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Exhibit 1.2
PIEDMONT NATURAL GAS COMPANY, INC.
__________ Shares*
Common Stock
(no par value)
Underwriting Agreement
----------, ----
[Names and Addresses
of Underwriters]
Dear Sirs:
Piedmont Natural Gas Company, Inc., a North Carolina
corporation (the "Company"), proposes to sell to you (the "Underwriters"),
_______ shares of Common Stock, no par value ("Common Stock"), of the Company
(said shares to be issued and sold by the Company being hereinafter called the
"Underwritten Securities"). The Company also proposes to grant to the
Underwriters an option to purchase up to ________ additional shares of Common
Stock (the "Option Securities"; the Option Securities, together with the
Underwritten Securities, being hereinafter called the "Securities").
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1. Certain terms used in this Section 1 are defined in paragraph (c)
hereof.
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933 (the "Act") and has filed with the Securities
and Exchange Commission (the "Commission") a registration statement (file number
33-_____) on such Form, including a related preliminary prospectus, for the
registration under the Act of the offering and sale of the Securities, and such
registration statement has become effective. The Company may have filed one or
more amendments or supplements thereto, and any such amendment has become
effective. No stop order suspending the effectiveness of the registration
statement has been issued, and no proceeding for that purpose has been
instituted or threatened by the Commission. The Company has prepared and will
file with the Commission one of the following: (i) prior to effectiveness of
such registration statement, a further amendment to such registration statement,
including the form of final prospectus, (ii) a final prospectus in accordance
with Rules 430A and 424(b)(1) or (4), or (iii) a final prospectus in accordance
with Rules 415 and 424(b)(2) or (5). In the case of clause (ii), the Company has
included in the registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and the rules
thereunder to be included in the Prospectus with respect to the securities and
the offering
--------
* PLUS an option to purchase from Piedmont Natural Gas Company, Inc. up to
[_______] additional shares to cover over-allotments.
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thereof. The Company has previously delivered to you and counsel for the
Underwriters copies of the registration and prospectus, any such amendment or
supplement, the final prospectus and all documents incorporated by reference
therein that were filed with the Commission on or prior to the date of this
Agreement (including one fully executed copy of the registration statement and
of each amendment thereto for each of you and for counsel for the Underwriters).
As filed, the registration statement, as amended at the Effective Date, and form
of final prospectus, or such final prospectus, shall contain all Rule 430A
Information, together with all other such required information, with respect to
the Securities and the offering thereof and, except to the extent the
Underwriters shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution Time
or, to the extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein. If the Registration Statement
contains the undertaking specified by Regulation S-K Item 512(x), the
Registration Statement, at the Execution Time, meets the requirements set forth
in Rule 415(a)(1)(x).
(b) On the Effective Date, each part of the Registration
Statement did or will, and when the Preliminary Prospectus is filed with the
Commission and when the Prospectus is first filed (if required) in accordance
with Rule 424(b), on the Closing Date (as hereinafter defined) and on any
settlement date pursuant to Section 3(c) hereof, the Preliminary Prospectus and
the Prospectus (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act and the Securities Exchange
Act of ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇" and the respective rules thereunder; on the
Effective Date, each part of the Registration Statement did not or will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading; the Preliminary Prospectus, on the date of filing with
the Commission did not and, on the Closing Date and on any settlement date
pursuant to Section 3(c) hereof, will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 424(b), did not or will not, and on the date of any filing
pursuant to Rule 424(b), on the Closing Date and on any settlement date pursuant
to Section 3(c) hereof, the Prospectus (together with any supplement thereto)
will not, include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the Prospectus (or
any supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
specifically for use in connection with the preparation of the Registration
Statement, the Preliminary Prospectus or the Prospectus (or any supplement
thereto).
