more
Book-Entry Debt Securities, the clearing agent registered under the Securities
and Exchange Act of 1934, as amended, specified for that purpose as
contemplated by Section 2.01.
EVENT OF DEFAULT:
The term "Event of Default" has the meaning specified in Article Six.
HOLDER:
The terms "holder", "holder of Debt Securities", "securityholder" or
other similar term shall mean the registered holder of any security.
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INDENTURE:
The term "Indenture" shall mean this instrument as originally executed
or as it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, including without limitation, the terms of particular series
of Debt Securities established as contemplated by Article Two.
OFFICERS' CERTIFICATE:
The term "Officers' Certificate" shall mean a certificate signed by
the Chairman of the Board, President, Chief Executive Officer, Senior Vice
President, or any Vice President, or Principal Financial Officer, and by the
Principal Accounting Officer, the Controller, any Assistant Controller, the
Secretary or any Assistant Secretary of the Company, and delivered to the
Trustee.
OPINION OF COUNSEL:
The term "Opinion of Counsel" shall mean an opinion in writing signed
by legal counsel, who may be an employee of or counsel to the Company and who
shall be reasonably satisfactory to the Trustee, or who may be other counsel
reasonably satisfactory to the Trustee.
ORIGINAL ISSUE DISCOUNT DEBT SECURITIES:
The term "Original Issue Discount Debt Securities" shall mean any Debt
Securities which are initially sold at a discount from the principal amount
thereof and which provide upon Event of Default for declaration of an amount
less than the principal amount thereof to be due and payable upon acceleration
thereof.
OUTSTANDING:
The term "outstanding", when used with reference to Debt Securities,
shall, subject to the provisions of Section 7.08 and Section 8.04, mean, as of
any particular time, all Debt Securities authenticated and delivered by the
Trustee under this Indenture, except:
(a) Debt Securities theretofore canceled by the Trustee
or delivered to the Trustee for cancellation;
(b) Debt Securities, or portions thereof, for the payment
or redemption of which moneys in the necessary amount shall have been
deposited in trust with the Trustee or with any Paying Agent (other
than the Company) or shall have been set aside and segregated in trust
by the Company (if the Company shall act as its own Paying Agent),
provided, that if such Debt Securities are to be
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redeemed prior to the maturity thereof, notice of such redemption
shall have been given as provided in Article Three or other provision
satisfactory to the Trustee shall have been made for giving such
notice; and
(c) Debt Securities which have been paid pursuant to
Section 2.09, or Debt Securities in lieu of or in substitution for
which other Debt Securities shall have been authenticated and
delivered pursuant to the terms of Section 2.07 or Section 2.09,
unless proof satisfactory to the Trustee is presented that any such
Debt Securities are held by bona fide holders in due course;
provided, however, that in determining whether the holders of the
requisite principal amount of outstanding Debt Securities have given
any request, demand, authorization, direction, notice, consent or
waiver hereunder, Debt Securities owned by the Company or any other
obligor upon the Debt Securities or any affiliate of the Company or
such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Debt Securities which the
Trustee knows to be so owned shall be so disregarded. Debt Securities
so owned which have been pledged in good faith may be regarded as
outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Debt
Securities and that the pledgee is not the Company or any other
obligor upon the Debt Securities or any affiliate of the Company or
such other obligor.
PAYING AGENT:
The term "Paying Agent" shall mean any person authorized by the
Company to pay the principal, premium (if any) or interest on any Debt
Securities on behalf of the Company.
PERSON:
The term "person" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, limited liability company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
RECORD DATE:
The term "record date" as used with respect to any interest payment
date shall have the meaning specified in Section 2.05.
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RESPONSIBLE OFFICER:
The term "Responsible Officer", when used with respect to the Trustee,
shall mean the chairman or any vice-chairman of the board of directors, the
chairman or any vice-chairman of the executive committee of the board of
directors, the chairman of the trust committee, the president, any vice
president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any senior trust officer, any trust officer or assistant trust
officer, the controller or any assistant controller or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trustee matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
TRUST INDENTURE ACT:
Except as otherwise provided in Sections 10.01 and 10.02, the term
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as amended,
and as in force at the date of this Indenture as originally executed.
VICE PRESIDENT:
The term "Vice President" when used with respect to the Company or the
Trustee shall mean any vice president, whether or not designated by a number or
word or words added before or after the title "vice president."
ARTICLE TWO
ISSUE, EXECUTION, REGISTRATION AND EXCHANGE OF DEBT SECURITIES
SECTION 2.01. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Debt Securities of all series which
may be authenticated and delivered and outstanding under this Indenture is not
limited.
The Debt Securities may be issued in one or more series. There shall
be established in or pursuant to a Board Resolution and, subject to Section
2.04, set forth, or determined in the manner provided, in an Officer's
Certificate, or established in one or more indentures supplemental hereto,
prior to the issuance of Debt Securities of any series,
(1) the designation of the Debt Securities of the particular
series which shall distinguish the Debt
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Securities of the series from all other Debt Securities and from Debt
Securities of any other series;
(2) any limitation on the aggregate principal amount of Debt
Securities of the series which may be authenticated and delivered
under this Indenture (except for Debt Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Debt Securities of such series pursuant to Section
2.07, 2.08, 2.09, 3.03, or 10.04 and except for any Debt Securities
which are deemed never to have been authenticated and delivered
hereunder);
(3) the person to whom any interest on a Debt Security of the
series shall be payable, if other than the person in whose name that
Debt Security is registered at the close of business on the record
date for such interest;
(4) the date or dates on which the principal of the Debt
Securities of the series is payable;
(5) the rate or rates at which the Debt Securities of the
series shall bear interest, if any, or the method by which such rate
or rates will be determined, the date or dates from which such
interest shall accrue, the date or dates on which such interest shall
be payable and the record date or dates for the interest payable;
(6) the place or places at which the principal, premium (if
any) and interest on the Debt Securities of the series shall be
payable and the method of such payment;
(7) the period or periods within which, the price or prices at
which and the terms and conditions upon which Debt Securities of the
series may be redeemed, in whole or in part, at the option of the
Company;
(8) the obligations, if any, of the Company to redeem or
purchase Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a holder thereof and the
period or periods within which, the price or prices at which, and the
terms and conditions upon which Debt Securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation;
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Debt Securities of the
series shall be issuable;
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(10) if the amount of payments of principal, premium (if any)
or interest on any Debt Securities of the series may be determined
with reference to an index, the manner in which such amounts shall be
determined;
(11) whether the Debt Securities of the series shall be issued
in whole or in part in the form of one or more Book-Entry Debt
Securities and, in such case, the Depository or Depositories with
respect to such Book-Entry Debt Security or Securities and the
circumstances under which any such Book-Entry Debt Security may be
registered for transfer or exchange, or authenticated and delivered,
in the name of a person other than such Depository or its nominee, if
other than as set forth in Section 2.07;
(12) if other than the principal amount thereof, the portion
of the principal amount of the Debt Securities of the series which
shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.01;
(13) any modification, amendment or addition to the covenants
of the Company set forth in Article Four or Article Five of this
Indenture with respect to the Debt Securities of the series;
(14) whether the Debt Securities of the series are subject to
defeasance or covenant defeasance, or such other means of satisfaction
and discharge as may be specified for a series;
(15) any Events of Default with respect to Debt Securities of
the series, if not otherwise set forth herein; and
(16) any other terms or provisions of such series (which shall
not be inconsistent with the provisions of this Indenture, except as
permitted by Section 10.01(g));
All Debt Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or
pursuant to the Board Resolution referred to above and set forth, or determined
in the manner provided, in the Officers' Certificate referred to above or in
any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or Assistant Secretary of the Company and
delivered to the Trustee at
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or prior to the delivery of the Officers' Certificate setting forth the terms
of the series.
SECTION 2.02. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's Certificate of authentication shall be in the
following form:
[Form of Trustee's Certificate of Authentication]
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
<TABLE>
<S> <C>
Dated:
-----------------------------------
Citibank, N.A., as Trustee
By:
------------------------------
Authorized Signatory
</TABLE>
SECTION 2.03. FORM OF LEGEND FOR BOOK-ENTRY DEBT SECURITIES
Any Book-Entry Debt Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:
"This Debt Security is a Book-Entry Debt Security within the meaning
of the Indenture hereinafter referred to and is registered in the name
of a Depository or a nominee of a Depository. This Debt Security is
exchangeable for Debt Securities registered in the name of a person
other than the Depository or its nominee only in limited circumstances
described in the Indenture, and no transfer of this Debt Security
(other than a transfer of this Debt Security as a whole by the
Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository) may
be registered except in such limited circumstances."
SECTION 2.04. FORM AND DELIVERY OF DEBT SECURITIES.
The Debt Securities shall be in substantially the forms approved from
time to time by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
or designation and such legends or endorsements placed thereon as the officers
executing such Debt Securities may deem appropriate and as are not inconsistent
with the provisions of this Indenture, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of
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any stock exchange on which the Debt Securities may be listed, or to conform to
usage. If the form of Debt Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 2.01 for the authentication and delivery of such
Debt Securities.
The definitive Debt Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Debt Securities, as evidenced by
their execution of such Debt Securities.
Prior to the issuance, of Debt Securities of any new series, the
Company shall deliver to the Trustee the following:
(a) The Board Resolution by or pursuant to which the
terms of such series and such form of Debt Securities has been
approved;
(b) An Officers' Certificate concurrently dated stating
that all conditions precedent provided for in this Indenture relating
to the authentication and delivery of Debt Securities in such form
have been satisfied;
(c) An Opinion of Counsel stating that: (1) the form and
terms of such Debt Securities have been established by or pursuant to
a Board Resolution in conformity with the terms of this Indenture; (2)
the Debt Securities in such form, when completed by appropriate
insertions and executed and delivered by the Company to the Trustee
for authentication in accordance with this Indenture, authenticated
and delivered by the Trustee in accordance with this Indenture, and
sold in the manner specified in such Opinion of Counsel, will be valid
and legally binding obligations of the Company and enforceable in
accordance with their terms (subject to applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance, or
other similar laws affecting the rights of creditors now or hereafter
in effect, and to equitable principles that may limit the right to
specific enforcement of remedies, and further subject to the
application of principles of public policy); and (3) such other
matters as the Trustee may reasonably request; and
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(d) A Company Order directing the authentication and
delivery of such Debt Securities.
Notwithstanding the provisions of the preceding paragraph, if all Debt
Securities of a series are not to be originally issued at one time, it shall
not be necessary to deliver the Officers' Certificate, Opinion of Counsel, or
Company Order otherwise required pursuant to such preceding paragraph at or
prior to the time of authentication of each Debt Security of such series if
such documents are delivered at or prior to the authentication upon original
issuance of the first Debt Security of such series to be issued.
The Trustee shall not be required to authenticate and deliver any such
Debt Securities if the issue of such Debt Securities pursuant to this Indenture
will affect the Trustee's own rights, duties or immunities under the Debt
Securities and this Indenture or otherwise in a manner which is not reasonably
acceptable to the Trustee.
SECTION 2.05. DENOMINATIONS; RECORD DATE.
The Debt Securities of each series shall be issuable as registered
Debt Securities without coupons in such denominations as may be specified as
contemplated by Section 2.01. In the absence of any such provisions with
respect to the Debt Securities of any series, the Debt Securities of such
series shall be issuable in denominations of $1,000 and any integral multiple
thereof. Each Debt Security shall be dated the date of its authentication and
may be issued at a discount without interest or shall bear interest as set
forth in the form of such Debt Security.
The term "record date" as used with respect to an interest payment date
for any series shall mean such day or days as shall be specified as
contemplated by Section 2.01; provided, however, that in the absence of any
such provisions with respect to any series, such term shall mean (1) the last
day of the calendar month next preceding such interest payment date if such
interest payment date is the fifteenth day of a calendar month; or (2) the
fifteenth day of a calendar month next preceding such interest payment date if
such interest payment date is the first day of the calendar month.
SECTION 2.06. EXECUTION OF DEBT SECURITIES.
The Debt Securities shall be signed on behalf of the Company by its
President, Chief Executive Officer, Chief Financial Officer or Chief Accounting
Officer under its corporate seal and attested by its Secretary or one of its
Assistant Secretaries. Such signatures may be the manual or facsimile
signatures of the present
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or any future such officers. The seal of the Company may be in the form of a
facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Debt Securities.
Only such Debt Securities as shall bear thereon a certificate of
authentication substantially in the form hereinabove recited, executed by the
Trustee by manual signature of one of its authorized signatories, shall be
entitled to the benefits of this Indenture or be valid or obligatory for any
purpose. Such certificate by the Trustee upon any Debt Security executed by
the Company shall be conclusive evidence that the Debt Security so
authenticated has been duly authenticated and delivered hereunder.
In case any officer of the Company who shall have signed any of the
Debt Securities shall cease to be such officer before the Debt Security so
signed shall be authenticated and delivered by the Trustee or issued and sold
by the Company, such Debt Security nevertheless may be authenticated and
delivered or issued and sold as though the person who signed such Debt Security
has not ceased to be such officer of the Company; and any Debt Security may be
signed on behalf of the Company by such persons as, at the actual date of the
execution of such Debt Security, shall be the proper officers of the Company,
although at the date of the execution of this Indenture any such person was not
such officer.
Upon the execution and delivery of this Indenture, the Company shall
deliver to the Trustee an Officers' Certificate as to the incumbency and
specimen signatures of officers authorized to execute and deliver the Debt
Securities and give instructions under this Section and, as long as Debt
Securities are outstanding under this Indenture, shall deliver a similar
Officers' Certificate each year on the anniversary of the date of the first
such Officers' Certificate. The Trustee may conclusively rely on the documents
delivered pursuant to this Section (unless revoked by superseding comparable
documents) and Section 2.04 thereof as to the authorization of the Board of
Directors of any Debt Securities delivered hereunder, and the form and terms
thereof, and as to the authority of the instructing officers referred to in
this Section so to act.
SECTION 2.07. REGISTRATION; EXCHANGE AND REGISTRATION OF TRANSFER OF DEBT
SECURITIES.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee or at an office or agency to be maintained by the Company in
accordance with Section 4.02, a register (the register maintained in such
office and in any other office or agency of the Company in a place of payment
being herein sometimes collectively referred to as the "Debt Security
Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Debt Securities
and of transfers of Debt Securities. The Trustee is hereby appointed
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"Debt Security Registrar" for the purpose of registering Debt Securities and
transfers of Debt Securities as herein provided.
Such Debt Security Register shall be in written form or in any other
form capable of being converted into written form within a reasonable time. At
all reasonable times the Debt Security Register shall be open for inspection by
the Trustee. Upon due presentment for registration of transfer of any Debt
Security of a particular series at such office or agency, the Company shall
execute and register and the Trustee shall authenticate and make available for
delivery in the name of the transferee or transferees a new Debt Security or
Debt Securities of such series for an equal aggregate principal amount.
Debt Securities of any series may be exchanged for a like aggregate
principal amount of Debt Securities of other authorized denominations of such
series. Debt Securities to be exchanged shall be surrendered at the office or
agency to be designated and maintained by the Company for such purpose in
accordance with the provisions of Section 4.02, and the Company shall execute
and register and the Trustee shall authenticate and make available for delivery
in exchange therefor the Debt Security or Debt Securities which the
securityholder making the exchange shall be entitled to receive.
All Debt Securities issued upon any registration of transfer or
exchange of Debt Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Debt Securities surrendered upon such registration of
transfer or exchange.
All Debt Securities presented for registration of transfer or for
exchange, redemption or payment, as the case may be, shall (if so required by
the Company or the Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company and
the Debt Security Registrar, and duly executed by, the holder or his attorney
duly authorized in writing.
No service charge shall be made for any exchange or registration of
transfer of Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith.
The Company shall not be required to exchange or register a transfer
of (a) any Debt Securities of any series for a period of fifteen (15) days next
preceding the mailing of the notice of any redemption of such Debt Securities
of such series to be redeemed, or (b) any such series selected, called or being
called for redemption except, in the case of any such series to be redeemed in
part, the portion thereof not to be so redeemed.
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Notwithstanding the foregoing and except as otherwise specified or
contemplated by Section 2.01, any Book-Entry Debt Security shall be
exchangeable pursuant to this Section or Sections 2.08, 3.03, and 10.04 for
Debt Securities registered in the name of, and a transfer of a Book-Entry Debt
Security of any series may be registered to, any person other than the
Depository for such Debt Security or its nominee only if (i) such Depository
notifies the Company that it is unwilling or unable to continue as Depository
for such Book-Entry Debt Security or if at any time such Depository ceases to
be a clearing agency registered under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), (ii) the Company executes and delivers to the Trustee
a Company Order that such Book-Entry Debt Security shall be so exchangeable and
the transfer thereof so registerable or (iii) there shall have occurred and be
continuing an Event of Default with respect to the Debt Securities of such
series. Upon the occurrence in respect of any Book-Entry Debt Security of any
series of any one or more of the conditions specified in clauses (i), (ii), or
(iii) of the preceding sentence or such other conditions as may be specified as
contemplated by Section 2.01 for such series, such Book-Entry Debt Security may
be exchanged for Debt Securities registered in the names of, and the transfer
of such Book-Entry Debt Security may be registered to, such persons (including
persons other than the Depository with respect to such series and its nominees)
as such Depository shall direct. Notwithstanding any other provision of this
Indenture, any Debt Security authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, any Book-Entry Debt Security
shall also be a Book-Entry Debt Security and shall bear the legend specified in
Section 2.03 except for any Debt Security which is not a Book-Entry Debt
Security authenticated and delivered in exchange for, or upon registration of
transfer of, a Book-Entry Debt Security pursuant to the preceding sentence.
SECTION 2.08. TEMPORARY DEBT SECURITIES.
Pending the preparation of definitive Debt Securities of any series,
the Company may execute and the Trustee shall, upon Company Order, authenticate
and make available for delivery temporary Debt Securities of such series which
are printed, lithographed, typewritten, mimeographed or otherwise produced.
Temporary Debt Securities of any series shall be issuable as registered Debt
Securities without coupons, of any authorized denomination, and in the form
approved from time to time by or pursuant to a Board Resolution but with such
omissions, insertions and variations as may be appropriate for temporary Debt
Securities, all as may be determined by the officers executing such temporary
Debt Securities, but not inconsistent with the terms of this Indenture or any
provision of applicable law. Every temporary Debt Security shall be executed
by the Company and be authenticated by the Trustee upon the same conditions and
in substantially the same manner, and with like effect, as the definitive Debt
Securities. Without unnecessary delay, the Company shall execute and shall
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furnish definitive Debt Securities of such series and thereupon temporary Debt
Securities of such series may be surrendered in exchange therefor without
charge at the office or agency to be designated and maintained by the Company
for such purpose in accordance with the provisions of Section 4.02, and the
Trustee shall authenticate and make available for delivery in exchange for such
temporary Debt Securities an equal aggregate principal amount of definitive
Debt Securities of the same series of authorized denominations. Until so
exchanged the temporary Debt Securities of any series shall be entitled to the
same benefits under this Indenture as definitive Debt Securities of such
series.
SECTION 2.09. MUTILATED, DESTROYED, LOST OR STOLEN DEBT SECURITIES.
In case any temporary or definitive Debt Security of any series shall
become mutilated or be destroyed, lost or stolen, the Company, in the case of a
mutilated Debt Security shall, and in the case of a lost, stolen or destroyed
Debt Security may in its discretion, execute and the Trustee shall authenticate
and make available for delivery, a new Debt Security of the same series,
bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated Debt Security, or in lieu of and in substitution
for the Debt Security so destroyed, lost or stolen. In every case the
applicant for a substituted Debt Security shall furnish to the Company and to
the Trustee such security or indemnity as may be required by them to save each
of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company and to the Trustee evidence to
their satisfaction of the destruction, loss or theft of such Debt Security and
of the ownership thereof. The Trustee may authenticate any such substituted
Debt Security and make available for delivery the same upon the written request
or authorization of any officer of the Company. Upon the issuance of any
substituted Debt Security, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses connected therewith and in addition a
further sum not exceeding two dollars for each Debt Security so issued in
substitution. In case any Debt Security which has matured or is about to
mature shall become mutilated or be destroyed, lost or stolen, the Company may,
instead of issuing a substituted Debt Security, pay or authorize the payment of
the same (without surrender thereof except in the case of a mutilated Debt
Security) if the applicant for such payment shall furnish the Company and the
Trustee with such security or indemnity as they may require to save them
harmless and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft
of such Debt Security and of the ownership thereof.
