ENERGY WEST INCORPORATED
$8,000,000 Aggregate Principal Amount
__% Notes due June 1, 2012
_________________
UNDERWRITING AGREEMENT
, 1997
▇. ▇. ▇▇▇▇▇▇▇▇ & Co.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P.
c/o ▇. ▇. ▇▇▇▇▇▇▇▇ & Co.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Energy West Incorporated, a Montana corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and
sell to you as underwriters (the "Underwriters") $8,000,000 aggregate
principal amount of its __% Notes due June 1, 2012 (the "Notes"). The
Notes are to be issued pursuant to an indenture (the "Indenture") between the
Company and Norwest Bank Minnesota, National Association, as trustee (the
"Trustee").
1. (a) The Company represents and warrants to, and agrees
with, each of you that:
(i) A registration statement in respect of the Notes has
been filed with the Securities and Exchange Commission (the
"Commission"); such registration statement and any
post-effective amendment thereto, each in the form heretofore
delivered to you, and, excluding exhibits thereto but
including all documents incorporated by reference in the
prospectus contained therein, have been declared effective by
the Commission in such form; no other document with respect to
such registration statement or document incorporated by
reference therein has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of
such registration statement has been issued and no proceeding
for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such
registration statement or filed with the Commission pursuant
to Rule 424(a) of the rules and regulations of the Commission
under
the Securities Act of 1933, as amended (the "Act"),
being hereinafter called a "Preliminary Prospectus"; the
various parts of such registration statement, including all
exhibits thereto (but excluding Form T-1) and including (i)
the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 5(a) hereof and deemed by
virtue of Rule 430A under the Act to be part of the
registration statement at the time it was declared effective
and (ii) the documents incorporated by reference in the
prospectus contained in the registration statement at the time
such part of the registration statement became effective, each
as amended at the time such part of the registration statement
became effective, being hereinafter called the "Registration
Statement"; such final prospectus, in the form first filed
pursuant to Rule 424(b) under the Act, being hereinafter
called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the documents delivered therewith
pursuant to Item 11 of Form S-2 under the Act and the
documents incorporated by reference therein pursuant to Item
12 of Form S-2 under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall
be deemed to refer to and include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the
Registration Statement;
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and
each Preliminary Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the
Act and the rules and regulations of the Commission
thereunder, 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, in
the light of the circumstances in which they were made, not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished
in writing to the Company by you expressly for use therein;
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(iii) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material
respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances in which
they were made, not misleading; and any further documents so
filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents
become effective or are filed with the Commission, as the case
may be, will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder and
will 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, in the light of the
circumstances in which they were made, not misleading;
provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the
Company by you expressly for use therein;
(iv) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in all
material respects to the requirements of the Act, the Exchange
Act and the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the rules and regulations of the
Commission thereunder, and do not and will not, as of the
applicable effective date as to the Registration Statement and
any amendment thereto and as of the applicable filing date as
to the Prospectus and any amendment or supplement thereto,
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, in the light of the
circumstances in which they were made, not misleading;
provided, however, that this representation and warranty shall
not apply to (i) that part of the Registration Statement which
shall constitute the Statement of Eligibility (Form T-1) under
the Trust Indenture Act of the Trustee or (ii) any statements
or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by you
expressly for use therein;
(v) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus any material loss or interference with its business
from fire, explosion, flood or
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other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries or
any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general
affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus;
(vi) Each of the Company and each of its
subsidiaries has good and marketable title in fee simple to
all material real property and good and marketable title to
all personal property owned by it, in each case free and clear
of all liens, encumbrances and defects except such as are
described in the 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 or any such subsidiary; and any material real property
and buildings held under lease by the Company or any of its
subsidiaries are held by it 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 or any such
subsidiary;
(vii) The Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Montana, with power
and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any
such jurisdiction;
(viii) Each subsidiary of the Company has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority
(corporate and other) to own its properties and conduct its
business, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, or is subject to no
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material liability or disability by reason of the failure to be
so qualified in any such jurisdiction;
(ix) The Company is a public utility as defined in the
