Fall River Gas Company
340,000 Shares Common Stock (*)
Underwriting Agreement
, 1997
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First Albany Corporation
As Representative of the Several
Underwriters Named in Schedule A
c/o First Albany Corporation
Corporate Finance Department
53 State Street
Boston, Massachusetts 02109
Ladies and Gentlemen:
Section 1. Introductory. Fall River Gas Company ("Company") a
Massachusetts corporation, has an authorized capital stock consisting of
2,201,334 shares, $.83 1/3 par value, of Common Stock ("Common Stock"), of
which 1,787,261 shares were outstanding and 414,073 shares were held in the
Company's treasury as of __________, 1997. The Company proposes to issue and
sell 340,000 shares directly out of the Company's treasury ("Firm Shares") to
the several underwriters named in Schedule A as it may be amended by the
Pricing Agreement hereinafter defined ("Underwriters"), who are acting
severally and not jointly. In addition, the Company proposes to grant to the
Underwriters an option to purchase up to 51,000 additional shares of Common
Stock ("Option Shares") as provided in Section 4 hereof. The Firm Shares
and, to the extent such option is exercised, the Option Shares, are
hereinafter collectively referred to as the "Shares."
You have advised the Company that the Underwriters propose to make a
public offering of their respective portions of the Shares as soon as you
deem advisable after the registration statement hereinafter referred to
becomes effective, if it has not yet become effective, and the Pricing
Agreement hereinafter defined has been executed and delivered.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company and the Representative, acting on behalf of the
several Underwriters, shall enter into an agreement substantially in the form
of Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may
take the form of an exchange of any standard form of written
telecommunication between the Company and the Representative and shall
specify such applicable information as is indicated in Exhibit A hereto. The
offering of the Shares will be governed by this Agreement, as supplemented by
the Pricing Agreement.
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(*)Plus an option to acquire up to 51,000 additional shares to cover
overallotments.
From and after the date of the execution and delivery of the Pricing
Agreement, this Agreement shall be deemed to incorporate the Pricing
Agreement.
The Company hereby confirms its agreement with the Underwriters as follows:
Section 2. Representations and Warranties of the Company. The
Company represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-2 (File No. 333-_____) and a
related preliminary prospectus with respect to the Shares have been
prepared and filed with the Securities and Exchange Commission
("Commission") by the Company in conformity with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "1933 Act;" all references herein
to specific rules are rules promulgated under the 1933 Act); and the
Company has so prepared and has filed such amendments thereto, if any, and
such amended preliminary prospectuses as may have been required to the date
hereof. If the Company has elected not to rely upon Rule 430A, the Company
has prepared and will promptly file an amendment to the registration
statement and an amended prospectus. If the Company has elected to rely
upon Rule 430A, it will prepare and file a prospectus pursuant to Rule
424(b) that discloses the information previously omitted from the
prospectus in reliance upon Rule 430A. There have been or will promptly be
delivered to you one signed copy of such registration statement and
amendments, together with one copy of all documents incorporated by
reference therein, one copy of each exhibit filed therewith, and conformed
copies of such registration statement and amendments (but without exhibits)
and of the related preliminary prospectus or prospectuses and final forms
of prospectus for each of the Underwriters.
Such registration statement (as amended, if applicable) at the
time it becomes effective and the prospectus constituting a part thereof
(including the information, if any, deemed to be part thereof pursuant to
Rule 430A(b) and/or Rule 434), as from time to time amended or
supplemented, are hereinafter referred to as the "Registration Statement,"
and the "Prospectus," respectively, except that if any revised prospectus
shall be provided to the Underwriters by the Company for use in connection
with the offering of the Shares which differs from the Prospectus on file
at the Commission at the time the Registration Statement became or becomes
effective (whether or not such revised prospectus is required to be filed
by the Company pursuant to Rule 424(b)), the term Prospectus shall refer to
such revised prospectus from and after the time it was provided to the
Underwriters for such use. If the Company elects to rely on Rule 434 of
the 1933 Act, all references to "Prospectus" shall be deemed to include,
without limitation, the form of prospectus and the term sheet, taken
together, provided to the Underwriters by the Company in accordance with
Rule 434 of the 1933 Act ("Rule 434 Prospectus"). Any registration
statement (including any amendment or supplement thereto or information
which is deemed part thereof) filed by the Company under Rule 462(b) ("Rule
462(b) Registration Statement") shall be deemed to be part of the
"Registration Statement" as defined
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herein, and any prospectus (including any amendment or supplement thereto
or information which is deemed part thereof) included in such registration
statement shall be deemed to be part of the "Prospectus", as defined
herein, as appropriate. The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder are hereinafter
collectively referred to as the "Exchange Act." Any reference herein to
any preliminary prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to
Form S-2 under the 1933 Act ("Incorporated Documents"), as of the date of
such preliminary prospectus or Prospectus, as the case may be.
The Incorporated Documents, when they were filed with the Commission,
conformed in all material respects to the requirements of the Exchange Act
and none of such documents 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.
(b) The Commission has not issued any order preventing or suspending
the use of any preliminary prospectus, and each preliminary prospectus has
conformed in all material respects with the requirements of the 1933 Act
and, as of its date, has not included any untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein not misleading; and when the Registration Statement became or
becomes effective, and at all times subsequent thereto, up to the First
Closing Date or the Second Closing Date hereinafter defined, as the case
may be, the Registration Statement, including the information deemed to be
part of the Registration Statement at the time of effectiveness pursuant to
Rule 430A(b), if applicable, and the Prospectus and any amendments or
supplements thereto, contained or will contain all statements that are
required to be stated therein in accordance with the 1933 Act and in all
material respects conformed or will in all material respects conform to the
requirements of the 1933 Act, and neither the Registration Statement nor
the Prospectus, nor any amendment or supplement thereto, included or will
include any untrue statement of a material fact or omitted or will omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that the Company
makes no representation or warranty as to information contained in or
omitted from any preliminary prospectus, the Registration Statement, the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representative specifically for use
in the preparation thereof.
(c) The Company and its subsidiary have been duly incorporated and
are validly existing as corporations in good standing under the laws of
their respective places of incorporation, with corporate power and
authority to own their properties and conduct their business as described
in the Prospectus; the Company and its subsidiary are duly qualified to do
business as foreign corporations under the corporation law of, and are in
good standing as such in, each jurisdiction in which they own or lease
substantial properties, have an office, or in which substantial
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business is conducted and such qualification is required except in any such
case where the failure to so qualify or be in good standing would not have
a material adverse effect upon the Company and its subsidiary taken as a
whole; and no proceeding of which the Company has knowledge has been
instituted in any such jurisdiction, revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or
qualification.
