EXHIBIT 1.3
PIEDMONT NATURAL GAS COMPANY, INC.
DEBT SECURITIES
UNDERWRITING AGREEMENT
__________ __, 2003
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
As Representative(s) of the Several Underwriters,
Wachovia Capital Markets, LLC
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.
SunTrust Capital Markets, Inc.
BB&T Capital Markets, a division of ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇▇, Inc.
Ladies and Gentlemen:
Piedmont Natural Gas Company, Inc., a North Carolina corporation (the
"Company"), confirms its agreement with the several Underwriters listed in
Schedule A hereto (the "Underwriters", which term may refer to a single
Underwriter if only one is listed in Schedule A) as follows:
1. Description Of Securities. The Company proposes to issue and sell to
the several Underwriters securities of the title, amount and particular terms
set forth or referred to in Schedule B hereto ("Securities"). The Securities are
to be issued under the Indenture, dated as of April 1, 1993, between Piedmont
Natural Gas Company, Inc., a New York corporation (the "Predecessor Company"),
and Citibank, N.A., as trustee (the "Trustee"), as amended by the First
Supplemental Indenture, dated as of February 25, 1994, among the Company, the
Predecessor Company and the Trustee, and the Second Supplemental Indenture,
dated as of June 15, 2003, between the Company and the Trustee (collectively,
the "Indenture").
2. Representations And Warranties Of The Company. The Company
represents and warrants to, and agrees with, each Underwriter that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"). Two registration statements on
such form (with the file numbers set forth in Schedule B hereto) with respect to
the offering and sale of the Securities, including a related preliminary
prospectus, have been prepared by the Company in conformity with the
requirements of the Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the rules and regulations ("Rules and Regulations") of the Securities
and Exchange Commission ("Commission") thereunder, filed with the Commission and
become effective. The registration statements and prospectus may have been
amended or supplemented prior to the date of this Agreement; if any such
amendment or supplement was made, such amendment or supplement was filed with
the Commission, and any such amendment has become effective. No stop order
suspending the effectiveness of the registration statements has been issued, and
no proceeding for that purpose has been instituted or threatened by the
Commission. A prospectus supplement ("Prospectus Supplement") setting forth the
terms of the Securities and of their sale and distribution has been so prepared
and will be filed pursuant to Rule 424(b) of the Act. The Company has delivered
to you and counsel for the Underwriters copies of the registration statements
and prospectus, any such amendment or supplement, the Prospectus Supplement 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 statements and of each amendment thereto for
counsel for the Underwriters and three conformed copies thereof for you). The
registration statements, as they may have heretofore been amended or
supplemented is referred to herein as the "Registration Statements", and the
final form of prospectus included in the Registration Statements, as
supplemented by the Prospectus Supplement, is referred to herein as the
"Prospectus". Each form of Prospectus, or Prospectus and Prospectus Supplement,
if any, heretofore made available for use in offering the Securities is referred
to herein as a "Preliminary Prospectus". Any reference herein to a Registration
Statement, the Prospectus, any amendment or supplement thereto or any
Preliminary Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to a Registration Statement or
Prospectus shall be deemed to refer to and include the filing after the
execution hereof of any document with the Commission deemed to be incorporated
by reference therein.
(b) Each part of the Registration Statements, when such part became or
becomes effective, the Preliminary Prospectus on the date of filing thereof with
the Commission, and the Prospectus and any amendment or supplement thereto, on
the date of filing thereof with the Commission and at the Closing Date (as
hereinafter defined), complied or will comply in all material respects with the
requirements of the Act, the Trust Indenture Act, the Exchange Act and the Rules
and Regulations; each part of the Registration Statements, when such part became
or becomes effective, did not or will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; the Preliminary
Prospectus, and the Prospectus and any amendment or supplement thereto, on the
date of filing thereof with the Commission and at the Closing Date, did not or
will not include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; except that the
foregoing shall not apply to statements in or omissions from any such document
in reliance upon, and in conformity with, written information furnished to the
Company by you, or by any Underwriter through you, specifically for use in the
preparation thereof. The Indenture, including any amendment and supplement
thereto, pursuant to which the Securities will be issued, conforms, or, in the
case of any amendment or supplement filed after the date of this Agreement, will
conform with the requirements of the Trust Indenture Act and the Rules and
Regulations thereunder.
