1
Exhibit 1-A
DELMARVA POWER & LIGHT COMPANY
Common Stock
UNDERWRITING AGREEMENT
___________, 199_
To the Representative named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Ladies and Gentlemen:
The undersigned, Delmarva Power & Light Company, a Delaware and
Virginia corporation (the "Company"), hereby confirms its agreement with each of
the several Underwriters hereinafter named as follows:
The term "Underwriters" as used herein shall be deemed to mean the
firm or corporation or the several firms or corporations named in Schedule II
hereto and any underwriter substituted as provided in Section 3 and the term
"Underwriter" shall be deemed to mean one of such Underwriters. If the firm or
firms listed in Schedule I hereto (the "Representative") are the same as the
firm or firms listed in Schedule II hereto, then the terms "Underwriters" and
"Representative", as used herein, shall each be deemed to refer to such firm or
firms. The Representative represents that it has been authorized by the
Underwriters to execute this Agreement on their behalf and to act for them in
the manner herein provided. All obligations of the Underwriters hereunder are
several and not joint. If more than one firm is named in Schedule I hereto, any
action under or in respect of this Agreement may be taken by such firms jointly
as the Representative or by one of the firms acting on behalf of the
Representative and such action will be binding upon all the Underwriters.
1. Description of Shares. The Company has authorized by appropriate
corporate action and proposes to issue and sell to the several Underwriters its
Common Stock, Par Value $2.25 ("Common Stock"), in the amount specified in
Schedule I hereto (the "Firm Shares").
2
-2-
In addition, for the sole purpose of covering over-allotments in
connection with the sale of the Firm Shares, the Company, as provided in Section
3, has granted to the Underwriters an option (the "Option") to purchase from the
Company the Option Shares (as defined in Section 3), up to the maximum amount
specified in Schedule I hereto, at the same price per share as the Firm Shares.
The Firm Shares and the Option Shares are hereinafter collectively referred to
as the "Shares".
2. Representations, Warranties and Agreements of the Company. The
Company represents and warrants to, and agrees with, the several Underwriters
that:
(a) A registration statement (identified in Schedule I hereto),
together with amendments thereto, if any, with respect to the Shares has
been prepared by the Company and filed with the Securities and Exchange
Commission (the "Commission") in conformity with the rules, regulations
and releases of the Commission (the "Rules and Regulations") under the
Securities Act of 1933, as amended (the "Act"). Such registration
statement has been declared effective by the Commission. Copies of said
registration statement, together with all amendments thereto, if any,
including the exhibits filed therewith, have heretofore been delivered to
the Representative, and copies of any amendments thereto, including the
exhibits filed therewith, which shall be subsequently filed will be so
delivered to the Representative. As used in this Agreement, the term
"Registration Statement" means said registration statement, including
exhibits, financial statements and all documents incorporated therein by
reference, as amended to the date hereof. As used in the Agreement, (i)
the term "Prospectus" means (A) if a preliminary prospectus supplement
with respect to the Shares was prepared in conformity with the Rules and
Regulations and, together with the prospectus in the form included in the
Registration Statement, filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations ("Rule 424(b)"), such preliminary prospectus
supplement and prospectus completed to reflect the terms of the sale of
the Shares, (B) if no such preliminary prospectus supplement was so
prepared and filed, the prospectus in the form included in the
Registration Statement as to be supplemented by a prospectus supplement
reflecting the terms of the offering of the Shares or (c) if the Shares
are to be offered without a prospectus supplement, the prospectus in the
form included in the Registration Statement completed to reflect the terms
of such offering, in each case proposed to be filed on or about the date
hereof with the Commission pursuant to Rule 424(b),
3
-3-
and (ii) the term "Prospectus Supplement" means the prospectus supplement
proposed so to be filed with the Commission, in each case including all
documents incorporated in such prospectus and prospectus supplement by
reference (the "Incorporated Documents"). In the event of any amendment to
the Registration Statement after the date hereof, the term "Registration
Statement" also shall mean such Registration Statement as so amended. In
the event of any supplement to the Prospectus, after the date of the
filing with the Commission of the Prospectus pursuant to Rule 424(b), the
term "Prospectus" also shall mean such Prospectus as so amended or
supplemented; provided, however, that any supplement to the Prospectus
filed with the Commission pursuant to Rule 424(b) with respect to an
offering of the Company's securities other than the Shares shall not be
deemed to be a supplement to or part of the Prospectus. Any reference
herein to the terms "amend", "amendment" or "supplement" with respect to
the Registration Statement or the Prospectus shall be deemed to refer to
and include the filing of any document under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), deemed to be incorporated
therein after the date hereof and prior to the termination of the offering
of the Shares by the Underwriters.
(b) No stop order suspending the effectiveness of the Registration
Statement, nor any order preventing or suspending use of the Prospectus
nor any order directed to the adequacy or accuracy of any Incorporated
Document has been issued by the Commission, and no proceeding for any such
purpose has been initiated or is pending or, to the knowledge of the
Company, is contemplated by the Commission.
(c) On the date of this Agreement and at all times subsequent hereto
up to and at the Closing Date (as defined in Section 3) and, in respect of
the Option Shares, up to and at the Option Closing Date (as defined in
Section 3), (i) the Registration Statement and the Prospectus do and will,
contain all statements and information which are required to be included
therein by the Act and the Rules and Regulations and will conform, in all
material respects, to the requirements of the Act and the Rules and
Regulations; (ii) the Registration Statement does not and will not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading; and (iii) the Prospectus does not and will not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to
4
-4-
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes
no representations or warranties as to information contained in or omitted
from the Registration Statement or the Prospectus, in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter expressly for use in the preparation thereof. There are no
contracts or documents of the Company or of any Subsidiary (as defined
below) of the Company which are required to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which
have not been filed as required.