(d) The Company owns directly 100 percent of the issued and
outstanding capital stock of its subsidiary, free and clear of any claims,
liens, encumbrances or security interests and all of such capital stock has
been duly authorized and validly issued and is fully paid and
nonassessable.
(e) The issued and outstanding shares of capital stock of the Company
as set forth in the Prospectus have been duly authorized and validly
issued, are fully paid and nonassessable, and conform to the description
thereof contained in the Prospectus.
(f) The Shares have been duly authorized and when issued, delivered
and paid for pursuant to this Agreement, will be validly issued, fully paid
and nonassessable, and will conform to the description thereof contained in
the Prospectus.
(g) The making and performance by the Company of this Agreement and
the Pricing Agreement have been duly authorized by all necessary corporate
action and will not violate any provision of the Company's charter or
bylaws and will not result in the breach, or be in contravention, of any
provision of any agreement, franchise, license, indenture, mortgage, deed
of trust, or other instrument to which the Company or any subsidiary is a
party or by which the Company, any subsidiary or the property of any of
them may be bound or affected, or any order, rule or regulation applicable
to the Company or any subsidiary of any court or regulatory body,
administrative agency or other governmental body having jurisdiction over
the Company or any subsidiary or any of their respective properties, or any
order of any court or governmental agency or authority entered in any
proceeding to which the Company or any subsidiary was or is now a party or
by which it is bound. No consent, approval, authorization or other order
of any court, regulatory body, administrative agency or other governmental
body is required for the execution and delivery of this Agreement or the
Pricing Agreement or the consummation of the transactions contemplated
herein or therein, except for compliance with the 1933 Act and blue sky
laws applicable to the public offering of the Shares by the several
Underwriters and clearance of such offering with the National Association
of Securities Dealers, Inc. ("NASD"). This Agreement has been duly
executed and delivered by the Company.
(h) The accountants who have expressed their opinions with respect to
certain of the financial statements included or incorporated by reference
in the Registration Statement are independent accountants as required by
the 1933 Act.
(i) The consolidated financial statements of the Company included or
incorporated by reference in the Registration Statement present fairly the
consolidated
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financial position of the Company as of the respective dates of such
financial statements, and the consolidated results of operations and cash
flows of the Company for the respective periods covered thereby, all in
conformity with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed in the
Prospectus. The financial information set forth in the Prospectus under
"Selected Financial Data" presents fairly on the basis stated in the
Prospectus, the information set forth therein.
(j) Neither the Company nor its subsidiary is in violation of its
charter or in default under any consent decree, or in default with respect
to any material provision of any lease, loan agreement, franchise, license,
permit or other contract obligation to which it is a party; and there does
not exist any state of facts which constitutes an event of default as
defined in such documents or which, with notice or lapse of time or both,
would constitute such an event of default, in each case, except for
defaults which neither singly nor in the aggregate are material to the
Company and its subsidiary taken as a whole.
(k) There are no material legal or governmental proceedings pending,
or to the Company's knowledge, threatened to which the Company or its
subsidiary is or may be a party or of which material property owned or
leased by the Company or its subsidiary is or may be the subject, or
related to environmental or discrimination matters which are not disclosed
in the Prospectus, or which question the validity of this Agreement or the
Pricing Agreement or any action taken or to be taken pursuant hereto or
thereto.
(l) There are no holders of securities of the Company having rights
to registration thereof or preemptive rights to purchase Common Stock.
(m) The Company and its subsidiary have good and marketable title to
all the properties and assets reflected as owned in the financial
statements hereinabove described (or elsewhere in the Prospectus), subject
to no lien, mortgage, pledge, charge or encumbrance of any kind except
those, if any, reflected in such financial statements (or elsewhere in the
Prospectus) or which are not material to the Company and its subsidiary
taken as a whole. The Company and its subsidiary hold their respective
leased properties which are material to the Company and its subsidiary
taken as a whole under valid and binding leases.
(n) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares.
(o) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as
contemplated by the Prospectus, the Company and its subsidiary, taken as a
whole, have not incurred any material
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liabilities or obligations, direct or contingent, nor entered into any
material transactions not in the ordinary course of business and there has
not been any material adverse change in their condition (financial or
otherwise) or results of operations nor any material change in their
capital stock, short-term debt or long-term debt.
(p) The Company agrees that it will not, without the prior written
consent of the Representative: (1) offer, pledge, sell, contract to sell,
sell any option or contract to sell, sell any right or warrant to purchase,
or otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exchangeable for Common
Stock or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership
of the Common Stock, whether any such transaction is described in clause
(1) or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, for a period of 180 days after this
Agreement becomes effective without the prior written consent of the
Representative, unless such shares of Common Stock are issued pursuant to
the Company's Share Owner Dividend Reinvestment and Stock Purchase Plan.
The Company has obtained similar agreements from each of its executive
officers, directors and principal stockholders.
(q) There is no material document of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required.
(r) The Company together with its subsidiary owns and possesses all
right, title and interest in and to, or has duly licensed from third
parties, all patents, patent rights, trade secrets, inventions, know-how,
trademarks, trade names, copyrights, service marks and other proprietary
rights ("Trade Rights") material to the business of the Company and its
subsidiary taken as a whole. Neither the Company nor its subsidiary has
received any notice of infringement, misappropriation or conflict from any
third party as to such material Trade Rights which has not been resolved or
disposed of and neither the Company nor its subsidiary has infringed,
misappropriated or otherwise conflicted with material Trade Rights of any
third parties, which infringement, misappropriation or conflict would have
a material adverse effect upon the condition (financial or otherwise) or
results of operations of the Company and its subsidiary taken as a whole.
(s) The conduct of the business of the Company and its subsidiary is
in compliance in all respects with applicable federal, state, local and
foreign laws and regulations, except where the failure to be in compliance
would not have a material adverse effect upon the condition (financial or
otherwise) or results of operations of the Company and its subsidiary taken
as a whole.
(t) All offers and sales of the Company's capital stock prior to the
date hereof were at all relevant times exempt from the registration
requirements of the 1933 Act or were duly registered in accordance
therewith, and were duly registered
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with or the subject of an available exemption from the registration
requirements of the applicable state securities or blue sky laws.
(u) The Company has filed all necessary federal and state income and
franchise tax returns and has paid all taxes shown as due thereon, and
there is no tax deficiency that has been, or to the knowledge of the
Company might be, asserted against the Company or any of its properties or
assets that would or could be expected to have a material adverse affect
upon the condition (financial or otherwise) or results of operations of the
Company and its subsidiary taken as a whole.
(v) A registration statement relating to the Common Stock has been
declared effective by the Commission pursuant to the Exchange Act and the
Common Stock is duly registered thereunder. The Company's Common Stock is
traded in the over-the-counter market on the OTC Bulletin Board. The
Shares have been approved for listing on the American Stock Exchange,
subject to notice of issuance or sale of the Shares, as the case may be.
