Exhibit 1.1
1,300,000 Shares
Philadelphia Suburban Corporation
Common Stock
($.50 Par Value)
UNDERWRITING AGREEMENT
May 13, 2003
Xxxxxx X. Xxxxx & Co., X.X.
Xxxxxx Xxxxxxxxxx Xxxxx LLC
c/o Xxxxxx X. Xxxxx & Co., L.P.
00000 Xxxxxxxxxx Xxxx
Xx. Xxxxx, XX 00000
Ladies and Gentlemen:
Philadelphia Suburban Corporation, a Pennsylvania corporation (the
"Company"), proposes to sell to the underwriters (the "Underwriters") named in
Schedule I hereto an aggregate of 1,300,000 shares of the Company's Common
Stock, $.50 par value (the "Firm Shares"). The respective amounts of the Firm
Shares to be so purchased by each of the Underwriters are set forth opposite
their names in Schedule I hereto. The Company also proposes to sell at the
Underwriters' option an aggregate of up to 195,000 additional shares of the
Company's Common Stock (the "Option Shares") as set forth below.
As the Underwriters, you have advised the Company (a) that you are
authorized to enter into this Agreement, and (b) that you are willing, acting
severally and not jointly, to purchase the numbers of Firm Shares set forth
opposite your respective names in Schedule I, plus your pro rata portion of the
Option Shares if you elect to exercise the over-allotment option in whole or in
part. The Firm Shares and the Option Shares (to the extent the aforementioned
option is exercised) are herein collectively called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
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1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company represents and warrants to each of the
Underwriters as follows:
(i) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (File No. 333-104290),
including a prospectus, relating to the Company's securities in conformity with
the Securities Act of 1933, as amended (the "Act") and the rules and regulations
(the "Rules and Regulations") of the Commission thereunder, and has filed with,
or transmitted for filing to, or shall promptly hereafter file with or transmit
for filing to, the Commission a prospectus supplement (the "Prospectus
Supplement") specifically relating to the Shares pursuant to Rule 424 under the
Act. The term "Registration Statement" means the registration statement,
including the exhibits thereto, as amended to the date of this Agreement. The
term "Basic Prospectus" means the prospectus dated April 25, 2003 included in
the Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the Prospectus Supplement. As used herein, the terms "Basic
Prospectus" and "Prospectus" shall include in each case the documents, if any,
incorporated by reference therein. The terms "supplement," "amendment" and
"amend" as used herein shall include all documents deemed to be incorporated by
reference in the Prospectus that are filed subsequent to the date of the Basic
Prospectus by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(ii) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the Commonwealth of
Pennsylvania, with corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement. Each of the
significant subsidiaries of the Company as listed on Schedule II (collectively,
the "Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement. The Company
and each of the Subsidiaries are duly qualified to transact business in all
jurisdictions in which the conduct of their business requires such
qualification, except for such jurisdictions where the failure to so qualify
would not have a material adverse effect on the earnings, business, management,
properties, assets, rights, operations or condition (financial or otherwise) of
the Company and of the Subsidiaries taken as a whole (a "Material Adverse
Effect"). The outstanding shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and non-assessable
and are owned by the Company or another Subsidiary free and clear of all liens,
encumbrances and equities and claims; and no options, warrants or other rights
to purchase, agreements or other obligations to issue or other rights to convert
any obligations into shares of capital stock or ownership interests in the
Subsidiaries are outstanding, other than those described in the Registration
Statement or described in any document incorporated by reference therein.
(iii) The outstanding shares of Common Stock of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable; the Shares to be issued and sold by the Company have been duly
authorized and when issued and paid for as contemplated herein will be validly
issued, fully paid and non-assessable; and no preemptive rights of shareholders
exist with respect to any of the Shares or the issue and sale thereof, other
than those described in the Registration Statement or described in any document
incorporated by reference therein. Neither the filing of the Registration
Statement nor the offering or sale of the Shares as contemplated by this
Agreement gives rise to any rights, other than those which have been waived or
satisfied, for or relating to the registration of any shares of Common Stock.