(d) The Company has filed timely all reports and all definitive
proxy and information statements required to be filed by the Company with
the Commission pursuant to the Exchange Act and the rules and regulations
of the Commission thereunder. Each of the Incorporated Documents, when it
and any amendment thereto was filed with the Commission, complied as to
form in all material respects to the requirements of the Exchange Act, and
the rules and regulations of the Commission thereunder, and any
Incorporated Document and any amendment thereto, when filed with the
Commission will comply as to form in all material respects to the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder; and none of such documents includes or will include
any untrue statement of a material fact or omits or will omit to state any
material fact required to be stated therein, or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(e) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of Delaware and Virginia, with
all corporate authority, including franchises, necessary to own or lease
its properties and conduct its business as described in the Registration
Statement and the Prospectus and to issue and sell the Shares; the Company
is duly qualified to do business as a foreign corporation in good standing
in Maryland, New Jersey, Ohio and Pennsylvania, being all of the
jurisdictions in which the conduct of its business or its ownership or
leasing of property requires such qualification, with all corporate
authority, including franchises necessary to own or lease its properties
and conduct its business as described in the Registration Statement and
Prospectus. The Company has no direct subsidiaries other than Delmarva
Energy Company, Delmarva
5
-5-
Industries, Inc., Delmarva Capital Investments, Inc., Delmarva Services
Company, Conectiv Services, Inc. and Conectiv Communications, Inc. (the
"Subsidiaries"), all of the stock of each of which is owned by the
Company, free and clear of any lien, pledge or other encumbrance except
for those matters satisfactory to the Underwriters discussed in the
opinion of Xxxx X. Xxxxxxxx, General Counsel for the Company, delivered
pursuant to Section 5(d) hereof. Each of the Subsidiaries has been duly
organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation and is duly qualified to do
business as a foreign corporation and is in good standing under the laws
of any jurisdiction in which the conduct of its business or its ownership
or leasing of property requires such qualification, with all corporate and
other authority and franchises necessary to own or lease its properties
and conduct its business as described in the Registration Statement and
the Prospectus.
(f) The performance of this Agreement and the consummation of the
transactions herein contemplated and the fulfillment of the terms hereof
will not result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any statute, indenture, mortgage, deed
of trust, note agreement or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which any of them is
bound or to which any of their property is subject, or of the Company's
Restated Certificate and Articles of Incorporation, as amended, or
By-Laws, as amended, or any order, rule or regulation of any court or
other governmental body applicable to the Company or any of the
Subsidiaries or any of their property.
(g) The Company has full power and lawful authority to authorize,
issue and sell the Shares on the terms and conditions herein set forth,
and has taken all corporate action necessary therefor; has obtained every
consent, approval, authorization or other order of any regulatory body
which is required for such authorization, issue or sale, except as may be
required under state securities laws; and such consents, approvals,
authorizations or other orders are not subject to appeal.
(h) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set
forth in or contemplated by the Registration Statement and the Prospectus:
(1) the Company and the Subsidiaries taken as a whole have not incurred
any
6
-6-
material liabilities or obligations, direct or contingent, and have not
entered into any material transaction, not in the ordinary course of
business; (2) there has not been any material change in the capital stock
or long-term debt of the Company and the Subsidiaries taken as a whole or
any material adverse change, or development involving a prospective
material adverse change, in the condition, financial or otherwise, or in
the earnings, business, net worth or results of operations of the Company
and the Subsidiaries taken as a whole; (3) no material loss or damage
(whether or not insured) to the property of the Company and the
Subsidiaries taken as a whole has been sustained; and (4) no legal or
governmental proceeding, domestic or foreign, materially affecting the
Company and the Subsidiaries taken as a whole or the transactions
contemplated by this Agreement, has been instituted or, to the knowledge
of the Company, threatened.
(i) The financial statements set forth in or incorporated by
reference into the Registration Statement and the Prospectus fairly
present the consolidated financial condition of the Company and the
Subsidiaries and the results of their operations as of the dates and for
the periods therein specified; and said financial statements (including
the related notes) have been prepared in accordance with generally
accepted accounting principles which have been consistently applied
throughout the periods involved.
(j) Coopers & Xxxxxxx, which has reported on certain financial
statements filed with the Commission and incorporated by reference into
the Registration Statement and the Prospectus, are independent certified
public accountants as required by the Act and the Rules and Regulations.
(k) Except as set forth in or contemplated by the Registration
Statement and the Prospectus, there is not pending any action, suit or
other proceeding to which the Company or any of the Subsidiaries is a
party or of which any property of the Company or any of the Subsidiaries
is the subject, before or by any court or other governmental body, which
might result in any material adverse change in the condition, business or
prospects of the Company and the Subsidiaries taken as a whole or might
materially adversely affect the properties or assets of the Company and
the Subsidiaries taken as a whole; and no such action, suit or proceeding
is known by the Company to be threatened or contemplated.
7
-7-
(l) All of the outstanding shares of the capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable; when the Shares shall have been delivered against
payment therefor as provided herein, they will have been duly and validly
issued, and will be fully paid and non-assessable and free and clear of
any claim, lien, encumbrance or security interest on behalf of, or arising
through, the Company; and the Shares conform to the description thereof
contained in the Registration Statement and the Prospectus.
(m) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(n) The Company and the Subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not, singly or
in the aggregate, have a material adverse effect on the Company and the
Subsidiaries, taken as a whole.
(o) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and the Subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or
in the aggregate, have a material adverse effect on the Company and the
Subsidiaries, taken as a whole.
8
-8-
3. Sale, Purchase, and Delivery of Shares; Options; Substitution of
Underwriters. On the basis of the representations, warranties and agreements
herein contained, and subject to the terms and conditions herein set forth, the
Company agrees to sell to each of the Underwriters, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, the respective
principal amount of Firm Shares set forth opposite the name of such Underwriter
in Schedule II hereto at the purchase price set forth in Schedule I hereto.
The Company agrees to make the certificates for the Firm Shares
available to the Representative for the purpose of expediting their checking and
packaging on behalf of the Underwriters, at the New York City offices of
Chemical Bank, not later than 1:30 P.M. on the business day next preceding the
Closing Date.
Payment for and delivery of the Firm Shares (the "Closing") shall be
made at the place, time and date specified in Schedule I hereto or at such other
time and date as the Representative and the Company may agree in writing, such
time and date for payment being herein referred to as the "Closing Date". On the
Closing Date, the Company shall deliver certificates for the Firm Shares to the
Representative for the respective accounts of the Underwriters, against payment
to or upon the order of the Company of the purchase price of the Firm Shares, by
certified check or checks, or official bank or bank cashier's check or checks,
payable in New York Clearing House funds. Time shall be of the essence, and
delivery at the time determined as set forth above is a further condition of the
obligation of each Underwriter and of the Company. The certificates for the Firm
Shares so delivered shall be registered in the respective names of the
Underwriters in the respective numbers of shares set forth opposite the names of
such Underwriters in Schedule II annexed hereto, but the Company will, if
requested by the Representative not less than three (3) full business days prior
to the Closing Date, deliver all or any part of such certificates registered in
such other names and in such other denominations as may be requested. To the
extent practicable, the Representative will furnish the taxpayer identification
numbers of the registered owners.