(w) The Company is not, and does not intend to conduct its business
in a manner in which it would become, an "investment company" as defined in
Section 3(a) of the Investment Company Act of 1940, as amended ("Investment
Company Act").
(x) The Company is not a "holding company" or a "subsidiary company"
of a "public utility company" or of a "holding company" or an "affiliate"
of a "holding company" or of a "subsidiary company" of a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended (the "Holding Company Act").
(y) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, An Act Relating to Disclosure of Doing Business with Cuba, and the
Company further agrees that if it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba after
the date the Registration Statement becomes or has become effective with
the Commission or with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information reported in
the Prospectus, if any, concerning the Company's business with Cuba or with
any person or affiliate located in Cuba changes in any material way, the
Company will provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
(z) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required
by this Agreement to be delivered to the Representative was or will be,
when made, inaccurate, untrue or incorrect.
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(aa) Neither the Company nor its subsidiary is involved in any
material labor dispute nor, to the knowledge of the Company, is any such
dispute threatened.
(bb) Neither the Company nor its subsidiary nor, to the Company's
knowledge, any employee or agent of the Company or its subsidiary has made
any payment of funds of the Company or its subsidiary or received or
retained any funds in violation of any law, rule or regulation.
(cc) An authorizing order has been issued by the Massachusetts
Department of Public Utilities authorizing the issuance and sale of the
Shares and said order is in full force and effect and final and
non-appealable; and no further authorization, approval, consent or order of
any governmental authority or agency is legally required in connection with
the authorization, issuance and sale of the Shares by the Company pursuant
to this Agreement (other than qualification under state securities laws,
Blue Sky laws or the by-laws and rules of the NASD).
(dd) The Company has valid and sufficient grants, franchises,
miscellaneous permits and easements free from unduly burdensome
restrictions, adequate for the conduct of its business in the territories
in which it is now conducting such business and the ownership of the
properties now owned by it.
Section 3. Representations and Warranties of the Underwriters. The
Representative, on behalf of the several Underwriters, represents and
warrants to the Company that the information set forth (a) on the cover page
of the Prospectus with respect to price, underwriting discounts and
commissions and terms of the offering and (b) under "Underwriting" in the
Prospectus was furnished to the Company by and on behalf of the Underwriters
for use in connection with the preparation of the Registration Statement and
is correct and complete in all material respects.
Section 4. Purchase, Sale and Delivery of Shares. On the basis of
the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Company agrees to sell to
the Underwriters named in Schedule A hereto, and the Underwriters agree,
severally and not jointly, to purchase the Firm Shares from the Company at
the price per share set forth in the Pricing Agreement. The obligation of
each Underwriter to the Company shall be to purchase from the Company that
number of full shares set forth opposite the name of such Underwriter in
Schedule A hereto. The initial public offering price and the purchase price
shall be set forth in the Pricing Agreement.
At 9:00 A.M., [Chicago] Time, on the fourth business day, if permitted
under Rule 15c6-1 under the Exchange Act, (or the third business day if
required under Rule 15c6-1 under the Exchange Act or unless postponed in
accordance with the provisions of Section 12) following the date the
Registration Statement becomes effective (or, if the Company has elected to
rely upon Rule 430A, the fourth business day, if permitted under Rule 15c6-1
under the Exchange Act, (or the third business day if required under Rule
15c6-1 under the Exchange Act) after execution of the Pricing Agreement), or
such other time not later than
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ten business days after such date as shall be agreed upon by the
Representative and the Company, the Company will deliver to you at the
offices of [counsel for the Underwriters] or through the facilities of The
Depository Trust Company for the accounts of the several Underwriters,
certificates representing the Firm Shares to be sold by it against payment of
the purchase price therefor by delivery of next-day funds, by wire transfer
or otherwise, to the Company. Such time of delivery and payment is herein
referred to as the "First Closing Date." The certificates for the Firm Shares
so to be delivered will be in such denominations and registered in such names
as you request by notice to the Company prior to 10:00 A.M., [Chicago] Time,
on the second full business day preceding the First Closing Date, and will be
made available at the Company's expense for checking and packaging by the
Representative at 10:00 A.M., [Chicago] Time, on the business day preceding
the First Closing Date. Payment for the Firm Shares so to be delivered shall
be made at the time and in the manner described above at the offices of
counsel for the Underwriters.
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein
set forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to an aggregate of 51,000 Option
Shares, at the same purchase price per share to be paid for the Firm Shares,
for use solely in covering any overallotments made by the Underwriters in the
sale and distribution of the Firm Shares. The option granted hereunder may
be exercised at any time (but not more than once) within 30 days after the
date of the initial public offering upon notice by you to the Company setting
forth the aggregate number of Option Shares as to which the Underwriters are
exercising the option, the names and denominations in which the certificates
for such shares are to be registered and the time and place at which such
certificates will be delivered. Such time of delivery (which may not be
earlier than the First Closing Date), being herein referred to as the "Second
Closing Date," shall be determined by you, but if at any time other than the
First Closing Date, shall not be earlier than three nor later than 10 full
business days after delivery of such notice of exercise. The number of
Option Shares to be purchased by each Underwriter shall be determined by
multiplying the number of Option Shares to be sold by a fraction, the
numerator of which is the number of Firm Shares to be purchased by such
Underwriter as set forth opposite its name in Schedule A and the denominator
of which is the total number of Firm Shares (subject to such adjustments to
eliminate any fractional share purchases as you in your absolute discretion
may make). Certificates for the Option Shares will be made available at the
Company's expense for checking and packaging at 10:00 A.M., [Chicago] Time,
on the first full business day preceding the Second Closing Date. The manner
of payment for and delivery of the Option Shares shall be the same as for the
Firm Shares as specified in the preceding paragraph; provided, however, that
as to any Option Shares purchased by the Underwriters to cover
over-allotments, the Company agrees to reimburse the Underwriters in an
amount equal to the $_____ per share dividend declared on the Common Stock
which is payable on November 15, 1997, to the extent such Option Shares are
delivered to the Underwriters subsequent to the record date (November 1,
1997) for such dividend.
You have advised the Company that each Underwriter has authorized you to
accept delivery of its Shares, to make payment and to receipt therefor. You,
individually and not
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as the Representative of the Underwriters, may make payment for any Shares to
be purchased by any Underwriter whose funds shall not have been received by
you by the First Closing Date or the Second Closing Date, as the case may be,
for the account of such Underwriter, but any such payment shall not relieve
such Underwriter from any obligation hereunder.