(c) The documents incorporated or deemed to be incorporated by
reference in the Registration Statements and the Prospectus when they became
effective or at the time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the requirements of the
Act, the Exchange Act, and the Rules and Regulations.
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(d) The financial statements of the Company and its consolidated
subsidiaries included or incorporated in the Registration Statements and
Prospectus fairly present the financial condition of the Company and its
consolidated 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 accounting principles generally
accepted in the United States consistently applied throughout the periods
involved (except as otherwise stated therein). The pro forma financial
statements and the related notes thereto included or incorporated in the
Registration Statements and the Prospectus present fairly the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to
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; and all of the
outstanding shares of capital stock of each Subsidiary have been duly authorized
and validly issued and are fully paid and non-assessable, 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.
(f) The Indenture and the Securities have been duly authorized, the
Indenture has been duly qualified under the Trust Indenture Act, executed and
delivered and constitutes, and the Securities, when duly executed,
authenticated, issued and delivered as contemplated hereby and by the Indenture,
will constitute, valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, reorganization, arrangement or other similar
laws now or hereafter in effect affecting the rights of creditors generally and
general principles of equity and rules of law governing and limiting the
availability of specific performance, injunctive relief and other equitable
remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(g) 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 Statements 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 Statements
or Prospectus, or to be filed as an exhibit, which is not described or filed as
required, and the description in the Registration Statements and Prospectus of
statutes, legal and governmental proceedings, contracts and other documents are
accurate and fairly present the information required to be shown.
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(h) The Company's authorized equity capitalization is as set forth in
the Prospectus (if contained therein).
(i) The execution, delivery and performance of the Indenture, of this
Agreement, the issuance and sale of the Securities, the consummation of the
transactions herein contemplated and the fulfillment of the terms hereof will
not 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; and the Company has full power and
authority to authorize, issue and sell the Securities as contemplated by this
Agreement.
(j) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance and sale of the
Securities by the Company, except such as have been obtained and made under the
Act and the Trust Indenture Act and as may be required under state securities
laws and such other approvals as have been obtained.
(k) This Agreement has been duly authorized, executed and delivered by
the Company.
(l) 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 Statements 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 Statements are good and valid except for and subject only to
such defects as may be set forth or referred to in the Registration Statements,
and such others as do not 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.
(m) Except as described in the Registration Statement and except as
would not, singly or in the aggregate, result in a material adverse effect on
the condition of the Company or in its financial position or results of
operations:
(i) the business, assets and properties of the Company are and
have been operated and maintained in compliance with all applicable
federal, state, city, county and local environmental protection laws
and regulations (collectively, the "Environmental Laws");
(ii) no event has occurred which, with or without the passage
of time or the giving of notice, or both, would constitute
non-compliance by the Company with, or a violation by the Company of,
the Environmental Laws; and
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(iii) the Company has not caused or permitted to exist, as a
result of an intentional or unintentional act or omission, a disposal,
discharge or release of solid wastes, pollutants or hazardous
substances, on or from any site which currently is or formerly was
owned, leased, occupied or used by it in violation of the Environmental
Laws.
(n) Except as described in the Registration Statement and except as
would not, singly or in the aggregate, result in a material adverse effect on
the condition of the Company or in its financial position or results of
operations, (a) no labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent, and (b) the
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its or any subsidiary's principal suppliers, manufacturers,
customers or contractors.
(o) The Company is a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended (the "Holding Company Act") that
is exempt from all provisions of the Holding Company Act, except Section 9(a)(2)
thereof, by order of the Commission pursuant to Section 3(a)(5) thereof. Neither
the execution, delivery and performance by the Company of this Agreement or the
issuance of the Securities violates any provision of the Holding Company Act or
any rules or regulations thereunder.
(p) No holders of securities of the Company have rights to registration
of such securities under the Registration Statements.
3. Purchase, Sale And Delivery Of Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell to
each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at the purchase price set forth in Schedule B hereto,
the amount of Securities set forth opposite the name of such Underwriter in
Schedule A hereto.