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(iv) All of the Shares conform in all material respects to the
description thereof contained in or incorporated by reference in the
Registration Statement. The form of certificates for the Shares conforms to the
corporate law of the jurisdiction of the Company's incorporation.
(v) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed offering of the
Shares nor instituted proceedings for that purpose. As of the date it became
effective under the Act, the Registration Statement contained, and the
Prospectus and any amendments or supplements thereto will contain, as of the
date the Prospectus, such amendment or supplement is filed with the Commission,
all statements which are required to be stated therein by, and conforms to, or
will conform to, as the case may be, the requirements of the Act and the Rules
and Regulations. The documents incorporated, or to be incorporated, by reference
in the Prospectus, at the time they became effective or were or will be filed
with the Commission, as the case may be, conformed or will conform, as the case
may be, in all material respects to the requirements of the Exchange Act or the
Act, as applicable, and the rules and regulations of the Commission thereunder.
The Registration Statement did not, as of the date it became effective, contain,
and any amendment thereto will not, as of the date it becomes effective,
contain, any untrue statement of a material fact and did not omit, and will not
omit, to state any material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus and any amendments
and supplements thereto, as of the date the Prospectus, such amendment or
supplement is filed with the Commission do not contain, and will not contain,
any untrue statement of material fact, and do not omit and will not omit, 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 were
made, not misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted from 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 any Underwriter specifically for use in the preparation thereof.
(vi) The consolidated financial statements of the Company and
its subsidiaries, together with related notes and schedules as set forth or
incorporated by reference in the Registration Statement, present fairly in all
material respects the financial position and the results of operations and cash
flows of the Company and the consolidated subsidiaries, at the indicated dates
and for the indicated periods. Such financial statements and related schedules
have been prepared in accordance with generally accepted principles of
accounting, consistently applied throughout the periods involved, except as
disclosed therein in all material respects, and all adjustments necessary for a
fair presentation of results for such periods have been made. The summary
financial and statistical data included or incorporated by reference in the
Registration Statement present fairly in all material respects the information
shown therein and such data has been compiled on a basis consistent with the
financial statements presented therein and the books and records of the company.
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(vii) PricewaterhouseCoopers LLP, who have certified certain
of the financial statements filed with the Commission as part of, or
incorporated by reference in, the Registration Statement, are independent public
accountants as required by the Act and the Rules and Regulations.
(viii) There are no legal or governmental proceedings pending
to which the Company or the Subsidiaries is a party or of which any property of
the Company or the Subsidiaries is the subject that are required to be disclosed
in the Registration Statement that are not so disclosed as required; and to the
Company's knowledge, no such proceedings are threatened or contemplated.
(ix) Each of the Company and the Subsidiaries has good and
marketable title to all of their respective properties and assets reflected in
the consolidated financial statements hereinabove described except where the
failure to have such title would not have a Material Adverse Effect, subject to
no lien, mortgage, pledge, charge or encumbrance of any kind except those
reflected in such financial statements or described in the Registration
Statement or which are not material in amount. Each of the Company and the
Subsidiaries occupies its leased properties under valid and existing leases,
with only such exceptions with respect to any particular lease as do not
interfere in any material respect with the conduct of the business of the
Company.
(x) Each of the Company and the Subsidiaries has filed all
material Federal, State, local and foreign tax returns, or has filed for
extensions of the due dates for such returns which have been required to be
filed and paid all taxes indicated by such returns and all assessments received
by it or any of them to the extent that such taxes have become due, or has
received timely extensions thereof, other than any taxes which the Company or
any Subsidiary is contesting in good faith. The Company does not know of any
actual or proposed additional material tax assessments.
