Document:

EX-10.26 Non-Employee Director Compensation

 

Exhibit 10.26

BLACKBAUD, INC.

NON-EMPLOYEE DIRECTOR COMPENSATION

Board Members:

	•	 	An annual retainer of $17,500, payable in cash, for services as a member of the Board; the Chairman of the Audit
Committee would receive an additional $15,000 annually for such service.
	 
	•	 	$3,000 per regular meeting attended (4 regularly scheduled meetings per year).
	 
	•	 	$1,000 per regular committee meeting attended (4 regularly scheduled meetings per year).
	 
	•	 	$1,000 per telephonic board and/or committee meetings.
	 
	•	 	An annual grant of restricted stock of the Company worth $60,000 on the date of grant vesting fully on the first
anniversary of the date of grant.

Chairman:

	•	 	An annual retainer of $50,000, payable in cash, for service as Chairman of the Board.
	 
	•	 	An annual grant of restricted stock of the Company worth $60,000 on the date of grant vesting fully on the first
anniversary of the date of grant.EX-4.1 Third Supplemental Indenture

 

Exhibit 4.1

 

 

PIEDMONT NATURAL GAS COMPANY, INC.

AND

CITIBANK, N.A., TRUSTEE

THIRD SUPPLEMENTAL INDENTURE

DATED AS OF JUNE 20, 2006

Supplemental to Indenture Dated as of April 1, 1993

6.25% INSURED QUARTERLY NOTES SERIES 2006, DUE 2036

 

 

 

 

TABLE OF CONTENTS1

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE 1 6.25% Insured Quarterly Notes Series 2006, Due 2036	 	 	2	 
	 
	 	 	 	 	 	 
	SECTION 101.
	 	Establishment	 	 	2	 
	SECTION 102.
	 	Definitions	 	 	2	 
	SECTION 103.
	 	Payment of Principal and Interest	 	 	3	 
	SECTION 104.
	 	Denominations	 	 	4	 
	SECTION 105.
	 	Global Securities	 	 	4	 
	SECTION 106.
	 	Transfer	 	 	5	 
	SECTION 107.
	 	Redemption at the Company's Option	 	 	5	 
	SECTION 108.
	 	Redemption upon Death of a Beneficial Owner	 	 	5	 
	SECTION 109.
	 	Mandatory Redemption	 	 	8	 
	 
	 	 	 	 	 	 
	ARTICLE 2 Special Insurance Provisions	 	 	8	 
	 
	 	 	 	 	 	 
	SECTION 201.
	 	Supplemental Indentures	 	 	8	 
	SECTION 202.
	 	Events of Default and Remedies	 	 	8	 
	SECTION 203.
	 	Insurance Policy Payment Procedures	 	 	9	 
	SECTION 204.
	 	Application of Term “Outstanding” to Notes	 	 	10	 
	SECTION 205.
	 	Insurer as Third Party Beneficiary	 	 	10	 
	SECTION 206.
	 	Concerning the Special Insurance Provisions	 	 	11	 
	 
	 	 	 	 	 	 
	ARTICLE 3 Amendment of Original Indenture	 	 	11	 
	 
	 	 	 	 	 	 
	SECTION 301.
	 	Amendment of Original Indenture	 	 	11	 
	 
	 	 	 	 	 	 
	ARTICLE 4 Miscellaneous Provisions	 	 	12	 
	 
	 	 	 	 	 	 
	SECTION 401.
	 	Concerning the Trustee	 	 	12	 
	SECTION 402.
	 	Defeasance	 	 	12	 
	SECTION 403.
	 	Sinking Fund	 	 	12	 
	SECTION 404.
	 	Notices:	 	 	12	 
	SECTION 405.
	 	Miscellaneous.	 	 	13	 
	 
	 	 	 	 	 	 
	EXHIBIT A FORM OF NOTE	 	 	 	 
	 
	 	 	 	 	 	 
	EXHIBIT B CERTIFICATE OF AUTHENTICATION	 	 	 	 

 

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

i 

 

     THIS THIRD SUPPLEMENTAL INDENTURE, dated as of June 20, 2006, between PIEDMONT NATURAL GAS
COMPANY, INC., a corporation organized and existing under the laws of the State of North Carolina
(the “Company”), and CITIBANK, N.A., a national banking association duly organized and existing
under the laws of the United States, as Trustee (in such capacity, the “Trustee”).

WITNESSETH:

     WHEREAS, a predecessor to the Company has heretofore executed and delivered to the Trustee an
Indenture dated as of April 1, 1993 (the “Base Indenture”);

     WHEREAS, the Company has heretofore executed and delivered to the Trustee a First Supplemental
Indenture dated as of February 25, 1994 (pursuant to which the Company assumed all of the
obligations of its predecessor company under the Base Indenture) and a Second Supplemental
Indenture dated as of June 15, 2003 (collectively, with the Base Indenture, the “Original
Indenture”);

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

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

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

     WHEREAS, the Original Indenture provides that the Company and the Trustee may from time to
time enter into indentures supplemental thereto to change or eliminate any provision of the
Indenture or to add any new provision to the Indenture; provided that if such change, elimination
or addition will adversely affect the interest of the holders of the Debt Securities of any series
in any material respect, such change, elimination, or addition will become effective with respect
to such series only when there is no Debt Security of such series remaining outstanding under the
Indenture;

