Exhibit 1.2
Draft
5/3/96
CITIZENS UTILITIES COMPANY
Common Stock
UNDERWRITING AGREEMENT
New York, New York
[Date]
To the Representatives named in Schedule I of each of the several Underwriters
named in Schedule II hereto
Dear Sirs:
Citizens Utilities Company, a Delaware corporation
(the "Company"), proposes, subject to the terms and conditions stated
herein, to issue and sell severally and not jointly to the Underwriters named in
Schedule II hereto (the "Underwriters") for whom you are acting as
representatives (the "Representatives") (i) that number of shares of Common
Stock Series A and Series B (par value $.25 per share) of the Company ("Common
Stock") specified in Schedule I hereto and (ii) an option described in Section 2
hereof to purchase all or any part of the number of additional shares of Common
Stock to cover overallotments as is specified in Schedule I hereto. The shares
of Common Stock to be purchased initially by the Underwriters (the "Initial
Shares"), together with all or any part of the shares of Common Stock subject to
the option described in Section 2 hereof (the "Option Shares"), are collectively
hereinafter called the "Shares".
I. Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter that:
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933 (the "Act") and has filed with the
Securities and Exchange Commission (the "Commission") a registration
statement on such Form, including a prospectus, for the registration
under the Act of the Shares, which registration statement has become
effective. Such registration statement and prospectus may have been
amended or supplemented from time to time prior to the date of this
Agreement. Any such amendment or supplement was filed with the
Commission and any such amendment has become effective. Promptly upon
execution of this Agreement, the Company will file with the Commission
a prospectus supplement (the "Prospectus Supplement") relating to the
Shares pursuant to Rule 424 under the Act. Copies of such registration
statement and prospectus, any such amendment or supplement, the
Prospectus Supplement and all documents incorporated by reference
therein which were filed with the Commission on or prior to the date of
this Agreement have been delivered to you. The registration statement
and prospectus as amended or supplemented prior to the date of this
Agreement, and as supplemented by the Prospectus Supplement are
hereinafter called the "Registration Statement" and the "Prospectus",
respectively. Any reference herein 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 Securities Exchange Act of 1934 (the "Exchange
Act") on or before the date of this Agreement, and any reference herein
to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to include the
filing of any document under the Exchange Act deemed to be incorporated
by reference therein after the date of this Agreement.
(b) (i) The Registration Statement, at the time it became
effective, any post-effective amendment thereto, at the time it became
effective, the Prospectus, at the date of this Agreement and at the
Closing Date (as hereinafter defined), any amendments thereof and
supplements thereto complied or will comply in all material respects
with the Act and the Exchange Act and the respective rules thereunder
and (ii) the Registration Statement did not contain and, as amended by
any amendment thereto, will not contain any untrue statement of a
material fact or omitted or will omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading and the Prospectus and any amendment
thereof or supplement thereto does not contain and will not contain any
untrue statement of a material fact or omits or will omit to state any
material fact required to be stated therein or 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
Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the
Prospectus or any amendment thereof or supplement thereto in reliance
upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the Representatives
specifically for use in connection with the preparation of the
Prospectus.
(c) The documents incorporated by reference in the Prospectus
conformed in all material respects to the requirements of the Act or
the Exchange Act and the rules and regulations of the Commission
thereunder, and any documents so filed and incorporated by reference
subsequent to the date of this Agreement will, when they are filed with
the Commission, conform in all material respects to the requirements of
the Act and the Exchange Act, and the rules and regulations of the
Commission thereunder; and none of such documents include or will
include any untrue statement of a material fact or omit or will omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
set forth in the Registration Statement and the Prospectus, there has
not been any material adverse change in the business, properties or
financial condition of the Company and its subsidiaries, considered as
a whole, and there have not been any transactions entered into by the
Company or any of its subsidiaries which is material to the Company and
its subsidiaries, considered as a whole, other than transactions in the
ordinary course of business and transactions contemplated by the
Registration Statement or Prospectus.