statutes of the States of Montana, Wyoming and Arizona and is
authorized by its Restated Articles of Incorporation to carry
on the business in which it is engaged, as set forth in the
Prospectus; the Company has the legal right to function and
operate as a natural gas utility in the States of Montana,
Wyoming and Arizona; and the Company is subject as to rates,
issuance of securities, service and other matters to the
jurisdiction of certain authorities as and to the extent
stated in the Prospectus;
(x) The Company has valid and subsisting franchises
covering all municipalities in which it operates, which
authorize the Company to carry on the respective utility
businesses in which it is engaged in the municipalities
covered by such franchises;
(xi) The Company has an authorized capitalization as set
forth in the Prospectus;
(xii) The Notes have been duly authorized, and, when the
Notes are issued and delivered pursuant to this Agreement,
such Notes will have been duly executed, authenticated, issued
and delivered and will constitute valid and legally binding
obligations of the Company entitled to the benefits provided
by the Indenture, which will be substantially in the form
filed as an exhibit to the Registration Statement; the
Indenture has been duly authorized and duly qualified under
the Trust Indenture Act and at the Time of Delivery (as
defined in Section 4 hereof), the Indenture will constitute a
valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture and
the Notes conform to the descriptions thereof contained in the
Prospectus;
(xiii) The issue and sale of the Notes and the
compliance by the Company with all of the provisions of the
Notes, the Indenture and this Agreement and the consummation
of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject,
nor will such action result
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in any violation of the provisions of the Restated Articles of
Incorporation or Bylaws of the Company or any of its subsidiaries
or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company
or any of its properties which would be material to the Company
and its subsidiaries taken as a whole;
(xiv) Neither the Company nor any of its subsidiaries is
in violation of any law, ordinance, governmental rule or
regulation, or court decree to which it may be subject, and
neither the Company nor any subsidiary has failed to obtain
any license, certificate, permit, franchise or other
governmental authorization necessary to the ownership of its
property or to the conduct of its business as it is currently
being carried on and as described in the Prospectus, which
violation is likely to have a material adverse effect on the
general affairs, condition (financial or otherwise), business,
prospects, properties, net worth or results of operations of
the Company and its subsidiaries considered as a whole;
(xv) Each of the Montana Public Service Commission (the
"Montana Commission"), the Wyoming Public Service Commission
(the "Wyoming Commission") and the Arizona Corporation
Commission (the "Arizona Commission") has entered one or more
orders authorizing the issue and sale of the Notes by the
Company on the terms and conditions not inconsistent with the
terms and conditions set forth in or contemplated by this
Agreement as hereinafter provided; and no further approval,
authorization, consent, certificate or order of any state or
federal commission or regulatory authority is necessary with
respect to the execution and delivery of the Indenture or the
issue and sale of the Notes as contemplated herein or the
consummation by the Company of the transactions contemplated
by this Agreement or the Indenture, except such consents,
approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Notes by
the Underwriters. A true and complete copy of such order or
orders of the Montana Commission, the Wyoming Commissions and
the Arizona Commission has been delivered to the Underwriters;
(xvi) Other than as set forth in the Prospectus, there
are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any
of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the financial position,
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shareholders' equity or results of operations of the Company
and its subsidiaries taken as a whole; and, to the best of the
Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;
(xvii) Ernst & Young LLP, which has certified certain
financial statements of the Company, are independent public
accountants as required by the Act and the rules and regulations
of the Commission thereunder;
(xviii) Each of the Company and each of its subsidiaries
owns or possesses all patents, patent applications,
trademarks, service marks, tradenames, trademark
registrations, service mark registrations, copyrights,
licenses, inventions, trade secrets and other similar rights
necessary for the conduct of its business as currently being
carried on, is complying therewith and has not received any
notice of conflict with the asserted rights of others in
respect of such matters. Except as stated in the Prospectus,
no name which the Company or any of its subsidiaries uses and
no other aspect of the business of the Company or any of its
subsidiaries will involve or give rise to any infringement of,
or license or similar fees for, any patents, patent
applications, trademarks, service marks, tradenames, trademark
registrations, service mark registrations, copyrights,
licenses, inventions, trade secrets or other similar rights of
others, which would have a material adverse effect on the
business of the Company and its subsidiaries taken as a whole,
and neither the Company nor any of its subsidiaries has
received any notice of any such infringement or fee, or any
claim with respect thereto, except as stated in the Prospectus;
(xix) Each of the Company and each of its subsidiaries
has filed all necessary federal, state, and foreign income and
franchise tax returns and has paid all taxes as shown as due
thereon; and there is no material tax deficiency which has
been asserted against the Company;
(xx) The Company has complied and will comply with all
provisions of Florida Statutes Section 517.075 (Chapter
92-198, Laws of Florida). Neither the Company, nor any
affiliate thereof, does business with the government of Cuba,
or with any person or affiliate located in Cuba; and
(xxi) The Company has not taken and will not take,
directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of
the Notes.