Section 5. Covenants of the Company. The Company covenants and
agrees that:
(a) The Company will advise you promptly of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, or of any notification of the suspension of qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceedings for that purpose, and will also advise you promptly of any
request of the Commission for amendment or supplement of the Registration
Statement, of any preliminary prospectus or of the Prospectus, or for
additional information.
(b) The Company will give you notice of its intention to file or
prepare any amendment to the Registration Statement (including any
post-effective amendment) or any Rule 462(b) Registration Statement or any
amendment or supplement to the Prospectus (including any revised prospectus
which the Company proposes for use by the Underwriters in connection with
the offering of the Shares which differs from the prospectus on file at the
Commission at the time the Registration Statement became or becomes
effective, whether or not such revised prospectus is required to be filed
pursuant to Rule 424(b) and any term sheet as contemplated by Rule 434) and
will furnish you with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use, as the case
may be, and will not file any such amendment or supplement or use any such
prospectus to which you or counsel for the Underwriters shall reasonably
object.
(c) If the Company elects to rely on Rule 434 of the 1933 Act, the
Company will prepare a term sheet that complies with the requirements of
Rule 434. If the Company elects not to rely on Rule 434, the Company will
provide the Underwriters with copies of the form of prospectus, in such
numbers as the Underwriters may reasonably request, and file with the
Commission such prospectus in accordance with Rule 424(b) of the 1933 Act
by the close of business in New York City on the second business day
immediately succeeding the date of the Pricing Agreement. If the Company
elects to rely on Rule 434, the Company will provide the Underwriters with
copies of the form of Rule 434 Prospectus, in such numbers as the
Underwriters may reasonably request, by the close of business in New York
on the business day immediately succeeding the date of the Pricing
Agreement.
(d) If at any time when a prospectus relating to the Shares is
required to be delivered under the 1933 Act any event occurs as a result of
which the Prospectus, including any amendments or supplements, would
include an untrue statement of a material fact, or omit to state any
material fact required to be stated therein or
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necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend the Prospectus, including any amendments or supplements
thereto and including any revised prospectus which the Company proposes for
use by the Underwriters in connection with the offering of the Shares which
differs from the prospectus on file with the Commission at the time of
effectiveness of the Registration Statement, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) to comply with
the 1933 Act, the Company promptly will advise you thereof and will
promptly prepare and file with the Commission an amendment or supplement
which will correct such statement or omission or an amendment which will
effect such compliance; and, in case any Underwriter is required to deliver
a prospectus nine months or more after the effective date of the
Registration Statement, the Company upon request, but at the expense of
such Underwriter, will prepare promptly such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of Section
10(a)(3) of the 1933 Act.
(e) Neither the Company nor any of its subsidiaries will, prior to
the earlier of the Second Closing Date or termination or expiration of the
related option, incur any liability or obligation, direct or contingent, or
enter into any material transaction, other than in the ordinary course of
business, except as contemplated by the Prospectus.
(f) Neither the Company nor any of its subsidiaries will acquire any
capital stock of the Company prior to the earlier of the Second Closing
Date or termination or expiration of the related option nor will the
Company declare or pay any dividend or make any other distribution upon the
Common Stock payable to stockholders of record on a date prior to the
earlier of the Second Closing Date or termination or expiration of the
related option, except in either case as contemplated by the Prospectus.
(g) Not later than February 15, 1999 the Company will make generally
available to its security holders an earnings statement (which need not be
audited) covering a period of at least 12 months beginning after the
effective date of the Registration Statement, which will satisfy the
provisions of the last paragraph of Section 11(a) of the 1933 Act.
(h) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Shares by an
Underwriter or dealer, the Company will furnish to you at its expense,
subject to the provisions of subsection (d) hereof, copies of the
Registration Statement, the Prospectus, each preliminary prospectus, the
Incorporated Documents and all amendments and supplements to any such
documents in each case as soon as available and in such quantities as you
may reasonably request, for the purposes contemplated by the 1933 Act.
(i) The Company will cooperate with the Underwriters in qualifying or
registering the Shares for sale under the blue sky laws of such
jurisdictions as you
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designate, and will continue such qualifications in effect so long as
reasonably required for the distribution of the Shares. The Company shall
not be required to qualify as a foreign corporation or to file a general
consent to service of process in any such jurisdiction where it is not
currently qualified or where it would be subject to taxation as a foreign
corporation.
(j) During the period of five years hereafter, the Company will
furnish you and each of the other Underwriters with a copy (i) as soon as
practicable after the filing thereof, of each report filed by the Company
with the Commission, any securities exchange or the NASD; (ii) as soon as
practicable after the release thereof, of each material press release in
respect of the Company; and (iii) as soon as available, of each report of
the Company mailed to stockholders.
(k) The Company will use the net proceeds received by it from the
sale of the Shares being sold by it in the manner specified in the
Prospectus.
(l) If, at the time of effectiveness of the Registration Statement,
any information shall have been omitted therefrom in reliance upon Rule
430A and/or Rule 434, then immediately following the execution of the
Pricing Agreement, the Company will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A, Rule 424(b)
and/or Rule 434, copies of an amended Prospectus, or, if required by such
Rule 430A and/or Rule 434, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted. If required, the Company will prepare and file, or transmit for
filing, a Rule 462(b) Registration Statement not later than the date of the
execution of the Pricing Agreement. If a Rule 462(b) Registration
Statement is filed, the Company shall make payment of, or arrange for
payment of, the additional registration fee owing to the Commission
required by Rule 111.
(m) The Company will comply with all registration, filing and
reporting requirements of the Exchange Act and the American Stock Exchange.
Section 6. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective as
to all of its provisions or is terminated, the Company agrees to pay (i) all
costs, fees and expenses (other than legal fees and disbursements of counsel
for the Underwriters and the expenses incurred by the Underwriters, except as
may otherwise be specified herein) incurred in connection with the
performance of the Company's obligations hereunder, including without
limiting the generality of the foregoing, all fees and expenses of legal
counsel for the Company and of the Company's independent accountants, all
costs and expenses incurred in connection with the preparation, printing,
filing and distribution of the Registration Statement, each preliminary
prospectus and the Prospectus (including all Incorporated Documents, exhibits
and financial statements) and all amendments and supplements provided for
herein, this Agreement, the Pricing Agreement and the Blue Sky Memorandum,
(ii) all costs, fees and expenses (including legal fees not to exceed $2,000
and disbursements of counsel for the Underwriters) incurred by the
Underwriters in connection with qualifying or registering all
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or any part of the Shares for offer and sale under blue sky laws, including
the preparation of a blue sky memorandum relating to the Shares and clearance
of such offering with the NASD; (iii) all fees and expenses of the Company's
transfer agent, printing of the certificates for the Shares and all transfer
taxes, if any, with respect to the sale and delivery of the Shares to the
several Underwriters; and (iv) a non-accountable expense allowance of $50,000
to the Representative.
