2,000,000 Shares
WASHINGTON GAS LIGHT COMPANY
Common Stock
UNDERWRITING AGREEMENT
----------------------
November 12, 1998
PAINEWEBBER INCORPORATED
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
X.X. XXXXXXX & SONS, INC.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Washington Gas Light Company, a District of Columbia and Virginia
corporation (the "Company"), proposes to sell an aggregate of 2,000,000 shares
(the "Firm Shares") of the Company's Common Stock, $1.00 par value per share
(the "Common Stock"), to you and to the other underwriters named in Schedule I
(collectively, the "Underwriters"), for whom you are acting as representatives
(the "Representatives"). The Company has also agreed to grant to you and the
other Underwriters an option (the "Option") to purchase up to an additional
300,000 shares of Common Stock (the "Option Shares") on the terms and for the
purposes set forth in Section 1(b). The Firm Shares and the Option Shares are
hereinafter collectively referred to as the "Shares."
The public offering price per share for the Shares and the purchase price
per share for the Shares to be paid by the several Underwriters shall be agreed
upon by the Company and the Representatives, acting on behalf of the several
Underwriters, and such agreement shall be set forth in a separate written
instrument substantially in the form of Exhibit A hereto (the "Price
Determination Agreement"). The Price Determination Agreement may take the form
of an exchange of any standard form of written telecommunication among the
Company and the Representatives and shall specify such applicable information as
is indicated in Exhibit A hereto. The offering of the Shares will be governed by
this Agreement, as supplemented by the Price Determination Agreement. From and
after the date of the execution and delivery of the Price Determination
Agreement, this Agreement shall be deemed to incorporate, and, unless the
context
otherwise indicates, all references contained herein to "this Agreement" and to
the phrase "herein" shall be deemed to include the Price Determination
Agreement.
The Company confirms as follows its agreements with the Representatives and
the several other Underwriters. The Underwriters will offer the Shares as
described in the Prospectus.
1. Agreement to Sell and Purchase.
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(a) On the basis of the representations, warranties and agreements of
the Company herein contained and subject to all the terms and
conditions of this Agreement, the Company agrees to sell to each
Underwriter named below, and each Underwriter, severally and not
jointly, agrees to purchase from the Company at the purchase price per
share for the Firm Shares to be agreed upon by the Representatives and
the Company in accordance with Section 1(c) hereof and set forth in
the Price Determination Agreement, the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I, plus such
additional number of Firm Shares which such Underwriter may become
obligated to purchase pursuant to Section8 hereof. Schedule I may be
attached to the Price Determination Agreement.
(b) Subject to all the terms and conditions of this Agreement, the
Company grants the Option to the several Underwriters to purchase,
severally and not jointly, up to 300,000 Option Shares from the
Company at the same price per share as the Underwriters shall pay for
the Firm Shares. The Option may be exercised only to cover
over-allotments in the sale of the Firm Shares by the Underwriters and
may be exercised in whole or in part at any time on or before the 30th
day after the date of this Agreement, upon written or telegraphic
notice (the "Option Shares Notice") by the Representatives to the
Company no later than 12:00 noon, New York City time, at least two and
no more than five business days before the date specified for closing
in the Option Shares Notice (the "Option Closing Date") setting forth
the aggregate number of Option Shares to be purchased and the time and
date for such purchase. On the Option Closing Date, the Company will
issue and sell to the Underwriters the number of Option Shares set
forth in the Option Shares Notice, and each Underwriter will purchase
such percentage of the Option Shares as is equal to the percentage of
Firm Shares that such Underwriter is purchasing, as adjusted by the
Representatives in such manner as they deem advisable to avoid
fractional shares.
(c) The public offering price per share for the Firm Shares and the
purchase price per share for the Firm Shares to be paid by the several
Underwriters shall be agreed upon and set forth in the Price
Determination Agreement, which shall be dated the date hereof.
2. Delivery and Payment.
--------------------
Delivery of the Firm Shares shall be made to the Representatives for the
accounts of the Underwriters by credit to the account of the Company with the
Depository Trust Company, against payment of the purchase price by wire transfer
of Federal Funds or similar same day funds to an account designated in writing
by the Company to PaineWebber Incorporated at least one business day prior to
the Closing Date (as hereinafter defined). Such payment shall be made at 10:00
a.m., New York City time, on the third business
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day after the date on which the first bona fide offering of the Shares to the
public is made by the Underwriters or at such time on such other date, not later
than ten business days after such date, as may be agreed upon by the Company and
the Representatives (such date is hereinafter referred to as the "Closing
Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares and Option Shares by the Company to the
respective Underwriters shall be borne by the Company. The Company will pay and
save each Underwriter and any subsequent holder of the Shares harmless from any
and all liabilities with respect to or resulting from any failure or delay in
paying Federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original issuance or
sale to such Underwriter of the Firm Shares and Option Shares.
3. Representations and Warranties of the Company.
---------------------------------------------
The Company represents, warrants and covenants to each Underwriter that:
(a) The Company meets the requirements for use of Form S-3 and a
registration statement (Registration No. 333-63735) on Form S-3
relating to the Shares, including such amendments to such registration
statement as may have been required to the date of this Agreement, has
been prepared by the Company under the provisions of the Securities
Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, and
has been filed with the Commission. Such registration statement has
been declared effective by the Commission. Copies of such registration
statement and amendments have been delivered to the Representatives.
The term "Registration Statement" means the registration statement,
including financial statements and all exhibits and all documents
incorporated or deemed incorporated by reference, as from time to time
amended or supplemented pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), Rule 430A or Rule 434 of the
Rules and Regulations, or otherwise, and any registration statement
filed under Rule 462(b) of the Rules and Regulations as such
registration statement may be amended from time to time. The term
"Prospectus" means the prospectus constituting a part of the
Registration Statement and any amendments or supplements to such
prospectus, including without limitation the prospectus supplement
filed with the Commission in connection with the proposed sale of the
Shares contemplated by this Agreement (the "Prospectus Supplement"),
through the date of such Prospectus Supplement; provided, however,
that if any revised prospectus or prospectus supplement, including the
Prospectus Supplement, shall be provided to the Underwriter by the
Company for use in connection with the offering of the Shares that
differs from the Prospectus (whether or not such revised prospectus or
prospectus supplement is required to be filed by the Company with the
Commission pursuant to Rule 424(b) of the Rules and Regulations), the
term "Prospectus" shall refer to such revised prospectus or prospectus
supplement, as the case may be, from and after the time it is first
provided to the Underwriter for such use. Any reference herein
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to the Registration Statement or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Exchange
Act on or before the date hereof or are so filed hereafter. 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 any such document filed or to be filed
under the Exchange Act after the date of the Prospectus, and deemed to
be incorporated therein by reference.
