Exhibit 1
782,500 Shares
BANGOR HYDRO-ELECTRIC COMPANY
Common Stock
UNDERWRITING AGREEMENT
----------------------
March ____, 1994
SMITH BARNEY SHEARSON INCORPORATED
As Representative of the Several Underwriters
c/o SMITH BARNEY SHEARSON INCORPORATED
1345 Avenue of the Americas
New York, New York 10105
Ladies and Gentlemen:
Bangor Hydro-Electric Company, a Maine corporation (the "Company"),
proposes to issue and sell an aggregate of 782,500 shares of its common
stock, $5.00 par value per share, to the several Underwriters (defined
below). The Company's common stock, $5.00 par value, is hereinafter referred
to as the "Common Stock" and the 782,500 shares of Common Stock to be issued
and sold to the Underwriters by the Company are hereinafter referred to as
the "Firm Shares." The Company also proposes to sell to the Underwriters,
upon the terms and conditions set forth in Section 2 hereof, up to an
additional 117,375 shares (the "Additional Shares") of Common Stock. The
Firm Shares and the Additional Shares are hereinafter collectively referred
to as the "Shares."
The Company wishes to confirm as follows its respective agreements
with the Representative (defined below) and the other several Underwriters on
whose behalf the Representative is acting, in connection with the several
purchases of the Shares by the Underwriters.
The term "Underwriters," as used herein, shall be deemed to mean
the several persons, firms or corporations named in Schedule I hereto
(including any substituted Underwriters
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under the provisions of Section 10) and the term "Representative," a used
herein, shall be deemed to mean the representative or representatives of such
Underwriters by whom or on whose behalf this Underwriting Agreement is
signed. If there shall be only one person, firm or corporation named in said
Schedule I, the term "Underwriters," and the term "Representative," as used
herein, shall mean that person, firm or corporation.
1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-3 under the Act
(the "registration statement"), including a prospectus subject to completion
relating to the Shares. The term "Registration Statement" as used in this
Agreement means the registration statement (including all financial schedules
and exhibits), as amended at the time it became effective. If it is
contemplated, at the time this Agreement is executed, that a post-effective
amendment to the registration statement will be filed and must be declared
effective before the offering of the Shares may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as so amended by said post-effective amendment. Such term shall
also include Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A. "Rule 424" and "Rule 430A" refer to
such rules and regulations under the Act. "Rule 430A Information" means
information with respect to the Shares and the offering thereof permitted to
be omitted from the Registration Statement when it became effective pursuant to
Rule 430A. The term "Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement, or, if the
prospectus included in the Registration Statement omits information in
reliance on Rule 430A under the Act and such information is included in a
prospectus filed with the Commission pursuant to Rule 424(b) under the Act,
the term "Prospectus" as used in this Agreement means the propectus relating
to the Shares that is first filed pursuant to Rule 424(b). The term
"Preliminary Prospectus" as used in this Agreement means the prospectus
subject to completion in the form included in the registration statement at
the time of the initial filing of the registration statement with the
Commission, and as such prospectus shall have been amended from time to time
prior to the date of the Prospectus. "Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment or
amendments thereto became effective. Any reference in this Agreement to the
registration statement, the Registration Statement, any Preliminary
Prospectus 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
under the Act, as of the date of the registration statement, the Registration
Statement, such Preliminary Prospectus or the Prospectus, as the
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case may be, and any reference to any amendment or supplement to the
registration statement, the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after such date under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") which, upon filing, are incorporated by
reference therein, as required by paragraph (b) of Item 12 of Form S-3. As
used herein, the term "Incorporated Documents" means the documents which are
incorporated by reference into the registration statement, the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto.
2. Agreements to Sell and Purchase. The Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell
to each Underwriter and, upon the basis of the representations, warranties
and agreements of the Company herein contained and subject to all the terms
and conditions set forth herein, each Underwriter agrees, severally and not
jointly, to purchase from the Company, at a purchase price of $_____ per
Share (the "purchase price per Share"), the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto (or such number of
Firm Shares increased as set forth in Section 10 hereof).
The Company also agrees, subject to all the terms and conditions
set forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company herein contained
and subject to all the terms and conditions set forth herein, the
Underwriters shall have the right to purchase from the Company, at the
purchase price per Share, pursuant to an option (the "over-allotment option")
which may be exercised at any time and from time to time prior to 9:00 p.m.,
New York City time, on the 30th day after the date of the Prospectus (or, if
such 30th day shall be a Saturday or Sunday or a holiday, on the next
business day thereafter when the New York Stock Exchange is open for
trading), up to an aggregate of 117,375 Additional Shares from the Company.
Additional Shares may be purchased only for the purpose of covering over-
allotments made in connection with the offering of the Firm Shares. Upon any
exercise of the over-allotment option, each Underwriter, severally and not
jointly, agrees to purchase from the Company the number of Additional Shares
(subject to such adjustments as the Representative may determine in order to
avoid fractional shares) which bears the same proportion to the number of
Additional Shares to be sold by the Company as the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto (or such
number of Firm Shares increased as set forth in Section 10 hereof) bears to
the aggregate number of Firm Shares to be sold by the Company.
3. Terms of Public Offering. The Company has been advised by the
Representative that the Underwriters propose to
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make a public offering of their respective portions of the Shares as soon
after the Registration Statement and this Agreement have become effective as
in the Representative's judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office
of Smith Barney Shearson Incorporated, 1345 Avenue of the Americas, New York, NY
10105, at 10:00 a.m., New York City time, on _________, 1994 (the "Closing
Date"). The place of for the Firm Shares and the Closing Date may be varied
by agreement among the Representative and the Company.