     WHEREAS, the Company proposes to modify and amend Section 4.07 of the Indenture as it would
apply to Debt Securities issued under the Indenture on or after the date hereof to permit the
Company to incur certain liens described herein and in the Indenture; and

     WHEREAS, the Company represents that all acts and things necessary to constitute this Third
Supplemental Indenture a valid, binding and enforceable instrument have been done and performed,
and the execution of this Third Supplemental Indenture has in all respects been duly authorized,
and the Company, in the exercise of legal right and power in it vested, is executing this Third
Supplemental Indenture:

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained
and for other valuable consideration, the receipt whereof is hereby

 

 

acknowledged, the parties have executed and delivered this Third Supplemental Indenture and
the Company covenants and agrees with the Trustee as follows:

ARTICLE 1

6.25% Insured Quarterly Notes Series 2006, Due 2036

     SECTION 101. Establishment. There is hereby established a new series of Debt
Securities to be issued under the Indenture, to be designated as the Company’s 6.25% Insured
Quarterly Notes Series 2006, Due 2036 (the “Notes”).

     There are to be authenticated and delivered $200,000,000 aggregate principal amount of Notes.
No Notes shall be authenticated and delivered in excess of the principal amount except as provided
by Sections 2.07, 2.08, 2.09, 3.03 or 10.04 of the Original Indenture. The Notes shall be issued
in definitive fully registered form.

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

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

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

     The Notes will not have a sinking fund.

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

     “Beneficial Owner” has the meaning set forth in Section 108 hereof.

     “Fiscal Agent” means U.S. Bank Trust National Association, New York, New York, or its
successor.

     “Initial Period” has the meaning set forth in Section 108 hereof.

     “Insurance Agreement” means that certain Insurance Agreement, dated as of June 20, 2006, by
and between the Company and the Insurer.

     “Insurer” means Financial Guaranty Insurance Company, a New York stock insurance corporation,
or any successor thereto.

     “Interest Payment Dates” means March 1, June 1, September 1 and December 1 of each year,
commencing September 1, 2006.

2

 

     “Mandatory Redemption Event” means the occurrence of (a) the following series of events: (i)
the Company consolidates, merges, reorganizes or otherwise transfers substantially all of its
assets, (ii) the consolidation, merger, reorganization or transfer of assets results in the Company
no longer being engaged in the business of the distribution of natural gas in North Carolina, South
Carolina and Tennessee, (iii) the obligations of the Company under the Indenture are neither
assumed nor guaranteed by the resulting entity that is thereafter to engage in the distribution of
natural gas in North Carolina, South Carolina and Tennessee, (iv) the Insurer has not consented to
such consolidation, merger, reorganization or transfer and (v) the Insurer notifies the Trustee in
writing that the Notes shall be called for redemption, or (b) the Company’s failure to make, when
due, any premium payment required under the Insurance Agreement within ten (10) days after receipt
by the Company of written notice thereof from the Insurer, and the Insurer does not consent to or
waive such failure.

     “Original Issue Date” means June 20, 2006.

     “Participants” has the meaning set forth in Section 108 hereof.

     “Policy” means the surety bond for the benefit of the holders of the Notes issued by the
Insurer with respect to payments due for principal of and interest on the Notes as provided in such
policy.

     “Redemption Request” has the meaning set forth in Section 108 hereof.

     “Representatives” has the meaning set forth in Section 108 hereof.

     “Subsequent Period” has the meaning set forth in Section 108 hereof.

     “Stated Maturity” means June 1, 2036.

     SECTION 103. Payment of Principal and Interest. The principal of the Notes shall be
due at Stated Maturity (unless earlier redeemed). The unpaid principal amount of the Notes shall
bear interest at the rate of 6.25% per annum until paid or duly provided for. Interest shall be
paid quarterly in arrears on each Interest Payment Date to the Person in whose name the Notes are
registered at the close of business on the Record Date for such Interest Payment Date, provided
that interest payable at the Stated Maturity of principal or on a Redemption Date as provided
herein will be paid to the Person to whom principal is payable. Any such interest that is not so
punctually paid or duly provided for will forthwith cease to be payable to the Holders on such
Record Date and will be paid to the Person in whose name the Notes are registered on a subsequent
record date established for the payment of such defaulted interest by notice given by mail or on
behalf of the Company to the Holders no less than fifteen (15) days preceding such subsequent
record date, such record date to be not less than five (5) days preceding the date of payment of
such defaulted interest or in any other lawful manner acceptable to the Trustee.

     Payments of interest on the Notes will include interest accrued to but excluding the
respective Interest Payment Date. Interest payments for the Notes shall be computed and paid on
the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest
is payable on the Notes is not a Business Day, then payment of the interest payable on such date
will be made on the next succeeding day that is a Business Day (and without any interest or other

3

 

payment in respect of any such delay), with the same force and effect as if made on the date
the payment was originally payable.

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

     SECTION 104. Denominations. The Notes may be issued in denominations of $1,000, or
any integral multiple thereof.

