UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 


 

Date of Report (Date of earliest event reported): May 21, 2019

 

PIEDMONT NATURAL GAS COMPANY, INC.

(Exact Name of Registrant as Specified in its Charter)

 

North Carolina

 

1-6196

 

56-556998

(State or Other Jurisdiction
of Incorporation or Organization)

 

(Commission File Number)

 

(IRS Employer
Identification No.)

 

4720 Piedmont Row Drive, Charlotte, North Carolina 28210

(Address of Principal Executive Offices, including Zip Code)

 

(704) 364-3120

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o             Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o             Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o             Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o             Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

o    Emerging growth company

 

o             If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class:

 

Trading Symbol(s)

 

Name of each exchange on which registered:

 

 

 

 

 

None

 

 

 


 

Item 8.01.  Other Events.

 

On May 24, 2019, Piedmont Natural Gas Company, Inc. (the “Company”) consummated the issuance and sale of the securities described below pursuant to an underwriting agreement, dated May 21, 2019 (the “Underwriting Agreement”), with BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, SMBC Nikko Securities America, Inc. and U.S. Bancorp Investments, Inc., as representatives of the several underwriters named therein (the “Underwriters”), pursuant to which the Company agreed to issue and sell to the Underwriters $600,000,000 aggregate principal amount of the Company’s 3.50% Senior Notes due 2029 (the “Securities”). The Securities were sold to the Underwriters at a discount to their principal amount.  The Securities were issued under the Indenture, dated as of April 1, 1993, with The Bank of New York Mellon Trust Company, N.A., as successor to Citibank, N.A. (the “Trustee”), as supplemented from time to time, including by the Ninth Supplemental Indenture (the “Supplemental Indenture”), dated as of May 24, 2019, between the Company and the Trustee, relating to the Securities (collectively, the “Indenture”).  The disclosure in this Item 8.01 is qualified in its entirety by the provisions of the Indenture, the Supplemental Indenture, which together with the form of global notes evidencing the Securities, is filed as Exhibit 4.1 hereto, and the Underwriting Agreement, which is filed as Exhibit 99.1 hereto.  Such exhibits are incorporated herein by reference.  Also, in connection with the issuance and sale of the Securities, the Company is filing a legal opinion regarding the validity of the Securities as Exhibit 5.1 to this Form 8-K for the purpose of incorporating the opinion into the Company’s Registration Statement, as amended No. 333-213765-06.

 

Item 9.01.  Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit

 

Description

Exhibit 4.1

 

Ninth Supplemental Indenture dated as of May 24, 2019 between the Company and The Bank of New York Mellon Trust Company, N.A., as successor to Citibank, N.A. and forms of global notes

Exhibit 5.1

 

Opinion regarding validity of the Securities

Exhibit 23.1

 

Consent (included as part of Exhibit 5.1)

Exhibit 99.1

 

Underwriting Agreement, dated May 21, 2019, among the Company and BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, SMBC Nikko Securities America, Inc. and U.S. Bancorp Investments, Inc., as representatives of the several underwriters named therein

 

1


 

SIGNATURE

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

PIEDMONT NATURAL GAS COMPANY, INC.

 

 

Date: May 24, 2019

 

 

 

 

By:

/s/ Robert T. Lucas III

 

 

Name:

Robert T. Lucas III

 

 

Title:

Assistant Corporate Secretary

 

2


Exhibit 4.1

 

 

PIEDMONT NATURAL GAS COMPANY, INC.

 

AND

 

THE BANK OF NEW YORK MELLON

 

TRUST COMPANY, N.A., AS TRUSTEE

 

NINTH SUPPLEMENTAL INDENTURE

 

DATED AS OF MAY 24, 2019

 

SUPPLEMENT TO INDENTURE DATED AS OF APRIL 1, 1993

 

3.50% SENIOR NOTES, DUE 2029

 

 


 

TABLE OF CONTENTS(1)

 

 

Page

 

 

ARTICLE 1 3.50% Senior Notes Due 2029

2

 

 

SECTION 101. Establishment

2

 

 

SECTION 102. Definitions

3

 

 

SECTION 103. Payment of Principal and Interest

3

 

 

SECTION 104. Denominations

4

 

 

SECTION 105. Book-Entry Debt Securities

4

 

 

SECTION 106. Transfer

5

 

 

SECTION 107. Redemption at the Company’s Option

5

 

 

ARTICLE 2 Miscellaneous Provisions

6

 

 

SECTION 201. Concerning the Trustee

6

 

 

SECTION 202. Defeasance; Satisfaction and Discharge

6

 

 

SECTION 203. Sinking Fund

6

 

 

SECTION 204. Notices

6

 

 

SECTION 205. Miscellaneous

6

 

 

EXHIBIT A FORM OF NOTE

 

 

 

EXHIBIT B CERTIFICATE OF AUTHENTICATION

 

 


(1)  This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions.

 

i


 

THIS NINTH SUPPLEMENTAL INDENTURE (this “ Ninth Supplemental Indenture ”), dated as of May 24, 2019, between PIEDMONT NATURAL GAS COMPANY, INC. , a corporation organized and existing under the laws of the State of North Carolina (the “ Company ”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. , a national banking association duly organized and existing under the laws of the United States, as successor to Citibank, N.A. (the “ Trustee ”).

 

WITNESSETH:

 

WHEREAS , a predecessor to the Company has heretofore executed and delivered to the Trustee an Indenture dated as of April 1, 1993 (the “ Base Indenture ”, as amended by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture and the Fourth Supplemental Indenture (each as defined below), the “ Original Indenture ”);

 

WHEREAS , the Company has heretofore executed and delivered to the Trustee a First Supplemental Indenture dated as of February 25, 1994 (the “ First Supplemental Indenture ”) pursuant to which the Company assumed all of the obligations of its predecessor company under the Base Indenture;

 

WHEREAS , the Company has heretofore executed and delivered to the Trustee a Second Supplemental Indenture dated as of June 15, 2003 (the “ Second Supplemental Indenture ”) pursuant to which Section 4.07 (“ Limitation on Liens ”) of the Base Indenture was amended, applicable to all Series of Debt Securities issued after June 15, 2003;

 

WHEREAS , the Company has heretofore executed and delivered to the Trustee a Third Supplemental Indenture dated as of June 20, 2006 (the “ Third Supplemental Indenture ”) pursuant to which (i) the Company issued $200,000,000 in aggregate principal amount of its 6.25% Insured Quarterly Notes Series 2006 due 2036 and (ii) the Limitation on Liens and related definitions in Section 1.01 of the Base Indenture were amended, applicable to all series of Debt Securities issued on or after June 20, 2006;

 

WHEREAS , the Company has heretofore executed and delivered to the Trustee a Fourth Supplemental Indenture dated as of May 6, 2011 (the “ Fourth Supplemental Indenture ”) pursuant to which Section 5.03 of the Base Indenture was amended, applicable to all series of Debt Securities issued on or after May 6, 2011;

 

WHEREAS , the Company has heretofore executed and delivered to the Trustee a Fifth Supplemental Indenture dated as of August 1, 2013 pursuant to which the Company issued $300,000,000 in aggregate principal amount of its 4.65% Senior Notes due 2043;

 

WHEREAS , the Company has heretofore executed and delivered to the Trustee a Sixth Supplemental Indenture dated as of September 18, 2014 pursuant to which the Company issued $250,000,000 in aggregate principal amount of its 4.10% Senior Notes due 2034;

 

WHEREAS , the Company has heretofore executed and delivered to the Trustee a Seventh Supplemental Indenture dated as of September 14, 2015 pursuant to which the Company issued $150,000,000 in aggregate principal amount of its 3.60% Senior Notes due 2025;

 

WHEREAS , the Company has heretofore executed and delivered to the Trustee an Eighth Supplemental Indenture dated as of July 28, 2016 pursuant to which the Company issued $300,000,000 in aggregate principal amount of its 3.64% Senior Notes due 2046;

 


 

WHEREAS , the Original Indenture is incorporated herein by this reference and the Original Indenture, as heretofore supplemented and as further supplemented by this Ninth Supplemental Indenture, is herein called the “ Indenture ”;

 

WHEREAS , the Original Indenture provides that the Company and the Trustee may from time to time enter into indentures supplemental thereto to issue and establish the form or terms of a new series of Debt Securities;

 

WHEREAS , the Company proposes to issue under the Indenture a new series of Debt Securities; and

 

WHEREAS , the Company represents that all acts and things necessary to constitute this Ninth Supplemental Indenture and the Notes (as defined below), when executed by the Company and authenticated and delivered by the Trustee, the valid, binding and enforceable obligations of the Company have been done and performed, and the execution of this Ninth Supplemental Indenture has in all respects been duly authorized, and the Company, in the exercise of legal right and power in it vested, is executing this Ninth Supplemental Indenture.

 

NOW, THEREFORE , in consideration of the premises and of the mutual covenants herein contained and for other valuable consideration, the receipt whereof is hereby acknowledged, the parties have executed and delivered this Ninth Supplemental Indenture and the Company covenants and agrees with the Trustee as follows:

 

ARTICLE 1

 

3.50% Senior Notes Due 2029

 

SECTION 101.                                         Establishment There is hereby established a new series of Debt Securities to be issued under the Indenture, to be designated as the Company’s 3.50% Senior Notes Due 2029 (the “ Notes ”).

 

There are to be initially authenticated and delivered $600,000,000 aggregate principal amount of Notes; provided, however, that the authorized aggregate principal amount of the Notes may be increased above such amount without the consent of the Holders of any then outstanding Notes by a Board Resolution authorizing such increase; provided, however, that such additional Notes issued pursuant to such increase will be fungible with the initially issued Notes for U.S. Federal income tax purposes, and any such additional Notes issued in this manner will be consolidated with, and will form a single series with, the initially issued Notes.  The Notes shall be issued in definitive fully registered form.

 

The Notes shall be issued in the form of a Book-Entry Debt Security in substantially the form set out in Exhibit A hereto.  The Depository with respect to the Notes shall be The Depository Trust Company.

 

The form of the Trustee’s Certificate of Authentication for the Notes shall be in substantially the form set forth in Exhibit B hereto.

 

Each Note shall be dated the date of authentication thereof and shall bear interest from the date of original issuance thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for.

 

2


 

SECTION 102.                                         Definitions .   The following defined terms used herein shall, unless the context otherwise requires, have the meanings specified below.  Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Original Indenture.

