CHESAPEAKE UTILITIES
CORPORATION
COMMON STOCK, PAR VALUE PER SHARE
$0.4867
ROBERT W. BAIRD
& CO. INCORPORATED
A.G. EDWARDS & SONS, INC.
As Representatives of the Several
Underwriters
Identified in Schedule I Annexed Hereto
c/o Robert W. Baird & Co. Incorporated
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Chesapeake
Utilities Corporation, a Delaware corporation (the “
Company ”), proposes to issue and sell to the several
Underwriters named in Schedule I hereto (the “
Underwriters ”) 600,300 shares of the Common Stock,
par value per share $0.4867, of the Company (the “ Firm
Shares ”).
The Company also
proposes to issue and sell to the several Underwriters up to an
additional 90,045 shares of Common Stock, par value per share
$0.4867, of the Company (the “ Additional Shares
”), if and to the extent that you, Robert W. Baird & Co.
Incorporated (“ Baird ”) and A.G. Edwards &
Sons, Inc. (“ Managers ”), as managers of the
offering, shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock
granted to the Underwriters in Section 2 hereof. The Firm
Shares and the Additional Shares are hereinafter collectively
referred to as the “ Shares .” The shares of
Common Stock, par value per share $0.4867, of the Company to be
outstanding after giving effect to the sales contemplated hereby
are hereinafter referred to as the “ Common Stock
.”
The Company has
prepared and filed, in accordance with the Securities Act of 1933,
as amended (the “ Securities Act ”), and the
rules and regulations thereunder, with the Securities and Exchange
Commission (the “ Commission ”) a registration
statement on Form S-3 (file number 333-135602) including a
prospectus, relating to the Shares, which registration statement
and prospectus incorporate or are deemed to incorporate by
reference documents that the Company has filed, or will file, with
the Commission in accordance with the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”), and the
rules and regulations thereunder. The registration statement as
amended at the time it becomes effective for purposes of
Section 11 of the Securities Act (as such section applies to
the Underwriters), including the documents filed as part thereof
and information contained or incorporated by reference in the
prospectus or otherwise deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A
or Rule 430B under the Securities Act, is hereinafter referred
to as the “ Registration Statement .” If the
Company files an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act
(the “
Rule 462 Registration Statement ”), then any
reference herein to the term “ Registration Statement
” shall be deemed to include such Rule 462 Registration
Statement. The Company has also filed with, or transmitted for
filing to, or shall promptly after the date of this Agreement file
with or transmit for filing to, the Commission a prospectus
supplement (in the form first used to confirm sales of the Shares
(or in the form first made available to the Underwriters by the
Company to meet requests of purchasers pursuant to Rule 173
under the Securities Act), the “ Prospectus Supplement
”) pursuant to Rule 424 under the Securities Act. The
term “ Base Prospectus ” means the prospectus
dated November 9, 2006, relating to the Shares, in the form in
which it has most recently been filed with the Commission as part
of the Registration Statement on or prior to the date of this
Agreement. The term “ Prospectus ” means the
Base Prospectus as supplemented by the Prospectus Supplement. The
term “ Preliminary Prospectus ” means any
preliminary form of Prospectus (including without limitation the
preliminary Prospectus Supplement dated November 13, 2006,
filed with the Commission pursuant to Rule 424).
