EXHIBIT 1.1
EXHIBIT 1.1
420,000 SHARES OF COMMON STOCK
OF
PENNICHUCK CORPORATION
UNDERWRITING AGREEMENT
----------------------
November ___, 1998
Xxxxxx X. Xxxxx & Co., L.P.
00000 Xxxxxxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Dear Sirs:
Pennichuck Corporation, a New Hampshire corporation (the "Company"),
confirms its agreement with Xxxxxx X. Xxxxx & Co., L.P. (the "Underwriter") as
follows:
1. Description of Shares. The Company proposes to issue and sell to
the Underwriter 420,000 shares of the common stock, par value $1.00 per share
("Common Stock") of the Company (such 420,000 shares are hereinafter sometimes
referred to as the "Firm Shares"). In addition, solely for the purpose of
covering over-allotments, the Company proposes to grant the Underwriter the
option to purchase up to an additional 63,000 shares of Common Stock (the
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"Option Shares"). The Firm Shares and the Option Shares are hereinafter
sometimes referred to collectively as the "Shares." The Shares are more fully
described in the Registration Statement and Prospectus hereinafter defined.
2. Representations and Warranties of the Company. The Company
represents, warrants and agrees that:
(a) The Company meets the requirements for use of Form S-2 under
the Securities Act of 1933, as amended (the "Act") and has prepared and
filed with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-2 (Registration Statement No. 333-
65527) relating to the Shares and the offering thereof in accordance
with the Act and has filed such amendments thereto as may have been
required to the date hereof. The registration statement has been
prepared in conformity with the requirements of the Act and the rules
and regulations thereunder (the "Rules and Regulations"). Copies of
that registration statement as amended to date have been delivered by
the Company to you as the Underwriter. As used in this Agreement,
"Preliminary Prospectus" means each prospectus included in that
registration statement, or amendments of such registration statement or
prospectus, before that registration statement, as so amended, became
effective under the Act and any prospectus filed by the Company with the
consent of the Underwriter pursuant to Rule 424(a) of the Rules and
Regulations and the documents incorporated by reference in such
preliminary prospectus. "Registration Statement" means that
registration statement including the prospectus, exhibits and financial
statements, and all documents incorporated by reference therein,
including any information deemed by virtue of Rule 430A(a)(3) of the
Rules and Regulations to be part of such Registration Statement, as of
the time such registration statement or post-effective amendment became
effective under the Act; and "Prospectus" means the prospectus filed
with the Commission by the Company with the consent of the Underwriter
pursuant to Rule 424(b) of the Rules and Regulations, unless no such
Rule 424(b) Prospectus is filed, in which case it shall mean the
Prospectus filed as part of the last Registration Statement filed on or
before the effective date thereof. The Commission has not issued any
order preventing or suspending the use of any Preliminary Prospectus.
(b) Each Preliminary Prospectus, at the time of the filing
thereof, did not contain 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 light of the circumstances in which
made, not misleading; provided that no representation or warranty is
made as to information contained in or omitted from any Preliminary
Prospectus in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Underwriter specifically
for inclusion therein. The Registration Statement has been declared
effective by the Commission.
(c) The Registration Statement and the Prospectus in all
material respects: (i) complied as of the date the Registration became
effective, (ii) comply as of the date hereof and (iii) will comply as
of the Closing Date, as hereinafter defined, with the requirements of
the Act, the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the rules and regulations of the Commission under such Acts;
the Registration Statement and any amendment thereof, at the time it
became effective, did not contain an untrue statement of a material
act or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and the
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Prospectus, at the time the Registration Statement became effective did
not, as of the date hereof does not and as of the Closing Date will not,
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
Paragraph 0 shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by the
Underwriter expressly for use in the Registration Statement or the
Prospectus.
(d) The documents incorporated by reference into the Prospectus
pursuant to Item 12 of Form S-2 under the Act, at the time they were
filed with the Commission, complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder (the "Exchange Act Rules and Regulations"), comply
in all material respects with the requirements of the Exchange Act and
the Exchange Act Rules and Regulations and did not contain any 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, in
the light of the circumstances under which they are made, not
misleading.
(e) Xxxxxx Xxxxxxxx LLP, the accountants whose report appears in
the Prospectus, are independent public accountants as required by the
Act and the Rules and Regulations.
(f) The consolidated financial statements of the Company and its
subsidiaries filed as part of the Registration Statement or included in
any Preliminary Prospectus or the Prospectus present fairly, and the
financial statements included in any amendment or supplement to the
Prospectus will present fairly, the financial condition and results of
operations of the Company and its subsidiaries, at the dates and for the
periods indicated, and have been, and in the case of financial
statements included in any amendment or supplement to the Prospectus
will be, prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved. No other financial statements are required to be set forth in
the Registration Statement or the Prospectus under the Act or the Rules
and Regulations thereunder.