 

Comparable Treasury Issue ” means the United States Treasury security selected by the Quotation Agent as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed (assuming, for this purpose, that the Notes matured on the Par Call Date), that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes.

 

Comparable Treasury Price ” means, with respect to any redemption date, (1) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (2) if the Quotation Agent obtains fewer than four of such Reference Treasury Dealer Quotations, the average of all such Reference Treasury Dealer Quotations as determined by the Company.

 

Interest Payment Dates ” means June 1 and December 1 of each year, commencing December 1, 2019.

 

Original Issue Date ” means May 24, 2019.

 

Par Call Date ” means March 1, 2029.

 

Quotation Agent ” means one of the Reference Treasury Dealers appointed by the Company.

 

Reference Treasury Dealer ” means (1) each of BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, a Primary Treasury Dealer (as defined below) selected by U.S. Bancorp Investments, Inc. and a Primary Treasury Dealers selected by SMBC Nikko Securities America, Inc., plus one other financial institution appointed by the Company at the time of any redemption, or their respective affiliates or successors, each of which is a primary U.S. Government securities dealer in the United States of America (a “ Primary Treasury Dealer ”); provided, however, that if any of the foregoing or their affiliates or successors shall cease to be a Primary Treasury Dealer, the Company shall substitute therefor another Primary Treasury Dealer.

 

Reference Treasury Dealer Quotations ” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such redemption date.

 

Stated Maturity ” means June 1, 2029.

 

Treasury Rate ” means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity or interpolated maturity (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

 

SECTION 103.                                         Payment of Principal and Interest .   The principal of the Notes shall be due at the Stated Maturity (unless earlier redeemed).  The unpaid principal amount of the Notes shall bear interest at the rate of 3.50% per annum until paid or duly provided for.  Interest shall be paid semi-annually in arrears on each Interest Payment Date to the Person in whose name the Notes are registered at

 

3


 

the close of business on the Record Date for such Interest Payment Date, provided that interest payable at the Stated Maturity of principal or on a redemption date as provided herein will be paid to the Person to whom principal is payable.  Any such interest that is not so punctually paid or duly provided for will forthwith cease to be payable to the Holders on such Record Date and will be paid to the Person in whose name the Notes are registered on a subsequent record date established for the payment of such defaulted interest by notice given by mail or on behalf of the Company to the Holders no less than fifteen (15) days preceding such subsequent record date, such record date to be not less than five (5) days preceding the date of payment of such defaulted interest or in any other lawful manner acceptable to the Trustee.

 

Payments of interest on the Notes will include interest accrued to but excluding the respective Interest Payment Date.  Interest payments for the Notes shall be computed and paid on the basis of a 360-day year of twelve 30-day months (and for any partial periods shall be calculated on the basis of the number of days elapsed in a 360-day year of twelve 30-day months).  In the event that any date on which interest is payable on the Notes is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), with the same force and effect as if made on the date the payment was originally payable.

 

Payment of the principal and interest due at the Stated Maturity or earlier redemption of the Notes shall be made upon surrender of the Notes at the Corporate Trust Office of the Trustee.  The principal of and interest on the Notes shall be paid in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  Payments of the principal and interest (including interest on any Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by wire transfer to the Holders entitled thereto who have provided appropriate wire transfer instructions to the Trustee, or by check mailed to the Holders of the Notes entitled thereto at their last addresses as they appear on the Debt Security Register or (ii) if the Notes are Book-Entry Debt Securities, the Depository, as Holder of the Notes, shall be entitled to receive payment of interest by wire transfer of immediately available funds.

 

SECTION 104.                                         Denominations .   The Notes may be issued in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

SECTION 105.                                         Book-Entry Debt Securities .   The Notes will be issued in the form of a Book-Entry Debt Security registered in the name of the Depository or its nominee.  Except under the limited circumstances described below, Notes represented by the Book-Entry Debt Security will not be exchangeable for, and will not otherwise be issuable as, Notes in definitive, non-global form.  The Book-Entry Debt Securities described above may not be transferred except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or to a successor Depository or its nominee.

 

Owners of beneficial interests in such a Book-Entry Debt Security will not be considered the Holders thereof for any purpose under the Indenture, and no Book-Entry Debt Security representing a Note shall be exchangeable, except for another Book-Entry Debt Security of like denomination and tenor to be registered in the name of the Depository or its nominee or to a successor Depository or its nominee.  The rights of Holders of such Book-Entry Debt Security shall be exercised only through the Depository.

 

Subject to the procedures of the Depository, a Book-Entry Debt Security shall be exchangeable for Notes registered in the names of persons other than the Depository or its nominee only if (i) the Depository notifies the Company that it is unwilling or unable to continue as a Depository for such Book-Entry Debt Security and no successor Depository shall have been appointed by the Company, or if at any time the Depository ceases to be a clearing agency registered under the Securities Exchange Act of 1934,

 

4


 

as amended, at a time when the Depository is required to be so registered to act as such Depository and no successor Depository shall have been appointed by the Company, in each case within 60 days after the Company receives such notice or becomes aware of such cessation, (ii) the Company in its sole discretion determines that such Book-Entry Debt Security shall be so exchangeable, or (iii) there shall have occurred an Event of Default with respect to the Notes.  Any Book-Entry Debt Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Notes registered in such names as the Depository shall direct.

 

SECTION 106.                                         Transfer .   No service charge will be made for the exchange or to register a transfer of Notes, but payment will be required of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.

 

The Company shall not be required to exchange or register a transfer of (a) Notes for a period of fifteen (15) days next preceding the mailing of the notice of any redemption of Notes to be redeemed, or (b) Notes selected, called or being called for redemption, except, in the case of Notes to be redeemed in part, the portion thereof not to be so redeemed.

 

SECTION 107.                                         Redemption at the Company’s Option .   Prior to the Par Call Date, the Company shall have the right to redeem the Notes, at its option, at any time in whole or in part and from time to time, at a redemption price calculated by the Company equal to the greater of:

 

(i)                                      100% of the principal amount of the Notes to be redeemed; and

 

(ii)                                   the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed that would be due if the Notes matured on the Par Call Date (exclusive of interest accrued as of the date of redemption), discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, plus 20 basis points;

 

plus, in each case, accrued and unpaid interest on the principal amount being redeemed to, but excluding, such redemption date.

 

On or after the Par Call Date, the Company shall have the right to redeem the Notes, at its option, at any time in whole or in part and from time to time, at a redemption price equal to 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest on the principal amount of the Notes being redeemed to, but excluding, such redemption date.

 

Notwithstanding the foregoing, installments of interest on the Notes that are due and payable on an Interest Payment Date falling on or prior to a redemption date shall be payable on such Interest Payment Date to the Holders as of the close of business on the relevant Record Date.

 

On or after the date of redemption, interest will cease to accrue on the Notes or portion of the Notes redeemed.  However, interest will continue to accrue if the Company defaults in the payment of the amount due upon redemption.

 

Notice of redemption to each Holder of the Notes shall be given by the Company, or, at the Company’s request, by the Trustee, in the manner provided in Section  3.02 of the Original Indenture, at least ten (10) and not more than sixty (60) days prior to the date fixed for redemption.

 

5


 

ARTICLE 2

 

Miscellaneous Provisions

 

SECTION 201.                                         Concerning the Trustee .   The Trustee accepts the trusts of the Indenture and agrees to perform the same, but only upon the terms and conditions set forth in the Indenture, to which the parties hereto and the Holders from time to time agree.  Without limiting the generality of the foregoing, the Trustee assumes no responsibility for the correctness of the recitals herein contained, which shall be taken as the statements of the Company.  The Trustee makes no representation or warranty as to, and assumes no responsibility for, the validity or adequacy of this Ninth Supplemental Indenture or the Notes, it shall not be accountable for the Company’s use of proceeds from the Notes, and it shall not be responsible for any statement of the Company in this Ninth Supplemental Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustee’s certificate of authentication.

 

SECTION 202.                                         Defeasance; Satisfaction and Discharge .   The provisions of Article Thirteen of the Base Indenture shall apply to the Notes.

 

SECTION 203.                                         Sinking Fund .   The Notes are not entitled to the benefits of any sinking fund.

 

SECTION 204.                                         Notices.   The address for any notice or demand under this Ninth Supplemental Indenture for each of the parties shall be as follows:

 

If to the Company:
Piedmont Natural Gas Company, Inc.
4720 Piedmont Row Drive
Charlotte, North Carolina 28210
Attention: Treasurer

 

With a copy to:
Duke Energy Corporation
550 South Tryon Street
Charlotte, North Carolina 28202
Attention: General Counsel

 

If to the Trustee:
The Bank of New York Mellon Trust Company, N.A.
10161 Centurion Parkway
Jacksonville, Florida 32256
Attention: Corporate Trust Administration

 

SECTION 205.                                         Miscellaneous .

 

(a)                                  Except as expressly amended hereby with respect to the Notes, the Original Indenture is in all respects ratified and confirmed and all the terms, provisions and conditions thereof shall be and remain in full force and effect.

 

(b)                                  All the covenants, stipulations, promises and agreements in this Ninth Supplemental Indenture contained by or on behalf of the Company shall bind its successors and assigns, whether so expressed or not.

 

6


 

(c)                                   This Ninth Supplemental Indenture and each Note shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be governed by and construed in accordance with the laws of said State.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

(d)                                  If any provision of the Indenture limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part of or govern the Indenture, such latter provision shall control.  If any provision of the Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to the Indenture as so modified or to be excluded, as the case may be.

 

(e)                                   The titles and headings of the sections of this Ninth Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof.

 

(f)                                    This Ninth Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed an original, and such counterparts shall together constitute one and the same instrument.

 

(g)                                   In case any provision in this Ninth Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof or of the Indenture shall not in any way be affected or impaired thereby.

 

[Signature page to follow.]

 

7


 

IN WITNESS WHEREOF, the parties hereto have caused this Ninth Supplemental Indenture to be duly executed, and attested, all as of the date first above written.

 

ATTEST:

 

PIEDMONT NATURAL GAS COMPANY, INC.

 

 

 

 

 

 

By:

/s/ Robert T. Lucas III

 

By:

/s/ William E. Currens, Jr.

 

Name: Robert T. Lucas III

 

 

Name:

William E. Currens, Jr.