For purposes of
this Agreement, “ free writing prospectus ” has
the meaning set forth in Rule 405 under the Securities Act; “
Time of Sale Prospectus ” means the Base Prospectus
and the Preliminary Prospectus, together with the free writing
prospectuses, if any, each identified in Schedule II hereto
(each, a “ Permitted Free Writing Prospectus ”),
and other information conveyed to purchasers of the Shares at or
prior to the Time of Sale as set forth in Schedule II hereto;
“ Time of Sale ” means 5:00 p.m. (Central Time)
on the date of this Agreement; and “ road show ”
has the meaning set forth in Rule 433(h)(4) under the Securities
Act. As used herein, the terms “Registration
Statement,” “Base Prospectus,” “Preliminary
Prospectus,” “Time of Sale Prospectus” and
“Prospectus” shall include the documents, if any,
deemed to be incorporated by reference therein, including, unless
the context otherwise requires, the documents, if any, filed as
exhibits to such incorporated documents. The terms
“supplement,” “amendment” and
“amend” as used herein with respect to the Registration
Statement, the Base Prospectus, the Time of Sale Prospectus, any
Preliminary Prospectus, the Prospectus or any free writing
prospectus shall include all documents subsequently filed by the
Company with the Commission pursuant to the Exchange Act that are
deemed to be incorporated by reference therein.
1.
Representations and Warranties of the Company . The Company
represents and warrants to and agrees with each of the Underwriters
on the date hereof, on the Closing Date (as defined in Section 4)
and on each Option Closing Date (as defined in Section 2), if
any, that:
(a) The
Registration Statement has become effective under the Securities
Act; no stop order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of any Preliminary
Prospectus or the Prospectus is in effect, and no proceedings for
such purpose are pending before or, to the Company’s
knowledge, threatened by the Commission.
(b) The Base
Prospectus and any Preliminary Prospectus filed as part of the
registration statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all
2
material
respects with the Securities Act and the rules and regulations
thereunder (including, without limitation, Rule 430B(a) or
430A(a)).
(c) (i) Each
document, if any, filed or to be filed pursuant to the Exchange Act
and incorporated by reference in the Time of Sale Prospectus or the
Prospectus complied or will comply when so filed in all material
respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder; (ii) each part of
the Registration Statement, when such part became effective, did
not contain and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading;
(iii) the Registration Statement, as of the date hereof, does
not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; (iv) the
Registration Statement complies and, as amended or supplemented, if
applicable, will comply in all material respects with the
Securities Act; the conditions to the use of Form S-3 in connection
with the offering and sale of the Shares as contemplated hereby
have been satisfied; the Registration Statement meets, and the
offering and sale of the Shares as contemplated hereby complies
with, the requirements of Rule 415 under the Securities Act
(including without limitation Rule 415(a)(5)); (v) at no
time during the period that begins on the earlier of the date of
the Preliminary Prospectus and the date on which the Preliminary
Prospectus was filed with the Commission and ends immediately prior
to the execution of this Agreement did any Preliminary Prospectus
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; (vi) the Time of Sale Prospectus does not, and at
the Applicable Time, at the Closing Date and, if applicable, each
Option Closing Date, the Time of Sale Prospectus, as then amended
or supplemented by the Company, if applicable, will not, contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(vii) each Permitted Free Writing Prospectus does not conflict
with the information contained in the Registration Statement, the
Time of Sale Prospectus or the Prospectus; (viii) each road
show, when considered together with the Time of Sale Prospectus,
does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; and (ix) the Prospectus, as of the date it is
filed with the Commission pursuant to Rule 424, at the Closing
Date and at each Option Closing Date, if any, will comply in all
material respects with the Securities Act (including without
limitation Section 10(a) of the Securities Act) and will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided, however, that the representations and
warranties set forth in this Section 1(c) do not apply to
statements or omissions in the Registration Statement, the Time of
Sale Prospectus, any Preliminary Prospectus, any Permitted Free
Writing Prospectus, any road show
3
or the
Prospectus or any amendments or supplements thereto based upon
information relating to any Underwriter furnished to the Company in
writing by such Underwriter through the Managers expressly for use
therein, it being agreed that the only information furnished by the
Underwriters to the Company expressly for use therein are the
statements contained in the first paragraph of the
“Underwriting — Discounts and Commissions”
subsection, and in each paragraph of the “Underwriting
— Stabilization” subsection, of the Prospectus
Supplement (and preliminary Prospectus Supplement).