Every substituted Debt Security issued pursuant to the provisions of
this Section by virtue of the fact that any Debt
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Security is destroyed, lost or stolen shall, with respect to such Debt
Security, constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debt Security shall be restored,
found or recovered at any time, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Debt
Securities duly issued hereunder.
All Debt Securities shall be held and owned upon the express condition
that the foregoing provisions are exclusive with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debt Securities and shall, to
the extent permitted by law, preclude any and all other rights or remedies,
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.
SECTION 2.10. CANCELLATION.
All Debt Securities surrendered for payment, redemption, exchange or
registration of transfer shall, if surrendered to the Company or any agent of
the Company or Trustee, be delivered to the Trustee and promptly canceled by it
or, if surrendered directly to the Trustee, be canceled by it, and no Debt
Securities shall be issued in lieu thereof except as expressly permitted by any
of the provisions of this Indenture. The Company may deliver to the Trustee for
cancellation any Debt Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Debt Securities so delivered shall be promptly canceled by the Trustee. Any
canceled Debt Securities held by the Trustee shall be destroyed unless otherwise
directed by the Company.
SECTION 2.11. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 2.01 for Debt
Securities of any series, interest on the Debt Securities of each series shall
be computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE THREE
REDEMPTION OF DEBT SECURITIES
SECTION 3.01. REDEMPTION OF DEBT SECURITIES; APPLICABILITY OF SECTION.
Redemption of Debt Securities of any series as permitted or required
by the terms thereof shall be made in accordance with such terms and this
Section; provided, however, that if any provision of any series of Debt
Securities shall conflict with any provision of
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this Section, the provision of such series of Debt Securities shall govern.
SECTION 3.02. NOTICE OF REDEMPTION; SELECTION OF DEBT SECURITIES.
In case the Company shall desire to exercise the right to redeem all or
any part of a series of Debt Securities pursuant to this Article Three, it shall
fix a date for redemption. Notice of redemption of Debt Securities to be
redeemed at the election of the Company shall be given by the Company, or, at
the Company's request, by the Trustee in the name and at the expense of the
Company. The Company or the Trustee, as the case may be, shall mail a notice of
such redemption at least thirty (30) and not more than sixty (60) days prior to
the date fixed for redemption to the holders of such Debt Securities, to be
redeemed as a whole or in part, at their last addresses as the same appear on
the Debt Security Register. Such mailing shall be by prepaid first class mail.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the holder receives such
notice. In any case, failure to give such notice by mail or any defect in the
notice to the holder of any such Debt Security designated for redemption as a
whole or in part shall not affect the validity of the proceedings for the
redemption of any other such Debt Security. If the Company requests the
Trustee to mail a notice of redemption, it shall make such request at least
ten days prior to the designated mailing date unless a shorter notice period is
satisfactory to the Trustee.
Each such notice of redemption shall specify the date fixed for
redemption, the redemption price at which such Debt Securities are to be
redeemed, the CUSIP numbers of such Debt Securities, the place of payment, that
payment will be made upon presentation and surrender of such Debt Securities,
that interest accrued to the date fixed for redemption will be paid as
specified in said notice, and that on and after said date interest thereon or
on the portions thereof to be redeemed will cease to accrue. If less than all
of a series are to be redeemed, the notice of redemption shall specify the
numbers of the Debt Securities to be redeemed. In case any Debt Security is to
be redeemed in part only, the notice of redemption shall state the portion of
the principal amount thereof to be redeemed and shall state that, upon
surrender of such Debt Security, a new Debt Security or Debt Securities in
principal amount equal to the unredeemed portion thereof will be issued of the
same series.
On or before the redemption date specified in the notice of redemption
given as provided in this Section, the Company will deposit in trust with the
Trustee or with one or more Paying Agents, (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in Section 4.03) an
amount of money sufficient to redeem on the redemption date all the Debt
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Securities or portions of Debt Securities so called for mandatory redemption at
the appropriate redemption price, together with accrued interest to the date
fixed for redemption. If less than all of a series are to be redeemed, the
Company will give the Trustee adequate written notice at least forty-five (45)
days in advance (unless a shorter notice shall be satisfactory to the Trustee)
as to the aggregate principal amount of Debt Securities to be redeemed.
If less than all of a series are to be redeemed, the Trustee shall
select in such manner as it shall deem appropriate and fair, not more than
sixty (60) days prior to the date of redemption, the numbers of the Debt
Securities or portions thereof not previously called for redemption, to be
redeemed in whole or in part. The portions of principal of Debt Securities so
selected for partial redemption shall be equal to $1,000 or any integral
multiple thereof. The Trustee shall notify the Company of the Debt Securities
to be so redeemed.
SECTION 3.03. PAYMENT OF DEBT SECURITIES CALLED FOR REDEMPTION.
If notice of redemption has been given as above provided, the Debt
Securities or portions of Debt Securities with respect to which such notice has
been given shall become due and payable on the date and at the place stated in
such notice at the applicable redemption price, together with interest accrued
to the date fixed for redemption, and on and after said date (unless the Company
shall default in the payment of such Debt Securities at the redemption price,
together with interest accrued to said date) interest on the Debt Securities or
portions of Debt Securities so called for redemption shall cease to accrue. On
presentation and surrender of such Debt Securities subject to redemption at said
place of payment in said notice specified, the said Debt Securities or the
specified portions thereof shall be paid and redeemed by the Company at the
applicable redemption price, together with interest accrued thereon to the date
fixed for redemption (but if the date fixed for redemption is an interest
payment date, the interest payable on such date shall be paid to the holders at
the close of business on the applicable record date subject to the provisions
hereof). At the option of the Company payment may be made by check to the
holders of the Debt Securities or other persons entitled thereto against
presentation and surrender of such Debt Securities.
Upon presentation of any Debt Security redeemed in part only, the
Company shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Debt
Security or Debt Securities, of authorized denominations, in aggregate
principal amount equal to the unredeemed portion of the Debt Security so
presented and of the same series (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the
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holder thereof or such holder's attorney duly authorized in writing).
SECTION 3.04. REDEMPTION SUSPENDED DURING EVENT OF DEFAULT.
The Trustee shall not redeem any Debt Securities (unless all Debt
Securities then outstanding are to be redeemed) or commence the giving of any
notice or redemption of Debt Securities during the continuance of any Event of
Default of which a Responsible Officer of the Trustee has actual knowledge or
notice, except that where the giving of notice of redemption of any Debt
Securities shall theretofore have been made, the Trustee shall redeem such Debt
Securities, provided funds are deposited with it for such purpose. Except as
aforesaid, any moneys theretofore or thereafter received by the Trustee shall,
during the continuance of such Event of Default, be held in trust for the
benefit of the securityholders and applied in the manner set forth in Section
6.06; provided, however, that in case such Event of Default shall have been
waived as provided herein or otherwise cured, such moneys shall thereafter be
held and applied in accordance with the provision of this Article Three.
ARTICLE FOUR
PARTICULAR COVENANTS OF THE COMPANY
SECTION 4.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company covenants and agrees for the benefit of each series of
Debt Securities that it will duly and punctually pay or cause to be paid the
principal, premium (if any) and interest on each of the Debt Securities at the
place, at the respective times and in the manner provided in the terms of the
Debt Securities and in this Indenture.
The Company hereby initially designates the Trustee as its Paying
Agent. The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent or approve a change in the office
through which any Paying Agent acts.
The person in whose name any Debt Security is registered at the close
of business on the record date with respect to an interest payment date shall
be entitled to receive the interest payable on such interest payment date
notwithstanding the cancellation of such Debt Security upon any registration of
transfer or exchange thereof subsequent to such record date and prior to such
interest payment date; provided, however, that if and to the extent the Company
shall default in the payment of the interest due on such interest payment date,
such defaulted interest shall be paid to the persons in whose names the Debt
Securities are registered on a subsequent record date established by notice
given
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by mail by or on behalf of the Company to the holders of Debt Securities
of the series in default not less than fifteen (15) days preceding such
subsequent record date, such record date to be not less than five (5) days
preceding the date of payment of such defaulted interest or in any other lawful
manner acceptable to the Trustee.
The principal, redemption premium (if any) and interest (if any) on
the Debt Securities shall be payable at the office or agency of the Paying
Agent or Paying Agents, in New York Clearing House funds; provided, that at the
option of the Company interest may be paid by check mailed to the holders of
the Debt Securities entitled thereto at their last addresses as they appear on
the Debt Security Register.
SECTION 4.02. OFFICES FOR NOTICES AND PAYMENTS, ETC.
As long as any of the Debt Securities remain outstanding, the Company
will designate and maintain, in the Borough of Manhattan, the City of New York
(or in such other place or places as the Company may designate from time to time
by Company Order), an office or agency where the Debt Securities may be
presented for registration of transfer and for exchange as in this Indenture
provided, an office or agency where notices and demands to or upon the Company
in respect of the Debt Securities or of this Indenture may be served, and an
office or agency where the Debt Securities may be presented for payment. The
Company will give to the Trustee notice of the location of each such office or
agency and of any change in the location thereof. In the case the Company shall
fail to maintain any such office or agency in the Borough of Manhattan, the City
of New York, or in such other place or places as the Company may designate
pursuant to this Section, or shall fail to give such notice of the location or
of any change in the location thereof, presentations may be made and notices and
demands may be served at the principal corporate trust office of the Trustee.
The Company hereby initially designates the Corporate Trust Office of
Citibank, N.A. as the office of the Company in the Borough of Manhattan, the
City of New York, where the Debt Securities may be presented for payment, for
registration of transfer and for exchange as in this Indenture provided and
where notices and demands to or upon the Company in respect of the Debt
Securities or of this Indenture may be served.
SECTION 4.03. PROVISIONS AS TO PAYING AGENT.
(a) Whenever the Company shall appoint a Paying Agent
other than the Trustee with respect to the Debt Securities of any
series, it will cause such Paying Agent to execute and deliver to the
Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section:
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(1) that it will hold all sums held by it as
Paying Agent for the payment of the principal, premium (if
any) or interest on the Debt Securities of such series
(whether such sums have been paid to it by the Company or by
any other obligor on the Debt Securities of such series) in
trust for the benefit of the holders of the Debt Securities of
such series entitled thereto or the Trustee and will notify
the Trustee of the receipt of sums to be so held;
(2) that it will give the Trustee notice of any
default by the Company (or by any other obligor on the Debt
Securities of such series) in the making of any payment of the
principal, premium (if any) or interest on the Debt Securities
of such series when the same shall be due and payable; and
(3) that at any time when any such default has
occurred and is continuing, it will, upon the written request
of the Trustee, forthwith pay to the Trustee all sums so held
in trust by such Paying Agent.
(b) If the Company shall act as its own Paying Agent, it
will, on or before each due date of the principal, premium (if any) or
interest on the Debt Securities of any series, set aside, segregate
and hold in trust for the benefit of the holders of the Debt
Securities of such series entitled thereto a sum sufficient to pay
such principal, premium (if any) or interest so becoming due. The
Company will promptly notify the Trustee of any failure to take such
action.
Whenever the Company shall have one or more Paying Agents, it
will, prior to each due date of the principal, premium (if any) or
interest on any Debt Securities, deposit with a Paying Agent a sum
sufficient to pay the principal, premium (if any) or interest, so
becoming due, such sum to be held in trust for the benefit of the
persons entitled to such principal, premium or interest, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
(c) Anything in this Section to the contrary
notwithstanding, the Company may, at any time, for the purpose of
obtaining a satisfaction and discharge with respect to one or more or
all series of Debt Securities
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hereunder, or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust for such series by it or any Paying
Agent hereunder as required by this Section, such sums to be held by
the Trustee upon the trusts herein contained.
(d) Anything in this Section to the contrary
notwithstanding, the agreement to hold sums in trust as provided in
this Section is subject to the provisions of Sections 12.03 and 12.04.
SECTION 4.04. STATEMENT AS TO COMPLIANCE.
The Company will deliver to the Trustee, within one hundred twenty
(120) days after the end of each fiscal year, a brief certificate from the
Chief Executive Officer, Principal Financial Officer or Principal Accounting
Officer as to his or her knowledge of the Company's compliance with all
conditions and covenants under this Indenture. For purposes of this Section
4.04, such compliance shall be determined without regard to any period of grace
or requirement of notice under this Indenture.
SECTION 4.05 PROPERTY.
The Company will cause (or, with respect to property owned in common
with others, make reasonable effort to cause) all its properties used or useful
in the conduct of its business to be maintained and kept in good condition,
repair and working order and will cause (or with respect to property owned in
common with others make reasonable effort to cause) to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as,
in the judgment of the Company, may be necessary so that the business carried
on in conjunction therewith may be properly conducted; provided, however, that
the foregoing shall not prevent the Company from discontinuing, or causing the
discontinuance of, the operation and maintenance of any of its properties if
such discontinuance is, in the judgment of the Company, desirable in the
conduct of its business.
SECTION 4.06. CORPORATE EXISTENCE.
Subject to the provisions of Article Eleven, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights (charter and statutory) and franchises
and the corporate existence, rights (charter and statutory) and franchises of
its subsidiaries; provided, however, that the Company shall not be required to,
or to cause any subsidiary to, preserve any right or franchise or to keep in
full force and effect the corporate existence of any subsidiary if the Company
shall determine that the keeping in existence or preservation thereof is no
longer desirable in the conduct of the business of the Company and that the
loss thereof is not
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disadvantageous in any material respect to the holders of any series of Debt
Securities.
SECTION 4.07. LIMITATION ON LIENS.
Except as in this Section expressly permitted, so long as any of the
Debt Securities of any series shall be outstanding, the Company will not at any
time directly or indirectly create, assume or suffer to exist, and will not
cause, suffer or permit any subsidiary, as long as it remains a subsidiary,
directly or indirectly to create, assume or suffer to exist, except in favor of
the Company, any mortgage, pledge or other lien or encumbrance of or upon any of
its properties or assets, real, personal or mixed (including stock and other
securities of subsidiaries), whether owned at the date of this Indenture or
thereafter acquired, or of or upon any income or profits therefrom, without
making effective provision (and the Company covenants that in such case it will
make or cause to be made effective provision) whereby the Debt Securities then
outstanding together with any other indebtedness of the Company then entitled
thereto shall be secured by such mortgage, pledge, lien or encumbrance equally
and ratably with any and all other obligations and indebtedness thereby secured,
so long as any such other obligations or indebtedness shall be so secured.
Nothing in this Indenture shall be construed to prevent the Company or
any subsidiary, without so securing the Debt Securities, from creating,
assuming or suffering to exist the following mortgages, pledges, liens or
encumbrances, to which the provisions of the preceding paragraph shall not be
applicable:
1. mortgages, pledges, liens or encumbrances upon any
property presently owned or hereafter acquired, created at the time of
acquisition to secure a portion of the purchase price thereof, or
existing thereon at the date of acquisition, whether or not assumed by
the Company or a subsidiary, provided that every such mortgage,
pledge, lien or encumbrance shall apply only to the property so
acquired and fixed improvements thereon;
2. any extension, renewal, or refunding of any mortgage,
pledge, lien or encumbrance permitted by subsection (a) above, if
limited to the same property subject to, and securing not more than
the amount secured by, the mortgage, pledge, lien or encumbrance
extended, renewed or refunded;
3. the pledge of current assets, in the ordinary course
of business, to secure current liabilities;
4. mortgages or other liens upon (i) property, to secure
obligations to pay all or a part of the purchase price of such
property only out of or measured by the production, or
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the proceeds of such production, from such property of oil or gas or
products or by-products thereof, or (ii) the production from property
of oil or gas or products or by-products thereof, or the proceeds of
such production, to secure obligations to pay all or part of the
expenses of exploration, drilling or development of such property
only out of such production or the proceeds of such production;
5. mechanics' or materialmen's liens, good faith
deposits in connection with tenders, leases of real estate, bids or
contracts (other than contracts for the payment of money), deposits to
secure public or statutory obligations, deposits to secure, or in lieu
of, surety, stay or appeal bonds, and deposits as security for the
payment of taxes or assessments or similar charges, liens or security
interests given in connection with bid or completion bonds;
6. any lien arising by reason of deposits with, or the
giving of any form of security to, any governmental agency or any body
created or approved by law or governmental regulation for any purposes
at any time as required by law of governmental regulation as a
condition to the transaction of any business or the exercise of any
privilege or license, or to enable the Company or a subsidiary to
maintain self-insurance or to participate in any funds established to
cover any insurance risks in connection with workmen's compensation,
unemployment insurance, old age pensions or other social security, or
to share in the privileges or benefits required for companies
participating in such arrangements;
7. the pledge or assignment of accounts receivable,
including customers' installment paper, to banks or others made in the
ordinary course of business (including to or by any subsidiary which
is principally engaged in the business of financing the business of
the Company and its subsidiaries);
8. the liens of taxes or assessments for the then
current year or not at the time due, or the liens of taxes or
assessments already due but the validity of which is being contested
in good faith and against which an adequate reserve has been
established;
9. any judgment or lien against the Company or a
subsidiary, so long as the finality of such judgment is being
contested and the execution thereon is stayed;
10. assessments or similar encumbrances, the existence of
which does not impair the use of the property subject thereto for the
purposes for which it was acquired;
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11. landlords' liens on fixtures and movable property
located on premises leased by the Company or a subsidiary in the
ordinary course of business so long as the rent secured thereby is not
in default; and
12. liens on the assets of any limited liability company
organized under a limited liability company act of any state in which
a limited liability company is treated as a partnership for federal
income tax purposes.
SECTION 4.08. WAIVER OF COVENANTS.
The Company may omit in any particular instance to comply with any
covenant or condition set forth herein if before or after the time for such
compliance the holders of a majority in principal amount of the Debt Securities
of all series affected thereby then outstanding (voting as one class) shall
either waive such compliance in such instance or generally waive compliance
with such covenant or condition, but no such waiver shall extend to or affect
such covenant or condition except to the extent so expressly waived, and, until
such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such covenant or condition shall remain
in full force and effect.
SECTION 4.09. NOTICE OF DEFAULT.
The Company shall file with the Trustee written notice of the
occurrence of any Default or Event of Default within five (5) business days of
its becoming aware of any such Default or Event of Default.
ARTICLE FIVE
SECURITYHOLDER LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 5.01. SECURITYHOLDER LISTS.
The Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee (1) semiannually, not more than fifteen (15) days
after each record date when any Debt Securities of any series are outstanding,
a list, in such form as the Trustee may reasonably require, of all information
in the possession or control of the Company as to the names and addresses of
the holders of such Debt Securities as of such date, and (2) at such other
times as the Trustee may request in writing, within thirty (30) days after
receipt by the Company of any such request, a list in such form as the Trustee
may reasonably require of the names and addresses of the holders of Debt
Securities of particular series specified by the Trustee as of a date not more
than 15 days prior to the time such information is furnished; provided,
however, that
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if and so long as the Trustee shall be the Debt Security Registrar, such list
shall not be required to be furnished.
SECTION 5.02. PRESERVATION AND DISCLOSURE OF LISTS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of each series of Debt Securities contained in the most recent list
furnished to it as provided in Section 5.01 or received by the Trustee in
its capacity as Debt Security Registrar. The Trustee may destroy any list
furnished to it as provided in Section 5.01 upon receipt of a new list so
furnished.
(b) In case three (3) or more holders of Debt Securities (the
"applicants") apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Debt Security of such
series for a period of at least six (6) months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Debt Securities of a particular series (in
which case the applicants must hold Debt Securities of such series) or with
holders of all Debt Securities with respect to their rights under this
Indenture or under such Debt Securities and it is accompanied by a copy of the
form of proxy or other communication which such applicants propose to transmit,
then the Trustee shall, within five (5) business days after the receipt of such
application, at its election, either
(1) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions
of subsection (a) of this Section, or
(2) inform such applicants as to the approximate number
of holders of Debt Securities of such series or all Debt Securities,
as the case may be, whose names and addresses appear in the
information preserved at the time by the Trustee, in accordance with
the provisions of subsection (a) of this Section and as to the
approximate cost of mailing to such securityholders the form of proxy
or other communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each securityholder of such series or all Debt Securities,
as the case may be, whose name and address appear in the information preserved
at the time by the Trustee in accordance with the provisions of subsection (a)
of this Section, a copy of the form of proxy or other communication which
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is specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five (5) days
after such tender, the Trustee shall mail to such applicants and file with the
Securities and Exchange Commission (the "Commission"), together with a copy of
the material to be mailed, a written statement to the effect that, in the
opinion of the Trustee, such mailing would be contrary to the best interests of
the holders of Debt Securities of such series or all Debt Securities, as the
case may be, or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. After opportunity for a
hearing upon the objections specified in the written statement so filed, the
Commission may, and if demanded by the Trustee or by such applicants shall,
enter an order either sustaining one or more of such objections or refusing to
sustain any of them. If the Commission shall enter an order refusing to
sustain any of such objections, or if, after the entry of an order sustaining
one or more of such objections, the Commission shall find, after notice and
opportunity for hearing, that all objections so sustained have been met, and
shall enter an order so declaring, the Trustee shall mail copies of such
material to all such securityholders with reasonable promptness after the entry
of such order and the renewal of such tender; otherwise, the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.