Section 7. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm
Shares on the First Closing Date and the Option Shares on the Second Closing
Date shall be subject to the accuracy of the representations and warranties
on the part of the Company herein set forth as of the date hereof and as of
the First Closing Date or the Second Closing Date, as the case may be, to the
accuracy of the statements of officers of the Company made pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective either
prior to the execution of this Agreement or not later than 1:00 P.M.,
[Chicago] Time, on the first full business day after the date of this
Agreement, or such later time as shall have been consented to by you but in
no event later than 1:00 P.M., [Chicago] Time, on the third full business
day following the date hereof; and prior to the First Closing Date or the
Second Closing Date, as the case may be, 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 shall be pending
or, to the knowledge of the Company or you, shall be contemplated by the
Commission. If the Company has elected to rely upon Rule 430A and/or Rule
434, the information concerning the initial public offering price of the
Shares and price-related information shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) within the prescribed period
and the Company will provide evidence satisfactory to the Representative of
such timely filing (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with
the requirements of Rules 430A and 424(b)). If a Rule 462(b) Registration
Statement is required, such Registration Statement shall have been
transmitted to the Commission for filing and become effective within the
prescribed time period and, prior to the First Closing Date, the Company
shall have provided evidence of such filing and effectiveness in accordance
with Rule 462(b).
(b) The Shares shall have been qualified for sale under the blue sky
laws of such states as shall have been specified by the Representative.
(c) The legality and sufficiency of the authorization, issuance and
sale or transfer and sale of the Shares hereunder, the validity and form of
the certificates representing the Shares, the execution and delivery of
this Agreement and the Pricing Agreement, and all corporate proceedings and
other legal matters incident thereto, and the form of the Registration
Statement and the Prospectus (except financial
-13-
statements) shall have been approved by counsel for the Underwriters
exercising reasonable judgment.
(d) You shall not have advised the Company that the Registration
Statement or the Prospectus or any amendment or supplement thereto,
contains an untrue statement of fact, which, in the opinion of counsel for
the Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein
or necessary to make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company or its subsidiary, whether or not arising in the ordinary
course of business, which, in the judgment of the Representative, makes it
impractical or inadvisable to proceed with the public offering or purchase
of the Shares as contemplated hereby.
(f) There shall have been furnished to you, as Representative of the
Underwriters, on the First Closing Date or the Second Closing Date, as the
case may be, except as otherwise expressly provided below:
(i) An opinion of Rich, May, Bilodeau & Flaherty, P.C., counsel
for the Company addressed to the Underwriters and dated the First
Closing Date or the Second Closing Date, as the case may be, to the
effect that:
(1) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Massachusetts with corporate power and authority
to own its properties and conduct its business as described in
the Prospectus; and the Company has been duly qualified to do
business as a foreign corporation under the corporation law of,
and is in good standing as such in, every jurisdiction where the
ownership or leasing of property, or the conduct of its business
requires such qualification except where the failure so to
qualify would not have a material adverse effect upon the
condition (financial or otherwise) or results of operations of
the Company and its subsidiary taken as a whole;
(2) an opinion to the same general effect as clause (1) of
this subparagraph (i) in respect of the subsidiary of the
Company;
(3) all of the issued and outstanding capital stock of the
subsidiary of the Company has been duly authorized, validly
issued and is fully paid and nonassessable, and, except as
disclosed in the Registration Statement, the Company owns
directly 100 percent of the outstanding capital stock of its
subsidiary, and to the best knowledge of such counsel, such stock
is owned free and clear of any claims, liens, encumbrances or
security interests;
-14-
(4) the authorized capital stock of the Company, of which
there is outstanding the amount set forth in the Registration
Statement and Prospectus (except for subsequent issuances, if
any, pursuant to stock options or other rights referred to in the
Prospectus), conforms as to legal matters in all material
respects to the description thereof in the Registration Statement
and Prospectus;
(5) the issued and outstanding capital stock of the Company
has been duly authorized and validly issued and is fully paid and
nonassessable;
(6) the certificates for the Shares to be delivered
hereunder are in due and proper form, and when duly countersigned
by the Company's transfer agent and delivered to you or upon your
order against payment of the agreed consideration therefor in
accordance with the provisions of this Agreement and the Pricing
Agreement, the Shares represented thereby will be duly authorized
and validly issued, fully paid and nonassessable;
(7) the Registration Statement has become effective under
the 1933 Act, and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the 1933 Act, and
the Registration Statement (including the information deemed to
be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) and/or Rule 434, if
applicable), the Prospectus and each amendment or supplement
thereto (except for the financial statements and other
statistical or financial data included therein as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the 1933 Act; such
counsel have no reason to believe that either the Registration
Statement (including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to
Rule 430A(b) and/or Rule 434, if applicable) or the Prospectus,
or the Registration Statement or the Prospectus as amended or
supplemented (except as aforesaid), as of their respective
effective or issue dates, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus as amended or supplemented, if
applicable, as of the First Closing Date or the Second Closing
Date, as the case may be, contained any untrue statement of a
material fact or omitted to state any material fact necessary to
make the statements therein not misleading in light of the
circumstances under which they were made; the statements in the
Registration Statement and the Prospectus summarizing statutes,
rules and regulations are accurate and fairly and correctly
present the information required to be presented
-15-
by the 1933 Act or the rules and regulations thereunder, in all
material respects and such counsel does not know of any statutes,
rules and regulations required to be described or referred to in
the Registration Statement or the Prospectus that are not
described or referred to therein as required; and such counsel
does not know of any legal or governmental proceedings pending or
threatened required to be described in the Prospectus which are
not described as required, nor of any contracts or documents of a
character required to be described in the Registration Statement
or Prospectus or to be filed as exhibits to the Registration
Statement which are not described or filed, as required;
(8) the statements under the caption "Description of
Capital Stock" in the Prospectus, insofar as such statements
constitute a summary of documents referred to therein or matters
of law, are accurate summaries and fairly and correctly present,
in all material respects, the information called for with respect
to such documents and matters;
(9) this Agreement and the Pricing Agreement and the
performance of the Company's obligations hereunder have been duly
authorized by all necessary corporate action and this Agreement
and the Pricing Agreement have been duly executed and delivered
by and on behalf of the Company, and are legal, valid, and
binding agreements of the Company, enforceable in accordance with
their respective terms, except as enforceability of the same may
be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights and by the
exercise of judicial discretion in accordance with general
principles applicable to equitable and similar remedies and
except as to those provisions relating to indemnities for
liabilities arising under the 1933 Act as to which no opinion
need be expressed; and, except for the approval of the
Massachusetts Department of Public Utilities, no approval,
authorization or consent of any public board, agency, or
instrumentality of the United States or of any state or other
jurisdiction is necessary in connection with the issue or sale of
the Shares pursuant to this Agreement (other than under the 1933
Act, applicable blue sky laws and the rules of the NASD) or the
consummation by the Company of any other transactions
contemplated hereby;
(10) the execution and performance of this Agreement will
not contravene any of the provisions of, or result in a default
under, any agreement, franchise, license, indenture, mortgage,
deed of trust, or other instrument known to such counsel, of the
Company or its subsidiary or by which the property of any of them
is bound and which contravention or default would be material to
the Company and its subsidiary taken as a whole; or violate any
of the provisions of the charter or bylaws of the Company or any
of its subsidiaries or, so far as is known to such counsel,
violate any statute, order, rule or regulation of
-16-
any regulatory or governmental body having jurisdiction over the
Company or any of its subsidiary;
(11) all documents incorporated by reference in the
Prospectus, when they were filed with the Commission, complied as
to form in all material respects with the requirements of the
Exchange Act; and such counsel have no reason to believe that any
of such documents, when they were so filed, contained an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made when such
documents were so filed, not misleading; such counsel need
express no opinion as to the financial statements or other
financial or statistical data contained in any such document;
(12) to such counsel's knowledge, all offers and sales of
the Company's capital stock since September 30, 1992 were at all
relevant times exempt from the registration requirements of the
1933 Act or were duly registered in accordance therewith and were
duly registered or the subject of an available exemption from the
registration requirements of the applicable state securities or
blue sky laws;
(13) The Company is not an "investment company" or a person
"controlled by" an "investment company" within the meaning of the
Investment Company Act.
