<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT FILED PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) - June 8, 1995
UNITED CITIES GAS COMPANY
(Exact name of registrant as specified in charter)
<TABLE>
<S> <C> <C>
Illinois and Virginia 0-1284-3 36-1801540
(State or other jurisdiction (Commission File Number) (IRS Employer Identification Number)
of incorporation)
5300 Maryland Way, Brentwood, TN 37027
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (615) 373-0104
<PAGE> 2
Item 5. Other Events
On June 8, 1995, United Cities Gas Company (the "Company") entered
into an Underwriting Agreement with PaineWebber Incorporated, Edward D. Jones &
Co., and Legg Mason Wood Walker, Incorporated, as representatives of the
several underwriters named in such Underwriting Agreement, pursuant to which
the Company agreed to issue and sell 1,200,000 shares of its Common Stock and
180,000 shares of its Common Stock pursuant to an over-allotment option, as
contemplated by the Company's registration statement on Form S-3, SEC File No.
33-56983.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(1) Underwriting Agreement, dated June 8, 1995, by and among United Cities
Gas Company, PaineWebber Incorporated, Edward D. Jones & Co. and Legg
Mason Wood Walker, Incorporated, as representatives of the several
underwriters named therein.
<PAGE> 3
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
UNITED CITIES GAS COMPANY
By: /S/ TOM S. HAWKINS, JR.
---------------------------------
Tom S. Hawkins, Jr.
Vice President of Finance
On behalf of the registrant
Date: June 13, 1995
<PAGE> 1
EXHIBIT 1
1,200,000 Shares*
UNITED CITIES GAS COMPANY
Common Stock
UNDERWRITING AGREEMENT
June 8, 1995
New York, New York
PaineWebber Incorporated
1285 Avenue of the Americas
14th Floor
New York, New York 10019
Edward D. Jones & Co.
12555 Manchester Road
St. Louis, Missouri 63131-3729
Legg Mason Wood Walker, Incorporated
111 South Calvert Street
Baltimore, Maryland 21202-1476
Dear Sirs:
United Cities Gas Company, a corporation organized and existing under
the laws of the State of Illinois and the Commonwealth of Virginia (the
"Company"), proposes to issue and sell an aggregate of 1,200,000 shares (the
"Firm Shares") of the Company's authorized and unissued common stock, without
par value (the "Common Stock") to you and to the other underwriters named in
Schedule I (collectively the "Underwriters"), for whom you are acting as
representatives (the "Representatives"). The Company agrees to grant to the
Underwriters an option (the "Option") to purchase up to an additional 180,000
shares of such Common Stock (the "Option Shares") on the terms and for the
purposes set forth in Section 1(b) hereof. The Firm Shares and the Option
Shares are hereinafter collectively referred to as the "Shares."
The Company confirms as follows its agreement with the Representatives
and the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) The initial public offering price per share for the Firm Shares
and the purchase price per share for the Firm
- ---------------
* Plus an option to purchase up to 180,000 additional shares to cover
over-allotments.
<PAGE> 2
Shares to be paid by the several Underwriters shall be as set forth on
Exhibit A hereto. The Company agrees to issue and sell to each
Underwriter and, upon the basis of the representations, warranties and
agreements of the Company herein contained, and subject to the terms and
conditions herein set forth, each Underwriter agrees, severally and not
jointly, to purchase from the Company at the purchase price per share for
the Firm Shares, the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I, plus such additional number of Firm
Shares which such Underwriter may become obligated to purchase pursuant
to Section 8 hereof.
(b) Subject to all the terms and conditions hereof, the Company grants
to the Underwriters the Option to purchase, severally and not jointly,
all or any part of the Option Shares at the same price per share as the
Underwriters shall pay for the Firm Shares. The Option may be exercised
only to cover over-allotments in the sale of Firm Shares by the
Underwriters and may be exercised in whole or in part at any time (but
not more than once) on or before the 45th day after the date of this
Agreement upon written or telegraphic notice (the "Option Shares Notice")
by the Representatives to the Company no later than 12:00 noon, New York
City time at least two and no more than five business days before the
date specified for closing in the Option Shares Notice (the "Option
Closing Date") setting forth the aggregate number of Option Shares to be
purchased and the time and date for such purchase. On the Option Closing
Date, the Company will issue and sell to the Underwriters the number of
Option Shares set forth in the Option Shares Notice, and each Underwriter
will purchase such percentage of the Option Shares as is equal to the
percentage of Firm Shares that such Underwriter is purchasing, as
adjusted by the Representatives in such manner as it deems advisable to
avoid fractional Shares. The purchase price per share to be paid for the
Option Shares shall be the same price per share as for the Firm Shares,
less the amount of any dividend declared by the Company prior to the date
hereof and payable on the Firm Shares and as to which the record date has
occurred prior to the Option Closing Date.
(c) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (File No. 33-
56983), including a prospectus, covering the registration of the Shares
and the offering thereof from time to time in accordance with Rule 415
under the Securities Act of 1933, as amended (the "Securities Act").
Such registration statement has been declared effective by the
Commission. As provided in Section 4(a) hereof, a prospectus supplement
reflecting the terms of the Shares, the terms of the offering thereof and
the other matters set forth therein has been prepared and will be filed
promptly pursuant to Rule 424 under the Securities Act ("Rule 424").
Such prospectus supplement, in the form first
2
<PAGE> 3
filed with (or transmitted for filing to) the Commission on or after
the date hereof pursuant to Rule 424, is herein referred to as the
"Prospectus Supplement." Such registration statement, as amended and
supplemented at the date hereof, including the exhibits thereto and the
documents incorporated by reference therein pursuant to Item 12 of Form
S-3 under the Securities Act, is herein called the "Registration
Statement," and the basic prospectus included therein at the Effective
Date (as hereinafter defined) relating to all offerings of securities
under the Registration Statement, as supplemented by the Prospectus
Supplement, is herein called the "Prospectus," except that, if such basic
prospectus is amended or supplemented subsequent to the Effective Date,
the term "Prospectus" shall refer to the basic prospectus as so amended
or supplemented and as further supplemented by the Prospectus Supplement,
in either case including the documents filed by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), that are incorporated by reference therein.
2. Delivery and Payment. Delivery of the Firm Shares to the
Representatives for the accounts of the Underwriters against payment of the
purchase price by certified or official bank checks payable to the Company in
next day funds, shall take place at the office of Chapman and Cutler, 111 West
Monroe Street, Chicago, Illinois, at 9:00 a.m., Chicago time, on the fourth
business day following the date of this Agreement or at such time on such other
date, not later than seven business days after the date of this Agreement, as
shall be agreed upon by the Representatives and the Company (such date is
hereinafter referred to as the "Closing Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice (such
date is hereinafter referred to as the "Option Closing Date").
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representatives shall request at least two full business days prior to the
Closing Date or the Option Closing Date, as the case may be, by written notice
to the Company. For purposes of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection, at such place in New York City as is designated by
the Representatives, at least 24 hours prior to the Closing Date or the Option
Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares and Option Shares by the Company to
the respective Underwriters shall be borne by the Company. The Company will
pay and save each Underwriter and any
3
<PAGE> 4
subsequent holder of the Shares harmless from any and all liabilities with
respect to or resulting from any failure or delay in paying federal and state
stamp and other transfer taxes, if any, which may be payable or determined to
be payable in connection with the original issuance or sale to such Underwriter
of the Firm Shares and Option Shares.