(c) Each and every holder of Debt Securities, by receiving and
holding the same, agrees with the Company and the Trustee that neither
the Company nor the Trustee nor any agent of the Company or Trustee shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the holders of Debt Securities in accordance with the
provisions of 5.02(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under said subsection (b).
SECTION 5.03. REPORTS BY THE COMPANY.
The Company covenants so long as Debt Securities are outstanding:
(a) to file with the Trustee within fifteen (15) days
after the Company is required to file the same with the Commission,
copies of the annual reports and copies of the information, documents
and other reports (or such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe)
which the Company may be required to file with the Commission pursuant
to Section 13 or Section 15(d) of the 1934 Act; or, if the Company is
not required to file information, documents or reports pursuant to
either of
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such sections, then to file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by
the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of
the 1934 Act, in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time
in such rules and regulations;
(b) to file with the Trustee and the Commission, in
accordance with the rules and regulations prescribed from time to time
by the Commission, such additional information, documents, and reports
with respect to compliance by the Company with the conditions and
covenants provided for in this Indenture as may be required from time
to time by such rules and regulations; and
(c) to transmit by mail to all the holders of Debt
Securities of each series, as the names and addresses of such holders
appear on the Debt Security Register, within thirty (30) days after
the filing thereof with the Trustee, such summaries of any
information, documents and reports required to be filed by the Company
with respect to each such series pursuant to subsections (a) and (b)
of this Section as may be required by rules and regulations prescribed
from time to time by the Commission.
SECTION 5.04. REPORTS BY THE TRUSTEE.
(a) On or about November 15, 1993 and on or before sixty (60) days
after November 15th of each year thereafter, so long as any Debt Securities are
outstanding hereunder and if there has been any change in the following, the
Trustee shall transmit to the securityholders, as provided in 5.04(c), in
accordance with and to the extent required by Section 3.13(a) of the Trust
Indenture Act, a brief report dated as of the preceding October 31st, with
respect to:
(1) any change to its eligibility under Section 7.09 and
its qualification under Section 7.08;
(2) the creation of or any material change to a
relationship specified in Section 7.08(c)(1) through 7.08(c)(10);
(3) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the date
of such report, and
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for the reimbursement of which it claims or may claim a lien or
charge, prior to that of the Debt Securities, on any property or
funds held or collected by it as Trustee, except that the Trustee
shall not be required (but may elect) to report such advances
if such advances so remaining unpaid aggregate not more than one-half
of one percent (.5%) of the principal amount of the Debt Securities
for any series outstanding on the date of such report:
(4) any change to the amount, interest rate, and maturity
date of all other indebtedness owing by the Company (or by any other
obligor on the Debt Securities) to the Trustee in its individual
capacity, on the date of such report, with a brief description of any
property held as collateral security therefor, except an indebtedness
based upon a creditor relationship arising in any manner described in
paragraphs (2), (3), (4), or (6) of subsection (b) of Section 7.13;
(5) any change to the property and funds, if any,
physically in the possession of the Trustee (as such) on the date of
such report;
(6) any additional issue of Debt Securities which it has
not previously reported; and
(7) any action taken by the Trustee in the performance of
its duties under this Indenture which it has not previously reported
and which in its opinion materially affects the Debt Securities, except
action in respect of a default, notice of which has been or is to be
withheld by it in accordance with the provisions of Section 7.14.
(b) The Trustee shall transmit to the holders of Debt Securities,
as provided in subsection (c) of this Section, a brief report with respect to
the character and amount of any advances (and if the Trustee elects so to
state, the circumstances surrounding the making thereof) made by the Trustee
(as such) since the date of the last report transmitted pursuant to the
provisions of 5.04(a) (or if no such report has yet been so transmitted, since
the date of execution of this Indenture), for the reimbursement of which it
claims or may claim a lien or charge, prior to that of the Debt Securities of
any series on property or funds held or collected by it as Trustee, and which
it has not previously reported pursuant to this subsection (b), except that the
Trustee for each series shall not be required (but may elect) to report such
advances if such advances remaining unpaid at any time aggregate ten percent or
less of the principal amount of Debt Securities for such series outstanding at
such time, such report to be transmitted within 90 days after such time.
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(c) Reports pursuant to this Section shall be transmitted by first
class mail to all holders of Debt Securities, as the names and addresses of
such holders appear upon the Debt Security Register and to such holders of Debt
Securities as have, within the two (2) years preceding such transmissions,
filed their names and addresses with the Trustee for that purpose.
(d) A copy of each such report shall, at the time of such
transmission to holders of Debt Securities, be filed by the Trustee with each
stock exchange upon which the Debt Securities are listed, if any, and also with
the Commission. The Company agrees to promptly notify the Trustee when and as
the Debt Securities become listed on any stock exchange.
ARTICLE SIX
REMEDIES
SECTION 6.01. EVENTS OF DEFAULT; ACCELERATION OF MATURITY.
In case one or more of the following Events of Default with respect to
a particular series shall have occurred and be continuing, that is to say:
(a) default in the payment of the principal or premium
(if any) on any of the Debt Securities of such series as and when the
same shall become due and payable either at maturity, upon redemption,
by declaration or otherwise; or
(b) default in the payment of any installment of interest
upon any of the Debt Securities of such series as and when the same
shall become due and payable, and continuance of such default for a
period of thirty (30) days; or
(c) default in the payment of any sinking or purchase fund
or analogous obligation when the same becomes due and payable by the
terms of the Debt Securities of such series; or
(d) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the
Company in the Debt Securities or in this Indenture contained for a
period of ninety (90) days after the date on which written notice of
such failure, requiring the Company to remedy the same, shall have
been given, by registered or certified mail, to the Company by the
Trustee, or to the Company and the Trustee by the holders of at least
twenty-five percent (25%)in aggregate principal amount of the Debt
Securities affected thereby at the time outstanding; or
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(e) a default under any bond, debenture, note or other
evidence of indebtedness for money borrowed by the Company (including
a default with respect to Debt Securities of any series other than
that series) or under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company
(including this Indenture) whether such indebtedness now exists or
shall hereafter be created, which default shall constitute a failure
to pay in excess of $50,000,000 principal amount of such indebtedness
when due and payable after the expiration of any applicable grace
period with respect thereto or shall have resulted in an excess of
$50,000,000 of principal amount of such indebtedness becoming or
being declared due and payable prior to the date on which it would
otherwise have become due and payable, without such indebtedness
having been discharged, or such acceleration having been rescinded or
annulled, within a period of ten (10) days after there shall have been
given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the holders of at least
twenty-five percent (25%) in aggregate principal amount of the
outstanding Debt Securities of such series a written notice specifying
such default and requiring the Company to cause such indebtedness to
be discharged or cause such acceleration to be rescinded or annulled
and stating that such notice is a "Notice of Default" hereunder; or
(f) a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Company in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or for any substantial part of its property,
or ordering the winding-up or liquidation of its affairs and such
decree or order shall remain unstayed and in effect for a period of
sixty (60) consecutive days;
(g) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case under any such law, or shall consent to
the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or similar official) of
the Company or for any substantial part of its property, or shall make
any general assignment for the benefit of creditors; or
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(h) any other Event of Default provided in the supplemental
indenture under which such series of Debt Securities is issued or in
the form of Debt Security for such series.
then, if an Event of Default described in clause (a), (b), (c), (d) or (e)
shall have occurred and is continuing, and in each and every such case, unless
the principal amount of all the Debt Securities of such series shall have
already become due and payable, either the Trustee or the holders of not less
than twenty-five percent (25%) in aggregate principal amount of the Debt
Securities of each series affected thereby then outstanding hereunder (voting as
one class), by notice in writing to the Company by registered or certified mail
(and to the Trustee if given by securityholders) may declare the principal
amount of all the Debt Securities (or, with respect to Original Issue Discount
Debt Securities, such lesser amount as may be specified in the terms of such
Debt Securities) affected thereby to be due and payable immediately, and upon
any such declaration the same shall become and shall be immediately due and
payable, anything to the contrary in this Indenture or in the Debt Securities
of such series notwithstanding, or, if an Event of Default described in clause
(f) or (g) shall have occurred and is continuing, and unless the principal of
all the Debt Securities of such series shall have already become due and
payable, either the Trustee or the holders of not less than twenty-five
percent (25%) in aggregate principal amount of all the Debt Securities then
outstanding thereunder (voting as one class), by notice in writing to the
Company by registered or certified mail (and to the Trustee if given by
securityholders), may declare the principal of all the Debt Securities (or,
with respect to Original Issue Discount Debt Securities, such lesser amount as
may be specified in the terms of such Debt Securities) to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything to the contrary in this Indenture or in
the Debt Securities notwithstanding.
SECTION 6.02. RESCISSION AND ANNULMENT.
The provisions in Section 6.01 are subject to the condition that if,
at any time after the principal of the Debt Securities of any one or more
series shall have been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Company shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest upon all the Debt
Securities of such series or of all the Debt Securities, as the case may be,
and the principal or premium (if any) on all Debt Securities of such series or
of all the Debt Securities, as the case may be (or, with respect to Original
Issue Discount Debt Securities, such lesser amount as may be specified in the
terms of such Debt Securities), which shall have become due otherwise than
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by acceleration (with interest upon such principal and premium (if any) and, to
the extent that payment of such interest is enforceable under applicable law,
on overdue installments of interest, at the same rate as the rate of interest
specified in the Debt Securities of such series or all Debt Securities, as the
case may be (or, with respect to Original Issue Discount Debt Securities, at
the rate specified in the terms of such Debt Securities for interest on overdue
principal thereof upon maturity, redemption or acceleration of such series), to
the date of such payment of deposit, and such amount as shall be sufficient to
cover reasonable compensation to the Trustee, its agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances
made, by the Trustee except as a result of its negligence or bad faith, and any
and all defaults under the Indenture, other than the non-payment of the
principal of Debt Securities, which shall have become due by acceleration,
shall have been remedied -- then the holders of a majority in aggregate
principal amount of the Debt Securities of such series or of all the Debt
Securities as the case may be then outstanding, by written notice to the
Company and to the Trustee, may waive all defaults with respect to that series
or with respect to all Debt Securities, treated as a single class and rescind
and annul such declaration and its consequences; but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent default
or shall impair any right consequent thereon.
SECTION 6.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if
(1) default is made in the payment of any installment of
interest or mandatory sinking fund payment on any Debt Security when
such interest or mandatory sinking fund payment becomes due and
payable and such default continues for a period of thirty (30) days,
or
(2) default is made in the payment (other than any
sinking fund payment) of the principal or premium (if any) of any Debt
Security at the maturity thereof, including any maturity occurring by
reason of a call for redemption or otherwise,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
holders of such Debt Securities, the whole amount that shall have become due
and payable on such Debt Securities for principal, premium (if any) and
interest, with interest on the overdue principal and, to the extent that
payment of such interest shall be legally enforceable, upon overdue
installments of interest, at the rate borne by such Debt Securities; and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the
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reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceedings to judgment or final decree, and may enforce the
same against the Company or any other obligor upon such Debt Securities and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Debt
Securities, wherever situated.
If any Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
securityholders by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 6.04. TRUSTEE MAY FILE PROOFS OF CLAIM.
In the case of the pendency of a receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor upon
the Debt Securities or the property of the Company or such other obligor or
their creditors, the Trustee (irrespective of whether the principal of the Debt
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(i) to file such proofs of claim for the whole amount of
principal, premium (if any) and interest owing and unpaid in respect
of the Debt Securities and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the securityholders allowed in such judicial proceeding; and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby
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authorized by each securityholder to make such payments to the Trustee, and in
the event that the Trustee shall consent to the making of such payments
directly to the securityholders, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.06. To the extent that such payment of reasonable compensation,
expenses, disbursements, advances and other amounts out of the estate in any
such proceedings shall be denied for any reason, payment of the same shall be
secured by a lien on, and shall be paid out of, any and all distributions,
dividends, moneys, securities and other property which the holders of the Debt
Securities may be entitled to receive in such proceedings, whether in
liquidation or under any plan or reorganization or arrangements or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of the securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Debt Securities or the rights of any holder thereof, or to authorize the
Trustee to vote in respect of the claim of any securityholder in any such
proceeding.
SECTION 6.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF DEBT
SECURITIES.
All rights of action and claims under this Indenture or the Debt
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Debt Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Debt Securities in respect of which such
judgment has been recovered.
SECTION 6.06. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and
in case of the distribution of such money on account of principal, premium (if
any) or interest, upon presentation of the Debt Securities, and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 7.06;
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SECOND: To the payment of the amounts then due and unpaid upon
the Debt Securities for principal, premium (if any) and interest,
in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Debt Securities, for
principal and interest, respectively.
SECTION 6.07. LIMITATION ON SUITS.
No holder of any Debt Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(1) such holder has previously given written notice to
the Trustee of a continuing Event of Default;
(2) the holders of not less than twenty-five percent
(25%) in aggregate principal amount of the outstanding Debt
Securities of such series shall have made written request to the
Trustee to institute proceedings, in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such holder or holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to
be incurred in compliance with such request;
(4) the Trustee for sixty (60) days after its receipt of
such notice, request and offer of indemnity has failed to institute
any such proceedings; and
(5) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the
holders of a majority in principal amount of the outstanding Debt
Securities of such series;
it being understood and intended that no one or more holders of Debt Securities
shall have any right in any manner whatever by virtue of, or by availing of,
any provision of this Indenture to affect, disturb or prejudice the rights of
any other holders of Debt Securities of the same series or to obtain or to seek
to obtain priority or preference over any such holders or to enforce any right
under this Indenture, except in the manner herein provided and for the equal
and ratable benefit of all the holders of Debt Securities of the same series.
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SECTION 6.08. UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST.
Notwithstanding any other provision in this Indenture, the holder of
any Debt Security shall have the right, which is absolute and unconditional, to
receive payment of the principal, premium (if any) and (subject to the third
paragraph of Section 4.01) interest on such Debt Security on the respective
stated maturities expressed in such Debt Security (or, in the case of
redemption, on the redemption date) and to institute suit for the enforcement
of any such payment, and such right shall not be impaired or affected without
the consent of such holder.
SECTION 6.09. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any securityholder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such securityholder, then the Company, the Trustee and the
securityholders shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the securityholders shall
continue as though no such proceeding has been instituted.
SECTION 6.10. RIGHTS AND REMEDIES CUMULATIVE.
Except as provided in Section 2.09, no right or remedy herein conferred
upon or reserved to the Trustee or to the securityholders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.
SECTION 6.11. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any holder of any Debt
Security to exercise any right or remedy accruing upon any Default shall impair
any such right or remedy or constitute a waiver of any such Default or an
acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the securityholders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the
securityholders, as the case may be.
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SECTION 6.12. CONTROL BY SECURITYHOLDERS.
The holders of a majority in principal amount of outstanding Debt
Securities of each series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee under this Indenture,
provided that
(1) such direction shall not be in conflict with any
statute, rule of law or with this Indenture;
(2) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction; and
(3) the Trustee need not take any action which it
determines might involve it in personal liability or be unjustly
prejudicial to the securityholders of such series not consenting.
SECTION 6.13. WAIVER OF PAST DEFAULTS.
The holders of a majority in principal amount of the outstanding Debt
Securities of each series may, on behalf of the holders of all the Debt
Securities of such series, waive any past default hereunder with respect to
such series and its consequences, except a default
(1) in the payment of the principal, premium (if any) or
interest on any Debt Security, or
(2) in respect of a covenant or provision hereof which
under Article Ten cannot be modified or amended without the consent
of the holder of each outstanding Debt Security of such series
affected.
Upon any such waiver, such default shall cease to exist, and any Default or
Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture, but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 6.14. UNDERTAKING THE COSTS.
All parties to this Indenture agree, and each holder of any Debt
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including
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reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; provided, that the provisions of this Section shall not apply
to any suit instituted by the Trustee, to any suit instituted by any
securityholder, or group of securityholders, holding in the aggregate more than
ten percent (10%) in principal amount of the outstanding Debt Securities, or to
any suit instituted by any securityholder for the enforcement of the payment of
the principal, premium (if any) or interest on any Debt Security on or after
the respective stated maturities expressed in such Debt Security (or, in the
case of redemption, on or after the redemption date).
SECTION 6.15. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever,
claim or take the benefit or advantage of, any stay or extension laws wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefits or advantage of any
such law, and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE SEVEN
CONCERNING THE TRUSTEE
SECTION 7.01. DUTIES AND RESPONSIBILITIES OF TRUSTEE.
The Trustee, prior to the occurrence of an Event of Default of a
particular series and after the curing of all Events of Default of such series
which may have occurred, undertakes to perform such duties and only such duties
with respect to such series as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this Indenture against
the Trustee and in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture. In case an Event of
Default with respect to a particular series has occurred (which has not been
cured) the Trustee shall exercise with respect to such series such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in
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their exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
No provisions of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that:
(a) prior to the occurrence of an Event of Default with
respect to a particular series and after the curing of all Events of
Default with respect to such series which may have occurred, the
duties and obligations of the Trustee with respect to such series
shall be determined solely by the express provisions of this
Indenture, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Officers,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the holders of Debt Securities pursuant to
Section 6.12 relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Indenture.
No provision of this Indenture shall be construed as requiring the
Trustee to expend or risk its own funds or otherwise to incur any personal
financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if there shall be reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
SECTION 7.02. RELIANCE ON DOCUMENTS, OPINIONS, ETC.
Subject to the provisions of Section 7.01:
(a) the Trustee may rely and shall be protected in acting
or refraining from action upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond,
debenture, note or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
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(b) any request, direction, order or demand of the
Company mentioned herein shall be sufficiently evidenced by a Company
Request or Company Order (unless other evidence in respect thereof be
herein specifically prescribed); and any Board Resolution may be
evidenced to the Trustee by a copy thereof certified by the Secretary
or any Assistant Secretary of the Company; and whenever in the
administration of this Indenture the Trustee shall deem it desirable
that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee (unless other evidence be
herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;
(c) the Trustee may consult with counsel and the written
advice of such counsel and any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(d) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the securityholders pursuant to
the provisions of this Indenture, unless such securityholders shall
have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which might be incurred therein or
thereby;
(e) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note or other paper or
documents, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;
(f) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(g) the Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith and believed by it
to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture.
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SECTION 7.03. NO RESPONSIBILITY FOR RECITALS, ETC.
The recitals contained herein and in the Debt Securities, other than
the Trustee's certificate of authentication, shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for the correctness
of the same. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debt Securities, provided that the
Trustee shall not be relieved of its duty to authenticate Debt Securities only
as authorized by this Indenture. The Trustee shall not be accountable for the
use or application by the Company of Debt Securities or the proceeds thereof.
SECTION 7.04. OWNERSHIP OF DEBT SECURITIES
The Trustee or any agent of the Company or Trustee, in its individual
or any other capacity, may become the owner or pledgee of Debt Securities with
the same rights it would have if it were not Trustee, or an agent of the
Company or Trustee.
SECTION 7.05. MONEYS TO BE HELD IN TRUST
Subject to the provisions of Section 12.04 hereof, all moneys received
by the Trustee or any Paying Agent shall, until used or applied as herein
provided, be held in trust for the purposes for which they were received, but
need not be segregated from other funds except to the extent required by law.
Neither the Trustee nor any Paying Agent shall be under any liability for
interest on any moneys received by it hereunder except such as it may agree in
writing with the Company to pay thereon.
SECTION 7.06. COMPENSATION AND EXPENSES OF TRUSTEE.
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation for all
services rendered by it hereunder as the Company and the Trustee shall from
time to time agree in writing (which to the extent permitted by law shall not
be limited by any provision of law in regard to the compensation of a trustee
of an express trust), and, except as otherwise expressly provided, the Company
will pay or reimburse the Trustee forthwith upon its request for all reasonable
expenses and disbursements incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as
may arise from its negligence or bad faith. If any property other than cash
shall at any time be subject to the lien of this Indenture, the Trustee, if and
to the extent authorized by a receivership or bankruptcy court of competent
jurisdiction or by the supplemental instrument subjecting such property to such
lien,
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shall be entitled to make and to be reimbursed for, advances for the purpose
of preserving such property or of discharging tax liens or other prior liens
or encumbrances thereon. The Company also covenants to indemnify the Trustee
for, and to hold it harmless against, any and all loss, damage, claims,
liability or expense, including taxes (other than taxes based upon, measured or
determined by, the income of the Trustee) incurred without negligence or bad
faith on the part of the Trustee, arising out of or in connection with the
acceptance or administration of this trust, including the costs and expense of
defending itself against any claim or liability. The obligations of the
Company under this Section shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Debt Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the holders of particular
Debt Securities.