(c) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "Effective Date" shall mean each date that
the Registration Statement and any post-effective amendment or amendments
thereto became or become effective. "Execution Time" shall mean the date and
time that this Agreement is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus referred to in
paragraph (a) above and any preliminary prospectus included in the Registration
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Statement at the Effective Date that omits Rule 430A Information. "Prospectus"
shall mean the prospectus relating to the Securities that is first filed
pursuant to Rule 424(b) after the Execution Time or, if no filing pursuant to
Rule 424(b) is required, shall mean the form of final prospectus relating to the
Securities included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement referred to in
paragraph (a) above, including incorporated documents, exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto becomes effective prior to the
Closing Date, shall also mean such registration statement as so amended. Such
term shall include any Rule 430A Information deemed to be included therein at
the Effective Date as provided by Rule 430A. "Rule 415", "Rule 424", "Rule 430A"
and "Regulation S-K" refer to such rules or regulation under the Act. "Rule 430A
Information" means information with respect to the Securities and the offering
thereof permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A. Any reference herein to the Registration
Statement, a Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of such
Preliminary Prospectus or the Prospectus, as the case may be; and any reference
herein to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement, or the issue date of any
Preliminary Prospectus or the Prospectus, as the case may be, deemed to be
incorporated therein by reference.
(d) The financial statements of the Company and its
subsidiaries set forth in the Registration Statement and the Prospectus fairly
present the financial condition of the Company and its subsidiaries as of the
dates indicated and the results of operations and cash flows for the periods
therein specified; said financial statements have been prepared in conformity
with generally accepted accounting principals as applied in the United States
consistently applied throughout the periods involved (except as otherwise stated
therein).
(e) The Company and each of its significant subsidiaries
within the meaning of Regulation S-X (individually a "Subsidiary" and
collectively the "Subsidiaries") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction in
which it is chartered or organized, with full corporate power and authority to
own its properties and conduct its business as described in the Prospectus, and
is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such qualification
wherein it owns or leases material properties or conducts material business.
(f) The Company and its subsidiaries have all necessary
franchises or permits for natural gas operations in all communities now served,
except as set forth in the Registration Statement and except where the failure
to be so authorized by franchise or permit does not materially affect the right
of the Company or such subsidiary to the use of its properties or the conduct of
its business; and the franchises of the Company and its subsidiaries referred to
in the Registration Statement are good and valid except for and subject only to
such defects as may be set forth or referred to in the Registration Statement,
and such others as do not materially affect
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the right of the Company or such subsidiary to the use of its properties or the
conduct of its business, and said franchises impose no materially burdensome
restrictions.
(g) All outstanding shares of capital stock of each Subsidiary
have been duly authorized and validly issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the Subsidiaries are owned by the Company
either directly or through wholly owned subsidiaries free and clear of any
perfected security interest and any other security interests, claims, liens or
encumbrances.
(h) The Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms to the
description thereof contained in the Prospectus; all outstanding shares of
Common Stock have been duly authorized and validly issued and are fully paid and
nonassessable; the Securities have been duly authorized, and, when issued and
delivered to and paid for by the Underwriters pursuant to this Agreement, will
be validly issued, fully paid and nonassessable; on the Closing Date the
Securities will be duly authorized for listing, subject to official notice of
issuance, on the New York Stock Exchange; the certificates for the Securities
are in valid and sufficient form; and the holders of outstanding shares of
capital stock of the Company are not entitled to preemptive or other rights to
subscribe for the Securities.
(i) There is no pending or threatened action, suit or
proceeding before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries of a character
required to be disclosed in the Registration Statement which is not adequately
disclosed in the Prospectus, there is no statute required to be described in the
Prospectus that is not described as required, and there is no franchise,
contract or other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an exhibit, which is not
described or filed as required, and the description in the Registration
Statement and Prospectus of statutes, legal and governmental proceedings,
contracts and other documents are accurate and fairly present the information
required to be shown.
(j) This Agreement has been duly authorized, executed and
delivered by the Company.
(k) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated herein, except such as have been obtained under the
Act and such as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Underwriters and such other approvals as have been obtained.
(l) Neither the issue and sale of the Securities, nor the
consummation of the other transactions herein contemplated nor the fulfillment
of the terms hereof will conflict with, result in a breach of, or constitute a
default under the Articles of Incorporation or By-Laws of the Company or the
terms of any indenture or other agreement or instrument to which the Company or
any of its subsidiaries is a party or bound, or any statute, rule, order or
regulation applicable to the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its subsidiaries;
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and the Company has full power and authority to authorize, issue and sell the
Securities as contemplated by this Agreement.