(14) The Company is not a "holding company" or a "subsidiary
company" of a "public utility company" or of a "holding company"
or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" as such terms are defined in the
Holding Company Act.
(15) An authorizing order has been issued by the
Massachusetts Department of Public Utilities authorizing the
issuance and sale of the Shares, and to the best of such
counsel's knowledge, said order is in full force and effect and
final and non-appealable; and no further authorization, approval,
consent or order of any governmental authority or agency is
legally required in connection with the authorization, issuance
and sale of the Shares by the Company pursuant to this Agreement
(other than qualification under state securities laws, Blue Sky
laws or the by-laws and rules of the NASD).
(16) The Company has valid and sufficient grants,
franchises, miscellaneous permits and easements free from unduly
burdensome restrictions, adequate for the conduct of its business
in the territories in which it is now conducting such business
and the ownership of the properties now owned by it.
-17-
In rendering such opinion, such counsel may state that they are
relying upon the certificate of State Street Bank and Trust Company,
the transfer agent for the Common Stock, as to the number of shares of
Common Stock at any time or times outstanding, and that insofar as
their opinion under clause (7) above relates to the accuracy and
completeness of the Prospectus and Registration Statement, it is based
upon a general review with the Company's Representative and
independent accountants of the information contained therein, without
independent verification by such counsel of the accuracy or
completeness of such information. Such counsel may also rely upon the
opinions of other competent counsel and, as to factual matters, on
certificates of officers of the Company and of state officials, in
which case their opinion is to state that they are so doing and copies
of said opinions or certificates are to be attached to the opinion
unless said opinions or certificates (or, in the case of certificates,
the information therein) have been furnished to the Representative in
other form.
(ii) Such opinion or opinions of Chapman and Cutler, counsel for
the Underwriters, dated the First Closing Date or the Second Closing
Date, as the case may be, with respect to the incorporation of the
Company, the validity of the Shares, the Registration Statement and
the Prospectus and other related matters as you may reasonably
require, and the Company shall have furnished to such counsel such
documents and shall have exhibited to them such papers and records as
they request for the purpose of enabling them to pass upon such
matters.
(iii) A certificate of the chief executive officer and the
principal financial officer of the Company, dated the First Closing
Date or the Second Closing Date, as the case may be, to the effect
that:
(1) the representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct as of
the date of this Agreement and as of the First Closing Date or
the Second Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to such
Closing Date; and
(2) the Commission has not issued an order preventing or
suspending the use of the Prospectus or any preliminary
prospectus filed as a part of the Registration Statement or any
amendment thereto; no stop order suspending the effectiveness of
the Registration Statement has been issued; and to the best
knowledge of the respective signers, no proceedings for that
purpose have been instituted or are pending or contemplated under
the 1933 Act.
The delivery of the certificate provided for in this subparagraph
shall be and constitute a representation and warranty of the Company
as to the facts
-18-
required in the immediately foregoing clauses (1) and (2) of this
subparagraph to be set forth in said certificate.
(iv) At the time the Pricing Agreement is executed and also
on the First Closing Date or the Second Closing Date, as the case
may be, there shall be delivered to you a letter addressed to
you, as Representative of the Underwriters, from Arthur Andersen
LLP, independent accountants, the first one to be dated the date
of the Pricing Agreement, the second one to be dated the First
Closing Date and the third one (in the event of a second closing)
to be dated the Second Closing Date, to the effect set forth in
Schedule B. There shall not have been any change or decrease
specified in the letters referred to in this subparagraph which
makes it impractical or inadvisable in the judgment of the
Representative to proceed with the public offering or purchase of
the Shares as contemplated hereby.
(v) On or prior to the First Closing Date, the
Representative shall have received the executed agreements
referred to in Section 2(p).
(vi) Such further certificates and documents as you may
reasonably request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you
and to Chapman and Cutler, counsel for the Underwriters, which approval shall
not be unreasonably withheld. The Company shall furnish you with such
manually signed or conformed copies of such opinions, certificates, letters
and documents as you request.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification to the Company
without liability on the part of any Underwriter or the Company, except for
the expenses to be paid or reimbursed by the Company pursuant to Sections 6
and 8 hereof and except to the extent provided in Section 10 hereof.
Section 8. Reimbursement of Underwriters' Expenses. If the sale to
the Underwriters of the Shares on the First Closing Date is not consummated
because any condition of the Underwriters' obligations hereunder is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or to comply with any provision
hereof, unless such failure to satisfy such condition or to comply with any
provision hereof is due to the default or omission of any Underwriter, the
Company agrees to reimburse you and the other Underwriters upon demand for
all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been reasonably incurred by you and them in
connection with the proposed purchase and the sale of the Shares. Any such
termination shall be without liability of any party to any other party except
that the provisions of this Section, Section 6 and Section 10 shall at all
times be effective and shall apply.
-19-
Section 9. Effectiveness of Registration Statement. You and the
Company will use your and its best efforts to cause the Registration
Statement to become effective, if it has not yet become effective, and to
prevent the issuance of any stop order suspending the effectiveness of the
Registration Statement and, if such stop order be issued, to obtain as soon
as possible the lifting thereof.