(xi) Since the respective dates as of which information is
given or incorporated by reference in the Registration Statement, as it may be
amended or supplemented, except as described therein or in such incorporated
information, there has not been any change or any development that has had or
will have a Material Adverse Effect, whether or not occurring in the ordinary
course of business, and there has not been any material transaction entered into
by the Company or the Subsidiaries, other than transactions in the ordinary
course of business and changes and transactions described in the Registration
Statement, as it may be amended or supplemented. Each of the Company and the
Subsidiaries has no material contingent obligations which are not disclosed in
the Company's financial statements which are included in the Registration
Statement.
(xii) Neither the Company nor any of the Subsidiaries is or
with the giving of notice or lapse of time or both, will be, in violation of or
in default under (i) its Charter or By-Laws, or (ii) under any agreement, lease,
contract, indenture or other instrument or obligation to which it is a party or
by which it, or any of its properties, is bound and, solely with respect to this
clause (ii), which violation or default would have a Material Adverse Effect.
The execution and delivery of this Agreement and the consummation of the
transactions herein contemplated and the fulfillment of the terms hereof will
not conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any material indenture, mortgage, deed of trust or
other material agreement or instrument to which the Company or any Subsidiary is
a party or by which the Company or any Subsidiary or any of their respective
properties is bound, or of the Charter or By-Laws of the Company or any law,
order, rule or regulation judgement, order, writ or decree applicable to the
Company or any Subsidiary of any court or of any government, regulatory body or
administrative agency or other governmental body having jurisdiction, except
where such breach or default would not, except with respect to the Charter or
By-laws individually or in the aggregate, have a Material Adverse Effect.
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(xiii) The execution and delivery of, and the performance by
the Company of its obligations under, this Agreement has been duly and validly
authorized by all necessary corporate action on the part of the Company, and
this Agreement has been duly executed and delivered by the Company.
(xiv) Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and delivery
by the Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the Commission,
the National Association of Securities Dealers, Inc. (the "NASD") or such
additional steps as may be necessary to qualify the Shares for public offering
by the Underwriters under state securities or Blue Sky laws) has been obtained
or made and is in full force and effect.
(xv) Each of the Company and the Subsidiaries holds, has
obtained or meets the requirements for all material licenses, certificates and
permits, consents, orders, approvals and other authorizations from governmental
authorities which are necessary to the conduct of their businesses and has made
all declarations and filings with, all federal, state, local and other
governmental authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other tribunals, domestic or
foreign, necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date hereof,
except where the lack thereof would not have a Material Adverse Effect, and
neither the Company nor any such subsidiary has received any actual written
notice of any proceeding relating to revocation or modification of any such
material license, permit, certificate, consent, order, approval or other
authorization that would materially interfere with its ownership or lease, as
the case may be, or the operation of its properties or the carrying on of its
business as conducted on the date hereof, except as described in the
Registration Statement and the Prospectus; and each of the Company and its
subsidiaries is in material compliance with all laws and regulations relating to
the conduct of its business as conducted as of the date hereof, except where
such noncompliance would not have a Material Adverse Effect.
(xvi) Neither the Company, nor to the Company's knowledge,
any of its affiliates, has taken or may take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the shares of Common Stock to facilitate the sale or resale of the
Shares.
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(xvii) Neither the Company nor any Subsidiary is or, after
giving effect to the offering and sale of the Shares contemplated hereunder and
the application of the net proceeds from such sale as described in the
Prospectus, will be an "investment company" or an entity "controlled" by an
"investment company" within the meaning of such terms under the Investment
Company Act of 1940, (as amended, the "1940 Act") and the rules and regulations
of the Commission thereunder.
(xviii) The Company and each of its Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that in all material respects (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xix) The Company and each of its Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks relative to the
conduct of their respective businesses as currently conducted and the value of
their respective properties and as is reasonable and customary for companies
engaged in similar businesses.