The Securities to be purchased by the Underwriters will be delivered by
the Company to you for the accounts of the several Underwriters at the office
specified in Schedule B hereto against payment of the purchase price therefor by
the method, in the funds, on the date and at the times specified in such
Schedule B, or at such other time not later than eight full business days
thereafter as you and the Company determine, such time being herein referred to
as the "Closing Date". If Schedule B indicates that the Securities are to be
delivered in definitive form, such Securities shall be in such authorized
denominations and registered in such names as you may request upon at least two
business days' prior notice to the Company and will be made available for
checking and packaging at the office at which they are to be delivered at the
Closing Date (or such other office as may be specified for that purpose in
Schedule B) at least one business day prior to the Closing Date. If Schedule B
indicates that the Securities are to be delivered in global book-entry form,
such Securities shall be in the denominations specified in the applicable letter
of representations between the Company, the Trustee and The Depository Trust
Company ("DTC"), shall be registered in the name of DTC or a nominee of DTC and
shall be made available for checking at the office at which they are to be
delivered at the Closing Date (or such other office as may be specified for that
purpose in Schedule B) at least one business day prior to the Closing Date.
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It is understood that you, acting individually and not in a
representative capacity, may (but shall not be obligated to) make payment to the
Company on behalf of any other Underwriter for Securities to be purchased by
such Underwriter. Any such payment by you shall not relieve any such Underwriter
of any of its obligations hereunder.
The Company will pay to you, at the Closing Date, for the account of
each Underwriter any commission or other compensation that is specified in
Schedule B hereto. Such payment will be made in the manner and type of funds
specified in Schedule B, or to the extent provided in Schedule B may be deducted
by you from the purchase price of the Securities.
4. Covenants. The Company covenants and agrees with each Underwriter
that:
(a) The Company will cause the Prospectus Supplement to be filed as
required by Section 2(a) hereof (but only if you have not reasonably objected
thereto by notice to the Company after having been furnished a copy a reasonable
time prior to filing) and will notify you promptly of such filing. During the
period in which a prospectus relating to the Securities is required to be
delivered under the Act, the Company will notify you promptly of the time when
any subsequent amendment to a Registration Statement has become effective or any
subsequent supplement to the Prospectus has been filed and of any request by the
Commission for any amendment or supplement to a Registration Statement or the
Prospectus or for additional information; it will prepare and file with the
Commission, promptly upon your request, any amendments or supplements to the
Registration Statements or Prospectus that, in your reasonable opinion, may be
necessary or advisable in connection with the distribution of the Securities by
the Underwriters; it will file no amendment or supplement to the Registration
Statements or Prospectus (other than any prospectus supplement relating to the
offering of other securities registered under the Registration Statements or any
document required to be filed under the Exchange Act that upon filing is deemed
to be incorporated by reference therein) to which you shall reasonably object by
notice to the Company after having been furnished a copy a reasonable time prior
to the filing; and it will furnish to you at or prior to the filing thereof a
copy of any such prospectus supplement or any document that upon filing is
deemed to be incorporated by reference in the Registration Statements or
Prospectus.
(b) The Company will advise you, promptly after it shall receive notice
or obtain knowledge thereof, of the issuance by the Commission of any stop order
suspending the effectiveness of a Registration Statement, of the suspension of
the qualification of the Securities for offering or sale in any jurisdiction, or
of the initiation or threatening of any proceeding for any such purpose; and it
will promptly use its best efforts to prevent the issuance of any stop order or
to obtain its withdrawal if such a stop order should be issued.
(c) Within the time during which a prospectus relating to the
Securities is required to be delivered under the Act, the Company will comply as
far as it is able with all requirements imposed upon it by the Act and by the
Rules and Regulations, as from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Securities as contemplated
by the provisions hereof and the Prospectus. If during such period any event
occurs as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements
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therein, in the light of the circumstances then existing, not misleading, or if
during such period it is necessary to amend or supplement the Registration
Statements or the Prospectus to comply with the Act the Company will promptly
notify you and will amend or supplement the Registration Statements or the
Prospectus (at the expense of the Company) so as to correct such statement or
omission or effect such compliance.
(d) The Company will use its best efforts to qualify the Securities for
sale under the securities laws of such jurisdictions as you reasonably designate
and to continue such qualifications in effect so long as required for the
distribution of the Securities, except that the Company shall not be required in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction. The Company will also arrange
for the determination of the eligibility for investment of the Securities under
the laws of such jurisdictions as you reasonably request.
(e) The Company will furnish to the Underwriters and counsel for the
Underwriters, without charge, one signed and three conformed copies of the
Registration Statements, the Prospectus (including all documents incorporated by
reference therein) and all amendments and supplements to the Registration
Statements or Prospectus that are filed with the Commission during the period in
which a prospectus relating to the Securities is required to be delivered under
the Act (including all documents filed with the Commission during such period
that are deemed to be incorporated by reference therein), in each case as soon
as available and in such quantities as you may from time to time reasonably
request.