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2. Subject to the terms and conditions herein set forth, the
Company agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company,
the aggregate principal amount of Notes set forth opposite the name of each
Underwriter in Schedule I hereto. The purchase price for the Notes shall be
% of the principal amount thereof.
3. Upon the authorization by you of the release of the Notes, the
several Underwriters propose to offer the Notes for sale upon the terms and
conditions set forth in the Prospectus.
4. Certificates in definitive form for the Notes to be purchased by
each Underwriter hereunder, and in such denominations and registered in such
names as ▇. ▇. ▇▇▇▇▇▇▇▇ & Co. may request upon at least forty-eight hours'
prior notice to the Company, shall be delivered by or on behalf of the
Company to you for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks, payable to the order of the Company in funds
available in Great Falls, Montana on the same day or the equivalent thereof,
all at the office ▇. ▇. ▇▇▇▇▇▇▇▇ & Co., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇. The time and date of such delivery and payment shall be, with
respect to the Notes, 9:00 a.m., Rocky Mountain time, on ,
1997 or such other time and date as you and the Company may agree upon in
writing. Such time and date for delivery of the Notes is herein called the
"Time of Delivery." Such certificates will be made available for checking
and packaging at least twenty-four hours prior to the Time of Delivery at the
office of ▇. ▇. ▇▇▇▇▇▇▇▇ & Co., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus prior to the Time of Delivery
which shall be disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof,
of the time when the Registration Statement, or any amendment
thereto, has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to
furnish you with copies thereof; to file promptly all reports and
any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Notes; to
advise you, promptly after it receives notice thereof, of the
issuance by the
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Commission of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or Prospectus, of the suspension
of the qualification of the Notes for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Notes for offering and sale under
the securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Notes, provided that
in connection therewith the Company shall not be required to qualify
as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus
in such quantities as you may from time to time reasonably request,
and, if the delivery of a prospectus is required at any time prior
to the expiration of nine months after the time of issue of the
Prospectus in connection with the offering or sale of the Notes and
if at such time any events shall have occurred as a result of which
the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light
of the circumstances in which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with
the Act, the Exchange Act or the Trust Indenture Act, to notify you
and upon your request to file such document and to prepare and
furnish without charge to each Underwriter and to any dealer in
securities as many copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Notes at any time
nine months or more after the time of issue of the Prospectus, upon
your request but at the expense of such Underwriter, to prepare and
deliver to such Underwriter as many copies as you may request of an
amended or supplemented Prospectus complying with Section 10(a)(3)
of the Act;
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(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined
in Rule 158(c)), an earning statement of the Company and its
subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158);
(e) During the period of 180 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise
dispose of any securities of the Company which are substantially
similar to the Notes, without your prior written consent;
(f) During a period of five years from the effective date of
the Registration Statement, to furnish to you copies of all reports
or other communications (financial or other) furnished to
shareholders, and deliver to you (i) as soon as they are available,
copies of any reports and financial statements furnished to or filed
with the Commission or any national securities exchange on which any
class of securities of the Company is listed; and (ii) such
additional information concerning the business and financial
condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to
the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its shareholders generally or
to the Commission); and
(g) To use the net proceeds received by it from the sale of the
Notes in the manner specified in the Prospectus under the caption "Use
of Proceeds."