 

Title: Assistant Corporate Secretary

 

 

Title:

Senior Vice President,Financial Planning and Analysis

 

 

 

 

ATTEST:

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

 

 

 

 

 

 

By:

/s/ Mark A. Golder

 

By:

/s/ Karen Yu

 

Name: Mark A. Golder

 

 

Name: Karen Yu

 

Title: Vice President

 

 

Title: Vice President

 


 

EXHIBIT A

 

FORM OF NOTE

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“ DTC ”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.  OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.  OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

THIS DEBT SECURITY IS A BOOK-ENTRY DEBT SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.  THIS DEBT SECURITY IS EXCHANGEABLE FOR DEBT SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS DEBT SECURITY (OTHER THAN A TRANSFER OF THIS DEBT SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES.

 

PIEDMONT NATURAL GAS COMPANY, INC.

 

3.50% SENIOR NOTES DUE 2029

 

No. R-

$

 

CUSIP No. 720186 AL9

 

PIEDMONT NATURAL GAS COMPANY, INC., a corporation validly existing under the laws of the State of North Carolina (herein called the “ Company ”, which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of                      DOLLARS ($                      ) on June 1, 2029 and to pay interest thereon from May 24, 2019 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semiannually in arrears on June 1 and December 1 (each an “ Interest Payment Date ”) in each year, commencing December 1, 2019 at the rate of 3.50% per annum, until the principal hereof is paid or made available for payment, and (to the extent that the payment of such interest shall be legally enforceable) at the rate of 3.50% per annum on any overdue principal and on any overdue installment of interest.  The amount of interest payable on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Note is registered at the close of business on the regular Record Date for such interest, which shall be the fifteenth calendar day next preceding each Interest Payment Date (whether or not a Business Day), provided that interest payable at the Stated Maturity of principal or on a redemption date as provided in the Indenture will be paid to the Person to whom principal is payable.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such regular Record Date

 

A- 1


 

and will be paid to the Person in whose name the Notes are registered at the close of business on a subsequent record date established for the payment of such defaulted interest by notice given by mail or on behalf of the Company to the Holders no less than fifteen (15) days preceding such subsequent record date, such record date to be not less than five (5) days preceding the date of payment of such defaulted interest or in any other lawful manner acceptable to the Trustee.

 

Payments of interest on this Note will include interest accrued to but excluding the respective Interest Payment Date.  Interest payments for this Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months (and for any partial periods shall be calculated on the basis of the number of days elapsed in a 360-day year of twelve 30-day months).  In the event that any Interest Payment Date would otherwise be a day that is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), with the same force and effect as if made on the date the payment was originally payable.

 

Payment of the principal of and interest on this Note will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  Payment of interest on this Note (other than interest payable at maturity) will be made, at the option of the Company, by wire transfer to the Holders entitled thereto who have provided appropriate wire transfer instructions to the Trustee or by check mailed to the address of the Holder as such address shall appear in the Debt Security Register; provided, however, that if this Note is a Book-Entry Debt Security the Depository, as Holder of this Note, shall be entitled to receive payment of interest by wire transfer of immediately available funds.  Notices regarding changes of address shall be effective upon recordation in the Debt Securities Register.  Payment of the principal of and interest on this Note payable at maturity will be made in immediately available funds upon surrender of this Note at the corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, or such other office or agency of the Company maintained for such purpose in the Borough of Manhattan, The City of New York, provided, however, that if this Note is a Book-Entry Debt Security the Depository, as Holder of this Note, shall be entitled to receive payment of interest by wire transfer of immediately available funds in accordance with the arrangements with the Depository.

 

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

A- 2


 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

 

Dated: May 24, 2019

 

ATTEST:

 

PIEDMONT NATURAL GAS COMPANY, INC.

 

 

 

 

 

 

By:

 

 

By:

 

(Signature)

 

(Authorized Signature)

 

[Seal]

 

A- 3


 

(Reverse Side of Note)

 

This Note is one of a duly authorized issue of securities of the Company (herein called the “ Notes ”), issued and to be issued in one or more series under an Indenture, dated as of April 1, 1993, as amended (as amended and supplemented the “ Indenture ”), between Piedmont Natural Gas Company, Inc., a New York corporation and the predecessor to the Company and The Bank of New York Mellon Trust Company, N.A.  (as successor to Citibank N.A.), as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered.  This Note is a global Book-Entry Debt Security and is limited initially in the aggregate principal amount of $                    ; provided however that the authorized aggregate principal amount of this Note may be increased above such amount by a Board Resolution authorizing such increase.

 

Prior to March 1, 2029 (the “ Par Call Date ”), the Company shall have the right to redeem this Note, at its option, at any time in whole or in part and from time to time, at a redemption price calculated by the Company equal to the greater of (i) 100% of the principal amount to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on this Note to be redeemed that would be due if the Notes matured on the Par Call Date (exclusive of interest accrued as of the date of redemption), discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 20 basis points; plus, in each case, accrued and unpaid interest on the principal amount of this Note being redeemed to, but excluding, such redemption date.

 

On or after the Par Call Date, the Company shall have the right to redeem this Note, at its option, at any time in whole or in part and from time to time, at a redemption price equal to 100% of the principal amount of this Note to be redeemed, plus accrued and unpaid interest on the principal amount being redeemed to, but excluding, such redemption date.

 

For purposes of determining the redemption price:

 

Comparable Treasury Issue ” means the United States Treasury security selected by the Quotation Agent as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed (assuming, for this purpose, that the Notes matured on the Par Call Date), that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes.

 

Comparable Treasury Price ” means, with respect to any redemption date, (1) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (2) if the Quotation Agent obtains fewer than four of such Reference Treasury Dealer Quotations, the average of all such Reference Treasury Dealer Quotations determined by the Company.

 

“Quotation Agent ” means one of the Reference Treasury Dealers appointed by the Company.

 

“Reference Treasury Dealer” means (1) each of BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, a Primary Treasury Dealer (as defined below) selected by U.S. Bancorp Investments, Inc. and a Primary Treasury Dealers selected by SMBC Nikko Securities America, Inc., plus one other financial institution appointed by the Company at the time of any redemption, or their

 


 

respective affiliates or successors, each of which is a primary U.S. Government securities dealer in the United States of America (a “Primary Treasury Dealer”); provided, however, that if any of the foregoing or their affiliates or successors shall cease to be a Primary Treasury Dealer, the Company shall substitute therefor another Primary Treasury Dealer.

 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such redemption date.

 

“Treasury Rate ” means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity or interpolated maturity (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date .

 

This Note will not have a sinking fund.

 

If an Event of Default with respect to the Notes shall occur and be continuing, the aggregate principal amount of the Notes may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture.

 

The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of this Note and (b) certain restrictive covenants, in each case upon compliance by the Company with certain conditions set forth therein, which provisions apply to this Note.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Debt Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of at least a 66 2/3% in aggregate principal amount of such Debt Securities.  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Debt Securities of each series at the time outstanding, on behalf of the Holders of all Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfers hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

As provided in the Indenture and subject to certain limitations herein and therein set forth, the transfer of this Note is registrable in the Debt Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Debt Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transfers or transferees.

 


 

This global Book-Entry Debt Security is exchangeable for Notes in definitive, non-global form only under certain limited circumstances set forth in the Indenture.  Notes of this series so issued are issuable only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

No service charge shall be made for any such registration of transferor exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 


 

ABBREVIATIONS

 

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:

 

TEN COM-

as tenants in common

UNIF GIFT MIN ACT-

                  Custodian                  

 

 

 

   (Cust)

(Minor)

 

 

 

 

 

TEN ENT-

as tenants by the entireties as joint tenants

 

under Uniform Gifts to Minors Act

                                         

(State)

 

 

 

 

JT TEN-

with right of survivorship and not as tenants in common

 

 

 

Additional abbreviations may also be used
though not on the above list.

 

FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto

 

 

(please insert Social Security or other identifying number of assignee)

 

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE

 

 

 

the within Note and all rights thereunder, hereby irrevocably constituting and appointing

 

 

 

agent to transfer said Note on the books of the Company, with full power of substitution in the premises.

 

Dated:                 ,              

 

NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever.

 


 

EXHIBIT B

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Debt Securities of the series designated therein referred to in the within-mentioned Indenture.

 

Dated:  May 24, 2019

 

THE BANK OF NEW YORK MELLON

 

TRUST COMPANY, N.A., as Trustee

 

 

 

By:

 

 

(Authorized Signature)

 

 

B- 1


Exhibit 5.1

 

DUKE ENERGY BUSINESS SERVICES LLC

550 S. Tryon Street
Charlotte, North Carolina 28202
May 24, 2019

 

Piedmont Natural Gas Company, Inc.

4720 Piedmont Row Drive

Charlotte, North Carolina 28210

 

Re:                  Piedmont Natural Gas Company, Inc. $600,000,000 aggregate principal amount of 3.50% Senior Notes due 2029

 

Ladies and Gentlemen:

 

I am Deputy General Counsel of Duke Energy Business Services LLC, the service company affiliate of Piedmont Natural Gas Company, Inc., a North Carolina corporation (the “Company”), and in such capacity I have acted as counsel to the Company in connection with the public offering of $600,000,000 aggregate principal amount of the Company’s 3.50% Senior Notes due 2029 (the “Securities”) to be issued pursuant to the Indenture, dated as of April 1, 1993 (the “Original Indenture”), with The Bank of New York Mellon Trust Company, N.A., as successor to Citibank, N.A. (the “Trustee”), as supplemented from time to time, including by the Ninth Supplemental Indenture (the “Supplemental Indenture”), dated as of May 24, 2019, between the Company and the Trustee, relating to the Securities (the Original Indenture, as amended and supplemented, being referred to herein as the “Indenture”). On May 21, 2019, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, SMBC Nikko Securities America, Inc. and U.S. Bancorp Investments, Inc., as representatives of the several underwriters named therein (the “Underwriters”), relating to the sale by the Company to the Underwriters of the Securities.

 

This opinion is being delivered in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the “Securities Act”).

 

I am a member of the bar of the State of North Carolina and my opinion set forth herein is limited to North Carolina corporate law and the laws of the State of New York and the federal laws of the United States that, in my experience, are normally applicable to transactions of the type contemplated above and, to the extent that judicial or regulatory orders or decrees or consents, approvals, licenses, authorizations, validations, filings, recordings or registrations with governmental authorities are relevant, to those required under such laws (all of the foregoing being referred to as “Opined on Law”).  I do not express any opinion with respect to the law of any jurisdiction other than Opined on Law or as to the effect of any such non-opined law on the opinions herein stated.  This opinion is limited to the laws, including the rules and regulations, as in effect on the date hereof, which laws are subject to change with possible retroactive effect.