(e) Neither the issuance or sale of the Initial Shares nor the
Option Shares, nor the performance of the terms and provisions thereof
and of this Agreement, will conflict with, result in a breach of or
constitute a default under the terms of the Certificate of
Incorporation or By-Laws of the Company or any indenture, mortgage,
deed of trust or other agreement or instrument to which the Company is
a party or by which it is bound or any order or regulation applicable
to the Company of any Court, regulatory body, administrative agency or
governmental body having jurisdiction over the Company.
(f) The Shares conform to the description thereof contained in
the Prospectus and are duly and validly authorized, and, when delivered
to the Underwriters as provided herein against payment of the
consideration set forth in the Pricing Agreement, will be validly
issued and outstanding, fully paid and non-assessable with no personal
liability attaching to the ownership thereof, and listed on the New
York Stock Exchange.
2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to you and each other Underwriter, severally and not
jointly, and you and each other Underwriter agree, severally and not jointly, to
purchase from the Company, at the purchase price set forth in Schedule I hereto,
the number of Initial Shares set forth opposite such Underwriter's name in
Schedule II hereto plus any additional number of Option Shares which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 9 hereof.
In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to the number of additional shares of Common Stock
set forth on Schedule I hereto at the price set forth on Schedule I hereto. The
option hereby granted will expire 30 days after the date of this Underwriting
Agreement, and may be exercised in whole or in part from time to time only for
the purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Initial Shares upon notice by the
Representatives to the Company setting forth the number of Option Shares as to
which the Underwriters are then exercising the option and the time, date and
place of payment and delivery for such Option Shares. Any such time and date of
delivery (a "Date of Delivery") shall be determined by the Representatives, but
shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Date, as hereinafter defined,
unless otherwise agreed upon by the Representatives and the Company. If the
option is exercised as to all or any portion of the option Shares, the Option
Shares shall be sold by the Company and shall be purchased by the Underwriters,
severally and not jointly, in proportion to their respective Initial Share
underwriting obligations as set forth in Schedule II.
3. Delivery, Payment and Offering. Delivery of and payment for
the Initial Shares shall be made at the place, date and time specified in
Schedule I hereto (or such other place, date and time not later than ten full
business days thereafter as the Representatives and the Company shall
designate), which date and time may be postponed by agreement between the
Representatives and the Company or as provided in Section 9 hereof (such date
and time being herein called the "Closing" or "Closing Date"). Delivery of the
Initial Shares shall be made to the Representatives for the respective accounts
of the several Underwriters against payment by the several Underwriters through
the Representatives of the purchase price thereof to or upon the order of the
Company by official bank check or checks payable in clearing house funds. The
Initial Shares shall be in definitive form and shall be registered in such names
and in such authorized denominations as the Representatives may request not less
than three full business days in advance of the Closing Date. The Company agrees
to have the Initial Shares available for inspection, checking and packaging by
the Representatives in New York, New York, not later than 10:00 A.M., New York
City Time, on the last business day prior to the Closing Date.
In addition, in the event that any or all of the Option Shares
are purchased by the Underwriters, delivery of and payment for the Option Shares
shall be made on the Date of Delivery at the offices designated on Schedule I at
10:00 A.M. New York City Time (or such other time and place as the
Representatives and the Company shall designate), which date and time may be
postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof and which date may also be the Closing Date.
Delivery of the Option Shares shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by or on behalf
of the Underwriters through the Representatives of the purchase price thereof to
or upon the order of the Company by official bank check or checks payable in
clearing house funds. The Option Shares shall be in definitive form and shall be
registered in such names and in such authorized denominations as the
Representatives may request not less than three full business days in advance of
the Date of Delivery.
The Company agrees to have the Option Shares available for
inspection, checking and packaging by the Representatives in New York, New York,
not later than 10:00 a.m., New York City time, on the last business day prior to
the Date of Delivery.
It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Shares which it has agreed to purchase.
______________ ____________, individually and not as Representatives of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Shares to be purchased by any Underwriter whose check has not been
received by the Closing Date, but such payment shall not relieve such
Underwriter from its obligations hereunder.
Subject to the terms and conditions of this Agreement, the
Underwriters agree to make a bona fide public offering of the Shares as soon as
the Representatives deem advisable after this Agreement has been executed and
delivered.