(f) The Company will make generally available to its security holders
as soon as practicable, but in any event not later than 15 months after the end
of the Company's current fiscal quarter, an earnings statement (which need not
be audited) covering a 12-month period beginning after the date upon which the
Prospectus Supplement is filed pursuant to Rule 424 under the Act that shall
satisfy the provisions of Section 11(a) of the Act and Rule 158 thereunder.
(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, for any filing fee of
the National Association of Securities Dealers, Inc. relating to the Securities,
for any fees charged by investment rating agencies for rating the Securities
and, if the Securities are issued in global book-entry form, for any fees
charged by DTC. If the sale of Securities to be purchased by the several
Underwriters as provided for herein is not consummated by reason of any failure,
refusal or inability on the part of the Company to perform any agreement on its
part to be performed, or because any other condition of the Underwriters'
obligations hereunder required to be fulfilled by the Company is not fulfilled,
the Company will reimburse the several Underwriters for all reasonable
out-of-pocket disbursements (including fees and disbursements of counsel)
incurred by the Underwriters in connection with their investigation, preparing
to market and marketing the Securities or in contemplation of performing their
obligations hereunder. The Company shall not
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in any event be liable to any of the Underwriters for loss of anticipated
profits from the transactions covered by this Agreement.
(h) The Company will apply the net proceeds from the sale of the
Securities as set forth in the Prospectus and Prospectus Supplement.
(i) The Company will not, directly or indirectly, offer or sell, or
determine to offer or sell, any debt securities that are substantially similar
to the Securities (except under prior contractual commitments) during the period
beginning at the time of execution of this Agreement and ending on the first
business day after the Closing Date without your prior written consent.
5. Conditions Of Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for Securities as provided herein shall
be subject to the accuracy, as of the date hereof and the Closing Date (as if
made at the Closing Date), of the representations and warranties of the Company
herein, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statements or any part thereof shall have been issued and no proceeding for that
purpose shall have been instituted or, to the knowledge of the Company or any
Underwriter, threatened by the Commission, and any request of the Commission for
additional information (to be included in the Registration Statements or the
Prospectus or otherwise) shall have been complied with to your satisfaction.
(b) No Underwriter shall have advised the Company that the Registration
Statements 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 Statements
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 or
results of operations of the Company and its subsidiaries, or any downgrading in
the rating assigned to any securities of the Company, by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) of the Act) or any public announcement that any such organization has
under surveillance or review its ratings of any debt securities of the Company
(other than any announcement with positive implications of a possible upgrade,
and no implication of a possible downgrading, of such rating).
(d) You shall have received the opinion of Nelson, Mullins, ▇▇▇▇▇ &
Scarborough, L.L.P., counsel for the Company, dated the Closing 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
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the laws of each jurisdiction which requires such qualification wherein
it owns or leases material properties or conducts material business;
and all of the outstanding shares of capital stock of each Subsidiary
have been duly authorized and validly issued and are fully paid and
non-assessable, 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 interest, claims, liens
or encumbrances;
(ii) The Indenture and the Securities have been duly
authorized, the Indenture has been duly qualified under the Trust
Indenture Act, executed and delivered, the Securities purchased by the
Underwriters have been duly executed, authenticated, issued and
delivered, and the Indenture and such Securities constitute, when
executed, authenticated, issued and delivered in the manner provided in
the Indenture, will constitute, valid and legally binding obligations
of the Company, enforceable in accordance with their terms, subject, as
to enforcement, to applicable bankruptcy, insolvency, moratorium,
reorganization, arrangement or other similar laws now or hereafter in
effect affecting the rights of creditors generally and general
principles of equity and rules of law governing and limiting the
availability of specific performance, injunctive relief and other
equitable remedies (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(iii) The documents incorporated by reference in the
Prospectus (other than the financial statements and supporting
schedules included therein or omitted therefrom, as to which such
counsel expresses no opinion), when they were filed with the Commission
complied as to form in all material respects with the requirements of
the Exchange Act and the Rules and Regulations.