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

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

     Subject to the procedures of the Depository, a Global Security shall be exchangeable for Notes
registered in the names of persons other than the Depository or its nominee only if (i) the
Depository notifies the Company that it is unwilling or unable to continue as a Depository for such
Global Security and no successor Depository shall have been appointed by the Company, or if at any
time the Depository ceases to be a clearing agency registered under the Securities Exchange Act of
1934, as amended, at a time when the Depository is required to be so registered to act as such
Depository and no successor Depository shall have been appointed by the Company, in each case
within 60 days after the Company receives such notice or becomes aware of such cessation, (ii) the
Company in its sole discretion determines that such Global Security shall be so exchangeable, or
(iii) there shall have occurred an Event of Default with respect to the Notes. Any Global Security
that is exchangeable pursuant to the preceding sentence shall be exchangeable for Notes registered
in such names as the Depository shall direct.

4

 

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

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

     SECTION 107. Redemption at the Company’s Option. The Notes will be subject to
redemption at the option of the Company in whole or in part, without premium or penalty, at any
time and from time to time on or after June 1, 2011, upon not less than 30 nor more than 60 days’
notice by mail, at a redemption price (the “Redemption Price”) equal to 100% of the principal
amount to be redeemed plus any accrued and unpaid interest thereon to but excluding the applicable
redemption date.

     In the event of redemption of the Notes in part only, a new Note or Notes for the unredeemed
portion will be issued in the name or names of the Holders thereof upon the surrender thereof.

     Any redemption of less than all of the Notes shall, with respect to the principal thereof, be
divisible by $1,000.

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

     SECTION 108. Redemption upon Death of a Beneficial Owner. Unless the Notes have been
declared due and payable prior to the Stated Maturity by reason of an Event of Default, or have
been previously redeemed or otherwise repaid, the Representative (as hereinafter defined) of a
deceased Beneficial Owner (as hereinafter defined) of the Notes has the right to request redemption
prior to the Stated Maturity of all or part of his or her Notes, and the Company will redeem the
same, subject to the limitations that the Company will not be obligated to redeem, during the
period from the Original Issue Date through and including June 1, 2007 (the “Initial Period”), and,
during any twelve-month period that ends on and includes each June 1 thereafter (each such
twelve-month period being hereinafter referred to as a “Subsequent Period”), (i) on behalf of a
deceased Beneficial Owner Notes with a principal amount in excess of $25,000 aggregate principal
amount or (ii) Notes exceeding $4,000,000 in aggregate principal amount from all deceased
Beneficial Owners.

     The Company may, at its option, redeem any deceased Beneficial Owner’s Notes in the Initial
Period or any Subsequent Period in excess of the $25,000 limitation. Any such redemption by the
Company, to the extent that it exceeds the $25,000 limitation for any deceased Beneficial Owner,
shall not be included in the computation of the $4,000,000 aggregate limitation for the Notes for
such Initial Period or such Subsequent Period, as the case may be, or for any succeeding Subsequent
Period. The Company may, at its option, redeem deceased Beneficial Owners’ Notes in the Initial
Period or in any Subsequent Period in an aggregate principal amount exceeding the $4,000,000
aggregate limitation. Any such redemption by the

5

 

Company, to the extent it exceeds the $4,000,000 aggregate limitation, shall not reduce the
$4,000,000 aggregate limitation for any succeeding Subsequent Period. On any determination by the
Company to redeem Notes in excess of the $25,000 limitation or the $4,000,000 aggregate limitation,
such Notes shall be redeemed in the order of the receipt of Redemption Requests (as hereinafter
defined) by the Trustee.

     A request for redemption of a Note may be initiated by the personal representative or other
person authorized to represent the estate of the deceased Beneficial Owner or from a surviving
joint tenant(s) or tenant(s) by the entirety or the trustee of a trust (each, a “Representative”).
A Representative may initiate a request for redemption at any time and in any principal amount,
provided that the principal amount is in integral multiples of $1,000. The Representative shall
deliver its request to the Participant (as hereinafter defined) through whom the deceased
Beneficial Owner owned the Note to be redeemed, in form satisfactory to the Participant, together
with evidence of the death of the Beneficial Owner, evidence of the authority of the Representative
satisfactory to the Participant, any waivers, notices or certificates as may be required under
applicable state or federal law and any other evidence of the right to such redemption as the
Participant requires. The request must specify the principal amount of the Notes to be redeemed.
Subject to the rules and arrangements applicable to the Depository, the Participant will then
deliver to the Depository a request for redemption substantially in the form attached to the Notes
as Annex A (a “Redemption Request”). The Depository will, upon receipt of a Redemption Request,
forward the same to the Trustee. The Trustee is required to maintain records with respect to
Redemption Requests received by it, including the date of receipt, the name of the Participant
filing the Redemption Request and the status of each Redemption Request with respect to the $25,000
limitation and the $4,000,000 aggregate limitation. The Trustee will immediately file with the
Company each Redemption Request it receives, together with the information regarding the
eligibility of the Redemption Request with respect to the $25,000 limitation and the $4,000,000
aggregate limitation. The Company, the Depository and the Trustee may conclusively assume, without
independent investigation, that the statements contained in each Redemption Request are true and
correct and shall have no responsibility (a) for reviewing any documents submitted to the
Participant by the Representative or (b) for determining whether the applicable decedent is in fact
the Beneficial Owner of the interest in the Notes to be redeemed or is in fact deceased and whether
the Representative is duly authorized to request redemption on behalf of the applicable Beneficial
Owner.

