Fiscal Agency Agreement

Execution Copy FISCAL AGENCY AGREEMENT Between NORTHERN NATURAL GAS COMPANY, as Issuer and J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION, as Fiscal Agent ---------- Dated as of October 15, 2002 ---------- 5.375% Senior Notes due 2012 TABLE OF CONTENTS Page1. The Securities......................................................1 (a) General....................................................1 (b) Form of Securities; Denominations of Securities............1 (c) Temporary Securities.......................................4 (d) Legends....................................................4 (e) Book-Entry Provisions......................................52. Fiscal Agent; Other Agents..........................................63. Authentication......................................................64. Payment and Cancellation............................................7 (a) Payment....................................................7 (b) Cancellation...............................................85. Transfer and Exchange of Securities.................................8 (a) Transfers of Global Securities as Such.....................8 (b) Exchanges of Global Securities for Definitive Securities...8 (c) Beneficial Interests.......................................9 (d) Special Provisions Regarding Transfer of Beneficial Interests in a Regulation S Global Security................9 (e) Special Provisions Regarding Transfer of Beneficial Interests in a Rule 144A Global Security..................11 (f) Special Provisions Regarding Transfer of Restricted Definitive Securities.....................................136. Mutilated, Destroyed, Stolen or Lost Securities....................157. Register; Record Date for Certain Actions..........................158. Delivery of Certain Information....................................17 (a) Non-Reporting Issuer......................................17 (b) Information After Two Years...............................17 (c) Periodic Reports..........................................179. Conditions of Fiscal Agent's Obligations...........................18 (a) Compensation and Indemnity................................18 (b) Agency....................................................18 (c) Advice of Counsel.........................................19 (d) Reliance..................................................19 (e) Interest in Securities, etc...............................19 (f) Certifications............................................19 (g) No Implied Obligations....................................20 (h) No Liability..............................................20 (i) No Inquiry................................................20 (j) Agents....................................................20 (k) Directors, Officers.......................................2010. Resignation and Appointment of Successor...........................20 (a) Fiscal Agent and Paying Agent.............................20 (b) Resignation...............................................20 (c) Successors................................................21 (d) Acknowledgment............................................21 (e) Merger, Consolidation, etc................................2211. Payment of Taxes...................................................2212. Amendments.........................................................22 (a) Approval..................................................22 (b) Binding Nature of Amendments, Notice, Notations, etc......23 (c) "Outstanding" Defined.....................................2313. GOVERNING LAW......................................................24 i 14. Notices............................................................2415. Defeasance (Legal and Covenant)....................................24 (a) Issuer's Option to Effect Defeasance or Covenant Defeasance................................................24 (b) Defeasance and Discharge..................................24 (c) Covenant Defeasance.......................................25 (d) Conditions to Defeasance and Covenant Defeasance..........25 (e) Deposit in Trust; Miscellaneous...........................27 (f) Reinstatement.............................................2716. Headings...........................................................2717. Counterparts.......................................................2818. Successors and Assigns.............................................2819. Separability Clause................................................28 ii FISCAL AGENCY AGREEMENT (this "Agreement"), dated as of October 15, 2002,between NORTHERN NATURAL GAS COMPANY, a corporation duly organized under thelaws of the State of Delaware (the "Issuer"), and J.P. MORGAN TRUST COMPANY,NATIONAL ASSOCIATION, a national banking association, as Fiscal Agent (asdefined in Section 2 hereof). RECITALS OF THE ISSUER The Issuer has duly authorized the creation of an issue of its 5.375%Senior Notes due October 31, 2012 (the "Securities") of substantially the tenorand amount hereinafter set forth, and to provide therefor the Issuer has dulyauthorized the execution and delivery of this Agreement. All things necessary to make the Securities, when executed by the Issuerand authenticated and delivered hereunder and duly issued by the Issuer, thevalid obligations of the Issuer, and to make this Agreement a valid agreement ofthe Issuer, in accordance with their and its terms, have been done.1. The Securities. (a) General. The aggregate principal amount of Securities which may