(iv) 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 Statements by Item 103 of Regulation S-K
which is not 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 Statements or Prospectus,
or to be filed as an exhibit, which is not described or filed as
required; and the descriptions in the Registration Statements and
Prospectus of statutes, legal and governmental proceedings, and other
matters of law (other than (i) descriptions under the caption "Material
United States Federal Income Tax Consequences" in the Prospectus and
(ii) the matters covered by the opinion required by Section 5(d)(xi)
herein), the Company's certificate of incorporation and bylaws,
contracts and other documents are correct in all material respects and
fairly present the information required to be shown;
(v) The Registration Statements have become effective under
the Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) under the Act specified in such opinion on
the date specified therein, and, to the
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best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statements or of any part thereof has
been issued and no proceedings for that purpose have been instituted or
are pending or contemplated under the Act;
(vi) Each part of the Registration Statements, when such part
became effective, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at the
Closing Date, complied as to form in all material respects with the
requirements of the Act, the Trust Indenture Act, the Exchange Act and
the Rules and Regulations; such counsel has no reason to believe that
either any part of the Registration Statements, when such part became
effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Preliminary
Prospectus or the Prospectus and any amendment or supplement thereto,
on the date of filing thereof with the Commission or at the Closing
Date, included an 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; it being understood that
such counsel need express no opinion as to the financial statements or
other financial data included in any of the documents mentioned in
this clause and that such counsel may rely solely on certificates
of officers of the Company with respect to statistical data contained
in such documents;
(vii) The Company's authorized equity capitalization is as set
forth in the Prospectus (if contained therein);
(viii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation
of the transactions contemplated by this Agreement in connection with
the issuance and sale of the Securities by the Company, except such as
have been obtained and made under the Act and the Trust Indenture Act
and as may be required under state securities laws and such other
approvals (specified in such opinion) as have been obtained;
(ix) The execution, delivery and performance of the Indenture,
this Agreement, the issue and sale of the Securities, the consummation
of the other transactions herein contemplated or the fulfillment of the
terms hereof will not 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 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 power and
authority to authorize, issue and sell the Securities as contemplated
by this Agreement;
(x) This Agreement has been duly authorized, executed and
delivered by the Company;
(xi) 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
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the Registration Statements 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 Statements are good and valid except for and subject only
to such defects as may be set forth or referred to in the Registration
Statements, 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; and
(xii) The Company is a "holding company" within the meaning of
the Holding Company Act that is exempt from all provisions of the
Holding Company Act, except Section 9(a)(2) thereof, by order of the
Commission pursuant to Section 3(a)(5) thereof. Neither the execution,
delivery and performance of this Agreement nor the issuance of the
Securities violates any provision of the Holding Company Act or any
rules or regulations thereunder.
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 Company and public officials. The opinion to be
delivered pursuant to Sections 5(d)(iii) and 5(d)(xi) may be given by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, Vice President, Corporate Counsel and Secretary of the Company, in
lieu of Nelson, Mullins, ▇▇▇▇▇ & Scarborough, L.L.P.
(e) You shall have received from ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP,
counsel for the Underwriters, such opinion or opinions, dated the Closing Date,
with respect to the validity of the Securities, the Registration Statements, the
Prospectus and other related matters as you reasonably may request, and such
counsel shall have received such papers and information as they request to
enable them to pass upon such matters. In rendering their opinion, such counsel
may rely upon the opinion of Nelson, Mullins, ▇▇▇▇▇ & Scarborough, L.L.P.,
referred to above as to all matters governed by North Carolina law, and may rely
as to the execution and authentication of the Securities and the execution of
the Indenture on certificates of the Trustee.
(f) At or prior to the time of execution of this Agreement and at the
Closing Date, you shall have received a letter from Deloitte & Touche LLP, dated
the date of delivery thereof, to the effect set forth in Exhibit I hereto.
(g) You shall have received from the Company a certificate, signed by
the President and Chief Executive Officer or a Vice President and by the
principal financial or accounting officer of the Company, dated the Closing
Date, to the effect that, to the best of their knowledge based upon reasonable
investigation:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made at and as of the Closing
Date, and the
11
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statements has been issued, and no proceeding for that
purpose has been instituted or is threatened, by the Commission; and
(iii) Since the date of this Agreement, there has occurred no
event required to be set forth in an amendment or supplement to the
Registration Statements or Prospectus that has not been so set forth
and there has been no document required to be filed under the Exchange
Act and the Rules and Regulations thereunder that upon such filing
would be deemed to be incorporated by reference in the Prospectus that
has not been so filed.