     Subject to the $25,000 limitation and the $4,000,000 aggregate limitation, the Company will,
after the death of any Beneficial Owner, redeem such Beneficial Owner’s Note on the next Interest
Payment Date occurring not less than 30 days following receipt by the Company of a Redemption
Request from the Trustee. If Redemption Requests exceed the $4,000,000 aggregate limitation during
the Initial Period or any Subsequent Period, then such excess Redemption Requests will be applied,
in the order received by the Trustee to successive Subsequent Periods, regardless of the number of
Subsequent Periods required to redeem such interests. The Company may, at any time, notify the
Trustee that it will redeem on the next Interest Payment Date not less than 30 days thereafter, all
or any lesser amount of Notes for which Redemption Requests have been received but which are not
then eligible for redemption by reason of the $25,000 limitation or the $4,000,000 aggregate
limitation. Any Notes so redeemed shall be redeemed in the order of receipt of Redemption Requests
by the Trustee.

6

 

     The price to be paid by the Company for the Notes to be redeemed pursuant to a Redemption
Request is 100% of the principal amount thereof plus accrued and unpaid interest to the date of
payment. Subject to arrangements with the Depository, payment for Notes to be redeemed shall be
made to the Depository upon presentation of the Notes to the Trustee for redemption in the
aggregate principal amount specified in the Redemption Requests submitted to the Trustee by the
Depository which are to be fulfilled in connection with such payment. The principal amount of any
Notes acquired or redeemed by the Company other than by redemption at the option of any
Representative of a deceased Beneficial Owner pursuant to this Section 108 shall not be included in
the computation of either the $25,000 limitation or the $4,000,000 aggregate limitation for the
Initial Period or any Subsequent Period.

     For purposes of this section, a “Beneficial Owner” means the person who has the right to sell,
transfer or otherwise dispose of a Note and the right to receive the proceeds therefrom, as well as
the interest and principal payable to the Holder thereof. In general, a determination of
beneficial ownership in the Notes will be subject to the rules, regulations and procedures
governing the Depository and institutions that have accounts with the Depository or a nominee
thereof (“Participants”).

     For purposes of this section, a Note held in tenancy by the entirety, by joint tenancy or by
tenants in common will be deemed to be held by a single Beneficial Owner, and the death of a tenant
by the entirety, joint tenant or tenant in common will be deemed the death of a Beneficial Owner.
The death of a person who, during his or her lifetime, was entitled to substantially all of the
rights of a Beneficial Owner of an interest in the Notes will be deemed the death of the Beneficial
Owner, regardless of the recordation of such ownership on the records of the Participant, if such
rights can be established to the satisfaction of the Participant and the Company. Such rights
shall be deemed to exist in typical cases of nominee ownership, ownership under the Uniform Gifts
to Minors Act or the Uniform Transfers to Minors Act, community property or other similar joint
ownership arrangements, including individual retirement accounts or Keogh H.R. 10 plans maintained
solely by or for the decedent or by or for the decedent and any spouse, and trust and certain other
arrangements where one person has substantially all of the rights of a Beneficial Owner during such
person’s lifetime.

     In the case of a Redemption Request that is presented on behalf of a deceased Beneficial Owner
and that has not been fulfilled at the time the Company gives notice of its election to redeem the
Notes pursuant to Section 107 hereof, the Notes that are the subject of such pending Redemption
Request shall be redeemed pursuant to Section 107 hereof prior to any other Notes.

     Any Redemption Request may be withdrawn by the person(s) presenting such request upon delivery
of a written request for such withdrawal given by the Participant on behalf of such person(s) to
the Depository and by the Depository to the Trustee not less than 60 days prior to the Interest
Payment Date on which such Notes are first eligible for redemption.

     The Company may, at its option, purchase any Notes for which Redemption Requests have been
received in lieu of redeeming such Notes. Any Notes so purchased by the Company shall either be
reoffered for sale and sold within 180 days after the date of purchase or presented to the Trustee
for redemption and cancellation.

7

 

     During such time or times as the Notes are not represented by a Global Security and are issued
in definitive form, all references to Participants and the Depository, including the Depository’s
governing rules, regulations and procedures, shall be deemed deleted, all determinations which
under this Section the Participants are required to make shall be made by the Company (including,
without limitation, determining whether the applicable decedent is in fact the Beneficial Owner of
the interest in the Notes to be redeemed or is in fact deceased and whether the Representative is
duly authorized to request redemption on behalf of the applicable Beneficial Owner), all Redemption
Requests, to be effective, shall be delivered by the Representative to the Trustee, with a copy to
the Company, and shall be in the form of a Redemption Request (with appropriate changes mutually
agreed to by the Trustee and the Company to reflect the fact that such Redemption Request is being
executed by a Representative (including provision for signature guarantees)) and, in addition to
all documents that are otherwise required to accompany a Redemption Request, shall be accompanied
by the Note that is the subject of such request and, if applicable, a properly executed assignment
or endorsement. If the record interest in the Note is held by a nominee of the deceased Beneficial
Owner, a certificate or letter from such nominee attesting to the deceased’s ownership of a
beneficial interest in the Note must also be delivered.

     SECTION 109. Mandatory Redemption. Upon the occurrence of a Mandatory Redemption
Event, the Company shall redeem the Notes, in whole but not in part, prior to the Stated Maturity
upon not less than 30 nor more than 60 days’ notice at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest to the redemption date. A
Mandatory Redemption Event will be deemed to have occurred at the time that the Trustee receives
written notice from the Insurer of the occurrence of a Mandatory Redemption Event. Any notice of
redemption required to be given by the Trustee in connection with a redemption required by this
Section 109 need not be given earlier than 15 days after the date the Trustee receives notice of a
Mandatory Redemption Event pursuant to this Section 109.