The Company hereby grants to the Underwriters the Option. The Option
may be exercised, in whole or in part, on one occasion during the period
commencing on the date hereof and ending on the thirtieth day after the date
hereof, by written notice from the Representative to the Company. Such notice
shall set forth the aggregate number of shares of Common Stock (the "Option
Shares") as to which the Option is being exercised and
9
-9-
specify the date of delivery of, and payment for, such shares (the "Option
Closing Date"), which date shall be neither earlier than the later of the
Closing Date or the second business day following the date of exercise nor later
than the fifth business day after the date of exercise.
The Company agrees to make the certificates for the Option Shares
available to the Representative for the purpose of expediting their checking and
packaging on behalf of the Underwriters, at the New York City offices of
Chemical Bank, not later than 1:30 P.M. on the business day next preceding the
Option Closing Date.
Payment for the Option Shares shall be made on the Option Closing
Date. On the Option Closing Date, at the time and place specified in Schedule I
hereto, or at such other time and place as the Company and the Representative
may agree in writing, the Company shall deliver certificates for the Option
Shares to the Representative for the respective accounts of the Underwriters,
against payment to or upon the order of the Company of the purchase price of the
Option Shares, by certified check or checks, or official bank or bank cashier's
check or checks, payable in New York Clearing House funds. Time shall be of the
essence, and delivery at the time determined as set forth above is a further
condition of the obligation of each Underwriter and of the Company. The
certificates for the Option Shares so delivered shall be registered in the
respective names of the Underwriters in proportion to the respective numbers of
shares set forth opposite the names of such Underwriters in Schedule II annexed
hereto, but the Company will, if requested by the Representative not less than
two (2) full business days prior to the Option Closing Date, deliver all or any
part of such certificates registered in such other names and in such other
denominations as may be requested. To the extent practicable, the Representative
will furnish the taxpayer identification numbers of the registered owners.
It is understood that the several Underwriters propose to offer the
Shares for sale as set forth in the Prospectus.
In the event of default by one or more Underwriters in respect of
their obligations under this Agreement to take up and pay for the Firm Shares or
Option Shares, as the case may be, pursuant to this Section , and if the
aggregate of such defaults shall not exceed 10% of the Firm Shares or Option
Shares, as the case may be, the remaining Underwriters shall be obligated
severally (in proportion to their respective commitments hereunder or in such
other proportion as may be agreed upon by the Representative) to purchase the
Firm Shares or Option Shares, as
10
-10-
the case may be, which such defaulting Underwriter or Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters shall for any reason
permitted under this Agreement cancel their obligations to take up and pay for
the Firm Shares or the Option Shares, as the case may be, pursuant to this
Section , or in the event of a default by one or more Underwriters in respect of
their obligations under this Agreement to take up and pay for the Firm Shares or
the Option Shares, as the case may be, pursuant to this Section , and if the
aggregate of such cancellations or defaults shall exceed 10% of the aggregate
principal amount of the Firm Shares or Option Shares, as the case may be, the
remaining Underwriters shall have the right to take up and pay for (in such
proportion as may be agreed upon by the Representative) the Firm Shares or
Option Shares, as the case may be, which the canceling or defaulting Underwriter
or Underwriters agreed but failed to purchase. If such remaining Underwriters do
not, at the Closing Date or the Option Closing Date, as the case may be, take up
and pay for the aggregate principal amount of the Firm Shares or Option Shares,
as the case may be, which the canceling or defaulting Underwriter or
Underwriters failed to purchase, the time for delivery of the Firm Shares or
Option Shares, as the case may be, shall be extended for twenty-four hours, and
the several Underwriters shall have the privilege of substituting within such
twenty-four hours another underwriter or underwriters satisfactory to the
Company. If no such underwriter or underwriters shall have been substituted as
aforesaid, prior to the termination of such extended time for delivery, the time
for delivery of the Firm Shares or Option Shares, as the case may be, shall be
extended for a further twenty-four hours, during which the Company shall have
the privilege of finding another underwriter or underwriters, satisfactory to
the Representative, to purchase the aggregate principal amount of the Firm
Shares or Option Shares, as the case may be, which the canceling or defaulting
Underwriter or Underwriters failed to purchase. If it shall be arranged for the
remaining Underwriters or substituted underwriters to take up the Firm Shares or
Option Shares, as the case may be, of the canceling or defaulting Underwriter or
Underwriters as provided in this Section , (i) the Representative or the Company
shall have the right to postpone the time of delivery of the Firm Shares or
Option Shares, as the case may be, for a period of not more than five full
business days, in order to effect whatever changes which such arrangements may
make necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees promptly to file any amendment
to the Registration Statement or any supplement to the Prospectus which such
arrangements may make necessary, and (ii) the Firm Shares or Option Shares, as
the case may be, to be purchased by the remaining Underwriters or substituted
11
-11-
underwriters shall be taken as the basis of their respective underwriting
obligations for all purposes of this Agreement.
If, in the event of a default by one or more Underwriters, the
remaining Underwriters shall not take up and pay for all of the Firm Shares or
Option Shares, as the case may be, agreed to be purchased by the defaulting
Underwriters or substitute another underwriter or underwriters as aforesaid and
the Company shall not find another underwriter or underwriters for such Firm
Shares or Option Shares, as the case may be, as aforesaid, then this Agreement
may be terminated by the Company by giving prompt notice to the remaining
Underwriters.
If the Company shall not so elect to terminate this Agreement, it
shall have the right to require such remaining Underwriters, irrespective of the
default as aforesaid, to purchase the aggregate principal amount of the Firm
Shares or Option Shares, as the case may be, which they have agreed to purchase
hereunder. In such event the Company shall, within twenty-four hours after such
second twenty-four hour period, give notice thereof in writing or by facsimile
transmission to such remaining Underwriters and thereupon the time for delivery
of the Firm Shares or Option Shares, as the case may be, may be postponed for a
period of not more than five full business days in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements and the Company agrees
promptly to file any amendment to the Registration Statement or any supplement
to the Prospectus which may thereby be made necessary. In the absence of such
notice from the Company, this Agreement shall terminate without further action
on the part of either the Company or the Underwriters.