(g) Except as described in or contemplated by the Registration
Statement and the Prospectus, subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus, neither the Company nor any of its subsidiaries (as defined
in Paragraph 0) has incurred any material liability or obligation,
direct or contingent, or entered into any material transaction, whether
or not in the ordinary course of business, and there has not been any
material change on a consolidated basis in the Company"s capital stock,
or any material increase in the long-term debt of the Company or any of
its subsidiaries, or any issuance of options, warrants, convertible
securities or other rights to purchase capital stock of such entity, or
any material adverse change in, or any adverse development which
materially affects, the business, properties, financial condition,
results of operations, or prospects of the Company and its
subsidiariestaken as a whole.
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(h) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing and in good standing under the laws of
its jurisdiction of incorporation, and the Company and each of its
subsidiaries are duly qualified to do business and in good standing as
foreign corporations in each jurisdiction in which their respective
ownership of property or the conduct of their respective businesses
requires such qualification and wherein the failure to be so qualified
would have a material adverse effect on the business of the Company and
each of its subsidiaries, and have all power and authority necessary to
own or hold their properties and to conduct the business in which they
are engaged. All outstanding shares of capital stock of the
subsidiaries of the Company are owned directly or indirectly by the
Company and are validly authorized, issued and outstanding, fully paid
and non-assessable with no personal liability attaching to the ownership
thereof, and all of such shares are owned free and clear of any lien,
pledge or encumbrance or any claim of any third party, with the
exception of the shares that have been pledged by the Company to Fleet
Bank - NH ("Fleet") pursuant to that certain Loan Agreement entered into
by and between the Company, Pennichuck East Utility, Inc.and Fleet dated
April 8, 1998.
(i) The authorized and outstanding capitalization of the Company
as of September 30, 1998 was as set forth in the Registration Statement
and the Prospectus, and there have been no changes in the authorized or
outstanding capitalization of the Company since September 30, 1998
except as contemplated by the Registration Statement and the Prospectus.
When the Shares have been issued, delivered and paid for in the manner
herein described, the Shares will be fully paid, duly issued and non-
assessable; the Shares conform to all statements relating thereto in the
Registration Statement, and holders of the Shares will not be entitled
to preemptive rights.
(j) The filing of the Registration Statement and the execution
and delivery by the Company of this Agreement, and the consummation of
the transactions contemplated hereby and thereby, have been duly
authorized by the board of directors of the Company, and all necessary
corporate action to authorize and approve the same has been taken. This
Agreement has been duly executed and delivered by the Company and is a
valid and legally binding obligation of the Company.
(k) The Company and its subsidiaries have good and marketable
title to, or valid and enforceable leasehold interests in, all items of
real and personal property which are material to the business of the
Company and its subsidiaries taken as a whole, free and clear of all
liens, encumbrances and claims (other than the liens disclosed in the
Prospectus) which might materially interfere with the conduct of the
business of the Company and its subsidiaries taken as a whole.
(l) Except to the extent disclosed in the Prospectus, neither the
Company, nor any of its subsidiaries, is in violation of its corporate
charter or bylaws or in default under any obligation, agreement,
covenant or condition contained in any mortgage or other material
contract, lease, note, indenture or instrument to which it is a party or
by which it may be bound, the effect of which violation or default would
be material to the Company and its subsidiaries taken as a whole, or is
in violation in any material respect of any law, ordinance, governmental
rule, regulation or court decree to which it or its property may be
subject the effect of which violation would be material to the Company
and its subsidiaries taken as a whole, or has failed to obtain any
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material license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or to
the conduct of its business; and the execution, delivery and performance
of this Agreement by the Company, the sale of the Shares and the
consummation of the transactions contemplated by this Agreement will not
conflict with, result in the creation or imposition of any lien, charge
or encumbrance upon any of the properties or assets of the Company
pursuant to the terms of, or constitute a breach of or default under,
any agreement, indenture or instrument to which the Company is a party,
or by which the Company is bound, or result in a violation of the
corporate charter or bylaws of the Company or any law or ordinance to
which the Company or its properties may be subject or of any order, rule
or regulation of any court or governmental agency having jurisdiction
over the Company or its properties, except for conflicts, breaches,
violations or defaults which would be immaterial to the business and
operations of the Company and its subsidiaries taken as a whole and
which would not affect the validity or enforceability of this Agreement
or otherwise adversely affect the rights, duties or obligations of the
Underwriter or the holders of the Shares.
(m) No approval or consent of any governmental body, other than
as may be required under the Act or in connection or compliance with the
provisions of the securities or "blue sky" laws of any jurisdiction, is
legally required for the carrying out by the Company of the provisions
of this Agreement.
(n) Except as described in the Registration Statement and the
Prospectus, there is no litigation or governmental proceeding pending
or, to the knowledge of the Company threatened against the Company or
any of its subsidiaries which, if adversely resolved, could reasonably
be expected to result in any material adverse change in the business,
properties, financial condition, results of operations or prospects of
the Company and its subsidiaries taken as a whole or which is required
to be disclosed in the Registration Statement or the Prospectus.