(d) Prior to
the execution of this Agreement, the Company has not, directly or
indirectly, offered or sold any Shares by means of any
“prospectus” (within the meaning of the Securities Act)
or used any “prospectus” (within the meaning of the
Securities Act) in connection with the offer or sale of the Shares,
in each case other than the Preliminary Prospectus and/or the
Permitted Free Writing Prospectuses; the Company has not, directly
or indirectly, prepared, used or referred to any free writing
prospectuses, without the prior written consent of Baird, other
than the Permitted Free Writing Prospectuses and road shows
furnished or presented to the Managers before first use. Each
Permitted Free Writing Prospectus has been prepared, used or
referred to in compliance with Rules 164 and 433 under the
Securities Act; assuming that such Permitted Free Writing
Prospectus is so sent or given after the Registration Statement was
filed with the Commission (and after such Permitted Free Writing
Prospectus was, if required pursuant to Rule 433(d) under the
Securities Act, filed with the Commission), the sending or giving,
by any Underwriter, of any Permitted Free Writing Prospectus will
satisfy the provisions of Rule 164 and Rule 433 (without
reliance on subsections (b), (c) and (d) of
Rule 164); the conditions set forth in one or more of
subclauses (i) through (iv), inclusive, of Rule 433(b)(1)
under the Securities Act are satisfied, and the registration
statement relating to the offering of the Shares contemplated
hereby, as initially filed with the Commission, includes a
prospectus that, other than by reason of Rule 433 or
Rule 431 under the Securities Act, satisfies the requirements
of Section 10 of the Securities Act; neither the Company nor
the Underwriters are disqualified, by reason of subsection
(f) or (g) of Rule 164 under the Securities Act,
from using, in connection with the offer and sale of the Shares,
free writing prospectuses pursuant to Rules 164 and 433 under
the Securities Act; each Permitted Free Writing Prospectus that the
Company has filed, or is required to file, pursuant to Rule 433(d)
under the Securities Act or that was prepared by or behalf of or
used or referred to by the Company complies or will comply in all
material respects with the requirements of the Securities Act; no
Permitted Free Writing Prospectus conflicts with the information
contained in the Registration Statement, any Preliminary
Prospectus, Time of Sale Prospectus or Prospectus; and, to the
Company’s knowledge, no free writing prospectus prepared by
or on behalf of or used by any Underwriter contains any
“issuer information” within the meaning of
Rule 433(h)(2) under the Securities Act.
(e) The
Company was, at the time the Registration Statement was initially
filed and when it became effective, eligible to use Form S-3 to
register the offering of the Shares contemplated hereby. The
Company was not an “ineligible
4
issuer”
(as defined in Rule 405 under the Securities Act) as of the
eligibility determination date for purposes of Rules 164 and
433 under the Securities Act with respect to the offering of the
Shares contemplated by the Registration Statement.
(f) Shares of
Common Stock are listed on the New York Stock Exchange
(“NYSE”), and the Company has not received any notice
from the NYSE regarding the delisting of such shares from the NYSE.
The Shares are duly listed, and admitted and authorized for
trading, subject to official notice of issuance, on the NYSE. To
the Company’s knowledge, there are no affiliations or
associations between (i) any member of the NASD and
(ii) the Company or any of the Company’s officers,
directors or 5% or greater security holders or any beneficial owner
of the Company’s unregistered equity securities that were
acquired at any time on or after the 180th day immediately
preceding the date the Registration Statement was initially filed
with the Commission, except as disclosed in the Registration
Statement (excluding the exhibits thereto), the Time of Sale
Prospectus and the Prospectus.
(g) The
Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Time of
Sale Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not (i) have a material
adverse effect on the assets, business, condition (financial or
otherwise), results of operation or prospects of Company and its
subsidiaries, taken as a whole, (ii) prevent or materially
interfere with consummation of the transactions contemplated
hereby, or (iii) result in the delisting of shares of Common
Stock from the NYSE (the occurrence of any such effect, prevention,
interference or result described in the foregoing clauses (i),
(ii) or (iii) being herein referred to as a “
material adverse effect ”).