3. Representations and Warranties of the Company. The Company
represents to and warrants and covenants with each Underwriter that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act and (i) (A) on the original effective date of the
Registration Statement, (B) on the effective date of the most recent
post-effective amendment thereto, if any, and (C) on the date of the
filing by the Company of any Annual Report on Form 10-K after the
original filing of the Registration Statement and prior to or on the
Closing Date (and if any Option Shares are purchased, prior to or on the
Option Closing Date) (the latest of such dates herein referred to as the
"Effective Date"), in each case the Registration Statement and any
amendments and supplements thereto complied in all material respects
with the requirements of the Securities Act and the rules and
regulations of the Commission thereunder (the "Rules"), and did not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) on the date hereof and at the
Closing Date (and, if any Option Shares are purchased, on the Option
Closing Date), neither the Registration Statement nor any amendment or
supplement thereto contains or will contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
(iii) on the date that the Prospectus Supplement is filed with (or
transmitted for filing to) the Commission pursuant to Rule 424 and on
the Closing Date (and, if any Option Shares are purchased, on the Option
Closing Date), neither the Prospectus nor any amendment or supplement
thereto includes or will include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and
warranties in this subsection shall not apply to statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any Underwriter through you
expressly for use in the Registration Statement or the Prospectus.
(b) The documents incorporated by reference in the Prospectus pursuant
to Item 12 of Form S-3 under the Securities Act, at the time they were
filed with the Commission, complied (or in the case of documents filed
after
4
<PAGE> 5
the date of this Agreement but prior to termination of the offering of the
Shares, will comply) in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder
(the "Exchange Act Rules") and, when read together and with the other
information in the Prospectus, do not and will not, on the date hereof and
at the Closing Date (and if any Option Shares are purchased, on the Option
Closing Date), include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(c) Each preliminary prospectus supplement complied in all material
respects with the Securities Act and the Rules, on the date such
preliminary prospectus was filed with (or transmitted for filing to) the
Commission pursuant to Rule 424, and, as of its date, did not contain any
untrue statement of material fact or omit to state a material fact
necessary to make the statements in it, in light of the circumstances
under which they were made, not misleading. The foregoing representations
do not apply to statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by or on
behalf of any Underwriter through you expressly for use in such
preliminary prospectus supplement.
(d) The Registration Statement has become effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
are pending or threatened by the Commission.
(e) The Company has full corporate power and authority to enter into
this Agreement. This Agreement has been duly and validly authorized,
executed and delivered by the Company.
(f) The Company has filed with the state public utility regulatory
commissions in Georgia, Illinois, Kansas, Tennessee and Virginia seeking
appropriate orders relating to the issuance and sale of the Shares. Such
orders have been entered by such commissions and are effective and
sufficient to permit the issuance and sale of the Shares on the terms
contemplated by this Agreement. The Company is not subject to the
jurisdiction of the Federal Energy Regulatory Commission or the state
public utility regulatory commissions in Iowa, Kentucky, Missouri and
South Carolina with respect to the issuance and sale of the Shares.
(g) The certificate to be delivered pursuant to paragraph (e) of
Section 5 hereof and all other documents delivered by the Company or its
representatives in connection with the issuance and sale of the Shares
were on the dates on which they were delivered, or will be on the dates on
which
5
<PAGE> 6
they are to be delivered, true and complete in all material respects.
(h) The Company has been duly incorporated and is, and at the Closing
Date and, if later, the Option Closing Date, will be, validly existing and
in good standing under the laws of the State of Illinois and the
Commonwealth of Virginia and duly licensed or qualified to do business as
a foreign corporation in the States of Georgia, Iowa, Kansas, Kentucky,
Missouri, South Carolina and Tennessee. The Company has, and at the
Closing Date will have, full power and authority (corporate and other) to
conduct all the activities conducted by it, to own or lease all the assets
owned or leased by it and to conduct its business as described in the
Registration Statement and the Prospectus; and the Company is, and at the
Closing Date and, if later, the Option Closing Date, will be, duly
licensed or qualified to do business as a foreign corporation in all
jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such licensing or
qualification necessary and where the failure to so qualify would have a
material adverse effect upon the business or financial condition of the
Company and the Subsidiaries (as hereinafter defined), taken as a whole.
(i) The Company owns all of the outstanding common stock of UCG Energy
Corporation, a Delaware corporation ("UCG Energy") and United Cities Gas
Storage Company, a Delaware corporation ("UCG Storage"), each of which is
engaged in the business described in the Prospectus and is a corporation
duly organized and existing under the laws of its state of incorporation.
UCG Energy is duly qualified to do business as a foreign corporation in
the States of Alabama, Georgia, Illinois, Iowa, Kansas, Louisiana,
Mississippi, Missouri, North Carolina, South Carolina, Tennessee, Texas
and Virginia, with full power and authority (corporate and other) to
conduct all of the activities conducted by it, to own or lease all the
assets owned or leased by it and to conduct its business as described in
the Registration Statement and the Prospectus. UCG Storage is duly
qualified to do business as a foreign corporation in the States of Kansas,
Kentucky and Tennessee with full power and authority (corporate and
other), except as otherwise described in the documentation delivered
pursuant to the last sentence of paragraph 3(k) hereof, to conduct all of
the activities conducted by it, to own or lease all the assets owned or
leased by it and to conduct its business as described in the Registration
Statement and the Prospectus. Each of UCG Energy and UCG Storage is
licensed or qualified to do business as a foreign corporation in each
other state or jurisdiction in which such licensing or qualification is
necessary for UCG Energy and UCG Storage to conduct their respective
businesses as presently conducted and where the failure to so qualify
would have a material adverse effect upon the business or financial
condition of the Company and the Subsidiaries, taken
6
<PAGE> 7
as a whole. Other than UCG Energy, UCG Storage, UCG Leasing, Inc., a
Georgia corporation ("UCG Leasing"), and United Cities Propane Gas of
Tennessee, Inc., a Tennessee corporation ("UCPGT"), none of the Company,
UCG Energy or UCG Storage has any significant subsidiaries as defined in
the Rules. UCG Energy, UCG Storage, UCG Leasing and UCPGT are herein
sometimes referred to individually as a "Subsidiary" and collectively as
the "Subsidiaries."
(j) UCG Energy owns all of the outstanding common stock of each of UCG
Leasing and UCPGT, each of which is engaged in the business described in
the Prospectus and is a corporation duly organized and existing under the
laws of its state of incorporation. UCG Leasing and UCPGT are each
qualified or licensed to do business as a foreign corporation in each
state or jurisdiction in which such licensing or qualification is
necessary for UCG Leasing or UCPGT, as applicable, to conduct its business
as presently conducted and where the failure to so qualify would have a
material adverse effect upon the business or financial condition of the
Company and the Subsidiaries, taken as a whole, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus.