Delivery to the Underwriters of and payment for any Additional
shares to be purchased by the Underwriters shall be made at the
aforementioned office of Smith Barney Shearson Incorporated at such time on
such date (the "Option Closing Date"), which may be the same as the Closing
Date but shall in no event be earlier than the Closing Date nor earlier than
three nor later than ten business days after the giving of the notice
hereinafter referred to, as shall be specified in a written notice from the
Representative on behalf of the Underwriters to the Company of the
Underwriters' determination to purchase a number, specified in such notice,
of Additional Shares. The place of closing for any Additional Shares and the
Option Closing Date for such Shares may be varied by agreement between the
Representative and the Company.
Certificates for the Firm Shares and for any Additional Shares to
be purchased hereunder shall be registered in such names and in such
denominations as the Representative shall request prior to 1:00 p.m., New
York City time, on the third business day preceding the Closing Date or any
Option Closing Date, as the case may be. Such certificates shall be made
available to the Representative in New York City for inspection and packaging
not later than 9:30 a.m., New York City time, on the business day next
preceding the Closing Date or the Option Closing Date, as the case may be.
The certificates evidencing the Firm Shares and any Additional Shares to be
purchased hereunder shall be delivered to the Representative on the Closing
Date or the Option Closing Date, as the case may be, against payment of the
purchase price therefor by certified or official bank check or checks payable
in New York Clearing House (next day) funds to the order of the Company.
5. Agreements of the Company. The Company agrees with the
several Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it
is necessary for a post-effective amendment to the Registration Statement to
be declared effective before the offering of the Shares may commence, the
Company will endeavor to
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cause such post-effective amendment to become effective as soon as possible
and will advise the Representative promptly and, if requested by the
Representative, will confirm such advice in writing, when such post-effective
amendment has become effective.
(b) The Company will advise the Representative promptly and, if
requested by the Representative, will confirm such advice in writing: (i) of
any request by the Commission for any amendment of or a supplement to the
Registration Statement, any Preliminary Prospectus or the Prospectus or for
additional information; (ii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction or the initiation or threat to the Company of initiation of any
proceeding for such purpose; and (iii) within the period of time referred to
in paragraph (f) below, of any change in the Company's condition (financial
or other), business, prospects, properties, net worth or results of
operations, or of the happening of any event which makes any statement made
in the Registration Statement or the Prospectus (as then amended or
supplemented) untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus (as then amended or
supplemented) in order to state a material fact required by the Act or the
regulations thereunder to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Prospectus (as then amended or supplemented) to comply with the Act or
any other law. If at any time the Commission shall issue any stop 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 time.
(c) The Company will furnish to the Representative, without
charge, (i) two signed copies of the registration statement as originally
filed with the Commission and of each amendment thereto, including the
consolidated financial statements and all exhibits to the registration
statement, (ii) such number of conformed copies of the registration statement
as originally filed and of each amendment thereto as the Representative may
request, (iii) such number of copies of the Incorporated Documents, without
exhibits, as the Representative may request, and (iv) two copies of the
exhibits to the Incorporated Documents.
(d) The Company will not (i) file any amendment to the
Registration Statement or make any amendment or supplement to the
Prospectus of which the Representative shall not previously have been advised
or to which the Representative shall object after being so advised or
(ii) so long as, in the opinion of counsel for the Underwriters, a Prospectus is
required to be delivered in connection with sales by andy Underwriter or
dealer, fule any information, documents or reports pursuant to the
Exchange Act without delivering a copy of such information, documents or
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reports to the Representative prior to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to the Representative, without charge,
in such quantities as the Representative has requested or may hereafter
request, copies of each form of the Preliminary Prospectus. The Company
consents to the use, in accordance with the provisions of the Act and with
the securities or Blue Sky laws of the jurisdictions in which the Shares are
offered by the several Underwriters and by dealers, prior to the date of the
Prospectus, of each Preliminary Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period, as in the opinion
of counsel for the Underwriters, a prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer, the Company
will expeditiously deliver to each Underwriter and each dealer, without
charge, as many copies of the Prospectus, and of any amendment or supplement
thereto, as the Representative may request. The Company consents to the use
of the Prospectus, and of any amendment or supplement thereto, in accordance
with the provisions of the Act and with the securities or Blue Sky laws of
the jurisdictions in which the Shares are offered by the several Underwriters
and by all dealers to whom Shares may be sold, both in connection with the
offering and sale of the Shares and for such period of time thereafter as the
Prospectus is required by the Act to be delivered in connection with sales by
any Underwriter or dealer. If during such period of time any event shall
occur that in the judgment of the Company or in the opinion of counsel for
the Underwriters is required to be set forth in the Prospectus, as then
amended or supplemented, or should be set forth therein in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary to supplement or amend the
Prospectus (including by way of filing under the Exchange Act any document
which, upon filing, becomes an Incorporated Document) in order to comply with
the Act or any other law, the Company will forthwith prepare and, subject to
the provisions of paragraph (d) of this Section 5, file with the Commission
an appropriate supplement or amendment thereto (or such document) so that the
statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances under which they were made, be misleading, or so
that the Prospectus will comply with the Act or any other law, and will
expeditiously furnish to the Underwriters and such dealers as the
Representative shall specify, such number of copies thereof as such
Underwriters or dealers may reasonably request. In the event that the
Company and the Representative agree that the Prospectus should be amended or
supplemented, the Company, if requested by the Representative, will promptly
issue a press release announcing or
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disclosing the matters to be covered by the proposed amendment or supplement.