(o) There are no contracts or other documents 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 exhibits to the
Registration Statement.
(p) The Company and each of its subsidiaries have sufficient
authority under statutory provisions or by grant of franchises or
permits by municipalities or counties to conduct in all material
respects their respective businesses as presently conducted and as
described in the Registration Statement and Prospectus.
(q) Except as set forth in the Registration Statement and the
Prospectus, the Company and its subsidiaries are in compliance with all
applicable existing federal, state and local laws and regulations
relating to protection of human health or the environment or imposing
liability or standards of conduct concerning any Hazardous Material
("Environmental Laws"), except for such instances of noncompliance
which, either singly or in the aggregate, would not have a material
adverse effect on the condition (financial or otherwise), results of
operations or properties of the Company and its subsidiaries, taken as a
whole. The term "Hazardous Material" means (i) any "hazardous
substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, (ii) any "hazardous
waste" as defined by the Resource Conservation and Recovery Act, as
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amended, (iii) any petroleum or petroleum product, (iv) any
polychlorinated biphenyl and (v) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material, waste or substance
regulated under or within the meaning of any other law relating to
protection of human health or the environment or imposing liability or
standards of conduct concerning any such chemical, material, waste or
substance.
(r) No material labor dispute with the employees of the Company
or any of its subsidiaries exists or, to the knowledge of the Company,
is imminent; and the Company knows of no existing or imminent labor
disturbance by the employees of any of its principal suppliers,
manufacturers or contractors which might reasonably be expected to
result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries taken as a whole.
(s) Each of the Company and its subsidiaries owns, possesses or
has the right to use all material licenses, trademarks, patents, patent
rights, inventions, copyrights, service marks and trade names presently
employed by it in connection with the businesses now operated by it, and
neither the Company nor any of its subsidiaries has received any notice
of infringement of or conflict with asserted rights of others with
respect to any of the foregoing.
(t) The Company and its subsidiaries maintain insurance covering
their properties, operations, personnel and businesses which insures
against such losses and risks as are adequate in accordance with its
reasonable business judgment to protect the Company and its subsidiaries
and their businesses. Neither the Company nor any of its subsidiaries
has received notice from any insurer or agent of such insurer that
substantial capital improvements or other expenditures will have to be
made in order to continue such insurance. All such insurance is
outstanding and duly in force on the date hereof and will be outstanding
and duly in force on the Closing Date.
(u) Neither the Company nor any of its subsidiaries is 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.
(v) The Company and each of its subsidiaries have all necessary
consents, authorizations, approvals, orders, certificates and permits of
and from, and have made all declarations and filings with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease, license
and use their respective properties and assets and to conduct their
respective businesses in the manner described in the Prospectus, except
to the extent that the failure to obtain or file would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
Any certificate signed by any officer of the Company and delivered to
you or to counsel for the Underwriter shall be deemed a representation and
warranty by the Company to the Underwriter as to the matters covered thereby.
3. Purchase, Sale and Delivery of Shares. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell to the Underwriter,
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and the Underwriter agrees to purchase the Firm Shares from the Company. The
purchase price for the Firm Shares will be an amount equal to the initial
public offering price for the Shares as set forth in the Prospectus (the
"Share Public Offering Price"), less 5% of the Share Public Offering Price.
Delivery of the Firm Shares, in definitive form, and payment therefor,
shall be made at 10:00 A.M., St. Louis time, on the fourth business day after
the Registration Statement shall have been declared effective by the
Commission, or on such later date and time as may be agreed upon in writing
between the Underwriter and the Company, such day and time of delivery and
payment being herein called the "Closing Date." On the Closing Date, the Firm
Shares shall be delivered by the Company to the Underwriter at The Depository
Trust Company in New York, New York, against payment of the purchase price
therefor in funds immediately available to the order of the Company. The
Company agrees to make available to the Underwriter for inspection and
packaging in New York, New York, at least one full business day prior to the
Closing Date, certificates for the Shares so to be delivered in good delivery
form and in such denominations and registered in such names as the Underwriter
shall have requested, all such requests to have been made in writing at least
one full business day prior to the Closing Date.
In addition, on the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth, the
Company hereby grants to the Underwriter the option to purchase all or a
portion of the Option Shares as may be necessary to cover over-allotments, at
the Share Public Offering Price, less 5% of the Share Public Offering Price.
This option may be exercised only to cover over-allotments in the sale of Firm
Shares by the Underwriter. This option may be exercised at any time (but not
more than once) on or before the thirtieth day following the effective date of
the Registration Statement by written notice by you to the Company. Such
notice shall set forth the number of Option Shares as to which the option is
being exercised, and the date and time, as reasonably determined by the
Underwriter, when the Option Shares are to be delivered (such date and time
being herein sometimes referred to as the "Additional Closing Date");
provided, however, that the Additional Closing Date shall not be earlier than
the Closing Date nor earlier than the third business day after the date on
which the option shall have been exercised nor later than the eighth business
day after the day on which the option shall have been exercised, unless
otherwise agreed by the parties.