beauthenticated and delivered under this Agreement is limited to $300,000,000except for Securities authenticated and delivered upon registration of transfer,or in exchange for, or in lieu of other Securities pursuant to the provisions ofthis Agreement or the Securities. The Securities shall be known and designated as the "5.375% Senior Notesdue 2012" of the Issuer. The Securities will be unsecured, direct, unconditionaland general obligations of the Issuer and will rank pari passu with all otherunsecured and unsubordinated indebtedness of the Issuer. (b) Form of Securities; Denominations of Securities. The Securities will beissued in registered form without coupons in substantially the form, andincluding the terms, provided for herein and on Exhibit A. The Securities shallbe executed manually or in facsimile on behalf of the Issuer by its Chairman ofthe Board, President or a Vice President and by its Secretary or an AssistantSecretary (the "Authorized Officers"), notwithstanding that such officers, orany one of them, shall have ceased, for any reason, to hold such offices priorto the authentication and delivery of such Securities or did not hold suchoffices at the date of such Securities. The Securities may also have suchadditional provisions, omissions, variations or substitutions as are notinconsistent with the provisions of this Agreement and may have such letters,numbers or other marks of identification and such legends or endorsements placedthereon as may be required to comply with any law or with any rules madepursuant thereto or with the rules of any securities exchange or governmentalagency or as may, consistently herewith, be determined by the AuthorizedOfficers of the Issuer executing such Securities, as conclusively evidenced bytheir execution of such Securities. All of the Securities shall be otherwisesubstantially identical except as to denominations of Securities and as providedherein. (i) Except as otherwise set forth in this Agreement, the Securities offeredand sold in their initial resale distribution to a qualified institutional buyer(as defined in Rule 144A ("Rule 144A") under the United States Securities Act of1933, as amended (the "Act"), each a "QIB") in reliance on Rule 144A ("Rule 144ASecurities") shall initially be issued in the form of one or more GlobalSecurities (as defined in Section 1(e) hereof) in definitive, fully registeredform, substantially in the form set forth on Exhibit A, with such applicablelegends as are provided for herein and on Exhibit A, and in minimumdenominations of $100,000 and in integral multiples of $1,000 in excess of$100,000. Such Global Securities shall be duly executed by the Issuer andauthenticated by the Fiscal Agent as hereinafter provided, and deposited withthe U.S. Depository (as defined in Section 1(e) hereof). Until such time as theHolding Period (as defined below) shall have terminated, each such Securityshall be referred to as a "Rule 144A Global Security." The aggregate principalamount of any Rule 144A Global Security may be adjusted by endorsements toSchedule A on the reverse thereof in any situation where adjustment is permittedor required by this Agreement or provided for on Exhibit A. Unless the Issuerdetermines otherwise in accordance with applicable law, the legend setting forthtransfer restrictions shall be removed or deemed removed from a Rule 144ASecurity in accordance with the procedures set forth in Section 1(d) after suchtime as the applicable Holding Period shall have terminated, and each suchSecurity shall thereafter be held as an unrestricted Security. As used herein,the term "Holding Period," with respect to Rule 144A Securities, means theperiod referred to in Rule 144(k) under the Act or any successor provisionthereto ("Rule 144(k)") and as may be amended or revised from time to time,beginning from the later of (i) the original issue date of such Securities or(ii) the last date on which the Issuer or any affiliate of the Issuer was thebeneficial owner of such Securities (or any predecessor thereof). 1 (ii) Except as otherwise set forth in this Agreement, Securities offeredand sold in reliance on Regulation S under the Act ("Regulation S") will beissued initially in the form of one or more temporary Global Securities in theform provided for herein and on Exhibit A, with such applicable legends as areprovided for herein and on Exhibit A, and in minimum denominations of $100,000and in integral multiples of $1,000 in excess of $100,000 equal to theoutstanding principal amount of the Securities initially sold in reliance onRule 903 of Regulation S under the Act (the "Regulation S Temporary GlobalSecurities"). The Regulation S Temporary Global Securities, which will bedeposited on behalf of the purchasers of the Securities represented thereby withthe Fiscal Agent, as custodian for the U.S. Depository, and registered in thename of the U.S. Depository or the nominee of the U.S. Depository for theaccounts of designated agents holding on behalf of Euroclear Bank S.A./N.V., asoperator of the Euroclear System ("Euroclear"), or Clearstream Banking, S.A.