(g) The Company will cooperate in good faith with the
Representative and with counsel for the Underwriters in connection with the
registration or qualification of the Shares for offering and sale under the
securities or Blue Sky laws of such jurisdictions as the Representative may
designate and will file such consents to service of process or other
documents necessary or appropriate in order to effect such registration or
qualification, will maintain such qualifications in effect for so long as may
be required for the distribution of the Shares and will pay or reimburse the
Underwriters for counsel fees, filing fees and out-of-pocket expenses in
connection with such qualification and review; 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 service of process in suits, other than those arising out of the offering
or sale of the Shares in any jurisdiction where it is not now so subject or
to pay, or to reimburse the Underwriters for, such counsel fees exceeding
$10,000 or to incur, or to reimburse the Underwriters for, any such fees and
expenses if no Shares are delivered to and purchased by the Underwriters
hereunder because of a default by one or more of the Underwriters.
(h) The Company will make generally available to its security
holders and to the Representative a consolidated earnings statement, which
need not be audited, of the Company and its subsidiaries covering a twelve-
month period commencing after the Effective Date and ending not later than 15
months thereafter, as soon as practicable after the end of such period, which
consolidated earnings statement shall satisfy the provisions of Section 11(a)
of the Act or Rule 158 under the Act.
(i) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to
Section 10 hereof or by notice given by the Representative terminating this
Agreement pursuant to Section 10 or Section 11 hereof) or if this Agreement
shall be terminated by the Underwriters because of any failure or refusal on
the part of the Company to comply with the terms or fulfill any of the
conditions of this Agreement, the Company agrees to reimburse the
Representative for all out-of-pocket expenses (including fees and expenses of
counsel for the Underwriters) incurred by the Representative in connection
herewith.
(j) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder substantially in accordance with the
description set forth in the Prospectus.
(k) The Company will timely file the Prospectus pursuant to Rule
424(b) under the Act and will advise the Representative of the time and
manner of such filing.
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(l) The Company will not sell, contract to sell or otherwise
dispose of any Common Stock, any securities convertible into or exercisable
or exchangeable for Common Stock, or grant any options or warrants to
purchase Common Stock, except pursuant to this Agreement, or except pursuant
to the Company's Dividend Reinvestment and Common Stock Purchase Plan, for a
period of 90 days after the date of the Prospectus, without the
Representative's prior written consent.
(m) Except as stated in this Agreement and in the Preliminary
Prospectus and Prospectus, the Company has not taken, nor will it take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Shares.
(n) The Company will use its best efforts to have the shares of
Common Stock which it agrees to sell under this Agreement listed, subject to
notice of issuance, on the New York Stock Exchange on or before the Closing
Date.
6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) each Preliminary Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied
when so filed in all material respects with the provisions of the Act. The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus;
(b) the Company and the transactions contemplated by this
Agreement meet the requirements for the use of Form S-3 under the Act. The
registration statement in the form in which it became effective and also in
such form as it may be when any post-effective amendment thereto shall become
effective and the prospectus and any supplement or amendment thereto when
filed with the Commission under the Rule 424(b) under the Act, complied or
will comply in all material respects with the provisions of the Act and did
not or will not at any such times contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the registration statement or the prospectus made in reliance upon and in
conformity with information relating to any Underwriter furnished to the
Company in writing by or on behalf of any Underwriter through the
Representative expressly for use therein;
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(c) the Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed, when
such amendment was filed), complied in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
any further Incorporated Documents so filed will, when they are filed, comply
in all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder; no such document when if was filed (or, if an
amendment with respect to any such
document was filed, when such amendment was filed), contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to
make the statements therein not misleading; and no such further document, when
it is filed, will contain an untrue statement of a material fact or will
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading;
(d) except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto),
neither the Company nor any of its subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and its
subsidiaries taken as a whole, and there has not been any change in the
capital stock, or material increase in the short-term debt or long-term debt,
of the Company or any of its subsidiaries, or any material adverse change, or
any development involving or which may reasonably be expected to involve, a
prospective material adverse change, in the condition (financial or other),
business, net worth or results of operations of the Company and its
subsidiaries taken as a whole;
(e) as of the date of this Agreement, the Company has an
authorized capitalization as set forth in the Registration Statement and the
Prospectus; all of the issued and outstanding shares of Common Stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable; the Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Maine, with full power and authority to own, lease and operate its properties
and conduct its business as described in the Registration Statement and the
Prospectus, to execute and deliver this Agreement and to issue and sell the
Shares as herein contemplated;
(f) each of the Company's subsidiaries (individually a "Subsidiary"
and collectively, the "Subsidiaries") has been duly organized and is validly
existing as a corporation in good standing under the laws of its jurisdiction
of incorporation with full power and authority to own, lease and operate its
property and conduct the business in which it is presently engaged;
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(g) all of the issued and outstanding shares of capital stock of
each of the Subsidiaries, except East Branch Improvement Company, are owned
by the Company or one of the Subsidiaries; all of such shares have been duly
and validly authorized and issued and are fully paid and non-assessable; and
are so owned by the Company free and clear of any pledge, lien, charge,
encumbrance, security interest or other claim; there are no outstanding
rights, subscriptions, warrants, calls, preemptive rights, options or other
agreements of any kind with respect to the common stock of the Subsidiaries,
except East Branch Improvement Company;
(h) the Company and each of its Subsidiaries are duly qualified or
licensed by, and are in good standing in each jurisdiction in which they
conduct their respective businesses and in which the failure, individually or
in the aggregate, to be so licensed or qualified could have a material
adverse effect on the operations, business or condition of the Company and
its Subsidiaries, taken as a whole; and the Company and each of its
Subsidiaries are in compliance in all material respects with the laws,
orders, rules, regulations and directives issued or administered by such