Payment for the Option Shares shall be made in immediately available
funds, payable to the order of the Company, at the offices of the Company, or
such other place as shall be agreed upon between us, against delivery of the
Option Shares to the Underwriter through the facilities of The Depository
Trust Company for the account of the Underwriter.
Certificates for the Option Shares shall be in such denominations and
registered in such names as requested in writing by the Underwriter at least
two business days prior to the Additional Closing Date.
4. Covenants. The Company covenants and agrees with the Underwriter:
(a) To furnish promptly to the Underwriter and counsel for the
Underwriter one signed copy of the Registration Statement as originally
filed, and of each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith.
(b) To deliver promptly to the Underwriter such number of
conformed copies of the Registration Statement as originally filed and
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each amendment thereto (excluding exhibits other than this Agreement)
and of each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus as the Underwriter may reasonably request.
(c) To file promptly with the Commission the Prospectus pursuant
to Rule 424(b) of the Rules and Regulations and to file with the
Commission any amendment to the Registration Statement or the Prospectus
or any supplement to the Prospectus that may, in the reasonable judgment
of the Company or the Underwriter, be required by the Act or requested
by the Commission and approved by the Underwriter.
(d) Prior to filing with the Commission any amendment to the
Registration Statement or amendment or supplement to the Prospectus, or
to filing any Prospectus pursuant to Rule 424 of the Rules and
Regulations, to furnish a copy thereof to the Underwriter and counsel
for the Underwriter and obtain the consent of the Underwriter to
the filing (which consent will not be unreasonably withheld).
(e) To use its best efforts to cause any required post-effective
amendment to the Registration Statement to become effective and to
advise the Underwriter promptly (i) when any post-effective amendment to
the Registration Statement becomes effective, (ii) of any request or
proposed request by the Commission for an amendment to the Registration
Statement, an amendment or a supplement to the Prospectus or for any
additional information, (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the initiation or threat of any stop order proceeding, (iv) of receipt
by the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the
initiation or threat of any proceeding for that purpose, and (v) of the
happening of any event which makes untrue any statement of a material
fact made in the Registration Statement or the Prospectus, or which
requires the making of a change in the Registration Statement or the
Prospectus in order to make any material statement therein not
misleading.
(f) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Act, 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 therein, in the light of the
circumstances under which they were made, not misleading, or if it shall
be necessary to amend or supplement the Registration Statement or the
Prospectus to comply with the Act or the Exchange Act or the rules and
regulations of the Commission under such Acts, the Company promptly will
prepare and file with the Commission, subject to Paragraph 0, an
amendment or supplement which will correct such statement or omission or
an amendment which will effect such compliance.
(g) If the Commission shall issue a stop order suspending the
effectiveness of the Registration Statement, to make every reasonable
effort to obtain the lifting of that order at the earliest possible
time.
(h) As soon as practicable after the effective date of the
Registration Statement, to make generally available to its security
holders and to deliver to the Underwriter an earnings statement,
conforming with the requirements of Section 11(a) of the Act, covering a
period of at least twelve months beginning after the effective date of
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the Registration Statement, provided that the Company may comply with
this Paragraph 0 by complying with the safe harbor provisions of Rule
158 of the Rules and Regulations.
(i) For a period of three years from the effective date of the
Registration Statement, to furnish to the Underwriter copies of all
reports to shareholders and all reports, filings and financial
statements furnished by the Company to any securities exchange pursuant
to requirements of or agreements with such exchange or to the Commission
pursuant to the Exchange Act or any rule or regulation of the Commission
thereunder.
(j) To endeavor to qualify the Shares for offer and sale under
the securities laws of such jurisdictions as the Underwriter may
reasonably request, provided that no such qualification shall be
required if as a result thereof the Company would be required to qualify
as a foreign corporation, subject itself to general taxation or would be
made subject to service of general process, in each case in any
jurisdiction in which it is not so qualified or subject; and to maintain
such qualifications in effect so long as required for the distribution
of the Shares and to arrange for the determination of the legality of
the Shares for purchase by institutional investors.
(k) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company
will pay (i) the costs incident to the sale and delivery of the Shares
and any taxes payable in that connection; (ii) the costs incident to the
preparation, printing and filing under the Act of the Registration
Statement, any Preliminary Prospectus, the Prospectus and any
amendments, supplements and exhibits thereto; (iii) the costs of
distributing the Registration Statement as originally filed and each
amendment thereto and any post-effective amendments thereof (including
exhibits), any Preliminary Prospectus, the Prospectus, and any amendment
or supplement to the Prospectus; (iv) the costs, if any, of printing and
distributing this Agreement; (v) the costs of filings incident to
securing any required review by the National Association of Securities
Dealers, Inc.; (vi) the fees and expenses of qualifying the Shares under
the securities laws of the several jurisdictions as provided in this
Paragraph 0 and of preparing and printing a Blue Sky Memorandum
(including related fees and expenses of counsel to the Underwriter);
(vii) the cost of printing the certificates for the Shares; (viii) the
fees and expenses of the Company"s accountants and counsel; and (ix) all
other costs and expenses incident to the performance of the obligations
of the Company under this Agreement; provided, however, that except as
provided in sub-parts (v) and (vi) of this Paragraph 0 and in Paragraph
0, the Underwriter shall pay its own costs and expenses, including the
fees and expenses of its counsel, any transfer taxes on the Shares which
it may sell and the expenses of advertising any offering of the Shares
made by the Underwriter.