(k) Except as set forth in the last sentence of this paragraph (k),
each of the Company and the Subsidiaries 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 and, except as otherwise set forth in
the Prospectus, there are no legal or governmental proceedings pending or
threatened which might result in a material modification, suspension or
revocation thereof. Each of the Company and the Subsidiaries has, and is
operating in compliance with, in all material respects, all requisite
corporate power and authority, and all material and necessary
authorizations, approvals, orders, licenses, certificates and permits of
and from all governmental regulatory officials and bodies, to own, lease,
license and operate its properties and conduct its business as presently
conducted and as contemplated by the Prospectus, and the Company and the
Subsidiaries have filed all reports and taken all other action required by
the authority issuing the same where the failure to file or take other
action might reasonably be expected to give rise to a right in such
authority to seek to revoke, suspend or materially limit any such material
license, certificate or permit. The Company has all requisite power,
authority, authorizations, approvals, orders, licenses, certificates and
permits to enter into this Agreement and to carry out the provisions and
conditions hereof. Neither the Company nor any Subsidiary has received
any notice (nor does the Company know of any basis therefor) of conflict
with asserted rights of others in any respect which could
7
<PAGE> 8
materially adversely affect its business, except as described in the
Registration Statement and Prospectus. The foregoing representations of
the Company contained in this paragraph (k) shall not apply with respect
to those matters set forth in documentation delivered to the
Representatives concurrently with the execution of this Agreement as they
relate to grants, franchises, miscellaneous permits and easements relating
to the operations of the Company in the State of Missouri as to which
matters the Company represents only that there are no legal or
governmental proceedings pending or threatened which might result in a
material modification, suspension or revocation of any such grants,
franchises, miscellaneous permits and easements, and that any revocation,
suspension or limitation of any or all such grants, franchises,
miscellaneous permits and easements would not have a material adverse
effect upon the business or financial condition of the Company and the
Subsidiaries, taken as a whole.
(l) The capital stock of the Company (including the Shares being
issued) has been duly authorized by all necessary corporate action on the
part of the Company. All of the issued and outstanding shares of capital
stock of the Company have been, and the Shares upon issuance will be, duly
and validly authorized and issued, fully paid and nonassessable and free
of preemptive or similar rights. The description of the Common Stock in
the Registration Statement and the Prospectus is, and at the Closing Date
and, if later, the Option Closing Date will be, complete and accurate in
all material respects. Except as set forth in the Prospectus, the Company
does not have outstanding, and at the Closing Date or, if later, the
Option Closing Date will not have outstanding, any options to purchase, or
any rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell, any
shares of Common Stock, any shares of capital stock of any Subsidiary or
any such warrants, convertible securities or obligations. No holders of
securities of the Company have any rights to the registration of shares of
capital stock or other securities of the Company. Upon issuance and
delivery of the Shares hereunder and payment of the purchase price as
herein contemplated, the several Underwriters will acquire valid
marketable title to the Shares free and clear of any liens, pledges,
encumbrances, equities and claims whatsoever.
(m) All of the outstanding shares of capital stock of UCG Energy and
UCG Storage have been duly and validly authorized and issued and are fully
paid and nonassessable and are legally owned by the Company free and clear
of all liens, claims, security interests or other encumbrances. All of
the outstanding shares of UCG Leasing and UCPGT have been duly and validly
authorized and issued and are fully paid and nonassessable and are legally
owned by UCG Energy free and clear of all liens, claims, security
interests or other encumbrances. Other than as described in the
Prospectus,
8
<PAGE> 9
there are no rights to subscribe for or to purchase (by way of the
exercise of any option or warrant, the conversion or redemption of any
other security, or otherwise), or any restriction upon the voting or
transfer of, any of the capital stock of any Subsidiary.
(n) Neither the Company nor any Subsidiary is, nor at the Closing Date
or the Option Closing Date will any of them be, in violation of its
certificate or articles of incorporation or bylaws. No default exists,
and no event has occurred which, with notice or lapse of time or both,
would constitute a default in the due performance and observance of any
obligation, agreement or condition by the Company or any Subsidiary
contained in any mortgage, indenture, deed of trust, note, loan agreement
or other agreement or instrument to which the Company or any Subsidiary is
a party or by which the Company or any Subsidiary is bound or to which any
property or asset of the Company or any Subsidiary is subject, except for
defaults the effect of which would not be material to the Company and the
Subsidiaries taken as a whole.
(o) The performance of this Agreement and the consummation of the
transactions contemplated hereby will not conflict with, result in a
breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company or any Subsidiary
pursuant to the terms or provisions of, or give any other party a right to
terminate any of its obligations under, or result in the acceleration of
any obligation under the certificate or articles of incorporation or
bylaws (or equivalent documents) of the Company or any Subsidiary, any
indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement or other evidence of
indebtedness, lease, contract or other agreement or instrument to which
the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or any of its properties is bound or affected, or violate or
conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body applicable to
the business or properties of the Company or any Subsidiary; and no
consent, approval, authorization or order of or any filing or declaration
with, any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part herein
contemplated, except as have been obtained under the Securities Act or the
Rules and such as may be required under state securities or Blue Sky laws
or the by-laws and rules of the National Association of Securities
Dealers, Inc. ("NASD") in connection with the purchase and distribution by
the Underwriters of the Shares to be sold by the Company.
(p) The financial statements, selected financial information and
schedules included or incorporated by
9
<PAGE> 10
reference in the Registration Statement and the Prospectus fairly present
the financial condition, results of operations and cash flow of the
Company and the Subsidiaries on a consolidated basis at the respective
dates thereof and for the respective periods covered thereby, all in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the period involved, except as otherwise
disclosed in the Prospectus. No other financial statements or schedules
of the Company are required by the Securities Act, the Exchange Act, the
Exchange Act Rules or the Rules to be included in the Registration
Statement or the Prospectus.
(q) Arthur Andersen LLP (the "Accountants"), who audited certain of the
financial statements filed with the Commission and included or
incorporated by reference in the Registration Statement and the
Prospectus, are independent accountants with respect to the Company as
required by the Securities Act and the Rules.
(r) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, neither the Company nor
any Subsidiary has sustained any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, which is material to the Company and the
Subsidiaries taken as a whole, otherwise than as set forth or contemplated
by the Prospectus; and, since the respective dates as of which information
is given in the Registration Statement and the Prospectus, there have not
been, and prior to the Closing Date or the Option Closing Date, as the
case may be, there will not be, any declaration or payment of any
dividends or other distributions with respect to the capital stock of the
Company, any default in the payment of principal or interest on any
outstanding indebtedness of the Company, any material change in the
capital stock of the Company or any Subsidiary or in the long-term debt,
liabilities, contingent or otherwise, or obligations under capital leases
of the Company or any Subsidiary or any material adverse change, or any
development known to the Company involving a prospective material adverse
change, in or affecting the business, prospects, financial position,
stockholders' equity, or results of operations of the Company or any
Subsidiary, in each case otherwise than as set forth in or contemplated by
the Prospectus. Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
any material transaction entered into by the Company or any Subsidiary,
other than transactions in the ordinary course of business and changes and
transactions contemplated by the Registration Statement and the
Prospectus. The Company and the Subsidiaries have no contingent
obligations which are not disclosed in the Registration Statement and
Prospectus which
10
<PAGE> 11
can reasonably be expected to have a material adverse effect on the
financial condition, business, operations or prospects of the Company and
the Subsidiaries taken as a whole.
(s) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940,
as amended.
(t) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or
any Subsidiary or any of their respective officers in their capacity as
such, before or by any federal or state court, commission, regulatory
body, administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding might
materially and adversely affect the Company and its Subsidiaries taken as
a whole or the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole.
(u) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement which is not described or
filed as required.
(v) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required
by this Agreement to be delivered to the Representatives was or will be,
when made, inaccurate, untrue or incorrect.
(w) Neither the Company nor, to the knowledge of the Company, any of
its directors, officers or controlling persons has taken, directly or
indirectly, any action designed or which might reasonably be expected to
cause or result, under the Securities Act or otherwise, in, or which has
constituted, stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of any of the Shares.
(x) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement.