     Notice of redemption shall be given as provided in Section 3.02 of the Original Indenture.

ARTICLE 2

Special Insurance Provisions

     SECTION 201. Supplemental Indentures. The consent of the Insurer shall be required
with respect to any amendment or supplement to the Indenture affecting the Insurer’s rights and
remedies under Section 202 hereof or otherwise requiring the consent of the Holders of the Notes
pursuant to Section 10.02 of the Original Indenture. The Company shall deliver to any rating
agency rating the Notes notice of each such amendment or supplement and a copy thereof at least 15
days in advance of its execution or adoption and provide the Insurer with a full transcript of all
proceedings relating to the execution of any such amendment or supplement.

     SECTION 202. Events of Default and Remedies. Subject to Section 15.06 of the Original
Indenture and to the Trust Indenture Act, including, without limitation, Sections 316(a)(1) and
317(a) thereof, if an Event of Default occurs and is continuing, the Insurer shall be entitled to
control and direct the enforcement of all rights and remedies granted to the Holders of the Notes
or the Trustee for the benefit of the Holders of the Notes under the Indenture, including, without
limitation, (i) the right to accelerate the principal of the Notes as provided in

8

 

Section 6.01 of the Original Indenture, and (ii) the right to annul any such declaration of
acceleration, and the Insurer shall also be entitled to approve any waiver of an Event of Default
with respect to the Notes, the obligation of the Trustee to comply with any such direction to be
subject to compliance with the conditions set forth in Sections 6.12 and 7.02(d) of the Original
Indenture (as if references in those Sections to Holders were references to the Insurer) and the
protections provided to the Trustee by Section 7.01(c) of the Original Indenture shall be
applicable with respect to any direction from the Insurer given pursuant hereto (as if references
in said Section to Holders were references to the Insurer). The Insurer shall be entitled to
notify the Trustee and the Company of a default referred to in Section 6.01(d) of the Original
Indenture relating to the Notes as if it were the Holder of at least 25% in principal amount of the
Outstanding Notes, provided that such notice shall otherwise conform to the requirements of said
Section 6.01(d).

     The Trustee shall give the Insurer immediate notice of any default in the payment of the
principal or interest on the Notes (the obligation of the Trustee to give such notice to be deemed
satisfied if the Trustee shall have provided the notice required by Section 203(a) hereof). The
Trustee or the Company shall give the Insurer notice of any event which with the giving of notice
or the passage of time would constitute an Event of Default with respect to the Notes within 30
days of the Trustee’s or the Company’s actual knowledge thereof, provided that the Trustee shall
not be deemed to have knowledge thereof unless a Responsible Officer of the Trustee assigned to its
Corporate Trust Office shall have actual knowledge thereof or unless the Trustee shall have
received written notice thereof from the Company or the Holders of at least 25% in principal amount
of the Notes then Outstanding.

     No effect shall be given to payments made under the Policy in determining whether an Event of
Default with respect to the Notes has occurred or is continuing.

     SECTION 203. Insurance Policy Payment Procedures. (a) If, on any Interest Payment
Date for the Notes there is not on deposit with the Trustee sufficient moneys available to pay all
principal of and interest on the Notes due on such date, the Trustee shall immediately notify the
Insurer and the Fiscal Agent of the amount of such deficiency. If, by the day following said
Interest Payment Date, the Company has not provided the amount of such deficiency, the Trustee
shall simultaneously make available to the Insurer and to the Fiscal Agent the registration books
for the Notes maintained by the Trustee. In addition:

     (i) The Trustee shall provide the Insurer with a list of the Holders entitled to
receive principal or interest payments from the Insurer under the terms of the Policy and
shall make arrangements for the Insurer and its Fiscal Agent (1) to mail checks or drafts to
Holders entitled to receive full or partial interest payments from the Insurer and (2) to
pay principal of the Notes surrendered to the Fiscal Agent by the Holders entitled to
receive full or partial principal payments from the Insurer; and

     (ii) The Trustee shall, at the time it makes the registration books available to the
Insurer pursuant to (i) above, notify Holders entitled to receive the payment of principal
of or interest on the Notes from the Insurer (1) as to the fact of such entitlement, (2)
that the Insurer will remit to them all or part of the interest payments coming due subject
to the terms of the Policy, upon proof of a Holder’s entitlement to interest payments and
delivery to the Insurer, in form satisfactory to the Insurer, of an appropriate

9

 

assignment of the Holder’s right to payment, (3) that, except as provided in paragraph
(b) below, in the event that any Holder is entitled to receive full payment of principal
from the Insurer, such Holder must tender his Note with the instrument of transfer in the
form provided on the Note executed in the name of the Insurer, and (4) that, except as
provided in paragraph (b) below, in the event that such Holder is entitled to receive
partial payment of principal from the Insurer, such Holder must tender his Note for payment
first to the Trustee, which shall note on such Note the portion of principal paid by the
Trustee, and then, with an acceptable form of assignment executed in the name of the
Insurer, to the Fiscal Agent, which will then pay the unpaid portion of principal to the
Holder subject to the terms of the Policy.