4. Agreements. The Company agrees with the several
Underwriters that:
(a) With your consent, the Company will file the Prospectus
Supplement pursuant to Rule 424 under the Act and will notify the
Representatives promptly of such filing. During the period for which a
prospectus relating to the Shares is required to be delivered under the
Act, the Company will promptly advise the Representatives (i) when any
amendment to the Registration Statement shall have become effective,
(ii) when any subsequent supplement to the Prospectus has been filed or
mailed for filing, (iii) of any request by the Commission for any
amendment of or supplement to the Registration Statement or the
Prospectus or for any additional information, (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any
proceedings for that purpose, and (v) of the 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
threatening of any proceeding for such purpose. The Company will use
its best efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof. The
Company will not file any amendment to the Registration Statement or
supplement to the Prospectus (other than any prospectus supplement
relating to the offering of Shares registered under the Registration
Statement or a prospectus or prospectus supplement relating to an
offering of debt or additional equity securities which offering is
permitted by Section 4(f) hereof, and other than any document required
to be filed under the Exchange Act which upon filing is deemed to be
incorporated by reference in the Registration Statement or Prospectus)
unless the Company has furnished to the Representatives a copy for
their review prior to filing and will not file any such proposed
amendment or supplement to which they reasonably object. The Company
will furnish to the Representatives prior to the filing thereof a copy
of any such prospectus supplement and any document which upon filing is
deemed to be incorporated by reference in the Registration Statement or
Prospectus.
(b) 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
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
shall be necessary at any time to amend or supplement the Prospectus to
comply with the Act or the Exchange Act or the respective rules
thereunder, the Company promptly will prepare and file with the
Commission, subject to paragraph (a) of this Section 4, an amendment or
supplement which will correct such statement or omission or an
amendment or supplement which will effect such compliance.
(c) The Company will furnish such information, execute such
instruments and take such action as may be required to qualify the
Shares for sale under the laws of those states specified in a writing
heretofore delivered by you and countersigned by the Company and such
other jurisdictions as the Representatives may designate in which there
is a change of law or regulation after the date hereof affecting the
status of the Shares as exempt Shares under such laws and will maintain
such qualifications in effect so long as required for the distribution
of the Shares; provided, however, that the Company shall not be
required 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 or unlimited service of process in any jurisdiction where it is
not now so subject.
(d) The Company will furnish to the Representatives a signed
copy of the registration statement as originally filed and of each
amendment thereto, including copies of all documents incorporated by
reference in the Prospectus, all powers of attorney, consents and
exhibits filed therewith (other than exhibits incorporated by
reference), and will deliver to the Representatives conformed copies of
the Registration Statement, the Prospectus, including any documents
incorporated by reference therein at or after the date thereof and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, all amendments of and supplements to such
documents, in each case as soon as available and in such quantities as
the Representatives may reasonably request.
(e) For a period of five calendar years from the date of this
Agreement, the Company will furnish (or cause to be furnished) to each
of the Representatives, upon request, copies of (i) all reports to
stockholders of the Company and (ii) all reports and financial
statements filed with the Commission or with the New York Stock
Exchange.
(f) During the period beginning from the date of this
Agreement and continuing to and including the earlier of (i) the
termination of trading restrictions on the Initial Shares, as notified
to the Company by the Representatives, and (ii) the _________ day after
the Closing Date for the Initial Shares, the Company will not offer,
sell, or otherwise dispose of any shares of Common Stock or any
securities convertible into or exchangeable or exercisable for any such
shares of Common Stock (except for stock dividends paid in the normal
course, stock splits or stock splits carried out in the form of stock
dividends, shares sold under the Company's stock dividend sale plan,
shares issued under employee or director stock option or other employee
or director benefit or stock ownership plans and shares issued under
stockholder ownership plans, shares issued as consideration in
connection with acquisitions which have been disclosed to you and
securities under prior contractual commitments, if any, which have been
disclosed to you), without the prior written consent of the
Representatives, which consent shall not be unreasonably withheld.
