Exhibit 10
EXECUTION COPY
 
Piedmont Natural Gas Company, Inc.
$40,000,000 2.92% Series A Senior Notes due June 6, 2016
$160,000,000 4.24% Series B Senior Notes due June 6, 2021
______________
Note Purchase Agreement
______________
Dated May 6, 2011
 

 

--------------------------------------------------------------------------------

 

Table of Contents

  Section   Heading   Page

         
Section 1. Authorization of Notes
    1  
 
       
Section 2. Sale and Purchase of Notes
    1  
 
       
Section 3. Closing
    2  
 
       
Section 4. Conditions to Closing
    2  
 
       
Section 4.1. Representations and Warranties
    2  
Section 4.2. Performance; No Default
    2  
Section 4.3. Compliance Certificates
    2  
Section 4.4. Opinions of Counsel
    3  
Section 4.5. Purchase Permitted By Applicable Law, Etc.
    3  
Section 4.6. Sale of Other Notes
    3  
Section 4.7. Payment of Special Counsel Fees
    3  
Section 4.8. Private Placement Number
    3  
Section 4.9. Changes in Corporate Structure
    3  
Section 4.10. Funding Instructions
    3  
Section 4.11. Proceedings and Documents
    4  
 
       
Section 5. Representations and Warranties of the Obligors
    4  
 
       
Section 5.1. Organization; Power and Authority
    4  
Section 5.2. Authorization, Etc.
    4  
Section 5.3. Disclosure
    4  
Section 5.4. Organization and Ownership of Shares of Subsidiaries
    5  
Section 5.5. Financial Statements; Material Liabilities
    5  
Section 5.6. Compliance with Laws, Other Instruments, Etc.
    6  
Section 5.7. Governmental Authorizations, Etc.
    6  
Section 5.8. Litigation; Observance of Statutes and Orders
    6  
Section 5.9. Taxes
    6  
Section 5.10. Title to Property; Leases
    7  
Section 5.11. Licenses, Permits, Etc.
    7  
Section 5.12. Compliance with ERISA
    7  
Section 5.13. Private Offering by the Company
    8  
Section 5.14. Use of Proceeds; Margin Regulations
    8  
Section 5.15. Existing Indebtedness
    8  
Section 5.16. Foreign Assets Control Regulations, Etc.
    9  
Section 5.17. Status under Certain Statutes
    10  
Section 5.18. Pari Passu Obligations
    10  

-i-

 

--------------------------------------------------------------------------------

 

Section   Heading   Page

         
Section 6. Representations of the Purchasers
    10  
 
       
Section 6.1. Purchase for Investment
    10  
Section 6.2. Source of Funds
    10  
Section 6.3. Accredited Investor
    12  
 
       
Section 7. Information as to Company
    12  
 
       
Section 7.1. Financial Statements
    12  
Section 7.2. Certificates; Other Information
    13  
Section 7.3. Notices
    15  
Section 7.4. Visitation
    15    
Section 8. Payment and Prepayment of the Notes
    16  
 
       
Section 8.1. Maturity
    16  
Section 8.2. Optional Prepayments with Make-Whole Amount
    16  
Section 8.3. Allocation of Partial Prepayments
    16  
Section 8.4. Maturity; Surrender, Etc.
    16  
Section 8.5. Purchase of Notes
    16  
Section 8.6. Make-Whole Amount
    17  
Section 8.7. Change in Control
    18  
 
       
Section 9. Affirmative Covenants
    20  
 
       
Section 9.1. Compliance with Law
    20  
Section 9.2. Insurance
    20  
Section 9.3. Maintenance of Properties
    20  
Section 9.4. Payment of Obligations
    20  
Section 9.5. Corporate Existence, Etc.
    20  
Section 9.6. Books and Records
    21  
Section 9.7. Ranking
    21  
Section 9.8. Guarantors
    21  
 
       
Section 10. Negative Covenants
    22  
 
       
Section 10.1. Transactions with Affiliates
    22  
Section 10.2. Merger, Consolidation, Etc.
    22  
Section 10.3. Terrorism Sanctions Regulations
    23  
Section 10.4. Liens
    23  
Section 10.5. Leverage Ratio
    25  
Section 10.6. Change in Nature of Business
    25  
 
       
Section 11. Events of Default
    25  
 
       
Section 12. Remedies on Default, Etc.
    27  
 
       
Section 12.1. Acceleration
    27  
Section 12.2 Other Remedies
    28  

-ii-

 

--------------------------------------------------------------------------------

 

Section   Heading   Page

         
Section 12.3 Rescission
    28  
Section 12.4 No Waivers or Election of Remedies, Expenses, Etc.
    28  
 
       
Section 13. Registration; Exchange; Substitution of Notes
    28  
 
       
Section 13.1. Registration of Notes
    28  
Section 13.2. Transfer and Exchange of Notes
    29  
Section 13.3. Replacement of Notes
    29  
 
       
Section 14. Payments on Notes
    30  
 
       
Section 14.1. Place of Payment
    30  
Section 14.2. Home Office Payment
    30  
 
       
Section 15. Expenses, Etc
    30  
 
       
Section 15.1. Transaction Expenses
    30  
Section 15.2. Survival
    31  
 
       
Section 16. Survival of Representations and Warranties; Entire Agreement
    31  
 
       
Section 17. Amendment and Waiver
    31  
 
       
Section 17.1. Requirements
    31  
Section 17.2. Solicitation of Holders of Notes
    31  
Section 17.3. Binding Effect, etc
    32  
Section 17.4. Notes Held by Company, etc
    32  
 
       
Section 18. Notices
    32  
 
       
Section 19. Reproduction of Documents
    34  
 
       
Section 20. Confidential Information
    34  
 
       
Section 21. Substitution of Purchaser
    35  
 
       
Section 22. Miscellaneous
    36  
 
       
Section 22.1. Successors and Assigns
    36  
Section 22.2. Payments Due on Non-Business Days
    36  
Section 22.3. Accounting Terms
    36  
Section 22.4. Severability
    37  
Section 22.5. Construction, etc
    37  
Section 22.6. Counterparts
    37  
Section 22.7. Governing Law
    37  
Section 22.8. Jurisdiction and Process; Waiver of Jury Trial
    37  

-iii-

 

--------------------------------------------------------------------------------

 

Signature
      1

-iv-

--------------------------------------------------------------------------------

 

         
Schedule A
  —   Information Relating to Purchasers
 
       
Schedule B
  —   Defined Terms
 
       
Schedule 5.3
  —   Disclosure Materials
 
       
Schedule 5.4
  —   Subsidiaries of the Company and Ownership of Subsidiary Stock
 
       
Schedule 5.5
  —   Financial Statements
 
       
Schedule 5.15
  —   Existing Indebtedness
 
       
Schedule 10.4
  —   Existing Liens
 
       
Exhibit 1(a)
  —   Form of 2.92% Series A Senior Note due June 6, 2016
 
       
Exhibit 1(b)
  —   Form of 4.24% Series B Senior Note due June 6, 2021
 
       
Exhibit 4.4(a)(i)
  —   Form of Opinion of Special Counsel for the Company
 
       
Exhibit 4.4(a)(ii)
  —   Form of Opinion of In-House Counsel for the Company
 
       
Exhibit 4.4(b)
  —   Form of Opinion of Special Counsel for the Purchasers

-v-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.
4720 Piedmont Row Drive
Charlotte, North Carolina 28210
________________
$40,000,000 2.92% Series A Senior Notes due June 6, 2016
$160,000,000 4.24% Series B Senior Notes due June 6, 2021
May 6, 2011
To Each of the Purchasers Listed in
     Schedule A Hereto:
Ladies and Gentlemen:
     Piedmont Natural Gas Company, Inc., a North Carolina corporation (the
“Company”), agrees with each of the purchasers whose names appear at the end
hereof (each, a “Purchaser” and, collectively, the “Purchasers”) as follows:
Section 1. Authorization of Notes.
     The Company will authorize the issue and sale of (i) $40,000,000 aggregate
principal amount of its 2.92% Series A Senior Notes due June 6, 2016 (the
“Series A Notes”) and (ii) $160,000,000 aggregate principal amount of its 4.24%
Series B Senior Notes due June 6, 2021 (the “Series B Notes” and, together with
the Series A Notes, the “Notes”, such term to include any such notes issued in
substitution therefor pursuant to Section 13). The Notes shall be substantially
in the forms set out in Exhibit 1(a) and Exhibit 1(b), respectively. Certain
capitalized and other terms used in this Agreement are defined in Schedule B;
and references to a “Schedule” or an “Exhibit” are, unless otherwise specified,
to a Schedule or an Exhibit attached to this Agreement.
Section 2. Sale and Purchase of Notes.
     Subject to the terms and conditions of this Agreement, the Company will
issue and sell to each Purchaser and each Purchaser will purchase from the
Company, at the Closing provided for in Section 3, Notes in the principal amount
specified opposite such Purchaser’s name in Schedule A at the purchase price of
100% of the principal amount thereof. The Purchasers’ obligations hereunder are
several and not joint obligations and no Purchaser shall have any liability to
any Person for the performance or non-performance of any obligation by any other
Purchaser hereunder.

 

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Section 3. Closing.
        The execution and delivery of this Agreement shall occur at the offices
of Chapman and Cutler LLP, 111 W. Monroe Street, Chicago, Illinois 60603 at
10:00 a.m., Chicago time, on May 6, 2011. The sale and purchase of the Notes to
be purchased by each Purchaser shall occur at the offices of Chapman and Cutler
LLP, 111 W. Monroe Street, Chicago, Illinois 60603, at 11:00 a.m., Chicago time,
at a closing (the “Closing”) on June 6, 2011 or on such other Business Day
thereafter on or prior to June 30, 2011 as may be agreed upon by the Company and
the Purchasers. At the Closing the Company will deliver to each Purchaser the
Notes to be purchased by such Purchaser in the form of a single Note (or such
greater number of Notes in denominations of at least $1,000,000, as such
Purchaser may request) dated the date of the Closing and registered in such
Purchaser’s name (or in the name of its nominee), against delivery by such
Purchaser to the Company or its order of immediately available funds in the
amount of the purchase price therefor by wire transfer of immediately available
funds for the account of the Company to account number ########## at Bank of
America, N.A., ABA number #########. If at the Closing the Company shall fail to
tender such Notes to any Purchaser as provided above in this Section 3, or any
of the conditions specified in Section 4 shall not have been fulfilled to such
Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of
all further obligations under this Agreement, without thereby waiving any rights
such Purchaser may have by reason of such failure or such nonfulfillment.
Section 4. Conditions to Closing.
        Each Purchaser’s obligation to purchase and pay for the Notes to be sold
to such Purchaser at the Closing is subject to the fulfillment to such
Purchaser’s satisfaction, prior to or at the Closing, of the following
conditions:
     Section 4.1. Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be correct when made as of the
date of this Agreement and at the time of the Closing.
     Section 4.2. Performance; No Default. The Company shall have performed and
complied with all agreements and conditions contained in this Agreement required
to be performed or complied with by it prior to or at the Closing and after
giving effect to the issue and sale of the Notes (and the application of the
proceeds thereof as contemplated by Section 5.14) no Change in Control shall
have occurred and no Default or Event of Default shall have occurred and be
continuing.
     Section 4.3. Compliance Certificates.
        (a) Officer’s Certificate. The Company shall have delivered to such
Purchaser an Officer’s Certificate, dated the date of the Closing, certifying
that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
        (b) Secretary’s Certificate. The Company shall have delivered to such
Purchaser a certificate of its Corporate Secretary or Assistant Corporate
Secretary, dated the date of Closing,

-2-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

certifying as to the resolutions attached thereto and other corporate
proceedings relating to the authorization, execution and delivery of the Notes
and this Agreement.
     Section 4.4. Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance reasonably satisfactory to such Purchaser, dated
the date of the Closing (a) from (i) Moore & Van Allen PLLC, special counsel for
the Company and (ii) in-house counsel for the Company, covering the matters set
forth in Exhibit 4.4(a)(i) and Exhibit 4.4(a)(ii), respectively, (and the
Company hereby instructs its counsel to deliver such opinions to the Purchasers)
and (b) from Chapman and Cutler LLP, the Purchasers’ special counsel in
connection with such transactions, substantially in the form set forth in
Exhibit 4.4(b).
     Section 4.5. Purchase Permitted By Applicable Law, Etc. There shall not
have occurred any Change in Law after the date hereof such that, pursuant to
such Change in Law, on the date of Closing, such Purchaser’s purchase of Notes
(a) is not permitted by the laws and regulations of each jurisdiction to which
such Purchaser is subject, without recourse to provisions (such as section
1405(a)(8) of the New York Insurance Law) permitting limited investments by
insurance companies without restriction as to the character of the particular
investment, (b) violates any applicable law or regulation (including, without
limitation, Regulation T, U or X of the Board of Governors of the Federal
Reserve System) or (c) subjects such Purchaser to any tax, penalty or liability
under or pursuant to any applicable law or regulation, which law or regulation
was not in effect on the date hereof. If requested by such Purchaser respecting
any such Change in Law, such Purchaser shall have received an Officer’s
Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such purchase
is so permitted.
     Section 4.6. Sale of Other Notes. Contemporaneously with the Closing the
Company shall offer to sell to each other Purchaser the Notes to be purchased by
it at the Closing as specified in Schedule A.
     Section 4.7. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the Closing
the fees, charges and disbursements of the Purchasers’ special counsel referred
to in Section 4.4 to the extent reflected in a statement of such counsel
rendered to the Company at least two Business Days prior to the Closing.
     Section 4.8. Private Placement Number. A Private Placement Number issued by
Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have
been obtained for the Notes.
     Section 4.9. Changes in Corporate Structure. The Company shall not have
changed its jurisdiction of incorporation or organization, as applicable, or
been a party to any merger or consolidation or succeeded to all or any
substantial part of the liabilities of any other entity, at any time following
the date of the most recent financial statements referred to in Schedule 5.5.
     Section 4.10. Funding Instructions. At least three Business Days prior to
the date of the Closing, each Purchaser shall have received written instructions
signed by a Responsible Officer

-3-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

on letterhead of the Company confirming the bank and account information
specified in Section 3 including (i) the name and address of the transferee
bank, (ii) such transferee bank’s ABA number and (iii) the account name and
number into which the purchase price for the Notes is to be deposited.
     Section 4.11. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
reasonably satisfactory to such Purchaser and its special counsel, and such
Purchaser and its special counsel shall have received all such counterpart
originals or certified or other copies of such documents as such Purchaser or
such special counsel may reasonably request.
Section 5. Representations and Warranties of the Company.
        The Company represents and warrants to each Purchaser that:
     Section 5.1. Organization; Power and Authority. The Company (a) is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and (b) is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, except (respecting (a) or (b)) to the extent
failure to do so would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company has the corporate power
and authority to own or hold under lease the properties it purports to own or
hold under lease and to transact the business it transacts and proposes to
transact, except to the extent failure to do so, would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. The
Company has the corporate power and authority to execute and deliver this
Agreement and the Notes and to perform the provisions hereof and thereof.
     Section 5.2. Authorization, Etc. This Agreement and the Notes have been
duly authorized by all necessary corporate action on the part of the Company,
and this Agreement constitutes, and upon execution and delivery thereof each
Note will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
     Section 5.3. Disclosure. The Company, through its agent, Merrill Lynch,
Pierce, Fenner & Smith Incorporated, has delivered to each Purchaser a copy of a
Private Placement Memorandum, dated March, 20101 (the “Memorandum”), relating to
the transactions
 

1   The Private Placement Memorandum was inadvertently dated March 2010. It was
in fact produced and delivered to each Purchaser in March 2011.

-4-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

contemplated hereby. This Agreement, the Memorandum and the documents,
certificates or other writings delivered to the Purchasers by or on behalf of
the Company in connection with the transactions contemplated hereby and
identified in Schedule 5.3, and the financial statements listed in Schedule 5.5
(this Agreement, the Memorandum and such documents, certificates or other
writings and such financial statements delivered to each Purchaser prior to
March 21, 2011 being referred to, collectively, as the “Disclosure Documents”),
taken as a whole and including any information incorporated therein by
reference, do not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. Except as
disclosed in the Disclosure Documents (including by incorporation by reference),
since October 31, 2010, there has been no change in the financial condition,
operations, business or properties of the Company or any of its Subsidiaries
except changes that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect.
     Section 5.4. Organization and Ownership of Shares of Subsidiaries.
(a) Schedule 5.4 is (except as noted therein) a complete and correct list of the
Company’s Subsidiaries, showing, as to each Subsidiary, the correct name
thereof, the jurisdiction of its organization, and the percentage of shares of
each class of its capital stock or similar Equity Interests outstanding owned by
the Company and each other Subsidiary.
        (b) All of the outstanding shares of capital stock or similar Equity
Interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
        (c) Each Subsidiary identified in Schedule 5.4 (i) is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and (ii) is duly qualified as a
foreign corporation or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law, except (respecting
(i) or (ii)) to the extent failure to do so would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each such
Subsidiary has the corporate or other power and authority to own or hold under
lease the properties it purports to own or hold under lease and to transact the
business it transacts and proposes to transact, except to the extent failure to
do so, would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
     Section 5.5. Financial Statements; Material Liabilities. The Company has
delivered to each Purchaser copies of the consolidated financial statements of
the Company and its Subsidiaries listed on Schedule 5.5. All of said financial
statements (including in each case the related schedules and notes) fairly
present in all material respects the consolidated financial position of the
Company and its Subsidiaries as of the respective dates specified in such
Schedule and the consolidated results of their operations and cash flows for the
respective periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set forth in the
notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments). The Company and its

-5-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Subsidiaries do not have any Material liabilities that are not disclosed on such
financial statements or are not otherwise disclosed in the Disclosure Documents.
     Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Agreement and the Notes will not
(i) contravene the Company’s corporate charter or by-laws, (ii) result in any
breach of, or constitute a default under, or result in the creation of any Lien
in respect of any property of the Company, or any Subsidiary, under any
indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease,
or any other agreement or instrument to which the Company or any Subsidiary is
bound or by which the Company or any Subsidiary or any of their respective
properties may be bound or affected, (iii) conflict with or result in a breach
of any of the terms, conditions or provisions of any order, judgment, decree, or
ruling of any court, arbitrator or Governmental Authority applicable to the
Company or any Subsidiary or (iv) violate any provision of any statute or other
rule or regulation of any Governmental Authority applicable to the Company or
any Subsidiary (including, without limitation, PUHCA or the Federal Power Act,
as amended), except in each of the cases referenced in clauses (ii), (iii) or
(iv), to the extent failure to do so would not reasonably be expected to result
in a Material Adverse Effect.
     Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement and the Notes (including, without limitation,
any thereof under PUHCA, the Natural Gas Act or the Federal Power Act, each as
amended), other than such as have been obtained or made, as applicable.
     Section 5.8. Litigation; Observance of Statutes and Orders. (a) There are
no actions, suits, investigations or proceedings pending or, to the knowledge of
the Company, threatened against or affecting the Company or any Subsidiary or
any property of the Company or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.
        (b) Neither the Company nor any Subsidiary is in default under any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including without limitation Environmental Laws or, the USA Patriot
Act or any of the other laws and regulations referred to in Section 5.16) of any
Governmental Authority, which default or violation, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
     Section 5.9. Taxes. The Company and its Subsidiaries have filed all
Material income tax returns that are required to have been filed in any
jurisdiction, and have paid all taxes shown to be due and payable on such
returns and all other taxes and assessments payable by them, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (i) the amount of which is not
individually or in the aggregate Material or (ii) the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a

-6-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Subsidiary, as the case may be, has established adequate reserves in accordance
with GAAP. The Federal income tax liabilities of the Company and its
Subsidiaries have been finally determined (whether by reason of completed audits
or the statute of limitations having run) for all fiscal years up to and
including the fiscal year ended October 31, 2007.
     Section 5.10. Title to Property; Leases. The Company and its Subsidiaries
have good and sufficient title to, or valid leasehold interests in, their
respective Material properties, including all such properties reflected in the
most recent audited balance sheet referred to in Section 5.5 or purported to
have been acquired by the Company or any Subsidiary after said date (except as
sold or otherwise disposed of), in each case free and clear of Liens prohibited
by this Agreement, except for those defects in title and Liens that,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
     Section 5.11. Licenses, Permits, Etc. The Company and its Subsidiaries own
or possess all licenses, permits, franchises, authorizations, patents,
copyrights, proprietary software, service marks, trademarks and trade names, or
rights thereto, that are Material, without known conflict with the rights of
others, except for those conflicts that, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.
     Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and would not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in section 3 of ERISA), and no
event, transaction or condition has occurred or exists that would reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to section 401(a)(29) or 412 of the Code or section 4068 of ERISA, other than
such liabilities or Liens as would not be individually or in the aggregate
Material.
        (b) The present value of the aggregate benefit liabilities under each
Plan subject to Title IV of ERISA (other than Multiemployer Plans), determined
as of the end of such Plan’s most recently ended plan year on the basis of the
actuarial assumptions specified for funding purposes in such Plan’s most recent
actuarial valuation report, did not exceed the aggregate current value of the
assets of such Plan allocable to such benefit liabilities. The term “benefit
liabilities” has the meaning specified in section 4001 of ERISA and the terms
“current value” and “present value” have the meaning specified in section 3 of
ERISA.
        (c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
        (d) The expected postretirement benefit obligation (determined as of the
last day of the Company’s most recently ended fiscal year in accordance with
Financial Accounting Standards