(h) The Company shall have furnished to you such further certificates
and documents as you shall have reasonably requested.
(i) At or prior to the time of execution of this Agreement and at the
Closing Date, you shall also have received a letter from Deloitte & Touche LLP,
dated the date of delivery thereof, regarding the financial statements and other
financial information of North Carolina Natural Gas Corporation included or
incorporated by reference in the Prospectus. Such letter shall be in
substantially the form of the letter from Deloitte & Touche LLP regarding the
Company's financial statements pursuant to Exhibit I hereto or in such other
form reasonably acceptable to you.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you. The Company will furnish you with such conformed copies of
such opinions, certificates, letters and other documents as you shall reasonably
request.
6. Indemnification And Contribution. (a) The Company will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
part of a Registration Statement when such part became effective, or in a
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment 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 will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by it in connection with investigating or defending against such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company shall 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 an 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 you, or by any Underwriter through you, specifically for use in
the preparation thereof.
12
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any part of a Registration Statement when such part became
effective, or in a Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment 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,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made therein in
reliance upon and in conformity with written information furnished to the
Company by you, or by such Underwriter through you, specifically for use in the
preparation thereof, and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending against any such loss, claim, damage, liability or action as such
expenses are incurred. The Company acknowledges that the statements set forth in
the penultimate paragraph of the cover page, under the heading "Plan of
Distribution" in any Preliminary Prospectus and the Prospectus and under the
heading "Underwriting" in the Prospectus Supplement constitute the only
information furnished in writing by or on behalf of such Underwriters for
inclusion in the documents referred to in the forgoing indemnity, and you
confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party (i)
shall not relieve it from any liability which it may have to any indemnified
party under such subsection unless and to the extent such failure prejudices the
indemnifying party of substantial rights or defenses and (ii) shall not relieve
it, in any event, from any liability that it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall 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 6 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
13
(a) of this Section 6, representing the indemnified parties under such paragraph
(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) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering of the Securities (before deducting
expenses) received by the Company bear to the total compensation or profit
(before deducting expenses) received or realized by the Underwriters from the
purchase and resale, or underwriting, of the Securities. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were to be determined by pro rata
allocations (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the first sentence of this subsection
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending against any
action or claim that is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that such underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
14
(e) The obligations of the Company under this Section 6 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 6 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 Statements as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statements and to each person, if any, who controls the Company
within the meaning of the Act.
7. Representations And Agreements To Survive Delivery. All
representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the several
Underwriters contained in Section 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling persons, or the Company or any of its officers,
directors or any controlling persons, and shall survive delivery of and payment
for the Securities.
8. Substitution Of Underwriters. (a) If any Underwriter or Underwriters
shall fail to take up and pay for the amount of Securities agreed by such
Underwriter or Underwriters to be purchased hereunder, upon tender of such
Securities in accordance with the terms hereof, and the amount of Securities not
purchased does not aggregate more than 10% of the total amount of Securities set
forth in Schedule A hereto, the remaining Underwriters shall be obligated to
take up and pay for (in proportion to their respective underwriting obligations
hereunder as set forth in Schedule A hereto except as may otherwise be
determined by you) the Securities that the withdrawing or defaulting Underwriter
or Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and pay
for the amount of Securities agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such Securities in accordance with the terms
hereof, and the amount of Securities not purchased aggregates more than 10% of
the total amount of Securities set forth in Schedule A hereto, and arrangements
satisfactory to you and the Company for the purchase of such Securities by other
persons are not made within 36 hours thereafter, this Agreement shall terminate.
In the event of any such termination the Company shall not be under any
liability to any Underwriter (except to the extent provided in Section 4(g) and
Section 6 hereof) nor shall any Underwriter (other than an Underwriter who shall
have failed, otherwise than for some reason permitted under this Agreement, to
purchase the amount of securities agreed by such Underwriter to be purchased
hereunder) be under any liability to the Company (except to the extent provided
in Section 6 hereof).