(y) Neither the Company nor any Subsidiary is in violation of any law,
statute, ordinance, rule, regulation, order or decree of any court,
governmental body or regulatory authority or administrative agency having
jurisdiction over the Company or any Subsidiary or any of the property or
assets of the Company or any Subsidiary (including, without limitation, to
the best of the knowledge of the Company, any
11
<PAGE> 12
such law, statute, ordinance, rule, regulation, order or decree with
respect to environmental protection or the release, handling, treatment,
storage or disposal of hazardous substances or toxic wastes) which
violation is likely to materially adversely affect the financial
condition, business, operations or prospects of the Company and the
Subsidiaries taken as a whole.
(z) Any certificate signed by any officer of the Company and delivered
to the Representatives or to counsel for the Underwriters shall be deemed
a representation and warranty of the Company to the Underwriters as to the
matters covered thereby.
(aa) In the opinion of counsel for the Company, 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").
(bb) The Shares are eligible for quotation on the National Association
of Securities Dealers Automated Quotation System.
(cc) No claims have been asserted by any person to the use of any
material trademarks or trade names used by or necessary for the conduct of
the business of the Company or any Subsidiary or challenging or
questioning the right of the Company or any Subsidiary to use any such
trademark or trade name. The use in connection with the business and
operations of the Company and the Subsidiaries of such trademarks and
trade names does not, to the Company's knowledge, infringe on the rights
of any person.
4. Agreements of the Company. The Company agrees with the several
Underwriters as follows:
(a) If reasonably requested by you in connection with the offering of
the Shares, the Company will prepare a preliminary prospectus supplement
containing such information as you and the Company deem appropriate and,
immediately following the execution of this Agreement, the Company will
prepare a Prospectus Supplement that complies with the Securities Act and
the Rules and that sets forth the number of Firm Shares and their terms
not otherwise specified in the Prospectus, the name of each Underwriter
participating in the offering and the number of Firm Shares that each
severally has agreed to purchase, the name of each Underwriter, if any,
acting as representative of the Underwriters in connection with the
offering, the price at which the Firm Shares are to be purchased by the
Underwriters from the Company, the initial public offering price, any
selling concession and reallowance,
12
<PAGE> 13
and such other information as you and the Company deem appropriate in
connection with the offering of the Shares. The Company will promptly
transmit a copy of the Prospectus Supplement to the Commission via EDGAR
for filing pursuant to Rule 424 under the Securities Act and will furnish
to the Underwriters as many copies of any preliminary prospectus
supplement and the Prospectus as you shall reasonably request.
(b) If at any time when the Prospectus is required by the Securities
Act to be delivered in connection with sales of the Shares any event shall
occur or condition exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or counsel for the Company, to
amend the Registration Statement or amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of either such counsel, at any such time to
amend the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the Securities Act or the Rules,
or at any time to file under the Exchange Act any documents to be
incorporated by reference in the Registration Statement pursuant to Item
12 of Form S-3 in order to comply with the Securities Act, the Rules, the
Exchange Act or the Exchange Act Rules, then the Company will promptly
prepare and file with the Commission, subject to Section 4(e) hereof, such
amendment or supplement as may be necessary to correct such untrue
statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements.
(c) During the period when the Prospectus is required by the Securities
Act to be delivered in connection with sales of the Shares, the Company
will notify you immediately, and confirm the notice in writing, (i) of the
effectiveness of any amendment to the Registration Statement, (ii) of the
mailing or the delivery to the Commission for filing of any supplement to
the Prospectus or any document that would as a result thereof be
incorporated by reference in the Prospectus, (iii) of the receipt of any
comments from the Commission with respect to the Registration Statement,
the Prospectus, the Prospectus Supplement or any document incorporated by
reference in the Prospectus, (iv) of any request by the Commission for any
amendment to the Registration Statement or any supplement to the
Prospectus or for additional information relating thereto or to any
document incorporated by reference in the Prospectus and (v) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement, of the suspension of the qualification of
the Shares for offering or sale in any jurisdiction, or of the institution
or threatening of any proceeding for any of such purposes. The Company
will use every reasonable effort
13
<PAGE> 14
to prevent the issuance of any such stop order or of any order suspending
such qualification and, if any such order is issued, to obtain the lifting
thereof at the earliest possible moment.
(d) During the period when the Prospectus is required by the Securities
Act to be delivered in connection with sales of the Shares, the Company
will, subject to Section 4(e) hereof, file promptly all documents required
to be filed with the Commission pursuant to Section 13, 14 or 15(d) of the
Exchange Act.
(e) During the period when the Prospectus is required by the Securities
Act to be delivered in connection with sales of the Shares, the Company
will inform you of its intention to file documents required to be filed
with the Commission pursuant to Section 13 or 14 of the Exchange Act,
including any amendment to the Registration Statement, any supplement to
the Prospectus or any document that would as a result thereof be
incorporated by reference in the Prospectus; will furnish you with copies
of any such amendment, supplement or other document a reasonable time in
advance of filing; and will not file any such amendment, supplement or
other document in a form to which you or counsel for the Underwriters
shall object in good faith.
(f) The Company has furnished or will furnish to you, without charge,
three signed copies of the Registration Statement as originally filed and
of all amendments thereto (or, to the extent a signed copy is not
available, a conformed copy, certified by an officer of the Company to be
in the form as originally filed), whether filed before or after the
Registration Statement became effective, three copies of all exhibits and
documents filed therewith or incorporated by reference therein pursuant to
Item 12 of Form S-3 (through the end of the period when the Prospectus is
required by the Securities Act to be delivered in connection with sales of
the Shares) and three signed copies of all consents and certificates of
experts and has furnished or will furnish to you, for each other
Underwriter, one conformed copy of the Registration Statement (as
originally filed) and of each amendment thereto (including documents
incorporated by reference into the Prospectus but without exhibits, except
any exhibits specifically incorporated by reference into the Prospectus).
(g) The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Shares for offering and sale under the
applicable securities laws of such states and other jurisdictions as you
may designate and to maintain such qualifications in effect for a period
of not less than one year from the date hereof; provided, however, that
the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign
14
<PAGE> 15
corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. The
Company will file such statements and reports as may be required by the
laws of each jurisdiction in which the Shares have been qualified as above
provided.
(h) The Company will make generally available to its stockholders as
soon as practicable, but not later than 45 days after the close of the
period covered thereby, an earnings statement of the Company (in form
complying with the provisions of Rule 158 of the Rules), covering (i) a
period of 12 months beginning after the effective date of the Registration
Statement but not later than the first day of the Company's fiscal quarter
next following such effective date and (ii) a period of 12 months
beginning after the date of this Agreement but not later than the first
day of the Company's fiscal quarter next following the date of this
Agreement.
(i) The Company will use the net proceeds received by it from the sale
of the Shares in the manner specified in the Prospectus under the caption
"Use of Proceeds."
(j) For a period of five years after the Closing Date, the Company will
furnish to you and, upon request, to each Underwriter, copies of all
annual reports, quarterly reports and current reports filed with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as may
be designated by the Commission, and such other documents, reports and
information as shall be furnished by the Company to its stockholders
generally.