(b) On the date the Registration Statement was declared effective by
the Commission (the "Effective Date"), at all times subsequent to and
including the Closing Date and, if later, the Option Closing Date and
when any post-effective amendment to the Registration Statement
becomes effective or any amendment or supplement to the Prospectus is
filed with the Commission, the Registration Statement and the
Prospectus (as amended or as supplemented if the Company shall have
filed with the Commission any amendment or supplement thereto),
including the financial statements included or incorporated by
reference in the Prospectus or the Registration Statement, did or will
comply with all applicable provisions of the Act, the Exchange Act,
the rules and regulations thereunder (the "Exchange Act Rules and
Regulations") and the Rules and Regulations and will contain all
statements required to be stated therein in accordance with the Act,
the Exchange Act, the Exchange Act Rules and Regulations and the Rules
and Regulations. On the Effective Date and when any post-effective
amendment to the Registration Statement becomes effective, no part of
the Registration Statement or any such amendment did or will contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed
with the Commission and at the Closing Date and, if later, the Option
Closing Date, the Prospectus did not or will not contain any 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. The
foregoing representations and warranties in this Section 3(b) do not
apply to any statements or omissions made in reliance on and in
conformity with information relating to any Underwriter furnished in
writing to the Company by the Representatives specifically for
inclusion in the Registration Statement or Prospectus or any amendment
or supplement thereto. For all purposes of this Agreement, the amounts
of the selling concession and reallowance set forth in the Prospectus
Supplement constitute the only information relating to any Underwriter
furnished in writing to the Company by the Representatives
specifically for inclusion in the Registration Statement or the
Prospectus. The Company has not distributed any offering material in
connection with the offering or sale of the Shares other than the
Registration Statement, the Prospectus and any other materials, if
any, permitted by the Act.
(c) The documents which are incorporated by reference in the
Registration Statement and the Prospectus or from which information is
so incorporated by reference, when they become effective or were filed
with the Commission, as the case may be, complied in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, the Exchange Act Rules and Regulations and the Rules and
Regulations; and any documents so filed and incorporated by reference
subsequent to the Closing Date shall, when they are filed with the
Commission, conform in all material respects with the requirements of
the Act
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and the Exchange Act, as applicable, the Exchange Act Rules and
Regulations and the Rules and Regulations.
(d) Each of Crab Run Gas Company, Hampshire Gas Company, Shenandoah
Gas Company, Washington Gas Resources Corp., Washington Gas Energy
Services, Inc. and Washington Gas Energy Systems, Inc. (collectively,
the "Subsidiaries") and the Company is, and at the Closing Date will
be, a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation. The
Company and each of its Subsidiaries has, and at the Closing Date will
have, full power and authority to conduct all the activities conducted
by it, to own or lease all the assets owned or leased by it and to
conduct its business as described in the Registration Statement and
the Prospectus. The Company and each of its Subsidiaries is, and at
the Closing Date will be, duly licensed or qualified to do business
and in good standing as a foreign corporation in all jurisdictions in
which the nature of the activities conducted by it or the character of
the assets owned or leased by it makes such licensing or qualification
necessary. All of the outstanding shares of capital stock of the
Subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable and are owned by the Company free and
clear of all liens, encumbrances and claims whatsoever. Except for the
stock of the Subsidiaries and as disclosed in the Registration
Statement, the Company does not own, and at the Closing Date will not
own, directly or indirectly, any shares of stock or any other equity
or long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, association or other
entity which could be considered a "significant subsidiary" under Rule
1-02 of Regulation S-X promulgated under the Act. Complete and correct
copies of the certificate of incorporation and of the by-laws of the
Company, Shenandoah Gas Company and Hampshire Gas Company and all
amendments thereto have been delivered to the Representatives, and no
changes therein will be made subsequent to the date hereof and prior
to the Closing Date or, if later, the Option Closing Date.
(e) The outstanding shares of Common Stock have been, and the Shares
to be issued and sold by the Company upon such issuance will be, duly
authorized, validly issued, fully paid and nonassessable and will not
be subject to any preemptive or similar right. The description of the
Common Stock in the Registration Statement and the Prospectus is, and
at the Closing Date will be, complete and accurate in all respects.
Except as set forth in the Prospectus, the Company does not have
outstanding, and at the Closing Date will not have outstanding, any
options to purchase, or any rights or warrants to subscribe for, or
any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of Common Stock, any shares
of capital stock of any Subsidiary or any such warrants, convertible
securities or obligations.
(f) The financial statements and schedules included or incorporated by
reference in the Registration Statement or the Prospectus present
fairly the consolidated financial condition of the Company as of the
respective dates thereof and the consolidated results of operations
and cash flows of the Company for the respective periods covered
thereby, all in conformity with generally accepted accounting
principles applied on a consistent basis throughout the entire period
involved, except as otherwise disclosed in the Prospectus. No other
financial statements or schedules of the Company are required by the
Act, the Exchange Act or the Rules and Regulations to be included in
the Registration Statement or the Prospectus. Xxxxxx Xxxxxxxx
5
LLP (the "Accountants") who have reported on such financial
statements and schedules, are independent accountants with
respect to the Company as required by the Act and the Rules and
Regulations. The statements included in the Registration
Statement with respect to the Accountants pursuant to Item 509 of
Regulation S-K of the Rules and Regulations are true and correct
in all material respects.
(g) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i)transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(h) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior to
the Closing Date, except as set forth in or contemplated by the
Registration Statement and the Prospectus, (i) there has not been and
will not have been any material change in the capitalization of the
Company, or in the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company and
its Subsidiaries, arising for any reason whatsoever, (ii) neither the
Company nor any of its Subsidiaries has incurred nor will it incur any
material liabilities or obligations, direct or contingent, nor has it
entered into nor will it enter into any material transactions other
than pursuant to this Agreement and the transactions referred to
herein and (iii) the Company has not and will not have paid or
declared any dividends or other distributions of any kind on any class
of its capital stock.
(i) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment
Company Act of 1940, as amended.
(j) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or
threatened against or affecting the Company or any of its Subsidiaries
or any of their respective officers in their capacity as such, before
or by any Federal or state court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign,
wherein an unfavorable ruling, decision or finding might materially
and adversely affect the Company or any of its Subsidiaries or its
business, properties, business prospects, condition (financial or
otherwise) or results of operations.
(k) Except as would not have a material adverse effect on the
condition (financial or otherwise) or on the earnings, business,
properties, business prospects or operations of the Company and its
Subsidiaries, taken as a whole, the Company and each of its
Subsidiaries has, and at the Closing Date will have, (i) all
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to carry on its business as contemplated in
the Prospectus, (ii) complied in all respects with all laws,
regulations and orders applicable to it or its business and
(iii) performed all its obligations required to be performed by it,
and is not, and at the
6
Closing Date will not be, in default, under any indenture, mortgage,
deed of trust, voting trust agreement, loan agreement, bond,
debenture, note agreement, lease, contract or other agreement or
instrument (collectively, a "contract or other agreement") to
which it is a party or by which its property is bound or
affected,. To the best knowledge of the Company and each of its
Subsidiaries, no other party under any contract or other
agreement to which it is a party is in default in any respect
thereunder, except for any defaults that would not have a
material adverse effect on the condition (financial or otherwise)
or on the earnings, business, properties, business prospects or
operations of the Company and its Subsidiaries, taken as a whole.
Neither the Company nor any of its Subsidiaries is, nor at the
Closing Date will any of them be, in violation of any provision
of its certificate of incorporation or by-laws.