-7-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Board Codification Topic 715 “Compensation — Retirement Benefits”, without
regard to liabilities attributable to continuation coverage mandated by section
4980B of the Code) of the Company and its Subsidiaries is not Material.
        (e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject to
the prohibitions of section 406 of ERISA for which a tax could be imposed
pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by the
Company to each Purchaser in the first sentence of this Section 5.12(e) is made
in reliance upon and subject to the accuracy of such Purchaser’s representation
in Section 6.2 as to the sources of the funds used to pay the purchase price of
the Notes to be purchased by such Purchaser.
     Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any person other than the
Purchasers and not more than 45 other Institutional Investors, each of which has
been offered the Notes at a private sale for investment. Neither the Company nor
anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act or to the registration requirements of any
securities or blue sky laws of any applicable jurisdiction.
     Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Notes for general corporate purposes, including,
but not limited to, working capital needs and capital expenditures, and to
refinance outstanding borrowings. No part of the proceeds from the sale of the
Notes hereunder will be used, directly or indirectly, for the purpose of buying
or carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 221), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220). Margin stock does not constitute more than 5% of the value of the
consolidated assets of the Company and its Subsidiaries and the Company does not
have any present intention that margin stock will constitute more than 5% of the
value of such assets. As used in this Section, the terms “margin stock” and
“purpose of buying or carrying” shall have the meanings assigned to them in said
Regulation U.
     Section 5.15. Existing Indebtedness. Except as described therein,
Schedule 5.15 sets forth a complete and correct list of all outstanding
Indebtedness of the Company and its Subsidiaries as of January 31, 2011
(including a description of the obligors and obligees, principal amount
outstanding and collateral therefor, if any, and Guarantee thereof, if any),
since which date there has been no Material change in the amounts, interest
rates, sinking funds, installment payments or maturities of the Indebtedness of
the Company or its Subsidiaries. Neither the Company nor any Subsidiary is in
default and no waiver of default is currently in effect, in the payment of any
principal or interest on any Indebtedness of the Company or such Subsidiary and
no event or condition exists with respect to any Indebtedness of the Company or
any Subsidiary the outstanding principal amount of which exceeds $10,000,000
that would permit (or that with notice or the lapse of time, or both, would
permit) one or more Persons to cause such

-8-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Indebtedness to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
        (b) Neither the Company nor any Subsidiary is a party to, or otherwise
subject to any provision contained in, any instrument evidencing Indebtedness of
the Company or such Subsidiary, any agreement relating thereto or any other
agreement (including, but not limited to, its charter or other organizational
document) which limits the amount of, or otherwise imposes restrictions on the
incurring of, Indebtedness of the Company, except as specifically indicated in
Schedule 5.15.
     Section 5.16. Foreign Assets Control Regulations, Etc. (a) Neither the
Company nor any Affiliated Entity is (i) a Person whose name appears on the list
of Specially Designated Nationals and Blocked Persons published by the Office of
Foreign Assets Control Order or U.S. Department of Treasury (“OFAC”) (an “OFAC
Listed Person”), (ii) a department, agency or instrumentality of, or is
otherwise controlled by or acting on behalf of, directly or indirectly, (x) any
OFAC Listed Person; or (y) the government of a country subject to comprehensive
U.S. economic sanctions administered by OFAC (the “Country Sanctions”), or
(iii) a Person subject to the Country Sanctions (each OFAC Listed Person and
each other Person described in clause (ii) or (iii), a “Blocked Person”).
        (b) No part of the proceeds from the sale of the Notes hereunder
constitutes or will constitute funds obtained on behalf of any Blocked Person or
will otherwise be used, directly by the Company or indirectly through any
Affiliated Entity, in connection with any investment in, or knowingly in any
transactions or dealings with, any Blocked Person.
        (c) To the Company’s actual knowledge after making due inquiry, neither
the Company nor any Affiliated Entity (i) is under investigation by any
Governmental Authority for, or has been charged with, or convicted of, money
laundering, drug trafficking, terrorist-related activities or other money
laundering predicate crimes under any applicable law (collectively, “Anti-Money
Laundering Laws”), (ii) has been assessed civil penalties under any Anti-Money
Laundering Laws or (iii) has had any of its funds seized or forfeited in an
action under any Anti-Money Laundering Laws. The Company has taken reasonable
measures appropriate to the circumstances (in any event as required by
applicable law), to ensure that the Company and each Affiliated Entity is and
will continue to be in compliance with all applicable Anti-Money Laundering
Laws, except to the extent failure to do so would not reasonably be expected to
result in a Material Adverse Effect.
        (d) No part of the proceeds from the sale of the Notes hereunder will be
used, directly or indirectly, for any improper payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, official of any public international organization or
anyone else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage. The Company has taken reasonable
measures appropriate to the circumstances (in any event as required by
applicable law), to ensure that the Company and each Affiliated Entity is and
will continue to be in compliance with all applicable anti-corruption laws and
regulations, except to the extent failure to do so would not reasonably be
expected to result in a Material Adverse Effect.

-9-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

     Section 5.17. Status under Certain Statutes. Neither the Company nor any
Subsidiary is subject to regulation under the Investment Company Act of 1940, as
amended, or is subject to regulation under PUHCA, the ICC Termination Act of
1995, as amended, or the Federal Power Act, as amended.
     Section 5.18. Pari Passu Obligations. The obligations of the Company under
this Agreement and the Notes and the obligations of each Guarantor under the
Subsidiary Guaranty rank pari passu in right of payment with all other senior
unsecured Indebtedness of the Company and of each Guarantor, as applicable;
provided, the foregoing does not constitute any representation or warranty
regarding or otherwise limiting (a) the maturity date of any Indebtedness of the
Company or of any Guarantor, (b) any terms relating to the timing of
prepayments, redemptions or similar provisions (including without limitation on
a voluntary or involuntary basis) regarding any Indebtedness of the Company or
of any Guarantor or (c) any Liens with respect to secured Indebtedness upon or
with respect to any Property of the Company or of any Guarantor permitted
pursuant to this Agreement (including without limitation pursuant to
Section 10.4).
Section 6. Representations of the Purchasers.
     Section 6.1. Purchase for Investment. Each Purchaser severally represents
that it is purchasing the Notes for its own account or for one or more separate
accounts maintained by such Purchaser or for the account of one or more pension
or trust funds and not with a view to the distribution thereof, provided that
the disposition of such Purchaser’s or their property shall at all times be
within such Purchaser’s or their control. Each Purchaser understands that the
Notes have not been registered under the Securities Act and may be resold only
if registered pursuant to the provisions of the Securities Act or if an
exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that the
Company is not required to register the Notes.
       Each Purchaser severally represents that it has received and reviewed the
Disclosure Documents and has been furnished an opportunity to obtain any
additional information or documents concerning the Company and its Subsidiaries,
their financial condition, operations, business or properties necessary or
desirable to make an informed decision to purchase the Notes.
     Section 6.2. Source of Funds. Each Purchaser severally represents that at
least one of the following statements is an accurate representation as to each
source of funds (a “Source”) to be used by such Purchaser to pay the purchase
price of the Notes to be purchased by such Purchaser hereunder:
     (a) the Source is an “insurance company general account” (as the term is
defined in the United States Department of Labor’s Prohibited Transaction
Exemption (“PTE”) 95-60 (issued July 12, 1995)) in respect of which the reserves
and liabilities (as defined by the annual statement for life insurance companies
approved by the National Association of Insurance Commissioners (the “NAIC
Annual Statement”)) for the general account contract(s) held by or on behalf of
any employee benefit plan together with the

-10-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

amount of the reserves and liabilities for the general account contract(s) held
by or on behalf of any other employee benefit plans maintained by the same
employer (or affiliate thereof as defined in PTE 95-60) or by the same employee
organization in the general account do not exceed 10% of the total reserves and
liabilities of the general account (exclusive of separate account liabilities)
plus surplus as set forth in the NAIC Annual Statement filed with such
Purchaser’s state of domicile; or
        (b) the Source is a separate account that is maintained solely in
connection with such Purchaser’s fixed contractual obligations under which the
amounts payable, or credited, to any employee benefit plan (or its related
trust) that has any interest in such separate account (or to any participant or
beneficiary of such plan (including any annuitant)) are not affected in any
manner by the investment performance of the separate account; or
        (c) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 or (ii) a bank collective investment
fund, within the meaning of the PTE 91-38 and, except as disclosed by such
Purchaser to the Company in writing pursuant to this clause (c), no employee
benefit plan or group of plans maintained by the same employer or employee
organization beneficially owns more than 10% of all assets allocated to such
pooled separate account or collective investment fund; or
        (d) the Source constitutes assets of an “investment fund” (within the
meaning of Part V of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified
professional asset manager” or “QPAM” (within the meaning of Part V of the QPAM
Exemption), no employee benefit plan’s assets that are included in such
investment fund, when combined with the assets of all other employee benefit
plans established or maintained by the same employer or by an affiliate (within
the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the total
client assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, as of the last day of its most recent calendar
quarter, the QPAM does not own a 10% or more interest in the Company and no
Person controlling or controlled by the QPAM (applying the definition of
“control” in Section V(e) of the QPAM Exemption) owns a 20% or more interest in
the Company (or less than 20% but greater than 10%, if such Person exercises
control over the management or policies of the Company by reason of its
ownership interest) and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment fund have
been disclosed to the Company in writing pursuant to this clause (d); or
        (e) the Source constitutes assets of a “plan(s)” (within the meaning of
Section IV of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset
manager” or “INHAM” (within the meaning of Part IV of the INHAM Exemption), the
conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied,
neither the INHAM nor a Person controlling or controlled by the INHAM (applying
the definition of “control” in Section IV(d) of the INHAM Exemption) owns a 5%
or more interest in the Company and (i) the identity of such INHAM and (ii) the
name(s) of the employee

-11-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

benefit plan(s) whose assets constitute the Source have been disclosed to the
Company in writing pursuant to this clause (e); or
        (f) the Source is a governmental plan; or
      (g) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each of
which has been identified to the Company in writing pursuant to this clause (g);
or
        (h) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms “employee benefit plan”, “governmental
plan”, “party in interest” and “separate account” shall have the respective
meanings assigned to such terms in section 3 of ERISA.
     Section 6.3. Accredited Investor. Each Purchaser represents that it is an
“accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act acting for its own account (and not for
the account of others) or as a fiduciary or agent for others (which others are
also “accredited investors”). Each Purchaser further represents that such
Purchaser has had the opportunity to ask questions of the Company and received
answers concerning the terms and conditions of the sale of the Notes.
Section 7. Information as to Company.
     Section 7.1. Financial Statements. The Company shall deliver to each holder
of Notes that is an Institutional Investor:
      (a) as soon as available, but in any event by the date on which
consolidated financial statements for such period are required to be delivered
to the SEC under the Securities Laws (without regard to any extensions of such
date permitted by the Securities Laws for which any special application is
required) (and if the Company does not have to deliver such consolidated
financial statements to the SEC under the Securities Laws, then as soon as
available, but in any event within 90 days after the end of the fiscal year of
the Company), a consolidated balance sheet of the Company and its Subsidiaries
as at the end of each fiscal year, and the related consolidated statements of
income from operations, shareholders’ equity and cash flows for such fiscal
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, such consolidated statements to be audited and accompanied by (i) a report
and opinion of a Registered Public Accounting Firm of nationally recognized
standing reasonably acceptable to the Required Holders (which shall include but
not be limited to Deloitte & Touche, LLP), which report and opinion shall be
prepared in accordance with generally accepted auditing standards and applicable
Securities Laws and shall not be subject to any “going concern” or like
qualification or exception or any qualification or exception as to the scope of
such audit or with respect to the absence of any material misstatement; and

-12-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

     (b) as soon as available, but in any event by the date on which
consolidated financial statements for such period are required to be delivered
to the SEC under the Securities Laws (without regard to any extensions of such
date permitted by the Securities Laws for which any special application is
required) (and if the Company does not have to deliver such consolidated
financial statements to the SEC under the Securities Laws, then as soon as
available, but in any event within 45 days after the end of the first three
fiscal quarters of each fiscal year of the Company), a consolidated balance
sheet of the Company and its Subsidiaries as at the end of the fiscal quarter
and as at the end of the most recently completed fiscal year, the related
consolidated statements of income from operations for such fiscal quarter and
for the portion of the Company’s fiscal year then ended, setting forth in
comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
and the related consolidated statements of cash flows for the portion of the
Company’s fiscal year then ended setting forth in comparative form the figures
for the corresponding portion of the previous fiscal year, all in reasonable
detail, such consolidated statements to be certified by the chief executive
officer, chief financial officer, treasurer or controller of the Company as
fairly presenting the financial condition, results of operations, shareholders’
equity and cash flows of the Company and its Subsidiaries in accordance with
GAAP, subject only to normal year-end audit adjustments and the absence of
footnotes.
        As to any information contained in materials furnished pursuant to
Section 7.2(c), the Company shall not be separately required to furnish such
information under subsections (a) or (b) above, and to the extent that the
Company has filed a Form 10K or Form 10Q for the respective financial period
with the SEC, it shall be deemed to have satisfied subsections (a) and
(b) above.
     Section 7.2. Certificates; Other Information. The Company shall deliver to
each holder of Notes that is an Institutional Investor the following:
     (a) concurrently with the delivery of the financial statements referred to
in Sections 7.1(a) and (b) (commencing with the delivery of the financial
statements for the fiscal quarter ended April 30, 2011), a duly completed
compliance certificate signed by the chief executive officer, chief financial
officer, treasurer or controller of the Company, which certificate (i) shall
contain a statement that such officer has reviewed the relevant terms hereof and
has made, or caused to be made, under his or her supervision, a review of the
transactions and conditions of the Company from the beginning of the quarterly
or annual period covered by the statements then being furnished to the date of
the certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or an
Event of Default or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action the
Company shall have taken or proposes to take with respect thereto and (ii) shall
contain information (including detailed calculations) required in order to
establish whether the Company was in compliance with the requirements of
Section 10.5, inclusive during the quarterly or annual period covered by the
statements then being furnished (including with respect to such Section, where
applicable, the calculations of

-13-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

the maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Section, and the calculation of the amount,
ratio or percentage then in existence);
     (b) promptly after the same are requested by any holder of Notes that is an
Institutional Investor, copies of any detailed audit reports, management letters
or recommendations submitted to the board of directors (or the audit committee
of the board of directors) of the Company by independent accountants in
connection with the accounts or books of the Company or any Subsidiary, or any
audit of any of them;
     (c) promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the
stockholders of the Company, and copies of all annual, regular, periodic and
special reports and registration statements which the Company may file or be
required to file with the SEC under Sections 13 or 15(d) of the Securities
Exchange Act of 1934, and not otherwise required to be delivered pursuant
hereto;
     (d) promptly after the furnishing thereof, copies of any statement or
report furnished to any holder of debt securities of the Company or any
Subsidiary thereof pursuant to the terms of any indenture, loan or credit or
similar agreement and not otherwise required to be furnished pursuant to
Section 7.1 or any other subsection of this Section 7.2;
     (e) promptly, and in any event within five Business Days after receipt
thereof by the Company or any Subsidiary thereof, copies of each notice or other
correspondence received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any investigation or possible investigation or
other inquiry (excluding SEC comment letter) by such agency regarding financial
or other operational results of the Company or any Subsidiary thereof; and
     (f) promptly, such additional information regarding the business, financial
or corporate affairs of the Company or any Subsidiary, or compliance with the
terms of this Agreement or the Notes, as any holder of Notes that is an
Institutional Investor may from time to time reasonably request.
     Documents required to be delivered pursuant to Sections 7.1(a) or (b) or
Sections 7.2(c) or (d) (to the extent any such documents are included in
materials otherwise filed with the SEC) may be delivered electronically and if
so delivered, shall be deemed to have been delivered on the date (i) on which
the Company posts such documents, or provides a link thereto on the Company’s
website on the Internet at the website address www.piedmontng.com (or such other
website address as the Company may from time to time specify to each holder of
Notes that is an Institutional Investor); or (ii) on which such documents are
posted on the Company’s behalf on an Internet or intranet website, if any, to
which each holder of Notes that is an Institutional Investor has access;
provided that: upon the request of any holder of Notes that is an Institutional
Investor, (i) the Company shall deliver paper copies of such documents to such
holder that requests the Company to deliver such paper copies until a written
request to cease delivering

-14-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

paper copies is given by such holder and (ii) the Company shall notify such
holder (by telecopier or electronic mail) of the posting of any such documents
and provide to such holder by electronic mail electronic versions (i.e., soft
copies) of such documents. Each holder of Notes that is an Institutional
Investor shall be solely responsible for requesting delivery to it or
maintaining its copies of such documents.
     Section 7.3. Notices. Promptly, but in any event, within five (5) days of a
Responsible Office of the Company becoming aware thereof, the Company shall
notify each holder of Notes that is an Institutional Investor:
     (a) of the occurrence of any Default;
   (b) of any matter that has resulted or would reasonably be expected to result
in a Material Adverse Effect, including (i) any dispute, litigation,
investigation, proceeding or suspension between the Company or any Subsidiary
and any Governmental Authority; or (ii) the commencement of, or any material
development in, any litigation or proceeding affecting the Company or any
Subsidiary, including pursuant to any applicable Environmental Laws;
     (c) of the occurrence of any ERISA Event;
     (d) of any material change in accounting policies or financial reporting
practices by the Company or any Subsidiary; and
     (e) of any public announcement by Moody’s or S&P of any change in a debt
rating of the Company.
       Each notice pursuant to this Section 7.3 shall be accompanied by a
statement of a Responsible Officer of the Company setting forth details of the
occurrence referred to therein and stating what action the Company has taken and
proposes to take with respect thereto. Each notice pursuant to Section 7.3(a)
shall describe with particularity any and all provisions of this Agreement that
has been breached.
     Section 7.4. Visitation. The Company shall permit the representatives and
independent contractors of each holder of Notes that is an Institutional
Investor to visit and inspect any of its properties, to examine its corporate,
financial and operating records, and make copies thereof or abstracts therefrom,
and to discuss its affairs, finances and accounts with its directors, officers,
and independent public accountants, all at the expense of such holder, and at
such reasonable times during normal business hours and upon reasonable advance
notice to the Company, but not more frequently than once per every twelve
(12) month period; provided, however, that when an Event of Default exists each
holder of Notes that is an Institutional Investor (or any of their respective
representatives or independent contractors) may do any of the foregoing at the
expense of the Company at any time during normal business hours and without
advance notice as often as may be reasonably requested.

-15-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Section 8. Payment and Prepayment of the Notes.
     Section 8.1. Maturity. (a) As provided therein, the entire unpaid principal
balance of the Series A Notes shall be due and payable on the stated maturity
date thereof.
       (b) As provided therein, the entire unpaid principal balance of the
Series B Notes shall be due and payable on the stated maturity date thereof.
     Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may,
at its option, upon notice as provided below, prepay at any time all, or from
time to time any part of, the Notes, in an amount not less than 5% of the
aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment at 100% of the principal amount so prepaid, plus the
Make-Whole Amount, if any, determined for the prepayment date with respect to
such principal amount. The Company will give each holder of Notes written notice
of each optional prepayment under this Section 8.2 not less than 30 days and not
more than 60 days prior to the date fixed for such prepayment. Each such notice
shall specify such date (which shall be a Business Day), the aggregate principal
amount of the Notes to be prepaid on such date, the principal amount of each
Note held by such holder to be prepaid (determined in accordance with
Section 8.3), and the interest to be paid on the prepayment date with respect to
such principal amount being prepaid, and shall be accompanied by a certificate
of a Senior Financial Officer as to the estimated Make-Whole Amount, if any, due
in connection with such prepayment (calculated as if the date of such notice
were the date of the prepayment), setting forth the details of such computation.
Two Business Days prior to such prepayment, the Company shall deliver to each
holder of Notes a certificate of a Senior Financial Officer specifying the
calculation of such Make-Whole Amount, if any, as of the specified prepayment
date.
     Section 8.3. Allocation of Partial Prepayments. In the case of each partial
prepayment of the Notes, the principal amount of the Notes to be prepaid shall
be allocated among all of the Notes at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment.
     Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment (which shall be a Business Day), together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
     Section 8.5. Purchase of Notes. The Company will not and will not permit
any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except (a) upon the payment or
prepayment of the Notes in accordance with the terms of this Agreement and the
Notes or (b) pursuant to an offer to purchase made by the Company or an
Affiliate pro rata to the holders of all Notes at the time outstanding upon the
same terms and

-16-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

conditions. Any such offer shall provide each holder with sufficient information
to enable it to make an informed decision with respect to such offer, and shall
remain open for at least 15 Business Days. If the holders of more than 51% of
the principal amount of the Notes then outstanding accept such offer, the
Company shall promptly notify the remaining holders of such fact and the
expiration date for the acceptance by holders of Notes of such offer shall be
extended by the number of days necessary to give each such remaining holder at
least 5 Business Days from its receipt of such notice to accept such offer. The
Company will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment, prepayment or purchase of Notes pursuant to any provision of
this Agreement and no Notes may be issued in substitution or exchange for any
such Notes.
     Section 8.6. Make-Whole Amount.
       “Make-Whole Amount” means, with respect to any Note of any Series, an
amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount,
the following terms have the following meanings:
       “Called Principal” means, with respect to any Note of any Series, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or has
become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
       “Discounted Value” means, with respect to the Called Principal of any
Note of any Series, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective scheduled
due dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor (applied on
the same periodic basis as that on which interest on such Note is payable) equal
to the Reinvestment Yield with respect to such Called Principal.
       “Reinvestment Yield” means, with respect to the Called Principal of any
Note of any Series, 0.50% plus the yield to maturity calculated by using (i) the
yields reported, as of 10:00 A.M. (New York City time) on the second Business
Day preceding the Settlement Date with respect to Called Principal on screen
“PX-1” on the Bloomberg Financial Market Service (or such other display as may
replace Page PX1) on Bloomberg for the most recently issued actively traded on
the run U.S. Treasury securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date, or (ii) if
such yields are not reported as of such time or the yields reported as of such
time are not ascertainable (including by way of interpolation), the Treasury
Constant Maturity Series Yields reported, for the latest day for which such
yields have been so reported as of the second Business Day preceding the
Settlement Date, with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date.