(m) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
(n) The Company is not a "holding company" or a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
2. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations, warranties and agreements herein set
forth, the Company agrees to issue and sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company, at
a purchase price of $_____ per share, the amount of the Underwritten Securities
set forth opposite such Underwriter's name in Schedule I hereto. Delivery of
certificates for the Underwritten Securities, and payment therefor, shall be
made as provided in Section 3 hereof.
(b) Subject to the terms and conditions and in reliance upon
the representations, warranties and agreements herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally and
not jointly, up to _______ shares of Option Securities at the same purchase
price per share as the Underwriters shall pay for the Underwritten Securities.
Said option may be exercised only to cover over-allotments in the sale of the
Underwritten Securities by the Underwriters. Said option may be exercised in
whole or in part at any time (but not more than once) on or before the 30th day
after the date of the Prospectus upon written or facsimile notice by
________________, acting on behalf of the Underwriters (the "Representative"),
to the Company setting forth the number of shares of the Option Securities as to
which the several Underwriters are exercising the option and the settlement
date. Delivery of certificates for the shares of Option Securities, and payment
therefor, shall be made as provided in Section 3 hereof. The number of shares of
the Option Securities to be purchased by each Underwriter shall be the same
percentage of the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. (a) Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third business
day prior to the Closing Date) shall be made at 10:00 A.M., New York City time,
on __________ __, _____, or such later date (not later than _________ __,
_______) as the Underwriters shall designate, which date and time may be
postponed by agreement between the Underwriters and the Company or as provided
in Section 9 hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date"). Delivery of the Securities
shall be made to the Representative for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representative of the purchase price thereof to or upon the order of the Company
by certified or official bank check, checks drawn on or by a New York Clearing
House bank and payable in next day funds or wire transfer. Delivery of the
Underwritten Securities and the
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Option Securities shall be made at such location as the Representative shall
reasonably designate at least one business day in advance of the Closing Date
and payment for such Securities shall be made at the offices of ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Certificates for the Securities shall be registered in such names and in such
denominations as the Underwriters may request not less than three full business
days in advance of the Closing Date.
(b) The Company agrees to have the Securities available for
inspection, checking and packaging by the Underwriters in New York, New York,
not later than 1:00 P.M. on the business day prior to the Closing Date.
(c) If the option provided for in Section 2(b) hereof is
exercised after the third business day prior to the Closing Date, the Company
will deliver (at the expense of the Company) to the Representative, at
___________________________ or through the facilities of The Depository Trust
Company, on the date specified by the Representative (which shall be within
three business days after exercise of said option), certificates for the Option
Securities in such names and denominations as the Underwriters shall have
requested against payment of the purchase price thereof to or upon the order of
the Company by certified or official bank check, checks drawn on or by a New
York Clearing House bank and payable in next day funds or wire transfer. If
settlement for the Option Securities occurs after the Closing Date, the Company
will deliver to the Underwriters on the settlement date for the Option
Securities, and the obligation of the Underwriters to purchase the Option
Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements. The Company agrees with the several
Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the offering
of the Securities, the Company will not file any amendment to the Registration
Statement or supplement to the Prospectus unless the Company has furnished you a
copy for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the foregoing
sentence, if the Registration Statement has become or becomes effective pursuant
to Rule 430A, or filing of the Prospectus is otherwise required under Rule
424(b), the Company will cause the Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will provide
evidence satisfactory to the Representative of such timely filing. The Company
will promptly advise the Underwriters (i) when the Registration Statement, if
not effective at the Execution Time, and any amendment thereto, shall have
become effective, (ii) when the Prospectus, and any supplement thereto, shall
have been filed (if required) with the Commission pursuant to Rule 424(b), (iii)
when, prior to termination of the offering of the Securities, any amendment to
the Registration Statement shall have been filed or become effective, (iv) of
any request by the Commission for any amendment of the Registration Statement or
supplement to the Prospectus or for any
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additional information, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (vi) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Securities for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof. The Company will prepare and file with the
Commission, promptly upon your request, any amendments or supplements to the
Registration Statement or Prospectus that, in your reasonable opinion, may be
necessary or advisable in connection with the distribution of the Securities by
the Underwriters.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein in the light of the circumstances under which they
were made not misleading, or if it shall be necessary to amend the Registration
Statement or supplement the Prospectus to comply with the Act or the Exchange
Act or the respective rules thereunder, the Company promptly will prepare and
file with the Commission (at the expense of the Company), subject to the second
sentence of paragraph (a) of this Section 5, an amendment or supplement which
will correct such statement or omission or effect such compliance.