 

In connection with this opinion, I or attorneys under my supervision (with whom I have consulted) have examined and are familiar with originals or copies, certified or otherwise identified to our satisfaction, of:

 

(a) the registration statement on Form S-3, as amended (File No. 333-213765-06) of the Company originally filed on January 26, 2017, and subsequently filed on March 25, 2019, with the Securities and Exchange Commission (the “Commission”) under the Securities Act allowing for delayed offerings

 


 

pursuant to Rule 415 under the Securities Act and the information deemed to be a part of such registration statement as of the date hereof pursuant to Rule 430B of the General Rules and Regulations under the Securities Act (the “Rules and Regulations”) (such registration statement, effective upon original filing with the Commission on January 26, 2017 pursuant to Rule 462(e) of the Rules and Regulations, being hereinafter referred to as the “Registration Statement”);

 

(b) the prospectus, dated March 25, 2019, which forms a part of and is included in the Registration Statement in the form filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations;

 

(c) the preliminary prospectus supplement, dated May 21, 2019, relating to the offering of the Securities in the form filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations;

 

(d) the prospectus supplement, dated May 21, 2019, relating to the offering of the Securities in the form filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations;

 

(e) the Issuer Free Writing Prospectus filed with the Commission on May 21, 2019 pursuant to Rule 433(d) of the Securities Act and Section 5(e) of the Underwriting Agreement;

 

(f) the Amended and Restated Articles of Incorporation of the Company, dated as of October 3, 2016;

 

(g) the Bylaws of the Company, amended and restated effective as of October 3, 2016;

 

(h) an executed copy of the Underwriting Agreement;

 

(i) a specimen of the Securities;

 

(j) an executed copy of the Original Indenture,

 

(k) an executed copy of the Supplemental Indenture;

 

(l) resolutions of the Board of Directors of the Company, adopted by unanimous written consent on January 12, 2017, relating to, among other things, the preparation and filing with the Commission of the Registration Statement and the issuance of the Securities; and

 

(m) the Written Consent of the Assistant Treasurer, John L. Sullivan, III, effective May 21, 2019, acting pursuant to specific delegation made and authorization given by the Board of Directors pursuant to the resolutions described in clause (l) above, relating to the offering of the Securities.

 

I or attorneys under my supervision (with whom I have consulted) have also examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such agreements and certificates and receipts of public officials, certificates of officers or other representatives of the Company and others, and such other documents, certificates and records as I or attorneys under my supervision (with whom I have consulted) have deemed necessary or appropriate as a basis for the opinions set forth below.

 

In my examination, I or attorneys under my supervision (with whom I have consulted) have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as facsimile, electronic, certified or photostatic copies, and the authenticity of such copies. In making my examination of executed documents, I have assumed that the parties thereto, other than the Company,

 


 

had the power, corporate or other, to enter into and perform all obligations thereunder and I have also assumed the due authorization by all requisite action, corporate or other, and the execution and delivery by such parties of such documents and, except to the extent expressly set forth below, the validity and binding effect thereof on such parties. As to any facts material to the opinions expressed herein which were not independently established or verified, I or attorneys under my supervision (with whom I have consulted) have relied upon oral or written statements and representations of officers and other representatives of the Company and others.

 

The opinion set forth below is subject to the following further qualifications, assumptions and limitations:

 

(i) the validity or enforcement of any agreements or instruments may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law) and

 

(ii) I do not express any opinion as to the applicability or effect of any fraudulent transfer, preference or similar law on any agreements or instruments or any transactions contemplated thereby.

 

Based upon the foregoing and subject to the limitations, qualifications, exceptions and assumptions set forth herein, I am of the opinion that the Securities have been duly authorized and executed by the Company, and that when duly authenticated by the Trustee and issued and delivered by the Company against payment therefor in accordance with the terms of the Underwriting Agreement and the Indenture, the Securities will constitute valid and binding obligations of the Company entitled to the benefits of the Indenture and enforceable against the Company in accordance with their terms.

 

I hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement through incorporation by reference of a current report on Form 8-K.  I also consent to the reference to my name under the heading “Legal Matters” in the Prospectus Supplement. In giving this consent, I do not hereby admit that I am in the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission promulgated thereunder. This opinion is expressed as of the date hereof unless otherwise expressly stated, and I disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable laws.

 

 

Very truly yours,

 

 

 

/s/ Robert T. Lucas III

 

Robert T. Lucas III, Esq.

 


Exhibit 99.1

 

Execution Version

 

PIEDMONT NATURAL GAS COMPANY, INC.

 

$600,000,000 3.50% SENIOR NOTES DUE 2029

 

UNDERWRITING AGREEMENT

 

May 21, 2019

 

BNP Paribas Securities Corp.

Credit Suisse Securities (USA) LLC

SMBC Nikko Securities America, Inc.

U.S. Bancorp Investments, Inc.

As Representatives of the several Underwriters

 

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue
New York, New York 10010

 

Ladies and Gentlemen:

 

1.               Introductory. Piedmont Natural Gas Company, Inc., a North Carolina corporation (the “Company” ), proposes, subject to the terms and conditions stated herein, to issue and sell $600,000,000 aggregate principal amount of the Company’s 3.50% Senior Notes due 2029 (the “ Notes ”), to be issued pursuant to the provisions of an indenture, dated as of April 1, 1993 (the “ Original Indenture ”), between the Company and The Bank of New York Mellon Trust Company, N.A. (successor to Citibank, N.A.) as trustee (the “Trustee” ), as amended and supplemented by various supplemental indentures, including the Ninth Supplemental Indenture, to be dated as of May 24, 2019 (the “Supplemental Indenture” and together with the Original Indenture, the “Indenture” ).  BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, SMBC Nikko Securities America, Inc. and U.S. Bancorp Investments, Inc. (the “ Representatives ”) are acting as representatives of the several underwriters named in Schedule A hereto (together with the Representatives, the “ Underwriters ”).  The Company understands that the several Underwriters propose to offer the Notes for sale upon the terms and conditions contemplated by (i) this Agreement and (ii) the Base Prospectus, the Preliminary Prospectus and the Permitted Free Writing Prospectus (each as defined below) issued at or prior to the Applicable Time (as defined below) (the documents referred to in the foregoing subclause (ii) are referred to herein as the “ Pricing Disclosure Package ”).

 

2.               Representations and Warranties of the Company. As of the date hereof, as of the Applicable Time (as defined below) and as of the Closing Date (as defined below) the Company represents and warrants to, and agrees with, the several Underwriters that:

 

(a)                                  A registration statement, as amended (No. 333-213765-06), including a prospectus, relating to the Notes and certain other securities has been filed with the Securities

 


 

and Exchange Commission (the “ Commission ”) under the Securities Act of 1933, as amended (the “ 1933 Act ”). Such registration statement and any post-effective amendment thereto, each in the form heretofore delivered to you, became effective upon filing with the Commission pursuant to Rule 462 of the rules and regulations of the Commission under the 1933 Act (the “ 1933 Act Regulations ”), and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose or pursuant to Section 8A of the 1933 Act has been initiated or threatened by the Commission (if prepared, any preliminary prospectus supplement specifically relating to the Notes immediately prior to the Applicable Time included in such registration statement or filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations being hereinafter called a “ Preliminary Prospectus ”); the term “ Registration Statement ” means the registration statement as deemed revised pursuant to Rule 430B(f)(1) of the 1933 Act Regulations on the date of such registration statement’s effectiveness for purposes of Section 11 of the 1933 Act, as such section applies to the Company and the Underwriters for the Notes pursuant to Rule 430B(f)(2) of the 1933 Act Regulations (the “ Effective Date ”), including all exhibits thereto and including the documents incorporated by reference in the prospectus contained in the Registration Statement at the time such part of the Registration Statement became effective; the term “ Base Prospectus ” means the prospectus filed with the Commission on the date hereof by the Company; and the term “ Prospectus ” means the Base Prospectus together with the prospectus supplement specifically relating to the Notes prepared in accordance with the provisions of Rule 430B and promptly filed after execution and delivery of this Agreement pursuant to Rule 430B or Rule 424(b) of the 1933 Act Regulations; any information included in such Prospectus that was omitted from the Registration Statement at the time it became effective but that is deemed to be a part of and included in such registration statement pursuant to Rule 430B is referred to as “ Rule 430B Information ;” and any reference herein to any Registration Statement, Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein, prior to the date hereof; any reference to any amendment or supplement to the Preliminary Prospectus or Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the “ 1934 Act ”), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; and any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the 1934 Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement).  For purposes of this Agreement, the term “ Applicable Time ” means 3:45 p.m. (New York City time) on the date hereof.

 

(b)                                  The Registration Statement, the Permitted Free Writing Prospectus specified on Schedule B hereto, the Preliminary Prospectus and the Prospectus conform, and any amendments or supplements thereto will conform, in all material respects to the requirements of the 1933 Act and the 1933 Act Regulations; and (A) the Registration Statement, as of its original effective date as of the date of any

 

2


 

amendment and at each deemed effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Regulations, and at the Closing Date, did not and will not contain 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 (B) (i) the Pricing Disclosure Package, as of the Applicable Time, did not, (ii) the Prospectus and any amendment or supplement thereto, as of their dates, will not, and (iii) the Prospectus as of the Closing Date will not, include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the Company makes no warranty or representation to the Underwriters with respect to any statements or omissions made in reliance upon and in conformity with written information furnished to the Company by the Representatives on behalf of the Underwriters specifically for use in the Registration Statement, the Permitted Free Writing Prospectus, the Preliminary Prospectus or the Prospectus.

 

(c)                                   The Permitted Free Writing Prospectus specified on Schedule B hereto as of its issue date and at all subsequent times through the completion of the public offer and sale of the Notes or until any earlier date that the Company notified or notifies the Underwriters pursuant to Section 5(f) hereof did not, does not and will not include any information that conflicts with the information (not superseded or modified as of the Effective Date) contained in the Registration Statement, the Preliminary Prospectus or the Prospectus.

 

(d)                                  At the earliest time the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of the Notes, the Company was not an “ineligible issuer” as defined in Rule 405 of the 1933 Act Regulations.  The Company is, and was at the time of the initial filing of the Registration Statement, eligible to use Form S-3 under the 1933 Act.