-17-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

       In the case of each determination under clause (i) or clause (ii), as the
case may be, of the preceding paragraph, such implied yield will be determined,
if necessary, by (a) converting U.S. Treasury bill quotations to bond equivalent
yields in accordance with accepted financial practice and (b) interpolating
linearly between (1) the applicable U.S. Treasury security with the maturity
closest to and greater than such Remaining Average Life and (2) the applicable
U.S. Treasury security with the maturity closest to and less than such Remaining
Average Life. The Reinvestment Yield shall be rounded to the number of decimal
places as appears in the interest rate of the applicable Note.
       “Remaining Average Life” means, with respect to any Called Principal, the
number of years (calculated to the nearest one-twelfth year) obtained by
dividing (i) such Called Principal into (ii) the sum of the products obtained by
multiplying (a) the principal component of each Remaining Scheduled Payment with
respect to such Called Principal by (b) the number of years (calculated to the
nearest one-twelfth year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.
       “Remaining Scheduled Payments” means, with respect to the Called
Principal of any Note of any Series, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with respect to
such Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a date on
which interest payments are due to be made under the terms of the Notes, then
the amount of the next succeeding scheduled interest payment will be reduced by
the amount of interest accrued to such Settlement Date and required to be paid
on such Settlement Date pursuant to Section 8.2 or Section 12.1.
       “Settlement Date” means, with respect to the Called Principal of any Note
of any Series, the date on which such Called Principal is to be prepaid pursuant
to Section 8.2 or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
     Section 8.7. Change in Control.
       (a) Notice of Change in Control. The Company will, within 15 Business
Days after any Responsible Officer has knowledge of the occurrence of any Change
in Control, give written notice of such Change in Control to each holder of
Notes. If a Change in Control has occurred, such notice shall contain and
constitute an offer to prepay Notes as described in subparagraph (b) of this
Section 8.7 and shall be accompanied by the certificate described in
subparagraph (e) of this Section 8.7.
       (b) Offer to Prepay Notes. The offer to prepay Notes contemplated by
subparagraph (a) of this Section 8.7 shall be an offer to prepay, in accordance
with and subject to this Section 8.7, all, but not less than all, the Notes held
by each holder (in the case of this Section 8.7(b) only, “holder” in respect of
any Note registered in the name of a nominee for a disclosed beneficial owner
shall mean such beneficial owner) on a date specified in such offer (the
“Proposed Prepayment Date”) and such date shall be not less than 20 days and not
more than 30 days after

-18-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

the date of such offer (if the Proposed Prepayment Date shall not be specified
in such offer, the Proposed Prepayment Date shall be the 20th day after the date
of such offer).
       (c) Acceptance; Rejection. A holder of Notes may accept or reject the
offer to prepay made pursuant to this Section 8.7 by causing a notice of such
acceptance or rejection to be delivered to the Company at least 5 Business Days
prior to the Proposed Prepayment Date. A failure by a holder of Notes to respond
to an offer to prepay made pursuant to this Section 8.7 shall be deemed to
constitute a rejection of such offer by such holder.
       (d) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 8.7 shall be at 100% of the principal amount of such Notes, but without
the payment of the Make-Whole Amount, together with interest on such Notes
accrued to the date of prepayment. The prepayment shall be made on the Proposed
Prepayment Date except as provided in subparagraph (e) of this Section 8.7.
       (e) Officer’s Certificate. Each offer to prepay the Notes pursuant to
this Section 8.7 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying:
(i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this
Section 8.7; (iii) the principal amount of each Note offered to be prepaid; (iv)
the interest that would be due on each Note offered to be prepaid, accrued to
the Proposed Prepayment Date; (v) that the conditions of this Section 8.7 have
been fulfilled; and (vi) in reasonable detail, the nature and date or proposed
date of the Change in Control.
       (f) “Change in Control” Defined. “Change in Control” means (means an
event or series of events by which:
     (i) any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit
plan of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire whether such right is exercisable immediately or only after
the passage of time (such right, an “option right”)), directly or indirectly, of
35% or more of the equity securities of the Company entitled to vote for members
of the board of directors or equivalent governing body of the Company on a
fully-diluted basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any option right); or
     (ii) during any period of 24 consecutive months, a majority of the members
of the board of directors or other equivalent governing body of the Company
cease to be composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose election
or nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other

-19-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

equivalent governing body was approved by individuals referred to in clauses
(i) and (ii) above constituting at the time of such election or nomination at
least a majority of that board or equivalent governing body (excluding, in the
case of both clause (ii) and clause (iii), any individual whose initial
nomination for, or assumption of office as, a member of that board or equivalent
governing body occurs as a result of an actual or threatened solicitation of
proxies or consents for the election or removal of one or more directors by any
person or group other than a solicitation for the election of one or more
directors by or on behalf of the board of directors).
Section 9. Affirmative Covenants.
       The Company shall and shall cause each Guarantor to, so long as any of
the Notes are outstanding:
     Section 9.1. Compliance with Law. Without limiting Section 10.3, Comply in
all material respects with the requirements of all Laws, including without
limitation all Laws described in Section 5.16, and all orders, writs,
injunctions and decrees applicable to it or to its business or property, except
in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted; or (b) the failure to comply therewith would not
reasonably be expected to have a Material Adverse Effect.
     Section 9.2. Insurance. The Company shall maintain insurance (including
self-insurance) with respect to its properties and business as necessary and
appropriate in the customary business practice in the industry of the Company.
     Section 9.3. Maintenance of Properties. The Company shall maintain,
preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order and reasonably good
condition, ordinary wear and tear excepted; and (b) make all necessary repairs
thereto and renewals and replacements thereof, except in the case of both
(a) and (b) above, where the failure to do so would not reasonably be expected
to have a Material Adverse Effect.
     Section 9.4. Payment of Obligations. The Company shall pay and discharge as
the same shall become due and payable, all its obligations and liabilities,
including all federal, state and other material tax liabilities, assessments and
governmental charges or levies upon it or its properties or assets, unless the
same are being contested in good faith by appropriate proceedings diligently
conducted and adequate reserves in accordance with GAAP are being maintained by
the Company.
     Section 9.5. Corporate Existence, Etc. The Company shall (a) preserve,
renew and maintain in full force and effect its legal existence under the Laws
of the jurisdiction of its organization except in a transaction permitted by
Section 10.2 of this Agreement or except to the extent the Company, after any
such change in its legal existence, does not engage in any material line of
business substantially different from those lines of business conducted by the
Company and its Subsidiaries on the date hereof or any business substantially
related or incidental thereto;

-20-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

(b) preserve, renew and maintain in full force and effect its good standing
under the Laws of the jurisdiction of its origination, except where the failure
to do so would not reasonably be expected to result in a Material Adverse
Effect; (c) take all reasonable action to maintain all rights, privileges,
permits, licenses and franchises necessary or desirable in the normal conduct of
its business, except to the extent that failure to do so would not reasonably be
expected to have a Material Adverse Effect; and (d) preserve or renew all of its
registered patents, trademarks, trade names and service marks, the
non-preservation of which would reasonably be expected to have a Material
Adverse Effect.
     Section 9.6. Books and Records. The Company shall maintain proper books of
record and account, in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Company or such Subsidiary, as
the case may be.
     Section 9.7. Ranking. Except as otherwise required by applicable Law, the
Company will ensure that, at all times, all liabilities of the Company under the
Notes will rank in right of payment either pari passu with or senior to the
obligations under the Credit Agreement and under all other unsecured
Indebtedness of the Company provided, the foregoing does not constitute a
covenant regarding or otherwise limiting (a) the maturity date of any
Indebtedness of the Company or of any Guarantor, (b) any terms relating to the
timing of prepayments, redemptions or similar provisions (including without
limitation on a voluntary or involuntary basis) regarding any Indebtedness of
the Company or of any Guarantor or (c) any Liens with respect to secured
Indebtedness upon or with respect to any Property of the Company or of any
Guarantor permitted pursuant to this Agreement (including without limitation
pursuant to Section 10.4).
     Section 9.8. Guarantors. The Company will cause any Subsidiary which is
required by the terms of the Credit Agreement to become a party to, or otherwise
guarantee, Indebtedness in respect of the Credit Agreement, to enter into a
subsidiary guaranty agreement which shall be in a form substantially comparable
to and not more restrictive than such guarantee and otherwise reasonably
acceptable to the Company and the Required Holders providing for a guarantee of
the obligations of the Company under the Notes and this Agreement (a “Subsidiary
Guaranty”) and to deliver to each of the holders of the Notes (substantially
concurrently with the incurrence of any such guarantee obligation pursuant to
the Credit Agreement) the following items:
     (i) a certificate signed by an authorized Responsible Officer of the
Company making representations and warranties substantially to the effect of
those contained in Sections 5.4(c), 5.6 and 5.7, with respect to such Subsidiary
and the Subsidiary Guaranty, as applicable; and
     (ii) an opinion of counsel (who may be in-house counsel for the Company)
addressed to each of the holders of the Notes reasonably satisfactory to the
Required Holders, substantially to the effect that the Subsidiary Guaranty by
such Person has been duly authorized, executed and delivered and that the
Subsidiary Guaranty constitutes the legal, valid and binding obligation of such
Person enforceable in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency,

-21-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

reorganization, fraudulent conveyance, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
Section 10. Negative Covenants.
       The Company shall not, and shall not permit any Guarantor to (directly or
indirectly), so long as any of the Notes are outstanding:
     Section 10.1. Transactions with Affiliates. Enter into any transaction of
any kind (other than this Agreement and any other Finance Agreement or in
accordance with the terms thereof (including without limitation any guaranty
provided by a Subsidiary as required by the terms of the Credit Agreement, as
referenced in Section 9.8)) with any Affiliate of the Company, whether or not in
the ordinary course of business, other than on fair and reasonable terms
substantially as favorable to the Company or such Guarantor as would be
obtainable by the Company or such Guarantor at the time in a comparable arm’s
length transaction with a Person other than an Affiliate; provided, that the
foregoing restriction shall not apply to transactions between or among the
Company and any Guarantor or between and among any Guarantors.
     Section 10.2. Merger, Consolidation, Etc. Merge, dissolve, liquidate,
consolidate with or into another Person, or Dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person,
or discontinue or eliminate, a line of business; provided, that the foregoing
limitation on the sale, lease or other transfer of assets and on the
discontinuance or elimination of a line of business shall not prohibit, at any
time, a transfer of assets or the discontinuance or elimination of a line of
business (in a single transaction or a series of related transactions) to the
extent that any such Disposition would not cause the aggregate value of all
assets Disposed of (excluding the sale, lease or other transfer of assets
permitted under subsection (c) of this Section), after the Closing Date to
exceed $75,000,000, and provided, further, that so long as no Default or Event
of Default exists or would result therefrom:
     (a) the Company may merge with another Person if (i) such Person is
organized under the laws of the United States of America or one of its states,
and (ii) the Company is the surviving corporation or if the Company is not the
surviving corporation, such surviving corporation or business entity (the
“Successor Corporation”) shall have executed and delivered to each holder of
Notes its assumption of the due and punctual performance and observance of each
covenant and condition of this Agreement and the Notes (pursuant to such
agreements and instruments as shall be reasonably satisfactory to the Required
Holders), and the Successor Corporation shall have caused to be delivered to
each holder of Notes (A) an opinion of nationally recognized independent
counsel, to the effect that all agreements or instruments effecting such
assumption are enforceable in accordance with their terms and (B) to the extent
a Subsidiary Guaranty exists pursuant to Section 9.9, an acknowledgment from
each Subsidiary Guarantor that the Subsidiary Guaranty continues in full force
and effect;

-22-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

     (b) any Guarantor may merge with (i) the Company, provided that the Company
shall be the continuing or surviving Person, or (ii) any one or more other
Guarantors; and
     (c) the Company or any Guarantor may Dispose of all or substantially all of
its assets (upon voluntary liquidation or otherwise) to the Company or to any
Guarantor.
     Section 10.3. Terrorism Sanctions Regulations. The Company will not and
will not permit any Affiliated Entity to (a) become an OFAC Listed Person or
(b) have any investments in, or knowingly engage in any dealings or transactions
with any Blocked Person.
     Section 10.4. Liens. Create, assume, incur or suffer to exist any Lien upon
or with respect to any Property of the Company or any Guarantor except:
     (a) Liens existing on the date hereof and listed on Schedule 10.4 and any
renewals or extensions thereof, provided that (i) the property covered thereby
is not changed (except for proceeds of such property), and (ii) the direct or
any contingent obligor with respect thereto is not changed;
     (b) Liens for taxes not yet due or which are being contested in good faith
and by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
     (c) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or
other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person;
     (d) pledges or deposits in the ordinary course of business in connection
with workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;
     (e) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
     (f) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;
     (g) Liens securing judgments for the payment of money not constituting an
Event of Default under Section 11.1(i);

-23-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

     (h) leases or subleases granted to others in the ordinary course of
business not interfering in any material respect with the business of the
applicable Person;
     (i) any interest of title of a lessor under, and Liens arising from UCC
financing statements (or equivalent filings, registrations or agreements in
foreign jurisdictions) relating to, leases permitted by this Agreement;
     (j) Liens deemed to exist in connection with repurchase agreements;
     (k) normal and customary rights of setoff upon deposits of cash in favor of
banks or other depository institutions;
     (l) Liens of a collection bank arising under Section 4-210 of the Uniform
Commercial Code on items in the course of collection;
     (m) Liens existing on any asset or property prior to the acquisition
thereof by the Company or any Guarantor or existing on any asset or property of
any Person that becomes a Guarantor prior to the time such Person becomes a
Guarantor;
     (n) Liens on property securing purchase money indebtedness (including
capital lease obligations, provided that (i) such Liens attach to such property
within 90 days after the acquisition of such property, (ii) such Liens secure
only the payment of the purchase money Indebtedness (and refinancings, renewals
or extensions thereof) and (iii) such Liens attach only to the property subject
to the purchase money Indebtedness and do not encumber any other property of the
Company or any Guarantor;
     (o) Liens created or deemed to exist as a result of (i) a substantially
non-recourse assignment, sale or other transfer of receivables in connection
with one or more third-party financings (or Guarantee of such financing) of
energy projects developed by the Company or any Guarantor (or any subcontractor
of the Company or any Guarantor) and (ii) Liens on such energy projects in favor
of one or more providers of such third-party financing (including, without
limitation, with respect to each of the foregoing clauses (i) and (ii), projects
developed for agencies, departments and instrumentalities of the United States
government, any state, county, municipal government or other political
subdivision, any university or any college through utility energy services
contracts); and
     (p) Liens securing any other Indebtedness of the Company so long as the
Notes are equally and ratably secured with such other Indebtedness, pursuant to
an agreement reasonably satisfactory to the Required Holders; and
     (q) Liens not permitted by subsections (a) through (o) above, if at the
time of, and after giving effect to, the creation or assumption of any such
Lien, the aggregate amount of all Indebtedness of the Company or any Guarantor
secured by all such Liens not so permitted by subsections (a) through (o) above
does not exceed 10% of Consolidated Total Assets; provided further that, no such
Liens permitted under this Section 10.4(q) may secure any obligations under the
Credit Agreement.

-24-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

       Section 10.5. Leverage Ratio. The Company will not permit the ratio of
Consolidated Funded Indebtedness to Total Capitalization to exceed 0.70 to 1.00
at any time.
       Section 10.6. Change in Nature of Business. The Company will not, and
will not permit any Guarantor to, engage in any material line of business
substantially different from those lines of business conducted by the Company
and its Subsidiaries on the date hereof or any business substantially related or
incidental thereto.
Section 11. Events of Default.
       An “Event of Default” shall exist if any of the following conditions or
events shall occur and be continuing:
     (a) the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise; or
     (b) the Company defaults in the payment of any interest on any Note for
more than five Business Days after the same becomes due and payable; or
     (c) the Company defaults in the performance of or compliance with any term
contained in Sections 10.2, 10.4 or 10.5; or
     (d) the Company defaults in the performance of or compliance with any term
contained in any Finance Agreement (other than those referred to in
Sections 11(a), (b) and (c)) and such default is not remedied within 30 days
after the earlier of (i) a Responsible Officer obtaining actual knowledge of
such default and (ii) the Company receiving written notice of such default from
any holder of a Note (any such written notice to be identified as a “notice of
default” and to refer specifically to this Section 11(d)); or
     (e) any representation or warranty made in writing by or on behalf of the
Company or by any officer of the Company in any Finance Agreement or in any
writing furnished pursuant to any Finance Agreement proves to have been false or
incorrect in any material respect on the date as of which made; or
     (f) (i) the Company or any Guarantor is in default (as principal or as
guarantor or other surety) in the payment of any principal of or premium or
make-whole amount or interest on any Indebtedness that is outstanding in an
aggregate principal amount of at least $75,000,000 beyond any period of grace
provided with respect thereto, or (ii) the Company or any Guarantor is in
default in the performance of or compliance with any term of any evidence of any
Indebtedness in an aggregate outstanding principal amount of at least
$75,000,000 or of any mortgage, indenture or other agreement relating thereto or
any other condition exists, and as a consequence of such default or condition
such Indebtedness has become, or has been declared due and payable before its
stated maturity or before its regularly scheduled dates of payment; or

-25-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

     (g) the Company or any Guarantor (i) is generally not paying, or admits in
writing its inability to pay, its debts as they become due, (ii) files, or
consents by answer or otherwise to the filing against it of, a petition for
relief or reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an assignment
for the benefit of its creditors, (iv) consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its Property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
the purpose of any of the foregoing; or
     (h) a court or Governmental Authority of competent jurisdiction enters an
order appointing, without consent by the Company or any Guarantor, a custodian,
receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its Property, or constituting an order
for relief or approving a petition for relief or reorganization or any other
petition in bankruptcy or for liquidation or to take advantage of any bankruptcy
or insolvency law of any jurisdiction, or ordering the dissolution, winding-up
or liquidation of the Company or any Guarantors, or any such petition shall be
filed against the Company or any Guarantors and such petition shall not be
dismissed within 60 days; or
     (i) a final judgment or judgments for the payment of money aggregating in
excess of $75,000,000 (to the extent not covered by independent third party
insurance as to which the insurer does not dispute coverage) are rendered
against one or more of the Company or any Guarantor and which judgments are not,
within 60 days after entry thereof, bonded, discharged or stayed pending appeal,
or are not discharged within 60 days after the expiration of such stay; or
     (j) if (i) any Plan shall fail to satisfy the minimum funding standards of
ERISA or the Code for any plan year or part thereof or a waiver of such
standards or extension of any amortization period is sought or granted under
section 412 of the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the PBGC shall
have instituted proceedings under ERISA section 4042 to terminate or appoint a
trustee to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of any such proceedings,
(iii) the aggregate “amount of unfunded benefit liabilities” (within the meaning
of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with
Title IV of ERISA, shall exceed $75,000,000, (iv) the Company or any ERISA
Affiliate shall have incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any
Subsidiary establishes or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would increase the liability
of the Company or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either

-26-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

individually or together with any other such event or events, would reasonably
be expected to have a Material Adverse Effect; or
     (k) any Finance Agreement, at any time after its execution and delivery and
for any reason other than as expressly permitted hereunder or thereunder or
satisfaction in full of all the obligations under the Finance Agreements, ceases
to be in full force and effect; or the Company or any Guarantor contests in any
manner the validity or enforceability of any Finance Agreement; or the Company
or any Guarantor denies that it has any or further liability or obligation under
any Finance Agreement, or purports to revoke, terminate or rescind any Finance
Agreement.
As used in Section 11(j), the terms “employee benefit plan” and “employee
welfare benefit plan” shall have the respective meanings assigned to such terms
in section 3 of ERISA.
Section 12. Remedies on Default, Etc.
     Section 12.1. Acceleration. (a) If an Event of Default with respect to the
Company described in Section 11(g) or (h) (other than an Event of Default
described in clause (i) of Section 11(g) by virtue of the fact that such clause
encompasses clause (i) of Section 11(g)) has occurred, all the Notes then
outstanding shall automatically become immediately due and payable.
       (b) If any Event of Default (other than pursuant to Sections (11(g) or
(h)) has occurred and is continuing, the Required Holders may at any time at its
or their option, by notice or notices to the Company, declare all the Notes then
outstanding to be immediately due and payable.
       (c) If any Event of Default described in Section 11(a) or (b) has
occurred and is continuing, any holder or holders of Notes at the time
outstanding affected by such Event of Default may at any time, at its or their
option, by notice or notices to the Company, declare all the Notes held by it or
them to be immediately due and payable.
       Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest
thereon (including, but not limited to, interest accrued thereon at the Default
Rate) and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.

