<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 30, 1997
REGISTRATION NO. 333-
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION NO. 33-59369
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
AND
POST-EFFECTIVE AMENDMENT NO. 1
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 or (I.R.S. Employer Identification No.)
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)
---------------------
WITH COPIES TO:
<TABLE>
<C> <C>
JERRY W. AMOS, ESQ. ARNOLD H. TRACY, ESQ.
AMOS & JEFFRIES, L.L.P. COUDERT BROTHERS
SUITE 1230 1114 AVENUE OF THE AMERICAS
230 NORTH ELM STREET NEW YORK, NEW YORK 10036-7703
GREENSBORO, NORTH CAROLINA 27401 (212) 626-4400
(910) 273-5569
</TABLE>
---------------------
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]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
------------------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2)(3) OFFERING PRICE(2)(3) FEE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities............................. $95,000,000 100% $95,000,000 $28,787.88
=============================================================================================================================
</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 $95,000,000.
(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. 1 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. 1 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. 1 SHALL BECOME EFFECTIVE ON SUCH DATE
AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
* 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. 33-59369 previously filed by the registrant. This
registration statement, which is a new registration statement, also
constitutes Post-Effective Amendment No. 1 to Registration Statement No.
33-59369, and such Post-Effective Amendment No. 1 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 an 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 APRIL 30, 1997
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 April , 1997.
<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: Citicorp 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. Such material may also be accessed electronically by
means of the Commission's home page on the Internet at http://www.sec.gov. 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, 1996;
and
(b) Quarterly Report on Form 10-Q for the quarter ended January 31,
1997.
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 615,000
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 567,000 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 and in the sale of propane and propane appliances to
over 48,500 customers in the Company's three-state service area. The Company is
also engaged in Tennessee in the retailing of residential and commercial gas
appliances.
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 Regulatory Authority
("TRA") 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, 1997, and each of the fiscal years of
the Company in the five-year period ended October 31, 1996:
<TABLE>
<CAPTION>
TWELVE MONTHS
ENDED YEARS ENDED OCTOBER 31,
JANUARY 31, ------------------------------------
1997 1996 1995 1994 1993 1992
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges (unaudited)(1)......... 3.27 3.15 2.84 2.91 3.28 3.16
</TABLE>
- ---------------
(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 March 31, 1997, the Company had issued and outstanding senior notes with
an aggregate principal amount of $176,000,000 and medium-term notes with an
aggregate principal amount of $225,000,000.
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 periods within which
the price or prices at which
4
<PAGE> 6
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.
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
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<PAGE> 7
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 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
6
<PAGE> 8
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.
Unless otherwise indicated in the Prospectus Supplement, the covenants
contained in the Indenture and the Securities would not necessarily afford
holders protection in the event of a highly leveraged or other transaction
involving the Company that may adversely affect holders.
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.
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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;
(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
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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.
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 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
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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.
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,
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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.
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% 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,
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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 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
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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 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.
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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% 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 three months prior to the first day on which the value is in
effect and no later than one 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 0.65 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 0.65 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 is based upon objective financial or
economic information. 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 variations in the qualified floating rate
(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.
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<PAGE> 17
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
Final regulations concerning the proper tax treatment of certain contingent
payment debt instruments (other than Variable Debt Securities and Debt
Securities subject to alternate payment schedule contingencies discussed above)
were issued in June 1996 and are applicable to contingent payment debt
instruments issued after August 12, 1996. Under the final regulations, original
issue discount on a contingent payment debt instrument is determined by
reference to a "comparable yield" which, in general, is the yield for fixed rate
debt instruments of the same issuer having similar terms and conditions,
including "the level of subordination, term, timing of payments, and general
market conditions." Once the "comparable yield" has been determined, a projected
payment schedule must be prepared which will generate the comparable yield and
original issue discount calculations are based on the projected payment
schedule. If actual payments are more or less than the projected payments,
corresponding upward or downward adjustments to income are made in the year of
actual payment. In the event the Company issues Debt Securities that are subject
to these regulations, it will prepare the necessary projected payment schedule
and furnish it to holders of such Debt Securities who will normally be bound
thereby. Holders of Debt Securities that are subject to the contingent payment
debt regulations should consult their own tax advisors concerning the
application of the regulations and the appropriate tax treatment of Debt
Securities classified as contingent payment debt instruments.