 

(e)                                   The documents and interactive data in eXtensible Business Reporting Language (“ XBRL ”) incorporated or deemed to be incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, at the time they were filed or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the “ 1934 Act Regulations ”), and, when read together with the other information in the Prospectus, (a) at the time the Registration Statement became effective, (b) at the Applicable Time and (c) on the Closing Date did not, and 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, in the light of the circumstances under which they were made, not misleading.

 

(f)                                    The Company’s most recent Annual Report filed on Form 10-K meets the conditions specified in General Instruction I(1)(a) and (b) of the General Instructions for Form 10-K and the Company’s most recent Quarterly Report filed

 

3


 

on Form 10-Q meets the conditions specified in General Instruction H(1) of the General Instructions for Form 10-Q.

 

(g)                                   The compliance by the Company with all of the provisions of this Agreement has been duly authorized by all necessary corporate action and the consummation of the transactions herein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which any of them is bound or to which any of their properties or assets is subject that would have a material adverse effect on the business, financial condition or results of operations of the Company, nor will such action result in any violation of the provisions of the amended and restated articles of incorporation (the “ Articles ”) , bylaws (the “ Bylaws ”) or other governing document of the Company or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their respective properties that would have a material adverse effect on the business, financial condition or results of operations of the Company and its subsidiaries taken as a whole; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the consummation by the Company of the transactions contemplated by this Agreement, except for authorization by the North Carolina Utilities Commission which has been received as of the date of this Agreement, and the registration under the 1933 Act of the Notes, qualification under the Trust Indenture Act of 1939, as amended (the “ 1939 Act ”) and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Notes by the Underwriters.

 

(h)                                  This Agreement has been duly authorized, executed and delivered by the Company.

 

(i)                                      The Original Indenture has been duly authorized, executed and delivered by the Company and duly qualified under the 1939 Act and the Supplemental Indenture has been duly authorized and when executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by the Trustee, the Indenture will constitute a valid and legally binding instrument of the Company enforceable against the Company in accordance with its terms, subject to the qualifications that the enforceability of the Company’s obligations under the Indenture may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

(j)                                     The Notes have been duly authorized and when executed by the Company, and when authenticated by the Trustee, in the manner provided in the Indenture and delivered against payment therefor, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with

 

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their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally, and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law) and are entitled to the benefits afforded by the Indenture in accordance with the terms of the Indenture and the Notes.

 

(k)                                  Any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument filed or incorporated by reference as an exhibit to the Registration Statement or the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2018 or any subsequent Quarterly Report on Form 10-Q of the Company or any Current Report on Form 8-K of the Company with an execution or filing date after December 31, 2018 are all indentures, mortgages, deeds of trust, loan agreements or other agreements or instruments that are material to the Company and its subsidiaries taken as a whole.

 

(l)                                      The Company (i) is a corporation duly incorporated and validly existing in good standing under the laws of the State of North Carolina and has the corporate power and authority to own its property and to conduct its business as described in the Pricing Disclosure Package and the Prospectus, and (ii) is duly qualified to do business in each jurisdiction where the failure to be so qualified would materially adversely affect the ability of the Company to perform its obligations under this Agreement, the Indenture or the Notes.

 

(m)                              The Company has no “significant subsidiaries” within the meaning of Rule 1-02 Regulation S-X under the 1933 Act.

 

3.               Purchase, Sale and Delivery of Notes. 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 sell to the Underwriters, and the Underwriters agree, severally and not jointly, to purchase from the Company, at a purchase price of 99.098% of the principal amount of the Notes plus accrued interest, if any, from May 24, 2019 (and in the manner set forth below), the  principal amount of Notes set forth opposite the name of each Underwriter on Schedule A hereto plus the principal amount of additional Notes which each such Underwriter may become obligated to purchase pursuant to the provisions of Section 8 hereof.  The Underwriters hereby agree to make a payment to the Company in an amount equal to $1,200,000 including in respect of expenses incurred by the Company in connection with the offering of the Notes.

 

Payment of the purchase price for the Notes to be purchased by the Underwriters shall be made to the Company by wire transfer of immediately available funds, payable to the order of the Company against delivery of the Notes, in fully registered form, to you or upon your order at 10:00 a.m., New York City time, on May 24, 2019 or such other time and date as shall be mutually agreed upon in writing by the Company and the Representatives (the “ Closing Date ”). The Notes shall be delivered in the form of one or more global certificates in aggregate denomination equal to the aggregate principal amount of the Notes upon original issuance and registered in the name of Cede & Co., as nominee for The Depository Trust Company (“ DTC ”). All documents referred to herein

 

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that are to be delivered at the Closing Date shall be delivered at that time at the offices of Sidley Austin LLP, 787 Seventh Avenue, New York, New York 10019.

 

4.               Offering by the Underwriters. It is understood that the several Underwriters propose to offer the Notes for sale to the public as set forth in the Pricing Disclosure Package and the Prospectus.

 

5.               Covenants of the Company. The Company covenants and agrees with the several Underwriters that:

 

(a)                                  The Company will cause the Preliminary Prospectus and the Prospectus to be filed pursuant to, and in compliance with, Rule 424(b) of the 1933 Act Regulations, and advise the Underwriters promptly of the filing of any amendment or supplement to the Registration Statement, the Preliminary Prospectus or the Prospectus and of the institution by the Commission of any stop order proceedings in respect of the Registration Statement, 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 Notes (or the notice referred to in Rule 173(a) of the 1933 Act Regulations) is required to be delivered under the 1933 Act any event occurs as a result of which the Pricing Disclosure Package or 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, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Pricing Disclosure Package or the Prospectus to comply with the 1933 Act, the Company promptly will prepare and file with the Commission an amendment, supplement or an appropriate document pursuant to Section 13 or 14 of the 1934 Act which will correct such statement or omission or which will effect such compliance.

 

(c)                                   The Company, during the period when a prospectus relating to the Notes is required to be delivered under the 1933 Act, will timely file all documents required to be filed with the Commission pursuant to Section 13 or 14 of the 1934 Act.

 

(d)                                  Without the prior consent of the Underwriters, the Company has not made and will not make any offer relating to the Notes that would constitute a “free writing prospectus” as defined in Rule 405 of the 1933 Act Regulations, other than a Permitted Free Writing Prospectus; each Underwriter, severally and not jointly, represents and agrees that, without the prior consent of the Company, it has not made and will not make any offer relating to the Notes that would constitute a “free writing prospectus” as defined in Rule 405 of the 1933 Act Regulations, other than a Permitted Free Writing Prospectus or a free writing prospectus that is not required to be filed by the Company pursuant to Rule 433 of the 1933 Act Regulations (“ Rule 433 ”); any such free writing prospectus (which shall include the pricing term sheet referred to in Section 5(e) below), the use of which has been consented to by the Company and the Underwriters, is listed on Schedule B and herein is called a “ Permitted Free Writing Prospectus .”  The Company represents that it

 

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has treated or agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements of Rule 433 applicable to the Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping.

 

(e)                                   The Company agrees to prepare a pricing term sheet specifying the terms of the Notes not contained in the Preliminary Prospectus, substantially in the form of Schedule C hereto and approved by the Representatives on behalf of the Underwriters, and to file such pricing term sheet as an “issuer free writing prospectus” pursuant to Rule 433 prior to the close of business two business days after the date hereof.

 

(f)                                    The Company agrees that if at any time following the issuance of a Permitted Free Writing Prospectus any event occurs as a result of which such Permitted Free Writing Prospectus would conflict with the information in the Registration Statement (not superseded or modified as of the Effective Date), the Pricing Disclosure Package or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the Underwriters and, if requested by the Underwriters, will prepare and furnish without charge to each Underwriter a free writing prospectus or other document, the use of which has been consented to by the Underwriters, which will correct such conflict, statement or omission; provided, however, that this covenant shall not apply to any statements or omissions made in reliance upon and in conformity with written information furnished to the Company by the Representatives on behalf of the Underwriters specifically for use in the Registration Statement, the Pricing Disclosure Package or the Prospectus.

 

(g)                                   The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its security holders as soon as practicable an earnings statement for the purposes of, and to provide to the Underwriters the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.

 

(h)                                  The Company will furnish to you, without charge, copies of the Registration Statement (three of which will include all exhibits other than those incorporated by reference), the Pricing Disclosure Package and the Prospectus, and all amendments and supplements to such documents, in each case as soon as available and in such quantities as you reasonably request.

 

(i)                                      The Company will arrange or cooperate in arrangements, if necessary, for the qualification of the Notes for sale under the laws of such jurisdictions as you designate and will continue such qualifications in effect so long as required for the distribution; provided, however, that the Company shall not be required to qualify as a foreign corporation or to file any general consents to service of process under the laws of any state where it is not now so subject.

 

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(j)                                     The Company will pay all expenses incident to the performance of its obligations under this Agreement including (i) the printing and filing of the Registration Statement and the printing of this Agreement and any Blue Sky Survey, (ii) the preparation and printing of certificates for the Notes, (iii) the issuance and delivery of the Notes as specified herein, (iv) the fees and disbursements of counsel for the Underwriters in connection with the qualification of the Notes under the securities laws of any jurisdiction in accordance with the provisions of Section 5(i) and in connection with the preparation of the Blue Sky Survey, such fees not to exceed $5,000, (v) the printing and delivery to the Underwriters, in quantities as hereinabove referred to, of copies of the Registration Statement and any amendments thereto, of the Preliminary Prospectus, of the Prospectus, of the Permitted Free Writing Prospectus and any amendments or supplements thereto, (vi) any fees charged by independent rating agencies for rating the Notes, (vii) any fees and expenses in connection with the listing of the Notes on the New York Stock Exchange, LLC, (viii) any filing fee required by the Financial Industry Regulatory Authority, Inc., (ix) the costs of any depository arrangements for the Notes with DTC or any successor depositary and (x) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the Notes, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the Underwriters and officers of the Company and any such consultants, and the cost of any aircraft chartered in connection with the road show; provided, however, the Underwriters shall reimburse a portion of the costs and expenses referred to in this clause (x).