In the event of any such termination, the Company shall not be under
any liability to any Underwriter (except to the extent provided in Sections 4(e)
and 7 hereof) nor shall any Underwriter (other than an Underwriter who shall
have failed to purchase Firm Shares or Option Shares, as the case may be,
otherwise than for some reason permitted under this Agreement) be under any
liability to the Company (except to the extent provided in Section 7 hereof).
Any action taken by the non-defaulting Underwriters or by the
Company under this Section shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
4. Covenants of the Company. The Company further covenants and
agrees with the several Underwriters that:
12
-12-
(a) The Company shall comply with the provisions of, and make all
requisite filings with the Commission pursuant to, Rule 424(b) and notify
the Representative promptly of all such filings. The Company will not at
any time file any amendment to the Registration Statement or supplement to
the Prospectus of which the Representative shall not previously have been
advised and furnished with a copy or to which the Representative or Xxxx &
Priest, counsel for the several Underwriters, shall have reasonably and
promptly objected in writing or which is not in compliance with the Act or
the Rules and Regulations. The Company will prepare and file with the
Commission, promptly upon the Representative's request, any amendment to
the Registration Statement or supplement to the Prospectus which, in the
opinion of counsel for the several Underwriters and counsel for the
Company, may be necessary or advisable in connection with the offering of
the Shares by the Underwriters. The Company will file timely all reports
and any definitive proxy or information statements required to be filed by
the Company with the Commission pursuant to the Exchange Act and the rules
and regulations of the Commission thereunder subsequent to the date hereof
and for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Shares.
(b) The Company will notify the Representative promptly and confirm
in writing of (i) the issuance of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of the Prospectus or any order directed to the adequacy
or accuracy of any Incorporated Document or of the initiation of any
proceedings for any such purpose and (ii) the receipt of any comments from
the Commission in respect of the Registration Statement or the Prospectus,
or requesting additional information or the amendment or supplementation
of the Registration Statement or the Prospectus. If the Commission shall
issue a stop order or any order preventing or suspending the use of the
Prospectus or any order directed to the adequacy or accuracy of any
Incorporated Document at any time, or shall initiate any proceedings for
any such purpose, the Company will make every reasonable effort to prevent
the issuance of such order and, if issued, to obtain the lifting thereof.
(c) Within the time during which a prospectus relating to the Shares
is required to be delivered under the Act, the Company will comply so far
as it is able with all requirements imposed upon it by the Act, as now and
hereafter amended, and by the Rules and Regulations, as from
13
-13-
time to time in force, so far as necessary to permit the continuance of
sales of or dealings in the Shares as contemplated by the provisions
hereof; and if during such period any event occurs as a result of which
the Prospectus would include an 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 during such period it is necessary to amend or
supplement the Prospectus to comply with the Act or the Rules and
Regulations or to file under the Exchange Act or the rules and regulations
of the Commission thereunder any document incorporated by reference into
the Prospectus in order to comply with the Act, the Rules and Regulations,
the Exchange Act or the rules and regulations of the Commission
thereunder, the Company will promptly notify the Representative and will
amend or supplement the Prospectus or file such document (in form
satisfactory to counsel for the Underwriters and counsel for the Company
and at the expense of the Company) so as to correct such statement or
omission or effect such compliance.
(d) The Company will cooperate with the Underwriters in qualifying
and registering the Shares for sale under the securities laws and legal
investment laws of such jurisdictions as the Representative may designate,
and in continuing such qualifications in effect so long as required for
the distribution of the Shares; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to
submit to any requirements which it deems unduly burdensome. The Company
will advise the Representative promptly of any order or communication of
any public authority addressed to the Company suspending or threatening to
suspend qualification of the Shares for sale in any jurisdiction.
(e) Whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, the Company will pay, or
reimburse the Underwriters on demand for, all reasonable costs and
expenses incident to the performance of the Company's obligations under
this Agreement, including all expenses incident to the authorization of
the Shares and their issue and delivery by the Company, all expenses
incident to listing the Shares on any stock exchange, any necessary stamp
taxes in connection with the foregoing, the reasonable fees and expenses
of the Company's counsel and accountants, the costs and expenses incident
to the preparation and filing under the Act of the Registration Statement
(including all exhibits and
14
-14-
amendments thereto), the Prospectus and this Agreement, all fees and
disbursements (including reasonable fees and disbursements of counsel)
incurred by the Company or the Underwriters in connection with the
qualification of the Shares for sale under state securities laws and the
preparation of Blue Sky Memoranda and Legal Investment Surveys, the cost
of furnishing to the Underwriters copies of Blue Sky Memoranda and Legal
Investment Surveys, the Registration Statement and the Prospectus, and
each amended or supplemented Registration Statement or Prospectus and each
Prospectus prepared to permit compliance with Section 10(a)(3) of the Act
and the cost of preparing copies of this Agreement. The Company shall not,
however, be required to pay for any of the Representative's expenses or
those of any of the other Underwriters, other than as hereinabove set
forth and the costs of preparing copies of the legal opinion referred to
in subparagraph (e) of Section 5 hereof, the Underwriters' Questionnaires
and the Agreement Among Underwriters; provided, however, that, if this
Agreement shall not be consummated because it is (i) terminated by the
Representative pursuant to Section 5 or Section 6 hereof, (ii) terminated
pursuant to Section 3 hereof, or (iii) terminated by reason of any
failure, refusal or inability on the part of the Company to perform any
undertaking or satisfy any condition of this Agreement or to comply with
any of the terms hereof on its part to be performed, unless such failure,
refusal or inability be due to the default or omission of the
Underwriters, then and in any such case, the Company shall reimburse the
several Underwriters (but not defaulting Underwriters in the event of
termination pursuant to Section 3 hereof) for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel for the several
Underwriters) reasonably incurred in connection with investigating,
marketing and proposing to market the Shares or in contemplation of
performing their obligations hereunder, but the Company shall not in any
event be liable to any of the several Underwriters for damages on account
of loss of anticipated profits or commissions from the sale by them of the
Shares.