(l) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required
in connection with the authorization, issuance, transfer, sale or
delivery of the Shares by the Company, in connection with the
execution, delivery and performance of this Agreement by the Company
or in connection with the taking by the Company of any action
contemplated hereby, except such as have been obtained under the Act
or the Rules and Regulations and such as may be required under state
securities or Blue Sky laws or the by-laws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection
with the purchase and distribution by the Underwriters of the Shares,
and except for filings with and the orders from the Public Service
Commission of the District of Columbia and the State Corporation
Commission of Virginia authorizing the issuance and sale by the
Company of the Shares subject to certain conditions set forth therein,
both of which orders have been obtained and are in full force and
effect.
(m) The Company has full corporate power and authority to enter into
this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement
of the Company and is enforceable against the Company in accordance
with the terms hereof. The performance of this Agreement and the
consummation of the transactions contemplated hereby and the
application of the net proceeds from the offering and sale of the
Shares in the manner set forth in the Prospectus under "Use of
Proceeds" will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company or any of
its Subsidiaries pursuant to the terms or provisions of, or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, or give any other party a right to
terminate any of its obligations under, or result in the acceleration
of any obligation under, the certificate of incorporation or by-laws
of the Company or any of its Subsidiaries, any contract or other
agreement to which the Company or any of its Subsidiaries is a party
or by which the Company or any of its Subsidiaries or any of its
properties is bound or affected, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or regulation of any
court or other governmental agency or body applicable to the business
or properties of the Company or any of its Subsidiaries.
(n) The Company and each of its Subsidiaries has good and marketable
title to all properties and assets described in the Prospectus as
owned by it, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus or are
not material to the business of the Company or its Subsidiaries. The
Company and each of its Subsidiaries has valid, subsisting and
enforceable leases for the properties described in the
7
Prospectus as leased by it, with such exceptions as are not material
and do not materially interfere with the use made and proposed to be
made of such properties by the Company and such Subsidiaries.
(o) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement which is not
described or filed as required. All such contracts to which the
Company or any Subsidiary is a party have been duly authorized,
executed and delivered by the Company or such Subsidiary, constitute
valid and binding agreements of the Company or such Subsidiary and are
enforceable against the Company or such Subsidiary in accordance with
the terms thereof.
(p) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document
required by this Agreement to be delivered to the Representatives was
or will be, when made, inaccurate, untrue or incorrect.
(q) Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action
intended, or which might reasonably be expected, to cause or result,
under the Act or otherwise, in, or which has constituted,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
(r) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of
the Registration Statement.
(s) The Shares are duly authorized for listing, subject to official
notice of issuance, on the New York Stock Exchange and the
Philadelphia Stock Exchange.
(t) The Company and its Subsidiaries are in compliance with all
federal, state and local employment and labor laws, including, but not
limited to, laws relating to non-discrimination in hiring, promotion
and pay of employees; no labor dispute with the employees of the
Company or any Subsidiary exists or, to the knowledge of the Company,
is imminent or threatened; and the Company is not aware of any
existing, imminent or threatened labor disturbance by the employees of
any of its principal suppliers, manufacturers or contractors, in each
case that could result in a material adverse effect on the condition
(financial or otherwise) or on the earnings, business, properties,
business prospects or operations of the Company and its Subsidiaries,
taken as a whole.
(u) The Company and its Subsidiaries own, or are licensed or otherwise
have the full exclusive right to use, the material patents, patent
rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, services
marks and trade names (collectively, "patent and proprietary rights")
presently employed by them or which are necessary in connection with
the conduct of the business now operated by them, and neither the
Company nor any of its Subsidiaries has received any written notice or
otherwise has actual knowledge of any infringement of or conflict with
asserted rights of others or any other claims
8
with respect to any patent or proprietary rights, or of any basis for
rendering any patent and proprietary rights invalid or inadequate to
protect the interest of the Company or any of its Subsidiaries.
(v) Neither the Company nor any of its Subsidiaries nor, to the
Company's knowledge, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any
Subsidiary or received or retained any funds in violation of any law,
rule or regulation or of a character required to be disclosed in the
Prospectus.
(w) The Company has complied, or is not required to comply, and until
the completion of the distribution of the Shares will comply, or will
not be required to comply, with all of the provisions of (including,
without limitation, filing all forms required by) Section 517.075 of
the Florida Securities and Investor Protection Act and
Regulation 3E-900.001 issued thereunder with respect to the offering
and sale of the Shares.
(x) The Company and its 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 imposing liability or standards of conduct concerning
any Hazardous Material (as hereinafter defined) ("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,
individually or in the aggregate result in a material adverse effect
on the condition (financial or otherwise) or on the earnings,
business, properties, business prospects or operations of the Company
and its Subsidiaries, taken as a whole. The term "Hazardous Material"
means (A) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, (B) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act, as amended, (C) any petroleum or
petroleum product, (D) any polychlorinated biphenyl and (E) any
pollutant or contaminant or hazardous, dangerous, or toxic chemical,
material, waste or substance regulated under or within the meaning of
any other Environmental Law.
(y) 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 its 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). Except as set forth in the Registration
Statement and the Prospectus there are no costs and liabilities
associated with or arising in connection with Environmental Laws as
currently in effect (including, without limitation, costs of
compliance therewith) which would, singly or in the aggregate have a
material adverse effect on the condition (financial or otherwise) or
on the earnings, business, properties, business prospects or
operations of the Company and its Subsidiaries, taken as a whole.
9
(z) The Company maintains insurance with respect to its properties and
business of the types and in amounts generally deemed adequate for its
business and consistent with insurance coverage maintained by similar
companies and businesses, all of which insurance is in full force and
effect.
(aa) The Company has filed all material federal, state and foreign
income and franchise tax returns and has paid all taxes shown as due
thereon, other than taxes which are being contested in good faith and
for which adequate reserves have been established in accordance with
generally accepted accounting principles ("GAAP"); and the Company has
no knowledge of any tax deficiency which has been or might be asserted
or threatened against the Company. There are no tax returns of the
Company or any of its Subsidiaries that are currently being audited by
state, local or federal taxing authorities or agencies (and with
respect to which the Company or any Subsidiary has received notice),
where the findings of such audit, if adversely determined, would
result in a material adverse effect on the condition (financial or
otherwise) or on the earnings, business, properties, business
prospects or operations of the Company and its Subsidiaries, taken as
a whole.
(bb) With respect to each employee benefit plan, program and
arrangement (including, without limitation, any "employee benefit
plan" as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) maintained or contributed
to by the Company, or with respect to which the Company could incur
any liability under ERISA (collectively, the "Benefit Plans"), to the
best knowledge of the Company, no event has occurred which could
subject the Company to any liability under the terms of such Benefit
Plan, applicable law (including, without limitation, ERISA and the
Internal Revenue Code of 1986, as amended) or any applicable agreement
that could materially adversely affect the business, properties,
business prospects, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries, taken as a whole.
4. Agreements of the Company.
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The Company agrees with the several Underwriters as follows:
(a) The Company will not, either prior to the Closing Date or
thereafter during such period as the Prospectus is required by law to
be delivered in connection with sales of the Shares by an Underwriter
or dealer, file any amendment or supplement to the Registration
Statement or the Prospectus, unless a copy thereof shall first have
been submitted to the Representatives within a reasonable period of
time prior to the filing thereof and the Representatives shall not
have objected thereto in good faith.