Section 10. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the 1933 Act or the Exchange Act against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject under the 1933 Act,
the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Company, 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 any material fact contained in the Registration Statement,
including the information deemed to be part of the Registration Statement at
the time of effectiveness pursuant to Rule 430A and/or Rule 434, if
applicable, any preliminary prospectus, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and will reimburse
each Underwriter and each such controlling person for any legal or other
expenses reasonably incurred by such Underwriter or such controlling person
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable
in any such case to the extent that (i) any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter
through the Representative, specifically for use therein; or (ii) if such
statement or omission was contained or made in any preliminary prospectus and
corrected in the Prospectus and (1) any such loss, claim, damage or liability
suffered or incurred by any Underwriter (or any person who controls any
Underwriter) resulted from an action, claim or suit by any person who
purchased Shares which are the subject thereof from such Underwriter in the
offering and (2) such Underwriter failed to deliver or provide a copy of the
Prospectus to such person at or prior to the confirmation of the sale of such
Shares in any case where such delivery is required by the 1933 Act. In
addition to its other obligations under this Section 10(a), the Company
agrees that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in
this Section 10(a), it will reimburse the Underwriters on a monthly basis for
all reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the Company's obligation to reimburse
the Underwriters for such expenses and the possibility that such payments
might later be held to have been improper by
-20-
a court of competent jurisdiction. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company
within the meaning of the 1933 Act or the Exchange Act, against any losses,
claims, damages or liabilities to which the Company, or any such director,
officer or controlling person may become subject under the 1933 Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter), insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in the Registration Statement, any
preliminary prospectus, the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any preliminary prospectus, the Prospectus, or any amendment or
supplement thereto in reliance upon and in conformity with Section 3 of this
Agreement or any other written information furnished to the Company by such
Underwriter through the Representative specifically for use in the
preparation thereof; and will reimburse any legal or other expenses
reasonably incurred by the Company, or any such director, officer or
controlling person in connection with investigating or defending any such
loss, claim, damage, liability or action. In addition to their other
obligations under this Section 10(b), the Underwriters agree that, as an
interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, described in this Section
10(b), they will reimburse the Company on a monthly basis for all reasonable
legal and other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety
and enforceability of the Underwriters' obligation to reimburse the Company
for such expenses and the possibility that such payments might later be held
to have been improper by a court of competent jurisdiction. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
this Section, notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent
that the indemnifying party was prejudiced by such failure to notify. In
case any such action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate in, and, to the extent that it may
wish, jointly with all other indemnifying parties similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party; provided,
-21-
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, or the indemnified and indemnifying
parties may have conflicting interests which would make it inappropriate for
the same counsel to represent both of them, the indemnified party or parties
shall have the right to select separate counsel to assume such legal defense
and otherwise to 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 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 such counsel in connection with the
assumption of legal defense 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 Representative in the case of paragraph (a) representing all
indemnified parties not having different or additional defenses or potential
conflicting interest among themselves 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. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability arising out of such
proceeding.
(d) If the indemnification provided for in this Section is unavailable
to an indemnified party under paragraphs (a) or (b) hereof in respect of any
losses, claims, damages or liabilities referred to therein, then each
applicable 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 or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Underwriters 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 and the Underwriters in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The respective relative benefits
received by the Company and the Underwriters
-22-
shall be deemed to be in the same proportion in the case of the Company as
the total price paid to the Company for the Shares by the Underwriters (net
of underwriting discount but before deducting expenses), and in the case of
the Underwriters as the underwriting discount received by them bears to the
total of such amounts paid to the Company and received by the Underwriters as
underwriting discount in each case as contemplated by the Prospectus. The
relative fault of the Company and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates
to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by
a party as a result of the losses, claims, damages and liabilities referred
to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or
defending any action or claim.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section, 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 were offered 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 1933 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 are several
in proportion to their respective underwriting commitments and not joint.
(e) The provisions of this Section shall survive any termination of this
Agreement.
Section 11. Default of Underwriters. It shall be a condition to the
agreement and obligation of the Company to sell and deliver the Shares
hereunder, and of each Underwriter to purchase the Shares hereunder, that,
except as hereinafter in this paragraph provided, each of the Underwriters
shall purchase and pay for all Shares agreed to be purchased by such
Underwriter hereunder upon tender to the Representative of all such Shares in
accordance with the terms hereof. If any Underwriter or Underwriters default
in their obligations to purchase Shares hereunder on the First Closing Date
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10 percent of the
total number of Shares which the Underwriters are obligated to purchase on
the First Closing Date, the Representative may make arrangements satisfactory
to the Company for the purchase of such Shares by other persons, including
any of the Underwriters, but if no such arrangements are made by such date
the nondefaulting Underwriters shall be obligated severally, in proportion to
their respective commitments hereunder, to purchase the Shares which such
defaulting Underwriters agreed but failed to purchase on such date. If any
Underwriter or Underwriters so default and the aggregate number of Shares
with respect to which such default or defaults occur is more than the above
percentage and arrangements satisfactory to the Representative and the
Company for the purchase of such Shares by other persons are not made within
36 hours after such default, this Agreement will terminate without liability
on the part of any nondefaulting Underwriter or the Company, except for the
expenses to be paid by the
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Company pursuant to Section 6 hereof and except to the extent provided in
Section 10 hereof.
In the event that Shares to which a default relates are to be purchased
by the nondefaulting Underwriters or by another party or parties, the
Representative or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that the
necessary changes in the Registration Statement, Prospectus and any other
documents, as well as any other arrangements, may be effected. As used in
this Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
Section 12. Effective Date. This Agreement shall become effective
immediately as to Sections 6, 8, 10 and 13 and as to all other provisions at
10:00 A.M., [Chicago] Time, on the day following the date upon which the
Pricing Agreement is executed and delivered, unless such a day is a Saturday,
Sunday or holiday (and in that event this Agreement shall become effective at
such hour on the business day next succeeding such Saturday, Sunday or
holiday); but this Agreement shall nevertheless become effective at such
earlier time after the Pricing Agreement is executed and delivered as you may
determine on and by notice to the Company or by release of any Shares for
sale to the public. For the purposes of this Section, the Shares shall be
deemed to have been so released upon the release for publication of any
newspaper advertisement relating to the Shares or upon the release by you of
telegrams (i) advising Underwriters that the Shares are released for public
offering, or (ii) offering the Shares for sale to securities dealers,
whichever may occur first.
Section 13. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you
or by you by notice to the Company at any time prior to the time this
Agreement shall become effective as to all its provisions, and any such
termination shall be without liability on the part of the Company to any
Underwriter (except for the expenses to be paid or reimbursed pursuant to
Section 6 hereof and except to the extent provided in Section 10 hereof) or
of any Underwriter to the Company.