(l) Until the termination of the offering of the Shares, to file
timely all documents, and any amendments to previously filed documents,
required to be filed by it pursuant to the Exchange Act.
(m) To apply the net proceeds of the Shares as set forth in the
Prospectus.
(n) For a period of 60 days after the effective date of the
Registration Statement the Company will not, without the prior written
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consent of Xxxxxx X. Xxxxx & Co., L.P., directly or indirectly sell,
contract to sell or otherwise dispose of any shares of the Company"s
Common Stock or rights to acquire such shares, except for the Shares
sold hereunder and except pursuant to (i) stock option plans or in
connection with other incentive compensation arrangements, or (ii) the
exercise of warrants, and the Company will use its best efforts to
obtain a similar agreement from each of its directors and executive
officers listed in the Prospectus.
5. Conditions of Underwriter"s Obligations. The obligations of the
Underwriter hereunder are subject to the accuracy, when made and on the
Closing Date, of the representations and warranties of the Company contained
herein, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed to the extent
required by the Act or the Rules and Regulations; at or before the
Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued, and prior to that time no
stop order proceeding nor any order directed at any document
incorporated by reference in the Prospectus shall have been initiated
or, to the knowledge of the Company, threatened by the Commission, and
no challenge shall have been made to any document incorporated by
reference in the Prospectus; any request of the Commission for inclusion
of additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with; and the Company
shall not have filed with the Commission the Prospectus or any amendment
or supplement to the Registration Statement or the Prospectus without
the consent of the Underwriter.
(b) The Underwriter shall not have discovered and disclosed to
the Company on or prior to the Closing Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of a fact which, in the reasonable opinion
of the Underwriter or Armstrong, Teasdale, Schlafly, & Xxxxx, counsel
for the Underwriter, is material or omits to state a fact that, in the
reasonable opinion of the Underwriter or such counsel, is material and
is required to be stated therein or is necessary to make the statements
therein not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Shares, the
form of the Registration Statement and the Prospectus, other than
financial statements and other financial data, and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be satisfactory in all reasonable respects to Armstrong,
Teasdale, Schlafly, & Xxxxx, counsel for the Underwriter; and the
Company shall have furnished to such counsel all documents and
information that such counsel may reasonably request to enable them to
pass upon such matters.
(d) Xxxxxxxxx, Xxxxxxxx & Xxxxxxxx, P.A., as counsel to the
Company, shall have furnished to the Underwriter their opinion,
addressed to the Underwriter and dated the Closing Date, to the effect
that:
(i) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing and in good standing under
the laws of its jurisdiction of incorporation, is duly qualified
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to do business and in good standing as a foreign corporation in
each jurisdiction in which its ownership of property or conduct of
business requires such qualification and wherein the failure to be
so qualified would have a material adverse effect on the business
of the Company or such subsidiary, and has all corporate power and
authority necessary to own or hold its properties and conduct the
business in which it is engaged as described in the Prospectus.
(ii) All of the outstanding shares of Common Stock of the
Company (including the Shares) have been duly authorized and
validly issued, are fully paid and non-assessable and conform to
the description thereof in the Prospectus; and the shareholders of
the Company have no preemptive rights with respect to the Shares
being issued and sold by the Company hereunder.
(iii) All corporate action required to have been taken by
the Company for the due and proper authorization, issuance, sale
and delivery of the Shares, has been validly and sufficiently
taken, and the Shares have been duly authorized, validly issued
and are non-assessable.
(iv) To the knowledge of such counsel based upon
communications with representatives of the Commission, (A) the
Registration Statement is effective under the Act, and (B) the
Prospectus was timely filed with the Commission as required. To
the knowledge of such counsel, (C) no stop order suspending the
effectiveness of the Registration Statement has been issued, and
(D) no proceeding for that purpose is pending or threatened by the
Commission.
(v) To the knowledge of such counsel, (A) no order directed
to any document incorporated by reference in the Prospectus has
been issued, and (B) no challenge has been made to the accuracy or
adequacy of any such document.
(vi) The Registration Statement and the Prospectus and each
amendment or supplement, if any, thereto comply as to form in all
material respects with the requirements of the Act and the Rules
and Regulations (except that no opinion need be expressed as to
the financial statements or financial data contained therein).