jurisdictions;
(i) the Board of Directors of the Company or a committee thereof
duly authorized by the Board of Directors of the Company has duly adopted
resolutions authorizing the issuance and sale of the Shares by the Company;
the Shares to be sold by the Company, when issued and delivered to the
Underwriters as contemplated hereby, will be duly authorized and validly
issued, fully paid and non-assessable, and free and clear of any pledge,
lien, charge, encumbrance, security interest, preemptive right or other
claim;
(j) the Company has the corporate power and authority to enter
into this Agreement and to issue, sell and deliver the Shares to be sold by
it to the Underwriters as provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company and is a legal, valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws;
(k) the Common Stock of the Company, including the Shares,
conforms to the description thereof contained in the Registration Statement
and Prospectus, and the certificates for the Shares are in due and proper form
and the holders of the shares will
not be subject to personal liability by reason of being such holders;
(l) all approvals, authorizations, consents or orders of or filings
with any commission, board, body, authority or or agency required in
connection with the issuance and sale of the
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Shares as contemplated hereby have been obtained, other than in connection
with the necessary qualification under the securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters;
(m) neither the Company nor any of its Subsidiaries is in breach
of, or in default under (nor has any event occurred which with notice, lapse
of time, or both would constitute a breach of, or default under) its
respective Certificate of Organization or by-laws, or other organizational
documents, any license, franchise, certificate of public convenience and
necessity, bond, note or any other evidence of indebtedness, indenture,
mortgage, deed of trust, bank loan or credit agreement, lease or any other
agreement or instrument to which the Company or any of its Subsidiaries is a
party or by which any of them or their respective properties may be bound or
affected where such breach or default could have a material adverse effect on
the Company and its Subsidiaries taken as a whole;
(n) the execution, delivery and performance of this Agreement, the
incurrence of the obligations herein set forth and the consummation of the
transactions contemplated hereby will not (i) conflict with, or result in any
breach of or constitute a default under (nor constitute any event which with
notice, lapse of time, or both would constitute a breach of, or default
under), any provisions of the respective Certificate of Organization or by-
laws, or other organizational documents, of the Company or any of its
Subsidiaries or under any provision of any license, franchise, certificate of
public convenience and necessity, bond, note or any other evidence of
indebtedness, indenture, mortgage, deed of trust, bank loan or credit
agreement, lease or any other agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which any of them or their
respective properties may be bound or affected, or under any federal, state,
local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or any of its Subsidiaries or (ii) will result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its Subsidiaries pursuant to the
terms of any agreement or instrument to which any of them is a party or by
which any of them may be bound or to which any of the property or assets of
any of them is subject;
(o) the Company and each of its Subsidiaries have all necessary
licenses, franchises, certificates of public convenience and necessity,
authorizations, consents and approvals and have made all necessary filings
required under any federal, state, local or foreign law, regulation or rule
and have obtained all necessary authorizations, consents and approvals from
other persons, in order to own its respective properties and to conduct their
respective businesses except where the failure so to have, have made or have
obtained would not have a material adverse effect on the operations, business
or condition of the Company and its Subsidiaries, taken as a whole; and
neither the Company
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nor any of its Subsidiaries is in violation of, or in default under, any such
authorization, consent or approval or any federal, state, local or foreign
law, regulation or rule or any decree, order or judgment applicable to the
Company or any of its Subsidiaries where such violation or default could have
a material adverse effect on the operations, business, condition, prospects
or property of the Company and its Subsidiaries, taken as a whole;
(p) except as set forth in the Prospectus, there are no actions,
suits or proceedings pending or, to the best knowledge of the Company,
threatened against the Company or any of its Subsidiaries or any of their
respective properties, at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body,
authority or agency which could result in a judgment, decree or order having
a material adverse effect on the operations, business, condition, prospects
or property of the Company and its Subsidiaries, taken as a whole;
(q) all legal or governmental proceedings, contracts, licenses,
agreements or documents of a character which are required to be filed as
exhibits to the Registration Statement or any Incorporated Document or to be
summarized or described in the Registration Statement or the Prospectus have
been so summarized, described or filed as required;
(r) the consolidated financial statements, together with related
schedules and notes, of the Company and its Subsidiaries included or
incorporated by reference in the
Registration Statement and Prospectus (and
any amendment or supplement thereto) present fairly in all material respects
the financial condition of the Company and its Subsidiaries as of the dates
indicated and the results of operations and the cash flows of the Company and
its Subsidiaries for the periods specified; such consolidated financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, except as set forth in
the Prospectus, during the periods involved;
(s) no holder of any security of the Company has any right to
require registration of shares of Common Stock or any other security of the
Company because of the filing of the registration statement or consummation
of the transactions contemplated by this Agreement;
(t) Coopers & Lybrand, whose reports on the consolidated financial
statements of the Company and its Subsidiaries have been filed with the
Commission as part of the Registration Statement and the Prospectus (or any
amendment or supplement thereto) or incorporated by reference therein, are
independent public accountants with respect to the Company and its
Subsidiaries as required by the Act; and
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(u) the Company and each Subsidiary are exempt from the provisions
of the Public Utility Holding Company Act of 1935, as amended, other than the
provisions of Section 9(a)(2) thereof, and there are not pending, or to the
knowledge of the Company, contemplated any proceedings or actions (whether
through judicial or administrative review or otherwise) to abrogate or modify
such exemption.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless the Representative and each Underwriter and each
person, if any, who controls any 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, damages, liabilities and expenses (including reasonable costs
of investigation) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus or in the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or expenses arise out of
or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the information relating to such
Underwriter furnished in writing to the Company by or on behalf of any
Underwriter through the Representative expressly for use in connection
therewith; provided, however, that the indemnification contained in this
paragraph (a) with respect to any Preliminary Prospectus shall not inure to