-27-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

     Section 12.2 Other Remedies. If any Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 12.1, the holder of any Note
at the time outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or in any
Note, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or by law or
otherwise. Upon the occurrence of any Default, the holders may take any action
permitted by law to protect their rights under the Finance Agreements.
     Section 12.3 Rescission. At any time after any Notes have been declared due
and payable pursuant to Section 12.1(b) or (c), the Required Holders (in the
case of Section 12.1(b)) and the applicable holder or holders of Notes (in the
case of Section 12.1(c)), by written notice to the Company, may rescind and
annul any such declaration and its consequences if (a) the Company has paid all
overdue interest on the Notes, all principal of and Make-Whole Amount, if any,
on any Notes that are due and payable and are unpaid other than by reason of
such declaration, and all interest on such overdue principal and Make-Whole
Amount, if any, and (to the extent permitted by applicable law) any overdue
interest on the Notes, at the Default Rate, (b) neither the Company nor any
other Person shall have paid any amounts which have become due solely by reason
of such declaration, (c) all Events of Default, other than non-payment of
amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 17, and (d) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Notes. No rescission and annulment under this Section 12.3 will extend to or
affect any subsequent Event of Default or impair any right consequent thereon.
     Section 12.4 No Waivers or Election of Remedies, Expenses, Etc. No course
of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder’s rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by a Note upon any holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or thereafter
available at law, in equity, by statute or otherwise. Without limiting the
obligations of the Company under Section 15, the Company will pay to the holder
of each Note on demand such further amount as shall be sufficient to cover all
costs and expenses of such holder incurred in any enforcement or collection
under this Section 12, including, without limitation, reasonable attorneys’
fees, expenses and disbursements.
Section 13. Registration; Exchange; Substitution of Notes.
     Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a

-28-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.
     Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note to
the Company at the address and to the attention of the designated officer (all
as specified in Section 18(iii)), for registration of transfer or exchange (and
in the case of a surrender for registration of transfer accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
such holder’s attorney duly authorized in writing and accompanied by the
relevant name, address and other information for notices of each transferee of
such Note or part thereof), within ten Business Days thereafter, the Company
shall execute and deliver, at the Company’s expense (except as provided below),
one or more new Notes (as requested by the holder thereof) in exchange therefor,
in an aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the forms of Exhibit 1(a) or
1(b), as applicable. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated
the date of the surrendered Note if no interest shall have been paid thereon.
The Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $1,000,000, provided that
if necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $1,000,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representation set forth in
Section 6.2.
     Section 13.3. Replacement of Notes. Upon receipt by the Company at the
address and to the attention of the designated officer (all as specified in
Section 18(iii)) of evidence reasonably satisfactory to it of the ownership of
and the loss, theft, destruction or mutilation of any Note (which evidence shall
be, in the case of an Institutional Investor, notice from such Institutional
Investor of such ownership and such loss, theft, destruction or mutilation), and
     (a) in the case of loss, theft or destruction, of indemnity in favor of the
Company reasonably satisfactory to the Company (provided that if the holder of
such Note is, or is a nominee for, an original Purchaser or another holder of a
Note with a minimum net worth of at least $50,000,000 or a Qualified
Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be
deemed to be satisfactory), or
     (b) in the case of mutilation, upon surrender and cancellation thereof,
within ten Business Days thereafter, the Company at its own expense shall
execute and deliver, in lieu thereof, a new Note, dated and bearing interest
from the date to which interest shall have been paid on such lost, stolen,
destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated Note if no interest shall have been paid thereon.

-29-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Section 14. Payments on Notes.
     Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in New York, New York at the principal office of Bank of
America, N.A. in such jurisdiction. The Company may at any time, by notice to
each holder of a Note, change the place of payment of the Notes so long as such
place of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
     Section 14.2. Home Office Payment. So long as any Purchaser or its nominee
shall be the holder of any Note, and notwithstanding anything contained in
Section 14.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if any, and interest
by the method and at the address specified for such purpose below such
Purchaser’s name in Schedule A, or by such other reasonable method or at such
other address as such Purchaser shall have from time to time specified to the
Company in writing for such purpose, without the presentation or surrender of
such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, such Purchaser shall surrender such
Note for cancellation, reasonably promptly after any such request, to the
Company at its principal executive office or at the place of payment most
recently designated by the Company pursuant to Section 14.1. Prior to any sale
or other disposition of any Note held by a Purchaser or its nominee, such
Purchaser will, at its election, either endorse thereon the amount of principal
paid thereon and the last date to which interest has been paid thereon or
surrender such Note to the Company in exchange for a new Note or Notes pursuant
to Section 13.2. The Company will afford the benefits of this Section 14.2 to
any Institutional Investor that is the direct or indirect transferee of any Note
purchased by a Purchaser under this Agreement and that has made the same
agreement relating to such Note as the Purchasers have made in this
Section 14.2.
Section 15. Expenses, Etc.
     Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys’ fees of a special counsel) incurred by the
Purchasers and each other holder of a Note in connection with the preparation,
execution and delivery of this Agreement and the Notes, enforcement actions in
connection therewith and, if reasonably required by the Required Holders, local
or other counsel in connection with any amendments, waivers or consents under or
in respect of this Agreement or the Notes (whether or not such amendment, waiver
or consent becomes effective), including, without limitation: (a) the costs and
expenses incurred in enforcing or defending (or determining whether or how to
enforce or defend) any rights under this Agreement or the Notes or in responding
to any subpoena or other legal process or informal investigative demand issued
in connection with this Agreement or the Notes, or by reason of being a holder
of any Note, (b) the costs and expenses, including financial advisors’ fees,
incurred in connection with the insolvency or bankruptcy of the Company or any
Guarantor or in connection with any work-out or restructuring of the
transactions contemplated hereby and by the Notes and (c) the costs and expenses
incurred in connection with the initial filing of this Agreement and all related
documents and financial information with the SVO provided, that such

-30-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

costs and expenses under this clause (c) shall not exceed $5,000. The Company
will pay, and will save each Purchaser and each other holder of a Note harmless
from, all claims in respect of any fees, costs or expenses, if any, of brokers
and finders (other than those, if any, retained by a Purchaser or other holder
in connection with its purchase of the Notes).
     Section 15.2. Survival. The obligations of the Company under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement.
Section 16. Survival of Representations and Warranties; Entire Agreement.
       All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by any Purchaser of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of such
Purchaser or any other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement shall be deemed representations and warranties of the
Company under this Agreement. Subject to the preceding sentence, this Agreement
and the Notes embody the entire agreement and understanding between each
Purchaser and the Company and supersede all prior agreements and understandings
relating to the subject matter hereof.
Section 17. Amendment and Waiver.
     Section 17.1. Requirements. This Agreement and the Notes may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 20 hereof, or any defined term
(as it is used therein), will be effective as to any Purchaser unless consented
to by the Company and such Purchaser in writing, and (b) no such amendment or
waiver may, without the written consent of the Company and the holder of each
Note at the time outstanding affected thereby, (i) subject to the provisions of
Section 12 relating to acceleration or rescission, change the amount or time of
any prepayment or payment of principal of, or reduce the rate or change the time
of payment or method of computation of interest or of the Make-Whole Amount on,
the Notes, (ii) change the percentage of the principal amount of the Notes the
holders of which are required to consent to any such amendment or waiver, or
(iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.
     Section 17.2. Solicitation of Holders of Notes.
       (a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to

-31-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

each holder of outstanding Notes promptly following the date on which it is
executed and delivered by, or receives the consent or approval of, the requisite
holders of Notes.
       (b) Payment. The Company will not directly or indirectly pay or cause to
be paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security or provide other credit support, to any
holder of Notes as consideration for or as an inducement to the entering into by
any holder of Notes or any waiver or amendment of any of the terms and
provisions hereof unless such remuneration is concurrently paid, or security is
concurrently granted or other credit support concurrently provided, on the same
terms, ratably to each holder of Notes then outstanding even if such holder did
not consent to such waiver or amendment.
       (c) Consent in Contemplation of Transfer. Any consent made pursuant to
this Section 17 by the holder of any Note that has transferred or has agreed to
transfer such Note to the Company, any Subsidiary or any Affiliate of the
Company and has provided or has agreed to provide such written consent as a
condition to such transfer shall be void and of no force or effect except solely
as to such holder, and any amendments effected or waivers granted or to be
effected or granted that would not have been or would not be so effected or
granted but for such consent (and the consents of all other holders of Notes
that were acquired under the same or similar conditions) shall be void and of no
force or effect except solely as to such transferring holder.
     Section 17.3. Binding Effect, etc. Any amendment or waiver consented to as
provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term “this Agreement” and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
     Section 17.4. Notes Held by Company, etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
Section 18. Notices.
       (a) Notices Generally. All notices and communications provided for
hereunder shall be in writing and sent (a) by telecopy if the sender on the same
day sends a confirming copy of such notice by email (if recipient has specified
an email address in its notice address) and by a

-32-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

recognized overnight delivery service (charges prepaid), or (b) by registered or
certified mail with return receipt requested (postage prepaid), or (c) by a
recognized overnight delivery service (with charges prepaid) or (d) as provided
Section 18(b) below. Any such notice must be sent:
     (i) if to any Purchaser or its nominee, to such Purchaser or nominee at the
address specified for such communications in Schedule A, or at such other
address as such Purchaser or nominee shall have specified to the Company in
writing,
     (ii) if to any other holder of any Note, to such holder at such address as
such other holder shall have specified to the Company in writing, or
     (iii) if to the Company, to the Company at its address set forth below or
at such other address as the Company shall have specified to the holder of each
Note in writing:
Piedmont Natural Gas Company, Inc.
Office of the Treasurer
4720 Piedmont Row Drive
Charlotte, North Carolina 28210
Attention: Robert Pritchard
Telephone: ###-###-####
Telecopier: ###-###-####
Email: ###.#########@##########.com
with a copy to:
Piedmont Natural Gas Company, Inc.
Office of General Counsel
4720 Piedmont Row Drive
Charlotte, North Carolina 28210
Attention: Jane R. Lewis-Raymond
Telephone: ###-###-####
Telecopier: ###-###-####
Email: ####.#############@##########.com
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices hereunder shall be conclusively presumed received as
evidenced by a delivery receipt furnished by the United States Postal Service or
any reputable commercial delivery service. Notices delivered through electronic
communications to the extent provided in Section 18(b) below, shall be effective
as provided in such Section 18(b).
     (b) Electronic Communications. Notices and other communications to the
holders of Notes hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the applicable holders and

-33-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

the Company, provided that the foregoing shall not apply to notices regarding
Sections 2, 3 and 8 to any holder if such holder has notified the Company that
it is incapable of receiving notices under such Sections by electronic
communication. Each holder of Notes or the Company may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.
Section 19. Reproduction of Documents.
     This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by any Purchaser at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to any Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, electronic,
digital, or other similar process and such Purchaser may destroy any original
document so reproduced. The Company agrees and stipulates that, to the extent
permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by such Purchaser in the regular course of business) and
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.
Section 20. Confidential Information.
     For the purposes of this Section 20, “Confidential Information” means
information delivered to any Purchaser by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by such
Purchaser as being confidential information of the Company or such Subsidiary,
provided that such term does not include information that (a) (i) was publicly
known through no act or omission by such Purchaser or any Person acting on such
Purchaser’s behalf or (ii) was otherwise known to such Purchaser prior to the
time of such disclosure and not known to have been obtained or derived in
contravention of any confidentiality obligation in favor of the Company known to
such Purchaser after due inquiry; (b) subsequently becomes publicly known
through no act or omission by such Purchaser or any Person acting on such
Purchaser’s behalf; (c) otherwise becomes known to such Purchaser (and not known
to have been obtained or derived in contravention of any confidentiality
obligation in favor of the Company known to such Purchaser after due inquiry)
other than through disclosure by the Company or any Subsidiary; or
(d) constitutes financial statements delivered to such Purchaser under
Section 7.1 that are otherwise publicly available. Each Purchaser will maintain
the confidentiality of such Confidential Information in accordance with
procedures adopted by such Purchaser in good faith to protect confidential
information of third parties delivered to such Purchaser, provided that such
Purchaser may deliver or disclose Confidential Information to (i) its directors,
officers, employees, agents, attorneys, trustees and Affiliates (to the extent
such disclosure reasonably

-34-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

relates to the administration of the investment represented by its Notes and to
the extent each such recipient of Confidential Information is bound by the terms
of this Section 20 or otherwise agrees in writing prior to receipt of any
Confidential Information to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20), (ii) its
financial advisors and other professional advisors who agree in writing prior to
receipt of any Confidential Information to hold confidential such Confidential
Information substantially in accordance with the terms of this Section 20,
(iii) any other holder of any Note, (iv) any Institutional Investor to which it
sells or offers to sell such Note or any part thereof or any participation
therein (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 20),
(v) any Person from which it offers to purchase any security of the Company (if
such Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (vi) any federal
or state regulatory authority having jurisdiction over such Purchaser, (vii) the
NAIC or the SVO or, in each case, any similar organization, or any nationally
recognized rating agency that requires access to information about such
Purchaser’s investment portfolio, or (viii) any other Person to which such
delivery or disclosure is necessary (w) to effect compliance with any law, rule,
regulation or order applicable to such Purchaser, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which
such Purchaser is a party or (z) if an Event of Default has occurred and is
continuing, to the extent such Purchaser may reasonably determine such delivery
and disclosure to be necessary in the enforcement or for the protection of the
rights and remedies under such Purchaser’s Notes and this Agreement. Each holder
of a Note, by its acceptance of a Note, will be deemed to have agreed to be
bound by and to be entitled to the benefits of this Section 20 as though it were
a party to this Agreement. On reasonable request by the Company in connection
with the delivery to any holder of a Note of information required to be
delivered to such holder under this Agreement or requested by such holder (other
than a holder that is a party to this Agreement or its nominee), such holder
will enter into an agreement with the Company embodying the provisions of this
Section 20.
Section 21. Substitution of Purchaser.
     Each Purchaser shall have the right to substitute any one of its Affiliates
as the purchaser of the Notes that it has agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both such
Purchaser and such Affiliate, shall contain such Affiliate’s agreement to be
bound by this Agreement and shall contain a confirmation by such Affiliate of
the accuracy with respect to it of the representations set forth in Section 6.
Upon receipt of such notice, any reference to such Purchaser in this Agreement
(other than in this Section 21), shall be deemed to refer to such Affiliate in
lieu of such original Purchaser. In the event that such Affiliate is so
substituted as a Purchaser hereunder and such Affiliate thereafter transfers to
such original Purchaser all of the Notes then held by such Affiliate, upon
receipt by the Company of notice of such transfer, any reference to such
Affiliate as a “Purchaser” in this Agreement (other than in this Section 21),
shall no longer be deemed to refer to such Affiliate, but shall refer to such
original Purchaser, and such original Purchaser shall again have all the rights
of an original holder of the Notes under this Agreement.

-35-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Section 22. Miscellaneous.
     Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.
     Section 22.2. Payments Due on Non-Business Days. Anything in this Agreement
or the Notes to the contrary notwithstanding (but without limiting the
requirement in Section 8.4 that the notice of any optional prepayment specify a
Business Day as the date fixed for such prepayment), any payment of principal of
or Make-Whole Amount or interest on any Note that is due on a date other than a
Business Day shall be made on the next succeeding Business Day without including
the additional days elapsed in the computation of the interest payable on such
next succeeding Business Day; provided that if the maturity date of any Note is
a date other than a Business Day, the payment otherwise due on such maturity
date shall be made on the next succeeding Business Day and shall include the
additional days elapsed in the computation of interest payable on such next
succeeding Business Day.
     Section 22.3. Accounting Terms. (a) Generally. All accounting terms not
specifically or completely defined herein shall be construed in conformity with,
and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time, applied in a manner consistent with that used in preparing
the Audited Financial Statements, except as otherwise specifically prescribed
herein. Notwithstanding the foregoing, for purposes of determining compliance
with any covenant (including the computation of any financial covenant)
contained herein, Indebtedness of the Company and its Subsidiaries shall be
deemed to be carried at 100% of the outstanding principal amount thereof, and
the effects of FASB ASC 825 on financial liabilities shall be disregarded.
       (b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in this Agreement,
and either the Company or the Required Holders shall so request, representatives
of the holders of the Notes designated by the Required Holders at such time and
the Company shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to
the approval of the Required Holders); provided that, until so amended, (i) such
ratio or requirement shall continue to be computed in accordance with GAAP prior
to such change therein and (ii) the Company shall provide to the holders of the
Notes that are Institutional Investors financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth
a reconciliation between calculations of such ratio or requirement made before
and after giving effect to such change in GAAP. Any amendment of this Agreement,
at any time, with regard to any such change in GAAP shall be effected without,
in connection therewith, (a) the Company being obligated to pay any fee, (b) any
increase in the interest rate with respect to the Notes or (c) any other
increase in the consideration then payable by the Company pursuant to this
Agreement or the Notes.

-36-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

     Section 22.4. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by
applicable law) not invalidate or render unenforceable such provision in any
other jurisdiction.
     Section 22.5. Construction, etc. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
       For the avoidance of doubt, all Schedules and Exhibits attached to this
Agreement shall be deemed to be a part hereof.
     Section 22.6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.
     Section 22.7. Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of New York excluding choice-of-law principles of the law of such
State that would permit the application of the laws of a jurisdiction other than
such State.
     Section 22.8. Jurisdiction and Process; Waiver of Jury Trial. (a) Each
party to this Agreement hereby irrevocably submits to the non-exclusive
jurisdiction of any New York State or federal court sitting in the Borough of
Manhattan, The City of New York, over any suit, action or proceeding arising out
of or relating to this Agreement or the Notes. To the fullest extent permitted
by applicable law, each party to this Agreement hereby irrevocably waives and
agrees not to assert, by way of motion, as a defense or otherwise, any claim
that it is not subject to the jurisdiction of any such court, any objection that
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding brought in any such court and any claim that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.
       (b) Each party to this Agreement hereby consents to process being served
by or on behalf of any other party hereto in any suit, action or proceeding of
the nature referred to in Section 22.8(a) by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, return receipt requested, to it at its address specified in or
pursuant to Section 18 or at such other address of which such party shall then
have been notified pursuant to said Section. Each party to this Agreement hereby
agrees that such service upon receipt (i) shall be deemed in every respect
effective service of process upon it in any such suit, action or proceeding and
(ii) shall, to the fullest extent permitted by applicable law, be taken and

-37-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

held to be valid personal service upon and personal delivery to it. Notices
hereunder shall be conclusively presumed received as evidenced by a delivery
receipt furnished by the United States Postal Service or any reputable
commercial delivery service.
     (c) Nothing in this Section 22.8 shall affect the right of any party to
this Agreement to serve process in any manner permitted by applicable law, or
limit any rights that any party hereto may have to bring proceedings against any
other party hereto in the courts of any appropriate jurisdiction or to enforce
in any lawful manner a judgment obtained in one jurisdiction in any other
jurisdiction.
     (d) The parties hereto hereby waive trial by jury in any action brought on
or with respect to this Agreement, the Notes or any other document executed in
connection herewith or therewith.
* * * * *

-38-

--------------------------------------------------------------------------------

 

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

     If you are in agreement with the foregoing, please sign the form of
agreement on a counterpart of this Agreement and return it to the Company,
whereupon this Agreement shall become a binding agreement between you and the
Company.

            Very truly yours,

Piedmont Natural Gas Company, Inc.
      By   /s/ Robert O. Pritchard         Name:   Robert O. Pritchard       
Title:   Vice President, Treasurer, & Chief
Risk Officer   

 

--------------------------------------------------------------------------------

 

         

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Accepted as of the date first written above.

            The Northwestern Mutual Life Insurance
     Company
      By:   /s/ Timothy S. Collins         Name:   Timothy S. Collins       
Title:   Its Authorized Representative     

            The Northwestern Mutual Life Insurance Company
     For its Group Annuity Separate Account
      By:   /s/ Timothy S. Collins         Name:   Timothy S. Collins       
Title:   Its Authorized Representative   

 

--------------------------------------------------------------------------------

 

         

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Accepted as of the date first written above.

            Allstate Insurance Company
      By   /s/ Mark Cloghessy         Name:   Mark Cloghessy                   
  By   /s/ Jerry D. Zinkula         Name:   Jerry D. Zinkula        Authorized
Signatories:   

 

--------------------------------------------------------------------------------

 

         

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Accepted as of the date first written above.

            Allstate Life Insurance Company
      By   /s/ Mark Cloghessy         Name:   Mark Cloghessy                   
  By   /s/ Jerry D. Zinkula         Name:   Jerry D. Zinkula        Authorized
Signatories:   

 

--------------------------------------------------------------------------------

 

         

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Accepted as of the date first written above.
New York Life Insurance and Annuity
Corporation
By  New York Life Investment Management LLC,
its Investment Manager

                  By   /s/ Ruthard C. Murphy, II         Name:   Ruthard C.
Murphy, II        Title:   Director     

            New York Life Insurance Company
      By   /s/ Ruthard C. Murphy, II         Name:   Ruthard C. Murphy, II     
  Title:   Corporate Vice President   

 

--------------------------------------------------------------------------------

 

         

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Accepted as of the date first written above.

            State Farm Life Insurance Company
      By   /s/ Julie Hoyer         Julie Hoyer        Senior Investment Officer 
            By   /s/ Jeffrey T. Attwood         Jeffrey T. Attwood       
Investment Officer     

            State Farm Life and Accident Assurance
     Company
      By   /s/ Julie Hoyer         Julie Hoyer        Senior Investment Officer 
            By   /s/ Jeffrey T. Attwood         Jeffrey T. Attwood       
Investment Officer   

 

--------------------------------------------------------------------------------

 

         

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Accepted as of the date first written above.

            MONY Life Insurance Company of America
      By   /s/ Amy Judd       Name:  Amy Judd      Title:  Investment Officer   

 

--------------------------------------------------------------------------------

 

         

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Accepted as of the date first written above.