 

6.               Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Notes will be subject to the accuracy of the representations and warranties on the part of the Company herein, to the accuracy of the statements of officers of the Company made pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions precedent:

 

(a)                                  The Prospectus shall have been filed by the Company with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for filing by the 1933 Act Regulations and in accordance herewith and each Permitted Free Writing Prospectus shall have been filed by the Company with the Commission within the applicable time periods prescribed for such filings by, and otherwise in compliance with, Rule 433.

 

(b)                                  At or after the Applicable Time and prior to the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose or pursuant to Section 8A of the 1933 Act shall have been instituted or, to the knowledge of the Company or you, shall be threatened by the Commission.

 

(c)                                   At or after the Applicable Time and prior to the Closing Date, the rating assigned by Moody’s Investors Service, Inc. or S&P Global Ratings (or any of their

 

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successors) to any debt securities or preferred stock of the Company as of the date of this Agreement shall not have been lowered.

 

(d)                                  Since the respective most recent dates as of which information is given in the  Pricing Disclosure Package and the Prospectus and up to the Closing Date, there shall not have been any material adverse change in the condition of the Company, financial or otherwise, except as reflected in or contemplated by the Pricing Disclosure Package and the Prospectus, and, since such dates and up to the Closing Date, there shall not have been any material transaction entered into by the Company other than transactions contemplated by the Pricing Disclosure Package and the Prospectus and transactions in the ordinary course of business, the effect of which in your reasonable judgment is so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Notes on the terms and in the manner contemplated by the Pricing Disclosure Package and the Prospectus.

 

(e)                                   You shall have received an opinion of Robert T. Lucas III, Esq., Deputy General Counsel of Duke Energy Business Services LLC (who in such capacity provides legal services to the Company), the service company subsidiary of Duke Energy Corporation, or other appropriate counsel reasonably satisfactory to the Representatives (which may include Duke Energy Corporation’s other “in-house” counsel), dated the Closing Date, to the effect that:

 

(i)                                      The Company has been duly incorporated and is validly existing as a corporation in good standing under the law of the State of North Carolina, with power and authority (corporate and other) to own its properties and conduct its business as described in the Pricing Disclosure Package and the Prospectus and to enter into and perform its obligations under this Agreement.

 

(ii)                                   The Company is duly qualified to do business in each jurisdiction in which the ownership or leasing of its property or the conduct of its business requires such qualification, except where the failure to so qualify, considering all such cases in the aggregate, does not have a material adverse effect on the business, properties, financial condition or results of operations of the Company.

 

(iii)                                The Registration Statement became effective upon filing with the Commission pursuant to Rule 462 of the 1933 Act Regulations, and, to the best of such counsel’s knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or threatened under the 1933 Act.

 

(iv)                               The descriptions in the Registration Statement, the Pricing Disclosure Package and the Prospectus of any legal or governmental proceedings are accurate and fairly present the information required to be shown, and such

 

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counsel does not know of any litigation or any legal or governmental proceeding instituted or threatened against the Company or any of its properties that would be required to be disclosed in the Registration Statement, the Pricing Disclosure Package or the Prospectus and is not so disclosed.

 

(v)                                  This Agreement has been duly authorized, executed and delivered by the Company.

 

(vi)                               The issue and sale of the Notes by the Company and the execution, delivery and performance by the Company of this Agreement, the Indenture and the Notes will not contravene any of the provisions of the Articles or Bylaws of the Company, the North Carolina Business Corporation Act or any statute or any order, rule or regulation of which such counsel is aware of any court or governmental agency or body having jurisdiction over the Company, any of its properties or any of its subsidiaries, nor will such action conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under any indenture, mortgage, deed of trust, loan agreement or other agreement to which the Company is a party or by which it or its property is bound or to which any of its property or assets is subject or any instrument filed or incorporated by reference as an exhibit to the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2018 or any subsequent Quarterly Report on Form 10-Q or any Current Report on Form 8-K of the Company with an execution or filing date after December 31, 2018 or identified in Annex A to this Agreement, which affects in a material way the Company’s ability to perform its obligations under this Agreement, the Indenture or the Notes.

 

(vii)                            The North Carolina Utilities Commission has issued appropriate orders with respect to the issuance and sale of the Notes in accordance with this Agreement, and, to the best of such counsel’s knowledge, such orders are still in effect; the issuance and sale of the Notes to the Underwriters are in conformity with the terms of such orders; and no other authorization, approval or consent of any other governmental body (other than in connection or compliance with the provisions of the securities or Blue Sky laws of any jurisdiction) is legally required for the issuance and sale of the Notes pursuant to this Agreement.

 

(viii)                         The Indenture has been duly authorized, executed and delivered by the Company and qualified under the 1939 Act, and, assuming the due authorization, execution and delivery thereof by the Trustee, constitutes a valid and legally binding instrument of the Company, enforceable against the Company in accordance with its terms.

 

(ix)                               The Notes have been duly authorized, executed and issued by the Company and, when the same have been authenticated by the Trustee as specified in the Indenture and delivered against payment therefor, will constitute valid

 

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and legally binding obligations of the Company enforceable against the Company in accordance with their terms, and are entitled to the benefits afforded by the Indenture in accordance with the terms of the Indenture and the Notes.

 

(x)                                  No consent, approval, authorization, order, registration or qualification of or with any federal or North Carolina governmental agency or body or, to such counsel’s knowledge, any federal or North Carolina court, which has not been obtained or taken and is not in full force and effect, is required to authorize or for the Company to consummate the transactions contemplated by this Agreement, except for such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Notes by the Underwriters.

 

Such counsel may state that such counsel’s opinions in paragraphs (viii) and (ix) above are subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law) and to an implied covenant of good faith and fair dealing.  Such counsel shall state that nothing has come to such counsel’s attention that has caused such counsel to believe that each document incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, when filed, was not, on its face, appropriately responsive, in all material respects, to the requirements of the 1934 Act and the 1934 Act Regulations.  Such counsel shall also state that nothing has come to such counsel’s attention that has caused such counsel to believe that (i) the Registration Statement as of the effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Regulations, contained any 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, (ii) the Pricing Disclosure Package at the Applicable Time contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (iii) that the Prospectus, as of its date or at the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such counsel may also state that, except as otherwise expressly provided in such opinion, such counsel does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in or incorporated by reference into the Registration Statement, the Pricing Disclosure Package or the Prospectus and does not express any opinion or belief as to (i) the financial statements or other financial and accounting data contained or incorporated by reference therein, or excluded therefrom, including XBRL interactive data, (ii) the statement of the eligibility and qualification of the Trustee included in the Registration Statement (the “ Form T-1 ”) or (iii) the information in the Prospectus under the caption “Book-Entry System.”

 

In rendering the foregoing opinion, such counsel may state that such counsel does not express any opinion concerning any law other than the law of the State of North Carolina or, to the extent set forth in the foregoing opinions, the federal securities laws.  Such counsel may also

 

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state that such counsel has relied as to certain factual matters on information obtained from public officials, officers of the Company and other sources believed by such counsel to be reliable.

 

(f)                                    You shall have received an opinion of Hunton Andrews Kurth LLP, counsel to the Company, dated the Closing Date, to the effect that:

 

(i)                                      This Agreement has been duly authorized, executed and delivered by the Company.

 

(ii)                                   The Indenture has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by the Trustee, is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

 

(iii)                                The Notes have been duly authorized and executed by the Company, and, when duly authenticated by the Trustee and issued and delivered by the Company against payment therefor in accordance with the terms of this Agreement and the Indenture, the Notes will constitute valid and binding obligations of the Company, entitled to the benefits of the Indenture and enforceable against the Company in accordance with their terms.

 

(iv)                               The statements set forth (i) under the caption “Description of Debt Securities” in the Base Prospectus and (ii) under the caption “Description of the Notes” in the Pricing Disclosure Package and the Prospectus, insofar as such statements purport to summarize certain provisions of the Indenture and the Notes, fairly summarize such provisions in all material respects.

 

(v)                                  The statements set forth in the Pricing Disclosure Package and the Prospectus under the caption “Certain U.S. Federal Income Tax Considerations for Non-U.S. Holders,” insofar as such statements purport to constitute summaries of matters of United States federal income tax law, constitute accurate and complete summaries, in all material respects, subject to the qualifications set forth therein.

 

(vi)                               No Governmental Approval (as defined below), which has not been obtained or taken and is not in full force and effect, is required to authorize, or is required for, the execution or delivery of this Agreement by the Company or the consummation by the Company of the transactions contemplated hereby; except for such consents, approvals, authorizations, orders, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Notes by the Underwriters.

 

(vii)                            The Company is not and, solely after giving effect to the offering and sale of the Notes and the application of the proceeds thereof as described in the Prospectus, will not be subject to registration and regulation as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

 

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(viii)                         The execution and delivery by the Company of this Agreement and the Indenture and the consummation by the Company of the transactions contemplated hereby, including the issuance and sale of the Notes, will not violate or conflict with, or result in any contravention of, any Applicable Laws (as defined below) of the States of North Carolina and New York.

 

(ix)                               The statements set forth in the Pricing Disclosure Package and the Prospectus under the caption “Underwriting (Conflicts of Interest),” insofar as such statements purport to summarize certain provisions of this Agreement, fairly summarize such provisions in all material respects.

 

In rendering the foregoing opinions, Hunton Andrews Kurth LLP may state that (i) “Governmental Approval” means any consent, approval, license, authorization or validation of, or filing, qualification or registration with, any Governmental Authority (as defined below) required to be made or obtained by the Company pursuant to Applicable Laws, other than any consent, approval, license, authorization, validation, filing, qualification or registration that may have become applicable as a result of the involvement of any party (other than the Company) in the transactions contemplated by this Agreement or because of such parties’ legal or regulatory status or because of any other facts specifically pertaining to such parties; (ii) “Governmental Authorities” means any court, regulatory body, administrative agency or governmental body of the States of North Carolina and New York having jurisdiction over the Company under Applicable Laws and the Federal Energy Regulatory Commission, but excluding the North Carolina Utilities Commission and the New York State Public Service Commission; and (iii) “Applicable Laws” means those laws, rules and regulations of the States of North Carolina and New York that, in such counsel’s experience, are normally applicable to transactions of the type contemplated by this Agreement (other than state securities or blue sky laws, antifraud laws, the rules and regulations of the Financial Industry Regulatory Authority, Inc., the North Carolina Public Utilities Act, the rules and regulations of the North Carolina Utilities Commission and the New York State Public Service Commission and the New York State Public Service Law), but without such counsel having made any special investigation as to the applicability of any specific law, rule or regulation, and the Natural Gas Act and the rules and regulations of the Federal Energy Regulatory Commission thereunder.  In addition, such counsel may state that it has relied as to certain factual matters on information obtained from public officials, officers and representatives of the Company and that the signatures on all documents examined by such counsel are genuine, assumptions which such counsel shall not independently verified.