(h) Each
subsidiary of the Company that is a “significant
subsidiary” of the Company within the meaning of
Regulation S-X promulgated under the Securities Act (each a
“Significant Subsidiary” and collectively the
“Significant Subsidiaries” ) has been duly
organized, is validly existing as a corporation or limited
liability company in good standing under the laws of the
jurisdiction of its organization, has the corporate power and
authority to own its property and to conduct its business as
described in the Time of Sale Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect; all of the issued shares of capital stock
of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are
owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims.
5
(i) This
Agreement has been duly authorized, executed and delivered by the
Company.
(j) The
authorized and outstanding capitalization of the Company is as set
forth in the Time of Sale Prospectus and will be as set forth in
the Prospectus. The authorized capital stock of the Company
conforms and will conform as to legal matters to the description
thereof contained in the Time of Sale Prospectus and the
Prospectus.
(k) The
shares of Common Stock outstanding prior to the issuance of the
Shares to be sold by the Company have been duly authorized, are
validly issued, fully paid and non-assessable, have been issued in
compliance with applicable securities laws and were not issued in
violation of any preemptive or similar rights.
(l) The
Shares to be sold by the Company have been duly authorized and,
when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable,
and the issuance of such Shares will not be subject to any
preemptive or similar rights.
(m) Neither
the execution and delivery by the Company of, nor the performance
by the Company of its obligations under, this Agreement will
conflict with, contravene, result in a breach or violation of, or
imposition of any lien, charge or encumbrance upon any assets of
the Company or any of its subsidiaries pursuant to, or constitute a
default under (i) any statute, law, rule, regulation,
judgment, order or decree of any governmental body, regulatory or
administrative agency or court having jurisdiction over the Company
or any subsidiary; (ii) the certificate of incorporation or
bylaws of the Company or any of its subsidiaries; or (iii) any
contract, agreement, obligation, covenant or instrument to which
the Company or any of its subsidiaries (or any of their respective
assets) is subject or bound.
(n) No
approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or of or with any
self-regulatory organization or other non-governmental regulatory
authority (including, without limitation, the NYSE), or approval of
the Company’s shareholders, is required in connection with
the issuance and sale of the Shares or the consummation of the
transactions contemplated hereby, other than (i) registration
of the Shares under the Securities Act, which has been effected
(or, with respect to any Rule 462 Registration Statement, will
be effected in accordance with Rule 462(b) under the Securities
Act), (ii) any necessary qualification under the securities or
blue sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriters, (iii) under the NASD Conduct
Rules, (iv) the approval of the Delaware Public Service
Commission (the “DPSC”), (v) the approval of the
Florida Public Service Commission (the “FPSC”), and
(vi) the listing of the Shares with the NYSE. Without limiting
the foregoing subsections (m) and (n), (A) the Company has
received a final order of the FPSC, dated November 3, 2005,
authorizing the issuance of the Shares contemplated by this
Agreement, and such issuance complies with the terms and conditions
of such
6
order, and
(B) the Company has received an order of the DPSC dated
October 31, 2006, authorizing the issuance of the Shares
contemplated by this Agreement, which order will become effective
on November 30, 2006, and with respect to which no appeal will
be sustained.
(o) There are
no actions, suits, claims, investigations or proceedings pending
or, to the Company’s knowledge, threatened or contemplated to
which the Company or any of its subsidiaries or any of their
respective directors or officers is or would be a party or of which
any of their respective properties is or would be subject at law or
in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or
agency, or before or by any self-regulatory organization or other
non-governmental regulatory authority (including, without
limitation, the NYSE) (i) other than any such action, suit,
claim, investigation or proceeding accurately described in the Time
of Sale Prospectus which, if resolved adversely to the Company or
any of its subsidiaries, would not, individually or in the
aggregate, have a material adverse effect or (ii) that are
required to be described in the Time of Sale Prospectus and are not
so described. There are no statutes, regulations, contracts or
other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement that are not described or filed as
required.