     (b) In the event that the Trustee has notice that any payment of principal of or interest on a
Note has been recovered from a Holder pursuant to the United States Bankruptcy Code by a trustee in
bankruptcy in accordance with the final, nonappealable order of a court having competent
jurisdiction, the Trustee shall, at the time it provides notice to the Insurer, notify all Holders
that in the event that any Holder’s payment is so recovered, such Holder will be entitled to
payment from the Insurer to the extent of such recovery if sufficient funds are not otherwise
available, and the Trustee shall furnish to the Insurer its records evidencing the payments of
principal of and interest on the Notes which have been made by the Trustee and subsequently
recovered from Holders, and the dates on which such payments were made.

     (c) The Insurer shall, to the extent it makes payment of principal of or interest on the
Notes, become subrogated to the rights of the recipients of such payments in accordance with the
terms of the Policy and, to evidence such subrogation, (i) in the case of subrogation as to claims
for past due interest, the Trustee shall note the Insurer’s rights as subrogee on the registration
books maintained by the Trustee upon receipt from the Insurer of proof of the payment of interest
thereon to the Holders of such Notes and (ii) in the case of subrogation as to claims for past due
principal, the Trustee shall note the Insurer’s rights as subrogee on the registration books for
the Notes maintained by the Trustee upon surrender of the Notes by the Holders thereof, together
with proof of the payment of principal thereof to the Holders of such Notes. Notwithstanding
anything in the Officers’ Certificate and Authentication Order, the Indenture or the Notes to the
contrary, the Trustee shall make payment of such past due interest and past due principal directly
to the Insurer to the extent that the Insurer is a subrogee with respect thereto.

     SECTION 204. Application of Term “Outstanding” to Notes. In the event that the
principal and/or interest due on the Notes shall be paid by the Insurer pursuant to the Policy, the
Notes shall remain Outstanding for all purposes of the Indenture, not be considered defeased or
otherwise satisfied and not be considered paid by the Company, and the assignment and pledge of the
Indenture and all covenants, agreements and other obligations of the Company to the Holders of the
Notes shall continue to exist and shall run to the benefit of the Insurer, and the Insurer shall be
subrogated to the rights of such Holders to the extent of each such payment.

     SECTION 205. Insurer as Third Party Beneficiary. To the extent that the Indenture
confers upon or gives or grants to the Insurer any right, remedy or claim under or by reason of the
Indenture, the Insurer is hereby explicitly recognized as being a third-party beneficiary hereunder
and may enforce any such right, remedy or claim conferred, given or granted hereunder.

10

 

     SECTION 206. Concerning the Special Insurance Provisions. The provisions of this
Article 2 shall apply notwithstanding anything in the Indenture to the contrary, but only so long
as the Policy shall be in full force and effect and the Insurer is not in default thereunder.

ARTICLE 3

Amendment of Original Indenture

     SECTION 301. Amendment of Original Indenture. Effective on June 20, 2006, the
Original Indenture is amended as follows:

     (a) Section 1.01 of the Original Indenture is amended so as to add the following definitions:

     Consolidated Total Assets:

     “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.

     GAAP:

     “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.

     Subsidiary:

     “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.

(b) Section 4.07 of the Original Indenture is amended by:

(i) restating clause (12) thereof in its entirety to read as follows:

“12. liens on the assets of any limited liability company organized under a limited
liability company act of any state in which a limited liability company is permitted to be
treated as a partnership or disregarded for federal income tax purposes.”

11

 

and (ii) with respect to the Notes and each series of Debt Securities issued on or after
June 20, 2006, restating the final paragraph thereof in its entirety to read as follows:

     “With respect to any Debt Securities issued on or after June 20, 2006, liens not
permitted by paragraphs 1 through 12 above if at the time of, and after giving effect to,
the creation or assumption of any such lien, the aggregate amount of all consolidated
indebtedness of the Company secured by such liens does not exceed 10% of the Company’s
Consolidated Total Assets.”

     For the avoidance of doubt, the amendment contained in this Section 301(b)(ii) shall
not apply to any Debt Securities issued prior to June 20, 2006.

ARTICLE 4

Miscellaneous Provisions

     SECTION 401. Concerning the Trustee. The Trustee accepts the trusts of the Indenture
and agrees to perform the same, but only upon the terms and conditions set forth in the Indenture,
to which the parties hereto and the Holders from time to time agree. Without limiting the
generality of the foregoing, the Trustee assumes no responsibility for the correctness of the
recitals herein contained, which shall be taken as the statements of the Company.

     SECTION 402. Defeasance. The provisions of Article Thirteen of the Original Indenture
shall apply to the Notes.

     SECTION 403. Sinking Fund. The Notes are not entitled to the benefits of any sinking
fund.

     SECTION 404. Notices. The address for any notice or demand under this Third
Supplemental Indenture for each of the parties shall be as follows:

If to the Company:

Piedmont Natural Gas Company, Inc.

4720 Piedmont Row Drive

Charlotte, North Carolina 28210

Attention: Robert O. Pritchard, Treasurer

If to the Trustee:

Citibank, N.A.

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Louis Piscitelli, Vice President

If to the Insurer:

Financial Guaranty Insurance Company

125 Park Avenue

New York, New York 10017

Attention: Risk Management

12

 

If to the Fiscal Agent:

U.S. Bank Trust National Association

100 Wall Street, 19th Floor

New York, New York 10005

Attention: Corporate Trust Department

     SECTION 405. Miscellaneous.