("Clearstream"), shall be duly executed by the Issuer and authenticated by theFiscal Agent as hereinafter provided. Following the termination of theRestricted Period (as defined below) and upon the receipt by the Fiscal Agentof: a. a written certificate from the U.S. Depository, together with copies ofcertificates from Euroclear and Clearstream, certifying that they have receivedcertification of non-United States beneficial ownership of 100% of the aggregateprincipal amount of the Regulation S Temporary Global Securities (except to theextent of any beneficial owners thereof who acquired an interest therein duringthe Restricted Period pursuant to another exemption from registration under theAct and who will take delivery of a beneficial ownership interest in a Rule 144AGlobal Security or a Restricted Definitive Security (as defined below), all ascontemplated by Section 5(d) hereof); and b. a certificate signed by the Authorized Officers ("Officers'Certificate"), beneficial interests in the Regulation S Temporary Global Securities will be exchanged for beneficial interests in a permanent global Security in the form provided for herein and on Exhibit A, issued in a denomination equal to the outstanding principal amount of the Regulation S Temporary Global Securities (the "Regulation S Permanent Global Securities") pursuant to the rules and regulations of the U.S. Depository, Euroclear or Clearstream, as applicable, in each case pertaining to beneficial interests in Global Securities ("Applicable Procedures"). Simultaneously with the authentication of the Regulation S Permanent Global Securities, the Fiscal Agent will cancel the Regulation S Temporary Global Securities. As used herein, "Regulation S Global Securities" means the Regulation S Temporary Global Securities or the Regulation S Permanent Global Securities, as applicable. The aggregate principal amount of the Regulation S Temporary Global Securities and the Regulation S Permanent Global Securities may be adjusted by endorsements to Schedule A on the reverse thereof in any situation where adjustment is permitted or required by this Agreement. As used herein, the term "Restricted Period," with respect to Regulation S Securities, means the period of 40 consecutive days beginning on and including the later of (i) the date on which interests in such Securities are offered to Persons (as defined below) other than distributors (as defined in Regulation S) and (ii) the original issue date of such Securities. Except as otherwise provided in this Agreement, no Regulation S Global Security shall be issued except as provided in this paragraph to evidence Securities offered and sold in reliance on Regulation S. Unless the Issuer determines otherwise in accordance with applicable law, the legend setting forth transfer restrictions shall be removed or deemed removed from a Regulation S Security in accordance with the procedures set forth in Section 1(d) hereof, and each such Security shall thereafter be held as an unrestricted Security. As used herein, "Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. 2 The provisions of the "Operating Procedures of the Euroclear System" and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream Banking" and "Customer Handbook" of Clearstream will be applicable to transfers of beneficial interests in the Regulation S Temporary Global Securities and the Regulation S Permanent Global Securities that are held by Agent Members (as defined in Section 1(e)) through Euroclear or Clearstream. (iii) Except as otherwise provided in this Agreement, Securities offeredand sold in their initial resale distribution to purchasers who areinstitutional "accredited investors" as described in Rule 501(a)(1), (2), (3) or(7) under the Act and who are not QIBs shall be issued in the form of fullyregistered, definitive, physical certificates, substantially in the form setforth herein and on Exhibit A, with such applicable legends as are provided foron Exhibit A, and in minimum denominations of $250,000 and in integral multiplesof $1,000 in excess of $250,000 (such securities are herein referred to as"Restricted Definitive Securities"). Unless the Issuer determines otherwise inaccordance with applicable law, the legend setting forth transfer restrictionsshall be removed or deemed removed from a Restricted Definitive Security inaccordance with the procedures set forth in Section 1(d) after such time as theapplicable Holding Period shall have terminated, and each such Security shallthereafter be held as an unrestricted Security. As used herein, the term"Holding Period," with respect to Restricted Definitive Securities, means theperiod referred to in Rule 144(k) or any successor provision thereto and as maybe amended or revised from time to time, beginning from the later of (i) theoriginal issue date of such Securities or (ii) the last date on which the Issueror any affiliate of the Issuer was the beneficial owner of such Securities (orany predecessor thereof). (c) Temporary Securities. Until definitive Securities are prepared, theIssuer may execute, and there shall be authenticated and delivered in accordancewith the provisions of Section 3 hereof (in lieu of definitive printedSecurities), temporary Securities. Such temporary Securities may be inregistered global form. Such temporary Securities shall be subject to the samelimitations and conditions and entitled to the same rights and benefits asdefinitive Securities, except as provided herein or therein. TemporarySecurities shall be exchangeable for definitive Securities, when such definitiveSecurities are available for delivery; and upon the surrender for exchange ofsuch temporary Securities, the Issuer shall execute and there shall beauthenticated and delivered, in accordance with the provisions of Sections 6 and7 hereof, in exchange for such temporary Securities, a like aggregate principalamount of definitive Securities of like tenor. The Issuer shall pay all charges,including (without