the benefit of any Underwriter (or to the benefit of any person controlling
such Underwriter) on account of any such loss, claim, damage, liability or
expense arising from the sale of the Shares by such Underwriter to any person
if a copy of the Prospectus shall not have been delivered or sent to such
person within the time required by the Act and the regulations thereunder,
and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus, provided that the Company has delivered the
Prospectus to the several Underwriters in requisite quantity on a timely
basis to permit such delivery or sending. The foregoing indemnity agreement
shall be in addition to any liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, such Underwriter or such
controlling person shall promptly notify the Company and the Company shall
assume the defense thereof, including the employment of counsel and payment
of all fees and expenses. Such Underwriter or any such controlling person
shall have the right to employ separate counsel in any such action, suit or
proceeding and to participate in the defense thereof, but
13
the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the Company has agreed in
writing to pay such fees and expenses, (ii) the Company has failed to assume
the defense and employ counsel, or (iii) the named parties to any such
action, suit or proceeding (including any impleaded parties) include both such
Underwriter or such controlling person and the Company
Company and such Underwriter or such controlling person shall have
been advised by its counsel that representation of such indemnified party
and the Company byt the same counsel would be
inappropriate under applicable standards of professional conduct (whether
or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them (in
which case the Company shall not have the right to assume the defense of such
action, suit or proceeding on behalf of such Underwriter or such controlling
person). It is understood, however, that the Company shall, in connection
with any one such action, suit or proceeding or separate but substantially
similar or related actions, suits or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for
the reasonable fees and expenses of only one separate firm of attorneys (in
addition to any local counsel) at any time for all such Underwriters and
controlling persons not having actual or potential differing interests with
the Representative or among themselves, which firm shall be designated in
writing by Smith Barney Shearson Incorporated, and that all such fees and
expenses shall be reimbursed as they are incurred. The Company shall not be
liable for any settlement of any such action, suit or proceeding effected
without its written consent, but if settled with such written consent, or if
there be a final judgment for the plaintiff in any such action, suit or
proceeding, the Company agrees to indemnify and hold harmless any
Underwriter, to the extent provided in the preceding paragraph, and any such
controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, and any person who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to
the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with respect to information relating to such
Underwriter furnished in writing by or on behalf of such Underwriter through
the Representative expressly for use in the Registration Statement, the
Prospectus or any Preliminary Prospectus, or any amendment or supplement
thereto. If any action, suit or proceeding shall be brought against the
Company, any of its directors, any such officer, or any such controlling
person based on the Registration Statement, the Prospectus or any Preliminary
Prospectus, or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Underwriter pursuant to this paragraph
(c), such Underwriter shall have the rights and duties given to the Company
by
14
paragraph (b) above (except that if the Company shall have assumed the
defense thereof such Underwriter shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof, but
the fees and expenses of such counsel shall be at such Underwriter's
expense), and the Company, its directors, any such officer, and any such
controlling person shall have the rights and duties given to the Underwriters
by paragraph (b) above. The foregoing indemnity agreement shall be in
addition to any liability which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or expenses
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other
hand from the offering of the Shares, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and the
Underwriters on the other in connection with the statements or omissions that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total 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 the table on the cover page of the Prospectus. The
relative fault of the Company on the one hand and the Underwriters on the
other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company on the one hand or by the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined
by a pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses
15
reasonably incurred by such indemnified party in connection with
investigating any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price of the Shares underwritten by it and distributed to the public exceeds
the amount of any damages which such Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 7 are
several in proportion to the respective numbers of Firm Shares set forth
opposite their names in Schedule I hereto (or such numbers of Firm Shares
increased as set forth in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under
this Section 7 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred.
The indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers, or any
person controlling the Company, (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement. A successor
to any Underwriter or any person controlling any Underwriter, or to the
Company, its directors or officers, or any person controlling the Company,
shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 7.
8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
16
(a) If, at the time this Agreement is executed and delivered, it
is necessary for a post-effective amendment to the registration statement to
be declared effective before the offering of the Shares may commence, such
post-effective amendment shall have become effective not later than 5:30
p.m., New York City time, on the date hereof, or at such later date and time
as shall be consented to in writing by the Representative, and all filings,
if any, required by Rules 424 and 430A under the Act shall have been timely
made and prior to the Closing Date the Company shall have provided evidence
satisfactory to the Representative of such timely filing; and no stop order
suspending the effectiveness of the registration statement shall have been
issued and no proceeding for that purpose shall have been instituted or, to
the knowledge of the Company or any Underwriter, threatened by the
Commission, and any request of the Commission for additional information (to
be included in the registration statement or the prospectus or otherwise)
shall have been complied with to the Representative's satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth, or results of operations of the Company or
its Subsidiaries not contemplated by the Prospectus, which in the
Representative's opinion, would materially, adversely affect the market for the
Shares, or (ii) andy event or development relating
to or involving the Company or any officer or director of the Company
which makes any statement made in the Prospectus untrue or which, in the
opinion of the Coumpnay and its counsel or the
Underwriters and their counsel, requires the making of any addition to or
change in the Prospectus in order to state a material fact
required by the Act or any other law to be stated therein or necessary in
order to make the statements therein not misleading, if amending or
supplementing the Prospectus to reflect such event or development would, in
the Representative's opinion, adversely affect the market for the Shares.