(k) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay, or
reimburse if paid by the Representative, all fees, costs and expenses
incident to the performance of the obligations of the Company under this
Agreement, including fees, costs and expenses of or relating to (1) the
preparation, printing and filing of the Registration Statement and
exhibits thereto, each preliminary prospectus, the Prospectus, any
amendment or supplement to the Registration Statement or the Prospectus,
(2) the preparation and delivery of certificates representing the Shares,
(3) the printing of this Agreement, any Agreement Among Underwriters and
any Dealer Agreements, (4) the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky laws of the
jurisdictions referred to in paragraph (g) of this Section 4, including
the reasonable fees, disbursements and other charges of counsel to the
Underwriters in connection therewith, and the preparation and printing of
preliminary, supplemental and final Blue Sky memoranda, (5) furnishing
(including costs of shipping and mailing) such copies of the
15
<PAGE> 16
Registration Statement, the Prospectus, any preliminary prospectus, and
all amendments and supplements thereto as may be requested for use in
connection with the offering and sale of the Shares by the Underwriters or
by dealers to whom Shares may be sold, (6) counsel to the Company and (7)
the transfer agent and registrar for the Shares.
(l) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.
(m) If this Agreement shall be terminated by the Company (otherwise
than pursuant to Section 8) or if for any reason the Company shall be
unable to perform its obligations hereunder, the Company will reimburse
the several Underwriters for all out-of-pocket expenses (including the
fees, disbursements and other reasonable charges of counsel to the
Underwriters) reasonably incurred by them in connection herewith.
(n) The Company will not at any time, directly or indirectly, take any
action designed or which might reasonably be expected to cause or result
in, under the Securities Act or otherwise, or which will constitute,
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of any of the Shares.
(o) The Company will use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Date or the Option Closing Date, as the case
may be, and to satisfy all conditions precedent to delivery of the Shares.
(p) The Company will use its best efforts to maintain qualification of
the Company's Common Stock in the National Market System of the National
Association of Securities Dealers Automated Quotation System ("NASDAQ")
and comply with Schedule D of the NASD By-laws.
(q) The Company will not, for a period of 90 days after the
commencement of the public offering of the Shares, without the prior
written consent of the Representatives, issue, sell, offer to sell or
otherwise dispose of any shares of Common Stock or any security
convertible into or exchangeable for shares of Common Stock or other
rights to acquire such shares (other than (i) pursuant to the Company's
(a) Employee Stock Purchase Plan, (b) Dividend Reinvestment and Stock
Purchase Plan, (c) Long-Term Stock Plan of 1989, (d) Customer Stock
Purchase Plan, (e) Non-Employee Director Stock Plan, (ii) in connection
with the acquisition of all of the outstanding shares of Monarch Gas
Company pursuant to the letter of intent dated April 6, 1995, or (iii) for
the benefit of participants in the Company's employee investment plan
under Section 401(k) of the Internal Revenue Code of 1986, as amended).
16
<PAGE> 17
(r) The Company will comply with all requirements of the orders of the
regulatory authorities referred to in Section 3(f) in connection with the
issuance of the Shares, including the filing of any reports and the
payment of any fees required pursuant to such orders.
5. Conditions of the Obligations of the Underwriters. The obligations
of each Underwriter hereunder are subject to the accuracy, on the date of this
Agreement, and on the Closing Date and the Option Closing Date, as applicable,
of the representations of the Company in this Agreement, the accuracy and
completeness in all material respects of all statements made by the Company or
any its officers in any certificate delivered to the Representatives or its
counsel pursuant to this Agreement, performance by the Company of its
obligations under this Agreement and each of the following conditions:
(a) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
be pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or
registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall
be pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such
authorities shall have been complied with to the satisfaction of the staff
of the Commission or such authorities and (iv) after the date hereof no
amendment or supplement to the Registration Statement or the Prospectus
shall have been filed unless a copy thereof was first submitted to the
Representatives within a reasonable period of time prior to the filing
thereof and the Representatives did not object thereto in good faith, and
(v) the Representatives shall have received certificates of the Company,
dated the Closing Date and the Option Closing Date and signed by the
President or any Vice President of the Company (who may, as to proceedings
threatened, rely upon the best of their information and belief), to the
effect of clauses (i), (ii) and (iii).
(b) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (1) there shall not have been
any material adverse change in the general affairs, business prospects,
management, business, properties, condition (financial or otherwise) or
results of operations of the Company and the Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, in each case other than as set forth in or contemplated by the
Registration Statement and the Prospectus and (2) neither the Company nor
any Subsidiary shall have sustained any material loss or interference with
its business or properties from fire, explosion, flood or
17
<PAGE> 18
other casualty, whether or not covered by insurance, or from any labor
dispute or any court or legislative or other governmental action, order or
decree, which is not set forth in the Registration Statement and the
Prospectus, if, in the judgment of the Representatives, any such
development makes it impracticable or inadvisable to consummate the sale
and delivery of the Shares by the Underwriters at the initial public
offering price.
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of
its Subsidiaries or any of their respective officers or directors in their
capacities as such, before or by any federal, state or local court,
commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, in which litigation or proceeding an
unfavorable ruling, decision or finding would materially and adversely
affect the business, properties, business prospects, condition (financial
or otherwise) or results of operations of the Company and the Subsidiaries
taken as a whole.
(d) Each of the representations and warranties of the Company contained
herein shall be true and correct in all material respects at the Closing
Date and, with respect to the Option Shares, at the Option Closing Date,
as if made at the Closing Date and, with respect to the Option Shares, at
the Option Closing Date, and all covenants and agreements herein contained
to be performed on the part of the Company and all conditions herein
contained to be fulfilled or complied with by the Company at or prior to
the Closing Date and, with respect to the Option Shares, at or prior to
the Option Closing Date, shall have been duly performed, fulfilled or
complied with.
(e) Concurrently with the execution and delivery of this Agreement and
at the Closing Date and, as to the Option Shares, at the Option Closing
Date, there shall be furnished to the Representatives a certificate of the
Company, dated the date of its delivery, signed by the President or any
Vice President of the Company, in form and substance satisfactory to the
Representatives, to the effect that (1) each signer has carefully examined
the Registration Statement and the Prospectus (including the incorporated
documents) and (A) as of the date of such certificate, such documents are
true and correct in all material respects and do not include any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading and (B) in the case of the certificate delivered on the Closing
Date and, if later, the certificate delivered on the Option Closing Date,
since the date of the Prospectus Supplement, no event has occurred as a
result of which it is necessary to amend or supplement the
18
<PAGE> 19
Prospectus in order to make the statements therein, in the light of the
circumstances under which they are made, not untrue or misleading in any
material respect and there has been no document required to be filed under
the Exchange Act and the Exchange Act Rules that upon such filing would be
deemed to be incorporated by reference into the Prospectus that has not
been so filed, (2) each of the representations and warranties of the
Company contained in this Agreement were, when originally made, and are at
the time such certificate is delivered true and correct in all material
respects, (3) each of the covenants required to be performed by the
Company on or prior to the date of such certificate has been duly, timely
and fully performed and each condition herein required to be complied with
by the Company on or prior to the delivery of such certificate has been
duly, timely and fully complied with, (4) to the knowledge of such
officer, no actions to prohibit the sale of the Shares have been taken or
threatened by the Commission, (5) to the knowledge of such officer, no
order suspending the effectiveness of the Registration Statement or
prohibiting the sale of the Shares has been issued and no proceedings for
such purpose are pending before or threatened by the Commission, (6) when
the Registration Statement became effective and at all times subsequent
thereto up to the delivery of such certificate, the Registration Statement
and the Prospectus and any amendments or supplements thereto contained all
statements and information required to be included therein, in the light
of the circumstances in which made, and neither the Registration Statement
nor the Prospectus nor any amendment or supplement thereto included any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they are made, not
misleading, (7) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, and except as
contemplated in the Prospectus, neither the Company nor any Subsidiary
incurred any direct or contingent liabilities or obligations material to
the Company and the Subsidiaries, taken as a whole, not in the ordinary
course of business, or entered into any transactions material to the
Company and the Subsidiaries, taken as a whole, not in the ordinary course
of business, and there has not been any change in the capital stock or
outstanding indebtedness of the Company or any Subsidiary material to the
Company and the Subsidiaries, taken as a whole, or any adverse change in
the financial position, net worth or results of operations of the Company
or any Subsidiary which is material to the Company and the Subsidiaries,
taken as a whole, and (8) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
neither the Company nor any Subsidiary has sustained any loss of or damage
to its properties, whether or not insured, which is material to the
Company and the Subsidiaries, taken as a whole.