6. The Company covenants and agrees with each Underwriter that the
Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants and
counsel for the Underwriters in connection with the registration of the Notes
under the Act and all other expenses in connection with the preparation,
printing and filing of the Indenture, Registration Statement, any Preliminary
Prospectus and the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriters and dealers and
the issuance and delivery of the Notes as contemplated by this Agreement;
(ii) the cost of printing or producing this Agreement, the Selling
Agreements, the Blue Sky Memorandum and any other documents in connection
with the offering, purchase, sale and delivery of the Notes; (iii) all
expenses in connection with the qualification of the Notes for offering and
sale under state securities laws as provided in Section 5(b) hereof,
including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky
survey; (iv) the filing fees and fees and disbursements of counsel for the
Underwriters incident to securing any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Notes; (v) the cost of preparing certificates; (vi) the fees and
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expenses of the Trustee and the fees and disbursements of counsel for the
Trustee in connection with the preparation of the Indenture and the Notes;
(vii) all expenses in connection with the qualification of the Notes as
book-entry Notes; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except for
fees and disbursements of counsel for the Underwriters and as otherwise
provided in this Section, Section 8 and Section 11 hereof, the Underwriters
will pay all of their own costs and expenses, including transfer taxes on
resale of any Notes by the Underwriters and any advertising expenses
connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Notes
to be delivered at the Time of Delivery, shall be subject, in their
discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of
Delivery, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and
the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction;
(b) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, shall
have furnished to you such opinion or opinions, dated the Time of
Delivery, with respect to the incorporation of the Company, the
validity of the Notes and the Indenture being delivered, the
Registration Statement, the Prospectus, and other related matters as
you may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable
them to pass upon such matters;
(c) ▇▇▇▇ ▇. ▇▇▇▇▇, Corporate Counsel of the Company, shall
have furnished to you his written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Montana, with power and authority
(corporate and other) to own its properties and conduct its
business as described in the Prospectus;
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(ii) Each of the Company's subsidiaries has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the state of its jurisdiction, with
power and authority (corporate and other) to own its
properties and conduct its business;
(iii) Each of the Company and each of its subsidiaries
has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification; or is subject to no material liability or
disability by reason of failure to be so qualified in any such
jurisdiction (such counsel being entitled to rely in respect
of the opinion in this clause upon opinions of local counsel
and in respect of matters of fact upon certificates of
officers of the Company, provided that counsel shall state
that he believes that both you and he are justified in relying
upon such opinions and certificates);
(iv) The Company is a public utility under the laws of
the States of Montana, Wyoming and Arizona and is authorized
by its Restated Articles of Incorporation to carry on the
business in which it is engaged, as set forth in the
Prospectus; the Company has the legal right to function and
operate as a natural gas utility in the States of Montana,
Wyoming and Arizona; and the Company is subject as to rates,
issuance of securities, service and other matters to the
jurisdiction of certain authorities as and to the extent
stated in the Prospectus;
(v) The Company has valid and subsisting franchises
covering all municipalities in which it operates, which
authorize the Company to carry on the respective utility
businesses in which it is engaged in the municipalities
covered by such franchises;
(vi) The Company has an authorized capitalization as set
forth in the Prospectus;
(vii) Each of the Company and its subsidiaries has good
and marketable title in fee simple to all material real
property owned by it, free and clear of all liens,
encumbrances and defects except such as are described in the
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 or each
such subsidiary; and any real property and buildings held
under lease by the Company or any of 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 or such subsidiary (in giving the
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opinion in this clause, such counsel may state that no
examination of record titles for the purpose of such opinion
has been made, and that he is relying upon a general review of
the titles of the Company, upon opinions of local counsel and
abstracts, reports and policies of title companies rendered or
issued at or subsequent to the time of acquisition of such
property by the Company, upon opinions of counsel to the
lessors of such property and, in respect of matters of fact,
upon certificates of officers of the Company, provided that
such counsel shall state that he believes that both you and he
are justified in relying upon such opinions, abstracts,
reports, policies and certificates);
(viii) Other than as set forth in the Prospectus, after
due inquiry such counsel does not know of any legal or
governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
material adverse effect on the financial position,
shareholders' equity or results of operations of the Company
and its subsidiaries; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(ix) This Agreement has been duly authorized, executed and
delivered by the Company;
(x) The Notes have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and
legally binding obligations of the Company entitled to the
benefits provided by the Indenture; and the Notes and the
Indenture conform to the descriptions thereof in the
Prospectus as amended or supplemented;
(xi) The Indenture has been duly authorized, executed
and delivered by the Company and (assuming the due
authorization, execution and delivery of the Indenture by the
Trustee) constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and the
Indenture has been duly qualified under the Trust Indenture
Act;
(xii) The issue and sale of the Notes being delivered at
the Time of Delivery by the Company and the compliance by the
Company with all of the provisions of the Notes, the Indenture
and this Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or
result in a breach or violation of
-13-
any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its
subsidiaries is subject, neither will such action result in
any violation of the provisions of the Restated Articles of
Incorporation or Bylaws of the Company or any of its
subsidiaries or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or
body having jurisdiction over the Company or any of its
properties;
(xiii) The order or orders of the Montana Commission,
the Wyoming Commission and the Arizona Commission referred to