(b) The Company will notify the Representatives promptly, and will
confirm such advice in writing, (1) when any post-effective amendment
to the Registration Statement becomes effective, (2) of any request by
the Commission for amendments or supplements to the Registration
Statement or the Prospectus or for additional information, (3) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose or the threat thereof, (4) of the
happening of any event during the period mentioned in the second
sentence of Section 4(e) that in the judgment of the Company makes any
statement made in the Registration Statement or the
10
Prospectus untrue or that requires the making of any changes in
the Registration Statement or the Prospectus in order to make the
statements therein, in light of the circumstances in which they are
made, not misleading and (5) of receipt by the Company or any
representative or attorney of the Company of any other communication
from the Commission relating to the Company, the Registration
Statement or the Prospectus. If at any time the Commission shall issue
any order suspending the effectiveness of the Registration Statement,
the Company will make every reasonable effort to obtain the withdrawal
of such order at the earliest possible moment.
(c) The Company will furnish to the Representatives, without charge,
two signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and
schedules, and all exhibits thereto (including any document filed
under the Exchange Act and deemed to be incorporated by reference into
the Prospectus) and will furnish to the Representatives, without
charge, for transmittal to each of the other Underwriters, a copy of
the Registration Statement and any post-effective amendment thereto,
including financial statements and schedules but without exhibits.
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(e) The Company will deliver to each of the Underwriters, without
charge, as many copies of the Prospectus or any amendment or
supplement thereto as the Representatives may reasonably request. The
Company consents to the use of the Prospectus or any amendment or
supplement thereto by the several Underwriters and by all dealers to
whom the Shares may be sold, both in connection with the offering or
sale of the Shares and for any period of time thereafter during which
the Prospectus is required by law to be delivered in connection
therewith. If during such period of time any event shall occur which
in the judgment of the Company or counsel to the Underwriters should
be set forth in the Prospectus in order to make any statement therein,
in the light of the circumstances under which it was made, not
misleading, or if it is necessary to supplement or amend the
Prospectus to comply with law, the Company will forthwith prepare and
duly file with the Commission an appropriate supplement or amendment
thereto, and will deliver to each of the Underwriters, without charge,
such number of copies thereof as the Representatives may reasonably
request. The Company shall not file any document under the Exchange
Act before the termination of the offering of the Shares by the
Underwriters if such document would be deemed to be incorporated by
reference into the Prospectus which is not approved by the
Representatives after reasonable notice thereof, and such approval
shall not be unreasonably withheld.
(f) Prior to any public offering of the Shares by the Underwriters,
the Company will cooperate with the Representatives and counsel to the
Underwriters in connection with the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of
such jurisdictions as the Representatives may request; provided, that
in no event shall the Company be obligated to qualify to do business
in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process in any
jurisdiction where it is not now so subject.
11
(g) During the period of five years commencing on the Closing Date,
the Company will furnish to the Representatives and each other
Underwriter who may so request copies of such financial statements and
other periodic and special reports as the Company may from time to
time distribute generally to the holders of any class of its capital
stock, and will furnish to the Representatives and each other
Underwriter who may so request a copy of each annual or other report
it shall be required to file with the Commission.
(h) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than
the last day of the fifteenth full calendar month following the
calendar quarter in which the Effective Date falls, an earnings
statement (which need not be audited but shall be in reasonable
detail) for a period of 12 months ended commencing after the Effective
Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay, or
reimburse if paid by the Representatives, all costs and expenses
incident to the performance of the obligations of the Company under
this Agreement, including but not limited to costs and expenses of or
relating to (1) the preparation, printing and filing of the
Registration Statement and exhibits to it, the Prospectus and any
amendment or supplement to the Registration Statement or the
Prospectus, (2) the preparation and delivery of certificates
representing the Shares, (3) the word processing, printing and
reproduction of this Agreement, the Agreement Among Underwriters, any
Dealer Agreements and any Underwriters' Questionnaire, (4) furnishing
(including costs of shipping, mailing and courier) such copies of the
Registration Statement and the Prospectus, and all amendments and
supplements thereto, as may be requested for use in connection with
the offering and sale of the Shares by the Underwriters or by dealers
to whom Shares may be sold, (5) the listing of the Shares on the New
York Stock Exchange and the Philadelphia Stock Exchange, (6) any
filings required to be made by the Underwriters with the NASD, and the
fees, disbursements and other charges of counsel for the Underwriters
in connection therewith, (7) the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of
such jurisdictions designated pursuant to Section 4(f), including the
fees, disbursements and other charges of counsel to the Underwriters
in connection therewith, and the preparation and printing of
preliminary, supplemental and final Blue Sky memoranda, (8) counsel to
the Company, (9) the transfer agent for the Shares and (10) the
Accountants.
(j) If this Agreement shall be terminated by the Company pursuant to
any of the provisions hereof (otherwise than pursuant to Section 8) or
if for any reason the Company shall be unable to perform its
obligations hereunder, the Company will reimburse the several
Underwriters for all out-of-pocket expenses (including the fees,
disbursements and other charges of counsel to the Underwriters)
reasonably incurred by them in connection herewith.
(k) The Company will not at any time, directly or indirectly, take any
action intended, or which might reasonably be expected, to cause or
result in, or which will constitute, stabilization of the price of the
shares of Common Stock to facilitate the sale or resale of any of the
Shares.
12
(l) The Company will apply the net proceeds from the offering and sale
of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds".
(m) During the period of 30 days commencing at the Closing Date, the
Company will not, without the prior written consent of PaineWebber
Incorporated, directly or indirectly, sell, contract to sell, offer to
sell, assign, pledge, hypothecate, lend, transfer, make any short sale
of, grant any option, right or warrant for the sale of, or otherwise
dispose of, any Common Stock or securities convertible into Common
Stock, other than to the Underwriters pursuant to this Agreement and
other than pursuant to the Company's employee benefit plans, the
Dividend Reinvestment and Common Stock Purchase Plan and the
Directors' Stock Compensation Plan.
5. Conditions of the Obligations of the Underwriters.
--------------------------------------------------
In addition to the execution and delivery of the Price Determination
Agreement, the obligations of each Underwriter hereunder are subject to the
following conditions:
(a) Notification that all filings required by Rule 424 of the Rules
and Regulations shall have been made.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose
shall be pending or threatened by the Commission, (ii) the Company is
not aware of any order suspending the effectiveness of the
Registration Statement or the qualification or registration of the
Shares under the securities or Blue Sky laws of any jurisdiction and
no proceeding for such purpose shall be pending before or threatened
or contemplated by the Commission or the authorities of any such
jurisdiction, (iii) any request for additional information on the part
of the staff of the Commission or any such authorities shall have been
complied with to the satisfaction of the staff of the Commission or
such authorities and (iv) after the date hereof no amendment or
supplement to the Registration Statement or the Prospectus shall have
been filed unless a copy thereof was first submitted to the
Representatives and the Representatives did not object thereto in good
faith, and the Representatives shall have received certificates, dated
the Closing Date and the Option Closing Date and signed by the Chief
Executive Officer or the Chairman of the Board of Directors of the
Company and the Chief Financial Officer of the Company (who may, as to
proceedings threatened, rely upon the best of their information and
belief), to the effect of clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have
been, and no development shall have occurred which could reasonably be
expected to result in, a material adverse change in the general
affairs, business, business prospects, properties, management,
condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, in each case
other than as set forth in or contemplated by the Registration
Statement and the Prospectus and (ii) neither the Company nor any of
its Subsidiaries shall have sustained any material loss or
interference with its business or properties from fire, explosion,
flood or other casualty, whether or not covered by
13
insurance, or from any labor dispute or any court or legislative or
other governmental action, order or decree, which is not set forth
in the Registration Statement and the Prospectus, if in the
judgment of the Representatives any such development makes it
impracticable or inadvisable to consummate the sale and delivery of
the Shares by the Underwriters at the public offering price.