(f) The Company will apply the proceeds from the sale of the Shares
substantially as set forth under the caption "Use of Proceeds" in the
Prospectus.
(g) The Company will deliver to the Representative, as promptly as
practicable, a signed copy of the Registration Statement and all
amendments thereto including all exhibits filed therewith and signed
consents, certificates and opinions of accountants and of any other
persons named in
15
-15-
the Registration Statement as having prepared, certified or reviewed any
part thereof, and will deliver to the Representative such number of
unsigned copies of the Registration Statement, without exhibits, and of
all amendments thereto, as the Representative may reasonably request. The
Company will deliver to or upon the order of the Representative, from time
to time, as many copies of the Prospectus (excluding Incorporated
Documents) as the Representative may reasonably request.
(h) The Company will make generally available to its security
holders and deliver to the Representative as soon as it is practicable to
do so, an earnings statement (which need not be audited) covering a period
of at least twelve months beginning not later than the first day of the
month next succeeding the month in which occurred the effective date of
the Registration Statement (as defined in Rule 158 under the Act), which
shall satisfy the requirements of Section 11(a) of the Act.
(i) For a period of five years from the Closing Date, the Company
will deliver to the Representative and, upon request, to each of the other
Underwriters (i) as soon as available, a copy of each report of the
Company mailed to security holders or filed with the Commission and (ii)
from time to time such other information concerning the Company as the
Representative shall reasonably request. If at any time, the Company shall
have a majority-owned subsidiary or subsidiaries which is or are
"significant" within the meaning of Regulation S-X of the Commission, the
financial statements contained in the documents referred to in (i) shall
be furnished in consolidated form, if such consolidation is required under
such Regulation S-X, for the Company and such subsidiary or subsidiaries.
(j) During the period beginning on the date hereof and continuing
through the later of the Closing Date and the Option Closing Date, the
Company, except for sales of Common Stock pursuant to dividend
reinvestment and employee benefit plans, will not offer, sell or otherwise
alienate, without the Representative's prior consent, any other of its
Shares of Common Stock.
5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Firm Shares and the Option
Shares, as provided herein, shall be subject to the accuracy, as of the date
hereof and as of the Closing Date and, with respect to the Option Shares, the
Option Closing Date (as if made on such Dates), of the representations
16
-16-
and warranties of the Company herein, to the accuracy of statements of Company
officers made in certificates delivered pursuant to the provisions hereof, 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
Statement, or order preventing or suspending the use of the Prospectus,
shall have been issued; no order of the Commission directed to the
adequacy or accuracy of any Incorporated Document shall be in effect; and
no proceedings for any such purpose shall have been instituted or be
pending or, to the knowledge of the Company or the Representative, shall
be contemplated or threatened by the Commission; 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
the reasonable satisfaction of Xxxx & Priest, counsel for the several
Underwriters; no amendment to the Registration Statement or Prospectus
shall have been filed hereafter to which the Representative or Xxxx &
Priest, counsel for the several Underwriters, shall have reasonably and
promptly objected in writing after having received reasonable notice and a
copy thereof; there shall be in full force and effect on the date of this
Agreement appropriate orders of The Public Service Commission of Delaware
and the State Corporation Commission of Virginia permitting the issuance
and sale of the Shares and the transactions relating thereto substantially
in accordance with the terms and conditions set forth herein; such orders
shall contain no condition inconsistent with the provisions hereof or
unacceptable to the Representative and shall be issued under circumstances
that in the Representative's reasonable judgment are appropriate for the
protection of the Underwriters; and on or prior to the Closing Date, and,
with respect to the Option Shares, the Option Closing Date, neither of
said orders shall have been rescinded, modified or stayed, or the right of
the Company to operate thereunder restrained, or be subject to any
litigation or proceeding pending, or to the knowledge of the
Representative or the Company, threatened.
(b) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set
forth in or contemplated by the Prospectus, there shall not have been any
change in the capital stock, short-term debt or long-term debt of the
Company and the Subsidiaries taken as a whole, or any adverse change or
any development involving a prospective adverse change in the condition,
financial or otherwise, or
17
-17-
in the earnings, business, net worth or results of operations of the
Company and the Subsidiaries taken as a whole, all or any of which, in the
Representative's reasonable judgment, materially impairs the investment
quality of the Shares; and no Underwriter shall have disclosed in writing
to the Company on or prior to the Closing Date or, with respect to the
Option Shares, the Option Closing Date, that the Registration Statement or
Prospectus contained an untrue statement of fact which, in the opinion of
Xxxx & Priest, counsel for the Underwriters, is material, or omits to
state a fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(c) The authorization and issuance of the Shares, the Registration
Statement, the Prospectus and all corporate proceedings and other legal
matters incident thereto shall be satisfactory in all material respects to
Xxxx & Priest, and the Company shall have furnished to Xxxx & Priest such
documents as they may reasonably request to enable them to be satisfied
with respect to the matters referred to in this subparagraph and to
furnish to the Representative an opinion, dated as of the Closing Date,
or, with respect to the Option Shares, the Option Closing Date, as
required by subparagraph (e) of this Section 5.
(d) On the Closing Date, and, with respect to the Option Shares, on
the Option Closing Date, the Representative shall have received the
favorable opinion of Xxxx X. Xxxxxxxx, General Counsel for the Company,
dated as of such date, satisfactory in form, scope and substance to the
Representative and to counsel for the Underwriters to the effect that:
(i) the Company has been duly organized and is validly
existing as a corporation in good standing under the laws of Delaware and
Virginia, with all corporate power and other authority necessary to own or
lease its properties and conduct its business as described in the
Registration Statement and the Prospectus and to issue and sell the
Shares; and each of the Subsidiaries has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction and is duly qualified to do business as a foreign corporation
and is in good standing under the laws of any jurisdiction in which the
conduct of its business or the ownership or leasing of its properties
requires such qualification, with all corporate and other authority and
franchises necessary to own or lease its
18
-18-
properties and conduct its business as described in the Registration
Statement and Prospectus.