(vii) The statements made in the Prospectus, insofar as
they purport to summarize the provisions of statutes, legal and
overnmental proceedings, contracts or other documents specifically
referred to therein are accurate and fairly present the
information called for with respect thereto by Form S-2 under the
Act (except that no opinion need be expressed as to financial
statements or financial or statistical data continued therein).
(viii) To such counsel"s knowledge, except as disclosed in
the Prospectus, there is no litigation or any governmental
proceeding pending or threatened against the Company or any of its
subsidiaries which could have a material adverse effect on the
Company and its subsidiaries taken as a whole or which is required
to be disclosed in the Registration Statement or the Prospectus.
(ix) To such counsel"s knowledge, there are no contracts or
other documents which are required to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations
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which have not been filed as exhibits to the Registration
Statement as permitted by the Rules and Regulations.
(x) To such counsel"s knowledge, neither the Company nor
any of its subsidiaries is in violation of its corporate charter
or bylaws, or in default under any agreement, indenture or
instrument, the effect of which violation or default would be
material to the Company and its subsidiaries taken as a whole, or
is in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its
property may be subject or, except as disclosed in the Prospectus,
has failed to obtain any material license, permit, certificate,
franchise or other governmental authorization or permit necessary
to the ownership of its property or to the conduct of its
business.
(xi) This Agreement has been duly authorized, executed and
delivered by the Company. The Agreement and the transactions
contemplated by this Agreement will not conflict with any
agreement of the Company or its subsidiaries known to counsel,
will not create a lien or encumbrance upon any property of the
Company or its subsidiaries, will not violate the articles of
incorporation or bylaws of the Company or its subsidiaries and
will not violate any law or governmental ordinance, order or
regulation, except to the extent that such conflict, lien,
encumbrance or violation would have no material adverse effect on
the Company and its subsidiaries taken as a whole.
(xii) No approval or consent of any governmental body,
other than as may be required in connection or compliance with the
provisions of the securities or "blue sky" laws of any
jurisdiction, is legally required for the issue and sale of the
Shares by the Company or for the carrying out by the Company of
the provisions of this Agreement.
(xiii) No approval by the New Hampshire Public Utilities
Commission is legally required for the issue and sale of the
Shares by the Company or for the carrying out by the Company of
the provisions of this Agreement.
Such counsel also shall confirm that during the preparation of the
Registration Statement and Prospectus, such counsel has participated in
conferences with your representatives and counsel for the Underwriter, and
with officers and representatives of the Company, at which conferences the
contents of the Registration Statement and Prospectus were discussed, reviewed
and revised. On the basis of the information which was developed in the
course thereof, considered in light of such counsel"s understanding of
applicable law and the experience gained by such counsel thereunder, such
counsel shall confirm that nothing came to such counsel"s attention that would
lead such counsel to believe that either the Registration Statement or
Prospectus or any amendment or supplement thereto (other than the financial
statements and notes thereto, or any related schedules therein, as to which
such counsel need express no opinion) contains any untrue statement of a
material fact 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.
(e) On the Closing Date, there shall have been furnished to you a
certificate, dated such date, from the Company, signed on behalf of the
77
Company by the President and Chief Executive Officer and the Treasurer
and Chief Financial Officer, stating that to the knowledge of the
officers signing such certificate:
(i) The representations, warranties and agreements of the
Company in Paragraph 0 are true and correct as of such date; the
Company has complied with all its agreements contained herein;
and the conditions set forth in Paragraph 0 have been fulfilled;
(ii) Neither the Registration Statement, as of its
effective date, nor the Prospectus, as of its date, included any
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, and since the effective date of
the Registration Statement, no event has occurred which should
have been set forth in a supplement to or amendment of the
Prospectus which has not been set forth in such a supplement or
amendment; and
(iii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for
that purpose have been instituted or are pending or threatened,
under the Act.
(f) On the date of this Agreement and on the Closing Date, Xxxxxx
Xxxxxxxx LLP, shall have furnished to you letters dated such dates
substantially in the form of a draft of such letter previously
delivered to you.
(g) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall not
have been any change specified in the letter referred to in Paragraph 0
which makes it impractical or inadvisable in the reasonable judgment of
the Underwriter to proceed with the public offering or delivery of the
Shares as contemplated by the Prospectus.
(h) The Underwriter shall have received from Armstrong, Teasdale,
Schlafly & Xxxxx, counsel for the Underwriter, such opinion or
opinions, dated the Closing Date, with respect to the issuance and sale
of the Shares, the Registration Statement, the Prospectus, and other
related matters as the Underwriter may reasonably require, and the
Company shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such
matters.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to the Underwriter and Armstrong, Teasdale, Schlafly & Xxxxx,
counsel for the Underwriter.
If any of the conditions specified in this Paragraph 0 shall not have
been fulfilled when and as provided in this Agreement, or if any of the
opinions or certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form and substance
to the Underwriter and its counsel, this Agreement and all obligations of the
Underwriter hereunder may be canceled at, or at any time prior to, the Closing
Date by the Underwriter.