(c) As soon as practicable, but in any event not later than 15
months after the end of the Company's current fiscal quarter, the Company will
make generally available to its security holders and to the Underwriters an
earnings statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Underwriters and counsel
for the Representative, without charge, one signed and three conformed copies of
the Registration Statement (including exhibits thereto) and, so long as delivery
of a prospectus by an Underwriter or dealer may be required by the Act, all
amendments and supplements to the Registration Statement or Prospectus that are
filed with the Commission and as many copies of each Preliminary Prospectus and
the Prospectus and any supplement thereto as the Underwriters may reasonably
request.
(e) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as the Underwriters may
designate and will maintain such qualifications in effect so long as required
for the distribution of the Securities.
(f) The Company will not, for a period of 120 days following
the Execution Time, without the prior written consent of the Underwriters,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any other shares of Common Stock or any
securities convertible into, or exchangeable for, shares of Common Stock;
provided, however, that the Company may issue and sell Common Stock pursuant to
any employee stock option plan, stock ownership plan or dividend reinvestment
and stock purchase plan of the Company in effect at the Execution Time and the
Company may issue Common
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Stock issuable upon the conversion of securities or the exercise of warrants
outstanding at the Execution Time.
(g) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay all
authorized expenses incident to the performance of its obligations hereunder,
will pay the expenses of printing all documents relating to the offering, and
will reimburse the Underwriters for any expenses (including fees and
disbursements of counsel) incurred by them in connection with the matters
referred to in Section 4(d) hereof and the preparation of memoranda relating
thereto and for any filing fee of the National Association of Securities
Dealers, Inc. relating to the Securities.
(h) The Company will apply the net proceeds from the sale of
the Securities as set forth in the Prospectus and Prospectus Supplement.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3(c) hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Underwriters agree in writing to a later
time, the Registration Statement will become effective not later than (i) 6:00
P.M. New York City time, on the date of determination of the public offering
price, if such determination occurred at or prior to 3:00 P.M. New York City
time on such date or (ii) 12:00 Noon on the business day following the day on
which the public offering price was determined, if such determination occurred
after 3:00 P.M. New York City time on such date; if filing of the Prospectus, or
any supplement thereto, is required pursuant to Rule 424(b), the Prospectus, and
any such supplement, will be filed in the manner and within the time period
required by Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened by the Commission and any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to your satisfaction.
(b) No Underwriter shall have advised the Company that the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact that in your opinion is material,
or omits to state a fact that in your opinion is material and is required to be
stated therein or is necessary to make the statements therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there shall not have been any change, on a
consolidated basis, in the capital stock, long-term debt of the Company and its
subsidiaries, or any adverse change, or any development involving a prospective
adverse change, in the condition (financial or other), business, prospects, net
worth
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or results of operations of the Company and its subsidiaries, or any change in
the rating assigned to any securities of the Company, that, in your judgment,
makes it impractical or inadvisable to offer or deliver the Securities on the
terms and in the manner contemplated in the Prospectus.