19
<PAGE> 20
(f) The Representatives shall have received on each of the Closing Date
and the Option Closing Date from Chapman and Cutler, counsel for the
Company, an opinion, dated such Closing Date or Option Closing Date, as
the case may be, satisfactory in form and substance to counsel for the
Underwriters, to the effect that:
(i) The Company (A) is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Illinois
and the Commonwealth of Virginia, (B) is duly qualified and in good
standing as a foreign corporation in the States of Georgia, Iowa,
Kansas, Kentucky, Missouri, South Carolina and Tennessee, and to the
best of the knowledge, information and belief of such counsel, the
Company is duly qualified and in good standing as a foreign
corporation in each other state or jurisdiction in which the location
of its properties or the conduct of its business makes such
qualification necessary and where the failure to so qualify would
have a material adverse effect upon the business or financial
condition of the Company and the Subsidiaries, taken as a whole, and
(C) has due corporate authority to carry on its business as described
in the Prospectus and to own, lease, license and operate the
properties used in said business;
(ii) Each Subsidiary (A) is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation, (B) to the best of the knowledge, information and
belief of such counsel, is duly qualified and in good standing as a
foreign corporation in each jurisdiction in which the location of its
properties or the conduct of its business makes such qualification
necessary and where the failure to so qualify would have a material
adverse effect upon the business or financial condition of the Company
and the Subsidiaries, taken as a whole, and (C) has due corporate
authority to carry on its business as described in the Prospectus and
to own, lease, license and operate the properties used in said
business;
(iii) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding agreement
of the Company, subject, however, to bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights
generally and by the exercise of judicial discretion in accordance
with general principles applicable to equitable and similar remedies
and to possible limitations on the validity or enforceability of the
indemnification and contribution provisions contained in this
Agreement as a result of securities laws or public policy;
20
<PAGE> 21
(iv) 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, except as to such matters
relating to the operations of the Company in the State of Missouri as
may be acceptable to the Representatives;
(v) All authorizations, approvals, consents or other orders of any
governmental authority or agency 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) have been
obtained and continue in full force and effect;
(vi) The Company has authorized capital stock as set forth in the
Registration Statement and the Prospectus under the heading
"Description of Capital Stock;" the authorized capital stock conforms,
as to legal matters, to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock;"
(vii) The issue and sale of the Shares by the Company and the
performance of this Agreement and the consummation of the transactions
herein contemplated will not result in a material breach or violation
of any of the terms or provisions of, or constitute a material default
under, any indenture, mortgage, deed of trust, loan agreement,
partnership agreement, joint venture, stock purchase agreement, or
other material agreement or instrument known to such counsel to which
the Company is a party or by which the Company is bound or to which
any of the properties or assets of the Company or any Subsidiary is
subject, nor will such action result in any violation of the
provisions of the Amended Articles of Incorporation, as amended, or
By-laws, as amended, of the Company, or any statute or, to the best of
such counsel's knowledge, any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or
any of its properties;
(viii) The Shares have been duly authorized by all necessary
corporate action, the certificates therefor are in due and proper form
and, when issued, delivered and paid for in accordance with the terms
of this Agreement, and duly countersigned by the transfer agent and
registrar thereof, will be validly issued, fully paid and
nonassessable, and free of all preemptive or similar rights. The
Shares conform to the description thereof contained in the Prospectus;
21
<PAGE> 22
(ix) The Registration Statement has become effective under the
Securities Act and, to the best of such counsel's knowledge, 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 before or are contemplated by the Commission. Any
required filing of the Prospectus or any supplements to it have been
made in accordance with Rule 424(b) of the Rules;
(x) Such counsel does not know of any legal or governmental
proceeding pending or threatened to which the Company or any
Subsidiary is a party or to which any of the properties of the Company
or any Subsidiary is subject which is required to be described in the
Registration Statement or the Prospectus and is not so described, or
of any contract or other document which is required to be described in
the Registration Statement or the Prospectus or is required to be
filed as an exhibit to the Registration Statement which is not
described or has not been filed as required. The statements in the
Prospectus, insofar as such statements constitute a summary of
documents referred to therein or of statutes, laws or legal or
governmental proceedings, are accurate summaries in all material
respects and fairly and correctly present the information called for
with respect to such documents and matters;
(xi) The Registration Statement, at the Effective Date, and the
Prospectus, at the date it was filed with (or transmitted for filing
to) the Commission pursuant to Rule 424 (except the financial
statements, schedules and financial and statistical data included
therein, as to which no opinion need be expressed) complied as to form
in all material respects with the Securities Act and the Rules; and
(xii) 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.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, counsel for the Underwriters, representatives of the independent
public accountants for the Company and the Representatives at which the
contents of the Registration Statement and Prospectus and related matters were
discussed and, although, except for the matters referred to under the heading
"Legal Opinions" in the Prospectus, such counsel is not passing upon and does
not assume responsibility for the accuracy, completeness or fairness of the
statements
22
<PAGE> 23
contained in the Registration Statement and Prospectus, on the basis of the
foregoing, no facts have come to the attention of such counsel that lead them
to believe that either the Registration Statement, at the Effective Date, or
the Prospectus, at the date it was filed with (or transmitted for filing to)
the Commission pursuant to Rule 424 and as of the date of such opinion,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
comment with respect to the financial statements, schedules and other
financial and statistical data included in the Registration Statement or the
Prospectus).
With respect to the matters covered by foregoing clauses (i) and (ii),
Chapman and Cutler may rely upon certificates of responsible officers of the
Company as to the nature and extent of business being conducted by the
Company and the Subsidiaries in states or jurisdictions wherein they are not
licensed or qualified as foreign corporations. With respect to the matters
covered by foregoing clauses (iv) and (v) above, such counsel may rely upon
the opinion of Mark G. Thessin, Esq., Vice President, Regulatory Affairs for
the Company. Such opinion of counsel for the Company shall state that the
opinion of such other counsel is in form and substance satisfactory to
counsel for the Company and, in their opinion, they and the Underwriters are
justified in relying on such other opinion. In addition, such counsel need
not express any opinion with respect to the Federal Energy Regulatory
Commission's jurisdiction with respect to the Barnsley, Kentucky storage
field and UCG Storage.
(g) The Representatives shall have received on each of the Closing Date
and the Option Closing Date from Jones, Day, Reavis & Pogue, counsel to the
Underwriters, an opinion dated such Closing Date or Option Closing Date, as
the case may be, with respect to the Registration Statement, the Prospectus
and this Agreement, which opinion shall be satisfactory in all respects to
the Representatives. The Company must have furnished to such counsel such
documents as they may request for the purpose of enabling them to render such
opinion. In rendering such opinion, Jones, Day, Reavis & Pogue may rely on
certificates of responsible officers of the Company as to matters of fact and
upon advice from State authorities as to good standing.