To secure the Company's obligations under this Section, the Trustee
shall have a senior claim to which the Debt Securities are hereby made
subordinate on all money or property held or collected by the Trustee, except
that held in trust to pay principal, premium (if any) and interest (if any) on
particular Debt Securities.
When the Trustee incurs expenses or renders services after an Event of
Default, the expenses and the compensation for the services are intended to
constitute expenses of administration under any bankruptcy law.
SECTION 7.07. OFFICERS' CERTIFICATE AS EVIDENCE.
Subject to the provisions of Section 7.01, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking
or suffering any action to be taken hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to
the Trustee, and such certificate, in the absence of negligence or bad faith on
the part of the Trustee, shall be full warrant to the Trustee for any action
taken, suffered or omitted by it under the provisions of this Indenture upon
the faith thereof.
SECTION 7.08. DISQUALIFICATIONS; CONFLICTING INTEREST OF TRUSTEE.
(a) If the Trustee has or shall acquire any conflicting interest,
as defined in this Section, it shall, within ninety (90) days after
ascertaining that it has such conflicting interest, and if an Event of Default
(as such term is defined in this Indenture, but exclusive of any period of
grace or requirement of notice) to which such conflicting interest relates
has not been cured or duly waived or otherwise eliminated before the end of
such 90-day
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period, either eliminate such conflicting interest or resign in the manner and
with the effect specified in Section 7.10.
(b) In the event that the Trustee shall fail to comply with the
provisions of Section 7.08(a), the Trustee shall, within ten (10) days after
the expiration of such 90-day period, transmit notice of such failure by first
class mail to all securityholders of the series affected by the conflicting
interest as the names and addresses of such holders appear on the Debt Security
Register.
(c) For the purposes of this Section the Trustee shall be deemed
to have a conflicting interest with respect to a particular series if such Debt
Securities have suffered an Event of Default (as such term is defined in this
Indenture, but exclusive of any period of grace or requirement of notice) and
(1) the Trustee is trustee under this Indenture with
respect to the outstanding Debt Securities of any other series or is
trustee under another indenture under which any other securities, or
certificates of interest or participation in any other securities, of
the Company are outstanding, unless such other indenture is a
collateral trust indenture under which the only collateral consists of
Debt Securities issued under this Indenture; provided that there shall
be excluded from the operation of this paragraph this Indenture with
respect to any other series, the Indenture dated as of May 1, 1963
between the Company and the Trustee, as supplemented, and any other
indenture or indentures under which other securities, or certificates
of interest or participation in other securities of the Company are
outstanding if (i) this Indenture is, and, if applicable, this
Indenture and such other indenture or indentures (and all series of
securities issuable thereunder), are wholly unsecured and rank
equally, and such other indenture or indentures (and such series) are
hereafter qualified under the Trust Indenture Act, as in effect at the
time of such qualification, unless the Commission shall have found and
declared by order pursuant to subsection (b) of Section 305 or
subsection (c) of Section 307 of the Trust Indenture Act, that
differences exist between the provisions of this Indenture with
respect to such particular series and (A) one or more other series in
this Indenture or (B) the provisions of such other indenture or
indentures (or such series) which are so likely to involve a material
conflict of interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee from acting
as such under this Indenture with respect to such particular series
and such other series or such other indenture or indentures, or (ii)
the Company shall have sustained the burden of proving, on application
to the
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Commission and after opportunity for hearing thereon, that
trusteeship under this Indenture with respect to such particular
series and such other series or under this Indenture and such other
indenture or indentures is not so likely to involve a material
conflict of interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee from acting
as such under this Indenture with respect to such particular series
and such other series or under this Indenture and such other indenture
or indentures;
(2) the Trustee or any of its directors or executive
officers is an underwriter for an obligor upon the Debt Securities of
any series issued under this Indenture;
(3) the Trustee directly or indirectly controls or is
directly or indirectly controlled by or is under direct or indirect
common control with an underwriter for the Company;
(4) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee, appointee, or
representative of the Company, or of an underwriter (other than the
Trustee itself) for the Company who is currently engaged in the
business of underwriting, except that (A) one individual may be a
director or an executive officer or both of the Trustee and a director
or an executive officer or both of the Company, but may not be at the
same time an executive officer of both the Trustee and the Company;
(B) if and so long as the number of directors of the Trustee in office
is more than nine, one additional individual may be a director or an
executive officer or both of the Trustee and a director of the
Company; and (C) the Trustee may be designated by the Company or by
any underwriter for the Company to act in the capacity of transfer
agent, registrar, custodian, paying agent, fiscal agent, escrow agent,
or depositary, or in any other similar capacity, or, subject to the
provisions of paragraph (1) of this subsection (c), to act as trustee,
whether under an indenture or otherwise;
(5) ten percent (10%) or more of the voting securities
of the Trustee is beneficially owned either by the Company or by any
director, partner or executive officer thereof, or twenty percent
(20%) or more of such voting securities is beneficially owned,
collectively, by any two or more of such persons, or ten percent (10%)
or more of the voting securities of the Trustee is beneficially owned
either by an underwriter for the Company or by any director, partner
or executive officer
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thereof, or is beneficially owned, collectively, by any two or more
such persons;
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, (A) five
percent (5%) or more of the voting securities, or ten percent (10%) or
more of any other class of security, of the Company, not including the
Debt Securities issued under this Indenture and securities issued
under any other indenture under which the Trustee is also trustee, or
(B) ten percent (10%) or more of any class of security of an
underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, five
percent (5%) or more of the voting securities of any person who, to
the knowledge of the Trustee, owns ten percent (10%) or more of the
voting securities of, or controls directly or indirectly or is under
direct or indirect common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, ten percent
(10%) or more of any class of security of any person who, to the
knowledge of the Trustee, owns fifty percent (50%) or more of the
voting securities of the Company; or
(9) the Trustee owns on the date of an Event of Default
as defined in this Indenture (but exclusive of any period of grace or
requirement of notice) or any anniversary of such Event of Default
while such Event of Default remains outstanding, in the capacity of
executor, administrator, testamentary or inter vivos trustee,
guardian, committee or conservator, or in any other similar capacity,
an aggregate of twenty-five percent (25%) or more of the voting
securities, or of any class of security, of any person, the beneficial
ownership of a specified percentage of which would have constituted a
conflicting interest under paragraph (6), (7) or (8) of this
subsection (c). As to any such securities of which the Trustee
acquired ownership through becoming executor, administrator, or
testamentary trustee of an estate which include them, the provisions
of the preceding sentence shall not apply, for a period of not more
than two years from the date of such acquisition, to the extent that
such securities included in such estate do not exceed twenty-five
percent (25%) of such voting securities or twenty-five percent (25%)
of any such class of security. Promptly after the dates of any such
Event of Default and annually in each succeeding year that the Debt
Securities
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of any series hereunder remain in Default, the Trustee shall make a
check of its holdings of such securities in any of the above-mentioned
capacities as of such dates. If the Company fails to make payment in
full of principal of or interest on any of the Debt Securities when
and as the same becomes due and payable, and such failure continues
for thirty (30) days thereafter, the Trustee shall make a prompt
check of its holdings of such securities in any of the
above-mentioned capacities as of the date of the expiration of such
30-day period, and after such date, notwithstanding the foregoing
provisions of this paragraph (9), all such securities so held by the
Trustee, with sole or joint control over such securities vested in it,
shall, but only so long as such failure shall continue, be considered
as though beneficially owned by the Trustee for the purposes of
paragraphs (6), (7) and (8) of this subsection (c); or
(10) except under the circumstances described in
paragraphs (1), (3), (4), (5) or (6) of Section 7.13(b), the Trustee
shall be or shall become a creditor of the Company.
For purposes of paragraph (1) of this subsection (c) and of Section
6.12, the term "series of securities" or "series" means a series, class or
group of securities issuable under an indenture pursuant to whose terms holders
of one such series may vote to direct the indenture trustee, or otherwise take
action pursuant to a vote of such holders, separately from holders of another
such series: provided, that "series of securities" or "series" shall not
include any series of securities issuable under an indenture if all such series
rank equally and are wholly unsecured.
The specification of percentages in paragraphs (5) to (9), inclusive,
of this subsection (c) shall not be construed as indicating that the ownership
of such percentages of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) or this subsection (c).
For the purposes of paragraphs (6), (7), (8) and (9) of this subsection
(c) only, (A) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (B) an obligation shall be deemed to
be in default when a default in payment of principal shall have continued for
thirty (30) days or more and shall not have been cured; and (C) the Trustee
shall not be deemed to be the owner or holder of (i) any security which it
holds as collateral
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security (as trustee or otherwise) for any obligation which is not in default
as defined in clause (b) above, or (ii) any security which it holds as
collateral security under this Indenture, irrespective of any default
hereunder, or (iii) any security which it holds as agent for collection, or as
custodian, escrow agent, or depositary, or in any similar representative
capacity.
(d) For the purposes of this Section:
(1) The term "underwriter" when used with reference to
the Company shall mean every person who, within one year prior to the
time as of which the determination is made, has purchased from the
Company with a view to, or has offered or has sold for the Company in
connection with, the distribution of any security of the Company
outstanding at such time, or has participated or has had a direct or
indirect participation in any such undertaking, or has participated or
has had a participation in the direct or indirect underwriting of any
such undertaking, but such term shall not include a person whose
interest was limited to a commission from an underwriter or dealer not
in excess of the usual and customary distributors' or sellers'
commission.
(2) The term "director" shall mean any director of a
corporation or any individual performing similar functions with
respect to any organization whether incorporated or unincorporated.
(3) The term "person" shall mean an individual, a
corporation, a partnership, an association, a joint-stock company,
limited liability company, a trust, an unincorporated organization, or
a government or political subdivision thereof. As used in this
paragraph, the term "trust" shall include only a trust where the
interest or interests of the beneficiary or beneficiaries are
evidenced by a security.
(4) The term "voting security" shall mean any security
presently entitling the owner or holder thereof to vote in the
direction or management of the affairs of a person, or any security
issued under or pursuant to any trust, agreement or arrangement
whereby a trustee or trustees or agent or agents for the owner or
holder of such security are presently entitled to vote in the
direction or management of the affairs of a person.
(5) The term "Company" shall mean any obligor upon the
Debt Securities.
(6) The term "executive officer" shall mean the
president, every vice president, every trust officer, the
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cashier, the secretary, and the treasurer of a corporation, and any
individual customarily performing similar functions with respect to any
organization whether incorporated or unincorporated, but shall not
include the chairman of the board of directors.
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the following
provisions:
(1) A specified percentage of the voting securities of
the Trustee, the Company or any other person referred to in this
Section (each of whom is referred to as a "person" in this paragraph)
means such amount of the outstanding voting securities of such person
as entitles the holder or holders thereof to cast such specified
percentage of the aggregate votes which the holders of all the
outstanding voting securities of such person are entitled to cast in
the direction or management of the affairs of such person.
(2) A specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of
the class outstanding.
(3) The term "amount", when used in regard to securities,
means the principal amount if relating to evidences of indebtedness,
the number of shares if relating to capital shares, and the number of
units if relating to any other kind of security.
(4) The term "outstanding" means issued and not held by
or for the account of the issuer. The following securities shall not
be deemed outstanding within the meaning of this definition:
(A) securities of an issuer held in a sinking
fund relating to securities of the issuer of the same class;
(B) securities of an issuer held in a sinking
fund relating to another class of securities of the issuer, if
the obligation evidenced by such other class of securities is
not in default as to principal or interest or otherwise;
(C) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as to
principal or interest or otherwise; and
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(D) securities held in escrow if placed in escrow
by the issuer thereof;
provided, however, that any voting securities of an issuer shall be
deemed outstanding if any person other than the issuer is entitled to
exercise the voting rights thereof.
(5) A security shall be deemed to be of the same class as
another security if both securities confer upon the holder or holders
thereof substantially the same rights and privileges, provided,
however, that in the case of secured evidences of indebtedness, all of
which are issued under a single indenture, differences in the interest
rates or maturity dates of various series thereof shall not be deemed
sufficient to constitute such series different classes and provided
further, that, in the case of unsecured evidences of indebtedness,
differences in the interest rates or maturity dates thereof shall not
be deemed sufficient to constitute them securities of different
classes, whether or not they are issued under a single indenture.
(f) Except in the case of a default in the payment of the
principal or interest on any Debt Securities of any series issued
hereunder, or in the payment of any sinking or purchase fund
installment, the Trustee shall not be required to resign as provided
by subsection (c) of this Section if the Trustee shall have sustained
the burden of proving, on application to the Commission and after
opportunity for hearing thereon, that (i) such Event of Default may
be cured or waived during a reasonable period and under the procedures
described in such application, and (ii) a stay of the Trustee's duty
to resign will not be inconsistent with the interests of the holders
of the Debt Securities of any series issued hereunder. The filing of
such an application shall automatically stay the performance of the
duty to resign until the Commission orders otherwise. Any resignation
of the Trustee shall become effective only upon the appointment of a
successor trustee and such successor's acceptance of such appointment
as provided in Section 7.11.
(g) If Section 310(b) of the Trust Indenture Act is amended at any
time after the date of this Indenture to change the circumstances under which a
Trustee shall be deemed to have a conflicting interest with respect to the Debt
Securities of any series or to change any of the definitions in connection
therewith, this Section 7.08 shall be automatically amended to incorporate such
changes, unless such changes would cause any Trustee then acting as Trustee
hereunder with respect to any outstanding Debt Securities to be deemed to have
a conflicting interest, in which case such changes shall be incorporated
herein only to the extent
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that such changes (i) would not cause the Trustee to be deemed to have a
conflicting interest, or (ii) are required by law.
SECTION 7.09. ELIGIBILITY OF TRUSTEE.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States or
of any State or Territory thereof or of the District of Columbia, which (a) is
authorized under such laws to exercise corporate trust powers, and (b) is
subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority, (c) shall have at all times a combined capital
and surplus of not less than $5,000,000 and (d) shall not be the Company or any
person directly or indirectly controlling, controlled by, or under common
control with the Company. If such corporation publishes reports of condition
at least annually, pursuant to law, or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation at any time shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 7.10.
SECTION 7.10. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign with respect to one or more or all series by giving
written notice of resignation to the Company. Upon receiving such notice of
resignation the Company shall promptly appoint a successor trustee with respect
to the applicable series by written instrument, in duplicate, executed by order
of the Board of Directors of the Company, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee. If
no successor trustee shall have been so appointed and have accepted appointment
within thirty (30) days after the mailing of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions
of the subsection (a) of Section 7.08 with respect to any series of
Debt Securities after written request therefor by the Company or by
any securityholder who has been a bona fide holder of a Debt Security
or
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Debt Securities of such series for at least six (6) months, or
(2) the Trustee shall cease to be eligible in accordance
with the provisions of Section 7.09 with respect to any series of Debt
Securities and shall fail to resign after written request therefor by
the Company or by any such securityholder, or
(3) the Trustee shall become incapable of acting with
respect to any series of Debt Securities, or shall be adjudged a
bankrupt or insolvent, or a receiver of the Trustee or of its property
shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case,
the Company may remove the Trustee with respect to the applicable
series of Debt Securities and appoint a successor trustee with
respect to such series by written instrument, in duplicate, executed
by order of the Board of Directors of the Company, one copy of which
instrument shall be delivered to the Trustee so removed and one copy
to the successor trustee, or, subject to the provisions of Section
6.14, any securityholder of such series who has been a bona fide
holder of a Debt Security or Debt Securities of the applicable series
for at least six (6) months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor trustee
with respect to such series. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debt Securities of all series (voting as one class) at the time outstanding may
at any time remove the Trustee with respect to Debt Securities of all series
and appoint a successor trustee with respect to the Debt Securities of all
series.
(d) Any resignation or removal of the Trustee and any appointment
of a successor trustee pursuant to any of the provisions of this Section shall
become effective upon the appointment of a successor trustee and the acceptance
of appointment by the successor trustee as provided in Section 7.11.
SECTION 7.11. ACCEPTANCE BY SUCCESSOR TRUSTEE.
Any successor trustee appointed as provided in Section 7.10 shall
execute, acknowledge and deliver to the Company and to its
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predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee with respect
to all or any applicable series shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligations with respect to such series of
its predecessor hereunder, with like effect as if originally named as trustee
herein; but, nevertheless, on the written request of the Company or of the
successor trustee, the predecessor trustee shall, upon payment of any amounts
then due it pursuant to the provisions of Section 7.06, execute and deliver an
instrument transferring to such successor trustee all the rights and powers of
the predecessor trustee. Upon request of any such successor trustee, the
Company shall execute any and all instruments in writing in order more fully
and certainly to vest in and confirm to such successor trustee all such rights
and powers. Any trustee, including the initial Trustee, ceasing to act shall,
nevertheless, retain a lien upon all property or funds held or collected by
such trustee to secure any amounts then due it pursuant to the provisions of
Section 7.06.
In case of the appointment hereunder of a successor trustee with
respect to the Debt Securities of one or more (but not all) series, the
Company, the predecessor Trustee and each successor trustee with respect to the
Debt Securities of any applicable series shall execute and deliver an indenture
supplemental hereto which shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the predecessor Trustee with respect to the Debt Securities of any
series as to which the predecessor Trustee is not retiring shall continue to be
vested in the predecessor Trustee, and shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such trustees co-trustees of the same trust and that each such
trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such trustee.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
qualified and eligible under the provisions of this Article Seven.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the Company shall mail notice of the succession of such trustee
hereunder to all holders of Debt Securities of any applicable series as the
names and addresses of such holders shall appear on the Debt Security Register.
If the Company fails to mail such notice in the prescribed manner within ten
(10) days after the acceptance of appointment by the successor
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trustee, the successor trustee shall cause such notice to be so mailed at the
expense of the Company.
SECTION 7.12. SUCCESSOR BY MERGER, ETC.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be qualified and eligible under the provisions
of this Article Seven, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. In case any Debt Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Debt Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such Debt
Securities.
SECTION 7.13. LIMITATIONS ON RIGHTS OF TRUSTEE AS CREDITOR.