(d) At the Closing Date and any settlement date pursuant to
Section 3(c) hereof, the Company shall have furnished to the Underwriters the
opinion of Nelson, Mullins, ▇▇▇▇▇ & Scarborough, L.L.P., counsel to the Company,
dated such date, to the effect that:
(i) the Company and each of its Subsidiaries has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and
is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts
material business;
(ii) the Company and its subsidiaries have all
necessary franchises or permits for natural gas operations in all
communities now served, except as set forth in the Registration
Statement and except where the failure to be so authorized by franchise
or permit does not, in the opinion of such counsel, materially affect
the right of the Company or such subsidiary to the use of its
properties or the conduct of its business; and the franchises of the
Company and its subsidiaries referred to in the Registration Statement
are good and valid except for and subject only to such defects as may
be set forth or referred to in the Registration Statement, and such
others as do not, in the opinion of such counsel, materially affect the
right of the Company or such subsidiary to the use of its properties or
the conduct of its business, and said franchises impose no materially
burdensome restrictions;
(iii) all outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued and are fully
paid and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Subsidiaries
are owned by the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest and, to
the best knowledge of such counsel, any other security interests,
claims, liens or encumbrances;
(iv) the Company's authorized equity capitalization
is as set forth in the Prospectus; the capital stock of the Company
conforms to the description thereof contained in the Prospectus; all
outstanding shares of Common Stock, the Underwritten Securities and any
Option Securities being delivered on the date of such opinion have been
duly authorized and validly issued and are fully paid and
nonassessable; any Option Securities to be delivered after the date of
such opinion have been duly authorized, and, when issued and delivered
to and paid for by the Underwriters pursuant to this Agreement, will be
validly issued, fully paid and nonassessable; the Securities have been
duly authorized for listing, subject to official notice of issuance, on
the New York Stock Exchange; the certificates for the Securities are in
valid and sufficient form; and the holders of outstanding shares of
capital stock of the Company are not entitled to preemptive or other
rights to subscribe for the Securities;
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(v) to the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries of a character required to be
disclosed in the Registration Statement by Item 103 of Regulation S-K
which is not adequately disclosed in the Prospectus, there is no
statute required to be described in the Prospectus that is not
described as required, and there is no franchise, contract or other
document of a character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit, which is not
described or filed as required; and the descriptions in the
Registration Statement or Prospectus, of statutes, legal and
governmental proceedings, contracts and other documents are accurate
and fairly present the information required to be shown; it being
understood that such counsel need express no opinion as to the
financial statements or other financial data contained in the
Registration Statement or the Prospectus and that such counsel may rely
solely on certificates of officers of the Company with respect to
statistical data contained in the Registration Statement or the
Prospectus;
(vi) the Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b) pursuant to
the subparagraph of Rule 424(b) specified in such opinion; to the best
knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement or any part thereof has been issued and
no proceedings for that purpose have been instituted or are pending or
contemplated under the Act; the Registration Statement and the
Prospectus comply as to form in all material respects with the
applicable requirements of the Act and the Exchange Act and the
respective rules thereunder; and such counsel has no reason to believe
that at the Effective Date the Registration Statement contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Preliminary Prospectus or the
Prospectus, as of its date or as of date of such opinion, included any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company;
(viii) no consent, approval, authorization or order
of any court or governmental agency or body is required for the
consummation of the transactions contemplated herein, except such as
have been obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters and such other
approvals (specified in such opinion) as have been obtained;
(ix) neither the issue and sale of the Securities,
nor the consummation of the other transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach of, or constitute a default under the Articles of Incorporation
or By-Laws of the Company or the terms of any indenture or other
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agreement or instrument known to such counsel and to which the Company
or any of its subsidiaries is a party or bound, or any statute, rule,
order or regulation known to such counsel to be applicable to the
Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its subsidiaries; and the
Company has full corporate power and authority to authorize, issue and
sell the Securities as contemplated by this Agreement;
(x) no holders of securities of the Company have
rights to the registration of such securities under the Registration
Statement; and
(xi) to the best knowledge of such counsel, the
Company is not a "holding company" or a "subsidiary company" of a
"holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
In rendering such opinion, such counsel may (A) state, except
as to certain matters involving the absence of the need to obtain the approvals
of the South Carolina Public Service Commission and the Tennessee Regulatory
Authority for the transactions contemplated herein, its opinion is limited to
the federal laws of the United States and the laws of the State of North
Carolina and (B) rely, as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Issuer and public officials.
(e) On the Closing Date and any settlement date pursuant to
Section 3(c) hereof, the Underwriters shall have received from ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, such opinion or
opinions, dated such date, with respect to the issuance and sale of the
Securities, the Registration Statement, the Prospectus (together with any
supplement thereto) and other related matters as the Underwriters may reasonably
require, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(f) On the Closing Date and any settlement date pursuant to
Section 3(c) hereof, the Company shall have furnished to the Underwriters a
certificate of the Company, signed by the President and Chief Executive Officer
or a Vice President and the principal financial or accounting officer of the
Company, dated such date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Prospectus, any
supplement to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material respects on and
as of the date of such certificate with the same effect as if made on
such date and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to such date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any supplement
thereto), there has been no material adverse
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change in the condition (financial or other), earnings, business or properties
of the Company and its subsidiaries, whether or not arising from transactions in
the ordinary course of business, except as set forth or contemplated in the
Prospectus (exclusive of any supplement thereto).