in Section 1(a)(xv) have been duly entered and, to the best
knowledge of such counsel, are still in full force and effect,
and no further consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Notes or the consummation by the Company of the
transactions contemplated by this Agreement, except such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution
of the Notes by the Underwriters;
(xiv) The documents delivered with, or incorporated by
reference in, the Prospectus or any further amendment or
supplement thereto made by the Company prior to the Time of
Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion), when they or any further amendment or supplement
thereto made by the Company prior to the Time of Delivery
became effective or were filed with the Commission, as the
case may be, complied as to form in all material respects with
the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder; and such counsel has no reason to believe that any
of such documents, when such documents became effective or
were so filed, as the case may be, contained, in the case of a
registration statement which became effective under the Act,
an untrue statement of a material fact, or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, or, in the case of
other documents which were filed under the Exchange Act with
the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein,
-14-
in the light of the circumstances in which they were made when such
documents were so filed, not misleading;
(xv) To the best of such counsel's knowledge, each of the
Company and each of its subsidiaries owns or possesses the
exclusive right to use all franchises, patents, patent
applications, trademarks, service marks, trade names, trademark
registrations, service mark registrations, copyrights, licenses,
inventions, trade secrets and rights necessary for the conduct of
its business as it is currently being carried on and as described
in the Prospectus and, except as described in the Prospectus, has
not received any notice of conflict with the asserted rights of
others in respect thereof. Except as stated in the Prospectus, no
name which either of the Company or any of its subsidiaries uses
and no other aspect of the business of either the Company or any of
its subsidiaries involves or gives, or will involve or give, rise
to any infringement of, or license or similar fees for, any
patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service mark registrations,
copyrights, licenses, inventions, trade secrets or other similar
rights of others which would have a material adverse effect on the
business of the Company, and neither the Company nor any of its
subsidiaries has received any notice of any such infringement or
fee, or claim with respect thereto; and
(xvi) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company
prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the
Trust Indenture Act and the rules and regulations thereunder;
such counsel has no reason to believe that, as of its
effective date, the Registration Statement or any further
amendment thereto made by the Company prior to the Time of
Delivery (other than the financial statements and restated
schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of
the circumstances in which they were made, not misleading or
that, as of its date, the Prospectus or any further amendment
or supplement thereto made by the Company prior to the Time of
Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the
statements therein, in light of the circumstances in which
they were made, not misleading or that, as of the Time of
Delivery, either the Registration Statement or the
-15-
Prospectus or any further amendment or supplement thereto made
by the Company prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to
which such counsel need express no opinion) contains an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; and
such counsel does not know of any amendment to the
Registration Statement required to be filed or of any
contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required
to be incorporated by reference into the Prospectus or
required to be described in the Registration Statement or the
Prospectus which are not filed or incorporated by reference or
described as required.
(d) At 8:00 a.m., Rocky Mountain time, on the effective date
of the Registration Statement and the effective date of the most
recently filed post-effective amendment to the Registration
Statement and also at the Time of Delivery, ▇▇▇▇▇ & Young LLP shall
have furnished to you a letter or letters, dated the respective
date of delivery thereof, in form and substance satisfactory to
you, to the effect set forth in Annex I hereto;
(e) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus
any 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, otherwise than as set forth or contemplated in the
Prospectus, and (ii) since the respective dates as of which
information is given in the Prospectus there shall not have been
any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any change, or any development involving
a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company or any of its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in
Clause (i) or (ii), is in your judgment so material and adverse as
to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Notes being delivered at the Time
of Delivery on the terms and in the manner contemplated in the
Prospectus;
(f) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange;
(ii) a general moratorium on commercial banking activities in New York
declared by either Federal or New York State authorities; or
(iii) the outbreak or escalation of hostilities
-16-
involving the United States or the declaration by the United States
on or after the date hereof of a national emergency or war if the
effect of any such event specified in this Clause (iii) in your
judgment makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Notes being delivered at the
Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(g) There shall be in full force and effect one or more orders
of the Montana Commission, the Wyoming Commission and the Arizona
Commission authorizing the issue and sale of the Notes by the
Company on terms and conditions not inconsistent with the terms and
conditions set forth in this Agreement, and containing no
provisions unacceptable to the Underwriters, it being agreed that
the order or orders of the Montana Commission, the Wyoming
Commission and the Arizona Commission heretofore issued as
described in Section 1(a)(xv) contain no such unacceptable
provisions; and
(h) The Company shall have furnished or caused to be furnished
to you at the Time of Delivery certificates of officers of the
Company, satisfactory to you as to the accuracy of the
representations and warranties of the Company, herein at and as of
the Time of Delivery, as to the performance by the Company of all
of its obligations hereunder to be performed at or prior to the
Time of Delivery, and as to such other matters as you may
reasonably request and the Company shall have furnished or caused
to be furnished certificates as to the matters set forth in
subsections (a) and (g) of this Section, and as to such other
matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances in which they were made, not misleading,
and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or
-17-
supplement in reliance upon and in conformity with written
information furnished to the Company by you expressly for use
therein.