(c) The Representative shall have received on the Closing Date, or
the Option Closing Date, as the case may be, an opinion of Frederick S. Samp,
Esq., counsel for the Company, dated the Closing Date, or the Option Closing
Date, as the case may be, and addressed to the Representative, to the effect
that:
(i) the Company and each of its Subsidiaries have been duly
organized and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation with
full corporate power and authority to own, lease and operate their
respective properties and to conduct their respective businesses as
described in the Registration Statement and Prospectus (and any
amendment or supplement thereto);
17
(ii) the Company has the corporate power and authority to
enter into the Agreement and to issue, sell and deliver the Shares to be
sold by it to the Underwriters as provided herein, and the Agreement has
been duly authorized, executed and delivered by the Company and is a
valid, legal and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as enforcement of
rights to indemnity and contribution hereunder may be limited by Federal
or state securities laws or principles of public policy and subject to
the qualification that the enforceability of the Company's obligations
hereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other laws relating to or
affecting creditors' rights generally, and by general equitable
principles;
(iii) the Company has an authorized capitalization as set forth
in the Registration Statement and Prospectus; the outstanding shares of
Common Stock of the Company have been duly and validly authorized and
issued, and are fully paid, non-assessable and free of statutory and
contractual preemptive rights; the Common Stock of the Company,
including the Shares, conforms in all material respects to the
description thereof contained in the Registration Statement and
Prospectus; the certificates for the Shares are in due and proper form;
and the holders of the Shares will not be subject to personal liability
by reason of being such holders;
(iv) all of the issued and outstanding shares of common stock
of each of the Subsidiaries, except East Branch Improvement Company, are
owned directly by the Company; all of such shares have been duly and
validly authorized and issued and are fully paid and non-assessable and
are so owned free and clear of any pledge, lien, charge, encumbrance,
security interest or other claim; there are no outstanding rights,
subscriptions, warrants, calls, preemptive rights, options or other
agreements of any kind with respect to the common stock of the
Subsidiaries, except East Branch Improvement Company;
(v) the Shares, when issued and delivered to and paid for by
the Underwriters, will be duly and validly authorized and issued and
will be fully paid and non-assessable, and free of statutory and
contractual preemptive rights;
(vi) the Company and each of its Subsidiaries are duly
qualified or licensed in each jurisdiction in which they conduct their
respective businesses and in which the failure, individually or in the
aggregate, to be so licensed or qualified could have a material adverse
effect on the operations, business or condition of the Company and its
18
Subsidiaries, taken as a whole, and the Company and each of its
Subsidiaries are duly qualified, and are in good standing, in each
jurisdiction in which they own or lease real property or maintain an
office and in which such qualification is necessary;
(vii) the Registration Statement and all post-effective
amendments, if any, have become effective under the Act and, to the best
knowledge of such counsel after reasonable inquiry, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for the purpose are pending before or
contemplated by the Commission; and any required filing of the Prospectus
pursuant to Rule 424(b) has been made in accordance with Rule 424(b);
(viii) neither the Company nor any of its Subsidiaries is in
breach of, or in default under (nor has any event occurred which with
notice, lapse of time, or both would constitute a breach of, or default
under), its respective Certificate of Organization or by-laws, or other
organizational documents, any license, franchise, certificate of public
convenience and necessity, bond, note or any other evidence of
indebtedness, indenture, mortgage, deed of trust, bank loan, credit
agreement, lease or other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which any of them or
their respective properties may be bound or affected where such default
could have a material adverse effect on the operations, business or
condition of the Company and its Subsidiaries, taken as a whole, nor is
the Company or any of its Subsidiaries in violation of any law,
ordinance, administrative or governmental rule or regulation applicable
to the Company or any of its Subsidiaries or of any decree of any court
or governmental agency or body having jurisdiction over the Company or
any of its Subsidiaries;
(ix) the Company and each of its Subsidiaries have all
necessary licenses, franchises, certificates of public convenience and
necessity, authorizations, consents and approvals and have made all
necessary filings required under any federal, state, local and foreign
law, regulation or rule and have obtained all necessary authorizations,
consents and approvals from other persons in order to conduct their
respective businesses as described in the Registration Statement and
Prospectus, the absence of which could have a material adverse effect on
the Company and its Subsidiaries, taken as a whole;
(x) all approvals, authorizations, consents or orders of or
filings with any commission, board, body, authority or agency required
in connection with the issuance and sale of the Shares as contemplated
hereby have been obtained in all jurisdictions, except such counsel need
19
express no opinion as to any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters;
(xi) the Registration Statement and the Prospectus and any
supplements or amendments thereto (except for the consolidated financial
statements and the notes thereto and the schedules and other financial
and statistical data included therein, as to which such counsel need not
express any opinion) comply as to form in all material respects with the
requirements of the Act; and each of the Incorporated Documents (except
for the consolidated financial statements and the notes thereto and the
schedules and other financial and statistical data included therein, as
to which such counsel need not express any opinion) complies as to form
in all material respects with the Exchange Act and the rules and
regulations of the Commission thereunder;
(xii) the execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not conflict with or result in any
breach of, or constitute a default under (nor constitute any event which
with notice, lapse of time, or both, would constitute a breach of or
default under), any provisions of the respective Certificate of
Organization or by-laws, or other organizational documents, of the