(g) The Company will make generally available to its security
holders and to the Representatives, as soon as practicable, but not
later than sixteen months after the "effective date" of the
Registration Statement (as such term is defined in Rule 158(c) under
the Act), a consolidated earning statement (which need not be audited)
of the Company, covering a period of twelve-months beginning after such
effective date which will satisfy the provisions of Section 11(a) of
the Act.
5. Expenses. The Company will pay or cause to be paid the
following:
(i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement and the
Prospectus and amendments and supplements thereto and the furnishing
of copies thereof and of any preliminary Prospectus to the Underwriters
and dealers, all fees, if any, payable to the National Association of
Securities Dealers, Inc. or New York Stock Exchange;
(ii) the cost of printing this Agreement and the Blue Sky
Survey;
(iii) all expenses including fees and disbursements of counsel
(up to a maximum of $________) in connection with the qualification of
the Shares under the securities or Blue Sky laws of such jurisdictions
as the Representatives shall reasonably request and the preparation of
a Blue Sky Survey;
(iv) the cost of preparing certificates for the Shares;
and
(v) all other costs and expenses incident to the performance
of the Company's obligations hereunder which are not otherwise
specifically provided for in this Section 5. Except as provided in
Section 5 and Section 11 hereof, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel, transfer
taxes on resale of any of the Initial Shares by them, and any
advertising expenses connected with any offers they may make. The
Company shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits.
6. (a) Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Initial Shares shall be subject
to the accuracy in all material respects of the representations and warranties
on the part of the Company contained herein (except insofar as such
representations and warranties have already been qualified as to materiality
therein) as of the date hereof and the Closing Date, to the accuracy of the
statements of Company officers made in any certificates given pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission;
(ii) There shall be in full force and effect, on the date of
this Agreement and on the Closing Date, an order or orders, if
necessary, of the Federal Energy Regulatory Commission ("FERC")
authorizing the issue and sale of the Initial Shares on the terms set
forth or contemplated in this Agreement and no additional order of FERC
shall be necessary for such issuance and sale;
(iii) At the Closing Date, the Company shall have received all
authorizations from any state regulatory commission (other than
pursuant to any state "Blue Sky" laws), necessary for the issuance and
sale of the Initial Shares and related transactions on the terms set
forth or contemplated in this Agreement and containing no provision
unacceptable to the Representatives, which such authorizations shall be
in full force and effect and no order or additional order of any such
Commission shall be necessary for such issuance and sale which has not
been obtained;
(iv) The Shares shall have been approved for listing on
the New York Stock Exchange;
(v) At the Closing Date, the Representatives shall have been
furnished with the following opinions, addressed to the Underwriters
(with conformed copies thereof for each of the other Underwriters), in
form and substance satisfactory to the Representatives, dated the
Closing Date or a date not more than three days prior thereto:
(A) Opinion of Boulanger, Hicks & Churchill, P.C.,
New York, New York, counsel to the Company;
(B) Opinions of Brown & Bain, P.A., Phoenix, Arizona;
LeBouef, Lamb, Greene & MacRae, Denver, Colorado; Cades
Schutte Fleming & Wright, Honolulu, Hawaii; Marshall Ordemann,
counsel to the Louisiana Gas Division of the Company, Harvey,
Louisiana; Miller, Eggleston and Rosenberg, Ltd., Burlington,
Vermont; Stokes & Bartholomew, Nashville, Tennessee; and
Jackson & Kelly, Charleston, West Virginia (or other local
counsel to the Company), counsel to the Company; and
(C) Opinion of Simpson Thacher & Bartlett, New York,
New York, counsel to the Underwriters with respect to the
validity of the Shares, the Registration Statement, the
Prospectus, and other related matters as the Representatives
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;
(vi) On the Closing Date, the Representatives shall have been
furnished a letter dated the Closing Date, in form and substance
satisfactory to the Representatives, from KPMG Peat Marwick, the
Company's independent public accountants, containing statements and
information heretofore agreed upon with respect to the financial
statements and certain financial information contained in or
incorporated by reference into the Prospectus;
(vii) At the Closing Date, the Representatives shall have
received a certificate, dated the Closing Date, signed by an officer of
the Company, to the effect that, (A) since the respective dates as of
which information is given in the Registration Statement and
Prospectus, there has not been any material adverse change in the
business, properties or financial condition of the Company and its
subsidiaries, considered as a whole, and (B) since such dates, there
has not been any transaction entered into by the Company or any of its
subsidiaries other than transactions referred to in, or contemplated
by, the Registration Statement and Prospectus and transactions which
are not material to the Company and its subsidiaries considered as a
whole; and
(viii) At the Closing Date, the Representatives shall have
received a certificate, dated the Closing Date signed by an officer of
the Company, to the effect that, since the respective dates as of which
information is given in the Registration Statement and Prospectus,
neither the Company nor any of its subsidiaries shall have sustained a
loss by fire, flood, accident or other calamity which is substantial
with respect to the property of the Company and its subsidiaries,
considered as a whole. At the Closing the Representatives shall have
been furnished with certificates satisfactory to the Representatives as
to the accuracy of its representations and warranties herein at and as
of the Closing and as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to the Closing, and
the Company also shall have furnished to you a certificate satisfactory
to you as to the matters set forth in subsections (i) and (ii) of this
Section 6.