(a) Subject to the provisions of Section 7.13(b), if the Trustee
shall be or shall become a creditor, directly or indirectly, secured or
unsecured, of the Company or of any other obligor on the Debt Securities within
three (3) months prior to a default, as defined in Section 7.13(c), or
subsequent to such a default, then, unless and until such default shall be
cured, the Trustee shall set apart and hold in a special account for the
benefit of the Trustee individually, the holders of the Debt Securities and the
holders of other indenture securities (as defined in subsection (c) of this
Section):
(1) an amount equal to any and all reductions in the
amount due and owing upon any claim as such creditor in respect of
principal or interest, effected after the beginning of such three (3)
months' period and valid as against the Company and its other
creditors, except any such reduction resulting from the receipt or
disposition of any property described in paragraph (2) of this
subsection, or from the exercise of any right of set-off which the
Trustee could have exercised if a petition in bankruptcy had been
filed by or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of
any claim as such creditor, either as security therefor, or in
satisfaction or composition thereof, or otherwise, after the beginning
of such three months' period, or an amount equal to the proceeds of
any such property, if disposed of, subject,
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however, to the rights, if any, of the Company and its other creditors in such
property or such proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i) payments
made on account of any such claim by any person (other than
the Company) who is liable thereon, and (ii) the proceeds of
the bona fide sale of any such claim by the Trustee to a third
person, and (iii) distributions made in cash, securities, or
other property in respect of claims filed against the Company
in bankruptcy or receivership or in proceedings for
reorganization pursuant to Title 11 of the United States Code
or applicable state law;
(B) to realize, for its own account, upon any
property held by it as security for any such claim, if such
property was so held prior to the beginning of such three (3)
months' period;
(C) to realize, for its own account, but only to
the extent of the claim hereinafter mentioned, upon any
property held by it as security for any such claim, if such
claim was created after the beginning of such three (3)
months' period and such property was received as security
therefor simultaneously with the creation thereof, and if the
Trustee shall sustain the burden of proving that at the time
such property was so received the Trustee had no reasonable
cause to believe that a default as defined in Section 7.13(c)
would occur within three (3) months; or
(D) to receive payment on any claim referred to
in paragraph (B) or (C) of this subsection, against the
release of any property held as security for such claim as
provided in such paragraph (B) or (C), as the case may be, to
the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D) of this subsection,
property substituted after the beginning of such three (3) months' period for
property held as security at the time of such substitution shall, to the extent
of the fair value of the property released, have the same status as the
property released, and, to the extent that any claim referred to in any of such
paragraphs is created in renewal of or in substitution for or for the purpose
of repaying or refunding any preexisting claim of the
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Trustee as such creditor, such claim shall have the same status as such
preexisting claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the securityholders and the holders of other indenture
securities in such manner that the Trustee, the securityholders and the holders
of other indenture securities realize, as a result of payments from such
special account and payments of dividends on claims filed against the Company
in bankruptcy or receivership or in proceedings for reorganization pursuant to
Title 11 of the United States Code or applicable state law, the same percentage
of their respective claims, figured before crediting to the claim of the
Trustee anything on account of the receipt by it from the Company of the funds
and property in such special account and before crediting to the respective
claims of the Trustee, the securityholders and the holders of other indenture
securities, dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to Title 11 of the
United States Code or applicable state law, but after crediting thereon
receipts on account of the indebtedness represented by their respective claims
from all sources other than from such dividends and from the funds and property
so held in such special account. As used in this paragraph, with respect to
any claim, the term "dividends" shall include any distribution with respect to
such claim, in bankruptcy or receivership or in proceedings for reorganization
pursuant to Title 11 of the United States Code or applicable state law, whether
such distribution is made in cash, securities, or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership, or proceeding
for reorganization is pending shall have jurisdiction (i) to apportion between
the Trustee, the securityholders and the holders of other indenture securities,
in accordance with the provisions of this paragraph, the funds and property
held in such special account and the proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this paragraph
due consideration in determining the fairness of the distributions to be made
to the Trustee, the securityholders and the holders of other indenture
securities with respect to their respective claims, in which event it shall not
be necessary to liquidate or to appraise the value of any securities or other
property held in such special account or as security for any such claim, or to
make a specific allocation of such distributions as between the secured and
unsecured portions of such claims or otherwise to apply the provisions of this
paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning of
such three (3) months' period shall be subject to the provisions of this
subsection (a) as though such resignation or removal had not occurred. Any
Trustee who has resigned or been
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removed prior to the beginning of such three (3) months' period shall be
subject to the provisions of this subsection (a) if and only if the following
conditions exist:
(i) the receipt of property or reduction of claim which
would have given rise to the obligation to account, if such Trustee
had continued as trustee, occurred after the beginning of such three
(3) months' period; and
(ii) such receipt of property or reduction of claim
occurred within three (3) months after such resignation or removal.
(b) There shall be excluded from the operation of subsection (a)
of this Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued
under any indenture, or any security or securities having a maturity
of one year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy
court of competent jurisdiction, or by this Indenture, for the purpose
of preserving any property which shall at any time be subject to the
lien of this Indenture or of discharging tax liens or other prior
liens or encumbrances thereon, if notice of such advance and of the
circumstances surrounding the making thereof is given to the
securityholders at the time and in the manner provided in this
Indenture;
(3) disbursements made in the ordinary course of business
in the capacity of trustee under an indenture, transfer agent,
registrar, custodian, paying agent, fiscal agent or depositary, or
other similar capacity;
(4) an indebtedness created as a result of services
rendered or premises rented; or an indebtedness created as a result of
goods or securities sold in a cash transaction as defined in
subsection (c) of this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation
of any drafts, bills of exchange, acceptances, or obligations which
fall within the classification of self-liquidating paper as defined in
subsection (c) of this Section.
(c) As used in this Section:
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(1) The term "default" shall mean any failure to make
payment in full of principal or interest upon any of the Debt
Securities or the other indenture securities when and as such
principal or interest becomes due and payable.
(2) The term "other indenture securities" shall mean
securities upon which the Company is an obligor (as defined in the
Trust Indenture Act) outstanding under any other indenture (A) under
which the Trustee is also trustee, (B) which contains provisions
substantially similar to the provisions of subsection (a) of this
Section, and (C) under which a default exists at the time of the
apportionment of the funds and property held in the special account
referred to in such subsection (a).
(3) The term "cash transaction" shall mean any
transaction in which full payment for goods or securities sold is made
within seven (7) days after delivery of the goods or securities in
currency or in checks or other orders drawn upon banks or bankers and
payable upon demand.
(4) The term "self-liquidating paper" shall mean any
draft, bill of exchange, acceptance or obligation which is made,
drawn, negotiated or incurred by the Company for the purposes of
financing the purchase, processing, manufacture, shipment, storage or
sale of goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the goods, wares
or merchandise or the receivables or proceeds arising from the sale of
the goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with the Company arising
from the making, drawing, negotiating or incurring of the draft, bill
of exchange, acceptance or obligation.
(5) The term "Company" shall mean any obligor upon the
Debt Securities.
SECTION 7.14. NOTICE OF DEFAULT.
Within ninety (90) days after the occurrence of any default on a
series of Debt Securities hereunder, the Trustee shall transmit by mail to all
securityholders of that series, as their names and addresses appear in the Debt
Security Register, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that
except in the case of a default in the payment of the principal or interest on
any Debt Security, or in the payment of any sinking or purchase fund
installment, the Trustee shall be protected in withholding such notice if and
so long as the trust committee of directors
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and/or Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the securityholders; and
provided, further, that in the case of any default of the character specified
in clause (c) of Section 6.01 no such notice to securityholders shall be given
until at least thirty (30) days after the occurrence thereof. For the purpose
of this Section, the term "default" means any event which is, or after notice
or lapse of time or both would become, an Event of Default.
ARTICLE EIGHT
CONCERNING THE SECURITYHOLDERS
SECTION 8.01. ACTION BY SECURITYHOLDERS.
Whenever in this Indenture it is provided that the holders of a
specified percentage in aggregate principal amount of the Debt Securities of
any or all series may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by
securityholders in person or by agent, or (b) by the record of the holders of
Debt Securities voting in favor thereof at any meeting of securityholders duly
called and held in accordance with the provisions of Article Nine, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of securityholders.
Without limiting the generality of the foregoing, a holder, including
a Depository that is a holder of a Book-Entry Debt Security, may make, give or
take, by a proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided in
this Indenture to be made, given or taken by holders, and a Depository that is
a holder of a Book-Entry Debt Security may provide its proxy or proxies to the
beneficial owners of interest in any such Book-Entry Debt Security.
In determining whether the holders of a specified percentage in
aggregate principal amount of the Debt Securities of any or all series have
taken any action (including the making of any demand or request, the giving of
any notice, consent or waiver or the taking of any other action), the principal
amount of any Original Issue Discount Debt Security that may be counted in
making such determination and that shall be deemed to be outstanding for such
purposes shall be equal to the amount of the principal thereof that could be
declared to be due and payable upon an Event of Default pursuant to the terms
of such Original Issue Discount Debt Security at the time the taking of such
action is evidenced to the Trustee.
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SECTION 8.02. RECORD DATE FOR VOTING.
The Company may set a record date for purposes of determining the
identity of securityholders entitled to vote or consent to any action by vote
or consent authorized or permitted by Section 6.12. Such record date shall be
the later of thirty (30) days prior to the first solicitation of such consent
or the date of the most recent list of holders furnished to the Trustee
pursuant to Section 5.01 prior to such solicitation.
SECTION 8.03. PROOF OF EXECUTION BY SECURITYHOLDERS.
Subject to the provisions of Section 7.01, 7.02 and 9.05, proof of the
execution of any instrument by a securityholder or its agent or proxy shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee.
The ownership of Debt Securities shall be proved by the Debt Security
Register or by a certificate of the Debt Security Registrar.
The record of any securityholders' meeting shall be proved in the
manner provided in Section 9.06.
SECTION 8.04. WHO ARE DEEMED ABSOLUTE OWNERS.
Prior to due presentment of a Debt Security for registration of
transfer or exchange, the Company, the Trustee and any agent of the Company or
Trustee may deem the person whose name such Debt Security shall be registered
upon the books of the Company to be, and may treat him as, the absolute owner
of such Debt Security (whether or not such Debt Security shall be overdue and
notwithstanding any notation of ownership or other writing thereon), for the
purpose of receiving payment of or on account of the principal, premium (if
any) and interest on such Debt Security and for all other purposes; and neither
the Company nor the Trustee nor any agent of the Company or Trustee shall be
affected by any notice to the contrary. All such payments so made to any
holder for the time being, or upon his order, shall be valid and, to the extent
of the sum or sums so paid, effectual to satisfy and discharge the liability
for moneys payable upon any such Debt Security.
SECTION 8.05. COMPANY-OWNED DEBT SECURITIES DISREGARDED.
In determining whether the holders of the required aggregate principal
amount of Debt Securities have concurred in any direction, consent or waiver
under this Indenture, the Debt Securities which are owned by the Company or any
other obligor on the Debt Securities, or by any person directly or indirectly
controlling or controlled by or under direct or indirect common
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control with the Company or any other obligor on the Debt Securities, shall be
disregarded and deemed not to be outstanding for the purpose of any such
determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver, only
the Debt Securities which the Trustee knows are so owned shall be so
disregarded. The Debt Securities so owned which have been pledged in good
faith may be regarded as outstanding for the purposes of this Section if the
pledgee shall establish to the satisfaction of the Trustee the pledgee's right
to vote such Debt Securities and that the pledgee is not a person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In the case of a dispute
as to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee.
SECTION 8.06. REVOCATION OF CONSENTS; FUTURE SECURITYHOLDERS BOUND.
At any time prior to the taking of any action by the holders of the
percentage in aggregate principal amount of the Debt Securities specified in
this Indenture in connection with such action, any holder of a Debt Security,
the identifying number of which is shown by the evidence to be included in the
Debt Securities the holders of which have consented to such action, may, by
filing written notice with the Trustee at its office and upon proof of holding
as provided in Section 8.03, revoke such action so far as concerns such Debt
Security. Except as aforesaid any such action taken by the holder of any Debt
Security shall be conclusive and binding upon such holder and upon all future
holders and owners of such Debt Security and of any Debt Security issued in
exchange or substitution therefor irrespective of whether or not any notation
in regard thereto is made upon such Debt Security. Any action taken by the
holders of the percentage in aggregate principal amount of the Debt Securities
specified in this Indenture in connection with such action shall be
conclusively binding upon the Company, the Trustee and the holders of all of
the Debt Securities.
ARTICLE NINE
SECURITYHOLDERS' MEETINGS
SECTION 9.01. PURPOSES OF MEETING.
A meeting of securityholders of any or all series may be called at any
time and from time to time pursuant to the provisions of this Article for any
of the following purposes:
(a) to give any notice to the Company or to the Trustee, or to
give any directions to the Trustee, or to waive any default
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hereunder and its consequences, or to take any other action authorized to be
taken by securityholders pursuant to any of the provisions of Article Six;
(b) to remove the Trustee and appoint a successor trustee pursuant
to the provisions of Article Seven;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 10.02; or
(d) to take any other action authorized to be taken by or on
behalf of the holders of any specified aggregate principal amount of the Debt
Securities of any or all series, as the case may be, under any other provision
of this Indenture or under applicable law.
SECTION 9.02. CALL OF MEETING BY TRUSTEE.
The Trustee may at any time call a meeting of securityholders of any
or all series to take any action specified in Section 9.01, to be held at such
time and at such place in the Borough of Manhattan, The City of New York, as
the Trustee shall determine. Notice of every meeting of the securityholders of
any or all series, setting forth the time and place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be mailed
to all holders of Debt Securities of the applicable series as the names and
addresses of such holders appear on the Debt Security Register not less than
thirty (30) nor more than one hundred eighty (180) days prior to the date fixed
for the meeting.
SECTION 9.03. RECORD DATE FOR SECURITYHOLDERS' MEETING.
The record date for determining the identity of securityholders
entitled to attend any meeting of securityholders shall be the earlier of
thirty (30) days prior to the date fixed for the meeting or the date of the
most recent list of holders furnished to the Trustee pursuant to Section 5.01
prior to the date fixed for the meeting.
SECTION 9.04. CALL OF MEETING BY COMPANY OR SECURITYHOLDERS.
In case at any time the Company, pursuant to a Board Resolution, or
the holders of at least twenty-five percent (25%) in aggregate principal amount
of the Debt Securities of any or all series, as the case may be, then
outstanding, shall have requested the Trustee to call a meeting of
securityholders of any or all series to take any action authorized in Section
9.01, by written request setting forth in reasonable detail the action proposed
to be taken at the meeting, and the Trustee shall not have mailed the notice of
such meeting within thirty (30) days after receipt of such request, then the
Company or the holders of such Debt
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Securities in the amount above specified may determine the time and the place
in said Borough of Manhattan for such meeting and may call such meeting by
mailing notice thereof as provided in Section 9.02.
SECTION 9.05. QUALIFICATIONS FOR VOTING.
To be entitled to vote at any meeting of securityholders a person
shall be a holder of one or more Debt Securities of a series with respect to
which a meeting is being held or a person appointed by an instrument in writing
as proxy by such a holder. The only persons who shall be entitled to be
present or to speak at any meeting of the securityholders shall be the persons
entitled to vote at such meeting and their counsel and any representatives of
the Trustee and its counsel and any representatives of the Company and its
counsel.
SECTION 9.06. REGULATIONS.
Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting
of securityholders, in regard to proof of the holding of Debt Securities and of
the appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by securityholders as provided in Section 9.03, in which case the
Company or the securityholders calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the holders of a
majority in principal amount of the Debt Securities represented at the meeting
and entitled to vote.
Subject to the provisions of Sections 8.01 and 8.04, at any meeting
each securityholder or proxy shall be entitled to one vote for each $1,000
outstanding principal amount of Debt Securities held or represented by him,
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Debt Security challenged as not outstanding and ruled by the
chairman of the meeting to be not outstanding. The chairman of the meeting
shall have no right to vote except as a securityholder or proxy. Any meeting
of securityholders duly called pursuant to the provisions of Section 9.02 or
9.03 may be adjourned from time to time, and the meeting may be reconvened
without further notice.
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SECTION 9.07. VOTING.
The vote upon any resolution submitted to any meeting of
securityholders shall be by written ballot on which shall be subscribed the
signature of the securityholders or proxies and on which shall be inscribed the
identifying number or numbers or to which shall be attached a list of
identifying numbers of the Debt Securities held or represented by them. The
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of securityholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of the facts
setting forth a copy of the notice of the meeting and showing that said notice
was mailed as provided in Section 9.02. The record shall be signed and
verified by the chairman and secretary of the meeting and one of the
duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
ARTICLE TEN
SUPPLEMENTAL INDENTURES
SECTION 10.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF SECURITYHOLDERS.
Without the consent of securityholders, the Company, when authorized
by Board Resolution, and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as in force at the date of the
execution thereof) for one or more series and for one or more of the following
purposes:
(a) to evidence the succession of another corporation to
the Company, or successive successions and the assumption by the
successor corporation of the covenants, agreements and obligations of
the Company pursuant to Article Eleven hereof;
(b) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions as its Board of
Directors shall consider to be for the protection of the holders of
Debt Securities, and to make the occurrence, or the
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occurrence and continuance, of a default in any of such additional
covenants, restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth, with such period of
grace, if any, and subject to such conditions as such supplemental
indenture may provide;
(c) to provide for the issuance under this Indenture of
Debt Securities, whether or not then outstanding, in coupon form
(including Debt Securities registrable as to principal only) and to
provide for exchangeability of such Debt Securities with Debt
Securities issued hereunder in fully registered form and to make all
appropriate changes for such purpose;
(d) to modify, eliminate or add to the provisions of
this Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the Trust Indenture Act, or
under any similar federal statute hereafter enacted, and to add to
this Indenture such other provisions as may be expressly permitted by
the Trust Indenture Act, excluding, however, the provisions referred
to in Section 316(a)(2) of the Trust Indenture Act or any corresponding
provision in any similar federal statute hereafter enacted;
(e) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee;
(f) to evidence and provide for the acceptance and
appointment hereunder by a successor trustee with respect to the Debt
Securities of one or more series and to add or change any provisions
of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one trustee,
pursuant to Section 7.11;
(g) to change or eliminate any provision of the Indenture
or to add any new provision to the Indenture; provided that if such
change, elimination or addition will adversely affect the interests of
the holders of the Debt Securities of any series in any material
respect, such change, elimination or addition will become effective
with respect to such series only when there is no Debt Security of
such series remaining outstanding under the Indenture;
(h) to provide collateral security for the Debt
Securities;
(i) to change any place where (1) the principal, premium
(if any) and interest on Debt Securities of any series shall be
payable; (2) any Debt Securities of any series may be surrendered for
registration of transfer; (3) Debt Securities of any series may be
surrendered for exchange; and (4) notices
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and demands to or upon the Company in respect of the Debt Securities
of any series and the Indenture may be served; and
(j) to establish the form or terms of Debt Securities of
any series as permitted herein.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which adversely affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise. No supplemental indenture
shall be effective as against the Trustee unless and until the Trustee has duly
executed and delivered the same.
SECTION 10.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.
With the consent (evidenced as provided in Section 8.01) of the
holders of not less than sixty-six and two-thirds percent (66-2/3%) in
aggregate principal amount of the Debt Securities of each series at the time
outstanding affected by such supplemental indenture (voting as one class), the
Company, when authorized by a Board Resolution, and the Trustee may from time
to time and at any time enter into indenture or indentures supplemental hereto
(which shall conform to the provisions of the Trust Indenture Act as in force
at the date of the execution thereof) for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or of modifying in any manner the
rights of the holders of the Debt Securities of such series; provided, however,
that no such supplemental indenture shall (1) extend the fixed maturity of any
Debt Securities, or reduce the principal amount thereof or premium (if any) or
reduce the rate or extend the time of payment of interest thereon, without the
consent of the holder of each Debt Security so affected, or (2) reduce the
aforesaid percentage of Debt Securities, the consent of the holders of which is
required for any such supplemental indenture, without the consent of the
holders of all Debt Securities then outstanding.
Upon the request of the Company, accompanied by a copy of a Board
Resolution certified by the Secretary or an Assistant Secretary of the Company
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of securityholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture
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or otherwise, in which case the Trustee may in its discretion, but shall not
be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 10.02, the
Company shall mail a notice, setting forth in general terms the substance of
such supplemental indenture, to all holders of Debt Securities of each series
so affected as the names and addresses of such holders shall appear on the Debt
Security Register. Any failure of the Company so to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
SECTION 10.03. COMPLIANCE WITH TRUST INDENTURE ACT; EFFECT OF SUPPLEMENTAL
INDENTURES.
Any supplemental indenture executed pursuant to the provisions of this
Article Ten shall comply with the Trust Indenture Act, as then in effect. Upon
the execution of any supplemental indenture pursuant to the provisions of this
Article Ten, this Indenture shall be and be deemed to be modified and amended
in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Debt Securities shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
The Trustee, subject to the provisions of Sections 7.01 and 7.02,
shall be entitled to receive and shall be fully protected in relying upon an
Opinion of Counsel as conclusive evidence that any such supplemental indenture
complies with the provisions of this Article Ten.
SECTION 10.04. NOTATION ON DEBT SECURITIES.
Debt Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article Ten may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. New Debt Securities of any
series so modified as to conform, in the opinion of the Trustee and the Board
of Directors of the Company, to any modification of this Indenture contained in
any such supplemental indenture may be prepared by the Company,
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authenticated by the Trustee and delivered, without charge to the
securityholders, in exchange for the Debt Securities of such series then
outstanding.
ARTICLE ELEVEN
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 11.01. COMPANY MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
The Company covenants that it will not merge into or consolidate with
any other corporation or sell or convey all or substantially all of its assets
to any person, firm or corporation, unless (1) either the Company shall be the
continuing corporation, or the successor corporation (if other than the
Company) shall be a corporation organized and existing under the laws of the
United States of America or a state thereof or the District of Columbia and
such corporation shall expressly assume the due and punctual payment of the
principal, premium (if any) and interest on all the Debt Securities, according
to their tenor, and the due and punctual performance and observance of all of
the covenants and conditions of this Indenture to be performed by the Company
by supplemental indenture satisfactory to the Trustee, executed and delivered
to the Trustee by such corporation, and (2) the Company or such successor
corporation, as the case may be, shall not, immediately after such merger or
consolidation, or such sale or conveyance, be in default in the performance of
any such covenant or condition.
SECTION 11.02. SUCCESSOR CORPORATION SUBSTITUTED.