                Horizon Blue Cross Blue Shield of New
     Jersey

By: AllianceBernstein LP, its Investment Advisor

  By   /s/ Amy Judd       Name:  Amy Judd      Title:  Senior Vice President   

 

--------------------------------------------------------------------------------

 

         

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Accepted as of the date first written above.
The Lincoln National Life Insurance
     Company
By: Delaware Investment Advisers, a series of
Delaware Management Business Trust,
Attorney-In-Fact

                  By   /s/ Jayson Bronchetti         Name:   Jayson Bronchetti 
      Title:   Vice President   

 

--------------------------------------------------------------------------------

 

         

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Accepted as of the date first written above.

            The Prudential Insurance Company of
     America
      By   /s/ William H. Bulmer         Vice President             

MTL Insurance Company
By: Prudential Private Placement Investors,
L.P. (as Investment Advisor)
By: Prudential Private Placement Investors,
Inc. (as its General Partner)

                  By   /s/ William H. Bulmer         Vice President             

Physicians Mutual Insurance Company
By: Prudential Private Placement Investors,
L.P. (as Investment Advisor)
By: Prudential Private Placement Investors,
Inc. (as its General Partner)

                  By   /s/ William H. Bulmer         Vice President             

Medica Health Plans
By: Prudential Private Placement Investors,
L.P. (as Investment Advisor)
By: Prudential Private Placement Investors,
Inc. (as its General Partner)

                  By   /s/ William H. Bulmer         Vice President           

 

--------------------------------------------------------------------------------

 

         

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Accepted as of the date first written above.

            Thrivent Financial for Lutherans
      By   /s/ Patricia Eitrheim         Name:   Patricia Eitrheim       
Title:   Director   

 

--------------------------------------------------------------------------------

 

         

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Accepted as of the date first written above.

            First Trenton Indemnity Company
      By   /s/ Annette M. Masterson         Name:   Annette M. Masterson       
Title:   Vice President   

 

--------------------------------------------------------------------------------

 

         

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Accepted as of the date first written above.

            Travelers Casualty Insurance Company
    of America
      By   /s/ Annette M. Masterson         Name:   Annette M. Masterson       
Title:   Vice President   

 

--------------------------------------------------------------------------------

 

         

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Accepted as of the date first written above.

            Woodmen of the World Life Insurance
     Society
      By   /s/ Mark Schreier         Name:   Mark Schreier        Title:   Exec.
VP/Finance & Treasurer              By   /s/ Danny E. Cummins         Name:  
Danny E. Cummins        Title:   President & CEO   

 

--------------------------------------------------------------------------------

 

         

Piedmont Natural Gas Company, Inc.   Note Purchase Agreement

Accepted as of the date first written above.
Physicians Insurance A Mutual Company
Opthalmic Mutual Insurance Company
By: Prime Advisors, Inc., its Attorney-in-Fact

                    By:   /s/ Scott Sell         Name:   Scott Sell       
Title:   Vice President   

 

--------------------------------------------------------------------------------

 

         

Information Relating to Purchasers
Principal Amount

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
The Northwestern Mutual Life Insurance Company
    $0       $31,000,000   720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Securities Department
Email: #############@##################.com                

Payments
All payments by wire transfer of immediately available funds to:
US Bank
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
ABA# #########
For the account of: Northwestern Mutual Life
Account No. ############
with sufficient information to identify the source of the transfer, the amount
of interest, principal or premium, the series of Notes and the PPN
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of such wire transfers
to be addressed, Attention: Investment Operations, Email:
#############@##################.com
Physical Delivery of Notes
The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Anne T. Brower
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######
Schedule A
(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
The Northwestern Mutual Life Insurance Company
    $0       $1,000,000        For its Group Annuity Separate Account
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Securities Department
Email: #############@##################.com                

Payments
All payments by wire transfer of immediately available funds to:
US Bank
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
ABA# #########
For the account of: Northwestern Mutual Life-GASA
Account No. ############
with sufficient information to identify the source of the transfer, the amount
of interest, principal or premium, the series of Notes and the PPN
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of such wire transfers
to be addressed, Attention: Investment Operations, Email:
#############@##################.com.
Physical Delivery of Notes
The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Anne T. Brower
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######

A-2

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
Allstate Insurance Company
    $5,000,000       $0  
c/o Allstate Investments LLC
    $5,000,000           Attention: Private Placements Department
3075 Sanders Road, STE G3A
Northbrook, Illinois 60062-7127
Telephone: (###) ###-####
Telecopy: (###) ###-####                

Payments
All payments by Fedwire transfer of immediately available funds or ACH Payment,
identifying the name of the Issuer, the Private Placement Number and the payment
as principal, interest or premium, in the format as follows:
Bank: Citibank
ABA#: #########
Account name: Allstate Insurance Company Bond Collection Account — PP
Account #: ########
Reference: ### ######### ###, Piedmont 2.92% Series A Senior Notes, Due June 6,
2016, or
Payment Due Date: (MM/DD/YY) and the type and amount of payment being made.
For Example:
P ______ (enter “P” and the amount of principal being remitted, for example,
P5000000.00) —
I ______ (enter “I” and the amount of interest being remitted, for example,
I225000.00)
Notices
All notices of scheduled payments and written confirmation of such wire transfer
to be sent to:
Allstate Investments LLC
Investment Operations—Private Placements
3075 Sanders Road, STE G4A
Northbrook, Illinois 60062-7127
Telephone: (###) ###-#### Private Placements
Telecopy: (###) ###-####
Email: ##########@########.com

A-3

--------------------------------------------------------------------------------

 

All financial reports, compliance certificates and all other written
communications, including notice of prepayments to be sent by email
(###############@########.com) or hard copy addressed as first provided above.
Physical Delivery of Notes
Citibank N.A.
399 Park Avenue
Level B Vault
New York, NY 10022
Attention: Danny Reyes
For Allstate Life Insurance Company/Safekeeping Account No. ######
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######

A-4

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
Allstate Life Insurance Company
    $0       $6,000,000  
c/o Allstate Investments LLC

            $6,000,000  
Attention: Private Placements Department

            $5,000,000  
3075 Sanders Road, STE G3A

            $5,000,000   Northbrook, Illinois 60062-7127
Telephone: (###) ###-####
Telecopy: (###) ###-####                

Payments
All payments by Fedwire transfer of immediately available funds or ACH Payment,
identifying the name of the Issuer, the Private Placement Number and the payment
as principal, interest or premium, in the format as follows:
Bank: Citibank
ABA#: #########
Account name: Allstate Life Insurance Company Collection Account — PP
Account #: ########
Reference: ### ### ###### ###, Piedmont 4.24% Series B Senior Notes, Due June 6,
2021
Payment Due Date: (MM/DD/YY) and the type and amount of payment being made.
For Example:
P ______ (enter “P” and the amount of principal being remitted, for example,
P5000000.00) —
I ______ (enter “I” and the amount of interest being remitted, for example,
I225000.00)
Notices
All notices of scheduled payments and written confirmation of such wire transfer
to be sent to:
Allstate Investments LLC
Investment Operations—Private Placements
3075 Sanders Road, STE G4A
Northbrook, Illinois 60062-7127
Telephone: (###) ###-#### Private Placements
Telecopy: (###) ###-####
Email: ##########@########.com

A-5

--------------------------------------------------------------------------------

 

All financial reports, compliance certificates and all other written
communications, including notice of prepayments to be sent by email
(#################@########.com) or hard copy addressed as first provided above.
Physical Delivery of Notes
Citibank N.A.
399 Park Avenue
Level B Vault
New York, NY 10022
Attention: Danny Reyes
For Allstate Life Insurance Company/Safekeeping Account No. ######
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######

A-6

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
New York Life Insurance and Annuity Corporation
    $12,000,000       $5,000,000   c/o New York Life Investment Management LLC
51 Madison Avenue
2nd Floor, Room 208
New York, New York 10010-1603
Attention: Fixed Income Investors Group,                

Private Finance, 2nd Floor
Fax Number: (###) ###-####
Payments
All payments by wire or intrabank transfer of immediately available funds to:
JPMorgan Chase Bank
New York, New York
ABA # ###-###-###
Credit: New York Life Insurance and Annuity Corporation
General Account No. ###-#-#####
with sufficient information (including issuer, PPN number, interest rate,
maturity and whether payment is of principal, premium, or interest) to identify
the source and application of such funds.
Notices
All notices of payments, written confirmations of such wire transfers and any
audit confirmation:
New York Life Insurance and Annuity Corporation
c/o New York Life Investment Management LLC
51 Madison Avenue
2nd Floor, Room 208
New York, New York 10010-1603
Attention: Securities Operation, Private Group, 2nd Floor
Fax Number: (###) ###-####
with a copy sent electronically to:
###########@#####.com
#################@#####.com

A-7

--------------------------------------------------------------------------------

 

All other notices and communications to be addressed as first provided above,
with a copy sent electronically to: ###########@#####.com and
#################@#####.com, and with a copy of any notices regarding Defaults
or Events of Default under the operative documents to: Attention: Office of the
General Counsel, Investment Section, Room 1016, Fax Number: (###) ###-####.
Physical Delivery of Notes
New York Life Investment Management LLC
51 Madison Avenue, Room 1016M
New York, NY 10010
Attn: Matthew DelRosso, Vice President and Assistant General Counsel
Phone: (###) ###-####
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######

A-8

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
New York Life Insurance Company
    $8,000,000       $5,000,000   c/o New York Life Investment Management LLC
51 Madison Avenue
2nd Floor, Room 208
New York, New York 10010
Attention: Fixed Income Investors Group,                

Private Finance, 2nd Floor
Fax Number: (###) ###-####
Payments
All payments by wire or intrabank transfer of immediately available funds to:
JPMorgan Chase Bank
New York, New York 10019
ABA # ###-###-###
Credit: New York Life Insurance Company
General Account No. ###-#-#####
with sufficient information (including issuer, PPN number, interest rate,
maturity and whether payment is of principal, premium, or interest) to identify
the source and application of such funds.
Notices
All notices of payments, written confirmations of such wire transfers and any
audit confirmation:
New York Life Insurance Company
c/o New York Life Investment Management LLC
51 Madison Avenue
2nd Floor, Room 208
New York, New York 10010-1603
Attention: Securities Operations, Private Group, 2nd Floor
Fax Number: (###) ###-####
with a copy sent electronically to:
###########@#####.com
#################@#####.com

A-9

--------------------------------------------------------------------------------

 

All other notices and communications to be addressed as first provided above,
with a copy sent electronically to: ###########@#####.com and
#################@#####.com, and with a copy of any notices regarding Defaults
or Events of Default under the operative documents to: Attention: Office of the
General Counsel, Investment Section, Room 1016, Fax Number: (###) ###-####.
Physical Delivery of Notes
New York Life Investment Management LLC
51 Madison Avenue, Room 1016M
New York, NY 10010
Attn: Matthew DelRosso, Vice President and Assistant General Counsel
Phone: (###) ###-####
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######

A-10

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
State Farm Life Insurance Company
    $0       $21,000,000   One State Farm Plaza
Bloomington, Illinois 61710
Attention: Investment Department E-8
E-Mail: #################@#########.com                

Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds to:
JPMorganChase
ABA # #########
Attention: SSG Private Income Processing
A/C # ##########
for further credit to: State Farm Life Insurance Company
Custody Account # ######
Re: Piedmont Natural Gas Company, Inc., 4.24% Series B Senior Notes due June 6,
2021
PPN # ###### ###
Maturity Date: June 6, 2021
Notices
All notices, financial statements, officer’s certificates and other
correspondence to be addressed as first provided above, except notices with
respect to payment, and written confirmation of each such payment, to be
addressed:
State Farm Life Insurance Company
One State Farm Plaza
Bloomington, Illinois 61710
Attention: Investment Accounting Department D-3

A-11

--------------------------------------------------------------------------------

 

Physical Delivery of Notes
JPMorgan Chase Bank, N.A.
4 Chase Metrotech Center, 3rd Floor
Brooklyn, New York 11245-0001
Attention: Physical Receive Department
Account # ######
with a copy to: State Farm Insurance Companies
One State Farm Plaza
Bloomington, Illinois 61710
Attn: Corporate Law-Investments, A-3
Christaine M. Soffer, Associate General Counsel
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######

A-12

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
State Farm Life and Accident Assurance Company
    $0       $1,000,000   One State Farm Plaza
Bloomington, Illinois 61710
Attention: Investment Department E-8
E-Mail: #################@#########.com                

Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds to:
JPMorganChase
ABA # #########
Attention: SSG Private Income Processing
A/C # ##########
for further credit to: State Farm Life and Accident Assurance Company
Custody Account # ######
Re: Piedmont Natural Gas Company, Inc., 4.24% Series B Senior Notes due June 6,
2021
PPN # ###### ###
Maturity Date: June 6, 2021
Notices
All notices, financial statements, officer’s certificates and other
correspondence to be addressed as first provided above, except notices with
respect to payment, and written confirmation of each such payment, to be
addressed:
State Farm Life and Accident Assurance Company
One State Farm Plaza
Bloomington, Illinois 61710
Attention: Investment Accounting Department D-3

A-13

--------------------------------------------------------------------------------

 

Physical Delivery of Notes
JPMorgan Chase Bank, N.A.
4 Chase Metrotech Center, 3rd Floor
Brooklyn, New York 11245-0001
Attention: Physical Receive Department
Account # ######
with a copy to: State Farm Insurance Companies
One State Farm Plaza
Bloomington, Illinois 61710
Attn: Corporate Law-Investments, A-3
Christaine M. Soffer, Associate General Counsel
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######

A-14

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
MONY Life Insurance Company of America
    $4,000,000       $14,000,000   c/o AXA/Equitable Life Insurance Company
1290 Avenue of the Americas, 12th Floor
New York, New York 10104
Attention: Neville Hemmings                

Treasury Department
Telephone: (###) ###-####
Payments
All payments shall be made by wire transfer of immediately available funds to:
JP Morgan/Chase
ABA No.: ###-######
For credit to MONY America
Account Number: ###-######
A/C: MONY America—# #####
Face Amount of $4,000,000.00 (Series A) or
Face Amount of $14,000,000.00 (Series B)
Each such wire shall show the name of the Company, the Private Placement Number,
the due date of the payment being made and, if such payment is a final payment.
Notices
All notices of payment and written confirmation of wire transfers should be sent
to:
MONY Life Insurance Company of America
c/o AllianceBernstein LP
1345 Avenue of the Americas, 37th Floor
New York, New York 10105
Attention: Mike Maher — Telephone: (###) ###-####
Fax: (###) ###-####
All other notices and communications to be addressed:
MONY Life Insurance Company of America
c/o AllianceBernstein LP
1345 Avenue of the Americas, 37th Floor

A-15

--------------------------------------------------------------------------------

 

New York, New York 10105
Attention: Jeff Hughes
 AllianceBernstein LP
 Telephone: (###) ###-####
Physical Delivery of Notes
MONY Life Insurance Company of America
c/o AXA/Equitable Life Insurance Company
1290 Avenue of the Americas, 12th Floor
New York, New York 10104
Attention: Neville Hemmings
Treasury Department
Telephone: (###) ###-####
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######

A-16

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
Horizon Blue Cross Blue Shield of New Jersey
    $0       $2,000,000   c/o AllianceBernstein LP
1345 Avenue of the Americas
New York, New York 10105
Attention: Angel Salazar/Cosmo Valente                

Insurance Operations
Telephone: ###-###-#### or ###-###-####
Payments
All payments shall be made by wire transfer of immediately available funds to:
JP Morgan/Chase
ABA No. ###-######
For credit to the Private Income Processing Group
Account Number: ###-####-###
Account: Horizon Blue Cross Blue Shield of New Jersey-######
Face Amount of $2,000,000.00
Each wire shall show the name of the Company, the Private Placement Number, the
due date of the payment being made and, if such payment is a final payment.
Notices
All notices of payment and written confirmation of wire transfers should be sent
to:
JP Morgan Chase Manhattan Bank
14201 N. Dallas Parkway, 13th Floor
Dallas, Texas 75254-2917
Fax: ###-###-####

A-17

--------------------------------------------------------------------------------

 

with copies to:
Horizon Blue Cross Blue Shield of New Jersey
c/o AllianceBernstein LP
1345 Avenue of the Americas
New York, NY 10105
Attention: Mei Wong/Mike Maher
Telephone: ###-###-#### / ###-###-####
Fax: ###-###-####
and
Horizon Blue Cross Blue Shield of New Jersey
Three Penn Plaza, PP-15K
Newark, NJ 07105-2200
Attention: Susan McCarthy-Manager Cash & Investments
Telephone: ###-###-#### or ###-###-####
Fax: ###-###-####
All other notices and communications to be addressed:
AllianceBernstein LP
1345 Avenue of the Americas — 38th Floor
New York, NY 10105
Attention: Amy Judd
Phone: ###-###-####
Fax: ###-###-####
Physical Delivery of Notes
AllianceBernstein LP
1345 Avenue of the Americas
New York, New York 10105
Attention: Angel Salazar/Cosmo Valente
Insurance Operations
Telephone: ###-###-#### or ###-###-####
Name of Nominee in which Notes are to be issued: ######
Taxpayer I.D. Number: ##-#######

A-18

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
The Lincoln National Life Insurance Company
    $0       $6,000,000   c/o Delaware Investment Advisers            
$4,000,000   2005 Market Street, Mail Stop 41-104             $3,000,000  
Philadelphia, Pennsylvania 19103             $2,000,000   Attention: Fixed
Income Private Placements             $1,000,000   Private Placement Fax: (###)
###-####                

Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
“Piedmont Natural Gas Company, 4.24% Series B Senior Notes due June 6, 2021, PPN
###### ###, principal, premium or interest”) to:
The Bank of New York Mellon
One Wall Street, New York, New York 10286
ABA # #########
BNF Account #: ######
Attention: Private Placement P&I Dept.
For Further Credit: The Lincoln National Life Insurance Company
Further Credit: Custodial Account Names Listed Below
Further Credit A/C #: Custodial Account Numbers Listed Below
Ref: PPN/CUSIP # / Security Description / Payment Reason

                  Principal         Bank   Amount of         Custody   Notes    
Account Name   Number     $6,000,000    
The Lincoln National Life Insurance Company — ### #####
    ######     $4,000,000    
The Lincoln National Life Insurance Company — ### #### ###
    ######     $3,000,000    
The Lincoln National Life Insurance Company — ### #####
    ######     $2,000,000    
The Lincoln National Life Insurance Company — ### #####
    ######     $1,000,000    
The Lincoln National Life Insurance Company — ### #####
    ######  

Notices
All notices of payments on or in respect of the Notes and written confirmation
of each such payment to be addressed to:

A-19

--------------------------------------------------------------------------------

 

Delaware Investment Advisers
2005 Market Street, Mail Stop 41-104
Philadelphia, Pennsylvania 19103
Attention: Fixed Income Private Placements
Private Placement Fax: (###) ###-####
and
Lincoln Financial Group
1300 South Clinton Street, 2H-17
Fort Wayne, Indiana 46802
Attention: K. Estep — Investment Accounting
Investment Accounting Fax: (###) ###-####
and
The Bank of New York Mellon
P. O. Box 19266
Newark, New Jersey 07195
Attention: Private Placement P&I Department
Reference: Piedmont Natural Gas Company, PPN ###### ###
All other notices and communications to be addressed as first provided above.
Physical Delivery of Notes
The Bank of New York Mellon
Attn: Free Receive Department
One Wall Street, 3rd Floor
New York, NY 10286
Contact Person: Arnold Musella (Telephone ###-###-####)
(Reference note amount, account name and custody acct #)
Fax a copy of cover letter to: Karen Costa — The Bank of New York Mellon
Fax #: ###-###-####
With a copy to: Marilyn J. Smith
The Lincoln National Life Insurance Company
100 North Greene Street
Greensboro, NC 27401
#######.#####@###.com
Name in which Notes are to be issued: The Lincoln National Life Insurance
Company
Taxpayer I.D. Number: ##-#######

A-20

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
The Prudential Insurance Company
    $0       $8,000,000         of America
c/o Prudential Capital Group
2200 Ross Avenue, Suite 4200E
Dallas, TX 75201
Attention: Managing Director                

Energy and Corporate Finance
Payments
All payments on account of Notes held by such purchaser shall be made by wire
transfer of immediately available funds for credit to:
JPMorgan Chase Bank
New York, NY
ABA No.: ###-###-###
Account Name: Prudential Managed Portfolio
Account No: ###### (please do not include spaces)
Each such wire transfer shall set forth the name of the Company, a reference to
“4.24% Series B Senior Notes due June 6, 2021, Security No. ########, PPN ######
###” and the due date and application (as among principal, interest and
Make-Whole Amount) of the payment being made.
Notices
Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Investment Operations Group
Gateway Center Two, 10th Floor
100 Mulberry Street
Newark, NJ 07102-4077
Attention: Manager, Billings and Collections

A-21

--------------------------------------------------------------------------------

 

Address for all other communications and notices to be addressed as first
provided above, except recipient of telephonic prepayment notices should be:
Manager, Trade Management Group
Telephone: (###) ###-####
Facsimile: (###) ###-####
Physical Delivery of Notes
Prudential Capital Group
2200 Ross Avenue, Suite 4200E
Dallas, TX 75201
Attention: William H. Bulmer
Telephone: (###) ###-####
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######

A-22

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
MTL Insurance Company
    $0       $3,000,000   Prudential Private Placement Investors, L.P.
c/o Prudential Capital Group
2200 Ross Avenue, Suite 4200E
Dallas, TX 75201
Attention: Managing Director                

Energy and Corporate Finance
Payments
All payments on account of Notes held by such purchaser shall be made by wire
transfer of immediately available funds for credit to:
The Northern Trust Company
ABA # #########
Credit Wire Account # ##########
FFC: ##-######### Insurance Company — Prudential
Each such wire transfer shall set forth the name of the Company, a reference to
“4.24% Series B Senior Notes due June 6, 2021, PPN ###### ###” and the due date
and application (as among principal, interest and Make-Whole Amount) of the
payment being made.
Notices
Address for all notices of payments and written confirmation of such wire
transfers:
MTL Insurance Company
1200 Jorie Blvd.
Oak Brook, IL 60522-9060
Attention: Margaret Culkeen
Address for all other communications and notices to be addressed as first
provided above.