limitation) stamp and other taxes and governmental charges,incident to any exchange of temporary Securities for definitive Securities. Alltemporary Securities shall be identified as such and shall describe the right ofthe holder thereof to effect an exchange for definitive Securities and themanner in which such an exchange may be effected. (d) Legends. Securities shall be stamped or otherwise be imprinted with thelegends set forth on the face of the text of the Securities attached as ExhibitA, including any legend provided for pursuant to Section 1(e) hereof. Thelegends so provided on the face of the text of the Securities may be removedfrom any Security, upon written order signed in the name of the Issuer by theAuthorized Officers and delivered to the Fiscal Agent ("Order"), (i) two yearsfrom the later of issuance of the Security or the date such Security (or anypredecessor) was last acquired from an "affiliate" of the Issuer within themeaning of Rule 144 ("Rule 144") under the Act or (ii) in connection with a salemade pursuant to the volume (and other restrictions) of Rule 144 following oneyear from such time, provided that, if the legend is removed and the Security issubsequently held by such an affiliate of the Issuer, the legend shall bereinstated. Any legends provided pursuant to Section 1(e) hereof may be removedin the event the applicable Global Securities cease to be Global Securities inaccordance with Section 5 hereof. (e) Book-Entry Provisions. The Securities may be issued initially in theform of one or more registered global Securities ("Global Securities") depositedwith or on behalf of a depository located in the United States, which initiallyshall be The Depository Trust Company together with its nominee Cede & Co. (the"U.S. Depository"), that (i) shall be registered in the name of the U.S.Depository for such Global Security or Securities or the nominee of such U.S.Depository, (ii) shall be delivered by the Fiscal Agent to such U.S. Depositoryor pursuant to such U.S. Depository's instruction and (iii) shall bear a legendsubstantially similar to the following: 3 "THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE FISCAL AGENCYAGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE U.S.DEPOSITORY OR A NOMINEE OF THE U.S. DEPOSITORY. THIS SECURITY IS EXCHANGEABLEFOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE U.S. DEPOSITORYOR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE FISCAL AGENCYAGREEMENT, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THISSECURITY AS A WHOLE BY THE U.S. DEPOSITORY TO A NOMINEE OF THE U.S. DEPOSITORYOR BY A NOMINEE OF THE U.S. DEPOSITORY TO THE U.S. DEPOSITORY OR ANOTHER NOMINEEOF THE U.S. DEPOSITORY OR BY THE U.S. DEPOSITORY OR ANY SUCH NOMINEE TO ASUCCESSOR U.S. DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR U.S. DEPOSITORY) MAY BEREGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THEU.S. DEPOSITORY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,EXCHANGE OR PAYMENT, AND ANY CERTIFICATE IS ISSUED IN THE NAME OR NAMES ASDIRECTED IN WRITING BY THE U.S. DEPOSITORY, ANY TRANSFER, PLEDGE, OR OTHER USEHEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THEREGISTERED HOLDER HEREOF, THE U.S. DEPOSITORY, HAS AN INTEREST HEREIN." Members of, or direct of indirect participants in, the U.S. Depository("Agent Members") shall have no rights under this Agreement with respect to anyGlobal Security held on their behalf by the U.S. Depository or under the GlobalSecurity, and such U.S. Depository may be treated by the Issuer, the FiscalAgent, and any agent of the Issuer or the Fiscal Agent as the owner of suchGlobal Security for all purposes whatsoever. Notwithstanding the foregoing,nothing herein shall prevent the Issuer, the Fiscal Agent, or any agent of theIssuer or the Fiscal Agent from giving effect to any written certification,proxy or other authorization furnished by the U.S. Depository or impair, asbetween the U.S. Depository and its Agent Members, the operation of customarypractices governing the exercise of the rights of a holder of any Security. So long as the U.S. Depository or its nominee is the registered holder ofthe Securities, the U.S. Depository or such nominee will for all purposes of theSecurities and this Agreement be considered the sole owner or holder of suchSecurities. Until such time as definitive Securities may be issued, beneficialowners of Securities will not be entitled to have Securities registered in theirnames, will not receive or be entitled to receive physical delivery ofSecurities in definitive form, and will not be considered the owners or holdersthereof under this Agreement for any purpose. The Issuer initially appoints the Fiscal Agent to serve as custodian forthe Global Securities. This Section 1(e) shall apply only to Global Securities deposited with oron behalf of the U.S. Depository.2. Fiscal Agent; Other Agents. The Issuer hereby appoints J.P. Morgan TrustCompany, National Association, acting through its corporate trust office in SanFrancisco, California (the "Corporate Trust Office"), as fiscal agent of theIssuer in respect of the Securities, upon the terms and subject to theconditions herein set forth, and J.P. Morgan Trust Company, National Associationhereby accepts such appointment. J.P. Morgan Trust Company, National Associationand any successor or successors as such fiscal agent qualified and appointed inaccordance with Section 10 hereof, are herein called the "Fiscal Agent." TheFiscal Agent shall have the powers and authority granted to and conferred uponit in the Securities and hereby and such further powers and authority to act onbehalf of the Issuer as may be mutually agreed upon by the Issuer and the FiscalAgent. All of the terms and provisions with respect to such powers and authoritycontained in the Securities are subject to and governed by the terms andprovisions hereof. 