 

You shall also have received a statement of Hunton Andrews Kurth LLP, dated the Closing Date, to the effect that:

 

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(i) no facts have come to such counsel’s attention that have caused such counsel to believe that the documents filed by the Company under the 1934 Act and the 1934 Act Regulations that are incorporated by reference in the preliminary prospectus supplement that forms a part of the Pricing Disclosure Package and the Prospectus, when filed, were not, on their face, appropriately responsive in all material respects to the requirements of the 1934 Act and the 1934 Act Regulations (except that in each case such counsel need not express any view as to the financial statements, schedules and other financial and accounting information included or incorporated by reference therein or excluded therefrom, compliance with XBRL interactive data requirements) (ii) the Registration Statement, at the Applicable Time, and the Prospectus, as of its date, appeared on their face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the 1933 Act Rules and Regulations (except that in each case such counsel need not express any view as to the financial statements, schedules and other financial and accounting information included or incorporated by reference therein or excluded therefrom, compliance with XBRL interactive data requirements or that part of the Registration Statement that constitutes the statement of eligibility on the Form T-1) and (iii) no facts have come to such counsel’s attention that have caused such counsel to believe that the Registration Statement, at the Applicable Time, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus, as of its date or as of the Closing Date, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (except that in each case such counsel need not express any view as to the financial statements, schedules and other financial and accounting information included or incorporated by reference therein or excluded therefrom, or compliance with XBRL interactive data requirements, or that part of the Registration Statement that constitutes the statement of eligibility on the Form T-1).  Such counsel shall further state that, in addition, no facts have come to such counsel’s attention that have caused such counsel to believe that the Pricing Disclosure Package, as of the Applicable Time, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (except that such counsel need not express any view as to the financial statements, schedules and other financial and accounting information included or incorporated by reference therein or excluded therefrom, or compliance with XBRL interactive data requirements).

 

In addition, such statement shall confirm that the Prospectus has been filed with the Commission within the time period required by Rule 424 of the 1933 Act Regulations and any required filing of a Permitted Free Writing Prospectus pursuant to Rule 433 of the 1933 Act Regulations has

 

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been made with the Commission within the time period required by Rule 433(d) of the 1933 Act Regulations.  Such statement shall further state that assuming the accuracy of the factual matters contained in the representations and warranties of the Company set forth in Section 2(d) of this Agreement, the Registration Statement became effective upon filing with the Commission pursuant to Rule 462 of the 1933 Act Regulations and, pursuant to Section 309 of the 1939 Act, the Indenture has been qualified under the 1939 Act, and that based solely on such counsel’s review of the Commission’s website, no stop order suspending the effectiveness of the Registration Statement has been issued and, to such counsel’s knowledge, no proceedings for that purpose have been instituted or are pending or threatened by the Commission.

 

In addition, such counsel may state that such counsel does not pass upon, or assume any responsibility for, the accuracy, completeness or fairness of the statements contained or incorporated by reference in the Registration Statement, the Pricing Disclosure Package or the Prospectus and has made no independent check or verification thereof (except to the limited extent referred to in Section 6(f)(i), (v) and (vi) above).

 

(g)                                   You shall have received a letter from Sidley Austin LLP, counsel for the Underwriters, dated the Closing Date, with respect to such opinions and statements as you may reasonably request, and the Company shall have furnished to such counsel such documents as it requests for the purpose of enabling it to pass upon such matters.  In delivering its letter pursuant this Section 6(g), Sidley Austin LLP may rely on the opinion delivered pursuant to Section 6(d) hereof as to matters of North Carolina law.

 

(h)                                  At or after the date hereof, there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally or of the securities of the Company or Duke Energy Corporation, on the New York Stock Exchange; or (ii) a general moratorium on commercial banking activities in New York declared by either Federal or New York State authorities or a material disruption in commercial banking services or securities settlement or clearance services in the United States; or (iii) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war, if the effect of any such event specified in this subsection (h) in your reasonable judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Notes on the terms and in the manner contemplated in the Pricing Disclosure Package and the Prospectus. In such event there shall be no liability on the part of any party to any other party except as otherwise provided in Section 7 hereof and except for the expenses to be borne by the Company as provided in Section 5(j) hereof.

 

(i)                                      You shall have received a certificate of the Chairman of the Board, the President, any Vice President, the Secretary or an Assistant Secretary and any financial or accounting officer of the Company, dated the Closing Date, in which such officers,

 

15


 

to the best of their knowledge after reasonable investigation, shall state that the representations and warranties of the Company in this Agreement are true and correct as of the Closing Date, that the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Date, that the conditions specified in Section 6(c) and Section 6(d) have been satisfied, and that no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are threatened by the Commission.

 

(j)                                     At the time of the execution of this Agreement, you shall have received a letter dated such date, in form and substance satisfactory to you, from Deloitte & Touche LLP, the Company’s independent registered  public accounting firm, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference into the Registration Statement, the Pricing Disclosure Package and the Prospectus, including specific references to inquiries regarding any increase in long-term debt (excluding current maturities), decrease in net current assets (defined as current assets less current liabilities) or shareholder’s equity, and decrease in operating revenues or net income for the period subsequent to the latest financial statements incorporated by reference in the Registration Statement when compared with the corresponding period from the preceding year, as of a specified date not more than three business days prior to the date of this Agreement.

 

(k)                                  At the Closing Date, you shall have received from Deloitte & Touche LLP, a letter dated as of the Closing Date, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (j) of this Section 6, except that the specified date referred to shall be not more than three business days prior to the Closing Date.

 

The Company will furnish you with such conformed copies of such opinions, certificates, letters and documents as you reasonably request.

 

7.     Indemnification. (a)  The Company agrees to indemnify and hold harmless each Underwriter, their respective officers and directors, and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act, as follows:

 

(i)                                      against any and all loss, liability, claim, damage and expense whatsoever arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus (or any amendment or supplement thereto) or the Permitted Free Writing Prospectus, any issuer free writing prospectus as defined in Rule 433 of the 1933 Act Regulations or any electronic roadshow

 

16


 

or other written communication that constitutes an offer to buy the Notes provided to investors by, or with the approval of, the Company, or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with written information furnished to the Company by the Representatives on behalf of the Underwriters expressly for use in the Registration Statement (or any amendment thereto), the Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus (or any amendment or supplement thereto) or the Permitted Free Writing Prospectus;

 

(ii)                                   against any and all loss, liability, claim, damage and expense whatsoever to the extent of the aggregate amount paid in settlement of any litigation, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and

 

(iii)                                against any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) of this Section 7.

 

In no case shall the Company be liable under this indemnity agreement with respect to any claim made against any Underwriter or any such controlling person unless the Company shall be notified in writing of the nature of the claim within a reasonable time after the assertion thereof, but failure so to notify the Company shall not relieve it from any liability which it may have otherwise than under subsections 7(a) and 7(d). The Company shall be entitled to participate at its own expense in the defense, or, if it so elects, within a reasonable time after receipt of such notice, to assume the defense of any suit, but if it so elects to assume the defense, such defense shall be conducted by counsel chosen by it and approved by the Underwriter or Underwriters or controlling person or persons, or defendant or defendants in any suit so brought, which approval shall not be unreasonably withheld. In any such suit, any Underwriter or any such controlling person shall have the right to employ its own counsel, but the fees and expenses of such counsel shall be at the expense of such Underwriter or such controlling person unless (i) the Company and such Underwriter shall have mutually agreed to the employment of such counsel, or (ii) the named parties to any such action (including any impleaded parties) include both such Underwriter or such controlling person and the Company and such Underwriter or such controlling person shall have been advised by such counsel that a conflict of interest between the Company and such Underwriter or such controlling person may arise and for this reason it is not desirable for the same counsel to represent both the indemnifying party and also the indemnified party (it being understood, however, that the Company shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys for all such Underwriters and all such controlling persons, which

 

17


 

firm shall be designated in writing by you). The Company agrees to notify you within a reasonable time of the assertion of any claim against it, any of its officers or directors or any person who controls the Company within the meaning of Section 15 of the 1933 Act, in connection with the sale of the Notes.

 

(b)                                  Each Underwriter severally and not jointly agrees that it will indemnify and hold harmless the Company, its directors and each of the officers of the Company who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act to the same extent as the indemnity contained in subsection (a) of this Section, but only with respect to statements or omissions made in the Registration Statement (or any amendment thereto), the Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus (or any amendment or supplement thereto) or the Permitted Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Company by the Representatives on behalf of the Underwriters expressly for use in the Registration Statement (or any amendment thereto), the Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus (or any amendment or supplement thereto) or the Permitted Free Writing Prospectus.  In case any action shall be brought against the Company or any person so indemnified based on the Registration Statement (or any amendment thereto), the Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus (or any amendment or supplement thereto) or the Permitted Free Writing Prospectus and in respect of which indemnity may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each person so indemnified shall have the rights and duties given to the Underwriters, by the provisions of subsection (a) of this Section.

 

(c)                                   No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding, and 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 to or insufficient to hold harmless an indemnified party in respect of any and all loss, liability, claim, damage and expense whatsoever (or actions in respect thereof) that would otherwise have been indemnified under the terms of such indemnity, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense (or actions in respect thereof) 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 Notes. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required above, then each indemnifying

 

18


 

party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits 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 which resulted in such loss, liability, claim, damage or expense (or actions in respect thereof), 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 net proceeds from the offering (before deducting expenses) received by the Company bear to the total compensation received by the Underwriters in respect of the underwriting discount as set forth in the table on the cover page of the Prospectus. 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 on the one hand or the Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section. The amount paid or payable by an indemnified party as a result of the losses, liabilities, claims, damages or expenses (or actions in respect thereof) referred to above in this Section shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Notes underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which 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 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute are several in proportion to their respective underwriting obligations and not joint.