In case of any such consolidation, merger, sale or conveyance and upon
any such assumption by the successor corporation, such successor corporation
shall succeed to and be substituted for the Company, with the same effect as if
it had been named herein as the party of the first part. Such successor
corporation thereupon may cause to be signed, and may issue either in its own
name or in the name of the Company, any or all of the Debt Securities issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor corporation,
instead of the Company, and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall make available for delivery any Debt Securities which previously shall
have been signed and delivered by the officers of the Company to the Trustee
for authentication, and any Debt Securities which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All of the Debt Securities so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Debt Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Debt Securities had been issued at the date of the
execution thereof.
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In case of any such consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the Debt
Securities thereafter to be issued as may be appropriate.
SECTION 11.03. OPINION OF COUNSEL AND OFFICERS' CERTIFICATE TO BE GIVEN
TRUSTEE.
The Trustee shall receive an Opinion of Counsel and Officers'
Certificate as conclusive evidence that any such consolidation, merger, sale or
conveyance, and any such assumption, complies with the provisions of this
Article Eleven and that all conditions precedent herein provided for relating
to such transaction have been complied with.
ARTICLE TWELVE
SINKING FUNDS
SECTION 12.01 APPLICABILITY OF ARTICLE.
The provisions of this Article Twelve shall be applicable to any
sinking fund for the retirement of Debt Securities of a series except as
otherwise specified as contemplated by Section 2.01 for Debt Securities of
such series.
The minimum amount of any sinking fund payment provided for by the
terms of Debt Securities of any series is herein referred to as a "mandatory
sinking fund payment," and any payment in excess of such minimum amount
provided for by the terms of Debt Securities of any series is herein referred
to as an "optional sinking fund payment." If provided for by the terms of Debt
Securities of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 12.02. Each sinking fund payment
shall be applied to the redemption of Debt Securities of any series as provided
for by the terms of Debt Securities of such series.
SECTION 12.02. SATISFACTION OF SINKING FUND PAYMENTS WITH DEBT SECURITIES.
The Company (1) may deliver outstanding Debt Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Debt Securities of a series which have been redeemed either at the election of
the Company pursuant to the terms of such Debt Securities or through the
application of permitted optional sinking fund payments pursuant to the terms
of such Debt Securities, in each case in satisfaction of all or any part of any
sinking fund payment with respect to the Debt Securities of such series
required to be made pursuant to the terms
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<PAGE> 79
of such Debt Securities as provided for by the terms of such series; provided,
that such Debt Securities have not been previously so credited. Such Debt
Securities shall be received and credited for such purpose by the Trustee at
the Redemption Price specified in such Debt Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment
shall be reduced accordingly.
SECTION 12.03. REDEMPTION OF DEBT SECURITIES FOR SINKING FUND.
Not less than sixty (60) days prior to each sinking fund payment date
for any series of Debt Securities, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting Debt
Securities of that series pursuant to Section 12.02 and will also deliver to
the Trustee any Debt Securities to be so delivered. Not less than forty-five
(45) days before each such sinking fund payment date the Trustee shall select
the Debt Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 3.02 and cause notice of the redemption thereof to
be given in the name of and at the expense of the Company in the manner
provided in Section 3.02. Such notice having been duly given, the redemption
of such Debt Securities shall be made upon the terms and in the manner stated
in Section 3.03.
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 13.01. DISCHARGE OF INDENTURE.
(a) If,
(1) the Company shall have delivered to the Trustee for cancellation
all Debt Securities of any series theretofore authenticated (other than any
Debt Securities of such series which shall have been destroyed, lost or stolen
and which shall have been replaced or paid as provided in Section 2.09), or
(2) all such Debt Securities of such series not theretofore delivered
to the Trustee for cancellation shall have become due and payable, or are by
their terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit or cause to
be deposited with the Trustee as trust funds
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<PAGE> 80
(i) an amount of money (other than moneys repaid by the
Trustee or any Paying Agent to the Company in accordance with Section 13.04)
which will be sufficient, or
(ii) Government Obligations, as defined in 13.05, (which do not
contain provisions permitting the redemption or other prepayment thereof at the
option of the issuer thereof), the principal and interest on which when due,
without any regard to reinvestment thereof, will provide monies which will be
sufficient, or
(iii) a combination of (i) and (ii) which will be sufficient,
to pay at maturity or upon redemption all Debt Securities of such series not
theretofore delivered to the Trustee for cancellation, including principal,
premium (if any) and interest due or to become due to such date of maturity or
date fixed for redemption, as the case may be, and, if, in any such case, the
Company shall also pay or cause to be paid all other sums payable hereunder by
the Company with respect to such series, then this Indenture shall cease to be
of further effect with respect to the Debt Securities of such series, and the
Trustee, on demand of and at the cost and expense of the Company and subject
to Section 15.04, shall execute proper instruments acknowledging satisfaction
of and discharging this Indenture with respect to the Debt Securities of such
series. The Company agrees to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee in connection with
this Indenture or the Debt Securities of such series. Notwithstanding the
satisfaction and discharge of this Indenture with respect to the Debt
Securities of any series or of all series, the obligations of the Company to
the Trustee under Section 7.06 shall survive.
(b) In addition to the provisions of the next preceding paragraph, the
Company may terminate its obligations under the Debt Securities of any series
and this Indenture, except those obligations referred to in the penultimate
paragraph of this Section 13.01, if all Debt Securities of such series
previously authenticated and delivered (other than destroyed, lost or stolen
Debt Securities of such series which have been replaced or paid or Debt
Securities of such series for whose payment money or securities have
theretofore been held in trust and thereafter repaid to the Company, as
provided in Section 13.04) have been delivered to the Trustee for cancellation
and the Company has paid all sums payable by it hereunder, or if the Company
has irrevocably deposited or caused to be deposited with the Trustee (or an
escrow agent satisfactory to the Trustee), under the terms of an irrevocable
trust agreement in form and substance satisfactory to the Trustee, as trust
funds in trust solely for the benefit of the holders for that purpose, (i)
money or (ii) Government Obligations (which do not contain provisions
permitting the redemption or other
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prepayment thereof at the option of the issuer thereof), or a combination
thereof, maturing as to principal and interest in such amounts and at such
times as are sufficient without consideration of any reinvestment of such
principal or interest, to pay principal of and interest on the outstanding Debt
Securities of such series to maturity, provided that the Trustee shall have
been irrevocably instructed to apply such money or the proceeds of such
Government Obligations to the payment of said principal of and interest with
respect to the outstanding Debt Securities of such series.
Such irrevocable trust agreement shall include, among other things,
provisions for (1) payment of the principal of and interest on the Debt
Securities of such series, when due, including any mandatory sinking fund
payments, (2) payment of the fees and expenses of the Trustee, its agents and
counsel incurred or to be incurred in connection with carrying out such trust
provisions, (3) rights of registration, transfer, substitution and exchange of
Debt Securities of such series in accordance with the terms stated in this
Indenture, and (4) continuation of the rights and obligations and immunities of
the Trustee as against the holders as stated in this Indenture.
Notwithstanding the first paragraph of this Section 13.01(b), the
Company's obligations in Sections 2.07, 2.09, 4.01, 4.02, 6.01, 6.02, 6.09,
7.06, 7.10 and 13.04 shall survive until the Debt Securities of such series are
no longer outstanding; provided, however, that the Company's obligations in
Section 6.01 and 6.02 shall survive only with respect to an Event of Default
defined in Section 6.01(b) or 6.01(c). Thereafter the Company's obligations in
Sections 6.09, 7.06 and 13.04 shall survive.
After any such irrevocable deposit, accompanied by an Officers'
Certificate which shall state that the provisions of the first two paragraphs
of this Section 13.01(b) have been complied with, and upon delivery by the
Company to the Trustee of an opinion of independent legal counsel who shall be
acceptable to the Trustee, or, in lieu thereof, a favorable determination by
the Internal Revenue Service to the effect that holders of the Debt Securities
of such series will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and discharge and will be subject to
federal income tax on the same amount and in the same manner and at the same
time as would have been the case if such deposit and discharge had not occurred,
then the Company shall be discharged of its obligations under the Debt
Securities of such series and this Indenture with respect to the Debt
Securities of such series except for those surviving obligations specified
above, and the Trustee upon request shall acknowledge in writing such
discharge. Prior to the delivery of such acknowledgement, the Trustee may
require the Company to deliver to it an Officers' Certificate and Opinion of
Counsel, each stating that all conditions precedent providing for relating to
the deposit and discharge contemplated by this provision have been complied
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<PAGE> 82
with, and the Opinion of Counsel shall also state that such deposit does not
violate applicable law.
SECTION 13.02. DEPOSITED MONEYS TO BE HELD IN TRUST BY TRUSTEE.
All moneys deposited with the Trustee pursuant to Section 13.01 shall
be held in trust and applied by it to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent), to the
holders of the particular Debt Securities for the payment or redemption of
which such moneys have been deposited with the Trustee, of all sums due and to
become due thereon for principal, premium (if any) and interest.
SECTION 13.03. PAYING AGENT TO REPAY MONEYS HELD.
In connection with the satisfaction and discharge of this Indenture
with respect to Debt Securities of any series and the payment of all amounts
due the Trustee under Section 7.06 all moneys with respect to such Debt
Securities then held by any Paying Agent under the provisions of this Indenture
shall, upon written demand of the Company, be repaid to it or paid to the
Trustee and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
SECTION 13.04. RETURN OF UNCLAIMED MONEYS.
Any money deposited with or paid to the Trustee or any Paying Agent,
or then held by the Company, in trust for the payment of the principal, premium
(if any) or interest on any Debt Security of any series and remaining unclaimed
for two years after such principal, premium or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the holder of such Debt
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease.
The Company will deliver to the Trustee an Officers' Certificate and
an Opinion of Counsel which together shall state that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
SECTION 13.05. GOVERNMENT OBLIGATIONS.
Government Obligations include direct obligations of, or obligations
unconditionally guaranteed by, the United States of America entitled to the
benefit of the full faith and credit thereof and certificates, depositary
receipts or other instruments which evidence a direct ownership interest in
such obligations or
73
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in any specific interest or principal payments due in respect thereof.
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 14.01 INDENTURE AND DEBT SECURITIES SOLELY CORPORATE OBLIGATIONS.
No recourse under or upon any obligation, covenant or agreement
contained in this Indenture, or in any Debt Security, or because of any
indebtedness evidenced thereby, shall be had against any incorporator, or
against any past, present or future stockholder, officer or director, as such,
of the Company or of any successor corporation, either directly or through the
Company or any successor corporation, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being expressly
waived and released by the acceptance of the Debt Securities by the holders
thereof and as part of the consideration for the issue of the Debt Securities.
ARTICLE FIFTEEN
MISCELLANEOUS PROVISIONS
SECTION 15.01. BENEFITS OF INDENTURE RESTRICTED TO PARTIES AND
SECURITYHOLDERS.
Nothing in this Indenture or in the Debt Securities, expressed or
implied, shall give or be construed to give to any person, other than the
parties hereto and their successors and assigns and the holders of the Debt
Securities, any legal or equitable right, remedy or claim under this Indenture
or under any covenant or provision herein contained, all such covenants and
provisions being for the sole benefit of the parties hereto and their
successors and assigns and the holders of the Debt Securities.
SECTION 15.02. PROVISIONS BINDING ON COMPANY'S SUCCESSORS.
All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Company shall bind its successors
and assigns, whether so expressed or not.
SECTION 15.03. ADDRESSES FOR NOTICES, ETC.
Any notice or demand which by any provisions of this Indenture is
required or permitted to be given or served by the Trustee or by the holders of
Debt Securities to or on the Company may be given or served by postage prepaid
first class mail addressed (until another
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<PAGE> 84
address is filed by the Company with the Trustee), as follows: Piedmont
Natural Gas Company, Inc., 1915 Rexford Road, Post Office Box 33068, Charlotte,
North Carolina 28233, Attention: E.C. Hinson, Senior Vice President - Finance.
Any notice, direction, request or demand by any securityholder to or upon the
Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or made in writing at the principal Corporate Trust Office
of the Trustee as set forth in Section 4.02.
SECTION 15.04. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent have been complied with, except that
in the case of any such application or demand as to which the furnishing of
such documents is specifically required by any provision of this Indenture
relating to such particular application or demand, no additional certificate or
opinion need be furnished.
Each Officer's Certificate and Opinion of Counsel provided for in this
Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall include (1) a
statement that the person making such certificate or opinion has read such
covenant or condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (3) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
SECTION 15.05. LEGAL HOLIDAYS.
Except as otherwise specified as provided in Section 2.01, in any case
where the date of maturity of principal or interest on the Debt Securities or
the date fixed for redemption of any Debt Securities shall be a Saturday or
Sunday or a legal holiday in New York, New York, or Charlotte, North Carolina,
or in such other place or places as the Company may designate pursuant to
Section 4.02 or a day on which banking institutions in New York, New York, or
Charlotte, North Carolina, or in such other place or places are authorized by
law or required by executive order to close, then payment of principal,
premium (if any) or interest need not be made on such date but may be made on
the next succeeding business day
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with the same force and effect as if made on the date of maturity or the date
fixed for redemption, and no interest shall accrue for the period after such
date.
SECTION 15.06. TRUST INDENTURE ACT TO CONTROL.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.
SECTION 15.07. EXECUTION IN COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
SECTION 15.08. GOVERNING LAW.
This Indenture and each Security shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes shall be governed
by and construed in accordance with the laws of said State.
SECTION 15.09. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Debt Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
The Trustee, by its execution of this Indenture, hereby accepts the
trusts in this Indenture declared and provided, upon the terms and conditions
hereinabove set forth.
IN WITNESS WHEREOF, PIEDMONT NATURAL GAS COMPANY, INC., has caused
this Indenture to be signed and acknowledged by its Chairman of the Board or
its President or one of its Vice Presidents, and its corporate seal to be
affixed hereunto, and the same to be attested by its Secretary or an Assistant
Secretary; and Citibank, N.A., has caused this Indenture to be signed and
acknowledged by one of its Vice Presidents, and its corporate seal to be
affixed
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hereunto, and the same to be attested by one of its Senior Trust Officers, all
as of the day and year first above written.
PIEDMONT NATURAL GAS COMPANY, INC.
ATTEST:
/s/ Martin C. Ruegsegger By /s/ E.C. Hinson
- ------------------------- -----------------------------
E.C. Hinson, Senior Vice
President - Finance
[Corporate Seal]
CITIBANK, N.A., AS TRUSTEE
ATTEST:
/s/ Carol Ng By /s/ P. DeFelice
- ------------------------- -----------------------------
Vice President
[Corporate Seal]
77
<PAGE> 87
STATE OF NORTH CAROLINA )
: ss.:
COUNTY OF MECKLENBURG )
On the 28th day of May, 1993 before me personally came E.C. Hinson,
to me known, who, being by me duly sworn, did depose and say that he resides
at Charlotte, North Carolina, that he is Senior Vice President - Finance of
Piedmont Natural Gas Company, Inc., one of the parties described in and which
executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to the said instrument is such corporate
seal; that it was so affixed by authority of the board of directors of said
corporation, and that he signed his name thereto by like authority.
/s/ Rebecca N. Wynne
---------------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 28th day of May, 1993 before me personally came P. DeFelice,
to me known, who, being by me duly sworn, did depose and say that (s)he
resides at 47-09 169th Street, Flushing, N.Y. 11358, that (s)he is Vice
President of Citibank, N.A., as Trustee, one of the parties described in and
which executed the above instrument; that (s)he knows the corporate seal of
said corporation; that the seal affixed to the said instrument is such
corporate seal; that it was so affixed by authority of the board of directors
of said corporation, and that (s)he signed (his) (her) name thereto by like
authority.
/s/ Peter M. Pavlyshin
--------------------------------
Notary Public
Peter M. Pavlyshin
[NOTARIAL SEAL] Notary Public, State of New York
No. 41-4991297
Qualified in Queens County
Certificate Filed in New York County
Commission Expires January 27, 1994
78
<PAGE> 1
EXHIBIT 4.2
<PAGE> 2
Conformed Copy
PNG ACQUISITION COMPANY,
PIEDMONT NATURAL GAS COMPANY, INC.
and
CITIBANK, N.A., AS TRUSTEE
____________
FIRST SUPPLEMENTAL INDENTURE
Dated as of February 25, 1994
(Supplemental to Indenture dated as of April 1, 1993)
____________
Debt Securities
<PAGE> 3
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of the 25th day of
February, 1994, is between PIEDMONT NATURAL GAS COMPANY, INC., a corporation
duly organized and existing under the laws of the State of New York
("Piedmont"), PNG ACQUISITION COMPANY, a corporation duly organized and
existing under the laws of the State of North Carolina ("New Piedmont"), and
CITIBANK, N.A., a national banking association duly organized and existing
under the laws of the United States (the "Trustee").
W I T N E S S E T H:
WHEREAS, Piedmont has heretofore executed and delivered to the Trustee
an Indenture dated as of April 1, 1993 (the "Indenture"); and
WHEREAS, Section 11.01 of the Indenture provides that Piedmont may
merge into any corporation organized and existing under the laws of the United
States of America or a state thereof or the District of Columbia provided that
(i) such corporation expressly assumes the due and punctual payment of the
principal, premium (if any) and interest on all the Debt Securities, according
to their tenor, and the due and punctual performance and observance of all of
the covenants and conditions of the Indenture to be performed by Piedmont and
(ii) immediately thereafter such corporation is not in default in the
performance or observance of any of the covenant or condition of the Indenture;
and
WHEREAS, Piedmont desires to change its state of incorporation from
New York to North Carolina, and in order to accomplish this change in state of
incorporation proposes to undertake the merger of Piedmont with and into New
Piedmont, a wholly-owned subsidiary of Piedmont incorporated under the laws of
the state of North Carolina (the "Merger") pursuant to an Agreement and Plan of
Merger to be dated as of February 25, 1994 (the "Plan of Merger") and the name
of New Piedmont will be changed to "Piedmont Natural Gas Company, Inc."; and
WHEREAS, Section 10.01(a) of the Indenture provides that, without the
consent of any holders of the Debt Securities, Piedmont, when authorized by its
Board of Directors, and the Trustee may enter into an indenture supplemental
thereto to evidence the succession of another corporation to Piedmont and the
assumption by the successor corporation of the covenants,
<PAGE> 4
agreements and obligations of Piedmont pursuant to Article Eleven thereof; and
WHEREAS, New Piedmont intends by this First Supplemental Indenture to
assume the due and punctual payment of the principal, premium (if any) and
interest on all Debt Securities, according to their tenor, and the due and
punctual performance and observance of all of the covenants and conditions of
the Indenture to be performed by Piedmont; and
WHEREAS, Piedmont and New Piedmont represent that all acts and things
necessary to constitute this First Supplemental Indenture a valid, binding and
enforceable instrument have been done and performed, and the execution of this
First Supplemental Indenture has in all respects been duly authorized, and each
of Piedmont and New Piedmont, in the exercise of legal right and power in it
vested, is executing this First Supplemental Indenture; and
WHEREAS, Piedmont has heretofore delivered or is delivering
contemporaneously herewith to the Trustee (i) a copy of the resolution of its
Board of Directors certified by its Secretary or an Assistant Secretary
authorizing the execution of the First Supplemental Indenture, and (ii) an
Officers' Certificate and an Opinion of Counsel each stating that the execution
and delivery of this First Supplemental Indenture comply with the provisions of
Article Ten of the Indenture, that the Merger complies with the provisions of
Article Eleven of the Indenture and that all conditions precedent provided for
in the Indenture to the execution and delivery of this First Supplemental
Indenture have been complied with:
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and for other valuable consideration, the receipt
whereof is hereby acknowledged, the parties have executed and delivered this
First Supplemental Indenture and Piedmont and New Piedmont covenant and agree
with the Trustee for the equal and proportionate benefit of the respective
holders, from time to time, of the Debt Securities, as follows:
2
<PAGE> 5
SECTION 1. DEFINITIONS. For all purposes of this First Supplemental
Indenture, except as otherwise expressly provided or unless the context
otherwise requires, the terms used herein shall have the meanings assigned to
them in the Indenture.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF PIEDMONT AND NEW
PIEDMONT. Piedmont and New Piedmont hereby represent and warrant that
immediately following the Merger, New Piedmont will not be in default in the
performance or observance of any of the covenants or conditions of the
Indenture.
SECTION 3. ASSUMPTION BY NEW PIEDMONT. New Piedmont hereby assumes
the due and punctual payment of the principal, premium (if any) and interest on
all the Debt Securities, according to their tenor, and the due and punctual
performance and observance of all covenants and conditions of the Indenture to
be performed by Piedmont.