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which
they were made, not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by
such Underwriter expressly for use therein; and will reimburse the
Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such
action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party, under
subsection (a) or (b) above, of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof
is to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any
indemnified party otherwise than under such subsection. In case
any such action shall be brought against any indemnified party and
it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate therein
and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any
legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a)
-18-
or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in
such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the
other from the offering of the Notes. If, however, the allocation
provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and
the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by the Company on the one hand or the Underwriters on the other and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed
to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which
the Notes underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such
-19-
fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall
be in addition to any liability which the Company may otherwise
have, and shall extend, upon the same terms and conditions, to each
officer, director and agent of the Underwriters and to each person,
if any, who controls any Underwriter within the meaning of the Act;
and the obligations of the Underwriters under this Section 8 shall
be in addition to any liability which the respective Underwriters
may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the
Act.
9. (a) If either Underwriter shall default in its obligation
to purchase the Notes which it has agreed to purchase hereunder at
the Time of Delivery, the other Underwriter may in its discretion
arrange for it or another party or other parties to purchase such
Notes on the terms contained herein. If within thirty-six hours
after such default by either Underwriter the other Underwriter does
not arrange for the purchase of such Notes, then the Company shall
be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to such other
Underwriter to purchase such Notes on such terms. In the event
that, within the respective prescribed periods, the non-defaulting
Underwriter notifies the Company that it has so arranged for the
purchase of such Notes, or the Company notifies such non-defaulting
Underwriter that it has so arranged for the purchase of such Notes,
such non-defaulting Underwriter or the Company shall have the right
to postpone the Time of Delivery for a period of not more than
seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in
any other documents or arrangements, and the Company agrees to file
promptly any amendments to the Registration Statement or the
Prospectus which in the opinion of the non-defaulting Underwriter
may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this
Section with like effect as if such person had originally been a
party to this Agreement with respect to such Notes.
(b) If, after giving effect to any arrangements for the
purchase of the Notes of a defaulting Underwriter by the
non-defaulting Underwriter and the Company as provided in
subsection (a) above, the aggregate principal amount of such Notes
which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Notes to be purchased at the
Time of Delivery, then the Company shall have the right to require
the non-defaulting Underwriter to purchase the number of Notes
which such
-20-
Underwriter agreed to purchase hereunder at the Time of Delivery
and, in addition, to require the non-defaulting Underwriter to
purchase its pro rata share (based on the aggregate principal
amount of Notes which such Underwriter agreed to purchase
hereunder) of the Notes of such defaulting Underwriter for which
such arrangements have not been made; but nothing herein shall
relieve the defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Notes of a defaulting Underwriter by the
non-defaulting Underwriter and the Company as provided in
subsection (a) above, the aggregate principal amount of such Notes
which remains unpurchased exceeds one-eleventh of the aggregate
principal amount of all the Notes to be purchased at the Time of
Delivery, or if the Company shall not exercise the right described
in subsection (b) above to require the non-defaulting Underwriter
to purchase Notes of the defaulting Underwriter, then this
Agreement shall thereupon terminate, without liability on the part
of any non-defaulting Underwriter or the Company, except for the
expenses to be borne by the Company and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or
on behalf of any Underwriter or any controlling person of any Underwriter, or
the Company, or any officer or director or controlling person of the Company,
and shall survive delivery of and payment for the Notes.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Section 6 and Section 8 hereof; but, if for any other
reason any Notes are not delivered by or on behalf of the Company as provided
herein, the Company will reimburse the Underwriters for all out-of-pocket
expenses, including fees and disbursements of counsel, reasonably incurred by
the Underwriters in making preparations for the purchase, sale and delivery
of the Notes not so delivered, but the Company shall then be under no further
liability to any Underwriter in respect of the Notes not so delivered except
as provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of
the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by ▇. ▇. ▇▇▇▇▇▇▇▇ & Co. on behalf of the Underwriters.