(h) The Representatives shall have received on the Closing Date and the
Option Closing Date from the Accountants a signed letter dated the date
hereof, the Closing Date or the Option Closing Date, as the case may be, in
form and substance satisfactory to the Representatives (and the
Representatives, in their sole discretion, may determine that any such letter
is satisfactory to the Representatives even though it
23
<PAGE> 24
discloses changes in financial condition from earlier specified periods
which in the Representatives' judgment are immaterial) to the effect that
they are independent public accountants with respect to the Company as
required by the Securities Act and the Rules, and it is their opinion that
the financial statements and schedules audited by them and included or
incorporated by reference in the Company's most recently filed Annual Report
on Form 10-K and included or incorporated by reference in the Registration
Statement comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, the Exchange Act and the
regulations relating to financial statements in annual reports on Form 10-K
and with respect to such other matters as the Representatives may reasonably
request.
(i) The approvals and consents of the Illinois Commerce Commission, the
Kansas State Corporation Commission, the Tennessee Public Service
Commission, the Georgia Public Service Commission and the Virginia State
Corporation Commission and any other required approvals and consents
required for the valid issuance and sale of the Shares by the Company in
accordance with the provisions of this Agreement shall have been obtained
and shall be in full force and effect.
(j) The Company shall have furnished to the Representatives such
certificates, in addition to those specifically mentioned herein, as the
Representatives may have reasonably requested as to the accuracy and
completeness at the Closing Date and the Option Closing Date of any
statement in the Registration Statement or the Prospectus or any documents
filed under the Exchange Act and deemed to be incorporated by reference into
the Prospectus, as to the accuracy at the Closing Date and the Option
Closing Date of the representations and warranties of the Company herein, as
to the performance by the Company of its obligations hereunder, or as to the
fulfillment of the conditions concurrent and precedent to the obligations
hereunder of the Representatives.
(k) The Shares shall be qualified for sale in such states as the
Representatives may reasonably request, each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing
Date or the Option Closing Date as applicable.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement will comply with this Agreement only if they are in
form and scope satisfactory to counsel for the Representatives. The use by the
Underwriters of any amendments or supplements to the Prospectus which are
furnished by the Company will not constitute a waiver of any of the conditions
of this Section 5.
24
<PAGE> 25
6. Indemnification.
(a) The Company will indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person,
if any, who controls each Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages, expenses and liabilities (including any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages, expenses or liabilities arise out of or are based on any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, any preliminary prospectus supplement, the Prospectus
or any amendment or supplement to the Registration Statement or the Prospectus
or any incorporated document, or the omission or alleged omission to state in
such document a material fact required to be stated in it or necessary to make
the statements in it not misleading, provided that the Company will not be
liable to the extent that such loss, claim, damage, expense or liability arises
from the sale of the Shares in the public offering to any person by an
Underwriter and is based on an untrue statement or omission or alleged untrue
statement or omission (1) made in reliance on and in conformity with
information furnished in writing to the Company by the Representatives on
behalf of any Underwriter expressly for inclusion in the Registration
Statement, any preliminary prospectus supplement or the Prospectus or (2) in a
preliminary prospectus supplement if the Prospectus (or the Prospectus as
amended or supplemented) corrects the untrue statement or omission or alleged
untrue statement or omission that is the basis of the loss, claim, damage,
expense or liability for which indemnification is sought and the person
asserting any such loss, claim, damage, expense or liability purchased Shares
from such Underwriter but was not sent or given a copy of the Prospectus at or
prior to the written confirmation of the sale of such Shares to such person.
The Company acknowledges that the statements set forth under the heading
"Underwriting" and, based on the Company's representation in paragraph 3(w)
hereof, in the first two paragraphs on the inside front cover in any
preliminary prospectus supplement and the Prospectus Supplement and in the
first paragraph of the inside front cover in the basic Prospectus constitute
the only information relating to any Underwriter furnished in writing to the
Company by the Representatives on behalf of the Underwriters expressly for
inclusion in the Registration Statement, any preliminary prospectus supplement
or the Prospectus. This indemnity agreement will be in addition to any
liability that the Company might otherwise have.
25
<PAGE> 26
(b) Each Underwriter will indemnify and hold harmless the Company, each
director of the Company and each officer of the Company who signs the
Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, to the same extent as the foregoing indemnity from the Company
to each Underwriter, but only insofar as losses, claims, damages, expenses or
liabilities arise out of or are based on any untrue statement or omission or
alleged untrue statement or omission made in reliance on and in conformity
with information relating to any Underwriter furnished in writing to the
Company by the Representatives on behalf of such Underwriter expressly for
use in the Registration Statement, any preliminary prospectus or the
Prospectus. The Company acknowledges that the statements under the caption
"Underwriting" and, based on the Company's representation in paragraph 3(w)
hereof, in the first two paragraphs on the inside front cover in any
preliminary prospectus supplement and the Prospectus Supplement and in the
first paragraph on the inside front cover in the basic Prospectus constitute
the only information furnished in writing to the Company by the
Representatives on behalf of the Underwriters expressly for inclusion in the
Registration Statement, any preliminary prospectus supplement or the
Prospectus. This indemnity will be in addition to any liability that each
Underwriter might otherwise have.
(c) Any party that proposes to assert the right to be indemnified under
this Section 6 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 6, notify each such
indemnifying party of the commencement of such action, enclosing a copy of
all papers served, but the omission so to notify such indemnifying party will
not relieve it from any liability that it may have to any indemnified party
under this Section 6 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in, and, to the extent
that it elects by delivering written notice to the indemnified party promptly
after receiving notice of the commencement of the action from the indemnified
party, jointly with any other indemnifying party similarly notified, to
assume the defense of the action, with counsel satisfactory to the
indemnified party, and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense, the indemnifying
party will not be liable to the indemnified party for any legal or other
expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection
with the defense. The indemnified party will have the right to employ its
counsel in
26
<PAGE> 27
any such action, but the fees, expenses and other charges of such counsel
will be at the expense of such indemnified party unless (1) the employment of
counsel by the indemnified party has been authorized in writing by the
indemnifying party, (2) the indemnified party has reasonably concluded (based
on advice of counsel) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict
exists (based on advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the indemnifying
party will not have the right to direct the defense of such action on behalf
of the indemnified party) or (4) the indemnifying party has not in fact
employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of
which cases the fees, disbursements, expenses and other charges of counsel
will be at the expense of the indemnifying party or parties. It is
understood that no indemnifying party shall, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees, disbursements and other charges of more than one separate
firm (in addition to any local counsel) at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred.
An indemnifying party will not be liable for any settlement of any action or
claim effected without its written consent (which consent will not be
unreasonably withheld).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but
for any reason is held to be unavailable from the Company or the
Underwriters, the Company and the Underwriters will contribute to the total
loss, claim, damage, expense and liability (including any investigative,
legal and other expenses reasonably incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claim
asserted, but after deducting any contribution received by the Company from
persons other than the Underwriters, such as persons who control the Company
within the meaning of the Securities Act, officers of the Company who signed
the Registration Statement and directors of the Company, who also may be
liable for contribution) to which the Company and any one or more of the
Underwriters may be subject in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other. The relative benefits received by the Company and
the Underwriters shall be deemed to be in the same proportions as the net
proceeds from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by
the Underwriters, in
27
<PAGE> 28
each case as set forth in the table on the front cover of the Prospectus.