(xx) There are no existing or, to the best knowledge of the
Company, threatened labor disputes with the employees of the Company or any of
the Subsidiaries which are likely to have a Material Adverse Effect.
(xxi) Except as described in the Registration Statement or any
of the documents incorporated by reference therein, the Company and each of its
Subsidiaries (i) are in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received or meets
the requirements for all material permits, licenses or other approvals required
of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a Material Adverse Effect.
Except as described in the Registration Statement or any of the documents
incorporated by reference therein, there are no legal or governmental
proceedings pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries under any Environmental Law
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(xxii) In the ordinary course of its business, the Company
reviews of the effect of Environmental Laws on the business, operations and
properties of the Company and each of its subsidiaries, in the course of which
it identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). Except as described in the Registration Statement
or any of the documents incorporated by reference therein, on the basis of such
review, the Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a Material Adverse
Effect.
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(xxiii) The Shares have been duly listed on the New York Stock
Exchange.
A. PRICING PROVISIONS
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
(a) On the basis of the representations, warranties and
covenants herein contained, and subject to the conditions herein set forth, the
Company agrees to sell to the Underwriters and each Underwriter agrees,
severally and not jointly, to purchase, at a net purchase price of $22.20 per
share (representing the public offering price of $23.08 per share less
underwriting discounts and commissions of $0.88 per share), the number of Firm
Shares set forth opposite the name of each Underwriter in Schedule I hereof,
subject to adjustments in accordance with Section 9 hereof.
(b) Payment for the Firm Shares to be sold hereunder is to be
made in Federal (same day) funds to an account designated by the Company against
delivery of the Firm Shares therefor to the Underwriters. Such payment and
delivery are to be made through the facilities of The Depository Trust Company,
New York New York ("DTC") at 10:00 a.m., New York time, on the third business
day after the date of this Agreement or at such other time and date not later
than five business days thereafter as you and the Company shall agree upon, such
time and date being herein referred to as the "Closing Date." (As used herein,
"business day" means a day on which the New York Stock Exchange is open for
trading and on which banks in New York are open for business and not permitted
by law or executive order to be closed.)
(c) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the several Underwriters to
purchase the Option Shares at the price per share as set forth in the first
paragraph of this Section 2. No Option Shares shall be sold or delivered by the
Underwriters unless the Firm Shares previously have been, or simultaneously with
the Option Shares are, sold and delivered. The option granted hereby may be
exercised in whole or in part by giving written notice (i) at any time before
the Closing Date and (ii) only once thereafter within 30 days after the date of
this Agreement, by you, as the Underwriters, to the Company setting forth the
number of Option Shares as to which either or both the Underwriters are
exercising the option and the time and date at which such Option Shares are to
be delivered. The time and date at which the Option Shares are to be delivered
shall be determined by the Underwriters but shall not be earlier than three full
business days after written notice of the exercise of such option, nor in any
event prior to the Closing Date (such time and date being herein referred to as
the "Option Closing Date"). If the date of exercise of the option is three or
more days before the Closing Date, the notice of exercise shall set the Closing
Date as the Option Closing Date. The number of Option Shares to be purchased by
each Underwriter shall be in the same proportion to the total number of Option
Shares being purchased as the number of Firm Shares being purchased by such
Underwriter bears to the total number of Firm Shares, adjusted by you in such
manner as to avoid fractional shares. The option with respect to the Option
Shares granted hereunder may be exercised only to cover over-allotments in the
sale of the Firm Shares by the Underwriters. Either of the Underwriters may
cancel such option at any time prior to its expiration by giving written notice
of such cancellation to the Company. To the extent, if any, that the option is
exercised, payment for the Option Shares shall be made on the Option Closing
Date in Federal (same day funds) to an account designated by the Company for the
Option Shares against delivery of the Option Shares through the facilities of
DTC.
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3. OFFERING BY THE UNDERWRITERS.