Company or any of its Subsidiaries or under any provision of any
license, franchise, certificate of public convenience and necessity,
bond, note or any other evidence of indebtedness, indenture, mortgage,
deed of trust, bank loan, credit agreement, lease or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or
by which any of them or their respective properties may be bound or
affected, or under any federal, state or local law, rule or regulation
applicable to the Company or any of its Subsidiaries, under any federal,
state, local or foreign judgment, order or decree applicable to the
Company or any of its Subsidiaries, or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its Subsidiaries;
(xiii) there are no actions, suits or proceedings pending or, to
the knowledge of such counsel, threatened against the Company or any of
its Subsidiaries or any of their respective properties, at law or in
equity or before or by any commission, board, body, authority or agency
which are required to be described in he Registration Statement and
Prospectus (or any amendment or supplement thereto), but counsel, an
unfavorable judgment, decree, or order could have a material adverse
effect on the Company or any of its Subsidiaries; and
20
(xiv) there are no contracts, licenses, agreements, leases or
documents, of a character which are required to be summarized or
described in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) which have not been so summarized or
described or to be filed as an exhibit to the Registration Statement or
any Incorporated Document that are not described or filed as required,
as the case may be, and any such summary or description and any
references to statements of law or legal conclusions in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) are
accurate and present fairly the information required to be shown.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants of the
Company, and representatives of the Underwriters at which the contents of the
Registration Statement and Prospectus, including review and discussion of the
contents thereof (including review and discussion of the contents of all
Incorporated Documents) and, although such counsel is not passing upon and
does not assume responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or Prospectus, on the
basis of the foregoing nothing has come to the attention of such counsel that
causes him to believe that the Registration Statement (including the
Incorporated Documents) or any amendment thereto at the time such
Registration Statement or amendment became effective contained an untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
or the Prospectus (including any amendments or supplements thereto), as of
its date and as of the Closing Date or Option Closing Date, as the case may
be, contained or contains an untrue statement of a material fact or omitted
or omits to state a material necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no opinion with respect to
the consolidated financial statements and schedules and other financial and
statistical data included in the Registration Statement or the Prospectus or
any Incorporated Document).
(d) The Representative shall have received on the Closing Date, or
the Option Closing Date, as the case may be, an opinion of Winthrop, Stimson,
Putnam & Roberts, counsel for the Underwriters, dated the Closing Date, or
the Option Closing Date, as the case may be, with respect to the issuance and
sale of the Shares, the Registration Statement, the Prospectus and other
related matters as the Representative may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters. Winthrop, Stimson,
Putnam & Roberts may rely upon the opinion of Frederick S. Samp, Esq.
referred to in paragraph (c) above as to all matters of Maine Law.
21
(e) The Representative shall have received letters addressed to
the Representative and dated the date hereof and the Closing Date from
Coopers & Lybrand, independent certified public accountants, substantially in
the forms heretofore approved by the Representative.
(f)(i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there
shall not have been any change in the capital stock of the Company nor any
material increase in the short-term or long-term debt of the Company (other
than in the ordinary course of business) from that set forth or contemplated
in the Registration Statement or the Prospectus, or any amendment or
supplement thereto; (iii) there shall not have been, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, or any amendment or supplement thereto, except as may otherwise
be stated in the Registration Statement and Prospectus, or any amendment or
supplement thereto, any material adverse change in the condition (financial
or other), business, prospects, properties, net worth or results of
operations of the Company and its Subsidiaries taken as a whole; (iv) the
Company and its Subsidiaries shall not have any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of business),
that are material to the Company and its Subsidiaries, taken as a whole, other
than those reflected in the Registration
Statement or the Prospectus, or any amendment or supplement thereto; and
(v) all the representations and warranties of the Company contained in this
Agreement shall be true and correct on
and as of the date hereof and on and as of the Closing Date as if made on and
as of the Closing Date, and the Representative shall have
received a certificate, dated the Closing Date and signed by the chief
executive officer and the chief financial officer of the Company (or such
other officers as are acceptable to the Representative), to the effect set
forth in this Section 8(g) and in Section 8(h) hereof.
(g) The Company shall not have failed at or prior to the Closing
Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(h) The Company shall have furnished or caused to be furnished to
the Representative such further certificates and documents as the
Representative shall have requested.
(i) Prior to commencement of the offering of the Shares, the
Shares shall have been listed, subject to notice of issuance, on the New York
Stock Exchange.
22
All such opinions, certificates, letters and other documents will
be in compliance with the provisions hereof only if they are satisfactory in
form and substance to the Representative and its counsel.
Any certificate or document signed by any officer of the Company
and delivered to Representative or to counsel for the Underwriters, shall be
deemed a representation and warranty by the Company to each Underwriter as to
the statements made therein.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of any Option
Closing Date of the conditions set forth in this Section 8, except that, if
any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (g) shall be dated
the Option Closing Date in question and the opinions called for by
paragraphs (c), (d) and (e) shall be revised to reflect the sale of
Additional Shares.
9. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by the
Company of its obligations hereunder: (i) the preparation, printing (or
reproduction) and filing with the Commission of the Registration Statement
(including consolidated financial statements and exhibits thereto), each
Preliminary Prospectus, the Prospectus, and each amendment or supplement to
any of them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the Registration Statement, each Preliminary Prospectus, the
Prospectus, the Incorporated Documents, and all amendments or supplements to
any of them, as may be reasonably requested for use in connection with the
offering and sale of the Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares,
including any stamp taxes in connection with the original issuance and sale
of the Shares; (iv) the printing (or reproduction) and delivery of this
Agreement, the preliminary and supplemental Blue Sky Memoranda and all other
agreements, memoranda, correspondence and other documents printed (or
reproduced) and delivered in connection with the offering of the Shares; (v)
the listing of the Shares on the New York Stock Exchange; (vi) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states as provided in Section 5(g)
hereof (including the reasonable fees, expenses and disbursements of counsel
for the Underwriters relating to the preparation, printing (or reproduction)
and delivery of the preliminary and supplemental Blue Sky Memoranda and such
registration and qualification); (vii) the filing fees and the fees and
expenses of counsel for the Underwriters in connection with any filings
required to be made with the National Association of Securities Dealers,
Inc.; (viii) the fees and expenses of the Company's accountants and the
23
fees and expenses of counsel for the Company; and (ix) up to $28,000 for fees
of counsel for the Underwriters in connection with the offering of the
Shares.
10. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereof;
or (ii) if, at the time this Agreement is
executed and delivered, it is necessary for a post-effective amendment to
the registration statement to be declared effective before the offering of the
Share may commence, when notification of the
effectiveness of such post-effective amendment has been released by
the Commission. Until such time as this Agreement shall have
become effective, it may be terminated by the Company, by notifying the
Representative or by the Representative of the several Underwriters notifying
the Company.
If any one or more of the Underwriters shall fail or refuse to
purchase 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 the Firm Shares, each non-defaulting
Underwriter shall be obligated, severally, in the proportion which the number
of Firm Shares set forth opposite its name in Schedule I hereto bears to the
aggregate number of Firm Shares set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as the Representative
may specify in accordance with Section 20 of the Master Agreement Among
Underwriters of Smith Barney Shearson Incorporated, to purchase the Firm
Shares which such defaulting Underwriter or Underwriters agreed, but failed
or refused, to purchase. If any Underwriter or Underwriters shall fail or
refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares and arrangements satisfactory to the Representative and
the Company for the purchase of such Firm Shares by one or more non-
defaulting Underwriters or other party or parties approved by the
Representative and the Company are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case which does not
result in termination of this Agreement, either the Representative 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 the Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall
not relieve any defaulting Underwriter from liability in respect of any such
default of any such Underwriter under this Agreement. The term "Underwriter"
as used in this Agreement includes, for all purposes of this Agreement, any
party not listed in Schedule I hereto who, with the approval of the
Representative and the approval of the
24
Company, purchases Firm Shares which a defaulting Underwriter agreed, but
failed or refused, to purchase.
Any notice under this Section 10 may be made by telegram, telecopy
or telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. This Agreement shall be subject to
termination in the Representative's absolute discretion, without liability on
the part of any Underwriter to the Company, by notice to the Company, if
prior to the Closing Date or any Option Closing Date (if different from the
Closing Date and then only as to the Additional Shares), as the case may be,
(i) trading in securities generally on the New York Stock Exchange, American
Stock Exchange or National Association of Securities Dealers Automated
Quotation System shall have been suspended or materially limited, (ii) a
general moratorium on commercial banking activities in New York or Maine
shall have been declared by either federal or state authorities, or (iii)
there shall have occurred any outbreak or escalation of hostilities or other
international or domestic calamity, crisis or change in political, financial
or economic conditions, the effect of which on the financial markets of the
United States is such as to make it, in the Representative's reasonable
judgment, impracticable or inadvisable to proceed with or continue the
offering of the Shares or to enforce contracts for the resale of the Shares
by the Underwriters. Notice of such termination shall be promptly given to
the Company by telegraph, telecopy or telephone and shall be subsequently
confirmed by letter.
12. Information Furnished by the Underwriters. The statements set
forth in the last paragraph on the cover page, the stabilization legend on
the inside front cover, and the first and third paragraphs under the caption
"Underwriting" in any Preliminary Prospectus and in the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters
through the Representative as such information is referred to in Sections
6(b) and 7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10
and 11 hereof, notice given pursuant to any of the provisions of this
Agreement shall be in writing and shall be delivered (i) if to the Company,
at the office of the Company at 33 State Street, Bangor, Maine 04401, Attention:
Robert S. Briggs, President and
Chief Executive Officer or (ii) if to the Representative, care of Smith
Barney Shearson Incorporated, 1345 Avenue of the Americas, New York, New York
10105. Attention: Robert L. Gaeckle, Managing Director, Corporate Finance
Division.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 7 hereof and their respective
successors and assigns, to
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the extent provided herein, and no other person shall acquire or have any
right under or by virtue of this Agreement. Neither the term "successor" nor
the term "successors and assigns" as used in this Agreement shall include a
purchaser from any Underwriter of any of the Shares in his status as such
purchaser.
14. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed within the State of New
York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
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Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Representative.
Very truly yours,
BANGOR HYDRO-ELECTRIC COMPANY
By __________________________
Name: Robert S. Briggs
Title: President
Confirmed as of the date
first above mentioned on
behalf of themselves and the
other several Underwriters named
in Schedule I hereto.
SMITH BARNEY SHEARSON INCORPORATED
As Representative of the
Several Underwriters
By SMITH BARNEY SHEARSON INCORPORATED
By ____________________________
Name: Robert L. Gaeckle
Title: Managing Director
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SCHEDULE I
BANGOR HYDRO-ELECTRIC COMPANY
Number of
Underwriter Firm Shares
- ----------- -----------
Smith Barney Shearson
Incorporated .......
_______
Total....... 782,500
=======
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