If, but only if, the allocation provided by the foregoing sentence is not
permitted by applicable law, the allocation of contribution shall be made in
such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence, but also the relative fault of the
Company or the Underwriters with respect to the statements or omissions which
resulted in such loss, claim, damage, expense or liability, or any action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Representatives on behalf of
the Underwriters, the intent of the parties, and their relative knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage,
expense and liability referred to in this Section 6(d) shall be deemed to
include, for purposes of this Section 6(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), no Underwriter shall be required to
contribute any amount in excess of the amount of the underwriting discounts
and commissions received by it, and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 6(d) are several (and not joint) in proportion to
the respective underwriting obligations. For purposes of this Section 6(d),
any person who controls a party to this Agreement within the meaning of the
Securities Act will have the same rights to contribution as that party, and
each officer of the Company who signed the Registration Statement will have
the same rights to contribution as the Company, subject in each case to the
provisions hereof. Any party entitled to contribution, promptly after
receipt of notice of commencement of any action against such party in respect
of which a claim for contribution may be made under this Section 6(d), will
notify any such party or parties from whom contribution may be sought, but
the omission so to notify will not relieve the party or parties from whom
contribution may be sought from any
28
<PAGE> 29
other obligation it or they may have under this Section 6 except to the
extent such party or parties are prejudiced by the failure to receive such
notice. No party will be liable for contribution with respect to any action
or claim settled without its written consent (which consent will not be
unreasonably withheld).
(e) The indemnity and contribution agreements contained in this Section 6
and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of
(i) any investigation made by or on behalf of the Underwriters, (ii)
acceptance of any of the Shares and payment therefor or (iii) any termination
of this Agreement.
7. Termination.
(a) The obligations of the several Underwriters under this Agreement may
be terminated at any time prior to the Closing Date (or, with respect to the
Option Shares, on or prior to the Option Closing Date), by notice to the
Company from the Representatives, without liability on the part of any
Underwriter to the Company, if, prior to delivery and payment for the Firm
Shares (or the Option Shares, as the case may be), in the sole judgment of
the Representatives (i) the Company shall have failed, refused or been
unable, at or prior to the Closing Date (or the Option Closing Date, as the
case may be) to perform any agreement on its part to be performed, or because
any other condition to the Underwriters' obligations hereunder required to be
fulfilled by the Company is not fulfilled, (ii) trading in any of the equity
securities of the Company shall have been suspended by the Commission or by
the National Association of Securities Dealers Automated Quotations Market
System, (iii) trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum or maximum prices shall have
been generally established on such exchange, or additional material
governmental restrictions, not in force on the date of this Agreement, shall
have been imposed upon trading in securities generally by such exchange or by
order of the Commission or any court of other governmental authority, (iv) a
general banking moratorium shall have been declared by either federal or New
York State authorities, (v) if at or prior to the Closing Date (or the Option
Closing Date, as the case may be) the Company shall have sustained a loss by
strike, fire, flood, accident or other calamity of such character as to
interfere materially with the conduct of the business and operations of the
Company regardless of whether or not such loss shall have been insured, or
(vi) any material adverse change in the financial or securities markets in
the United States or in political, financial or economic conditions in the
United States or any outbreak or material escalation of hostilities or
declaration by the United States of a national emergency or war or other
calamity or crisis
29
<PAGE> 30
shall have occurred, the effect of any of which is such as to make it,
in the sole judgment of the Representatives, impracticable or
inadvisable to market the Shares on the terms and in the manner
contemplated by the Prospectus.
8. Substitution of Underwriters. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Firm Shares which it
or they have agreed to purchase hereunder, and the aggregate number of Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number of Firm
Shares, the other Underwriters shall be obligated, severally, to purchase the
Firm Shares which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase, in the proportions which the number of Firm Shares
which they have respectively agreed to purchase pursuant to Section 1 bears to
the aggregate number of Firm Shares which all such non-defaulting Underwriters
have so agreed to purchase, or in such other proportions as the Representatives
may specify; provided that in no event shall the maximum number of Firm Shares
which any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 8 by more than one-ninth of such number of
Firm Shares to be purchased by such Underwriter without the prior written
consent of such Underwriter. If any Underwriter or Underwriters shall fail or
refuse to purchase any Firm Shares and the aggregate number of Firm Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase exceeds one-tenth of the aggregate number of the Firm Shares and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Firm Shares are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company for the purchase or sale of any
Shares.
In any such case, either the Representatives or the Company will have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken pursuant to this Section 8 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
9. Miscellaneous. The reimbursement, indemnification and contribution
agreements in Sections 4 and 6 will remain in full force and effect regardless
of any termination of this Agreement, any investigation made by or on behalf of
any Underwriter, the Company or any controlling person and delivery of and
payment for the Shares.
This Agreement is solely for the benefit of the Underwriters and the
Company and their successors and assigns, and, to the extent expressed in this
Agreement, for the benefit of persons controlling any of the Underwriters or
the Company, and directors
30
<PAGE> 31
and officers of the Company, and their respective successors and assigns, and
no other person, partnership, association or corporation shall acquire or have
any right under or by virtue of this Agreement. The term "successors and
assigns" does not include any purchaser of Shares from any Underwriter merely
because of such purchase.
This Agreement shall become effective upon execution.
All notices and communications under this Agreement will be in writing,
effective only on receipt and mailed or delivered, by messenger, facsimile
transmission or otherwise, if to the Underwriters, to the Representatives, c/o
PaineWebber Incorporated at 1285 Avenue of the Americas, New York, New York
10019, and if to the Company, to its agent for service at such agent's address
on the cover of the Registration Statement.
This Agreement may be signed in multiple counterparts that taken as a
whole constitute one agreement.
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
THE COMPANY AND THE UNDERWRITERS EACH HEREBY IRREVOCABLY WAIVE ANY
RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
31
<PAGE> 32
Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
UNITED CITIES GAS COMPANY
By /s/ James B. Ford
------------------------------
Title Senior Vice President and
Treasurer
Confirmed:
PAINEWEBBER INCORPORATED
EDWARD D. JONES & CO.
LEGG MASON WOOD WALKER, INCORPORATED
By: PAINEWEBBER INCORPORATED
By /s/ Thomas R. Osborne
-------------------------
Title Vice President
Acting on behalf of each of the
Underwriters named in Schedule I
32
<PAGE> 33
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF FIRM
SHARES TO BE
NAME PURCHASED
- ---- --------------
<S> <C>
PaineWebber Incorporated............... 250,000
Edward D. Jones & Co................... 250,000
Legg Mason Wood Walker, Incorporated... 250,000
A.G. Edwards & Sons, Inc............... 110,000
Merrill Lynch, Pierce, Fenner &
Smith Incorporated................... 110,000
Smith Barney Inc....................... 110,000
Equitable Securities Corporation....... 30,000
Interstate/Johnson Lane Corporation.... 30,000
Ladenburg, Thalmann & Co., Inc......... 30,000
The Robinson-Humphrey Company, Inc..... 30,000
Total . . . . . . . . . . . . . . 1,200,000
=========
</TABLE>
<PAGE> 34
EXHIBIT A
UNITED CITIES GAS COMPANY
________________________
PRICE INFORMATION
1. The initial public offering price per share for the Firm Shares
shall be $14.50.
2. The purchase price per share for the Firm Shares to be paid by
the several Underwriters shall be $13.93 representing an amount equal to the
initial public offering price set forth above, less $.57 per share.