(p) The
Company is not, and after giving effect to the offering and sale of
the Shares and the application of the proceeds thereof as described
in the Prospectus will not be, required to register as an
“investment company” as such term is defined in the
Investment Company Act of 1940, as amended.
(q) The
financial statements included or incorporated by reference in the
Registration Statement, the Time of Sale Prospectus and the
Prospectus, together with the related notes and schedules, present
fairly the consolidated financial position of the Company and its
subsidiaries as of the dates indicated and the consolidated results
of operations, cash flows and changes in shareholders’ equity
of the Company for the periods specified and have been prepared in
compliance with the requirements of the Securities Act and Exchange
Act and in conformity with U.S. generally accepted accounting
principles applied on a consistent basis during the periods
involved; all pro forma financial statements or data included or
incorporated by reference in the Registration Statement, the Time
of Sale Prospectus and the Prospectus, if any, comply with the
requirements of the Securities Act and the Exchange Act, and the
assumptions used in the preparation of such pro forma financial
statements and data are reasonable, the pro forma adjustments used
therein are appropriate to give effect to the transactions or
circumstances described therein and the pro forma adjustments have
been properly applied to the historical amounts in the compilation
of those statements and data; the other financial and statistical
data contained or incorporated by reference in the Registration
Statement, the Time of Sale Prospectus and the Prospectus are
accurately and fairly presented and prepared on a basis consistent
with the financial statements and books and records of the Company;
there are no financial statements (historical or pro forma) that
are required to be included or incorporated by reference in the
Registration Statement,
7
the Time of
Sale Prospectus or the Prospectus that are not included or
incorporated by reference as required; the Company and its
subsidiaries do not have any material liabilities or obligations,
direct or contingent (including any off-balance sheet obligations),
not described in the Time of Sale Prospectus and the Prospectus;
and all disclosures contained or incorporated by reference in the
Time of Sale Prospectus and the Prospectus regarding
“non-GAAP financial measures” (as such term is defined
by the rules and regulations of the Commission) comply with
Regulation G under the Exchange Act and Item 10 of
Regulation S-K under the Securities Act, to the extent
applicable.
(r) All
statistical or market-related data included or incorporated by
reference in the Time of Sale Prospectus, the Prospectus and the
Permitted Free Writing Prospectuses are based on or derived from
sources that the Company reasonably believes to be reliable and
accurate, and the Company has obtained the written consent to the
use of such data from such sources to the extent required. Each
“forward-looking statement” (within the meaning of
Section 27A of the Securities Act or Section 21E of the
Exchange Act) contained or incorporated by reference in the
Registration Statement, the Time of Sale Prospectus, the Prospectus
and the Permitted Free Writing Prospectuses has been made or
reaffirmed with a reasonable basis and in good faith.
(s) The
Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (“ Environmental Laws
”), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses
or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not have a
material adverse effect. There are no costs or liabilities
associated with Environmental Laws (including, without limitation,
any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties) which
would have a material adverse effect.
(t) There are
no contracts, agreements or understandings between the Company and
any person granting such person the right to require the Company to
file a registration statement under the Securities Act with respect
to any securities of the Company or to require the Company to
include such securities with the Shares registered pursuant to the
Registration Statement.
(u) Subsequent
to the respective dates as of which information is given in each of
the Registration Statement, the Time of Sale Prospectus and the
Prospectus, (i) there has not occurred any material adverse
change, or, to the Company’s knowledge, any development
involving a prospective material adverse
8
change, in the
assets, business, condition (financial or otherwise), management,
operations or earnings of the Company and its subsidiaries, taken
as a whole; (ii) the Company and its subsidiaries have not
incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction;
(iii) the Company has not purchased any of its outstanding
capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock other than ordinary
and customary dividends; and (iv) there has not been any
material change in the capital stock, short-term debt or long-term
debt of the Company and its subsidiaries, except in each of clauses
(i) — (iv) above as described in each of the
Registration Statement, the Time of Sale Prospectus and the
Prospectus, respectively.