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6. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless the Underwriter
and each person, if any, who controls the Underwriter within the meaning
of the Act from and against any loss, claim, damage or liability, joint
or several, and any action in respect thereof, to which the Underwriter
or any such controlling person may become subject, under the Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement, the Prospectus, or the Registration
Statement or Prospectus as amended or supplemented, or arises out of, or
is 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 shall reimburse the Underwriter
and each such controlling person for any legal and other expenses
reasonably incurred by the Underwriter or such controlling person for
any legal and other expenses reasonably incurred by the Underwriter or
such controlling person in investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Prospectus or in the Registration Statement or the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by the Underwriter
specifically for inclusion therein; and provided further that as to any
Preliminary Prospectus this indemnity agreement shall not inure to the
benefit of the Underwriter or any person controlling the Underwriter on
account of any loss, claim, damage, liability or action arising from the
sale of Shares to any person by the Underwriter if the Underwriter
failed to send or give a copy of any Prospectus, as the same may be
amended or supplemented, to that person within the time required by the
Act, and the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact in such
Preliminary Prospectus was corrected in such Prospectus, unless such
failure resulted from non-compliance by the Company with Paragraph 0
hereof. The foregoing indemnity is in addition to any liability which
the Company may otherwise have to the Underwriter or any controlling
person of the Underwriter.
(b) The Underwriter agrees to indemnify and hold harmless the
Company, its directors and officers who signed the Registration
Statement and any person who controls the Company within the meaning of
the Act from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any
such director, officer or controlling person may become subject, under
the Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, the Prospectus or the
Registration Statement or Prospectus as amended or supplemented, or
arises out of, or is 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, but in each case only to
the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Company by the Underwriter
79
specifically for inclusion therein, and shall reimburse the Company and
its directors, officers and controlling persons for any legal and other
expenses reasonably incurred by the Company or any such director,
officer or controlling person in investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action.
The foregoing indemnity agreement is in addition to any liability which
the Underwriter may otherwise have to the Company.
(c) Promptly after receipt by an indemnified party under this
Paragraph 0 of notice of any claim or the commencement of any action,
the indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Paragraph 0, notify the
indemnifying party in writing of the claim or the commencement of that
action, provided that the failure to notify the indemnifying party shall
not relieve it from any liability which it may have to an indemnified
party otherwise than under this Paragraph 0. If any such claim or
action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein, and, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the
indemnified party; provided, however, 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 assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified
party under this Paragraph 0 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense other than reasonable costs of investigation, unless (i) the
indemnified party shall have employed such counsel in connection with
the assumption of legal defenses in accordance with the proviso to the
next preceding sentence, (ii) the indemnified party shall have
reasonably concluded that there may be a conflict of interest between
the indemnifying party and the indemnified party in the conduct of the
defense of such action (in which case the indemnifying party shall not
have the right to direct the defense of such action on behalf of the
indemnified party), (iii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of
commencement of the action or (iv) the indemnifying party has authorized
the employment of counsel for the indemnified party at the expense of
the indemnifying party.
(d) If the indemnification provided for in this Paragraph 0 shall
for any reason be unavailable to an indemnified party under Paragraph 0
or 0 in respect of any loss, claim, damage or liability, or any action
in respect thereof, referred to therein, then each 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
loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriter on
the other from the offering of the Shares or (ii) if the allocation
80
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 Underwriter on the other with respect to
the statements or omissions which resulted in such loss, claim, damage
or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriter on the other hand with
respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Shares (before deducting
expenses) received by the Company bears to the total underwriting
discounts and commissions received by the Underwriter with respect to
such offering, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriter, the intent of
the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and the Underwriter agree that it would not be just and
equitable if contributions pursuant to this Paragraph 0 were to be
determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred
to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Paragraph 0 shall be deemed to
include, for purposes of this Paragraph 0, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this Paragraph 0, the Underwriter shall not be
required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to
the public was offered to the public exceeds the amount of any damages
which the Underwriter has otherwise paid or become liable to pay by
reason of any 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.
(e) The Underwriter confirms that the statements with respect to
the public offering of the Shares set forth on the cover page of, and
under the caption "Underwriting" in, the Prospectus are correct and
were furnished in writing to the Company by the Underwriter for
inclusion in the Registration Statement and the Prospectus.
(f) The agreements contained in this Paragraph 0 and the
representations, warranties and agreements of the Company contained in
Paragraphs 0 and 0 shall survive the delivery of the Shares and shall
remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf
of any indemnified party.