It is understood that each of the Underwriters is to make a
public offering of the Firm Shares as soon as the Underwriters deem it advisable
to do so. The Firm Shares are to be initially offered to the public at the
public offering price set forth in the Prospectus. The Underwriters may from
time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are purchased pursuant
to Section 2 hereof, the Underwriters will offer them to the public on the
foregoing terms.
It is further understood that you will act as the Underwriters
in the offering and sale of the Shares in accordance with a Master Agreement
Among Underwriters entered into by you.
4. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees with each of the
Underwriters that:
(i) The Company will (A) use its best efforts to
cause the Registration Statement to remain effective and to prepare and timely
file with the Commission under Rule 424(b) of the Rules and Regulations a
Prospectus in a form approved by the Underwriters, and (B) not file any
amendment to the Registration Statement or supplement to the Prospectus or
document incorporated by reference therein of which the Underwriters shall not
previously have been advised and furnished with a copy or to which the
Underwriters shall have reasonably objected in writing or which is not in
compliance with the Rules and Regulations and (C) file on a timely basis all
reports and any definitive proxy or information statements required to be filed
by the Company with the Commission subsequent to the date of the Prospectus and
prior to the termination of the offering of the Shares by the Underwriters.
(ii) The Company will advise the Underwriters
promptly of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the use of the Prospectus or of
the institution of any proceedings for that purpose. The Company will use its
best efforts to prevent the issuance of any such stop order preventing or
suspending the use of the Prospectus and to obtain as soon as possible the
lifting thereof, if issued.
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(iii) The Company will cooperate with the
Underwriters in endeavoring to qualify the Shares for sale under the securities
laws of such jurisdictions as the Underwriters may reasonably have designated in
writing and will make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose, provided 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 where it is not now so
qualified or required to file such a consent. The Company will, from time to
time, prepare and file such statements, reports, and other documents, as are or
may be required to continue such qualifications in effect for so long a period
as the Underwriters may reasonably request for distribution of the Shares.
(iv) The Company will deliver to, or upon the order
of, the Underwriters, from time to time, as many copies of the Prospectus as the
Underwriters may reasonably request. The Company will deliver to, or upon the
order of, the Underwriters during the period when delivery of a Prospectus is
required under the Act, as many copies of the Prospectus in final form, or as
thereafter amended or supplemented, as the Underwriters may reasonably request.
Upon request, the Company will deliver to the Underwriters at or before the
Closing Date, one signed copy of the Registration Statement and all amendments
thereto including all exhibits filed therewith and all documents incorporated by
reference therein, and will deliver to the Underwriters such additional copies
of the Registration Statement and all amendments thereto, as the Underwriters
may reasonably request.
(v) Within the time during which a prospectus
relating to the Shares is required to be delivered under the Act, the Company
will comply with the Act and the Rules and Regulations, and the Exchange Act,
and the rules and regulations of the Commission thereunder, so as to permit the
completion of the distribution of the Shares as contemplated in this Agreement
and the Prospectus. If during the period in which a prospectus is required by
law to be delivered by an Underwriter or dealer, any event shall occur as a
result of which, in the judgment of the Company or in the reasonable opinion of
the Underwriters, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances existing
at the time the Prospectus is delivered to a purchaser, not misleading, or, if
it is necessary at any time to amend or supplement the Prospectus to comply with
any law, the Company promptly will either (i) prepare and file with the
Commission an appropriate amendment to the Registration Statement or supplement
to the Prospectus or (ii) prepare and file with the Commission an appropriate
filing under the Exchange Act which shall be incorporated by reference in the
Prospectus so that the Prospectus as so amended or supplemented will not, in the
light of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with the law.
(vi) The Company will make generally available to its
security holders, as soon as it is practicable to do so, but in any event not
later than 15 months after the effective date of the Registration Statement, an
earning statement (which need not be audited) in reasonable detail, covering a
period of at least 12 consecutive months beginning after the effective date of
the Registration Statement, which earnings statement shall satisfy the
requirements of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations and will advise you in writing when such statement has been so made
available.