(g) At the Execution Time, at the Closing Date and at any
settlement date pursuant to Section 3(c) hereof, Deloitte & Touche LLP shall
have furnished to the Underwriters a letter or letters, dated such date, in form
and substance satisfactory to the Underwriters, confirming that they are
independent accountants within the meaning of the Act and the Exchange Act and
the respective applicable published rules and regulations thereunder and stating
in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated in the
Registration Statement and the Prospectus and reported on by them
comply in form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a review of
interim financial information as described in SAS 71, Interim Financial
Information, on the unaudited financial statements included in the
Company's Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus;
(iii) on the basis of a reading of the latest
unaudited financial statements made available by the Company and its
subsidiaries; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with respect
to the comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and the audit committee of
the Company and the Subsidiaries; and inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries, nothing came to their
attention which caused them to believe that:
(A) any material modifications should be
made to the unaudited financial statements, if any, included
or incorporated by reference in the Prospectus, for them to be
in conformity with generally accepted accounting principles
as applied in the United States;
(B) the unaudited financial statements, if
any, included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the
applicable accounting requirements of the Act or the Exchange
Act and the published rules and regulations of the Commission
thereunder;
(C) the unaudited capsule information, if
any, included in the Prospectus does not agree with the
amounts set forth in the unaudited
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consolidated financial statements from which such capsule
information was derived or was not determined on a basis
substantially consistent with that of the audited financial
statements included in the Prospectus;
(D) at the date of the latest available
balance sheet read by such accountants, or at a subsequent
specified date not more than five days prior to the Closing
Date, there was any change in the capital stock (except for
the issuance of Common Stock under the Company's Employee
Stock Purchase Plan and Dividend Reinvestment and Stock
Purchase Plan and the Executive Long-Term Incentive Plan) or
any increase in short-term indebtedness or consolidated
long-term debt or any decrease in total common stock equity of
the Company and consolidated subsidiaries or, at the date of
the latest available balance sheet read by such accountants,
there was any increase in consolidated net current liabilities
or any decrease in consolidated net assets, as compared with
amounts shown on the latest balance sheet included in the
Prospectus; or
(E) for the period from the date of the
latest income statement included in the Prospectus to the
closing date of the latest available income statement read by
such accountants there were any decreases, as compared with
the corresponding period of the previous year, in consolidated
operating revenues, total or per share amounts of income
before extraordinary items, net operating income or net
income;
except in all cases set forth in clauses (D) and (E) above for changes,
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Prospectus (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by analysis
or computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
All financial statements and schedules included in
material incorporated by reference into the Prospectus shall be deemed
included in the Prospectus for purposes of this subsection. References
to the Prospectus in this paragraph (e) include any supplement thereto
at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (e) of this Section 6 or (ii) any
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change, or any development involving a prospective change, in or affecting the
business or properties of the Company and its subsidiaries the effect of which,
in any case referred to in clause (i) or (ii) above, is, in the judgment of the
Representative, so material and adverse as to make it impractical or inadvisable
to proceed with the public offering or the delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment thereof)
and the Prospectus (exclusive of any supplement thereto).
(i) Prior to the Closing Date, the Company shall have
furnished to the Underwriters such further information, certificates and
documents as the Underwriters may reasonably request.
If any of the conditions specified in this Section 6 shall not
have fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
substance to the Underwriters and counsel for the Underwriters, this Agreement
and all obligations of the Underwriters hereunder may be cancelled or at any
time prior to, the Closing Date by the Representative. Notice of cancellation
shall be given to the Company in writing or by telephone or facsimile confirmed
in writing.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in any Preliminary Prospectus or the Prospectus, or in any amendment thereof
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that (i) the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter specifically for use in
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connection with the preparation thereof, and (ii) such indemnity with respect to
any Preliminary Prospectus shall not inure to the benefit of any Underwriter (or
any person controlling such Underwriter) from whom the person asserting any such
loss, claim, damage or liability purchased the Securities which are the subject
thereof if such person did not receive a copy of the Prospectus (or the
Prospectus as supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of such Securities to such
person in any case where such delivery is required by the Act and the untrue
statement or omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus (or the Prospectus as supplemented).
