Exhibit 1.1
PIEDMONT NATURAL GAS COMPANY, INC.
DEBT SECURITIES
UNDERWRITING AGREEMENT
__________ __, 200_
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As [Representative(s) of] the Several Underwriters,
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Gentlemen:
Piedmont Natural Gas Company, Inc., a North Carolina
corporation (the "Company"), confirms its agreement with the several
Underwriters listed in Schedule A hereto (the "Underwriters", which term may
refer to a single Underwriter if only one is listed in Schedule A) as follows:
1. Description Of Securities. The Company proposes to
issue and sell to the several Underwriters securities of the title, amount and
particular terms set forth or referred to in Schedule B hereto ("Securities").
The Securities are to be issued under the Indenture, dated as of April 1, 1993,
between Piedmont Natural Gas Company, Inc., a New York corporation (the
"Predecessor Company"), and Citibank, N.A., as trustee (the "Trustee"), as
amended by the First Supplemental Indenture, dated as of February 25, 1994,
among the Company, the Predecessor Company and the Trustee, and the Second
Supplemental Indenture, dated as of June 15, 2003, between the 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:
(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 offering and sale of the Securities, including a related
preliminary prospectus, have been prepared by the Company in conformity with
the requirements of the Act, the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and the rules and regulations ("Rules and Regulations") of the
Securities and Exchange Commission ("Commission") thereunder, filed with the
Commission and become effective. The registration statements and prospectus may
have been amended or supplemented prior to the date of this Agreement; if any
such amendment or supplement was made, such amendment or
supplement was filed with the Commission, and any such amendment has become
effective. No stop order suspending the effectiveness of the registration
statements 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 so prepared and will be filed pursuant to
Rule 424(b) of the Act. The Company has delivered to you and counsel for the
Underwriters copies of the registration statements and prospectus, any such
amendment or supplement, the Prospectus 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 counsel for the
Underwriters and three conformed copies thereof for you). The registration
statements, as they may have heretofore been amended or supplemented is
referred to herein as the "Registration Statements", 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, the Preliminary Prospectus 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), complied or will comply in all
material respects with the requirements of the Act, the Trust Indenture Act,
the Exchange 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 therein or necessary to make the statements therein not
misleading; the Preliminary Prospectus, 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 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 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
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periods therein specified; said financial statements have been prepared in
conformity with accounting principles generally accepted in the United States
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).
(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, 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
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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 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 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 (the "Holding Company Act")] [a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended (the "Holding Company Act") that is exempt from all
provisions of the Holding Company Act, except Section 9(a)(2) thereof, by order
of the Commission pursuant to Section 3(a)(5) thereof. Neither the execution,
delivery and performance by the Company of this Agreement or the issuance of
the Securities violates any provision of the Holding Company Act or any rules
or regulations thereunder].
(m) No holders of securities of the Company have rights
to registration of such securities under the Registration Statements.
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.
The Securities to be purchased by the Underwriters will be
delivered by the Company to you for the accounts of the several Underwriters at
the office specified in Schedule
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B hereto against payment of the purchase price therefor by the method, in the
funds, on the date and at the times specified in such Schedule B, or at such
other time not later than eight full business days thereafter as you and the
Company determine, such time being herein referred to as the "Closing Date". If
Schedule B indicates that the Securities are to be delivered in definitive
form, such Securities shall be in such authorized denominations and registered
in such names as you may request upon at least two business days' prior notice
to the Company and will be made available for checking and packaging at the
office at which they are to be delivered at the Closing Date (or such other
office as may be specified for that purpose in Schedule B) at least one
business day prior to the Closing Date. If Schedule B indicates that the
Securities are to be delivered in global book-entry form, such Securities shall
be in the denominations specified in the applicable letter of representations
between the Company, the Trustee and The Depository Trust Company ("DTC"),
shall be registered in the name of DTC or a nominee of DTC and shall be made
available for checking at the office at which they are to be delivered at the
Closing Date (or such other office as may be specified for that purpose in
Schedule B) at least one business day prior to the Closing Date.