A-23

--------------------------------------------------------------------------------

 

Physical Delivery of Notes
The Northern Trust Company of New York
Harborside Financial Center 10, Suite 1401
3 Second Street
Jersey City, NJ 07311
Northern Acct. # ##-##### / Acct. Name: MTL Insurance Company — Prudential
Attention: Jose Mero and Ruby Vega
Send copy by nationwide overnight delivery service to:
Prudential Capital Group
Gateway Center 4
100 Mulberry, 7th Floor
Newark, NJ 07102
Attention: Trade Management, Manager
Telephone: (###) ###-####
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######

A-24

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
Physicians Mutual Insurance Company
    $0       $2,900,000   Prudential Private Placement Investors, L.P.
c/o Prudential Capital Group
2200 Ross Avenue, Suite 4200E
Dallas, TX 75201
Attention: Managing Director                

Energy and Corporate Finance
Payments
All payments on account of Notes held by such purchaser shall be made by wire
transfer of immediately available funds for credit to:
The Northern Trust Company
Chicago, IL
ABA # #########
Account Name: Physicians Mutual Insurance Company
Account No.: ##-#####
Each such wire transfer shall set forth the name of the Company, a reference to
“4.24% Series B Senior Notes due June 6, 2021, PPN ###### ###” and the due date
and application (as among principal, interest and Make-Whole Amount) of the
payment being made.
Notices
Address for all notices of payments and written confirmation of such wire
transfers:
Physicians Mutual Insurance Company
2600 Dodge Street
Omaha, NE 68131
Attention: Steve Scanlan
Facsimile: (###) ###-####
Address for all other communications and notices to be addressed as first
provided above.

A-25

--------------------------------------------------------------------------------

 

Physical Delivery of Notes
The Northern Trust Company of New York
Harborside Financial Center 10, Suite 1401
3 Second Street
Jersey City, NJ 07311
Northern Acct. # ##-##### / Acct. Name: Physicians Mutual Insurance Company —
Prudential
Attention: Jose Mero and Ruby Vega
Send copy by nationwide overnight delivery service to:
Prudential Capital Group
Gateway Center 4
100 Mulberry, 7th Floor
Newark, NJ 07102
Attention: Trade Management, Manager
Telephone: (###) ###-####
Name of Nominee in which Notes are to be issued: ######
Taxpayer I.D. Number: ##-#######

A-26

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
Medica Health Plans
    $0       $2,100,000   Prudential Private Placement Investors, L.P.
c/o Prudential Capital Group
2200 Ross Avenue, Suite 4200E
Dallas, TX 75201
Attention: Managing Director                

Energy and Corporate Finance
Payments
All payments on account of Notes held by such purchaser shall be made by wire
transfer of immediately available funds for credit to:
Mellon Trust of New England
ABA No: ###-###-###
Account No.: ######
Attention: MBS Income CC: 1253
For: ###########, Medica Health Plans
Each such wire transfer shall set forth the name of the Company, a reference to
“4.24% Series B Senior Notes due June 6, 2021, PPN ###### ###” and the due date
and application (as among principal, interest and Make-Whole Amount) of the
payment being made.
Notices
All notices and communications, including those relating to payment to be
addressed as first provided above.
Physical Delivery of Notes
Bank of New York Mellon Securities Trust Company
1 Wall Street, 3rd Floor, Window C
New York, NY 10286
Attention: Mike Visone
Ref: Medica Health Systems; Account Number: ###########
Send copy by nationwide overnight delivery service to:

A-27

--------------------------------------------------------------------------------

 

Prudential Capital Group
Gateway Center 4
100 Mulberry, 7th Floor
Newark, NJ 07102
Attention: Trade Management, Manager
Telephone: (###) ###-####
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######

A-28

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
Thrivent Financial for Lutherans
    $0       $5,000,000   625 Fourth Avenue South             $5,000,000  
Minneapolis, Minnesota 55415             $6,000,000   Attention: Investment
Division-Private Placements
Fax Number: (###) ###-####                

Payments
All payments of principal, premium or interest on the account of the Notes shall
be made by bank wire transfer (in immediately available funds) to:
ABA # #########
State Street Bank & Trust Co.
DDA # A/C — ####-###-#
Fund Number: ####
Fund Name: Thrivent Financial for Lutherans
All payments must include the following information: Security Description,
Private Placement Number, Reference Purpose of Payment and Interest and/or
Principal Breakdown.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payment and written confirmation of such wire transfers,
to be addressed:
Thrivent Financial for Lutherans
625 Fourth Avenue South
Minneapolis, Minnesota 55415
Attention: Investment Division-Private Placements
Alan D. Onstad
Fax: (###) ###-####

A-29

--------------------------------------------------------------------------------

 

with a copy to:
Thrivent Accounts
State Street Kansas City
801 Pennsylvania
Kansas City, Missouri 64105
Attention: Brian Kershner
Fax: (###) ###-####
Physical Delivery of Notes
DTC/New York Window
55 Water Street
Plaza Level — 3rd Floor
New York, NY 10041
Attention: Robert Mendez
Account: State Street
Fund Name: Thrivent Financial for Lutherans
Fund Number: ####
Nominee Name: ######
Nominee Tax ID Number: ##-#######
with a copy to the attention of Thrivent Financial in-house attorney, Marlene
Nogle, at 625 Fourth Avenue South, MS 1100, Minneapolis, MN 55415
Name of Nominee in which Notes are to be issued: ######
Taxpayer I.D. Number: ##-#######

A-30

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
First Trenton Indemnity Company
    $4,000,000       $0   c/o The Travelers Companies, Inc.
9275-NB11B
385 Washington Street
St. Paul, Minnesota 55102-1396                

Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
“Piedmont Natural Gas Company 2.92% Series A Senior Notes, Due June 6, 2016, PPN
###### ###, principal, premium or interest”) to:
JP Morgan Chase Bank
ABA # #########
Wire Account Name: Travelers Indemnity Company — Private Placements
Wire Account Number: #########
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Physical Delivery of Notes
The Travelers Companies, Inc.
385 Washington Street
St. Paul, MN 55102
Attention: Nicole Ankeny
Senior Counsel
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######

A-31

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
Travelers Casualty Insurance Company of America
    $0       $4,000,000   c/o The Travelers Companies, Inc.
9275-NB11B
385 Washington Street
St. Paul, Minnesota 55102-1396                

Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
“Piedmont Natural Gas Company 4.24% Series B Senior Notes, Due June 6, 2021, PPN
###### ###, principal, premium or interest”) to:
JP Morgan Chase Bank
ABA # #########
Wire Account Name: Travelers Indemnity Company — Private Placements
Wire Account Number: #########
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Physical Delivery of Notes
The Travelers Companies, Inc.
385 Washington Street
St. Paul, MN 55102
Attention: Nicole Ankeny
Senior Counsel
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######

A-32

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
Woodmen of the World Life Insurance Society
    $0       $6,000,000   Attn: Securities Department
1700 Farnam Street
Omaha, Nebraska 68102                

Payments
Wire transfer of payments to the Society should be made by immediately available
funds to:
U.S. Bank
ABA # #########
1700 Farnam Street
Omaha, Nebraska 68102
For the Account of WOW
Account No. #-###-###-#-####
The wire should contain a complete description of the issue, as well as
identifying the remittance as to principal, interest and/or premium.
Notices
All notices and communications to be addressed as first provided above.
Physical Delivery of Notes
Woodmen of the World Life Insurance Society
Attn: Securities Department
1700 Farnam Street
Omaha, Nebraska 68102
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######

A-33

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
Physicians Insurance A Mutual Company
    $1,000,000       $0   P.O. Box 91220
Seattle, Washington 98111
Attention: Rod Pierson                

Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
“Piedmont Natural Gas Company 2.92% Series A Senior Notes due June 6, 2016, PPN
###### ###, principal, premium or interest”) to:
The Northern Trust Company of New York
ABA # #########
Acct# ##########
FFC(OBI): ##-#####/Physicians Insurance Co, A Mutual Company
ATTN: INC/DIV OR ATTN: Maturities
any additional pertinent information (cusip#, note name, P&I amts, etc)
Attn: Dan Frenzel
Email: ##################@####.com; ####@####.com
Notices
All notices of payments on or in respect of the Notes and written confirmation
of each such payment to be addressed to:
The Northern Trust Company
FAX # (###) ###-####
ATTN: Dan Frenzel
Email: ##################@####.com; ####@####.com

A-34

--------------------------------------------------------------------------------

 

FFC(OBI): ##-#####/Physicians Insurance Co A Mutual Company
with copies to:
Physicians Insurance A Mutual Company
P.O. Box 91220
Seattle, Washington 98111
Attention: Rod Pierson
Senior Vice President, CFO and Treasurer
and
Prime Advisors, Inc.
100 Northfield Dr., 4th Floor
Windsor, Connecticut 06095
Attention: Lewis Leon, SVP/Investment Accounting
All notices and communications other than those in respect to payments to be
addressed to:
Prime Advisors, Inc.
Redmond Ridge Corporate Center
22635 NE Marketplace Dr., Suite 160
Redmond, Washington 98053
Attention: Scott Sell, Vice President
Physical Delivery of Notes
The Northern Trust Company of New York
Harborside Financial Center 10, Suite 1401
3 Second Street
Jersey City, NJ 07311
Acct: Physicians Insurance
Acct # ##-#####
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######

A-35

--------------------------------------------------------------------------------

 

                      Principal     Principal       Amount of     Amount of    
  Series A     Series B   Name of and Address   Notes to Be     Notes to Be   of
Purchaser   Purchased     Purchased  
Ophthalmic Mutual Insurance Company
    $1,000,000       $0   655 Beach Street
San Francisco, California 94109-1336
Attention: Rick Rascoe                

Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
“Piedmont Natural Gas Company 2.92% Series A Senior Notes due June 6, 2016, PPN
###### ###, principal, premium or interest”) to:
Mellon Trust of New England
ABA # #########
DDA# ##############
Acct# ###########
Acct Name: Ophthalmic Mutual Insurance Company
Notices
All notices of payments on or in respect of the Notes and written confirmation
of each such payment to be addressed to:
Bank of New York Mellon
ACCT # and Account Name
One Wall Street
National Custody — 23rd Floor
New York, NY 10286
Attention: Pearl Dent
Email: #####.####@#########.com
with copies to:
Ophthalmic Mutual Insurance Company
655 Beach Street
San Francisco, California 94109-1336
Attention: Rick Rascoe
Chief Financial Officer

A-36

--------------------------------------------------------------------------------

 

and
Prime Advisors, Inc.
100 Northfield Dr., 4th Floor
Windsor, Connecticut 06095
Attention: Lewis Leon, SVP/Investment Accounting
All notices and communications other than those in respect to payments to be
addressed to:
Prime Advisors, Inc.
Redmond Ridge Corporate Center
22635 NE Marketplace Dr., Suite 160
Redmond, Washington 98053
Attention: Scott Sell, Vice President
Physical Delivery of Notes
Bank of New York Mellon
One Wall Street
3rd Floor — Receive Window C
New York, NY 10286
Ref: Acct# ###########/Ophthalmic Mutual Insurance Company
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ##-#######

A-37

--------------------------------------------------------------------------------

 

Defined Terms
     As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
     “Affiliate” means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
     “Affiliated Entity” means the Subsidiaries of the Company and any of their
or the Company’s respective Controlled Affiliates. As used in this definition,
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
     “Anti-Money Laundering Laws” is defined in Section 5.16(c).
     “Anti-Terrorism Order” means Executive Order No. 13,224 of September 24,
2001, Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as
amended.
     “Attributable Indebtedness” means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation of any Person, the
capitalized amount of the remaining lease payments under the relevant lease that
would appear on a balance sheet of such Person prepared as of such date in
accordance with GAAP if such lease were accounted for as a capital lease.
     “Audited Financial Statements” means the audited consolidated balance sheet
of the Company and its Subsidiaries for the fiscal year ended October 31, 2010,
and the related consolidated statements of income from operations, shareholders’
equity and cash flows of the Company and its Subsidiaries for such fiscal year,
including the notes thereto.
     “Blocked Person” is defined in Section 5.16(a).
     “Business Day” means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in New York, New York or Charlotte, North Carolina
are required or authorized to be closed.
     “Change in Control” is defined in Section 8.7(f).
Schedule B
(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

     “Change in Law” means the occurrence, after the date of this Agreement, of
any of the following: (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
     “Closing” is defined in Section 3.
     “Code” means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
     “Company” means Piedmont Natural Gas Company, Inc., a North Carolina
corporation or any successor that becomes such in the manner prescribed in
Section 10.2.
     “Confidential Information” is defined in Section 20.
     “Consolidated Funded Indebtedness” means, as of any date of determination,
for the Company and its Subsidiaries on a consolidated basis, the sum of (a) the
outstanding principal amount of all obligations, whether current or long-term,
for borrowed money (including the Notes hereunder) and all obligations evidenced
by bonds, debentures, notes, loan agreements or other similar instruments,
(b) all purchase money Indebtedness, (c) all direct obligations arising under
standby letters of credit, bankers’ acceptances, bank guaranties, surety bonds
and similar instruments, (d) all obligations in respect of the deferred purchase
price of property or services (other than trade accounts payable in the ordinary
course of business), (e) Attributable Indebtedness in respect of capital leases
and Synthetic Lease Obligations, (f) without duplication, all Guarantees with
respect to outstanding Indebtedness of the types specified in clauses
(a) through (e) above of Persons other than the Company or any Subsidiary, and
(g) all Indebtedness of the types referred to in clauses (a) through (f) above
of any partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which the Company or a Subsidiary
is a general partner or joint venturer, except to the extent such Indebtedness
is expressly made non-recourse to the Company or such Subsidiary.
     “Consolidated Total Assets” means, as of any date of determination, for the
Company and its Subsidiaries on a consolidated basis, the total assets of the
Company and its Subsidiaries as set forth or reflected on the most recent
consolidated balance sheet of the Company and its Subsidiaries, prepared in
accordance with GAAP.
     “Control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.
     “Credit Agreement” means the Credit Agreement among the Company, the
lenders signatory hereto and Bank of America, N.A. as administrative agent among
others dated as of January 25, 2011, as such agreement may be hereafter amended,
modified, restated,

B-2

--------------------------------------------------------------------------------

 

supplemented, refinanced, increased or reduced from time to time, and any
successor credit agreement or similar facilities.
     “Default” means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
     “Default Rate” means that rate of interest that is the greater of (i) 2%
per annum above the rate of interest stated in clause (a) of the first paragraph
of the Notes or (ii) 2% over the rate of interest publicly announced by Bank of
America, N.A. in New York, New York (and its successors) as its “base” or
“prime” rate.
     “Disposition” or “Dispose” means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
     “Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
     “Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.
     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
     “ERISA Affiliate” means any trade or business (whether or not incorporated)
that is treated as a single employer together with the Company under section 414
of the Code.
     “Event of Default” is defined in Section 11.
     “Federal Power Act” means 16 U.S.C. § 791-828(c).
     “Finance Agreement” means this Agreement, the Notes and any Subsidiary
Guaranty.

B-3

--------------------------------------------------------------------------------

 

     “Form 10-K” means Form 10-K of the Company filed with the SEC for the
applicable fiscal period.
     “Form 10-Q” means Form 10-Q of the Company filed with the SEC for the
applicable fiscal period.
     “GAAP” means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
     “Governmental Authority” means the government of the United States or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank)
     “Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien); provided that, the
term “Guarantee” shall not include endorsements for collection or deposit in the
ordinary course of business. The amount of any Guarantee shall be deemed to be
an amount equal to the stated or determinable amount of the related primary
obligation, or portion thereof, in respect of which such Guarantee is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by the guaranteeing Person in good faith. The term
“Guarantee” as a verb has a corresponding meaning.
     “Guarantors” means each Person who is a signatory to the Subsidiary
Guaranty and any other Person who, pursuant to Section 9.8, executes a joinder
agreement and becomes a party to the Subsidiary Guaranty.

B-4

--------------------------------------------------------------------------------

 

     “Hazardous Material” means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
     “holder” means, with respect to any Note the Person in whose name such Note
is registered in the register maintained by the Company pursuant to
Section 13.1.
     “Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
     (a) all obligations of such Person for borrowed money and all obligations
of such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;
     (b) all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;
     (c) net obligations of such Person under any Swap Contract;
     (d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business);
     (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;
     (f) capital leases and Synthetic Lease Obligations;
     (g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person, valued, in the case of a redeemable preferred interest, at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends; and
     (h) all Guarantees of such Person in respect of any of the foregoing.
     For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, except to the extent such Indebtedness
is expressly made non-recourse to such Person. The amount of any net obligation
under any Swap Contract on any date shall be deemed to be the Swap Termination
Value thereof as of such date. The amount of any capital lease or Synthetic
Lease Obligation as

B-5

--------------------------------------------------------------------------------

 

of any date shall be deemed to be the amount of Attributable Indebtedness in
respect thereof as of such date.
     “Institutional Investor” means (a) any Purchaser of a Note, (b) any holder
of a Note holding (together with one or more of its affiliates) more than 3% of
the aggregate principal amount of the Notes then outstanding, (c) any bank,
trust company, savings and loan association or other financial institution, any
pension plan, any investment company, any insurance company, any broker or
dealer, or any other similar financial institution or entity, regardless of
legal form, and (d) any Related Fund of any holder of any Note.
     “Laws” means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case having the force of law.
     “Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
     “Make-Whole Amount” is defined in Section 8.6.
     “Material” means material in relation to the operations, business,
properties, condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole.
     “Material Adverse Effect” means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole;
(b) a material impairment of the ability of the Company or any Guarantor to
perform its obligations under any Finance Agreement to which it is a party; or
(c) a material adverse effect upon the legality, validity, binding effect or
enforceability against the Company or any Guarantor of any Finance Agreement to
which it is a party.
     “Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such
term is defined in section 4001(a)(3) of ERISA.
     “NAIC” means the National Association of Insurance Commissioners or any
successor thereto.
     “NAIC Annual Statement” is defined in Section 6.2(a).

B-6

--------------------------------------------------------------------------------

 

     “Natural Gas Act” means U.S.C. Title 15, Chapter 15B.
     “Notes” is defined in Section 1.
     “OFAC” is defined in Section 5.16(a).
     “OFAC Listed Person” is defined in Section 5.16(a).
     “Officer’s Certificate” means a certificate of a Senior Financial Officer
or of any other officer of the Company whose responsibilities extend to the
subject matter of such certificate.
     “PBGC” means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
     “PCAOB” means the Public Company Accounting Oversight Board.
     “Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
     “Plan” means an “employee benefit plan” (as defined in section 3(3) of
ERISA) subject to Title I of ERISA that is or, within the preceding five years,
has been established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company or
any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability.
     “Property” or “property” of a Person means any and all property, whether
real, personal, tangible, intangible, or mixed, of such Person, or other assets
owned, leased or operated by such Person.
     “PUHCA” means the Public Utility Holding Company Act of 2005, as amended.
     “Purchaser” is defined in the first paragraph of this Agreement.
     “Qualified Institutional Buyer” means any Person who is a “qualified
institutional buyer” within the meaning of such term as set forth in
Rule 144A(a)(1) under the Securities Act.
     “Registered Public Accounting Firm” has the meaning specified in the
Securities Laws and shall be independent of the Company as prescribed in the
Securities Laws.
     “Related Fund” means, with respect to any holder of any Note, any fund or
entity that (i) invests in Securities or bank loans, and (ii) is advised or
managed by such holder, the same investment advisor as such holder or by an
Affiliate of such holder or such investment advisor.
     “Required Holders” means, at any time, the holders of at least 51% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Affiliates).

B-7

--------------------------------------------------------------------------------

 

     “Responsible Officer” means the president, senior vice president, chief
financial officer, treasurer, or vice president-chief risk officer of the
Company and, solely for purposes of notices given pursuant to Section 18, any
other officer or employee of the Company so designated by any of the foregoing
officers in a notice to the holders of the Notes. Any document delivered
hereunder that is signed by a Responsible Officer of the Company shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of the Company and such Responsible
Officer shall be conclusively presumed to have acted on behalf of the Company.
     “S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill
Companies, Inc.
     “SEC” shall mean the Securities and Exchange Commission of the United
States, or any successor thereto.
     “Securities” or “Security” shall have the meaning specified in Section 2(1)
of the Securities Act.
     “Securities Act” means the Securities Act of 1933, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time in
effect.
     “Securities Exchange Act of 1934” means the Securities Exchange Act of
1934, as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
     “Securities Laws” means the Securities Act, the Securities Exchange Act of
1934, Sarbanes-Oxley and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the PCAOB.
     “Senior Financial Officer” means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
     “Shareholders’ Equity” means, as of any date of determination, consolidated
shareholders’ equity of the Company and its Subsidiaries as of that date
determined in accordance with GAAP.
     “Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
the Company.
     “Subsidiary Guaranty” is defined in Section 9.8.