(b) Option Share Closing: In the event the Underwriters
exercise their option granted in Section 2 hereof to purchase all or any portion
of the Option Shares, the representations and warranties of the Company
contained herein and the statements in any certificates furnished by the Company
hereunder shall be true and correct as of each Date of Delivery, and the
Representatives shall have received:
(i) A certificate of the Chairman or the President or any Vice
President and of the Treasurer or Assistant Treasurer of the Company,
dated such Date of Delivery, confirming that the certificate delivered
on the Closing Date pursuant to Section 6(a)(viii) hereof remains true
as of such Date of Delivery.
(ii) A certificate of an officer of the Company dated such
Date of Delivery confirming that the certificate delivered on the
Closing Date pursuant to Section 6(a)(vii) hereof remains true as of
such Date of Delivery.
(iii) The opinion of Boulanger, Hicks & Churchill, P.C.,
counsel for the Company, dated such Date of Delivery relating to the
Option Shares and otherwise to the same effect as the opinion required
by Section 6(a)(v)(A) hereof.
(iv) The opinion of Simpson Thacher & Bartlett, counsel for
the Underwriters, dated such Date of Delivery, relating to the Option
Shares and otherwise to the same effect as the opinion required by
Section 6(a)(v)(C) hereof.
(v) A letter from KPMG Peat Marwick, dated such Date of
Delivery, substantially the same in scope and substance as the letter
furnished to the Representatives pursuant to Section 6(a)(vi) hereof,
except that the "specified date" in the letter furnished pursuant to
this Section 6(b) shall be a date not more than six days prior to such
Date of Delivery.
(vi) Prior to the Date of Delivery the Company shall have
furnished to the Representatives such further information, certificates
and documents confirming as of such date the Company's representations
and warranties contained herein as they may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement, this Agreement and
all obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date by the Representatives. Notice of such cancellation
shall be given to the Company in writing, or by telephone or telegraph confirmed
in writing.
7. Conditions of Company's Obligations. The obligations
of the Company to sell and deliver the Shares are subject to the following
conditions:
(a) Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened.
(b) The conditions referred to in subsections (ii) and (iii)
of Section 6(a) shall have been met and no order or authorization
referred to therein shall contain any provision unacceptable to the
Company.
If any of the conditions specified in this Section 7 shall not
have been fulfilled, this Agreement and all obligations of the Company
hereunder, except as stated in Section 11, may be canceled on or at any time
prior to the Closing Date by the Company. Notice of such cancellation shall be
given to the Representatives in writing or by telephone or telegraph confirmed
in writing.
8. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person who controls any Underwriter within the
meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or
otherwise insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement for the registration of the Initial Shares
as originally filed or in any amendment thereof, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Prospectus or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or
is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company as herein
stated by or on behalf of any Underwriter through the Representatives
specifically for use in connection with the preparation thereof and
provided further that such indemnity with respect to a prospectus
included in the registration statement or any amendment thereto prior
to the supplementing thereof with the Prospectus Supplement shall not
inure to the benefit of any Underwriter (or any person controlling such
Underwriter) from whom the person asserting any such loss, claim,
damage or liability purchased the Shares which are the subject thereof
if such person was not sent or given by or on behalf of such
Underwriter a copy of the Prospectus as amended or supplemented (but
without the documents incorporated by reference therein) at or prior to
the confirmation of the sale of such Shares to such person in any case
where such delivery is required by the Act and the untrue statement or
omission of a material fact contained in the Prospectus was corrected
in the Prospectus as amended or supplemented. This indemnity agreement
will be in addition to any liability which the Company may otherwise
have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who
has signed the Registration Statement and each person, if any, who
controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the
Company to the Underwriters but only in relation to written information
furnished to the Company by or on behalf of such Underwriter through
the Representatives specifically for use in the preparation of the
Prospectus, and agrees to reimburse each such indemnified party for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action. This indemnity agreement will be in addition to any liability
which any Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
in writing of the commencement thereof; but the omission to so notify
the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under this Section 8.
In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the
extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel
satisfactory to such 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. Upon receipt of notice
from the indemnifying party to such indemnified party of its election
so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel, approved by the
Representatives in the case of subsection (a), representing the
indemnified parties under subsection (a) or (b), as the case may be,
who are parties to such action), (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice
of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party; and except that, if clause (i) or
(iii) is applicable, such liability shall be only in respect of the
counsel referred to in such claims (i) or (iii). It is understood that
all such fees and expenses shall be reimbursed as they are incurred.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in
subparagraphs (a) and (b) is due in accordance with its terms but is
for any reason unavailable from the Company or the Underwriters or
insufficient to hold the Underwriters, the Company or any party covered
by the foregoing indemnification harmless in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred
to therein, the Company and the Underwriters shall contribute to the
aggregate losses, claims, damages and liabilities (or actions in
respect thereof) to which the Company and one or more of the
Underwriters may be subject, as a result of such losses, claims,
damages or liabilities (or actions in respect thereof), in such
proportion as is appropriate to reflect the relative fault of the
Company on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any
other equitable considerations, including relative benefit. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters
on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. 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 of the Shares
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters
with respect to the offering of the Shares, in each case as set forth
in the table on the cover page of the Prospectus Supplement.
Notwithstanding the foregoing, 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 guilty of
such fraudulent misrepresentation. The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant
to this subsection (d) were 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 account of the equitable
considerations referred to above in this subsection (d). The amount
paid or payable by a party entitled to contribution as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such party in connection
with investigating or defending any such action or claim. The
Underwriters' obligations under this subsection (d) are several in
proportion to their respective underwriting obligations and not joint.
Notwithstanding the provisions of this Section 8, no Underwriter shall
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 exceeds the amount of any damages of the kind described
in Section 8(a) which such Underwriter has otherwise paid in respect of
such losses, liabilities, claims and damages. For purposes of this
subsection (d), each person, if any, who controls an Underwriter within
the meaning of either the Act or the Exchange Act, and each officer,
director and employee of an Underwriter shall have the same rights to
contribution as such Underwriter, and each person, if any, who controls
the Company within the meaning of either the Act or the Exchange Act,
each officer, director and employee of the Company shall have the same
rights to contribution as the Company, subject to the fourth sentence
of this subsection (d).
9. Default by an Underwriter. If any one or more of the
Underwriters shall fail to purchase and pay for all of the Shares agreed to be
purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in respective proportions which the amount of
Shares set forth opposite their names in Schedule II hereto bears to the
aggregate amount of Shares set forth opposite the names of all the remaining
Underwriters) the Shares which the defaulting Underwriter or Underwriters agreed
but failed to purchase; provided, however, that in the event that the aggregate
amount of Shares which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Shares set forth
in Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any of, the
Shares, and if such nondefaulting Underwriters do not purchase all of the
Shares, this Agreement will terminate without liability on the part of any
nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter, as set forth in this Section, the Closing Date shall be postponed
for such period, not exceeding seven days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
in the Prospectus or in any other documents or arrangements may be effected.