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

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

     (c) This Third Supplemental Indenture shall be deemed to be a contract made under the laws of
the State of New York and for all purposes shall be governed by and construed in accordance with
the laws of said State.

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

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

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

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

[Signature page to follow.]

13

 

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

	 	 	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	PIEDMONT NATURAL GAS COMPANY, INC.
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Martin C. Ruegsegger	 	 	 	By:	 	/s/ Robert O. Pritchard
	 	 	 	 	 	 	 	 	 
	 

	 	Secretary
	 	 	 	 	 	Name:  Robert O. Pritchard
	 

	 	 	 	 	 	 	 	Title:  Vice President
and Treasurer
	 
	 	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	CITIBANK, N.A.,
	 	 	 	 	 	 	as Trustee
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Nancy Forte	 	 	 	By:	 	/s/ Louis Piscitelli
	 	 	 	 	 	 	 	 	 
	 

	 	Assistant Vice President
	 	 	 	 	 	Name:  Louis Piscitelli
	 

	 	 	 	 	 	 	 	Title:  Vice President

 

 

EXHIBIT A

FORM OF NOTE

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

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

PIEDMONT NATURAL GAS COMPANY, INC.

6.25% Insured Quarterly Notes Series 2006, Due 2036

					
	No. ___
	 	 	 	$                    

CUSIP No. 720186 AF2

     PIEDMONT NATURAL GAS COMPANY, INC., a corporation validly existing under the laws of the State
of North Carolina (herein called the “Company”, which term includes any successor corporation under
the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of                      ($          ) on June 1, 2036 and to pay
interest thereon from June 20, 2006 or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, quarterly in arrears on March 1, June 1, September 1 and
December 1 (each an “Interest Payment Date”) in each year, commencing September 1, 2006 at the rate
of 6.25% per annum, until the principal hereof is paid or made available for payment, and (to the
extent that the payment of such interest shall be legally enforceable) at the rate of 6.25% per
annum on any overdue principal and on any overdue installment of interest. The amount of interest
payable on any Interest Payment Date

A-1

 

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

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

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

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

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

A-2

 

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

Dated: June      , 2006

	 	 	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	PIEDMONT NATURAL GAS COMPANY, INC.
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	(Signature)	 	 	 	 	 	(Authorized Signature)
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	[Seal]	 	 	 	 

 

 

CERTIFICATE OF AUTHENTICATION

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

Dated: June      , 2006

	 	 	 	 	 
	CITIBANK, N.A., as Trustee

 	 	 
	By:  	 	 	 
	 	(Authorized Signature) 	 	 
	 	 	 	 

 

 

	 	 	 	 	 

(Reverse Side of Note)

     This Security is one of a duly authorized issue of securities of the Company (herein called
the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of
April 1, 1993, as amended (herein called the “Indenture”), between Piedmont Natural Gas Company,
Inc., a New York corporation and the predecessor to the Company and Citibank, N.A., as Trustee
(herein called the “Trustee”, which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are
to be, authenticated and delivered. This Security is a global Book-Entry Debt Security representing
$                principal amount of the series of Securities designated on the face hereof.

     The Company shall have the right, subject to the terms and conditions of the Indenture, to
redeem this Security at any time and from time to time on or after June 1, 2011, upon not less than
30 nor more than 60 days’ notice, without premium or penalty, in whole or in part, at a redemption
price equal to 100% of the principal amount to be redeemed plus any accrued and unpaid interest to
the applicable redemption date (the “Redemption Price”).

     This Security shall be subject to mandatory redemption, in whole but not in part, upon not
less than 30 nor more than 60 days’ notice at a redemption price equal to 100% of the principal
amount to be redeemed plus any accrued and unpaid interest to the redemption date, upon the
occurrence of: (a) the following series of events: (i) the Company consolidates, merges,
reorganizes or otherwise transfers substantially all of its assets, (ii) the consolidation, merger,
reorganization or transfer of assets results in the Company no longer being engaged in the business
of the distribution of natural gas in North Carolina, South Carolina and Tennessee, (iii) the
obligations of the Company under the Indenture are neither assumed nor guaranteed by the resulting
entity that is thereafter to engage in the distribution of natural gas in North Carolina, South
Carolina and Tennessee, (iv) the Insurer has not consented to such consolidation, merger,
reorganization or transfer and (v) the Insurer notifies the Trustee in writing that the Notes shall
be called for redemption, or (b) the Company’s failure to make, when due, any premium payment
required under the Insurance Agreement, dated as of June 20, 2006 (the “Insurance Agreement”), by
and between the Company and Financial Guaranty Insurance Company (the “Insurer”) within ten (10)
days after receipt by the Company of written notice thereof from the Insurer, and the Insurer does
not consent to or waive such failure.

     Subject to the conditions and restrictions contained in the Indenture, this Security may be
redeemed in whole or in part at the Redemption Price, at the request of the Representative of the
deceased beneficial owner of this Security pursuant to a Redemption Request attached hereto as
Annex A.

     In the event of redemption of this Security in part only, a new Security or Securities of this
series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the
surrender hereof. This Security will not have a sinking fund.