4 The Issuer may appoint one or more agents (a "Paying Agent" or "PayingAgents") for the payment (subject to applicable laws and regulations) of theprincipal of and interest on the Securities, and one or more agents (a "TransferAgent" or "Transfer Agents") for the transfer and exchange of securities, atsuch place or places as the Issuer may determine; provided, however, the Issuershall at all times maintain a Paying Agent or agent thereof and Transfer Agentor agent thereof in the Borough of Manhattan, The City of New York (which PayingAgent and Transfer Agent may be the Fiscal Agent or any of its affiliates). TheIssuer initially appoints the Fiscal Agent, acting through its offices in theBorough of Manhattan, The City of New York, as Paying Agent and Transfer Agent.The Issuer shall promptly notify the Fiscal Agent of the name and address ofeach Paying Agent and Transfer Agent appointed, and will notify the Fiscal Agentof the resignation or termination of any Paying Agent or Transfer Agent. Subjectto the provisions of Section 10(c) hereof, the Issuer may vary or terminate theappointment of any such Paying Agent or Transfer Agent at any time and from timeto time upon giving not less than 90 days' notice to such Paying Agent orTransfer Agent, as the case may be, and to the Fiscal Agent. The Issuer shall cause notice of any resignation, termination orappointment of any Paying Agent or Transfer Agent or of the Fiscal Agent and ofany change in the office through which any such Agent will act to be given toregistered holders of the Securities.3. Authentication. The Fiscal Agent is authorized, upon receipt of Securitiesduly executed on behalf of the Issuer for the purposes of the original issuanceof the Securities, (i) to authenticate said Securities in an aggregate principalamount not in excess of $300,000,000 and to deliver said Securities inaccordance with an Order or Orders and (ii) thereafter to authenticate anddeliver said Securities in accordance with the provisions hereinafter set forth. The Fiscal Agent may, with the consent of the Issuer, appoint by aninstrument or instruments in writing one or more agents (which may includeitself) for the authentication of Securities and, with such consent, vary orterminate any such appointment upon written notice and approve any change in theoffice through which any authenticating agent acts. The Issuer (by writtennotice to the Fiscal Agent and the authenticating agent whose appointment is tobe terminated) may also terminate any such appointment at any time. The FiscalAgent hereby agrees to solicit written acceptances from the entities concerned(in form and substance satisfactory to the Issuer) of such appointments. In itsacceptance of such appointment, each such authenticating agent shall agree toact as an authenticating agent pursuant to the terms and conditions of thisAgreement.4. Payment and Cancellation.(a) Payment. Subject to the following provisions, the Issuer shall provide tothe Fiscal Agent in funds available on or prior to each date on which a paymentof principal of or any interest on the Securities shall become due, as set forthin the text of the Securities, such amount, in such coin or currency, as isnecessary to make such payment, and the Issuer hereby authorizes and directs theFiscal Agent from funds so provided to it to make or cause to be made payment ofthe principal of and interest on, as the case may be, the Securities set forthherein and in the text of the Securities. The Fiscal Agent shall arrangedirectly with any Paying Agent who may have been appointed pursuant to theprovisions of Section 2 hereof for the payment from funds so paid by the Issuerof the principal of and interest on the Securities as set forth herein and inthe text of the Securities. Notwithstanding the foregoing, the Issuer mayprovide directly to a Paying Agent funds for the payment of the principalthereof and premium and interest, if any, payable thereon under an agreementwith respect to such funds containing substantially the same terms andconditions set forth in this Section 4(a) and in Section 9(b) hereof; and theFiscal Agent shall have no responsibility with respect to any funds so providedby the Issuer to any such Paying Agent. 5 Any interest on the Securities shall be paid, unless otherwise provided inthe text of the Securities, to the Persons in whose names such Securities areregistered on the register maintained pursuant to Section 7 hereof at the closeof business on the record dates designated in the text of the Securities (the"registered holders"). Payments of principal of Securities shall be payableagainst surrender thereof at the corporate trust office or office of an agent ofthe Fiscal Agent and at the offices of such other Paying Agents as shall havebeen appointed pursuant to Section 2 hereof. Payments of principal shall be madeagainst surrender of Securities, and payments of interest on Securities shall bemade, in accordance with the foregoing and subject to applicable laws andregulations, by check mailed on or before the due date for such payment to thePerson entitled thereto at such Person's address appearing on the register ofthe Securities maintained pursuant to Section 7 hereo ...