7. Termination by the Underwriter. The obligations of the Underwriter
hereunder may be terminated by the Underwriter, in its absolute discretion, by
notice given to and received by the Company prior to delivery of and payment
for the Shares, if prior to that time (a)(i) the Company shall have failed,
refused or been unable to perform any agreement on its part to be performed
hereunder, (ii) any other condition to the Underwriter"s obligations hereunder
is not fulfilled, (iii) the Company sustains a loss, whether or not insured,
81
by reason of fire, flood, accident or other calamity, which, in the reasonable
opinion of the Underwriter, substantially affects the value of the properties
of the Company or which materially interferes with the operation of the
business of the Company, (iv) trading generally shall have been suspended or
materially limited on or by the New York Stock Exchange or American Stock
Exchange or the National Association of Securities Dealers or trading in any
securities of the Company shall have been suspended by any securities exchange
or in the over the counter market, (v) a banking moratorium is declared by the
United States, or by New York, Missouri or New Hampshire state authorities,
(vi) an outbreak of major hostilities or other national or international
calamity occurs, (vii) any action is taken by any government in respect of its
monetary affairs which, in the reasonable opinion of the Underwriter, has a
material adverse effect on the United States securities markets, or (viii)
there is a pending or threatened material legal or governmental proceeding
against the Company, other than proceedings described in the Registration
Statement or amendments or supplements thereto delivered to the Underwriter
prior to the execution of this Agreement, which in the reasonable opinion of
the Underwriter has a material adverse effect upon the Company, and (b) with
respect to the events specified in clauses (a)(i) through (a)(iii) hereof,
such event singly or together with other such events makes it, in your
reasonable judgment, impractical to market the Shares on the terms and in the
manner contemplated in the Prospectus.
8. Termination by the Company. The obligation of the Company to
deliver the Shares upon payment therefor shall be subject to the following
conditions:
On the Closing Date no stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for that purpose
shall then be pending before, or threatened by, the Commission.
In case any of the conditions specified above in this Paragraph 8 shall
not have been fulfilled, this Agreement may be terminated by the Company by
delivering written notice of termination to the Underwriter. Any such
termination shall be without liability of any party to any other party except
to the extent provided in Paragraph 0 and Paragraph 9 hereof.
9. Expenses Following Termination. If the sale of Shares provided for
herein is not consummated because of any refusal, inability or failure on the
part of the Company to comply with any of the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company shall be unable
to perform all its obligations under this Agreement, the Company shall not be
liable to the Underwriter for damages arising out of the transactions covered
by this Agreement, provided however that (i) the Company shall remain liable
to the extent provided in Paragraphs 0, 0 and 0 hereof and (ii) except where
termination occurs pursuant to Section 8 hereof, the Company shall pay the
out-of-pocket expenses incurred by the Underwriter in contemplation of the
performance by it of its obligations hereunder, including the fees and
disbursements of its counsel and travel, postage, telegraph and telephone
expenses. In no event will the Company be required to reimburse the
Underwriter pursuant to subsection (ii) of the preceding sentence in an amount
greater than $40,000.00.
10. Notices. The Company shall be entitled to act and rely upon any
request, consent, notice or agreement given or made by the Underwriter. Any
notice to the Underwriter shall be sufficient if given in writing or by
telecopy addressed to Xxxxxx X. Xxxxx & Co., L.P., 00000 Xxxxxxxxxx Xxxx, Xx.
Xxxxx, Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxxx; any notice to the
Company shall be sufficient if given in writing or by telecopy addressed to
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the Company at: Four Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxxxxx 00000 (Attention:
Xxxxxxx X. Xxxxx).
11. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriter, the Company and their respective successors.
This Agreement and the terms and provisions hereof are for the sole benefit of
only those persons, except that (a) the representations, warranties,
indemnities and agreements of the Company contained in this Agreement shall
also be deemed to be for the benefit of the person or persons, if any, who
control the Underwriter within the meaning of Section 15 of the Act, and (b)
the indemnities and agreements of the Underwriter contained in Paragraph 6 of
this Agreement shall be deemed to be for the benefit of directors of the
Company, officers of the Company who have signed the Registration Statement
and any person controlling the Company. Nothing in this Agreement is intended
or shall be construed to give any person other than the persons referred to in
this paragraph any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
12. Defined Terms. For purposes of this Agreement, (a) "business day"
means any day on which the New York Stock Exchange is open for trading, and
(b) "subsidiary" shall have the meaning set forth in Rule 405 of the Rules and
Regulations.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns
and the officers and directors and controlling persons referred to in
Paragraph 6 hereof, and no other person will have any right or obligation
hereunder. The term "successors and assigns" as used in this Agreement shall
not include any purchaser, as such purchaser, of any of the Shares from the
Underwriter.
14. Counterparts. This Agreement may be executed in multiple
counterparts, all of which, when taken together, shall constitute one and the
same agreement among the parties to such counterparts.
15. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Missouri.
If the foregoing correctly sets forth the agreement between the Company
and the Underwriter, please indicate your acceptance in the space provided for
that purpose.
Very truly yours,
PENNICHUCK CORPORATION
By:_________________________
Name:_______________________
Title:______________________
Accepted:
XXXXXX X. XXXXX & CO., L.P.
By:_____________________________
Xxxxx X. Xxxxxxxx
Principal
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