It is understood that you, acting individually and not in a
representative capacity, may (but shall not be obligated to) make payment to
the Company on behalf of any other Underwriter for Securities to be purchased
by such Underwriter. Any such payment by you shall not relieve any such
Underwriter of any of its obligations hereunder.
The Company will pay to you, at the Closing Date, for the
account of each Underwriter any commission or other compensation that is
specified in Schedule B hereto. Such payment will be made in the manner and
type of funds specified in Schedule B, or to the extent provided 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 a 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 a 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 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
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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 a 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 the Registration Statements or the Prospectus
to comply with the Act the Company will promptly notify you and will amend or
supplement the Registration Statements 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 and
counsel for the Underwriters, without charge, one signed and three conformed
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 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.
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(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.
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 the
Registration Statements 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 the Registration Statements or
the Prospectus or otherwise) shall have been complied with to your
satisfaction.
(b) No Underwriter shall have advised the Company that
the Registration Statements 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.
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(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 Nelson,
Mullins, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, L.L.P., counsel for the Company, dated the
Closing Date, to the effect that:
(i) The Company 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 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, when
executed, authenticated, issued and delivered in the manner provided
in the Indenture, 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
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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;
(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, the Exchange 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 Preliminary Prospectus or 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, 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
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its subsidiaries; and the Company has full power and authority to
authorize, issue and sell the Securities as contemplated by this
Agreement;
(ix) This Agreement has 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) The Company is [not a "holding company" or
a "subsidiary company" of a "holding company" within the meaning of
the Holding Company Act] [a "holding company" within the meaning of
the Holding Company Act that is exempt from all provisions of the
Holding Company Act, except Section 9(a)(2) thereof, by order of the
Commission pursuant to Section 3(a)(5) thereof. Neither the execution,
delivery and performance of this Agreement nor the issuance of the
Securities violates any provision of the Holding Company Act or any
rules or regulations thereunder.]
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. The
opinion to be delivered pursuant to Section 5(d)(x) may be given by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, Vice President, Corporate Counsel and Secretary of the Company, in
lieu of Nelson, Mullins, ▇▇▇▇▇ & Scarborough, L.L.P.
(e) You shall have received from ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to 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 Nelson,
Mullins, ▇▇▇▇▇ & Scarborough, L.L.P., referred to above as to all matters
governed by North Carolina law, and may rely as to the execution and
authentication of the Securities and the execution of the Indenture on
certificates of the Trustee.
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(f) At or prior to the time of execution of this
Agreement and at the Closing Date, you shall have received a letter from
Deloitte & Touche LLP, dated the date of delivery thereof, to the effect set
forth in Exhibit I hereto.
(g) You shall have received from the Company a
certificate, signed by the President and Chief Executive Officer 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 the Registration Statements 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 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.
(i) At or prior to the time of execution of this
Agreement and at the Closing Date, you shall also have received a letter from
Deloitte & Touche LLP, dated the date of delivery thereof, regarding the
financial statements and other financial information of North Carolina Natural
Gas Corporation included or incorporated by reference in the Prospectus. Such
letter shall be in substantially the form of the letter from Deloitte & Touche
LLP regarding the Company's financial statements pursuant to Exhibit I hereto
or in such other form reasonably acceptable to you.
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 a
11
Registration Statement when such part became effective, or in a 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 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 a Registration Statement when such part became
effective, or in a 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
12
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 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
13
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 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
14
(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 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 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, 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 Schedule B 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.
12. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
15
[Remainder of page intentionally left blank]
16
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:
SCHEDULE A
AMOUNT OF SECURITIES
UNDERWRITER TO BE PURCHASED
----------- -------------------
-------------------
Total..................................... $
===================
SCHEDULE B
Registration Statements No. 333-_____ and 333- _____
Titles of Securities:
Amounts of Securities:
Purchase Price:
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:
Other terms:
EXHIBIT I
1. They are independent certified public accountants
with respect to the Company and its subsidiaries within the meaning of the Act
and the Exchange 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 accounting principles
generally accepted in the United States;
(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) the unaudited pro forma consolidated condensed
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 or the pro forma adjustments have not
been properly applied to the historical amounts in
the compilation of those statements;
(E) 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 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
(F) 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 (E) and (F) 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 I include any supplement thereto at the date of the letter.