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 one 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
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<PAGE> 18
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% 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 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
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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) 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 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
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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 56,510 shares of the Company's Common Stock as of
March 31, 1997.
Certain legal matters in connection with the issuance of the Debt
Securities will be passed upon for any underwriters or agents by Coudert
Brothers, 1114 Avenue of the Americas, New York, New York 10036-7703.
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, 1996, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report 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............................. $ 28,787.88
Printing and engraving...................................... $ 35,000
Legal fees and expenses..................................... $ 65,000
Accounting fees and expenses................................ $ 25,000
Rating agency fees.......................................... $ 60,000
Blue Sky fees and expenses.................................. $ 2,500
Trustee's Fees and Expenses................................. $ 5,000
Miscellaneous expenses...................................... $ 5,000
-----------
Total.................................................. $226,287.88
===========
</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 incorporation or bylaws or by any
applicable resolution or contract upon receipt of an undertaking by or on
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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, criminal, administrative or investigative, whether
formal or informal, and any appeal therein (and any inquiry or investigation
that could
II-4
<PAGE> 25
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, respectively, 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> 26
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<S> <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
(incorporated by reference to Exhibit 4.1 of Form S-3
Registration Statement No. 33-59369 filed by the Registrant
on August 9, 1995)
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 (incorporated
by reference to Exhibit 4.2 of Form S-3 Registration
Statement No. 33-59369 filed by the Registrant on August 9,
1995)
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
(incorporated by reference to Exhibit 12 of Form 10-Q for
the quarterly period ended January 31, 1997)
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.
II-6
<PAGE> 27
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 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> 28
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. 1 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Charlotte, State of North
Carolina, on the 30th day of April, 1997.
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. 1 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 April 30, 1997
- ----------------------------------------------------- the Board, President
John H. Maxheim and Chief Executive
Officer
/s/ DAVID J. DZURICKY Senior Vice President -- April 30, 1997
- ----------------------------------------------------- Finance (Principal
David J. Dzuricky Financial Officer)
/s/ BARRY L. GUY Vice President and April 30, 1997
- ----------------------------------------------------- Controller (Principal
Barry L. Guy Accounting Officer)
JERRY W. AMOS* Director April 30, 1997
- -----------------------------------------------------
Jerry W. Amos
Director
- -----------------------------------------------------
C.M. Butler III
SAM J. DIGIOVANNI* Director April 30, 1997
- -----------------------------------------------------
Sam J. DiGiovanni
JOHN W. HARRIS* Director April 30, 1997
- -----------------------------------------------------
John W. Harris
MURIEL W. HELMS* Director April 30, 1997
- -----------------------------------------------------
Muriel W. Helms
JOHN F. MCNAIR III* Director April 30, 1997
- -----------------------------------------------------
John F. McNair III
</TABLE>
II-8
<PAGE> 29
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<C> <S> <C>
NED R. McWHERTER* Director April 30, 1997
- -----------------------------------------------------
Ned R. McWherter
WALTER S. MONTGOMERY, JR.* Director April 30, 1997
- -----------------------------------------------------
Walter S. Montgomery, Jr.
DONALD S. RUSSELL, JR.* Director April 30, 1997
- -----------------------------------------------------
Donald S. Russell, Jr.
JOHN E. SIMKINS, JR.* Director April 30, 1997
- -----------------------------------------------------
John E. Simkins, Jr.
*By: /s/ DAVID J. DZURICKY
-----------------------------------------------
David J. Dzuricky
(Attorney-in-Fact)
</TABLE>
II-9
<PAGE> 30
INDEX TO EXHIBITS
<TABLE>
<S> <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
(incorporated by reference to Exhibit 4.1 of Form S-3
Registration Statement No. 33-59369 filed by the Registrant
on August 9, 1995)
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 (incorporated
by reference to Exhibit 4.2 of Form S-3 Registration
Statement No. 33-59369 filed by the Registrant on August 9,
1995)
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
(incorporated by reference to Exhibit 12 of Form 10-Q for
the quarterly period ended January 31, 1997)
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.