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any
of its Subsidiaries or any of their respective officers or directors
in their capacities as such, before or by any Federal, state or local
court, commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, in which litigation or
proceeding an unfavorable ruling, decision or finding would materially
and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole.
(e) Each of the representations and warranties of the Company
contained herein shall be true and correct in all material respects at
the Closing Date and, with respect to the Option Shares, at the Option
Closing Date, as if made at the Closing Date and, with respect to the
Option Shares, at the Option Closing Date, and all covenants and
agreements herein contained to be performed on the part of the Company
and all conditions herein contained to be fulfilled or complied with
by the Company at or prior to the Closing Date and, with respect to
the Option Shares, at or prior to the Option Closing Date, shall have
been duly performed, fulfilled or complied with.
(f) The Representatives shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option
Closing Date, and satisfactory in form and substance to counsel for
the Underwriters, from Xxxx X. Xxxxx, Esq., counsel for the Company,
to the effect set forth in Exhibit B.
(g) The Representatives shall have received an opinion, dated the
Closing Date and the Option Closing Date, from Winthrop, Stimson,
Xxxxxx & Xxxxxxx, counsel to the Underwriters, with respect to the
Registration Statement, the Prospectus and this Agreement, which
opinion shall be satisfactory in all respects to the Representatives.
(h) On the date of the Prospectus, the Accountants shall have
furnished to the Representatives a letter, dated the date of its
delivery, addressed to the Representatives and in form and substance
satisfactory to the Representatives, confirming that they are
independent accountants with respect to the Company as required by the
Act and the Rules and Regulations and with respect to the financial
and other statistical and numerical information contained in the
Registration Statement or incorporated by reference therein. At the
Closing Date and, as to the Option Shares, the Option Closing Date,
the Accountants shall have furnished to the Representatives a letter,
dated the date of its delivery, which shall confirm, on the basis of a
review in accordance with the procedures set forth in the letter from
the Accountants, that nothing has come to their attention during the
period from the date of the letter referred to in the prior sentence
to a date (specified in the letter) not more than five days prior to
the Closing Date and the Option Closing Date which would require any
change in their letter dated the date of the
14
Prospectus, if it were required to be dated and delivered at the
Closing Date and the Option Closing Date.
(i) At the Closing Date and, as to the Option Shares, the Option
Closing Date, there shall be furnished to the Representatives an
accurate certificate, dated the date of its delivery, signed by each
of the Chief Executive Officer and the Chief Financial Officer of the
Company, in form and substance satisfactory to the Representatives, to
the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus (including any documents
filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus) and (A) as of the date of such
certificate, such documents are true and correct in all material
respects and do not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein
not untrue or misleading and (B) since the Effective Date, no event
has occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein not
untrue or misleading in any material respect and there has been no
document required to be filed under the Exchange Act and the Exchange
Act Rules and Regulations that upon such filing would be deemed to be
incorporated by reference into the Prospectus that has not been so
filed;
(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at
the time such certificate is delivered, true and correct in all
material respects;
(iii) Each of the covenants required herein to be performed by the
Company on or prior to the delivery of such certificate has been duly,
timely and fully performed and each condition herein required to be
complied with by the Company on or prior to the date of such
certificate has been duly, timely and fully complied with; and
(iv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (A) there has not been,
and no development has occurred which could reasonably be expected to
result in, a material adverse change in the general affairs, business,
business prospects, properties, management, condition (financial or
otherwise) or results of operations of the Company and its
Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and
the Prospectus and (B) neither the Company nor any of its Subsidiaries
has sustained any material loss or interference with its business or
properties from fire, explosion, flood or other casualty, whether or
not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree, which is
not set forth in the Registration Statement and the Prospectus,
and such other matters as the Representatives may reasonably request.
15
(j) The Shares shall be qualified for sale in such states as the
Representatives may reasonably request, each such qualification shall
be in effect and not subject to any stop order or other proceeding on
the Closing Date and the Option Closing Date.
(k) Prior to the Closing Date, the Shares shall have been duly
authorized for listing by the New York Stock Exchange and the
Philadelphia Stock Exchange upon official notice of issuance.
(l) The National Association of Securities Dealers, Inc. shall have
approved the underwriting terms and arrangements and such approval
shall not have been withdrawn or limited.
(m) The Company shall have furnished to the Representatives such
certificates, in addition to those specifically mentioned herein, as
the Representatives may have reasonably requested as to the accuracy
and completeness at the Closing Date and the Option Closing Date of
any statement in the Registration Statement or the Prospectus or any
documents filed under the Exchange Act and deemed to be incorporated
by reference into the Prospectus, as to the accuracy at the Closing
Date and the Option Closing Date of the representations and warranties
of the Company herein, as to the performance by the Company of its
obligations hereunder, or as to the fulfillment of the conditions
concurrent and precedent to the obligations hereunder of the
Representatives.
6. Indemnification.
---------------
(a) The Company will indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each
person, if any, who controls each Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act , from and
against any and all losses, claims, liabilities, expenses and damages
(including, but not limited to, any and all investigative, legal and
other expenses reasonably incurred in connection with, and any and all
amounts paid in settlement of, any action, suit or proceeding between
any of the indemnified parties and any indemnifying parties or between
any indemnified party and any third party, or otherwise, or any claim
asserted), as and when incurred, to which any Underwriter, or any such
person, may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or
damages arise out of or are based on (i) any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or any amendment or
supplement to the Registration Statement or the Prospectus or in any
documents filed under the Exchange Act and deemed to be incorporated
by reference into the Prospectus, or in any application or other
document executed by or on behalf of the Company or based on written
information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Shares under the securities laws
thereof or filed with the Commission, (ii) the omission or alleged
omission to state in such document a material fact required to be
stated in it or necessary to make the statements in it not misleading
or (iii) any act or failure to act or any alleged act or failure to
act by any Underwriter in connection with, or relating in any manner
to, the Shares or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, liability,
expense or damage arising out of or based
16
upon matters covered by clause (i) or (ii) above (provided that
the Company shall not be liable under this clause (iii) to the extent
it is finally judicially determined by a court of competent
jurisdiction that such loss, claim, liability, expense or damage
resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its gross negligence
or willful misconduct); provided that the Company will not be liable
to the extent that such loss, claim, liability, expense or damage
arises from the sale of the Shares in the public offering to any
person by an Underwriter and is based on an untrue statement or
omission or alleged untrue statement or omission made in reliance on
and in conformity with information relating to any Underwriter
furnished in writing to the Company by the Representatives on behalf
of any Underwriter expressly for inclusion in the Registration
Statement or the Prospectus. This indemnity agreement will be in
addition to any liability that the Company might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company,
each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each director
of the Company and each officer of the Company who signs the
Registration Statement to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only insofar as losses,
claims, liabilities, expenses or damages arise out of or are based on
any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Representatives on behalf of such Underwriter expressly for use in the
Registration Statement or the Prospectus. This indemnity will be in
addition to any liability that each Underwriter might otherwise have;
provided, however, that in no case shall any Underwriter be liable or
responsible for any amount in excess of the underwriting discounts and
commissions received by such Underwriter.