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(vii) The Company shall not (a) issue, offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly, or
file with the SEC any registration statement relating to, any additional shares
of its common stock or securities convertible into or exchangeable or
exercisable for any shares of its common stock, enter into a transaction which
would have the same effect or publicly disclose the intention to make any such
offer, sale, pledge, disposition or filing, or (b) grant any options whatsoever
in respect of its shares, except grants of employee stock options pursuant to
the terms of a plan in effect on the date of this Agreement, in each case for a
period of 30 days after the date of this Agreement, without the prior written
consent of the Underwriters. The foregoing restrictions shall not apply to any
grants of stock options or restricted stock pursuant to the terms of an equity
compensation or similar plan in effect on the date hereof, the issuance by the
Company of up to 200,000 Shares under the Company's shelf registration
statements or the issuance of shares under the Company's Dividend Reinvestment
and Direct Stock Purchase Plan.
(viii) The Company will cause each executive officer
and director of the Company to furnish to you, on or prior to the Closing Date,
a letter or letters, in form and substance satisfactory to the Underwriters
("Lockup Agreements"), pursuant to which each such person shall agree not to
offer, sell, sell short or otherwise dispose of, directly or indirectly, any
shares of Common Stock of the Company or other capital stock of the Company, or
any other securities convertible, exchangeable or exercisable for Common Shares
or derivative of Common Shares owned by such person or request the registration
for the offer or sale of any of the foregoing (or as to which such person has
the right to direct the disposition of) for a period of 30 days after the date
of this Agreement, directly or indirectly, except with the prior written consent
of the Underwriters.
(ix) The Company shall apply the net proceeds of its
sale of the Shares as set forth in the Prospectus.
(x) The Company shall not invest, or otherwise use
the proceeds received by the Company from its sale of the Shares in such a
manner as would require the Company or any of the Subsidiaries to register as an
investment company under the 0000 Xxx.
(xi) The Company will maintain a transfer agent and,
if necessary under the jurisdiction of incorporation of the Company, a registrar
for the Common Stock.
(xii) The Company will not take, directly or
indirectly, any action designed to cause or result in, or that constitutes or
might reasonably be expected to constitute, the stabilization or manipulation of
the price of any securities of the Company.
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5. COSTS AND EXPENSES.
The parties agree that the Underwriters shall not be
responsible for the following expenses (1) accounting fees of the Company; (2)
the fees and disbursements of counsel for the Company; (3) the cost of printing
and delivering to, or as requested by, the Underwriters copies of the
Registration Statement and the Prospectus, and any supplements or amendments
thereto; (4) the filing fees of the Commission; (5) the filing fees and expenses
(including legal fees and disbursements) incident to securing any required
review by the NASD of the terms of the sale of the Shares; (6) the Listing Fee
of the New York Stock Exchange; and (7) the expenses, including the fees and
disbursements of counsel for the Underwriters, incurred in connection with the
qualification of the Shares under State securities or Blue Sky laws. Any
transfer taxes imposed on the sale of the Shares to the respective Underwriters
will be paid by the Company. The Company shall not, however, be required to pay
for any of the Underwriters' expenses (other than those related to qualification
under NASD regulation and State securities or Blue Sky laws) except that, if
this Agreement shall not be consummated because the conditions in Section 6
hereof are not satisfied, or because this Agreement is terminated by the
Underwriters pursuant to Section 11 hereof, or by reason of any failure, refusal
or inability on the part of the Company to perform any undertaking or satisfy
any condition of this Agreement or to comply with any of the terms hereof on its
part to be performed, unless such failure, refusal or inability is due primarily
to the default or omission of any Underwriter, the Company shall reimburse each
of the Underwriters for reasonable out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with investigating,
marketing and proposing to market the Shares or in contemplation of performing
their obligations hereunder; but the Company shall not in any event be liable to
either Underwriter for damages on account of loss of anticipated profits from
the sale by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of each of the Underwriters to
purchase the Firm Shares on the Closing Date and the Option Shares, if any, on
the Option Closing Date are subject to the accuracy, as of the Closing Date or
the Option Closing Date, as the case may be, of the representations and
warranties of the Company contained herein, and to the performance by the
Company of its covenants and obligations hereunder and to the following
additional conditions:
(a) Any and all filings required by Rule 424 under the Act
shall have been made within the applicable time period prescribed by, and in
compliance with, the Rules and Regulations, and any request of the Commission
for additional information (to be included in the Registration Statement or
otherwise) shall have been disclosed to the Underwriters and complied with to
their reasonable satisfaction. No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been issued and
no proceedings for that purpose shall have been taken or, to the knowledge of
the Company, shall be contemplated or threatened by the Commission and no
injunction, restraining order or order of any nature by a Federal or state court
of competent jurisdiction shall have been issued as of the Closing Date which
would prevent the issuance of the Shares.