 

 

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

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

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

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

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

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

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

 

 

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

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

STATEMENT OF INSURANCE

     Financial Guaranty Insurance Company (the “Insurer”) has issued a surety bond containing the
following provisions with respect to this Security, such policy being on file at the Corporate
Trust Office of the Trustee, as paying agent (the “Paying Agent”):

     The Insurer hereby unconditionally and irrevocably agrees to pay for disbursement to the
Holders that portion of the principal of and interest on this Security which is then Due for
Payment and which the Company shall have failed to provide. Due for Payment means, with respect to
principal of this Security, the stated maturity date of this Security and the date of mandatory
redemption of this Security at the option of a representative of any deceased beneficial owner of
this Security, in the case of principal, and on the interest payment dates, in the case of
interest, and does not refer to any earlier date on which the payment of principal of this Security
is due by reason of call for redemption (other than described above), acceleration or other
advancement of maturity, and with respect to interest on this Security, the stated date for payment
of such interest, including interest payable at the stated maturity date and interest (but not
premium) payable on the date of mandatory redemption.

     Upon receipt of telephonic or telegraphic notice, subsequently confirmed in writing, or
written notice by registered or certified mail, from a Holder or the Paying Agent to the Insurer
that the required payment of principal or interest (as applicable) has not been made by the Company
to the Paying Agent, the Insurer on the due date of such payment or within one business day after
receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an
account with U.S. Bank Trust National Association, or its successor as its agent (the “Fiscal
Agent”), sufficient to make the portion of such payment not paid by the Company. Upon presentation
to the Fiscal Agent of evidence satisfactory to it of the Holder’s right to receive such payment
and any appropriate instruments of assignment required to vest all of such Holder’s right to such
payment in the Insurer, the Fiscal Agent will disburse such amount to the Holder.

     As used in this section, the term “Holder” means the person other than the Company or the
borrower(s) of note proceeds who at the time of nonpayment of this Security is entitled under the
terms of this Security to payment thereof.

     The policy is non-cancellable for any reason.

FINANCIAL GUARANTY INSURANCE COMPANY

 

 

ABBREVIATIONS

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

	 	 	 	 	 	 	 	 	 	 	 
	TEN COM-
	 	as tenants in	 	UNIF GIFT MIN ACT-	 	 	 	Custodian	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	common	 	 	 	(Cust)	 	 	 	(Minor)
	TEN ENT-
	 	as tenants by the	 	 	 	 	 	 	 	 
	 	 	entireties	 	 	 	under Uniform Gifts to
	JT TEN-	 	as joint tenants	 	 	 	Minors Act
	 
	 	with right of	 	 	 	 	 	 	 	 
	 
	 	survivorship and	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	not as tenants

in common	 	 	 	(State)

Additional abbreviations may also be used

though not on the above list.

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

 

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

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

 
 

 
 

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

 
 

 
 

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

Dated:                                  

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

 

 

ANNEX A

FORM OF REDEMPTION REQUEST

PIEDMONT NATURAL GAS COMPANY, INC.

___% SENIOR INSURED QUARTERLY NOTES SERIES 2006

(THE “NOTES”)

CUSIP NO. 720186 AF2

     The undersigned,                      (the “Participant”), does hereby certify, pursuant to
the provisions of that certain Indenture, dated as of April 1, 1993, as supplemented and amended
(the “Indenture”) made by and between Piedmont Natural Gas Company, Inc. (the “Company”) and
Citibank, N.A., as Trustee (the “Trustee”), to The Depository Trust Company (the “Depositary”), the
Company and the Trustee that:

     1. [Name of deceased Beneficial Owner] is deceased.

     2. [Name of deceased Beneficial Owner] had a $                     interest in the above referenced
Notes.

     3. [Name of Representative] is [Beneficial Owner’s personal representative/other person
authorized to represent the estate of the Beneficial Owner/surviving joint tenant/surviving tenant
by the entirety/trustee of a trust] of [Name of deceased Beneficial Owner] and has delivered to the
undersigned a request for redemption in form satisfactory to the undersigned, requesting that
$                     principal amount of said Notes be redeemed pursuant to said Indenture. The documents
accompanying such request, all of which are in proper form, are in all respects satisfactory to the
undersigned and [Name of Representative] is entitled to have the Notes to which this Request
relates redeemed.

     4. The Participant holds the interest in the Notes with respect to which this Request for
Redemption is being made on behalf of [Name of deceased Beneficial Owner].

     5. The Participant hereby certifies that it will indemnify and hold harmless the Depositary,
the Trustee and the Company (including their respective officers, directors, agents, attorneys and
employees), against all damages, loss, cost, expense (including reasonable attorneys’ and
accountants’ fees), obligations, claims or liability (collectively, the “Damages”) incurred by the
indemnified party or parties as a result of or in connection with the redemption of Notes to which
this Request relates. The Participant will, at the request of the Company, forward to the Company,
a copy of the documents submitted by [Name of Representative] in support of the request for
redemption.

     IN WITNESS WHEREOF, the undersigned has executed this Redemption Request as of                     ,
          .

	 	 	 	 	 
	 	[PARTICIPANT NAME]

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 	 	 	 

 

 

	 	 	 	 	 

EXHIBIT B

CERTIFICATE OF AUTHENTICATION

     This is one of the Notes referred to in the within-mentioned Indenture.

	 	 	 	 	 
	 	CITIBANK, N.A.

as Trustee

 	 
	 	By:  	 	 
	 	  	Authorized Officer	 
	 	 	 	 

B-1

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