(c) Any party that proposes to assert the right to be indemnified
under this Section 6 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a
claim is to be made against an indemnifying party or parties under
this Section 6, notify each such indemnifying party of the
commencement of such action, enclosing a copy of all papers served,
but the omission so to notify such indemnifying party will not relieve
it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 6 unless, and only to the
extent that, such omission results in the forfeiture of substantive
rights or defenses by the indemnifying party. If any such action is
brought against any indemnified party and it notifies the indemnifying
party of its commencement, the indemnifying party will be entitled to
participate in and, to the extent that it elects by delivering written
notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with
any other indemnifying party similarly notified, to assume the defense
of the action, with counsel satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of
its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except
as provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the
defense. The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses and other charges
of such counsel will be at the expense of such indemnified party
unless (1) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on advice of counsel) that there
may be legal defenses
17
available to it or other indemnified parties that are different from
or in addition to those available to the indemnifying party, (3 a
conflict or potential conflict exists (based on advice of counsel to
the indemnified party) between the indemnified party and the
indemnifying party (in which case the indemnifying party will not have
the right to direct the defense of such action on behalf of the
indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and
other charges of counsel will be at the expense of the indemnifying
party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements and other charges of more than one separate firm
admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they
are incurred. An indemnifying party will not be liable for any
settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld). No indemnifying
party shall, without the prior written consent of each indemnified
party, settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action or proceeding relating to the
matters contemplated by this Section 6 (whether or not any indemnified
party is a party thereto), unless such settlement, compromise or
consent includes an unconditional release of each indemnified party
from all liability arising or that may arise out of such claim, action
or proceeding. Notwithstanding any other provision of this Section
6(c), if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by
such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered
into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of
such settlement.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 6 is applicable in accordance
with its terms but for any reason is held to be unavailable from the
Company or the Underwriters, the Company and the Underwriters will
contribute to the total losses, claims, liabilities, expenses and
damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted,
but after deducting any contribution received by the Company from
persons other than the Underwriters, such as persons who control the
Company within the meaning of the Act, officers of the Company who
signed the Registration Statement and directors of the Company, who
also may be liable for contribution) to which the Company and any one
or more of the Underwriters may be subject in such proportion as shall
be appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other. The
relative benefits received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case
as set forth in
18
the table on the cover page of the Prospectus. If, but
only if, the allocation provided by the foregoing sentence is not
permitted by applicable law, the allocation of contribution shall be
made in such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing sentence but also the
relative fault of the Company, on the one hand, and the Underwriters,
on the other, with respect to the statements or omissions which
resulted in such loss, claim, liability, expense or damage, or action
in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such 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 Representatives on behalf of the Underwriters, 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 Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 6(d) were to be
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) 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, liability, expense
or damage, or action in respect thereof, referred to above in this
Section 6(d) shall be deemed to include, for purpose of this
Section 6(d), 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
Section 6(d), no Underwriter shall be required to contribute any
amount in excess of the underwriting discounts and commissions
received by it and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 6(d) are several in proportion
to their respective underwriting obligations and not joint. For
purposes of this Section 6(d), any person who controls a party to this
Agreement within the meaning of the Act will have the same rights to
contribution as that party, and each officer of the Company who signed
the Registration Statement will have the same rights to contribution
as the Company, subject in each case to the provisions hereof. Any
party entitled to contribution, promptly after receipt of notice of
commencement of any action against such party in respect of which a
claim for contribution may be made under this Section 6(d), will
notify any such party or parties from whom contribution may be sought,
but the omission so to notify will not relieve the party or parties
from whom contribution may be sought from any other obligation it or
they may have under this Section 6 (d). Except for a settlement
entered into pursuant to the last sentence of Section 6(c) hereof, no
party will be liable for contribution with respect to any action or
claim settled without its written consent (which consent will not be
unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company
contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any investigation made by or on behalf of
the Underwriters, (ii) acceptance of the Shares and payment therefore
or (iii) any termination of this Agreement.
7. Termination.
-----------
The obligations of the several Underwriters under this Agreement may be
terminated at any time on or prior to the Closing Date (or, with respect to the
Option Shares, on or prior to the Option Closing Date), by notice to the Company
from the
19
Representatives, without liability on the part of any Underwriter to
the Company, if, prior to delivery and payment for the Shares (or the Option
Shares, as the case may be), after consultation with the Company, in the sole
judgment of the Representatives, (i) there has been, since the respective dates
as of which information is given in the Registration Statement, any material
adverse change in the Company's business, properties, business prospects,
condition (financial or otherwise) or results of operations, (ii) trading in any
of the equity securities of the Company shall have been suspended by the
Commission, the NASD, by an exchange that lists the Shares or by the Nasdaq
Stock Market, (iii) trading in securities generally on the New York Stock
Exchange or the Nasdaq Stock Market shall have been suspended or limited or
minimum or maximum prices shall have been generally established on such exchange
or over the counter market, or additional material governmental restrictions,
not in force on the date of this Agreement, shall have been imposed upon trading
in securities generally by such exchange or by order of the Commission or the
NASD or any court or other governmental authority, (iv) a general banking
moratorium shall have been declared by either Federal or New York State
authorities or (v) any material adverse change in the financial or securities
markets in the United States or in political, financial or economic conditions
in the United States or any outbreak or material escalation of hostilities or
declaration by the United States of a national emergency or war or other
calamity or crisis shall have occurred the effect of any of which is such as to
make it, after consultation with the Company, in the sole judgment of the
Representatives, impracticable or inadvisable to market the Shares on the terms
and in the manner contemplated by the Prospectus.