(b) This Agreement may also be terminated by you prior to the First
Closing Date, and the option referred to in Section 4, if exercised, may be
cancelled at any time prior to the Second Closing Date, if (i) trading in
securities on the New York Stock Exchange or American Stock Exchange shall
have been suspended or minimum prices shall have been established on either
such exchange, or (ii) a banking moratorium shall have been declared by
Massachusetts, New York, or United States authorities, or (iii) there shall
have been any change in financial markets or in political, economic or
financial conditions which, in the opinion of the Representative, either
renders it impracticable or inadvisable to proceed with the offering and
sale of the Shares on the terms set forth in the Prospectus or materially
and adversely affects the market for the Shares, or (iv) there shall have
been an outbreak of major armed
-24-
hostilities between the United States and any foreign power which in the
opinion of the Representative makes it impractical or inadvisable to offer
or sell the Shares. Any termination pursuant to this paragraph (b) shall
be without liability on the part of any Underwriter to the Company or on
the part of the Company to any Underwriter (except for expenses to be paid
or reimbursed pursuant to Section 6 hereof and except to the extent
provided in Section 10 hereof).
Section 14. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of 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 its or their partners, principals,
members, officers or directors or any controlling person, as the case may be,
and will survive delivery of and payment for the Shares sold hereunder.
Section 15. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to you c/o First Albany Corporation, 53 State Street, Boston,
Massachusetts 02109, Attn: Corporate Finance Department, with a copy to
Jonathan A. Koff, Chapman and Cutler, 111 West Monroe, Chicago, Illinois
60603; and if sent to the Company will be mailed, delivered or telegraphed
and confirmed to the Company at its corporate headquarters with a copy to
Eric J. Krathwohl, Rich, May, Bilodeau & Flaherty, P.C., 294 Washington
Street, Boston, Massachusetts 02108.
Section 16. Successors. This Agreement and the Pricing Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors, personal Representative and assigns, and to the
benefit of the officers and directors and controlling persons referred to in
Section 10, and no other person will have any right or obligation hereunder.
The term "successors" shall not include any purchaser of the Shares as such
from any of the Underwriters merely by reason of such purchase.
Section 17. Representation of Underwriters. You will act as
Representative for the several Underwriters in connection with this
financing, and any action under or in respect of this Agreement taken by you
will be binding upon all the Underwriters.
Section 18. Partial Unenforceability. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
Section 19. Applicable Law. This Agreement and the Pricing Agreement
shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding
-25-
agreement among the Company and the several Underwriters including you, all
in accordance with its terms.
Very truly yours,
Fall River Gas Company
By
-------------------------------------
President and Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
First Albany Corporation
Acting as Representative of the several
Underwriters named in Schedule A.
By First Albany Corporation
By
------------------------------------------
Principal
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Schedule A
Number of Firm
Shares to be
Underwriter Purchased
- ----------- ---------
First Albany Corporation...................................
-------------
Total........................................ 340,000
Schedule B
Comfort Letter of Arthur Andersen LLP
(1) They are independent public accountants with respect to the Company
and its subsidiary within the meaning of the 1933 Act.
(2) In their opinion the consolidated financial statements of the
Company and its subsidiary included or incorporated by reference in the
Registration Statement and the consolidated financial statements of the
Company from which the information presented under the caption "Selected
Financial Data" has been derived which are stated therein to have been
examined by them comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the Exchange Act.
(3) On the basis of specified procedures (but not an examination in
accordance with generally accepted auditing standards), including inquiries
of certain officers of the Company and its subsidiary responsible for
financial and accounting matters as to transactions and events subsequent to
September 30, 1996, a reading of minutes of meetings of the stockholders and
directors of the Company and its subsidiary since September 30, 1996, a
reading of the latest available interim unaudited consolidated financial
statements of the Company and its subsidiaries (with an indication of the
date thereof) and other procedures as specified in such letter, nothing came
to their attention which caused them to believe that (i) the unaudited
consolidated financial statements of the Company and its subsidiary included
or incorporated by reference in the Registration Statement do not comply as
to form in all material respects with the applicable accounting requirements
of the 1933 Act and the Exchange Act or that such unaudited financial
statements are not fairly presented in accordance with generally accepted
accounting principles applied on a basis substantially consistent with that
of the audited financial statements included in the Registration Statement,
and (ii) at a specified date not more than five days prior to the date
thereof in the case of the first letter and not more than two business days
prior to the date thereof in the case of the second and third letters, there
was any change in the capital stock or long-term debt or short-term debt
(other than normal payments) of the Company and its subsidiary on a
consolidated basis or any decrease in consolidated net current assets or
consolidated stockholders' equity as compared with amounts shown on the
latest unaudited balance sheet of the Company included in the Registration
Statement or for the period from the date of such balance sheet to a date not
more than five days prior to the date thereof in the case of the first letter
and not more than two business days prior to the date thereof in the case of
the second and third letters, there were any decreases, as compared with the
corresponding period of the prior year, in consolidated gas operating
revenues, consolidated income before income taxes or in the total or per
share amounts of consolidated net income except, in all instances, for
changes or decreases which the Prospectus discloses have occurred or may
occur or which are set forth in such letter.
(4) They have carried out specified procedures, which have been agreed
to by the Representative, with respect to certain information in the
Prospectus specified by the Representative, and on the basis of such
procedures, they have found such information to be in agreement with the
general accounting records of the Company and its subsidiaries.
-2-
Exhibit A
FALL RIVER GAS COMPANY
340,000 Shares Common Stock (*)
PRICING AGREEMENT
, 1997
-----------
First Albany Corporation
As Representative of the Several
Underwriters Named in Schedule A
c/o First Albany Corporation
Corporate Finance Department
53 State Street
Boston, Massachusetts 02109
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated ____________, 1997
(the "Underwriting Agreement") relating to the sale by the Company and the
purchase by the several Underwriters for whom First Albany Corporation is
acting as representative (the "Representative"), of the above Shares. All
terms herein shall have the definitions contained in the Underwriting
Agreement except as otherwise defined herein.
Pursuant to Section 4 of the Underwriting Agreement, the Company agrees
with the Representative as follows:
1. The initial public offering price per share for the Shares shall be
$__________.
2. The purchase price per share for the Shares to be paid by the
several Underwriters shall be $__________, being an amount equal to the
initial public offering price set forth above less $__________ per share.
- ----------------------
(*)Plus an option to acquire up to 51,000 additional shares to cover
overallotments.
Schedule A is amended as follows:
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the
several Underwriters, including you, all in accordance with its terms.
Very truly yours,
Fall River Gas Company
By
-------------------------------------
President and Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
First Albany Corporation
Acting as Representative of the several
Underwriters.
By First Albany Corporation
By
--------------------------------
Principal
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