9. Termination. You shall have the right by giving notice as
hereinafter specified at any time at or prior to the Closing Date, to terminate
this Agreement if (i) 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, (ii) any other condition of the Underwriters' obligations
hereunder is not fulfilled, (iii) any suspension or limitation of trading in
securities generally on the New York Stock Exchange, or any setting of maximum
prices for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter market if,
in the judgement of such Underwriter, any such event or any condition giving
rise thereto or existing concurrently therewith makes it impracticable or
inadvisable to proceed with the purchase of Securities on the terms and in the
manner contemplated by the Prospectus,
15
(iv) a banking moratorium shall have been declared by Federal or New York
authorities, (v) the occurrence of any material disruption in the settlement or
clearing services shall have occurred or (vi) any outbreak or escalation of
hostilities, declaration of war by Congress, any other substantial national or
international calamity or emergency shall have occurred since the execution of
this Agreement that, in your judgment, makes it impractical or inadvisable to
proceed with the completion of the sale of and payment for the Securities to be
purchased by the Underwriters. Any such termination shall be without liability
of any party to any other party except that the provisions of Section 4(g) and
Section 6 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.
10. Notices. All notices or communications hereunder shall be in
writing and if sent to you shall be mailed, delivered, telexed or telecopied and
confirmed to you at the address set forth for that purpose in Schedule B hereto,
or if sent to the Company, shall be mailed, delivered, telexed or telecopied and
confirmed to the Company at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Treasurer. Notice to any Underwriter pursuant to
Section 6 hereof shall be mailed, delivered, telexed or telecopied and confirmed
to such Underwriter's address as it appears in Schedule B or other notice
furnished to the Company in writing for the purpose of communications hereunder.
Any party to this Agreement may change such address for notices by sending to
the parties to this Agreement written notice of a new address for such purpose.
11. Parties. This Agreement shall inure to the benefit of and be
binding upon the Company and the Underwriters and their respective successors
and the controlling persons, officers and directors referred to in Section 6
hereof, and no other person will have any right or obligation hereunder. No
purchaser of any Securities from any Underwriter shall be construed a successor
or assign by reason merely of such purchase.
In all dealings with the Company under this Agreement, you shall act on
behalf of each of the several Underwriters, and any action under this Agreement
taken by you or by any one of you designated in Schedule B hereto will be
binding upon all the Underwriters.
12. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[Remainder of page intentionally left blank]
16
If the foregoing correctly sets forth the understanding between the
Company and the several Underwriters, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement between the Company and the several Underwriters. Alternatively, the
execution of this Agreement by the Company and its acceptance by or on behalf of
the Underwriters may be evidenced by an exchange of telecopied or other written
communications.
Very truly yours,
PIEDMONT NATURAL GAS COMPANY, INC.
By
-------------------------------
Name:
Title:
ACCEPTED as of the date first above written
on behalf of ourselves and as
Representative(s) of the other Underwriters
named in Schedule A hereto.
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
By
----------------------------------------------
By
-------------------------------------------
Name:
Title:
SCHEDULE A
AMOUNT OF AMOUNT OF
SECURITIES TO SECURITIES TO
BE PURCHASED BE PURCHASED
UNDERWRITER % NOTES % NOTES
----------- ------------- -------------
------------ ------------
Total.............. $100,000,000 $100,000,000
============ ============
SCHEDULE B
Registration Statements No. 333-106268 and 333-62222
Titles of Securities: Medium Term Notes, Series E
Amount of Securities: $200,000,000
Purchase Price:
Closing
Office for delivery of Securities:
Office for payment for Securities:
Date and time of Closing:
Method of Payment: Wire Transfer
Type of Funds:
Underwriting Commission/Discount
Amount:
Method of payment:
Address for notices per Section 10: 4 World Financial Center, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Name of Underwriter to act: per Section 11: ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Form of Securities: Book-Entry
Particular terms of the Securities
Interest:
Maturity:
Other terms:
EXHIBIT I
1. They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the Exchange
Act and the Rules and Regulations.
2. In their opinion, the financial statements and any schedules audited
by them and included or incorporated by reference in the Registration Statements
and Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and the
published rules and regulations of the Commission thereunder.
3. 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.
4. 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
accounting principles generally accepted 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 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) the unaudited pro forma consolidated condensed 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 or the pro
forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) 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 date of such letter, there was any
change in the capital stock (except for the issuance of Common
Stock under the Company's Employee Stock Purchase Plan,
Executive Long-Term Incentive Plan and Dividend Reinvestment
and Stock Purchase 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
(F) for the period from the date of the latest income statement
included in the Prospectus to the 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, utility
operating income or net income; except in all cases set forth
in clauses (E) and (F) above for changes, increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter.
5. 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
Exhibit I include any supplement thereto at the date of the letter.