8. Substitution of Underwriters.
-----------------------------
If any one or more of the Underwriters shall fail or refuse to purchase any
of the Firm Shares which it or they have agreed to purchase hereunder, and the
aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of Firm Shares, the other Underwriters shall be
obligated, severally, to purchase the Firm Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase, in the
proportions which the number of Firm Shares which they have respectively agreed
to purchase pursuant to Section 1 bears to the aggregate number of Firm Shares
which all such non-defaulting Underwriters have so agreed to purchase, or in
such other proportions as the Representatives may specify; provided that in no
event shall the maximum number of Firm Shares which any Underwriter has become
obligated to purchase pursuant to Section 1 be increased pursuant to this
Section 8 by more than one-ninth of the number of Firm Shares agreed to be
purchased by such Underwriter without the prior written consent of such
Underwriter. If any Underwriter or Underwriters shall fail or refuse to purchase
any Firm Shares and the aggregate number of Firm Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase exceeds
one-tenth of the aggregate number of the Firm Shares and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Firm Shares are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company for the purchase or sale of any Shares under this Agreement. In any such
case either the Representatives or the Company shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus or
in any other documents or arrangements may be effected. Any action taken
pursuant to this Section
20
8 shall not relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
9. Miscellaneous.
-------------
Notice given pursuant to any of the provisions of this Agreement shall be
in writing and, unless otherwise specified, shall be mailed or delivered (a) if
to the Company, at the office of the Company, 0000 X Xxxxxx X.X., Xxxxxxxxxx
X.X. 00000, Attention: Secretary, or (b) if to the Underwriters, to the
Representatives at the offices of PaineWebber Incorporated, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Finance Department. Any
such notice shall be effective only upon receipt. Any notice under Section 7 or
8 may be made by telex or telephone, but if so made shall be subsequently
confirmed in writing.
This Agreement has been and is made solely for the benefit of the several
Underwriters and the Company and of the controlling persons, directors and
officers referred to in Section 6, and their respective successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" as used in this Agreement shall not
include a purchaser, as such purchaser, of Shares from any of the several
Underwriters.
All representations, warranties and agreements of the Company contained
herein or in certificates or other instruments delivered pursuant hereto, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter or any of its controlling persons and
shall survive delivery of and payment for the Shares hereunder.
Any action required or permitted to be taken by the Representatives under
this Agreement may be taken by them jointly or by PaineWebber Incorporated.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES
OF SUCH STATE.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby irrevocably waive any right
they may have to a trial by jury in respect of any claim based upon or arising
out of this Agreement or the transactions contemplated hereby.
21
This Agreement may not be amended or otherwise modified or any provision
hereof waived except by an instrument in writing signed by the Representatives
and the Company.
Please confirm that the foregoing correctly sets forth the agreement among
the Company and the several Underwriters.
Very truly yours,
WASHINGTON GAS LIGHT COMPANY
By: /S/ XXXXXXXX X.XXXXX
-------------------------
Title: Vice President, Treasurer
and Chief Financial Officer
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
X.X. XXXXXXX & SONS, INC.
Acting on behalf of
themselves and as the
Representatives of the
other several Underwriters
named in Schedule I hereof.
By: PAINEWEBBER INCORPORATED
By: /S/ XXXXXX X. XXXXXXXX
------------------------
Title: Managing Director
22
SCHEDULE I
UNDERWRITERS
Number of
Name of Firm Shares
Underwriters to be Purchased
------------ ----------------
PaineWebber Incorporated 525,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx 525,000
Incorporated
X.X. Xxxxxxx & Sons, Inc. 525,000
Credit Suisse First Boston Corporation 60,000
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation 60,000
Xxxxxx Xxxxxxxxxx Xxxxx Inc. 60,000
Xxxxxx Xxxxxxx & Co. Incorporated 60,000
Xxxxxxx Xxxxx Barney Inc. 60,000
Xxxxxx, Xxxxx Xxxxx, Inc. 25,000
Xxxxxxxx, Lemon & Co. Incorporated 25,000
Xxxxxx X. Xxxxx & Co., L.P. 25,000
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated 25,000
Xxxxx Capital Markets 25,000
---------
Total 2,000,000
=========
WASHINGTON GAS LIGHT COMPANY
PRICE DETERMINATION AGREEMENT
-----------------------------
November 12, 1998
PAINEWEBBER INCORPORATED
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
X.X. XXXXXXX & SONS, INC.
As Representatives of the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Reference is made to the Underwriting Agreement, dated November 12, 1998
(the "Underwriting Agreement"), among Washington Gas Light Company, a District
of Columbia and Virginia corporation (the "Company") and the several
Underwriters named in Schedule I thereto or hereto (the "Underwriters"), for
whom PaineWebber Incorporated, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated and X.X. Xxxxxxx & Sons, Inc. are acting as Representatives (the
"Representatives"). The Underwriting Agreement provides for the purchase by the
Underwriters from the Company, subject to the terms and conditions set forth
therein, of an aggregate of 2,000,000 shares (the "Firm Shares") of the
Company's common stock, par value $1.00 per share. This Agreement is the Price
Determination Agreement referred to in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the undersigned agree
with the Representatives as follows:
The public offering price per share for the Firm Shares shall be $25.0625.
The purchase price per share for the Firm Shares to be paid by the several
Underwriters shall be $24.2225, representing an amount equal to the public
offering price set forth above, less $0.8400 per share.
The Company represents and warrants to each of the Underwriters that the
representations and warranties of the Company set forth in Section 3 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
As contemplated by the Underwriting Agreement, attached as Schedule I is a
completed list of the several Underwriters, which shall be a part of this
Agreement and the Underwriting Agreement.
This Agreement shall be governed by the law of the State of New York
without regard to the conflict of laws principles of such State.
If the foregoing is in accordance with your understanding of the agreement
among the Underwriters and the Company, please sign and return to the Company a
counterpart hereof, whereupon this instrument along with all counterparts and
together with the Underwriting Agreement shall be a binding agreement among the
Underwriters and the Company in accordance with its terms and the terms of the
Underwriting Agreement.
Very truly yours,
WASHINGTON GAS LIGHT COMPANY
By:/s/ XXXXXXXX X. XXXXX
--------------------------
Title: Vice President,
Treasurer and
Chief Financial Officer
2
Confirmed as of the date
first above mentioned:
PAINEWEBBER INCORPORATED
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
X.X. XXXXXXX & SONS, INC.
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
named in Schedule I hereof.
By: PAINEWEBBER INCORPORATED
By: /s/ XXXXXX X.XXXXXXXX
------------------------
Title: Managing Director
3
EXHIBIT B
Form of Opinion of
Counsel for the Company
-----------------------
The Company and each of its Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has full corporate power and authority to conduct all the
activities conducted by it, to own or lease all the assets owned or leased by it
and to conduct its business as described in the Registration Statement and the
Prospectus. The Company is the sole record owner and the sole beneficial owner
of all of the capital stock of each of its Subsidiaries.
All of the outstanding shares of Common Stock have been, and the Shares,
when paid for by the Underwriters in accordance with the terms of the Agreement,
will be, duly authorized, validly issued, fully paid and nonassessable and will
not be subject to any preemptive or similar right under (i) the statutes,
judicial and administrative decisions, and the rules and regulations of the
governmental agencies of the District of Columbia or the State of Virginia,
(ii) the Company's certificate of incorporation or by-laws or (iii) any
instrument, document, contract or other agreement referred to in the
Registration Statement or any instrument, document, contract or agreement filed
as an exhibit to, or incorporated as an exhibit by reference in, the
Registration Statement. Except as described in the Registration Statement or the
Prospectus, there is no commitment or arrangement to issue, and there are no
outstanding options, warrants or other rights calling for the issuance of, any
share of capital stock of the Company or any Subsidiary to any person or any
security or other instrument that by its terms is convertible into, exercisable
for or exchangeable for capital stock of the Company.