(b) The Underwriters shall have received on the Closing Date
or the Option Closing Date, as the case may be, the opinions of Xxxxxx, Xxxxx &
Xxxxxxx LLP ("Xxxxxx Xxxxx"), counsel for the Company, dated the Closing Date or
the Option Closing Date, as the case may be, addressed to the Underwriters (and
stating that it may be relied upon by counsel to the Underwriters) to the effect
that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania, with corporate power and authority to own or lease
its properties and conduct its business as described in the Registration
Statement; each of Pennsylvania Suburban Water Company ("PSWC") and Consumers
Water Company ("CWC") has been duly organized and is validly existing as a
corporation in good standing under the laws of the Commonwealth of Pennsylvania,
with corporate power and authority to own or lease its properties and conduct
its business as described in the Registration Statement; the Company is duly
qualified to transact business in all jurisdictions in which the conduct of its
business requires such qualification, or in which the failure to qualify would
have a materially adverse effect upon the business of the Company and the
Subsidiaries taken as a whole; and the outstanding shares of capital stock of
each of PSWC and CWC have been duly authorized and validly issued and are fully
paid and non-assessable and are owned by the Company; and, to the best of such
counsel's knowledge, the outstanding shares of capital stock of each of PSWC and
CWC is owned free and clear of all liens, encumbrances and equities and claims.
11
(ii) The authorized shares of the Company's Common
Stock have been duly authorized; the outstanding shares of the Company's Common
Stock, have been duly authorized and validly issued and are fully paid and
non-assessable; all of the Shares conform in all material respects as to legal
matters to the description thereof contained in the Prospectus; the certificates
for the Shares, assuming they are in the form filed with the Commission, conform
to the requirements of the Pennsylvania Business Corporation Law of 1988, as
amended (the "PBCL"); the shares of Common Stock, including the Option Shares,
if any, to be sold by the Company pursuant to this Agreement have been duly
authorized and will be validly issued, fully paid and non-assessable when issued
and paid for as contemplated by this Agreement, and no preemptive rights of
shareholders exist with respect to any of the Shares or the issue or sale
thereof arising under the Company's Charter, By-laws or the PBCL.
(iii) Based upon the oral advice of a member of the
Staff of the Commission, the Registration Statement has become effective under
the Act and, to the best of the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are pending or
threatened under the Act.
(iv) The Registration Statement, as of the date it
became effective, the Prospectus and each amendment or supplement thereto and
document incorporated by reference therein, as of each of their respective
dates, comply as to form in all material respects with the requirements of the
Act or the Exchange Act as applicable and the applicable rules and regulations
thereunder (except that such counsel need express no opinion as to the financial
statements and related schedules incorporated by reference therein).
(v) The statements under the caption "Description of
Capital Stock" in the Prospectus, insofar as such statements constitute a
summary of documents referred to therein or matters of law, fairly summarize in
all material respects the information called for with respect to such documents
and matters.