(ii) the Company is duly qualified as a foreign corporation in
good standing in Maryland, New Jersey, Ohio and Pennsylvania, being all of
the jurisdictions in which the conduct of its business or its ownership or
leasing of properties requires such qualification; and the Company owns
all of the stock of the Subsidiaries, free and clear of any lien, pledge
or other encumbrance;
(iii) except as otherwise set forth in the Prospectus, and
except with respect to the location of certain poles, wires and other
facilities within public highways or over or under public or navigable
waters (the status of which does not in any case threaten to affect
materially the Company's ability to conduct its present business), the
Company has such valid franchises, certificates of convenience and
necessity, operating rights, licenses, permits, consents, approvals,
authorizations and/or orders of governmental bodies, political
subdivisions or regulatory authorities, free from materially burdensome
restrictions, as are necessary for the acquisition, construction and
ownership of the properties owned or leased by it and the maintenance and
operation of the properties operated by it and the conduct of the business
carried on by it as described in the Registration Statement and the
Prospectus, and, to the best of the knowledge of such counsel, the Company
is not in default or violation of any of such franchises, certificates of
convenience and necessity, operating rights, licenses, permits, consents,
approvals, authorizations and/or orders of governmental bodies, political
subdivisions or regulatory authorities, to the extent which would
materially affect the conduct of such business, and the Company is not, to
any material extent, in violation of any applicable Federal, state or
other laws and regulations;
(iv) the Firm Shares or the Option Shares, as the case may be,
have been duly and validly authorized and issued and, when delivered
against payment therefor as provided herein, will be fully paid and
non-assessable and free and clear of any claim, lien, encumbrance or
security interest on behalf of, or arising through, the Company;
(v) the Shares conform as to legal matters to the description
thereof and the statements concerning them contained in the Registration
Statement and the Prospectus, and the summary of certain terms and
provisions thereof
19
-19-
appearing in the Registration Statement and the Prospectus fairly presents
the information called for by the Act and the Rules and Regulations;
(vi) the Delaware Public Service Commission and the Virginia
State Corporation Commission have issued orders (to be identified by date
and docket number) authorizing the issuance and sale of the Shares and
authorizing generally the transactions relating thereto (including
permitting the Company to enter into this Agreement and perform its
obligations hereunder). Neither of such orders contains any condition
inconsistent with the provisions hereof nor, to the best knowledge of such
counsel, has either of such orders been rescinded, modified or stayed, and
no further action is required to be taken by, and no further
authorization, consent or approval is required to be obtained from, any
governmental authority having jurisdiction in connection with the
authorization, issuance and sale of the Shares (other than in connection
with state securities or blue sky laws as to which counsel need express no
opinion);
(vii) the statements in the Prospectus that are stated therein
to have been made on the authority of such counsel as an expert have been
reviewed by such counsel and, as to matters of law and legal conclusions,
are correct and fairly present the information required to be shown;
(viii) such counsel does not know of any legal or governmental
proceedings required to be described in the Registration Statement or the
Prospectus that are not described as required, or of any contracts or
documents of a character required to be described in the Registration
Statement or Prospectus, incorporated by reference into the Prospectus or
filed as exhibits to the Registration Statement by the Act or by the Rules
and Regulations that are not described, incorporated by reference or filed
as required;
(ix) the performance of this Agreement and the consummation of
the transactions herein contemplated and the fulfillment of the terms
hereof will not result in a breach of any of the terms or provisions of,
or constitute a default under, the Restated Certificate and Articles of
Incorporation, as amended, or By-Laws, as amended, of the Company, or any
indenture, mortgage, deed of trust, note or other agreement or instrument
known to such counsel to which the Company or any of the Subsidiaries is a
party or by which any of them is bound or to which any of their property
20
-20-
is subject, or any order, rule or regulation known to such counsel
applicable to the Company or any of the Subsidiaries of any court or other
governmental body;
(x) this Agreement has been duly authorized, executed and
delivered by the Company and is valid and binding on the Company, except
that rights to indemnity hereunder may be limited under securities laws;
(xi) the Registration Statement has become effective under the
Act, and, to the best knowledge of such counsel, no stop order with
respect thereto has been issued, no order directed to the adequacy or
accuracy of any Incorporated Document has been issued by the Commission
and no proceeding for any such purpose has been initiated or is pending
or, to the best knowledge of such counsel, contemplated by the Commission;
at the time the Registration Statement became effective, the Registration
Statement, and at the time the Prospectus was first filed with the
Commission pursuant to Rule 424(b), the Prospectus, complied as to form in
all material respects with the requirements of the Act and the Rules and
Regulations, and the Incorporated Documents, when filed with the
Commission, complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder; and such counsel has no reason to believe that (i)
the Registration Statement at the time the Registration Statement became
effective, and at the Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, or (ii) the Prospectus, at the time the Prospectus
was filed with the Commission pursuant to Rule 424(b) and at the Closing
Date, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the Statements therein, in the light of the
circumstances under which they were made, not misleading, except that such
counsel need express no opinion as to the financial statements and other
financial data included therein;
(xii) the Shares have been listed, upon official notice of issuance,
on the New York Stock Exchange and the Philadelphia Stock Exchange; and
(xiii) the shareholders of the Company have no preemptive rights to
subscribe for any of the Shares.
21
-21-
(e) On the Closing Date, and, with respect to the Option Shares, on
the Option Closing Date, the Representative shall have received the
favorable opinion of Xxxx & Priest, counsel for the several Underwriters,
dated as of such date, satisfactory in form, scope and substance to the
Representative with respect to the sufficiency of all corporate
proceedings and other legal matters relating to the Shares, the form of
the Registration Statement and the Prospectus, and as to the execution and
authorization of this Agreement and the transactions contemplated hereby
as the Representative may reasonably require, and the Company shall have
furnished to such counsel such documents as they may have requested for
the purpose of enabling them to pass upon such matters. In rendering such
opinions, Xxxx & Priest may rely as to matters governed by Delaware,
Maryland, New Jersey, Ohio, Pennsylvania and Virginia law upon the opinion
of Xxxx X. Xxxxxxxx, General Counsel for the Company, who may in turn rely
upon the opinions of other counsel as to certain legal conclusions
affected by the laws of Maryland, New Jersey, Ohio, Pennsylvania and
Virginia.
(f) On the date hereof, at the Closing Date and, with respect to the
Option Shares, on the Option Closing Date, the Representative shall have
received letters of Coopers & Xxxxxxx, dated as of such dates, to the
effect set forth in Schedule III annexed hereto and with respect to such
other matters as to which the Representative shall have inquired.