<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 Coudert Brothers, counsel for
the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity
of the Securities, the Registration Statements, the Prospectus and
other related matters as you reasonably may request, and such counsel
shall have received such papers and information as they request to
enable them to pass upon such matters. In rendering their opinion,
such counsel may rely upon the opinion of Amos & Jeffries, L.L.P.,
referred to above as to all matters governed by North Carolina law.
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 (i) shall not relieve it from any liability which it may
have to any indemnified party under such subsection unless and to the extent
such failure prejudices the indemnifying party of substantial rights or
defenses and (ii) shall not relieve it, in any event, from any liability that
it may have to any indemnified party otherwise than under such subsection. In
case any such action shall be brought against any indemnified party, and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to appoint counsel satisfactory to such
indemnified party to represent the indemnified party in such action; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to defend such action on behalf of
such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to appoint
counsel to defend such action and approval by the indemnified party of such
counsel, the indemnifying party will not be
14
<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: Ted C. Coble, Vice President and
Treasurer. Notice to any Underwriter pursuant to Section 6 hereof shall be
mailed, delivered, telexed or telecopied and confirmed to such Underwriter's
address as it appears in such Underwriter's questionnaire or other notice
furnished to the Company in writing for the purpose of communications
hereunder. Any party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new address for
such purpose.
11. PARTIES. This Agreement shall inure to the benefit of
and be binding upon the Company and the Underwriters and their respective
successors and the controlling persons, officers and directors referred to in
Section 6 hereof, and no other person will have any right or obligation
hereunder. No purchaser of any Securities from any Underwriter shall be
construed a successor or assign by reason merely of such purchase.
In all dealings with the Company under this Agreement, you
shall act on behalf of each of the several Underwriters, and any action under
this Agreement taken by you or by any one of you designated in Schedule B
hereto will be binding upon all the Underwriters.
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. 33-59369 and 333-
-----
Titles of Securities:
Amounts of Securities:
Purchase Price:
Delayed Delivery:
Closing-
Office for delivery of Securities:
Office for payment for Securities:
Date and time of Closing:
Method of Payment:
Type of Funds:
Underwriting Commission/Discount-
Amount:
Method of payment:
Address for notices per Section 10:
Name of Underwriter to act per Section 11:
Form of Securities:
Particular terms of the Securities-
Interest:
Maturity:
<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, Executive Long-Term Incentive Plan and
Dividend Reinvestment and Stock Purchase Plan) or any increase
in short-term indebtedness or consolidated long-term debt or
any decrease in total common stock equity of the Company and
consolidated subsidiaries; or, at the date of the latest
available balance sheet read by such accountants, there was
any increase in consolidated net current liabilities or any
decrease in consolidated net assets, as compared with amounts
shown on the latest balance sheet included in the Prospectus;
or
(E) for the period from the date of the latest income statement
included in the Prospectus to the date of the latest
available income statement read by such accountants there were
any decreases, as compared with the corresponding period of
the previous year, in consolidated operating revenues, utility
operating income or net income;
except in all cases set forth in clauses (D) and (E) above for changes,
increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter.
5. They have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information contained in
the Prospectus (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the general
accounting records of the Company and its subsidiaries subject to the internal
controls of the Company's accounting system or are derived directly from such
records by analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures specified in
such letter and have found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as otherwise specified
in such letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included in the
Prospectus for purposes of this subsection. References to the Prospectus in
this Exhibit II include any supplement thereto at the date of the letter.
2
<PAGE> 1
EXHIBIT 1.2
$150,000,000
PIEDMONT NATURAL GAS COMPANY, INC.