No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Shares by the Company, in connection with the execution, delivery and
performance of the Agreement by the Company or in connection with the taking by
the Company of any action contemplated thereby, except such as have been
obtained under the Act and the Rules and Regulations and such as may be required
under state securities or "Blue Sky" laws or by the by-laws and rules of the
NASD in connection with the purchase and distribution by the Underwriters of the
Shares to be sold by the Company, and except for filings with and the orders
from the Public Service Commission of the District of Columbia and the State
Corporation Commission of Virginia authorizing the issuance and sale by the
Company of the Shares subject to certain conditions set forth therein, both of
which orders have been obtained and are in full force and effect. All references
in this opinion to the Agreement shall include the Price Determination
Agreement.
The authorized, issued and outstanding capital stock of the Company is as
set forth in the Registration Statement and the Prospectus under the caption
"Capitalization Data" in the "Selected Financial Information" table. The
description of the Common Stock contained in the Prospectus is complete and
accurate in all material respects. The form of certificate used to evidence the
Common Stock is in due and proper form and complies with all applicable
statutory requirements.
The Registration Statement and the Prospectus (including any documents
incorporated by reference into the Prospectus, at the time they were filed)
comply or complied in all material respects as to form with the requirements of
the Act, the Exchange Act, the Exchange Act Rules and Regulations and the Rules
and Regulations (except that I express no opinion as to financial statements,
schedules and other financial data contained in the Registration Statement or
the Prospectus or incorporated by reference therein).
Any instrument, document, lease, license, contract or other agreement
(collectively, "Documents") required to be described or referred to in the
Registration Statement or the Prospectus has been properly described or referred
to therein and any Document required to be filed as an exhibit to the
Registration Statement has been filed as an exhibit thereto or has been
incorporated as an exhibit by reference in the Registration Statement; and no
default exists in the due performance or observance of any material obligation,
agreement, covenant or condition contained in any Document filed or required to
be filed as an exhibit to the Registration Statement, except for any defaults
that would not have a material adverse effect on the condition (financial or
otherwise) or on the earnings, business, properties, business prospects or
operations of the Company and its Subsidiaries, taken as a whole.
Except as disclosed in the Registration Statement or the Prospectus, no
person or entity has the right to require the registration under the Act of
shares of Common Stock or other securities of the Company by reason of the
filing or effectiveness of the Registration Statement.
The Company is not in violation of, or in default with respect to, any law,
rule, regulation, order, judgment or decree, except as may be described in the
Prospectus or such as in the aggregate do not now have and will not in the
future have a material adverse effect upon the operations, business or assets of
the Company and the Subsidiaries, taken as a whole.
All descriptions in the Prospectus of statutes, regulations or legal or
governmental proceedings are accurate and fairly present the information
required to be shown.
The Company has full corporate power and authority to enter into the
Agreement, and the Agreement has been duly authorized, executed and delivered by
the Company, is a valid and binding agreement of the Company and, except for the
indemnification and contribution provisions thereof, as to which I express no
opinion, is enforceable against the Company in accordance with the terms
thereof.
The execution and delivery by the Company of, and the performance by the
Company of its agreements in, the Agreement do not and will not (i) violate the
certificate
2
of incorporation or by-laws of the Company, (ii) breach or result in
a default under, cause the time for performance of any obligation to be
accelerated under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of the assets of the Company or any of its Subsidiaries
pursuant to the terms of, (x) any indenture, mortgage, deed of trust, loan
agreement, bond, debenture, note agreement, capital lease or other evidence of
indebtedness of which I have knowledge, (y) any voting trust arrangement or any
contract or other agreement to which the Company is a party that restricts the
ability of the Company to issue securities or (z) any Document filed as an
exhibit to, or incorporated as an exhibit by reference in, the Registration
Statement, (iii) breach or otherwise violate any existing obligation of the
Company under any court or administrative order, judgment or decree of which I
have knowledge or (iv) violate applicable provisions of any statute or
regulation in the City of Washington D.C., or the States of Virginia, West
Virginia or Maryland or of the United States.
Delivery of certificates for the Shares will transfer valid and marketable
title thereto to each Underwriter that has purchased such Shares in good faith
and without notice of any adverse claim with respect thereto.
The Company is not an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended.
The Shares have been duly authorized for listing by the New York Stock
Exchange and the Philadelphia Stock Exchange upon official notice of issuance.
I hereby confirm to you that I have been advised by the Commission that the
Registration Statement has become effective under the Act and that no order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for that purpose has been instituted or is pending, threatened or
contemplated.
I hereby further confirm to you that there are no actions, suits,
proceedings or investigations pending or, to my knowledge, overtly threatened in
writing against the Company or any of its Subsidiaries, or any of their
respective officers or directors in their capacities as such, before or by any
court, governmental agency or arbitrator which (i) seek to challenge the
legality or enforceability of the Agreement, (ii) seek to challenge the legality
or enforceability of any of the Documents filed, or required to be filed, as
exhibits to the Registration Statement, (iii) seek damages or other remedies
with respect to any of the Documents filed, or required to be filed, as exhibits
to the Registration Statement, (iv) except as set forth in or contemplated by
the Registration Statement and the Prospectus, seek money damages or seek to
impose criminal penalties upon the Company, any of its Subsidiaries or any of
their respective officers or directors in their capacities as such or (v) seek
to enjoin any of the business activities of the Company or any of its
Subsidiaries or the transactions described in the Prospectus.
The Company is exempt by order from the provisions of the Public Utility
Holding Company Act of 1935 (except Sections 11(b)(2), 11(d) and 11(e) thereof)
which
3
would otherwise require it to register thereunder, and the Company's gas
distribution activities are exempt from the Natural Gas Act.
The Public Service Commission of the District of Columbia and the State
Corporation Commission of Virginia have issued appropriate orders with respect
to the issuance and sale of the Shares in accordance with the Agreement; such
orders are still in full force and effect; the issuance and sale of the Shares
in accordance with the Agreement conform with the terms of such orders.
I have participated in the preparation of the Registration Statement and
the Prospectus and, without assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus or in any amendment or supplement thereto or in any
document incorporated by reference into the Prospectus, nothing has come to my
attention that causes me to believe that, both as of the Effective Date and as
of the Closing Date [and the Option Closing Date], the Registration Statement or
any amendment thereto 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 not misleading or that the
Prospectus including any documents incorporated by reference into the
Prospectus, at the time such Prospectus was issued and at the Closing Date [and
the Option Closing Date], contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances in which they
were made, not misleading (except that I express no opinion as to financial
statements, schedules and other financial data contained in the Registration
Statement or the Prospectus or incorporated by reference therein).
The foregoing opinion is subject to the qualification that the
enforceability of the Agreement may be: (i) subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally; and (ii) subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity)
including principles of commercial reasonableness or conscionability and an
implied covenant of good faith and fair dealing.
This letter is furnished by me solely for your benefit in connection with
the transactions referred to in the Agreement and may not be circulated to, or
relied upon by, any other person, except that this letter may be relied upon by
your counsel in connection with the opinion letter to be delivered to you
pursuant to Section 5(g) of the Agreement.
4