(v) The
Company and its subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all
personal property owned by them which is material to the business
of the Company and its subsidiaries, in each case free and clear of
all liens, encumbrances and defects except such as are described in
the Time of Sale Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease
by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its
subsidiaries, in each case except as described in the Time of Sale
Prospectus.
(w) Each of
the Company and its subsidiaries owns or possesses all inventions,
patent applications, patents, trademarks (both registered and
unregistered), trade names, service names, copyrights, trade
secrets and other proprietary information described in the
Registration Statement, the Time of Sale Prospectus and the
Prospectus as being owned or licensed by it or which is necessary
for the conduct of, or material to, its businesses (collectively,
the “ Intellectual Property ”), and the Company
is unaware of any claim to the contrary or any challenge by any
other person to the rights of the Company or any of its
subsidiaries with respect to the Intellectual Property. Neither the
Company nor any of its subsidiaries has infringed or is infringing
the intellectual property of a third party, and neither the Company
nor any of its subsidiaries has received notice of a claim by a
third party to the contrary, except in each case for such
infringements as have not and would not have a material adverse
effect.
(x) No
material labor dispute with the employees of the Company or any of
its subsidiaries exists, except as described in the Time of Sale
Prospectus, or, to the knowledge of the Company, is imminent; and
the Company is not aware of any existing, threatened or imminent
labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that could have a material
adverse effect on the Company and its subsidiaries, taken as a
whole. Neither the Company nor any of its subsidiaries is in
violation of any provision of the Employee Retirement Income
Security Act of 1974, as amended, or the rules and
regulations
9
promulgated
thereunder, except for such violations as would not have a material
adverse effect.
(y) The
Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses
in which they are engaged; and neither the Company nor any of its
subsidiaries has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not have
a material adverse effect.
(z) The
Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state
or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization
or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material
adverse effect.
(aa) Except
as otherwise would not have a material adverse effect, no
subsidiary of the Company is subject to any material direct or
indirect prohibition on paying any dividends to the Company, on
making any other distribution on such subsidiary’s capital
stock, on repaying to the Company any loans or advances to such
subsidiary from the Company or on transferring any of such
subsidiary’s property or assets to the Company or any other
subsidiary of the Company, except as described in the Time of Sale
Prospectus.
(bb) The
Company maintains “internal control over financial
reporting” (as defined in Rules 13a-15 and 15d-15 under the
Exchange Act) in compliance with the requirements of the Exchange
Act. The Company’s internal control over financial reporting
has been designed by the Company’s principal executive
officer and principal financial officer, or under their
supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles and is effective in performing the
functions for which it was established. Except as described in the
Time of Sale Prospectus, since the end of the Company’s most
recent audited fiscal year, there has been (i) no significant
deficiency or material weakness in the design or operation of the
Company’s internal control over financial reporting (whether
or not remediated) which is reasonably likely to adversely affect
the Company’s ability to record, process, summarize and
report financial information, and (ii) no change in the
Company’s internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect,
the Company’s internal control over financial
reporting.
(cc) The
Company maintains “disclosure controls and procedures”
(as such term is defined in Rules 13a-15 and 15d-15 under the
Exchange Act); such disclosure controls and procedures are designed
to ensure that material information
10
relating to the
Company, including its consolidated subsidiaries, is made known to
the Company’s Chief Executive Officer and Chief Financial
Officer by others within those entities, and such disclosure
controls and procedures are effective in performing the functions
for which they were established; the Chief Executive Officer and
the Chief Financial Officer of the Company have made all
certifications required by the Sarbanes-Oxley Act of 2002 and any
related rules and regulations promulgated by the Commission (the
“Sarbanes-Oxley Act”), and the statements made in each
such certification are accurate; the Company, its subsidiaries and
its directors and officers are each in compliance in all material
respects with the applicable provisions of the Sarbanes-Oxley
Act.