MEDIUM-TERM NOTES, SERIES C
AGENCY AGREEMENT
________________, 1997
[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 C, 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. 33-59369 and
333-_____), 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 they 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 none 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 Coudert Brothers, 1114 Avenue of
the Americas, New York, New York 10036, 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 Coudert Brothers, 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
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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, claim, lien or encumbrance;
(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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<PAGE> 12
equity and rules of law governing and limiting the
availability of specific performance, injunctive relief and
other equitable remedies (regardless of whether such
enforceability is considered in a proceeding in equity or at
law);
(iii) Any series of Securities established on or
prior to the date of such opinion has been duly authorized and
established in conformity with the Indenture, and, when the
terms of a particular Security and of its issuance and sale
have been duly authorized and established by all necessary
corporate action in conformity with the Indenture, and such
Security has been duly completed, executed, authenticated and
issued in accordance with the Indenture and delivered against
payment as contemplated by this Agreement, such Security will
constitute a valid and legally binding obligation of the
Issuer enforceable in accordance with its terms, subject, as
to enforcement, to applicable bankruptcy, insolvency,
moratorium, fraudulent conveyance, reorganization, arrangement
or other similar laws now or hereafter in effect affecting the
rights of creditors generally and general principles of equity
and rules of law governing and limiting the availability of
specific performance, injunctive relief and other equitable
remedies (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and the
Securities, when so issued and delivered and sold, will
conform, in all material respects, to the description thereof
contained in the Prospectus, it being understood that such
counsel may assume that at the time of the issuance, sale and
delivery of each Security (a) the authorization of such series
will not have been modified or rescinded and there will not
have occurred any change in law affecting the validity,
legally binding character or enforceability of such Security,
and (b) that neither of the issuance, sale and delivery of any
Security, nor any of the terms of such Security, nor
compliance by the Issuer with such terms, will violate any
then applicable law, any agreement or instrument then binding
upon the Issuer or any restriction then imposed by any court
or governmental body having jurisdiction over the Issuer;
(iv) To the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Issuer or any of its subsidiaries of
a character required to be disclosed in the Registration
Statements by Item 103 of Regulation S-K which is not
disclosed in the Prospectus, there is no statute required to
be described in the Prospectus that is not described as
required, and there is no franchise, contract or other
document of a character required to be described in the
Registration Statements or Prospectus, or to be filed as an
exhibit, which is not described or filed as required; and the
descriptions in the Registration
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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 their 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 LLP 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, Executive Long-Term Incentive 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 Coudert Brothers,
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, Coudert Brothers 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 LLP (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 LLP 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 (i) will not
relieve it from any liability which it may have to any indemnified
party under subsection (a) or (b) above unless and to the extent such
failure prejudices the indemnifying party of substantial rights or
defenses and (ii) will not, in any event, relieve it from any
liability which it may have to any indemnified party otherwise
than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to appoint counsel satisfactory to such indemnified
party to represent the indemnified party in such action; provided,
however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such
indemnified
21
<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 Coudert Brothers,
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 C 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 ___________, 1997 (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
______________, 1997, 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 _____________, 1997, 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 ____________,
1997 (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 4.3
<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 C (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 C 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>
April 30, 1997
Piedmont Natural Gas Company, Inc.
1915 Rexford Road
Charlotte, North Carolina 28211
Re: Registration Statement on Form S-3 filed on April 30, 1997,
with respect to $95,000,000 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
$95,000,000 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.
April 30, 1997
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 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 report dated December
20, 1996, appearing in the Annual Report on Form 10-K of Piedmont Natural Gas
Company, Inc., for the year ended October 31, 1996, 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
April 30, 1997
<PAGE> 1
EXHIBIT 24.1a
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, their true and lawful attorney-in-fact, with full
power of substitution, to (i) execute, deliver and file, on their behalf and in
their name and in their 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 S-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
their 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 their hand this 14th
day of April, 1997.
/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 the undersigned Notary Public duly acknowledged that this person
executed this document, this 14th day of April, 1997.
/s/ JACK W. CLOER
------------------------------------
Notary Public
My commission expires:
April 28, 2003
- ------------------------------------
<PAGE> 2
EXHIBIT 24.1b
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, their true and lawful attorney-in-fact, with full
power of substitution, to (i) execute, deliver and file, on their behalf and in
their name and in their 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 S-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
their 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 their hand this 10th
day of April, 1997.