SECTION 4. EFFECTIVENESS OF THIS FIRST SUPPLEMENTAL INDENTURE. This
First Supplemental Indenture shall become effective upon and simultaneously
with consummation of the Merger. Upon the effectiveness of this First
Supplemental Indenture, New Piedmont shall succeed to and be substituted for
Piedmont with the same effect as if New Piedmont had been named in the
Indenture.
SECTION 5. CONCERNING THE TRUSTEE. The Trustee accepts the trusts of
the Indenture as supplemented by this First Supplemental Indenture and agrees
to perform the same, but only upon the terms and conditions set forth in the
Indenture, as supplemented by this First Supplemental Indenture, to which the
parties hereto and the holders from time to time agree. Without limiting the
generality of the foregoing, the Trustee assumes no responsibility for the
correctness of the recitals herein contained, which shall be taken as the
statements of Piedmont and New Piedmont.
3
<PAGE> 6
SECTION 6. MISCELLANEOUS.
(a) Except as hereby expressly amended, the Indenture is in all
respects ratified and confirmed and all the terms, provisions and conditions
thereof shall be and remain in full force and effect.
(b) All the covenants, stipulations, promises and agreements in this
First Supplemental Indenture contained by or on behalf of New Piedmont shall
bind its successors and assigns, whether so expressed or not.
(c) This First Supplemental Indenture shall be deemed to be contract
made under the laws of the State of New York, and for all purposes shall be
governed by and construed in accordance with the laws of said State.
(d) If any provision of the Indenture as supplemented by this First
Supplemental Indenture limits, qualifies or conflicts with a provision of the
Trust Indenture Act that is required under such Act to be a part of or govern
the Indenture, such latter provision shall control. If any provision of the
Indenture, as supplemented by this First Supplemental Indenture, modifies or
excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the latter provision shall be deemed to apply to the Indenture as so
modified or to be excluded, as the case may be.
(e) The titles and headings of the sections of this First
Supplemental Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof and shall in no way modify or restrict
any of the terms or provisions hereof.
(f) This First Supplemental Indenture may be executed in any number
of counterparts, each of which shall be an original.
(g) In case any provision in this First Supplemental Indenture shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof or of the Indenture shall
not in any way be affected or impaired thereby.
4
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereto affixed and attested, all as of the date first above
written.
PIEDMONT NATURAL GAS COMPANY, INC.
By /s/ John H. Maxheim
---------------------------------
Attest:
/s/ Martin C. Ruegsegger
- -------------------------
[Corporate Seal]
PNG ACQUISITION COMPANY
By /s/ John H. Maxheim
---------------------------------
Attest:
/s/ Martin C. Ruegsegger
- -------------------------
[Corporate Seal]
CITIBANK, N.A., AS TRUSTEE
By /s/ John Byrnes
---------------------------------
Attest:
- ------------------------
[Corporate Seal]
5
<PAGE> 8
STATE OF NORTH CAROLINA )
) ss.:
COUNTY OF MECKLENBURG )
On the 25th day of February, 1994 before me personally came John H.
Maxheim, to me known, who, being by me duly sworn, did depose and say that he
resides at 1915 Rexford Road, that he is Chairman and President of Piedmont
Natural Gas Company, Inc., one of the parties described in and which executed
the above instrument; that he knows the corporate seal of said corporation;
that the seal affixed to the said instrument is such corporate seal; that it
was so affixed by authority of the board of directors of said corporation, and
that he signed his name thereto by like authority.
/s/ Joy D. Waggoner
----------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF NORTH CAROLINA )
) ss.:
COUNTY OF MECKLENBURG )
On the 25th day of February, 1994 before me personally came John H.
Maxheim, to me known, who, being by me duly sworn, did depose and say that he
resides at 1915 Rexford Road, that he is Chairman and President of PNG
Acquisition Company, one of the parties described in and which executed the
above instrument; that he knows the corporate seal of said corporation; that
the seal affixed to the said instrument is such corporate seal; that it was so
affixed by authority of the board of directors of said corporation, and that he
signed his name thereto by like authority.
/s/ Joy D. Waggoner
----------------------------
Notary Public
[NOTARIAL SEAL]
<PAGE> 9
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 7th day of September, 1994 before me personally came John
Byrnes, to me known, who, being by me duly sworn, did depose and say that (s)he
resides at 2388 Washington Ave., Queens, N.Y., that (s)he is Vice President of
Citibank, N.A., as Trustee, one of the parties described in and which executed
the above instrument; that (s)he knows the corporate seal of said corporation;
that the seal affixed to the said instrument is such corporate seal; that it
was so affixed by authority of the board of directors of said corporation, and
that (s)he signed (his) (her) name thereto by like authority.
/s/ Nancy H. Forte
------------------------------
Notary Public
[NOTARIAL SEAL]
2
<PAGE> 1
EXHIBIT 4.3
<PAGE> 2
Draft of 5/5/95
[FORM OF FACE OF DEBT SECURITY]
[If the Security is to be a Book-Entry Debt Security, insert -- This Security
is a Book-Entry Debt Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depository or a nominee of a
Depository. This Security is exchangeable for Securities registered in the
name of a person other than the Depository or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this Security
(other than a transfer of this Security as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository) may be registered except in such limited
circumstances.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.]
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT ANY LEGEND
REQUIRED BY THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND THE REGULATIONS
THEREUNDER.]
PIEDMONT NATURAL GAS COMPANY, INC.
[Insert Designation of Securities and Series]
No. $
---------- ------------
CUSIP No.
------
PIEDMONT NATURAL GAS COMPANY, INC., a corporation duly organized and
existing under the laws of the State of North Carolina (herein called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to [If the
Security is to be a Book-Entry Debt Security, insert -- Cede & Co., as nominee
for The Depository Trust Company]
[_______________________________________________________________________________
__], or registered assigns, the principal sum of ______________________________
___________________ on _________________________________________________
[If the Security is to bear interest prior to maturity, insert -- , and to pay
interest thereon from __________ or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, semi-annually on ________
and ________ in each year (each an "Interest Payment Date"), commencing ______,
at the rate of __% per annum, until the principal hereof is paid or made
available for payment [If applicable insert -- , and (to the extent that the
payment of such interest shall be legally enforceable) at the rate of ___% per
annum on any overdue principal and premium and on any overdue installment of
interest]. [The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year of twelve 30-day months.] The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the person in
whose name this Security is registered at the close of business on the Record
Date for such interest, which shall be the ________ or _________ (whether or
not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the holder on such Record Date and may either
be paid to the person in whose name this Security is registered at the close
of business on a subsequent record date for the payment of such defaulted
interest to be fixed by the Trustee, notice whereof shall be given to holders
of Securities of this series not less than 15 days
<PAGE> 3
prior to such subsequent record date, such subsequent record date to be not
less than five days preceding the date of payment of such default interest or
in any other lawful manner acceptable to the Trustee. Except as otherwise
stated above with respect to default interest, the person in whose name this
Security is registered at the close of business on the Record Date with
respect to an Interest Payment Date shall be entitled to receive the interest
payable on such date notwithstanding the cancellation of this Security upon
any registration of transfer or exchange hereof subsequent to such Record
Date and prior to such Interest Payment Date].
[If the Security is not to bear interest prior to Maturity, insert -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at stated
maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ____% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of
such default in payment to the date payment of such principal has been made or
duly provided for. Interest on any overdue principal shall be payable on
demand. Any such interest on any overdue principal that is not so paid on
demand shall bear interest at the rate of _____% per annum (to the extent that
payment of such interest shall be legally enforceable), which shall accrue from
the date of such demand for payment to the date payment of such interest has
been made or duly provided for, and such interest shall also be payable on
demand.]
Payment of the principal of and premium, (if any) and [if applicable,
insert -- any such] interest on this Security will be made at the corporate
trust office of the Trustee in the Borough of Manhattan, The City of New York,
or such other office or agency of the Company maintained for that purpose in
the Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts [if applicable, insert -- ; provided, however, that
at the option of the Company payment of interest may be made by check mailed to
the address of the person entitled thereto as such address shall appear in the
Debt Security Register].
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
2
<PAGE> 4
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by manual or facsimile signature under its corporate seal.
Dated: , 199
-------------- -
PIEDMONT NATURAL GAS COMPANY, INC.
[CORPORATE SEAL]
By:
------------------------------
Name:
Title:
Attest:
By:
-----------------------------------
[Assistant] Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
CITIBANK, N.A.,
As Trustee
By:
-----------------------------
Authorized Signatory
3
<PAGE> 5
[FORM OF REVERSE OF DEBT SECURITY]
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or
more series under 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 (herein called the "Trustee", which term
includes any successor trustee under the Indenture), as supplemented by the
First Supplemental Indenture, dated as of February 25, 1994, between the
Company, the Predecessor Company and the Trustee (herein collectively called
the "Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof [, limited in aggregate principal amount to
$_________].
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert
- -- (1) on _________ in any year commencing with the year _________ and ending
with the year _________ through operation of the sinking fund for this series
at a Redemption Price equal to 100% of the principal amount, and (2)] at any
time [on or after ______________], as a whole or in part, at the election of
the Company, at the following Redemption Prices (expressed as percentages of
the principal amount): If redeemed [on or before ________, ___%, and if
redeemed] during the 12-month period beginning ___________________ of the years
indicated,
REDEMPTION REDEMPTION
YEAR PRICE YEAR PRICE
---- ----- ---- -----
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments the payment dates for which are
on or prior to such Redemption Date will be payable to the holders of such
Securities, of record at the close of business on the relevant Record Dates
referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on _____________ in
any year commencing with the year ________ and ending with the year _________
through operation of the sinking fund for this series at the Redemption Prices
for redemption through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below, and (2) at any time [on
or after ________], as a whole or in part, at the election of the Company, at
the Redemption Prices for redemption otherwise than through operation of the
sinking fund (expressed as percentages of the principal amount) set forth in
the table below: If redeemed during the 12-month period beginning ___________
of the years indicated,
4
<PAGE> 6
Redemption Price Redemption Price For
For Redemption Redemption Otherwise
Through Operation Than Through Operation
Year of the Sinking Fund of the Sinking Fund
---- ------------------- -------------------
and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments the payment dates for which are on or prior to such
Redemption Date will be payable to the holders of such Securities, of record
at the close of business on the relevant Record Dates referred to on the face
hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
________, redeem any Securities of this series as contemplated by [Clause (2)
of] the preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of moneys borrowed having
an interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than ____% per annum.]
[The sinking fund for this series provides for the redemption on
________ in each year beginning with the year ________ and ending with the year
_________ of [not less than] $__________ [("mandatory sinking fund") and not
more than $________] aggregate principal amount of Securities of this series.
[Securities of this series acquired or redeemed by the Company otherwise than
through [mandatory] sinking fund payments may be credited against subsequent
[mandatory] sinking fund payments otherwise required to be made [in the
[inverse] order in which they become due].]
[If the Security is subject to redemption, insert -- In the event of
redemption of this Security in part only, a new Security or Securities of this
series for the unredeemed portion hereof will be issued in the name of the
holder hereof upon the cancellation hereof.]
[If the Security is not subject to redemption, insert -- The
Securities of this series are not redeemable in whole or in part at any time
prior to maturity.]
[If the Security is not an Original Issue Discount Security, insert --
If an Event of Default with respect to Securities of this series shall occur
and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.]
[If the Security is an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and
be continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and
payable and (ii) of interest on any overdue principal and overdue interest (in
each case to the extent that the payment
5
<PAGE> 7
of such interest shall be legally enforceable), all of the Company's
obligations in respect of the payment of the principal of and interest, if any,
on the Securities of this series shall terminate.]
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of Securities of this series upon compliance by the Company
with certain conditions set forth therein, which provisions apply to this
Security.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the holders of 66 2/3% in principal amount of the Securities at
the time outstanding of all series to be affected. The Indenture also contains
provisions permitting the holders of a majority in principal amount of the
Securities of each series at the time outstanding, on behalf of the holders of
all Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the holder of this Security
shall be conclusive and binding upon such holder and upon all future holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Security.
As set forth in, and subject to, the provisions of the Indenture, no
holder of any Security of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the holders of not
less than 25% in principal amount of the outstanding Securities of this series
shall have made written request, and offered reasonable indemnity to the
Trustee to institute such proceeding as trustee, and the Trustee shall not have
received from the holders of a majority in principal amount of the outstanding
Securities of this series a direction inconsistent with such request and the
Trustee shall have failed to institute such proceeding within 60 days;
provided, however, that such limitations do not apply to a suit instituted by
the holder hereof for the enforcement of payment of the principal of and
premium (if any) or interest on this Security on or after the respective due
dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium and
interest, if any, on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Debt
Security Register, upon surrender of this Security for registration of transfer
at the office or agency of the Company in any place where the principal of and
premium and interest, if any, on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Debt Security Registrar duly executed by, the holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
Securities of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $__________ and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series of a different
authorized denomination, as requested by the holder surrendering the same. [If
the Security is subject to redemption, insert -- In the event of any redemption
at the option of the Company, the Trustee shall not be required to (i) register
the transfer of or exchange Securities of this series during a period of 15
days next preceding the mailing of the notice of any redemption, or (ii)
register the transfer of or exchange any Security so selected for redemption,
except, in the case of any redemption in part, the portion of any Security not
to be redeemed.]
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
6
<PAGE> 8
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
___________________________________
7
<PAGE> 9
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
<TABLE>
<CAPTION>
<S> <C>
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT MIN ACT - ______________________ Custodian ____________________
(Custodian) (Minor)
Under Uniform Gifts to Minor Act (___________________________)
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
_______________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
(Please insert Social Security or other identifying number of assignee)
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
________________________________________________________________________________
________________________________________________________________________________
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
________________________________________________________________________________
attorney to transfer said Security on the books of the Company, with full
power of substitution in the premises.
<TABLE>
<CAPTION>
<S> <C>
Dated:__________________ X__________________________________________________________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.
</TABLE>
8
<PAGE> 1
EXHIBIT 4.4
FORM OF MASTER GLOBAL NOTE
- ---------------------------------------------
(Date of Issuance)
This Master Note represents Book-Entry Debt Securities within the meaning
of the Indenture hereinafter referred to and is registered in the name of a
Depository or a nominee of a Depository. This Master Note is exchangeable for
Debt Securities registered in the name of a Person other than the Depository or
its nominee only in the limited circumstances described in the Indenture, and no
transfer of this Master Note (other than a transfer of this Master Note as a
whole by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository) may be
registered except in such limited circumstances.
Piedmont Natural Gas Company, Inc. (the "Issuer"), a corporation organized
and existing under the laws of the State of North Carolina, for value received,
hereby promises to pay to Cede & Co. or its registered assigns: (i) on each
principal payment date, including each amortization date, redemption date,
repayment date, maturity date, and extended maturity date, as applicable, of
each obligation identified on the records of the Issuer (which records are
maintained by Citibank, N.A. (the "Paying Agent")), the principal amount and
premium, if any, then due and payable for each such obligation, and (ii) on each
interest payment date, if any, the interest then due and payable on the
principal amount for each such obligation. Payment shall be made by wire
transfer of United States dollars to the registered owner, or in immediately
available funds or the equivalent to a party as authorized by the registered
owner and in the currency other than United States dollars as provided for in
each such obligation, by the Paying Agent without the necessity or presentation
and surrender of this Master Note.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS MASTER NOTE SET FORTH
ON THE REVERSE HEREOF, WHICH ARE INCORPORATED HEREIN BY REFERENCE.
Further information with respect to the obligations of the Issuer evidenced
by this Master Note is contained in the prospectus, prospectus supplement(s),
and pricing supplement(s) prepared by the Issuer and on file with the Securities
and Exchange Commission.
This Master Note is a valid and binding obligation of the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
[Seal] PIEDMONT NATURAL GAS COMPANY, INC.
ATTEST:
By:
----------------------------------
Name:
Title:
- -----------------------------------------
Name:
Title:
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
CITIBANK, N.A., as Trustee
By:
----------------------------------
Name:
Title:
<PAGE> 2
This Master Note evidences indebtedness of the Issuer of a single Series of
Medium-Term Notes Series B (the "Debt Obligations"), all issued or to be issued
under and pursuant to an Indenture dated as of April 1, 1993, amended (the
"Indenture"), duly executed and delivered by Piedmont Natural Gas Company, Inc.,
a New York corporation and the corporate predecessor to the Issuer, to Citibank,
N.A., as trustee (the "Trustee"), as to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
duties, and immunities thereunder of the Trustee and the rights thereunder of
the holders of the Debt Obligations. As provided in the Indenture, the Debt
Obligations may mature at different times, may bear interest, if any, at
different rates, may be subject to different redemption provisions, if any, may
be subject to different sinking, purchase, or analogous funds, if any, may be
subject to different covenants and events of default, and may otherwise vary as
in the Indenture provided or permitted. The Debt Obligations aggregated with any
other indebtedness of the Issuer of this Series are limited (except as provided
in the Indenture) to the principal amount of $150,000,000 designated as the
Medium-Term Notes Series B of the Issuer due 9 months or more from the date of
issue. No reference herein to the Indenture and no provision of this Master Note
or of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest, if any, on each obligation at the times, places and rates, and in the
coin or currency, identified on the records of the Issuer.
At the request of the registered owner, the Issuer shall promptly issue and
deliver one or more separate note certificates evidencing each obligation
evidenced by this Master Note. As of the date any such note certificate or
certificates are issued, the obligations which are evidenced thereby shall no
longer be evidenced by this Master Note.
- --------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto
- --------------------------------------------------------------------------------
(Name, Address, and Taxpayer Identification Number of Assignee)
the Master Note and all rights thereunder, hereby irrevocably constituting and
appointing_____________________________________________________________________
_____________________________ attorney to transfer said Master Note on the books
of the Issuer with full power of substitution in the premises.
Dated:
---------------------------------------
(Signature)
Signature(s) Guaranteed: NOTICE: The signature on this
assignment must correspond with the
name as written upon the face of this
Master Note, in every particular,
without alteration or enlargement or
any change whatsoever.
- --------------------------------------------------------------------------------
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
Agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
<PAGE> 1
EXHIBIT 5.1
<TABLE>
<S> <C> <C>
AMOS & JEFFRIES, L.L.P.
ATTORNEYS AND COUNSELLORS AT LAW
TELEPHONE: (910) 273-5569 1230 RENAISSANCE PLAZA FACSIMILE: (910) 273-2435
230 NORTH ELM STREET
POST OFFICE BOX 787
GREENSBORO, NORTH CAROLINA 27402
</TABLE>
May 16, 1995
Piedmont Natural Gas Company, Inc.
1915 Rexford Road
Charlotte, North Carolina 28211
Re: Registration Statement on Form S-3 filed on May 16, 1995
with respect to $130,000,000 Aggregate Principal Amount of
Debt Securities
Gentlemen:
We have acted as counsel to Piedmont Natural Gas Company, Inc. (the
"Corporation") in connection with the registration by the Corporation of
$130,000,000 aggregate principal amount of additional unsecured notes,
debentures and other evidences of indebtedness (the "Debt Securities") as set
forth in the Registration Statement on Form S-3 (the "Registration Statement")
which is being filed on the date hereof with the Securities and Exchange
Commission ("SEC") by the Corporation pursuant to the Securities Act of 1933,
as amended.
The Debt Securities are to be issued in one or more series in amounts,
at prices and on terms to be determined when an agreement to sell is made or at
the time of sale, as the case may be, and are to be sold from time to time as
set forth in the Registration Statement, the prospectus contained therein (the
"Prospectus") and any amendments or supplements thereto.
We are generally familiar with the corporate proceedings and actions
undertaken by the Corporation in connection with the proposed offering of the
Debt Securities, and we have examined such agreements and certificates of public
officials and of officers of the Corporation and such instruments and documents
as we have deemed necessary to form a basis for the opinion hereinafter
expressed.
Based on the foregoing, we are of the opinion that: when (1) the
Registration Statement shall have been declared effective by order of the SEC,
(2) the terms of any series of the Debt Securities have been authorized by
appropriate corporate action of the Corporation, and (3) the
<PAGE> 2
Piedmont Natural Gas Company, Inc.
May 16, 1995
Page 2
Debt Securities have been issued and sold upon the terms and conditions set
forth in the Registration Statement, the Prospectus and the applicable
supplement to the Prospectus, the Debt Securities will be validly authorized,
legally issued and binding obligations of the Corporation, subject, as to
enforcement, to applicable bankruptcy, insolvency, moratorium, reorganization,
arrangement or 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).
We hereby consent to be named in the Registration Statement and in the
Prospectus as the attorneys who passed upon the legality of the Debt Securities
and to the filing of a copy of this opinion as Exhibit 5.1 to the Registration
Statement. By giving the foregoing consent, we do not admit that we are within
the category of persons required to give consents pursuant to Section 7 of
the Securities Act of 1933, as amended.