-21-
All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to you as the representatives in care of
▇. ▇. ▇▇▇▇▇▇▇▇ & Co., at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Syndicate Department, and if to the Company shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company
set forth in the Registration Statement, Attention: President. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters and the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and the
Underwriters and each person who controls the Company or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns,
and no other person shall acquire or have any right under or by virtue of
this Agreement. No purchaser of any of the Notes from any Underwriter shall
be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's
office in Washington, D. C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF MONTANA.
16. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one
and the same instrument.
-22-
If the foregoing is in accordance with your understanding, please
sign and return to us five counterparts hereof, and upon the acceptance
hereof by you, this letter and such acceptance hereof shall constitute a
binding agreement among each of the Underwriters and the Company.
Very truly yours,
ENERGY WEST INCORPORATED
By:
--------------------------------
Name:
Title:
Accepted as of the date hereof.
▇. ▇. ▇▇▇▇▇▇▇▇ & CO.
By:
-------------------------------
Authorized Signatory
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO.
By:
-------------------------------
Authorized Signatory
-23-
SCHEDULE I
Total Aggregate
Principal Amount of Notes
Underwriter to be Purchased
----------- -------------------------
▇. ▇. ▇▇▇▇▇▇▇▇ & Co. . . . . . . . . . . . . . . $
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.. . . . . . . . . . . . . .
Total. . . . . . . . . . . . . . . $8,000,000
ANNEX I
Pursuant to Section 7(d) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if
applicable, prospective financial statements and/or pro forma
financial information) examined by them and included in, delivered
with or incorporated by reference in the Registration Statement or
the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act or the Exchange Act,
as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial
information, prospective financial statements and/or condensed
financial statements derived from audited financial statements of
the Company for the periods specified in such letter, as indicated
in their reports thereon, copies of which have been furnished to
the Underwriters;
(iii) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of the Company for the five most recent fiscal years
included in the Prospectus and included or incorporated by
reference in Item 6 of the Company's Annual Report on Form 10-K for
the most recent fiscal year agrees with the corresponding amounts
(after restatement where applicable) in the audited consolidated
financial statements for such five fiscal years which were included
or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting
an examination in accordance with generally accepted auditing
standards, consisting of a reading of the unaudited financial
statements and other information referred to below, a reading of
the latest available interim financial statements of the Company
and its subsidiaries, inspection of the minute books of the Company
and its subsidiaries since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus,
inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included or incorporated by reference
in the Company's Quarterly Reports on Form 10-Q delivered with
or incorporated by reference in the Prospectus do not comply
as to form in all material respects with the applicable
accounting requirements of the Exchange Act as it applies to
Form 10-Q and the related published rules and regulations
thereunder or are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with the basis for the audited consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included or incorporated
by reference in the Company's Annual Report on Form 10-K for
the most recent fiscal year;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and
any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial
statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in Clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included in, deliverd with or
incorporated by reference in the Prospectus do not comply as
to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and
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upon conversions of convertible securities, in each case which
were outstanding on the date of the latest balance sheet
included in, delivered with or incorporated by reference in
the Prospectus) or any increase in the consolidated long-term
debt of the Company and its subsidiaries, or any decreases in
consolidated net current assets or net assets or other items
specified by the Underwriters, or any increases in any items
specified by the Underwriters, in each case as compared with
amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each
case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in Clause (E)
there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Underwriters, or any increases in any items specified by the
Underwriters, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by the Underwriters, except in
each case for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(v) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus
and the limited procedures, inspection of minute books, inquiries
and other procedures referred to in Paragraphs (iii) and (iv)
above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages
and financial information specified by the Underwriters which are
derived from the general accounting records of the Company and its
subsidiaries, which appear in the Prospectus (excluding documents
delivered therewith or incorporated by reference therein) or in
Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Underwriters or in documents delivered
with, or incorporated by reference in, the Prospectus specified by
the Underwriters, and have compared certain of such amounts,
percentages and financial information with the accounting records
of the Company and its subsidiaries and have found them to be in
agreement.
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