/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 the undersigned Notary Public duly acknowledged that this person
executed this document, this 10th day of April, 1997.
/s/ KAREN A. BASS
------------------------------------
Notary Public
My commission expires:
August 13, 2001
- ------------------------------------
<PAGE> 3
EXHIBIT 24.1c
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, their true and lawful attorney-in-fact, with full
power of substitution, to (i) execute, deliver and file, on their behalf and in
their name and in their 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 S-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
their 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 their hand this 11
day of April, 1997.
/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 the undersigned Notary Public duly acknowledged that this person
executed this document, this 11 day of April, 1997.
/s/ PATRICIA COX VISER
------------------------------------
Notary Public
My commission expires:
September 1, 1998
- ------------------------------------
<PAGE> 4
EXHIBIT 24.1d
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, their true and lawful attorney-in-fact, with full
power of substitution, to (i) execute, deliver and file, on their behalf and in
their name and in their 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 S-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
their 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 their hand this 17th
day of April, 1997.
/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 the undersigned Notary Public duly acknowledged that this person
executed this document, this 17th day of April, 1997.
/s/ DOUGLAS R. BROWN
------------------------------------
Notary Public
My commission expires:
December 1, 2000
- ------------------------------------
<PAGE> 5
EXHIBIT 24.1e
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, their true and lawful attorney-in-fact, with full
power of substitution, to (i) execute, deliver and file, on their behalf and in
their name and in their 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 S-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
their 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 their hand this
29th day of April, 1997.
/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 the undersigned Notary Public duly acknowledged that this person
executed this document, this 29th day of April, 1997.
/s/ Debra L. Brucki
------------------------------------
Notary Public
My commission expires:
December 18, 2000
- ------------------------------------
<PAGE> 6
EXHIBIT 24.1f
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, their true and lawful attorney-in-fact, with full
power of substitution, to (i) execute, deliver and file, on their behalf and in
their name and in their 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 S-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
their 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 their hand this 11
day of April, 1997.
/s/ SAM J. DIGIOVANNI
------------------------------------
Director
STATE OF FLORIDA
-------
COUNTY OF ORANGE
------
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 the undersigned Notary Public duly acknowledged that this person
executed this document, this 11th day of April, 1997.
/s/ JUDITH T. FURMAN
------------------------------------
Notary Public
My commission expires:
May 21, 2000
- ------------------------------------
<PAGE> 7
EXHIBIT 24.1g
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, their true and lawful attorney-in-fact, with full
power of substitution, to (i) execute, deliver and file, on their behalf and in
their name and in their 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 S-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
their 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 their hand this 10th
day of April, 1997.
/s/ W.S. MONTGOMERY, JR.
------------------------------------
Director
STATE OF SOUTH CAROLINA
--------------
COUNTY OF SPARTANBURG
-----------
This is to certify that before me personally came W.S. MONTGOMERY, JR. known
to me to be the individual described in and who executed the foregoing Power of
Attorney, and the undersigned Notary Public duly acknowledged that this person
executed this document, this 10th day of April, 1997.
/s/ PATRICIA J. TATE
------------------------------------
Notary Public
My commission expires:
March 31, 2002
- ------------------------------------
<PAGE> 8
EXHIBIT 24.1h
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, their true and lawful attorney-in-fact, with full
power of substitution, to (i) execute, deliver and file, on their behalf and in
their name and in their 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 S-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
their 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 their hand this 10th
day of April, 1997.
/s/ NED R. McWHERTER
------------------------------------
Director
STATE OF TENNESSEE
---------
COUNTY OF WEAKLEY
-------
This is to certify that before me personally came NED R. McWHERTER known
to me to be the individual described in and who executed the foregoing Power of
Attorney, and the undersigned Notary Public duly acknowledged that this person
executed this document, this 10 day of April, 1997.
/s/ MADELYN PRITCHETT
------------------------------------
Notary Public
My commission expires:
March 19, 2001
- ------------------------------------
<PAGE> 9
EXHIBIT 24.1i
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, their true and lawful attorney-in-fact, with full
power of substitution, to (i) execute, deliver and file, on their behalf and in
their name and in their 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 S-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
their 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 their hand this 14th
day of April, 1997.