Very truly yours,
Amos & Jeffries, L.L.P.
/s/ Jerry W. Amos
-----------------
Jerry W. Amos
<PAGE> 1
EXHIBIT 12.1
PIEDMONT NATURAL GAS COMPANY, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
FOR FISCAL YEARS ENDED OCTOBER 31, 1990 THROUGH 1994
AND TWELVE MONTHS ENDED JANUARY 31, 1995
(IN THOUSANDS EXCEPT RATIO AMOUNTS)
<TABLE>
<CAPTION>
JANUARY 31,
1995 1994 1993 1992 1991 1990
----------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Net income from continuing
operations...................... $37,996 $35,506 $37,534 $35,310 $20,552 $25,733
Income taxes...................... 23,956 21,407 23,427 21,259 11,408 14,859
Fixed charges..................... 30,861 29,736 26,715 26,246 26,823 25,739
----------- ------- ------- ------- ------- -------
Total Adjusted Earnings...... $92,813 $86,649 $87,676 $82,815 $58,783 $66,331
========= ======= ======= ======= ======= =======
Fixed Charges:
Interest.......................... $29,110 $27,671 $24,870 $24,570 $25,253 $24,271
Amortization of debt expense...... 334 334 192 180 259 164
One-third of rental expense....... 1,417 1,731 1,653 1,496 1,311 1,304
----------- ------- ------- ------- ------- -------
Total Fixed Charges.......... $30,861 $29,736 $26,715 $26,246 $26,823 $25,739
========= ======= ======= ======= ======= =======
Ratio of Earnings to Fixed Charges..... 3.01 2.91 3.28 3.16 2.19 2.58
========= ======= ======= ======= ======= =======
</TABLE>
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Piedmont Natural Gas Company, Inc., on Form S-3 of our reports dated December
16, 1994, appearing in the Annual Report on Form 10-K of Piedmont Natural Gas
Company, Inc., for the year ended October 31, 1994, and to the reference to us
under the heading "Experts" in the Prospectus, which is part of the Registration
Statement.
DELOITTE & TOUCHE LLP
Charlotte, North Carolina
May 16, 1995
<PAGE> 1
EXHIBIT 24.1
PIEDMONT NATURAL GAS COMPANY, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
executive officer of PIEDMONT NATURAL GAS COMPANY, INC., a corporation organized
under the laws of the State of North Carolina, does hereby make, constitute and
appoint David J. Dzuricky, his true and lawful attorney-in-fact, with full power
of substitution, to (i) execute, deliver and file, on his behalf and in his name
and in his capacity as set forth below, a Registration Statement on Form S-3
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, together with any and all exhibits thereto and any and all other
documents in support thereof or supplemental thereto, with respect to the
registration of and continuous offering of unsecured notes, debentures and other
evidences of indebtedness of the Corporation under the Registration Statement on
Form-3, and any and all further amendments to such Registration Statement, and
(ii) execute any and all applications, registration statements, notices and
other documents necessary or advisable to comply with applicable state
securities and blue sky laws and regulations, and to file the same together with
all other exhibits and documents in connection therewith, with the appropriate
state securities and blue sky authorities; and does hereby grant to said
attorney-in-fact power and authority to do and perform each and every act and
thing whatsoever as said attorney-in-fact may deem necessary or advisable to
carry out fully the intent of this instrument, to the same extent and with the
same effect as the undersigned might or could do personally, or in his capacity
as set forth below; and the undersigned does hereby ratify and confirm all acts
and things which said attorney-in-fact may do or cause to be done by virtue of
this instrument.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 4th
day of May, 1995.
/s/ DONALD S. RUSSELL
------------------------------------
Director
STATE OF SOUTH CAROLINA
-----------------------------------
COUNTY OF RICHLAND
----------------------------------
This is to certify that before me personally came DONALD S. RUSSELL known
to me to be the individual described in and who executed the foregoing Power of
Attorney, and he duly acknowledged that he executed same, this 4th day of
May, 1995.
/s/ KATHLEEN R. WILLIAMS
------------------------------------
Notary Public
My commission expires:
September 28, 2002
- ------------------------------------
<PAGE> 2
EXHIBIT 24.1
PIEDMONT NATURAL GAS COMPANY, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
executive officer of PIEDMONT NATURAL GAS COMPANY, INC., a corporation organized
under the laws of the State of North Carolina, does hereby make, constitute and
appoint David J. Dzuricky, his true and lawful attorney-in-fact, with full power
of substitution, to (i) execute, deliver and file, on his behalf and in his name
and in his capacity as set forth below, a Registration Statement on Form S-3
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, together with any and all exhibits thereto and any and all other
documents in support thereof or supplemental thereto, with respect to the
registration of and continuous offering of unsecured notes, debentures and other
evidences of indebtedness of the Corporation under the Registration Statement on
Form-3, and any and all further amendments to such Registration Statement, and
(ii) execute any and all applications, registration statements, notices and
other documents necessary or advisable to comply with applicable state
securities and blue sky laws and regulations, and to file the same together with
all other exhibits and documents in connection therewith, with the appropriate
state securities and blue sky authorities; and does hereby grant to said
attorney-in-fact power and authority to do and perform each and every act and
thing whatsoever as said attorney-in-fact may deem necessary or advisable to
carry out fully the intent of this instrument, to the same extent and with the
same effect as the undersigned might or could do personally, or in his capacity
as set forth below; and the undersigned does hereby ratify and confirm all acts
and things which said attorney-in-fact may do or cause to be done by virtue of
this instrument.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 2nd
day of May, 1995.
/s/ JOHN F. MCNAIR III
----------------------------------
Director
STATE OF NORTH CAROLINA
-----------------------------------
COUNTY OF FORSYTH
----------------------------------
This is to certify that before me personally came JOHN F. MCNAIR III known
to me to be the individual described in and who executed the foregoing Power of
Attorney, and he duly acknowledged that he executed same, this 2nd day of
May, 1995.
/s/ M. MARIE HARPER
----------------------------------
Notary Public
My commission expires:
February 19, 1999
- ------------------------------------
<PAGE> 3
EXHIBIT 24.1
PIEDMONT NATURAL GAS COMPANY, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
executive officer of PIEDMONT NATURAL GAS COMPANY, INC., a corporation organized
under the laws of the State of North Carolina, does hereby make, constitute and
appoint David J. Dzuricky, his true and lawful attorney-in-fact, with full power
of substitution, to (i) execute, deliver and file, on his behalf and in his name
and in his capacity as set forth below, a Registration Statement on Form S-3
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, together with any and all exhibits thereto and any and all other
documents in support thereof or supplemental thereto, with respect to the
registration of and continuous offering of unsecured notes, debentures and other
evidences of indebtedness of the Corporation under the Registration Statement on
Form-3, and any and all further amendments to such Registration Statement, and
(ii) execute any and all applications, registration statements, notices and
other documents necessary or advisable to comply with applicable state
securities and blue sky laws and regulations, and to file the same together with
all other exhibits and documents in connection therewith, with the appropriate
state securities and blue sky authorities; and does hereby grant to said
attorney-in-fact power and authority to do and perform each and every act and
thing whatsoever as said attorney-in-fact may deem necessary or advisable to
carry out fully the intent of this instrument, to the same extent and with the
same effect as the undersigned might or could do personally, or in his capacity
as set forth below; and the undersigned does hereby ratify and confirm all acts
and things which said attorney-in-fact may do or cause to be done by virtue of
this instrument.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 2nd
day of May, 1995.
/s/ MURIEL W. HELMS
------------------------------------
Director
STATE OF NORTH CAROLINA
-------------------------------------
COUNTY OF MECKLENBURG
------------------------------------
This is to certify that before me personally came MURIEL W. HELMS known to me
to be the individual described in and who executed the foregoing Power of
Attorney, and he duly acknowledged that he executed same, this 2nd day of
May, 1995.
/s/ PATRICIA COX VISER
------------------------------------
Notary Public
My commission expires:
September 1, 1998
- ------------------------------------
<PAGE> 4
EXHIBIT 24.1
PIEDMONT NATURAL GAS COMPANY, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
executive officer of PIEDMONT NATURAL GAS COMPANY, INC., a corporation organized
under the laws of the State of North Carolina, does hereby make, constitute and
appoint David J. Dzuricky, his true and lawful attorney-in-fact, with full power
of substitution, to (i) execute, deliver and file, on his behalf and in his name
and in his capacity as set forth below, a Registration Statement on Form S-3
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, together with any and all exhibits thereto and any and all other
documents in support thereof or supplemental thereto, with respect to the
registration of and continuous offering of unsecured notes, debentures and other
evidences of indebtedness of the Corporation under the Registration Statement on
Form-3, and any and all further amendments to such Registration Statement, and
(ii) execute any and all applications, registration statements, notices and
other documents necessary or advisable to comply with applicable state
securities and blue sky laws and regulations, and to file the same together with
all other exhibits and documents in connection therewith, with the appropriate
state securities and blue sky authorities; and does hereby grant to said
attorney-in-fact power and authority to do and perform each and every act and
thing whatsoever as said attorney-in-fact may deem necessary or advisable to
carry out fully the intent of this instrument, to the same extent and with the
same effect as the undersigned might or could do personally, or in his capacity
as set forth below; and the undersigned does hereby ratify and confirm all acts
and things which said attorney-in-fact may do or cause to be done by virtue of
this instrument.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 6th
day of May, 1995.
/s/ JOHN E. SIMKINS, JR.
------------------------------------
Director
STATE OF MARYLAND
-------------------------------
COUNTY OF BALTIMORE
------------------------------
This is to certify that before me personally came JOHN E. SIMKINS, JR. known to
me to be the individual described in and who executed the foregoing Power of
Attorney, and he duly acknowledged that he executed same, this 6th day of
May, 1995.
/s/ ALICE W. GROFF
----------------------------------
Notary Public
My commission expires:
April 1, 1999
- ---------------------------------
<PAGE> 5
EXHIBIT 24.1
PIEDMONT NATURAL GAS COMPANY, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
executive officer of PIEDMONT NATURAL GAS COMPANY, INC., a corporation organized
under the laws of the State of North Carolina, does hereby make, constitute and
appoint David J. Dzuricky, his true and lawful attorney-in-fact, with full power
of substitution, to (i) execute, deliver and file, on his behalf and in his name
and in his capacity as set forth below, a Registration Statement on Form S-3
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, together with any and all exhibits thereto and any and all other
documents in support thereof or supplemental thereto, with respect to the
registration of and continuous offering of unsecured notes, debentures and other
evidences of indebtedness of the Corporation under the Registration Statement on
Form-3, and any and all further amendments to such Registration Statement, and
(ii) execute any and all applications, registration statements, notices and
other documents necessary or advisable to comply with applicable state
securities and blue sky laws and regulations, and to file the same together with
all other exhibits and documents in connection therewith, with the appropriate
state securities and blue sky authorities; and does hereby grant to said
attorney-in-fact power and authority to do and perform each and every act and
thing whatsoever as said attorney-in-fact may deem necessary or advisable to
carry out fully the intent of this instrument, to the same extent and with the
same effect as the undersigned might or could do personally, or in his capacity
as set forth below; and the undersigned does hereby ratify and confirm all acts
and things which said attorney-in-fact may do or cause to be done by virtue of
this instrument.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 16th
day of May, 1995.
/s/ JERRY W. AMOS
------------------------------------
Director
STATE OF NORTH CAROLINA
---------------------------------
COUNTY OF MECKLENBURG
--------------------------------
This is to certify that before me personally came JERRY W. AMOS known to me to
be the individual described in and who executed the foregoing Power of
Attorney, and he duly acknowledged that he executed same, this 16th day of
May, 1995.
/s/ REBECCA N. WYNNE
------------------------------------
Notary Public
My commission expires:
April 20, 1998
- ------------------------------------
<PAGE> 6
EXHIBIT 24.1
PIEDMONT NATURAL GAS COMPANY, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
executive officer of PIEDMONT NATURAL GAS COMPANY, INC., a corporation organized
under the laws of the State of North Carolina, does hereby make, constitute and
appoint David J. Dzuricky, his true and lawful attorney-in-fact, with full power
of substitution, to (i) execute, deliver and file, on his behalf and in his name
and in his capacity as set forth below, a Registration Statement on Form S-3
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, together with any and all exhibits thereto and any and all other
documents in support thereof or supplemental thereto, with respect to the
registration of and continuous offering of unsecured notes, debentures and other
evidences of indebtedness of the Corporation under the Registration Statement on
Form-3, and any and all further amendments to such Registration Statement, and
(ii) execute any and all applications, registration statements, notices and
other documents necessary or advisable to comply with applicable state
securities and blue sky laws and regulations, and to file the same together with
all other exhibits and documents in connection therewith, with the appropriate
state securities and blue sky authorities; and does hereby grant to said
attorney-in-fact power and authority to do and perform each and every act and
thing whatsoever as said attorney-in-fact may deem necessary or advisable to
carry out fully the intent of this instrument, to the same extent and with the
same effect as the undersigned might or could do personally, or in his capacity
as set forth below; and the undersigned does hereby ratify and confirm all acts
and things which said attorney-in-fact may do or cause to be done by virtue of
this instrument.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 9th
day of May, 1995.
/s/ SAM J. DIGIOVANNI
------------------------------------
Director
STATE OF ILLINOIS
---------------------------------
COUNTY OF WILL
--------------------------------
This is to certify that before me personally came SAM J. DIGIOVANNI known to me
to be the individual described in and who executed the foregoing Power of
Attorney, and he duly acknowledged that he executed same, this 9th day of
May, 1995.
/s/ SAMUEL JOHNSON
------------------------------------
Notary Public
My commission expires:
May 3, 1996
- ------------------------------------
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility of a Trustee pursuant to
Section 305 (b)(2) ____
_______________________
CITIBANK, N.A.
(Exact name of trustee as specified in its charter)
13-5266470
(I.R.S. employer
identification no.)
399 Park Avenue, New York, New York 10043
(Address of principal executive office) (Zip Code)
_______________________
PIEDMONT NATURAL GAS COMPANY, INC.
(Exact name of obligor as specified in its charter)
North Carolina 56-0556998
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1915 Rexford Road
Post Office Box 33068
Charlotte, NC 28233
(Address of principal executive office) (Zip Code)
_______________________
Debt Securities
(Title of the indenture securities)
<PAGE> 2
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency, Washington, D.C.
Federal Reserve Bank of New York, New York, NY
33 Liberty Street,
New York, NY
Federal Deposit Insurance Corporation
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
Item 16. List of Exhibits.
List below all exhibits filed as a part of this Statement of
Eligibility.
Exhibits identified in parenthese below, on file with the
Commission, are incorporated herein by reference as exhibits
hereto.
Exhibit 1 - Copy of Articles of Association of the Trustee,
as now in effect. (Exhibit 1 to T-1 to
Registration Statement No. 2-79983)
Exhibit 2 - Copy of certificate of authority of the Trustee to
commence business. (Exhibit 2 to T-1 to
Registration Statement No. 2-29577)
Exhibit 3 - Copy of authorization of the Trustee to exercise
corporate trust powers. (Exhibit 3 to T-1 to
Registration Statement No. 2-55519)
2
<PAGE> 3
Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit
4 to T-1 to Registration Statement No. 33-34988)
Exhibit 5 - Not applicable.
Exhibit 6 - The consent of the Trustee required by Section
321(b) of the Trust Indenture Act of 1939.
(Exhibit 6 to T-1 to Registration Statement
No. 33-19227.)
Exhibit 7 - Copy of the latest Report of Condition of
Citibank, N.A. (as of December 31, 1994 - attached)
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
__________________
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Citibank, N.A., a national banking association organized and existing
under the laws of the United States of America, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York and State of New York, on the 15th day
of May, 1995.
CITIBANK, N.A.
By /s/ Carol Ng
------------------------
Carol Ng
Assistant Vice President
3
<PAGE> 4
Charter No. 1461
Comptroller of the Currency
Northeastern District
REPORT OF CONDITION
CONSOLIDATING
DOMESTIC AND FOREIGN
SUBSIDIARIES OF
CITIBANK, N. A.
of New York in the State of New York, at the close of business
on December 31, 1994, published in response to call made by
Comptroller of the Currency, under Title 12, United States Code,
Section 161. Charter Number 1461 Comptroller of the Currency
Northeastern District.
<TABLE>
<S> <C>
ASSETS
THOUSANDS
OF DOLLARS
Cash and balances due from depository
institutions:
Noninterest-bearing balances
and currency and coin . . . . . . . . . . . . . . . . . . . $ 6,759,000
Interest-bearing balances. . . . . . . . . . . . . . . . . . 7,201,000
Securities:
Held-to-maturity securities. . . . . . . . . . . . . . . . . 3,918,000
Available-for-sale securities. . . . . . . . . . . . . . . . 11,963,000
Federal funds sold and securities
purchased under agreements to
resell in domestic offices of the
bank and of its Edge and Agreement
subsidiaries, and in IBFs:
Federal funds sold. . . . . . . . . . . . . . . . . . . . . . 4,427,000
Securities purchased under
agreements to resell. . . . . . . . . . . . . . . . . . . . . 1,114,000
Loans and lease financing receivables:
Loans and leases, net of unearned
income. . . . . . . .$128,902,000
LESS: Allowance for loan
and lease losses. . . . 3,986,000
---------
Loans and leases, net of unearned
income and allowance. . . . . . . . . . . . . . . . . . . . 124,916,000
Assets held in trading accounts . . . . . . . . . . . . . . . . 35,573,000
Premises and fixed assets (including
capitalized leases) . . . . . . . . . . . . . . . . . . . . . 3,192,000
Other real estate owned . . . . . . . . . . . . . . . . . . . . 1,967,000
Investments in unconsolidated
subsidiaries and associated
companies . . . . . . . . . . . . . . . . . . . . . . . . . . 998,000
Customers' liability to this bank
on acceptances outstanding. . . . . . . . . . . . . . . . . . 1,420,000
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . 15,000
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . 7,024,000
------------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . $210,487,000
============
LIABILITIES
Deposits
In domestic offices . . . . . . . . . . . . . . . . . . . . . $ 33,727,000
Noninterest-bearing . $ 12,509,000
Interest-bearing. . . 21,218,000
------------
In foreign offices, Edge and Agreement
subsidiaries, and IBFs . . . . . . . . . . . . . . . . . . . 108,207,000
Noninterest-bearing. . . 7,180,000
Interest-bearing . . . 101,027,000
-----------
Federal funds purchased and securities
sold under agreements to repurchase in
domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in
IBFs:
Federal funds purchased. . . . . . . . . . . . . . . . . . . . . 6,044,000
Securities sold under
agreements to repurchase . . . . . . . . . . . . . . . . . . . . 992,000
Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . 21,458,000
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
Other borrowed money:
With original maturity of one
year or less . . . . . . . . . . . . . . . . . . . 7,803,000
With original maturity of more
than one year . . . . . . . . . . . . . . . . . . 3,895,000
Mortgage indebtedness and obligations
under capitalized leases . . . . . . . . . . . . . 99,000
Bank's liability on acceptances ex-
ecuted and outstanding . . . . . . . . . . . . . . 1,440,000
Notes and debentures subordinated
to deposits . . . . . . . . . . . . . . . . . . . 5,700,000
Other liabilities . . . . . . . . . . . . . . . . . . . . 7,226,000
------------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . $196,591,000
------------
EQUITY CAPITAL
Common stock. . . . . . . . . . . . . . . . . . . . . . . $751,000
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . 6,620,000
Undivided profits and capital re-
serves . . . . . . . . . . . . . . . . . . . . 6,945,000
Net unrealized holding gains (losses)
on available-for-sale securities . . . . . . . . . 156,000
Cumulative foreign currency
translation adjustments . . . . . . . . . . . . . (576,000)
------------
TOTAL EQUITY CAPITAL . . . . . . . . . . . . . . . . . . $ 13,896,000
------------
TOTAL LIABILITIES AND
EQUITY CAPITAL . . . . . . . . . . . . . . . . . . $210,487,000
============
</TABLE>
I, Roger W. Trupin, Controller of the above-named bank do hereby declare
that this Report of Condition is true and correct to the best of my knowledge
and belief.
ROGER W. TRUPIN
We, the undersigned directors, attest to the correctness of this Report
of Condition. We declare that it has been examined by us, and to the best of
our knowledge and belief has been prepared in conformance with the instructions
and is true and correct.
CHRISTOPHER J. STEFFEN }
PAUL J. COLLINS } Directors
PEI-YUAN CHIA }