(dd) Neither
the Company nor any of its subsidiaries has sent or received any
communication regarding termination of, or intent not to renew, any
of the contracts or agreements referred to or described in the Time
of Sale Prospectus or the Prospectus, or referred to or described
in, or filed as an exhibit to, the Registration Statement, and no
such termination or non-renewal has been threatened by the Company
or any of its subsidiaries or, to the Company’s knowledge,
any other party to any such contract or agreement.
(ee) All tax
returns required to be filed by the Company or any of its
subsidiaries have been timely filed, and all taxes and other
assessments of a similar nature (whether imposed directly or
through withholding) including any interest, additions to tax or
penalties applicable thereto due or claimed to be due from such
entities have been timely paid, other than those being contested in
good faith and for which adequate reserves have been provided or
which would not have a material adverse effect.
(ff) Neither
the Company nor any of its subsidiaries nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of
the Company or any of its subsidiaries is aware of or has taken any
action, directly or indirectly, that would result in a violation by
such persons of the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder; and the Company
and its subsidiaries have instituted and maintain policies and
procedures designed to ensure continued compliance therewith,
including without limitation a system of internal accounting
controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with
management’s general or specific authorization,
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and
(iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(gg) Except
as described in the Time of Sale Prospectus, the Company has not
sold, issued or distributed any shares of Common Stock during the
six-month period preceding the date hereof, including any sales
pursuant to Rule 144A under, or Regulation D or S of, the
Securities Act, other than shares issued pursuant
11
to employee
benefit plans or other employee, executive or director compensation
plans, the Company’s Dividend Reinvestment and Direct Stock
Purchase Plan or pursuant to the conversion of the Company’s
8.25% convertible debentures due March 1, 2014.
(hh) Neither
the Company nor any of its subsidiaries nor any of their respective
directors, officers, affiliates or controlling persons has taken,
directly or indirectly, any action designed, or which has
constituted or might reasonably be expected to cause or result in
the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the
Shares.
2.
Agreements to Sell and Purchase . The Company hereby agrees
to issue and sell 600,300 Shares to the several Underwriters at a
price of $28.975 per share (the “ Purchase Price
”), and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the
terms and conditions herein set forth, agrees, severally and not
jointly, to purchase from the Company at the Purchase Price the
number of Firm Shares (subject to such adjustments to eliminate
fractional shares as the Managers may determine) set forth opposite
the name of such Underwriter set forth in Schedule I
hereto.
Moreover, the
Company hereby agrees to issue and sell up to 90,045 Additional
Shares to the Underwriters at the Purchase Price, and the
Underwriters, upon the basis of the representations and warranties
contained herein, but subject to the terms and conditions herein
set forth, shall have the right (but not the obligation) to
purchase, severally and not jointly, up to the Additional Shares at
the Purchase Price. The Managers may exercise this right on behalf
of the Underwriters in whole or from time to time in part by giving
written notice not later than 30 days after the date of this
Agreement. Any exercise notice shall specify the number of
Additional Shares to be purchased by the Underwriters and the date
on which such shares are to be purchased. Each purchase date must
be at least one business day after the written notice is given and
may not be earlier than the closing date for the Firm Shares or
later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 4
hereof solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. On each day, if
any, that Additional Shares are to be purchased (an “
Option Closing Date ”), each Underwriter agrees,
severally and not jointly, to purchase the number of Additional
Shares (subject to such adjustments to eliminate fractional shares
as the Managers may determine) that bears the same proportion to
the total number of Additional Shares to be purchased on such
Option Closing Date as the number of Firm Shares set forth in
Schedule I hereto opposite the name of such Underwriter bears
to the total number of Firm Shares.
3. Terms
of Public Offering . The Company is advised by the Managers
that the Underwriters propose to make a public offering of their
respective portions of the Shares as soon after this Agreement has
become effective as in the Managers’ judgment is advisable.
The Company is further advised by the Managers that the Shares are
to be offered to
|