(g) On the Closing Date and, with respect to the Option Shares, on
the Option Closing Date, the Representative shall have received a
certificate or certificates, dated as of such date, of the President or a
Vice President or the principal accounting officer of the Company to the
effect that, to the best of his or her knowledge based on a reasonable
investigation:
(i) the representations and warranties of the Company in this
Agreement are true and correct, as though made on and as of the Closing
Date or the Option Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all the conditions required
by this Agreement to be performed or satisfied by the Company on or prior
to the Closing Date or the Option Closing Date, as the case may be; and
(ii) he or she has examined the Registration Statement and the
Prospectus, and, in his or her opinion, the Registration Statement, when
it became effective and at all times subsequent thereto up to and
including the Closing
22
-22-
Date, did not and does not include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and the
Prospectus, when the Prospectus Supplement was filed with the Commission
and at all times subsequent thereto up to and including the Closing Date,
did not and does not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and, since the effective date of the
Registration Statement, there has occurred no event required to be set
forth in an amended Registration Statement or a supplemented Prospectus
which had not been so set forth.
All the opinions, letters, certificates and documents mentioned
above or elsewhere in this Agreement will be in compliance with the provisions
hereof only if they are reasonably satisfactory to Xxxx & Priest. The Company
will furnish the Representative with such conformed copies of such opinions,
letters, certificates and documents as the Representative may reasonably
request.
If any condition to the Underwriters' obligations hereunder to be
satisfied on or prior to the Closing Date is not so satisfied, the
Representative may terminate this Agreement without liability on the part of any
Underwriter or the Company, except for the expenses to be paid or reimbursed by
the Company pursuant to Section 4(e) and except for any liability under Section
7 hereof.
6. Termination of Agreement. (a) The Representative, by notice to
the Company, may terminate this Agreement, at any time after the date of this
Agreement and on or prior to the Closing Date and, with respect to the Option
Shares, the Option Closing Date, if during such period (i) trading on the New
York Stock Exchange or the American Stock Exchange shall have been wholly
suspended, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, on the New
York Stock Exchange or the American Stock Exchange, by the New York Stock
Exchange or the American Stock Exchange or by order of the Commission or any
other governmental authority having jurisdiction, or trading of the Company's
securities on any exchange or in any over-the-counter market shall have been
suspended, or (ii) a banking moratorium shall have been declared by Federal or
New York authorities, or (iii) an outbreak of hostilities or an escalation
thereof, a declaration of war by Congress, another substantial
23
-23-
calamity or crisis or another event or occurrence of a similar character which,
in the Representative's reasonable judgment, makes it impracticable or
inadvisable to proceed with the completion of the sale of and payment for the
Firm Shares or Option Shares, as the case may be, or to enforce contracts for
the sale of the Shares shall have occurred, or (iv) the Company shall have
sustained a substantial loss by fire, flood, accident or other calamity which in
the Representative's reasonable judgment renders it inadvisable to consummate
the sale of the Firm Shares or Option Shares, as the case may be, to, and the
delivery of the Firm Shares or Option Shares, as the case may be, by, the
several Underwriters, regardless of whether or not such loss shall have been
insured. This Agreement may also be terminated at any time prior to the Closing
Date if, in the reasonable judgment of the Representative, the subject matter of
any amendment or supplement to the Registration Statement or the Prospectus
renders it either inadvisable to proceed with such offering or inadvisable to
proceed with the delivery of the Firm Shares or Option Shares, as the case may
be, to be purchased hereunder.
(b) In the event of the termination pursuant to this Section , the
Company shall not be under any liability to any Underwriter, except for the
expenses to be paid by it pursuant to the provisions of Section 4(e) and except
for any liability under Section 7, nor shall any Underwriter be under any
liability to the Company, except for any liability under Section 7.
(c) If the Representative elects to terminate this Agreement as
provided in this Section , the Company shall be notified promptly by the
Representative by telephone, confirmed in writing.
7. Indemnification. (a) The Company will indemnify and hold harmless
each Underwriter and each person, if any, who controls such Underwriter within
the meaning of the Act against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter or such controlling person may become
subject, under the Act, the Exchange Act 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 allegedly untrue statement of any
material fact contained in the 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, in the light of the circumstances under which they were made, not
misleading; and will reimburse each Underwriter and each such
24
-24-
controlling person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that 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 an untrue statement or allegedly untrue statement or omission
or alleged omission made in the Registration Statement, any preliminary
prospectus, or the Prospectus, or any amendment or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company,
each of its directors, each of its officers who has signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of the Act, against any losses, claims, damages or liabilities, joint or
several, to which the Company or any such director, officer or controlling
person may become subject, under the Act, the Exchange Act 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 allegedly untrue
statement of any material fact contained in the Registration Statement, any
preliminary prospectus, or the Prospectus, or any amendment or supplement
thereto, or arise out of or based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement or allegedly untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter specifically for use in the
preparation thereof; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred. This indemnity
agreement will be in addition to any liability such Underwriter may otherwise
have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying party
under this Section , notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party shall not relieve it
25
-25-
from any liability it may have to any indemnified party otherwise than under
this Section . In case any such action is brought against any indemnified party,
and it notifies an indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent that
it may wish, jointly with any other indemnifying party, similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation, unless, (i) the
employment of additional counsel has been authorized in writing by the
indemnifying party in connection with defending such action, or (ii)
representation of both the indemnifying party and the indemnified party by the
same counsel is inappropriate by applicable standards of professional conduct
for attorneys in the jurisdiction where suit is instituted due to actual or
potential conflicting interests between them (it being understood that the
indemnifying party shall not be liable for the expense of more than one separate
counsel (in addition to local counsel) representing the indemnified parties in
such action). No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) No indemnity by the Company hereunder shall apply in respect of
(i) any preliminary prospectus furnished to a person to whom any of the Shares
shall have been sold, unless a copy of the Prospectus is furnished by an
Underwriter or securities dealer to such person at or prior to the furnishing of
the written confirmation of such sale or mailed to such person with such
confirmation or (ii) any preliminary prospectus or Prospectus used by an
Underwriter or securities dealer after the same has been superseded by an
amended or supplemented preliminary prospectus or Prospectus supplied by the
Company to the Representative for the use of the Underwriters and securities
dealers. As used in this Section 7(d), the term "Prospectus" does not include
any Incorporated Document.
