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EXHIBIT 1.3
$[------------]
PIEDMONT NATURAL GAS COMPANY, INC.
MEDIUM-TERM NOTES, SERIES [____]
AGENCY AGREEMENT
-------------------, [---]
[Names and Addresses 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 $[________] aggregate
principal amount of its Medium-Term Notes, Series [_], Due Not Less Than Nine
Months from Date of Issue registered under the registration statement 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 statement 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 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:
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(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 a registration statement on such form (No. 33-[ ]),
including a prospectus, relating to debt securities of the Issuer,
including the Securities (the "Registered Securities"), which have
become effective under the Act. Such registration statement, as amended
as of the Closing Date (as defined in Section 3(e) hereof), is
hereinafter referred to as the "Registration Statement", and the
prospectus included in such Registration Statement, 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 Statement, as it
may be amended or supplemented, meets the requirements set forth in
Rule 415(a)(1)(x) and (a)(2) under the Act and complies in all material
respects with said Rule.
(b) On the effective date of the Registration
Statement relating to the Registered Securities, such Registration
Statement conformed in all respects to the requirements of the Act, the
Rules and Regulations, the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act") and the rules and regulations under the Trust
Indenture Act (the "Trust Indenture Act 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 Statement 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 (the Closing Date and each such time being herein sometimes
referred to as a "Representation Date"), the Registration Statement 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, in light of the circumstances in which they
were made, 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 Trust
Indenture Act Rules and Regulations.
(c) The financial statements of the Issuer and its
subsidiaries set forth in the Registration Statement 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 as applied in the United
States consistently applied throughout the periods involved (except as
otherwise stated therein).
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(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 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 Statement 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 Statement or Prospectus,
or to be filed as an exhibit, which is not described or filed as
required, and the descriptions in the Registration Statement 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.
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(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.
(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
Statement 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 Statement are good and valid except for and subject
only to such defects as may be set forth or referred to in the
Registration Statement, 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 (i) 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, and, in the case of such sales, no commission will be payable to the
Agents with respect to such sales or (ii) soliciting and accepting offers to
purchase Registered Securities directly on its own behalf in transactions with
persons other than the Agents, and, in the case of any such sales not resulting
from a solicitation made by any Agent, no commission will be payable to the
Agents with respect to such sale.
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(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 Statement 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.
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
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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.
(e) The documents required to be delivered by Section 5 hereof
shall be delivered at the office of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, 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 Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, counsel
for the Agents, one (1) signed copy and three conformed copies of the
Registration Statement, 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 Statement 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 Statement 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 Statement or the Prospectus, it
will promptly advise each Agent by telephone (with confirmation in
writing) and, 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
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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
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(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 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 Statement, (ii) the effective date of the most
recent post-effective amendment to the Registration Statement 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
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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 Statement, 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 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
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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 Statement 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 Statement 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 Statement 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 Statement 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 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 Xxxxxxxxxx.
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(x) Xx the Closing Date, the Agents shall have
received an opinion, dated the Closing Date, of Nelson, Mullins, Xxxxx
& Scarborough, 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 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,
the Master Note has been duly executed by the Company 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 Agency Agreement, and communicated to the Trustee as
provided in the Officer's Certificate delivered pursuant to
Section 2.01 and 2.04 of 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 have been
duly issued and 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
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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
Statement 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
Statement or Prospectus, or to be filed as an exhibit, which
is not described or filed as required; and the descriptions in
the Registration Statement 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 Statement has 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
Statement 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
Statement 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
Statement 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
data contained in the Registration Statement or the Prospectus
and that such counsel may rely solely on certificates of
officers of the Issuer with respect to statistical data
contained in the Registration Statement or the Prospectus;
(vi) The Issuer's authorized equity
capitalization is as set forth in the Prospectus (if contained
therein);
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(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 Prospectus or 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);
(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
Prospectus or 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 Statement 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 Statement are
good and valid except for and subject only to such defects as
may be set forth or referred to in the Registration Statement,
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
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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.
In rendering such opinion, such counsel may (A)
state, except as to certain matters involving the absence of the need
to obtain the approvals of the South Carolina Public Service Commission
and the Tennessee Regulatory Authority for the transactions
contemplated herein, its opinion is limited to the federal laws of the
United States and the laws of the State of North Carolina and (B) rely,
as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Issuer and public officials.
(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 Statement 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 Statement 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 as applied
in the United States;
(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
(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.
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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 Xxxxxx,
Xxxxxxxxxx & Sutcliffe LLP, 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 Statement,
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 their, to
pass upon such matters. In rendering such opinion, Xxxxxx, Xxxxxxxxxx &
Sutcliffe LLP may rely as to the matters relating to state regulatory
consents and approvals upon the opinion of Nelson, Mullins, Xxxxx &
Scarborough, 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 Xxxxx'x Investors
Service Inc. ("Moody's") or Standard & Poor's Ratings Group, a division
of XxXxxx-Xxxx, Inc. ("S&P") intends to reduce, or is considering a
reduction in, the ratings of any of the Issuer's debt securities unless
Moody's or S&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 and S&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:
(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 Statement 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
Statement.
(b) Each time that the Registration Statement 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
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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 Statement 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 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
Statement 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 Statement 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
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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
Statement 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 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 Statement, 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
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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 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 Statement, 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 as Agents 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
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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 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 (ii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii). No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to, or an admission of, fault, culpability or a failure
to act, by or on behalf of any indemnified party.
(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 treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations
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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 Statement as about to become a director of the Issuer), to each
officer of the Issuer who has signed the Registration Statement 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 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
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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.
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 Statement, 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 Nelson, Mullins,
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Xxxxx & Xxxxxxxxxxx, 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 Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, 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 Xxxxx'x, 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.
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 0000 Xxxxxxx Xxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxx X. Xxxxx, 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
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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.
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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:
24
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EXHIBIT A
The Issuer agrees to pay each Agent a commission equal to the following
percentage of the principal amount of Securities sold to purchasers solicited by
such Agent:
Commission Rate
(as a percentage of
Term principal amount)
---- -----------------
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150
From 18 months to less than 2 years .200
From 2 years to less than 3 years .250
From 3 years to less than 4 years .350
From 4 years to less than 5 years .450
From 5 years to less than 6 years .500
From 6 years to less than 7 years .550
From 7 years to less than 10 years .600
From 10 years to less than 15 years .625
From 15 years to less than 20 years .700
From 20 years to 30 years .750
Greater than 30 years To be determined at the
time of sale
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EXHIBIT B
ADMINISTRATIVE PROCEDURES
X-0
00
XXXXXXX X
XXXXXXXX AGREEMENT
_________, 200_
Piedmont Natural Gas Company, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxx X. Xxxxx, Vice President
and Treasurer
The undersigned agrees to purchase the following principal amount of
the Securities described in the Agency Agreement dated _________, 200_ (the
"Agency Agreement"):
Principal Amount $________________
Interest Rate ___%
Maturity Date ____________
Discount __% of Principal Amount
Price to be paid to Issuer (in
immediately available funds) $________________
Commission to Agent $________________
Settlement Date __________
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 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
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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 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,
C-2
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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.
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:
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