B-8

--------------------------------------------------------------------------------

 

     “SVO” means the Securities Valuation Office of the NAIC or any successor to
such Office.
     “Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.
     “Swap Termination Value” means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts.
     “Synthetic Lease Obligation” means, with respect to any Person, the
monetary obligation of a Person under (a) a so-called synthetic, off-balance
sheet or tax retention lease, or (b) an agreement for the use or possession of
property creating obligations that do not appear on the balance sheet of such
Person but which, upon the insolvency or bankruptcy of such Person, would be
characterized as the indebtedness of such Person (without regard to accounting
treatment).
     “Total Capitalization” means, as of any date of determination, the sum of
(i) Shareholders’ Equity on such date plus (ii) Consolidated Funded Indebtedness
on such date.
     “USA Patriot Act” means United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.
     “Wholly-Owned Subsidiary” means, at any time, any Subsidiary one hundred
percent of the Equity Interests (except directors’ qualifying shares) and voting
interests of which are owned by any one or more of the Company and the Company’s
other wholly-owned Subsidiaries at such time.

B-9

--------------------------------------------------------------------------------

 

Schedule 5.3
Disclosure Materials

A.   10-K for Years Ending:       October 31, 2007
October 31, 2008
October 31, 2009
October 31, 2010   B.   10-Q for Quarter Ending January 31, 2011   C.   Private
Placement Memorandum dated March, 20102   D.   Offering Letter dated March 10,
2011   E.   Investor Presentation dated March 14, 2011   F.   Circle Letter
dated March 21, 2011   G.   Note Purchase Agreement dated May 6, 2011

 

2   The Private Placement Memorandum was inadvertently dated March 2010. It was
in fact produced and delivered to each Purchaser in March 2011.

Schedule 5.3
(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

Schedule 5.4
Subsidiaries of the Company and Ownership of Subsidiary Stock

                      % of Equity         Interests         owned by        
Company         and/or each         other Name of subsidiary   Jurisdiction of
Organization   Subsidiary
Piedmont Energy Partners, Inc.
  North Carolina     100 %
Piedmont Hardy Storage Company, LLC
  North Carolina     100 %
Piedmont ENCNG Company, LLC
  North Carolina     100 %
Piedmont Energy Company
  North Carolina     100 %
Piedmont Interstate Pipeline Company
  North Carolina     100 %
Piedmont Intrastate Pipeline Company
  North Carolina     100 %
Piedmont Propane Company
  North Carolina     100 %

Schedule 5.4
(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

Schedule 5.5
Financial Statements

1.   Form 10-K Annual Reports for fiscal years ended October 31, 2007,
October 31, 2008, October 31, 2009 and October 31, 2010

2.   Form 10-Q Quarterly Report for the quarterly period ended January 31, 2011

Schedule 5.5
(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

Schedule 5.15
Existing Indebtedness
Obligor in each case is Piedmont Natural Gas Company, Inc.

                                  Provisions limiting                 amount of,
or         Principal amount   otherwise imposing         outstanding as of  
restrictions on the         January 31, 2011   incurring of, Description  
Obligee   (in thousands)   Indebtedness
Senior Notes: 8.51% due 2017
  Provident Life and Accident Insurance Company   $ 35,000     6B(2) —
Restrictions on Funded Debt
 
               
Medium-Term Notes
  Publicly held by nominee The Depository Trust & Clearing Corporation          
None
 
               
 
  The Bank of New York Mellon Trust Company, N.A. (as successor to Citibank,
N.A.), Trustee            
 
               
5.00%, due 2013
      $ 100,000      
 
               
6.87%, due 2023
      $ 45,000      
 
               
8.45%, due 2024
      $ 40,000      
 
               
7.40%, due 2025
      $ 55,000      
 
               
7.50%, due 2026
      $ 40,000      
 
               
7.95%, due 2029
      $ 60,000      
 
               
6.00%, due 2033
      $ 100,000      
 
               
Insured Quarterly Notes
6.25%, due 2036
  Publicly held by
nominee The
Depository Trust &
Clearing
Corporation   $ 196,904     None
 
               
 
  The Bank of New York Mellon Trust Company, N.A. (as successor to Citibank,
N.A.), Trustee            

Schedule 5.15
(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

                                  Provisions limiting                 amount of,
or         Principal amount   otherwise imposing         outstanding as of  
restrictions on the         January 31, 2011   incurring of, Description  
Obligee   (in thousands)   Indebtedness
Revolving Credit Agreement dated as of January 25, 2011
  Various institutional lenders

Bank of America, N.A., as Administrative Agent   $ 315,500     7.06 —
restriction on Consolidated Funded Indebtedness
 
               
Letters of Credit
  Liberty Mutual   $ 2,125      
 
               
 
  National Union   $ 1,334      
 
               
 
  City of Hendersonville, Tennessee   $ 32      
 
               
Bonds
               
 
               
Licenses and Permits
  Various Municipal Governments   $ 1,749      
 
               
Guarantee Payment
  State of NC Motor Fuel   $ 2      
 
               
Subdivision
  Nashville, TN Planning Commission   $ 80      
 
               
Workers Compensation
  South Carolina and Tennessee   $ 835      
 
               
Expansion Equity Contribution Agreement as of January 26, 2011 by and among
TransCardinal Company, LLC, PSNC Cardinal Pipeline Company, Piedmont Intrastate
Pipeline Company, Cardinal Pipeline Company, LLC and Cardinal Operating Company,
LLC
  Cardinal Pipeline Company,
LLC   $ 10,562     None

 5.15-2

 

--------------------------------------------------------------------------------

 

Schedule 10.4
Existing Liens

    The Company and its Subsidiaries are lessees under various leases which the
Company anticipates should be construed as operating leases. If so construed,
the assets subject to such leases should be the property of the applicable
lessors thereunder, and the interests of such lessor in such assets should not
constitute a Lien granted by the Company or any of its Subsidiaries.
Notwithstanding the foregoing, the Company has determined to disclose the
above-described leases in an abundance of caution.

              Future Payments   Lease Description   Fiscal Year 2010 -
Thereafter  
Real Property
  $ 18,948,852.70  
IS Hardware Leases
  $ 851,808.00  
Strategic Sourcing
  $ 404,600.00  
Exxon Lease
  $ 3,169,833.76  
 
       
Total
  $ 23,375,094.46  

Schedule 10.4
(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

[Form of Series A Note]
Piedmont Natural Gas Company, Inc.
2.92% Series A Senior Note Due June 6, 2016

      No. [_____]   [Date] $[_______]   PPN ###### ###

     For Value Received, the undersigned, Piedmont Natural Gas Company, Inc.
(herein called the “Company”), a corporation organized and existing under the
laws of the State of North Carolina, hereby promises to pay to [____________],
or registered assigns, the principal sum of [_____________________] Dollars (or
so much thereof as shall not have been prepaid) on June 6, 2016, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance hereof at the rate of 2.92% per annum from the date hereof,
payable semiannually on the 1st day of June and December in each year and at
maturity, commencing with the June or December next succeeding the date hereof,
until the principal hereof shall have become due and payable (whether at
maturity, upon notice of prepayment or otherwise), and (b) to the extent
permitted by applicable law, on any overdue payment of interest and, during the
continuance of an Event of Default, on such unpaid balance and on any overdue
payment of any Make-Whole Amount, at a rate per annum from time to time equal to
the greater of (i) 4.92%, or (ii) 2% over the rate of interest publicly
announced by Bank of America, N.A. from time to time in New York, New York as
its “base” or “prime” rate, payable semiannually as aforesaid (or, at the option
of the registered holder hereof, on demand).
     Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Bank of America, N.A. in New York, New York or at such other place as
the Company shall have designated by written notice to the holder of this Note
as provided in the Note Purchase Agreement referred to below.
     This Note is one of a series of Senior Notes (herein called the “Notes”)
issued pursuant to the Note Purchase Agreement, dated as of May 6, 2011 (as from
time to time amended, modified, supplemented, restated and/or replaced from time
to time, the “Note Purchase Agreement”), between the, Company and the respective
Purchasers named therein and is entitled to the benefits thereof. Each
subsequent holder of this Note will be deemed, by its acceptance hereof, to have
(i) agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreement and (ii) made the representation set forth in Section 6.2 of
the Note Purchase Agreement. Unless otherwise indicated, capitalized terms used
in this Note shall have the respective meanings ascribed to such terms in the
Note Purchase Agreement.
     The Company waives all relief from valuation and appraisement laws.
Exhibit 1(a)
(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

     This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer accompanied
by a written instrument of transfer duly executed, by the registered holder
hereof, a new Note for a like principal amount will be issued to, and registered
in the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the Person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company will not be affected by any notice to the contrary.
     The Company will make required prepayments of principal on the dates and in
the amounts specified in the Note Purchase Agreement. This Note is also subject
to optional prepayment, in whole or from time to time in part, at the times and
on the terms specified in the Note Purchase Agreement, but not otherwise.
     If an Event of Default occurs and is continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner, at the price
(including any applicable Make-Whole Amount) and with the effect provided in the
Note Purchase Agreement.
     This Note shall be construed and enforced in accordance with, and the
rights of the Company and the holder of this Note shall be governed by, the law
of the State of New York excluding choice-of-law principles of the law of such
State that would permit the application of the laws of a jurisdiction other than
such State.

            Piedmont Natural Gas Company, Inc.
      By           Name:        Title:        

E-1(a)-2

 

--------------------------------------------------------------------------------

 

[Form of Series B Note]
Piedmont Natural Gas Company, Inc.
4.24% Series B Senior Note Due June 6, 2021

      No. [_____]   [Date] $[_______]   PPN ###### ###

     For Value Received, the undersigned, Piedmont Natural Gas Company, Inc.
(herein called the “Company”), a corporation organized and existing under the
laws of the State of North Carolina, hereby promises to pay to [____________],
or registered assigns, the principal sum of [_____________________] Dollars (or
so much thereof as shall not have been prepaid) on June 6, 2021, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance hereof at the rate of 4.24% per annum from the date hereof,
payable semiannually on the 1st day of June and December in each year and at
maturity, commencing with the June or December next succeeding the date hereof,
until the principal hereof shall have become due and payable (whether at
maturity, upon notice of prepayment or otherwise), and (b) to the extent
permitted by applicable law, on any overdue payment of interest and, during the
continuance of an Event of Default, on such unpaid balance and on any overdue
payment of any Make-Whole Amount, at a rate per annum from time to time equal to
the greater of (i) 6.24%, or (ii) 2% over the rate of interest publicly
announced by Bank of America, N.A. from time to time in New York, New York as
its “base” or “prime” rate, payable semiannually as aforesaid (or, at the option
of the registered holder hereof, on demand).
     Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Bank of America, N.A. in New York, New York or at such other place as
the Company shall have designated by written notice to the holder of this Note
as provided in the Note Purchase Agreement referred to below.
     This Note is one of a series of Senior Notes (herein called the “Notes”)
issued pursuant to the Note Purchase Agreement, dated as of May 6, 2011 (as from
time to time amended, modified, supplemented, restated and/or replaced from time
to time, the “Note Purchase Agreement”), between the, Company and the respective
Purchasers named therein and is entitled to the benefits thereof. Each
subsequent holder of this Note will be deemed, by its acceptance hereof, to have
(i) agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreement and (ii) made the representation set forth in Section 6.2 of
the Note Purchase Agreement. Unless otherwise indicated, capitalized terms used
in this Note shall have the respective meanings ascribed to such terms in the
Note Purchase Agreement.
     The Company waives all relief from valuation and appraisement laws.
Exhibit 1(b)
(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

     This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer accompanied
by a written instrument of transfer duly executed, by the registered holder
hereof, a new Note for a like principal amount will be issued to, and registered
in the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the Person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company will not be affected by any notice to the contrary.
     The Company will make required prepayments of principal on the dates and in
the amounts specified in the Note Purchase Agreement. This Note is also subject
to optional prepayment, in whole or from time to time in part, at the times and
on the terms specified in the Note Purchase Agreement, but not otherwise.
     If an Event of Default occurs and is continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner, at the price
(including any applicable Make-Whole Amount) and with the effect provided in the
Note Purchase Agreement.
     This Note shall be construed and enforced in accordance with, and the
rights of the Company and the holder of this Note shall be governed by, the law
of the State of New York excluding choice-of-law principles of the law of such
State that would permit the application of the laws of a jurisdiction other than
such State.

            Piedmont Natural Gas Company, Inc.
      By           Name:           Title:        

E-1(b)-2

 

--------------------------------------------------------------------------------

 

Exhibit 4.4(a)(i)
Form of Opinion of Special Counsel
to the Company
June 6, 2011
To Those on the Attached Distribution List
     Re: Note Purchase Agreement in favor of Piedmont Natural Gas Company, Inc.
Ladies and Gentlemen:
     We have acted as counsel to Piedmont Natural Gas Company, Inc., a North
Carolina corporation (the “Borrower”), in connection with that certain Note
Purchase Agreement dated May 6, 2011 (the “Note Purchase Agreement”), by and
among the Borrower and the purchasers named therein (the “Purchasers”).
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Note Purchase Agreement. This opinion is
delivered pursuant to Section 4.4 of the Note Purchase Agreement. For purposes
of rendering our opinion set forth herein, we have reviewed originals or copies,
certified or otherwise identified to our satisfaction, of the following
documents, each of which (unless otherwise noted) is dated as of the date
hereof:

  1.   the Note Purchase Agreement; and     2.   the Notes.

     The Note Purchase Agreement and the Notes are individually referred to
herein as a “Loan Document” and collectively as the “Loan Documents.” As to
various questions of fact material to our opinion, we have relied upon, and
assumed without independent investigation the accuracy of, the representations
made by the parties to the Loan Documents (other than those which are expressed
as our opinions).
     In addition, for purposes of giving this opinion, we have examined such
corporate records of the Borrower, certificates of public officials,
certificates of appropriate officers and officials of the Borrower and such
other documents, and have made such inquiries, as we have deemed appropriate.
     In rendering the opinions expressed herein, we have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all
Exhibit 4.4(a)(i)
(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

documents submitted to us as conformed or photostatic copies and the
authenticity of the originals of such copies. For the purposes of the opinions
hereinafter expressed, we have further assumed: (i) the legal capacity of all
natural persons executing any Loan Document; (ii) that there are no oral or
written statements or agreements, course of performance after the date hereof
between any parties to the Loan Documents, course of dealing between any parties
to the Loan Documents or usage of trade that modify, amend or vary any of the
terms of any Loan Document; (iii) that, as to factual matters, any certificate,
representation or other document upon which we have relied and which was given
or dated earlier than the date of this opinion letter, continues to remain
accurate, insofar as relevant to the opinions contained herein, from such
earlier date through and including the date hereof; (iv) that there has been no
mutual mistake of fact between any parties to the Loan Documents, or
misrepresentation, fraud or deceit on the part of any party to the Loan
Documents in connection with the execution, delivery, performance under, or
transactions contemplated by, the Loan Documents; (v) all parties to the Loan
Documents are in good standing and validly existing under the laws of their
respective jurisdictions of organization; (vi) due authorization, execution and
delivery of the Loan Documents by all parties thereto; (vii) that each of the
parties to the Loan Documents has the power and authority to execute and deliver
the Loan Documents to which it is a party and to perform its respective
obligations thereunder; (viii) that each Loan Document is valid, binding and
enforceable against all parties thereto other than the Borrower; (ix) that the
execution and delivery by the Borrower of the Loan Documents and the performance
by the Borrower of its obligations thereunder will not violate or result in a
breach of any of the terms, conditions or provisions of (A) any law or
regulation (other than any law or regulation of the State of North Carolina or
federal law or regulation of the United States, in each case excepting any law
or regulation that has been excepted from this opinion letter pursuant to the
next following paragraph and the enumerated items thereafter), (B) any order,
writ, judgment, injunction, or decree of any court, governmental authority or
arbitrator, or (C) except as expressly set forth in paragraph 5 hereof, any
agreement, document or instrument to which any such party is a party, by which
it or its property is bound, or to which it is subject; and (x) that all parties
to the Loan Documents are in material compliance with all applicable laws, rules
and regulations governing the conduct of their business with respect to the
transactions contemplated by the Loan Documents.
     The opinions set forth herein are limited to matters governed by the laws
of the State of North Carolina and the federal laws of the United States, and no
opinion is expressed herein as to the laws of any other jurisdiction. We express
no opinion concerning any matter respecting or affected by any laws other than
laws that a lawyer admitted to practice law in the State of North Carolina
exercising customary professional diligence would reasonably recognize as being
directly applicable to the Borrower or the transactions contemplated in the Loan
Documents. Without limiting the generality of the foregoing, we express no
opinion concerning the following legal issues or the application of any such
laws or regulations to the matters on which our opinions are referenced:

  (i)   except as expressly set forth in paragraphs 2, 3 and 6 hereof, federal
and state securities laws and regulations;     (ii)   except as expressly set
forth in paragraph 3 hereof, Federal Reserve Board margin regulations;     (iii)
  pension and employee benefit laws and regulations;

4.4(a)(i)-2

--------------------------------------------------------------------------------

 

  (iv)   federal and state antitrust and unfair competition laws and
regulations;     (v)   compliance with fiduciary duty requirements;     (vi)  
the statutes, administrative decisions, and rules and regulations of county,
municipal and special political subdivisions, whether state-level, regional or
otherwise;     (vii)   federal and state laws and regulations concerning the
condition of title to any property;     (viii)   fraudulent transfer laws;    
(ix)   federal and state environmental laws and regulations;     (x)   federal
and state tax laws and regulations;     (xi)   federal and state land use and
subdivision laws and regulations;     (xii)   state and federal regulatory laws
or regulations specifically applicable to any entity as a result of its
non-profit status or solely because of the business in which it is engaged;    
(xiii)   the perfection or priority of any lien purported to be created by the
Loan Documents; or     (xiv)   laws, rules and regulations relating to money
laundering and terrorist groups (including without limitation the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, Public Law 107-56, 115 Stat. 380 (October 26,
2001), as amended, Executive Order 13224, the Trading with the Enemy Act, 50
App. U.S.C. 1, et. seq., any similar or related law and the rules and
regulations (temporary or permanent) promulgated under the foregoing or by the
Office of Foreign Assets Control of the United States Department of Treasury, as
each is amended from time to time.

     Based upon the foregoing, and such legal considerations as we have deemed
necessary and subject to the assumptions and qualifications set forth herein, we
are of the opinion that:
     1. Each of the Loan Documents provides that it shall be governed by, and
construed in accordance with, New York law. If, notwithstanding such choice of
law provision, a North Carolina court were to hold that either Loan Document is
governed by, and to be construed in accordance with, the internal laws of the
State of North Carolina, such Loan Document would be, under the internal laws of
the State of North Carolina, the valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms.
     2. Based solely upon the factual certifications in the officer’s
certificate attached as Exhibit A hereto (the “Officer’s Certificate”), the
Borrower is not an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

4.4(a)(i)-3

--------------------------------------------------------------------------------

 

     3. Assuming the Borrower complies with the provisions of the Note Purchase
Agreement relating to the use of proceeds of the Loans, neither the issuance of
the Notes nor the application of the proceeds of the sale of the Notes under the
Note Purchase Agreement violates Regulation U or X of the Board of Governors of
the Federal Reserve System.
     4. Under federal laws, rules and regulations of the United States of
America and the laws, rules and regulations of the State of North Carolina, no
consent, approval, authorization, declaration or filing by or with any
governmental authority, commission, board or agency is required for the
execution, delivery and performance of the Loan Documents that has not been
obtained or made as of the date hereof.
     5. The execution and delivery by the Borrower of the Loan Documents and
compliance by the Borrower with all of the provisions thereof (a) do not result
in a breach of or a default under, or result in the creation or imposition of
any Lien upon any property of the Borrower pursuant to, any document identified
to us as a material financing document in the Officer’s Certificate (except that
we express no opinion with respect to matters which require the performance of a
mathematical calculation or the making of a financial or accounting
determination) and (b) do not violate any federal law, rule or regulation of the
United States of America or any law, rule or regulation of the State of North
Carolina.
     6. The issuance, sale and delivery of the Notes under the circumstances
contemplated by the Note Purchase Agreement do not, under existing law, require
the registration of the Notes under the Securities Act of 1933, as amended, or
the qualification of an indenture under the Trust Indenture Act of 1939, as
amended.
     Our opinions concerning the enforceability of the Loan Documents under
North Carolina and federal law are subject to the following qualifications:
     (a) Enforcement of the Loan Documents may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratoria or similar state or
federal debtor relief laws from time to time in effect and which affect the
enforcement of creditors’ rights in general.
     (b) Enforcement of the Loan Documents is subject both to general principles
of equity and to considerations of public policy, including the requirement that
the parties thereto act with commercial reasonableness and in good faith to the
extent required by applicable law, the application of which may deny certain
rights and may be applied by a court of proper jurisdiction, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
For purposes of this paragraph, the terms “general principles of equity” and
“considerations of public policy” may include, but are not limited to, issues
related to the right to or obligation of the appointment of a receiver in
certain circumstances; the ability of an entity to appoint an attorney-in-fact;
fiduciary obligations of attorneys-in-fact; the enforceability of usury savings
clauses; waiver of procedural, substantive, or constitutional rights, including,
without limitation, the right of statutory or equitable redemption; disclaimers
or limitations of liability; waiver of defenses; waiver of acceleration rights
through historical acceptance of late payments; the exercise of self-help or
other remedies without judicial process; accounting for rent or sale proceeds;
requirements of mitigation of damages; and enforcement of default interest
provisions. Any provision waiving a right to jury trial is unenforceable as
against public policy pursuant to North Carolina General Statutes
Section 22B-10.