 

8.     Default by One or More of the Underwriters.   (a)  If any Underwriter shall default in its obligation to purchase the principal amount of the Notes, which it has agreed to purchase hereunder on the Closing Date, you may in your discretion arrange for you or another party or other parties to purchase such Notes, on the terms contained herein. If within twenty-four hours after such default by any Underwriter you do not arrange for the purchase of such Notes, then the Company shall be entitled to a further period of twenty-four hours within which to procure another party or other parties satisfactory to you to purchase such Notes on such terms. In the event that, within the respective prescribed periods, you notify the Company that you have so arranged for the purchase of such Notes, or the Company notifies you that it has so arranged for the purchase of such Notes, you or the Company shall have the right to postpone such Closing Date for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Pricing Disclosure Package or the Prospectus, or in any other

 

19


 

documents or arrangements, and the Company agrees to file promptly any amendments to the Registration Statement, the Pricing Disclosure Package or the Prospectus which may be required. The term “Underwriter” as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Notes.

 

(b)                                  If, after giving effect to any arrangements for the purchase of the Notes of a defaulting Underwriter or Underwriters by you or the Company as provided in subsection (a) above, the aggregate amount of such Notes which remains unpurchased does not exceed one-tenth of the aggregate amount of all the Notes to be purchased at such Closing Date, then the Company shall have the right to require each non-defaulting Underwriter to purchase the amount of Notes which such Underwriter agreed to purchase hereunder at such Closing Date and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the amount of Notes which such Underwriter agreed to purchase hereunder) of the Notes of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

 

(c)                                   If, after giving effect to any arrangements for the purchase of the Notes of a defaulting Underwriter or Underwriters by you or the Company as provided in subsection (a) above, the aggregate amount of such Notes which remains unpurchased exceeds one-tenth of the aggregate amount of all the Notes to be purchased at such Closing Date, or if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase the Notes of a defaulting Underwriter or Underwriters, then this Agreement shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the expenses to be borne by the Company as provided in Section 5(j) hereof and the indemnity and contribution agreement in Section 7 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

 

9.     Representations and Indemnities to Survive Delivery.   The respective indemnities, agreements, representations, warranties and other statements of the Company or its officers and of the several Underwriters 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 Underwriter or the Company, or any of their respective officers or directors or any controlling person referred to in Section 7, and will survive delivery of and payment for the Notes.

 

10.  Reliance on Your Acts. In all dealings hereunder, the Representatives shall act on behalf of each of the Underwriters, and the Company shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by the Representatives.

 

11.  No Fiduciary Relationship .  The Company acknowledges and agrees that (i) the purchase and sale of the Notes pursuant to this Agreement is an arm’s-length commercial transaction between the Company on the one hand, and the Underwriters on the other hand, (ii) in connection with the offering contemplated hereby and the process leading to such transaction, each

 

20


 

Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company or its shareholders, creditors, employees, or any other party, (iii) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) and no Underwriter has any obligation to the Company with respect to the offering contemplated hereby except the obligations expressly set forth in this Agreement, (iv) the Underwriters and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company, and (v) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the transaction contemplated hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.

 

12.        Recognition of the U.S. Special Resolution Regimes .

 

(i)                                      In the event that any Underwriter that is a Covered Entity (as defined below) becomes subject to a proceeding under a U.S. Special Resolution Regime (as defined below), the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

 

(ii)                                   In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate (as defined below) of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights (as defined below) under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

 

As used in this Section 12:

 

“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).

 

“Covered Entity” means any of the following:

 

(i)                                      a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

 

(ii)                                   a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

 

(iii)                                a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

 

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

 

21


 

“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

 

13.        Notices. All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed or telecopied and confirmed to BNP Paribas Securities Corp., 787 Seventh Avenue, New York, New York 10019, E-mail: new.york.syndicate@bnpparibas.com, Attention: Syndicate Desk — 7th Floor; Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, New York 10010-3629, Facsimile: (212) 325-4296, Attention: IBCM-Legal; SMBC Nikko Securities America, Inc., 277 Park Avenue, New York, New York 10172, Attention: Debt Capital Markets; U.S. Bancorp Investments, Inc., 214 N. Tryon Street, 26th Floor, Charlotte, North Carolina 28202, Attention: Credit Fixed Income; or if sent to the Company, will be mailed or telecopied and confirmed to it at 550 South Tryon Street, Charlotte, North Carolina 28202 (Telephone: (980) 373-3564), attention of Assistant Treasurer. Any such communications shall take effect upon receipt thereof.

 

14.        Business Day. As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.

 

15.        Successors. This Agreement shall inure to the benefit of and be binding upon the Underwriters and the Company and their respective successors.  Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons, officers and directors referred to in Section 7 and their respective successors, heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained; this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective successors and said controlling persons, officers and directors and their respective successors, heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Notes from any Underwriter shall be deemed to be a successor or assign by reason merely of such purchase.

 

16.        Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

 

17.        Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

 

22


 

If the foregoing is in accordance with your understanding, kindly sign and return to us two counterparts hereof, and upon confirmation and acceptance by the Underwriters, this letter and such confirmation and acceptance will become a binding agreement between the Company, on the one hand, and each of the Underwriters, on the other hand, in accordance with its terms.

 

 

Very truly yours,

 

 

 

PIEDMONT NATURAL GAS COMPANY, INC.

 

 

 

By:

/s/ Jack L. Sullivan, III

 

 

Name:

Jack L. Sullivan, III

 

 

Title:

Assistant Treasurer

 

[ Remainder of page left blank intentionally ]

 

23


 

The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above written.

 

On behalf of each of the Underwriters

 

CREDIT SUISSE SECURITIES (USA) LLC

 

 

 

By:

/s/ Nevin Bhatia

 

Name: Nevin Bhatia

 

Title: Managing Director

 

 

 

BNP PARIBAS SECURITIES CORP.

 

 

 

By:

/s/ Pasquale A. Perraglia IV

 

Name: Pasquale A. Perraglia IV

 

Title: Director

 

 

 

SMBC NIKKO SECURITIES AMERICA, INC.

 

 

 

By:

/s/ Bungo Miura

 

Name: Bungo Miura

 

Title: President

 

 

 

U.S. BANCORP INVESTMENTS, INC.

 

 

 

By:

/s/ Phillip Bennett

 

Name: Phillip Bennett

 

Title: Managing Director

 

 

24


 

SCHEDULE A

 

Underwriter

 

Principal Amount
of Notes

 

BNP Paribas Securities Corp.

 

$

120,000,000

 

C redit Suisse Securities (USA) LLC

 

$

120,000,000

 

S MBC Nikko Securities America, Inc.

 

$

120,000,000

 

U .S. Bancorp Investments, Inc.

 

$

120,000,000

 

L oop Capital Markets LLC

 

$

42,000,000

 

B B&T Capital Markets, a division of BB&T Securities, LLC

 

$

30,000,000

 

R egions Securities LLC

 

$

30,000,000

 

A cademy Securities, Inc.

 

$

6,000,000

 

D rexel Hamilton, LLC

 

$

6,000,000

 

M ischler Financial Group, Inc.

 

$

6,000,000

 

T otal

 

$

600,000,000

 

 

A- 1


 

SCHEDULE B

 

PRICING DISCLOSURE PACKAGE

 

1)                                      Base Prospectus

2)                                      Preliminary Prospectus Supplement dated May 21, 2019

3)                                      Permitted Free Writing Prospectus

a)                                      Pricing Term Sheet attached as Schedule C hereto

 

B- 1


 

SCHEDULE C

 

Filed pursuant to Rule 433

May 21, 2019

Relating to

Preliminary Prospectus Supplement dated May 21, 2019 to

Prospectus dated March 25, 2019

Registration Statement No. 333-213765-06

 

Piedmont Natural Gas Company, Inc.

 

$600,000,000 3.50% Senior Notes due 2029

 

 

 

Pricing Term Sheet

 

 

 

Issuer:

 

Piedmont Natural Gas Company, Inc.

 

 

 

Trade Date:

 

May 21, 2019

 

 

 

Settlement Date:

 

May 24, 2019; T+3

 

 

 

Security Description:

 

3.50% Senior Notes due 2029 (the “ Notes ”)

 

 

 

Interest Payment Dates:

 

June 1 and December 1 of each year, beginning on December 1, 2019

 

 

 

Principal Amount:

 

$600,000,000

 

 

 

Maturity Date:

 

June 1, 2029

 

 

 

Price to Public:

 

99.748% per Note, plus accrued interest, if any, from May 24, 2019

 

 

 

Coupon:

 

3.50%

 

 

 

Benchmark Treasury:

 

2.375% due May 15, 2029

 

 

 

Benchmark Treasury Price:

 

99 - 16+

 

 

 

Benchmark Treasury Yield:

 

2.430%

 

 

 

Spread to Benchmark Treasury:

 

+110 bps

 

 

 

Yield to Maturity:

 

3.530%

 

Annex A- 1


 

Redemption Provisions/
Make-Whole Call:

 

At any time before March 1, 2029 (which is the date that is three months prior to maturity of the Notes (the “ Par Call Date ”)), the issuer will have the right to redeem the Notes, at its option, in whole or in part and from time to time, at a redemption price equal to the greater of (1) 100% of the principal amount of the Notes being redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed that would be due if the Notes matured on the Par Call Date (exclusive of interest accrued to the redemption date), discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 20 basis points, plus, in either case, accrued and unpaid interest on the principal amount of the Notes being redeemed to, but excluding, such redemption date.

 

 

 

Par Call:

 

At any time on or after the Par Call Date, the issuer will have the right to redeem the Notes, at its option, in whole or in part and from time to time, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest on the principal amount of the Notes being redeemed to, but excluding, such redemption date.

 

 

 

CUSIP / ISIN:

 

720186 AL9 / US720186AL95

 

 

 

Joint Book-Running Managers:

 

BNP Paribas Securities Corp.
Credit Suisse Securities (USA) LLC
SMBC Nikko Securities America, Inc.
U.S. Bancorp Investments, Inc.

 

 

 

Co-Managers:

 

Loop Capital Markets LLC
BB&T Capital Markets, a division of BB&T Securities, LLC
Regions Securities LLC

 

 

 

Junior Co-Managers:

 

Academy Securities, Inc.
Drexel Hamilton, LLC
Mischler Financial Group, Inc.

 

The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Website at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling BNP Paribas Securities Corp. toll-free at 1-800-854-5674, Credit Suisse Securities (USA) LLC toll-free at 1-800-221-1037, SMBC Nikko Securities America, Inc. toll-free at 1-888-868-6856 or U.S. Bancorp Investments, Inc. toll-free at 1-877-558-2607.

 

A- 2