(e) If the indemnification provided for in subparagraph (a) or (b)
above should not be available to an
26
-26-
indemnified party in respect of any losses, claims, damages, liabilities and
expenses referred to therein, then the indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, liabilities
and expenses in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand and such indemnified
party on the other from the offering of the Shares, and also the relative fault
of the indemnifying party on the one hand and such indemnified party on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities and expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Underwriters shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bears to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company and the Underwriters 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 statement or omission.
(f) The parties hereto agree that it would not be just and equitable
if contribution were to be determined by pro rata allocation (even if the
Underwriters were to be treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
action or claim (which shall be limited as provided in subparagraph (c) above if
the indemnifying party shall have assumed the defense of any such action in
accordance with the provisions thereof). No person guilty of fraudulent
misrepresentation shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
8. Representations and Indemnities to Survive. All representations
and warranties of the Company contained herein and in the certificate or
certificates delivered pursuant to Section 5(g) and the indemnity agreements
contained in Section 7
27
-27-
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
by or on behalf of the Company or any officer, director or controlling person,
and shall survive delivery of and payment for the Shares and, in the case of the
indemnity agreements contained in Section 7, any termination of this Agreement.
9. Notices. All communications hereunder shall be in writing and if
sent to the Underwriters shall be mailed, delivered or transmitted by facsimile
and confirmed to the Representative at the address set forth in Schedule I
hereto, or if sent to the Company shall be mailed, delivered or transmitted by
facsimile and confirmed to it, c/o Vice President and Chief Financial Officer,
000 Xxxx Xxxxxx, X.X. Xxx 000, Xxxxxxxxxx, Xxxxxxxx 00000. Any such address may
be changed from time to time by notice as aforesaid.
10. Parties. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters and the Company and their respective
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person or corporation, other than the
parties hereto, their respective successors and assigns and the controlling
persons, officers and directors referred to in Section 7, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto, their respective successors and assigns and said controlling persons,
officers and directors, and for the benefit of no other person or corporation.
No purchaser of any of the Shares through or from any Underwriter shall be
construed a successor or assign by reason merely of such purchase.
11. Underwriters Not Agents of the Company. Nothing herein contained
shall constitute the Underwriters, or any of them, agents or representatives of
the Company, or authorize them to act for or on behalf of the Company in any
capacity.
12. Controlling Law. Although the place of performance of certain
obligations under this Agreement is stated to be outside of Delaware, it is the
express intention of the parties hereto that this Agreement shall be governed by
and construed in accordance with the laws of Delaware, without regard to the
choice of law principles.
28
-28-
If the foregoing correctly sets forth the understanding between the
Company and the 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 Underwriters severally.
Very truly yours,
DELMARVA POWER & LIGHT COMPANY
By______________________________
Title:
ACCEPTED as of the date first above written, as Underwriters and as
Representatives of the other Underwriters named in Schedule II.
[Insert name of Representative]
By:
By ___________________________
Title:
29
SCHEDULE I
Underwriting Agreement dated
Registration Statement No. __________
Representatives and Address:
SECURITIES:
DESIGNATION: Common Stock, Par Value $2.25
NUMBER OF SHARES: __________
MAXIMUM NUMBER OF OPTION SHARES: __________
PURCHASE PRICE PER SHARE: $ __________
PUBLIC OFFERING PRICE PER SHARE: __________
CONCESSION PER SHARE: $ __________
REALLOWANCE PER SHARE: $ __________
CLOSING DATE, TIME AND LOCATION:
OPTION CLOSING DATE, TIME AND LOCATION:
30
SCHEDULE II
Underwriter Number of Shares
------------
Total................................................... ============
31
SCHEDULE III
(i) They are independent public accountants within the meaning of
the Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements of the
Company and subsidiary companies ("Companies") examined by them and incorporated
by reference in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act and the Exchange
Act and the published rules and regulations thereunder;
(iii) On the basis of procedures performed specified by the American
Institute of Public Accountants for a review of interim financial information as
described in SAS No. 71 (but not an examination in accordance with generally
accepted auditing standards) on the unaudited interim consolidated financial
statements of the Company as set forth in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus, if any, a reading of the
latest available unaudited interim consolidated financial statements, if any, of
the Company subsequent to the financial statements incorporated by reference in
the Prospectus and the minutes of meetings of the Board of Directors and
stockholders of the Company and inquiries of officers and other employees of the
Company responsible for accounting matters and other specified procedures,
nothing has come to their attention which causes them to believe that (A) the
unaudited consolidated financial statements incorporated by reference in the
Prospectus, if any, do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act as it applies to Form
10-Q and the related published rules and regulations thereunder or that any
material modifications should be made to such unaudited consolidated financial
statements for them to be in conformity with generally accepted accounting
principles; (B) the unaudited interim consolidated financial statements, if any,
for periods subsequent to the financial statements incorporated by reference in
the Prospectus are not fairly stated on a basis substantially consistent with
that of the audited consolidated financial statements; (C) at a specified date
not more than three days prior to the date of such letter, there was any change
in the capital stock of the Companies or in their long-term debt, any increase
in their short-term debt or any decrease in their consolidated net assets, in
each case as compared with amounts shown in the most recent unaudited interim
consolidated balance sheet incorporated by reference in the Prospectus; or (D)
for the period from the date of the most recent audited or unaudited
consolidated financial statements incorporated by reference in the Prospectus to
a subsequent date not more than five days prior
32
to the date of such letter, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated operating revenues,
operating income, net income, earnings applicable to common stock and earnings
per average share of common stock of the Company; except in all instances for
changes or decreases which the Prospectus discloses have occurred or may occur
or which (i) are described in such letter and (ii) as so described, are
determined by the Representative in its discretion, not to be material; and
(iv) They have compared the dollar amounts (or percentages derived
from such dollar amounts), ratios and other financial information as agreed upon
contained in (A) the Prospectus, (B) the Company's latest Annual Report on Form
10-K incorporated by reference into the Prospectus, and (C) the Company's latest
Quarterly Report on Form 10-Q incorporated by reference into the Prospectus and
(D) the Company's Current Reports on Form 8-K incorporated by reference into the
Prospectus, (in each case to the extent that such dollar amounts, percentages,
ratios and other financial information are derived from the general accounting
records of the Company 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, ratios and other financial information to be
in agreement with such results except as otherwise specified in such letter.