4.4(a)(i)-4

--------------------------------------------------------------------------------

 

     (c) The enforceability and availability of certain remedies, rights and
waiver provisions, may be limited or rendered ineffective by applicable law;
provided, that subject to the other exceptions noted herein, there exist legally
adequate remedies for the realization of the principal benefits intended to be
afforded under the Loan Documents.
     (d) We express no opinion on the enforceability of any provision in a Loan
Document purporting to prohibit, restrict or condition the assignment of rights
under such Loan Document to the extent such restriction on assignability is
rendered ineffective by Section 9-408 of the Uniform Commercial Code.
     (e) We express no opinion with respect to any provision of the Loan
Documents providing that the acceptance by the Purchasers of a past due
installment or other performance by a party shall not be deemed a waiver of its
right to accelerate any payment obligation or other rights under the Loan
Documents.
     (f) We express no opinion with respect to any provision of the Loan
Documents purporting to require a party to pay or reimburse attorneys’ fees
incurred by another party or to indemnify another party therefor which may be
limited by applicable law and public policy.
     (g) We express no opinion with respect to any waiver of the statute of
limitations contained in the Loan Documents.
     (h) We express no opinion with respect to any provision of the Loan
Documents which requires that any amendments or waivers to the Loan Documents
must be in writing.
     (i) We express no opinion as to the enforceability of any provision in the
Loan Documents that purports to excuse a party for liability for its own acts.
     (j) We express no opinion as to the enforceability of any provision in the
Loan Documents that purports to make void any act done in contravention thereof.
     (k) We express no opinion as to the enforceability of any provision in the
Loan Documents that purports to authorize a party to act in its sole discretion,
that imposes liquidated damages, penalties, late payment charges or forfeiture
or that relates to evidentiary standards or other standards by which any of the
Loan Documents is to be construed.
     (l) We express no opinion as to the enforceability of provisions of the
Loan Documents providing for the indemnification of or contribution to a party
with respect to such party’s own negligence or willful misconduct, or where such
indemnification or contribution is contrary to public policy.
     (m) Provisions, if any, in the Loan Documents to the effect that waiver by
a party of performance obligations by another party shall not be deemed a waiver
of such party’s right thereafter to cause the applicable document to be in
default may not be enforceable in all circumstances, unless such party shall
(i) first provide written notice to the other party that subsequent defaults
will not be accepted and will result in a default under the Loan Documents, and
(ii) thereafter, timely and diligently pursue its

4.4(a)(i)-5

--------------------------------------------------------------------------------

 

default remedies under the Loan Documents. We express no opinion on the
enforceability of any provision of the Loan Documents to the extent that such
provision constitutes a waiver of illegality as a defense to performance of
contract obligations.
     (n) We express no opinion with respect to any consent to venue,
jurisdiction or service of process provisions or any waiver of an objection that
an action or proceeding has been brought in an inconvenient forum.
     (o) We express no opinion with respect to any severability provisions.
     (p) We express no opinion with respect to any provision waiving the
obligation to marshal assets.
     (q) We express no opinion with respect to any provision of any Loan
Document to the extent it authorizes or permits any affiliate of a Purchaser or
any purchaser of a participation interest to set-off or apply any deposit,
property or indebtedness.
     (r) North Carolina General Statutes Section 6-21.2 sets forth the
procedures and limitations applicable to the collection of attorneys’ fees and
accordingly, any provisions in the Loan Documents related to the ability of the
Purchasers or any other party to collect attorneys’ fees upon default are
subject to those limitations.
     (s) We express no opinion with respect to any choice of law provision.
     This opinion is delivered solely to you, in connection with the
transactions contemplated under the Loan Documents and may not be relied upon
for any other purpose or in any manner by any Person other than the addressees
hereof, except that we hereby consent to reliance hereon by any successor or
permitted assignee of any addressee (including successive assignees) under the
Note Purchase Agreement (collectively, the “Reliance Parties”), on the condition
and understanding that (i) this letter speaks only as of the date hereof,
(ii) we have no responsibility or obligation to update this letter, to consider
its applicability or correctness to any person other than its addressees, or to
take into account changes in law, facts or any other developments of which we
may later become aware, and (iii) any such reliance must be actual and
reasonable under the circumstances existing at the time of transfer, including
any changes in law, facts or other developments known to or reasonably known by
the Reliance Party at such time.
     No copies of this opinion may be delivered or furnished to any other party
other than a Reliance Party or a prospective Reliance Party, nor may all or
portions of this opinion be quoted, circulated or referred to in any other
document without our prior written consent, except that copies of this opinion
may be provided for informational purposes to your respective counsel, auditors,
underwriters, and rating agencies and to any regulatory agency having
supervisory authority over you or a Reliance Party, including the National
Association of Insurance Commissioners, and except that this opinion may be used
in connection with the assertion of a defense as to which this opinion is
relevant and necessary or in response to a court order or other legal process.
The opinions expressed in this letter are rendered as of the date hereof and we
express no opinion as to circumstances or events or change in applicable law
that may occur subsequent to such date.

4.4(a)(i)-6

--------------------------------------------------------------------------------

 

Very truly yours,

4.4(a)(i)-7

--------------------------------------------------------------------------------

 

Distribution List

4.4(a)(i)-8

--------------------------------------------------------------------------------

 

EXHIBIT A
OFFICER’S CERTIFICATE
OF
PIEDMONT NATURAL GAS COMPANY, INC.
FOR
OPINION OF MOORE & VAN ALLEN PLLC
     I, Robert O. Pritchard, hereby certify that I am the duly elected,
qualified and acting Vice President, Treasurer and Chief Risk Officer of
Piedmont Natural Gas Company, Inc., a North Carolina corporation (“Piedmont”),
and do hereby certify:
     1. As Vice President, Treasurer and Chief Risk Officer of Piedmont, I am
familiar with the business and affairs of Piedmont and with the proceedings
taken in connection with the Note Purchase Agreement dated May 6, 2011 (the
“Note Purchase Agreement”), by and among Piedmont and the purchasers named
therein. Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings assigned to them in the Note Purchase Agreement. I
have either personal knowledge of the matters and things hereinbelow set forth
or have obtained information with respect thereto from officers and employees of
Piedmont in whom I have confidence and whose duties require them to have
personal knowledge thereof.
     2. I am familiar with the terms of the Note Purchase Agreement and each of
the other documents entered into in connection with the transactions
contemplated therein (the “Transaction Documents”) and make this certificate
with the intent that it shall be relied upon by Moore & Van Allen PLLC as a
basis for its opinion to be rendered with respect to the transactions
contemplated by the Transaction Documents.
     3. Piedmont is not an entity which (a) is or holds itself out as being
engaged primarily, or proposes to engage primarily, in the business of
investing, reinvesting or trading in securities; (b) is engaged or proposes to
engage in the business of issuing face-amount certificates of the installment
type, or has been engaged in such business and has any such certificate
outstanding; or (c) is engaged or proposes to engage in the business of
investing, reinvesting, owning, holding or trading in securities, nor does
Piedmont own or propose to acquire “investment securities” having a value
exceeding 40 per centum of the value of its total assets (exclusive of
government securities and cash items) on an unconsolidated basis. As used in
this paragraph, “investment securities” include all securities except
(i) government securities, (ii) securities issued by employees’ securities
companies, and (iii) securities issued by majority-owned subsidiaries of the
owner which are not investment companies. As used in this paragraph, “government
securities” means any security issued or guaranteed as to principal or interest
by the United States, or by a person controlled or supervised by and acting as
an instrumentality of the Government of the United States pursuant to authority
granted by the Congress of the United States; or any certificate of deposit for
any of the foregoing.
     4. The weighted average per annum (non-default) interest rate payable on
the Notes does not exceed 4%.

4.4(a)(i)-9

--------------------------------------------------------------------------------

 

     5. The documents listed on Schedule 1 hereto constitute all material
financing documents of Piedmont.
     6. Attached hereto as Schedule 2 is a true and correct copy of the Order
Granting Petition issued April 12, 2011 by the North Carolina Utilities
Commission.

4.4(a)(i)-10

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the undersigned has executed this Officer’s Certificate
this 6th day of June, 2011.

                  By:         Name: Robert O. Pritchard      Title: Vice
President, Treasurer and Chief Risk Officer   

4.4(a)(i)-11

--------------------------------------------------------------------------------

 

         

Schedule 1
Material Financing Documents

1.   Credit Agreement dated as of January 25, 2011 by and among Piedmont, Bank
of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer
thereunder and each Lender from time to time party thereto.

2.   Note Agreement, dated as of September 21, 1992, between Piedmont and
Provident Life and Accident Insurance Company.

3.   Amendment to Note Agreement, dated as of September 16, 2005, by and between
Piedmont and Provident Life and Accident Insurance Company.

4.   Amendment to September 1992 Note Agreement, dated April 15, 2011, by and
between Piedmont and Provident Life and Accident Insurance Company.

5.   Indenture, dated as of April 1, 1993, between Piedmont and The Bank of New
York Mellon Trust Company, N.A. (as successor to Citibank, N.A.), Trustee (the
“Indenture”).

6.   Medium-Term Note, Series A, dated as of October 6, 1993.

7.   First Supplemental Indenture, dated as of February 25, 1994, between PNG
Acquisition Company, Piedmont Natural Gas Company, Inc., and Citibank, N.A.,
Trustee (the “First Supplemental Indenture”).   8.   Medium-Term Note, Series A,
dated as of September 19, 1994.   9.   Form of Master Global Note.   10.  
Pricing Supplement of Medium-Term Notes, Series B, dated October 3, 1995.   11.
  Pricing Supplement of Medium-Term Notes, Series B, dated October 4, 1996.  
12.   Form of Master Global Note, executed September 9, 1999.   13.   Pricing
Supplement of Medium-Term Notes, Series C, dated September 15, 1999.   14.  
Pricing Supplement No. 3 of Medium-Term Notes, Series C, dated September 26,
2000.   15.   Form of Master Global Note, executed June 4, 2001.   16.   Pricing
Supplement No. 1 of Medium-Term Notes, Series D, dated September 18, 2001.   17.
  Second Supplemental Indenture, dated as of June 15, 2003, between Piedmont and
Citibank, N.A., Trustee (the “Second Supplemental Indenture”).

4.4(a)(i)-12

--------------------------------------------------------------------------------

 

18.   Form of 5% Medium-Term Note, Series E, dated as of December 19, 2003.  
19.   Form of 6% Medium-Term Note, Series E, dated as of December 19, 2003.  
20.   Agreement of Resignation, Appointment and Acceptance, dated as of
March 29, 2007, by and among the registrant, Citibank N.A., and The Bank of New
York Trust Company, N.A.   21.   Fourth Supplemental Indenture, dated as of
May 6, 2011, between Piedmont and The Bank of New York Mellon Trust Company,
N.A., as Trustee.

4.4(a)(i)-13

--------------------------------------------------------------------------------

 

Schedule 2
[Order Granting Petition issued April 12, 2011 by the North Carolina Utilities
Commission to be
inserted.]

4.4(a)(i)-14

--------------------------------------------------------------------------------

 

Exhibit 4.4(a)(ii)
Form of Opinion of In-House Counsel
to the Company
June 6, 2011
To Those on the Attached Distribution List
Ladies and Gentlemen:
     I am Vice President, General Counsel, Chief Ethics and Compliance Officer
and Corporate Secretary of Piedmont Natural Gas Company, Inc., a North Carolina
corporation (the “Borrower”), and have acted as counsel to the Borrower in
connection with that certain Note Purchase Agreement dated May 6, 2011 (the
“Note Purchase Agreement”), by and among the Borrower and the purchasers named
therein (the “Purchasers”). Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Note
Purchase Agreement. This opinion is delivered pursuant to Section 4.4 of the
Note Purchase Agreement. For purposes of rendering my opinion set forth herein,
I have reviewed originals or copies, certified or otherwise identified to my
satisfaction, of the following documents, each of which (unless otherwise noted)
is dated as of the date hereof:

  1.   the Note Purchase Agreement; and

  2.   the Notes.

     The Note Purchase Agreement and the Notes are individually referred to
herein as a “Loan Document” and collectively as the “Loan Documents.” As to
various questions of fact material to my opinion, I have relied upon, and
assumed without independent investigation the accuracy of, the representations
made by the parties to the Loan Documents (other than those which are expressed
as my opinions).
     In addition, for purposes of giving this opinion, I have examined such
company records of the Borrower, certificates of public officials, certificates
of appropriate officers and officials of the Borrower and such other documents,
and have made such inquiries, as I have deemed appropriate.
     In rendering the opinions expressed herein, I have assumed 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 conformed or photostatic copies and the authenticity of the originals of such
copies. For the purposes of the opinions hereinafter expressed, I have further
assumed the legal capacity of all natural persons executing any Loan Document
and that (i) there is no oral or written
Exhibit 4.4(a)(ii)
(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

statement or agreement, waiver, course of performance, course of dealing or
usage of trade that modifies, amends, waives or varies any of the terms of any
Loan Document and there has been no termination of any of the Loan Documents,
and (ii) as to factual matters, any certificate, representation or other
document upon which I have relied and which was given or dated earlier than the
date of this opinion letter, continues to remain accurate, insofar as relevant
to the opinions contained herein, from such earlier date through and including
the date hereof.
     The opinions set forth herein are limited to matters governed by the laws
of the State of North Carolina and the federal laws of the United States (the
“Applicable Laws”), and no opinion is expressed herein as to the laws of any
other jurisdiction. Without limiting the generality of the foregoing, I express
no opinion concerning the following legal issues or the application of any such
laws or regulations to the matters on which my opinions are referenced:

  (i)   federal and state securities laws and regulations;     (ii)   Federal
Reserve Board margin regulations;     (iii)   pension and employee benefit laws
and regulations;     (iv)   federal and state antitrust and unfair competition
laws and regulations;     (v)   federal and state laws and regulations
concerning document filing requirements and other filing requirements;     (vi)
  compliance with fiduciary duty requirements;     (vii)   the statutes,
administrative decisions, and rules and regulations of county, municipal and
special political subdivisions, whether state-level, regional or otherwise;    
(viii)   federal and state laws and regulations concerning the condition of
title to any property;     (ix)   fraudulent transfer laws;     (x)   federal
and state environmental laws and regulations;     (xi)   federal and state tax
laws and regulations;     (xii)   federal and state land use and subdivision
laws and regulations;     (xiii)   state and federal regulatory laws or
regulations specifically applicable to any entity as a result of its non-profit
status or solely because of the business in which it is engaged;     (xiv)   the
perfection or priority of any lien purported to be created by the Loan
Documents; or     (xv)   laws, rules and regulations relating to money
laundering and terrorist groups (including without limitation the Uniting and
Strengthening America by Providing Appropriate

4.4(a)(ii)-2

--------------------------------------------------------------------------------

 

      Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law
107-56, 115 Stat. 380 (October 26, 2001), as amended, Executive Order 13224, the
Trading with the Enemy Act, 50 App. U.S.C. 1, et. seq., any similar or related
law and the rules and regulations (temporary or permanent) promulgated under the
foregoing or by the Office of Foreign Assets Control of the United States
Department of Treasury, as each is amended from time to time.

     Based upon the foregoing, and such legal considerations as I have deemed
necessary and subject to the assumptions and qualifications set forth herein, I
am of the opinion that:
     1. Based solely on a certificate from the Secretary of State of North
Carolina dated as of March 21, 2011, the Borrower is a corporation validly
existing under the laws of the State of North Carolina.
     2. The Borrower has all necessary corporate power to execute and deliver
the Loan Documents and to perform its obligations thereunder. The Loan Documents
have been duly executed and delivered by the Borrower.
     3. The execution and delivery by the Borrower of the Loan Documents and the
performance by the Borrower of its obligations thereunder (a) have been duly
authorized by all requisite corporate action on the part of the Borrower, and
(b) do not violate the articles of incorporation or bylaws of the Borrower.
     4. The Borrower is not subject to regulation under Sections 1264 and 1265
of the Energy Policy Act of 2005, Public Law No. 109-58.
     To my knowledge, no litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or overtly threatened in
writing by or against the Borrower or any of its properties or revenues with
respect to any of the Loan Documents.
     This opinion is delivered solely to you, in connection with the
transactions contemplated under the Loan Documents and may not be relied upon
for any other purpose or in any manner by any Person other than the addressees
hereof, except that I hereby consent to reliance hereon by any successor or
permitted assignee of any addressee (including successive assignees) under the
Note Purchase Agreement (collectively, the “Reliance Parties”), on the condition
and understanding that (i) this letter speaks only as of the date hereof, (ii) I
have no responsibility or obligation to update this letter, to consider its
applicability or correctness to any person other than its addressees, or to take
into account changes in law, facts or any other developments of which I may
later become aware, and (iii) any such reliance must be actual and reasonable
under the circumstances existing at the time of transfer, including any changes
in law, facts or other developments known to or reasonably known by the Reliance
Party at such time.
     No copies of this opinion may be delivered or furnished to any other party
other than a Reliance Party or a prospective Reliance Party, nor may all or
portions of this opinion be quoted, circulated or referred to in any other
document without my prior written consent, except that copies of this opinion
may be provided for informational purposes to your respective counsel, auditors,
underwriters, and rating agencies and to any regulatory agency having
supervisory authority over you or a Reliance Party,

4.4(a)(ii)-3

--------------------------------------------------------------------------------

 

including the National Association of Insurance Commissioners, and except that
this opinion may be used in connection with the assertion of a defense as to
which this opinion is relevant and necessary or in response to a court order or
other legal process. The opinions expressed in this letter are rendered as of
the date hereof and I express no opinion as to circumstances or events or change
in applicable law that may occur subsequent to such date.
Very truly yours,

4.4(a)(ii)-4

--------------------------------------------------------------------------------

 

Distribution List

4.4(a)(ii)-5

--------------------------------------------------------------------------------

 

Exhibit 4.4(b)
Form of Opinion of Special Counsel
to The Purchasers
To the parties listed on Schedule A to the
    Note Purchase Agreement referred to below:

     Re:   $40,000,000 2.92% Series A Senior Notes due June 6, 2016
$160,000,000 4.24% Series B Senior Notes due June 6, 2021

of

Piedmont Natural Gas Company, Inc. (the “Company”)

Ladies and Gentlemen:
     We have acted as your special counsel in connection with your purchases on
the date hereof of $40,000,000 2.92% Series A Senior Notes due June 6, 2016 and
$160,000,000 4.24% Series B Senior Notes due June 6, 2021 (the “Notes”) of the
Company issued under and pursuant to the Note Purchase Agreement among the
Company and each of you. This opinion letter is delivered to you pursuant to
Section 4.4(b) of that certain Note Purchase Agreement dated May ___, 2011, as
amended from time to time (the “Note Agreement”) between the Company and the
purchasers listed on Schedule A thereto.
     In that connection, we have examined the following:
     (a) The Note Agreement;
     (b) A copy of the Articles of Incorporation of the Company and all
amendments thereto certified by the Secretary of State of the State of North
Carolina and the Certificate of Existence of such Secretary of State for the
Company (the “Good Standing Certificate”);
     (c) A copy of the by-laws of the Company, as amended to the date hereof,
and a copy of the resolutions adopted by the Board of Directors or similar
governing body of the Company with respect to the authorization of the Note
Agreement, the issuance, sale and delivery of the Notes and related matters,
each as certified by a secretarial officer of the Company;
Exhibit 4.4(b)
(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

     (d) The opinion of Moore and Van Allen PLLC, special counsel to the Company
dated the date hereof and delivered responsive to Section 4.4(a)(i) of the Note
Agreement;
     (e) The opinion of the General Counsel of the Company dated the date hereof
and delivered responsive to Section 4.4(a)(ii) of the Note Agreement;
     (f) The Notes delivered on the date hereof;
     (g) Such certificates of officers of the Obligors and of public officials
as we have deemed necessary to give the opinions hereinafter expressed; and
     (h) Such other documents and matters of law as we have deemed necessary to
give the opinions hereinafter expressed.
     In addition, we have also relied, as to certain factual matters, upon
appropriate certificates of public officials and officers of the Company and
upon representations of the Company and you delivered in connection with the
issuance and sale of the Notes.
     Based upon the foregoing, we are of the opinion that:
     1. The Note Agreement has been duly authorized, executed and delivered by
and constitutes the legal, valid and binding contract of the Company enforceable
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance and similar laws affecting creditors’ rights generally, and general
principles of equity (regardless of whether the application of such principles
is considered in a proceeding in equity or at law).
     2. The Notes have been duly authorized, executed and delivered by and
constitute the legal, valid and binding obligations of the Company enforceable
in accordance with their terms, subject to bankruptcy, insolvency, fraudulent
conveyance and similar laws affecting creditors’ rights generally, and general
principles of equity (regardless of whether the application of such principles
is considered in a proceeding in equity or at law).
     3. The issuance, sale and delivery of the Notes under the circumstances
contemplated by the Second Supplement do not, under existing law, require the
registration of the Notes under the Securities Act of 1933, as amended, or the
qualification of an indenture under the Trust Indenture Act of 1939, as amended.
     Our opinion is limited to the laws of the State of New York and the Federal
laws of the United States and we express no opinion on the laws of any other
jurisdiction. This opinion is furnished solely for your benefit and the benefit
of your successors and assigns.
Respectfully submitted,
 4.4(b)-2