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter specifically for use in the
preparation of the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. The Company acknowledges that the statements set forth in
the last paragraph of the cover page and under the heading "Underwriting" in any
Preliminary Prospectus and the Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in any Preliminary Prospectus or the Prospectus, and you, as the Underwriters,
confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnified party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 8. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to appoint counsel
satisfactory to such indemnified party to represent the indemnified party in
such action; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to defend such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
appoint counsel to defend such action and approval by the indemnified party of
such counsel, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (plus any local counsel), approved by the Underwriters in the
case of paragraph (a) of this Section 8, representing the indemnified parties
under such paragraph
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(a) who are parties to such action), (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party; and except
that, if clause (i) or (iii) is applicable, such liability shall be only in
respect of the counsel referred to in such clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) of this
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company on grounds of policy or otherwise, the
Company and the Underwriters shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) to which the Company and one
or more of the Underwriters may be subject in such proportion so that the
Underwriters are responsible for that portion represented by the percentage that
the underwriting discount appearing on the cover page of the Prospectus bears to
the public offering price appearing thereon and the Company is responsible for
the balance; provided, however, that (y) in no case shall any Underwriter
(except as may be provided in any Agreement Among Underwriters relating to the
offering of the Securities) be responsible for any amount in excess of the
underwriting discount applicable to the Securities purchased by such Underwriter
hereunder and (z) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
the Act shall have the same rights to contribution as such Underwriter, and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (y) and (z) of this
paragraph (d). Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this paragraph (d), notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
paragraph (d).
(e) The obligations of the Company under this Section 8 shall
be in addition to any liability that the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company (including any person who, with
his consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase Securities agreed to be purchased by such Underwriter or
Underwriters hereunder and
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such failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective proportions which
the amount of Securities set forth opposite their names in Schedule I hereto
bears to the aggregate amount of Securities set forth opposite the names of the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate amount of Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule I hereto, the remaining Underwriters
shall have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such nondefaulting Underwriters do not
purchase all the Securities, this Agreement will terminate without liability to
any nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding seven days, as the Underwriters shall determine
in order that the required changes in the Registration Statement and the
Prospectus or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Company and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Underwriters, by notice given to
the Company prior to delivery of and payment for the Securities, if prior to
such time (i) trading in the Company's Common Stock shall have been suspended by
the Commission or the New York Stock Exchange or trading in securities generally
on the New York Stock Exchange or the American Stock Exchange shall have been
suspended or limited or minimum or maximum prices shall have been established on
either of such Exchanges, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities, (iii) there shall have occurred
any outbreak or escalation of hostilities, declaration by the United States of a
national emergency or war or other calamity or crises the effect of which on the
financial markets is such as to make it, in the judgment of the Representative,
impracticable or inadvisable to market the Securities; (iv) the Company shall
have failed, refused or been unable, at or prior to the Closing Date, to perform
any agreement on its part to be performed hereunder or (v) any other condition
of the Underwriters' obligations hereunder is not fulfilled. Any such
termination shall be without liability of any party to any other party except
that the provisions of Section 7 and Section 8 hereof shall at all times be
effective. If you elect to terminate this Agreement as provided in this Section,
the Company shall be notified promptly by you by telephone, telex or telecopy,
confirmed by letter.
11. Representations and Agreements to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
Company or its officers set forth in or made pursuant to this Agreement and the
agreements of the Underwriters contained in Section 8 hereof will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of the officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Securities.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Underwriters, will be mailed,
delivered or transmitted via facsimile and confirmed to the Representative at
__________________________; or, if sent to
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Company, will be mailed, delivered or transmitted via facsimile and confirmed to
it at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇.▇. ▇▇▇▇▇,
Vice President and Treasurer.
13. Successors. This Agreement will inure to the benefit of
and binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
14. Representation of Underwriters. Any action under this
Agreement taken by the Representative will be binding on each Underwriter.
15. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW York.
16. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
executed counterparts shall together constitute one and the same Agreement.
[Remainder of page intentionally left blank]
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
PIEDMONT NATURAL GAS COMPANY, INC.
By: _____________________________
Name:
Title:
foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
---------------------
---------------------
---------------------
By: _________________
Name:
Title:
20
SCHEDULE I
Number of Shares of Underwritten
Underwriters Securities to be Purchased
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--------------------------
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Total.......................
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