/s/ JOHN W. HARRIS
------------------------------------
Director
STATE OF NORTH CAROLINA
--------------
COUNTY OF MECKLENBURG
-----------
This is to certify that before me personally came JOHN W. HARRIS known
to me to be the individual described in and who executed the foregoing Power of
Attorney, and the undersigned Notary Public duly acknowledged that this person
executed this document, this 14th day of April, 1997.
/s/ THERESA M. DICK
------------------------------------
Notary Public
My commission expires:
April 29, 2001
- ------------------------------------
<PAGE> 1
EXHIBIT 25.1
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 offices) (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:
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
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.
</TABLE>
(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 parentheses 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)
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.
<PAGE> 3
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, 1996 - 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 ____ day
of ______________, 1997.
CITIBANK, N.A.
By /s/ Carol Ng
-------------------------
Carol Ng
Vice President
<PAGE> 4
Citibank, N.A.
of New York in the State of New York, at the close of business on December 31,
1996, 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>
<CAPTION>
ASSETS
Thousands
of dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........................................................ $ 7,362,000
Interest-bearing balances ..................................................................................... 12,822,000
Held-to-maturity securities ................................................................................... 0
Available-for-sale securities ................................................................................. 23,558,000
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 ........................................................................................ 2,939,000
Securities purchased under agreements to resell ........................................................... 677,000
Loans and lease financing receivables:
Loans and Leases, net of unearned income ........................................... $154,979,000
LESS: Allowance for loan and lease losses .......................................... 4,382,000
------------
Loans and leases, net of unearned income, allowance, and reserve .............................................. 150,597,000
Trading assets ................................................................................................ 27,259,000
Premises and fixed assets (including capitalized leases) ...................................................... 3,606,000
Other real estate owned ....................................................................................... 824,000
Investments in unconsolidated subsidiaries and associated companies ........................................... 1,253,000
Customers' liability to this bank on acceptances outstanding .................................................. 2,077,000
Intangible assets ............................................................................................. 106,000
Other assets .................................................................................................. 7,926,000
------------
TOTAL ASSETS .................................................................................................. $241,006,000
============
LIABILITIES
Deposits:
In domestic offices ....................................................................................... $ 37,389,000
Noninterest-bearing ................................................................ $ 14,046,000
Interest-bearing ................................................................... 23,343,000
------------
In foreign offices, Edge and Agreement subsidiaries, and IBFs ................................................. 134,287,000
Noninterest-bearing ................................................................ 9,660,000
Interest-bearing ................................................................... 124,627,000
------------
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 ................................................................................... 3,907,000
Securities sold under agreements to repurchase ............................................................ 363,000
Trading liabilities ........................................................................................... 20,795,000
Other borrowed money:
With a remaining maturity of one year or less ............................................................. 8,955,000
With a remaining maturity of more than one year ........................................................... 4,471,000
Mortgage indebtedness and obligations under capitalized leases ................................................ 136,000
Bank's liability on acceptances executed and outstanding ...................................................... 2,104,000
Subordinated notes and debentures ............................................................................. 4,700,000
Other liabilities ............................................................................................. 7,665,000
------------
TOTAL LIABILITIES ............................................................................................. $224,772,000
============
EQUITY CAPITAL
Perpetual preferred stock and related surplus ................................................................ 0
Common stock ................................................................................................. $ 751,000
Surplus ...................................................................................................... 7,120,000
Undivided profits and capital reserves ....................................................................... 8,277,000
Net unrealized holding gains (losses) on available-for-sale securities ....................................... 673,000
Cumulative foreign currency translation adjustments .......................................................... (587,000)
------------
TOTAL EQUITY CAPITAL ......................................................................................... $ 16,234,000
------------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK, AND EQUITY CAPITAL .......................................... $241,006,000
============
</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
CONTROLLER
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.
PAUL J. COLLINS
JOHN S. REED
WILLIAM R. RHODES
DIRECTORS