Nothing herein contained shall relieve any defaulting Underwriter of its
liability, if any, to the Company or any nondefaulting Underwriter for damages
occasioned by its default hereunder.
In the event of a default by an Underwriter as set forth in
this section, either the Representatives or the Company shall have the right to
postpone the Closing Date or the Date of Delivery for a period of not exceeding
7 days in order that any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements may be effected.
10. Representations and Indemnities to Survive Delivery. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of their respective officers, directors or employees or
any controlling person within the meaning of the Act, and will survive delivery
of and payment for the Shares.
11. Termination. This Agreement shall be subject to
termination by the Underwriters by notice given by the Representatives, to the
Company prior to the Closing Date or Date of Delivery that the Representatives
elect to terminate this Agreement on the grounds that trading in any of the
Company's securities on the New York Stock Exchange shall have been suspended or
limited or minimum price shall have been established on such Exchange, a banking
moratorium shall have been declared either by Federal or New York State
authorities, or there shall have occurred any new outbreak or material
escalation of major hostilities or other calamity or crisis the effect of which
on the financial markets in the United States is such as to make it, in the
judgment of the Representatives, impracticable to sell the Shares or enforce
contracts for the sale of the Shares.
If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 5, 8 and 10 hereof; but if for any other reason
the Shares are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters, through you for all out-of-pocket
expenses approved in writing by you (up to a maximum of $_______), including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparation for the purchase, sale and delivery of the Shares, but the
Company shall then be under no further liability to any Underwriter except as
provided in Sections 5, 8 and 10 hereof.
12. Representation of the Underwriters. The Representatives
represent and warrant to the Company that they are authorized to act as the
representatives of the Underwriters in connection with this financing and that
the Representatives' execution and delivery of this Agreement and any action
under this Agreement taken by such Representatives will be binding upon all
Underwriters.
13. Notices. All communications hereunder shall be in writing
and, if sent to the Representatives, shall be mailed, delivered or telegraphed
and confirmed to them at their address set forth for that purpose in Schedule I
hereto or, if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at High Ridge Park, P.O. Box 3801, Stamford, Connecticut 06905,
attention of Robert J. DeSantis, Vice President and Treasurer.
14. Parties in Interest. This Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Section 9 and Section 10 hereof, the officers and directors
and controlling persons referred to in Section 8 hereof, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right or by virtue of this Agreement. No purchase of
any of the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
15. Applicable Law. This Agreement will be governed by
and construed in accordance with the laws of the State of New York.
16. Counterparts. This Agreement may be executed in
counterparts, all of which, taken together, shall constitute a single agreement
among the parties to such counterparts.
17. Interpretation When No Representatives. In the event no
Underwriters are named in Schedule II hereto, the term "Underwriters" shall be
deemed for all purposes of this Agreement to be the Underwriter or Underwriters
named as such in Schedule I hereto, the number of the Shares to be purchased by
any such Underwriter shall refer to that set opposite its name in Schedule I
hereto and all references to the "Representatives" shall be deemed to refer to
the Underwriter or Underwriters named in Schedule I.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
CITIZENS UTILITIES COMPANY
By__________________________________
Name: Robert J. DeSantis
Title: Vice President and Treasurer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
[Name(s) of Representative(s) of Underwriters]
By:
Name:
Title:
For themselves and as Representatives
of the several Underwriters named in
Schedule II to the foregoing Agreement.
CITIZENS UTILITIES COMPANY
SCHEDULE I
Underwriting Agreement dated _________ 199_
Registration Statement No. ________
Representatives and Address:
Security:
Designation: Common Stock Series A
Common Stock Series B
Number of Initial Shares to be purchased by Underwriters:
-----------------.
Number of Option Shares to be purchased by Underwriters:
-----------------.
Initial Public Offering Price: $______________.
Purchase Price: $________ per share being an amount equal to the
initial public offering price set forth above less $________ per share.
Closing Date, Time and Location: ________, 199_
at the offices of
SCHEDULE II
Number of Shares
Names of Underwriters to be Purchased
Total......................................______________________