(vi) Such counsel does not know of any contracts or
documents required to be filed as exhibits to or incorporated by reference in
the Registration Statement or described in the Registration Statement or the
Prospectus which are not so filed, incorporated by reference or described as
required, and to counsel's knowledge, such contracts and documents as are
summarized in the Registration Statement or the Prospectus are fairly summarized
in all material respects.
12
(vii) Such counsel knows of no material legal or
governmental proceedings pending or threatened against the Company or any of the
Subsidiaries except as set forth in the Prospectus.
(viii) The execution and delivery of this Agreement
and the consummation of the transactions herein contemplated do not and will not
violate or result in a breach of any of the terms or provisions of, or
constitute a default under, the Charter or By-Laws of the Company, or any
material indenture, mortgage, deed of trust or other material agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which the Company or any of the Subsidiaries may be bound and which is known to
such counsel.
(ix) This Agreement has been duly authorized,
executed and delivered by the Company.
(x) No approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the execution and
delivery of this Agreement and the consummation of the transactions herein
contemplated (other than as may be required by the NASD or as required by State
securities and Blue Sky laws as to which such counsel need express no opinion)
except such as have been obtained or made, specifying the same.
(xi) The Company is not and after giving effect to
the offering and the sale of the Shares contemplated hereunder and the
application of the net proceeds from such sale as described in the Prospectus,
will not be, an "investment company" or an entity "controlled" by an "investment
company" within the meaning of such terms under the 1940 Act and the rules and
regulations of the Commission thereunder.
In rendering such opinion Xxxxxx Xxxxx may rely as to matters
governed by the laws of states other than Pennsylvania, New York or Federal laws
on local counsel in such jurisdictions, provided that in each case Xxxxxx Xxxxx
shall state that they believe that they and the Underwriters are justified in
relying on such other counsel. In addition to the matters set forth above, the
Underwriters shall receive a statement from such counsel to the effect that
nothing has come to the attention of such counsel which leads them to believe
that (i) the Registration Statement, at the time it became effective under the
Act, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading (except that such counsel need express no view as to
financial statements, schedules and statistical information therein), and (ii)
the Prospectus, or any supplement thereto, on the date it was filed pursuant to
the Rules and Regulations and as of the Closing Date or the Option Closing Date,
as the case may be, contained or contains an untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (except that such counsel need express no view as to
financial statements, schedules and statistical information therein). With
respect to such statement, Xxxxxx Xxxxx may state that their belief is based
upon the procedures set forth therein, but is without independent check and
verification.
13
(c) The Underwriters shall have received on the Closing Date
or the Option Closing Date, as the case may be, the opinions of Xxx X. Xxxxx,
Esq., Executive Vice President - General Counsel for the Company, dated the
Closing Date or the Option Closing Date, as the case may be, addressed to the
Underwriters (and stating that it may be relied upon by counsel to the
Underwriters) to the effect that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Pennsylvania, with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration Statement;
each of the Subsidiaries has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement; the Company
and each of the Subsidiaries are duly qualified to transact business in all
jurisdictions in which the conduct of their business requires such
qualification, or in which the failure to qualify would have a Materially
Adverse Effect; and the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued and are fully paid and
non-assessable and are owned by the Company or a Subsidiary; and, to the best of
such counsel's knowledge, the outstanding shares of capital stock of each of the
Subsidiaries is owned free and clear of all liens, encumbrances and equities and
claims, and no options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any obligations into any
shares of capital stock or of ownership interests in the Subsidiaries are
outstanding.
(ii) Except as described in or contemplated by the
Prospectus or the documents incorporated by reference therein, there are no
outstanding securities of the Company convertible or exchangeable into or
evidencing the right to purchase or subscribe for any shares of capital stock of
the Company and there are no outstanding or authorized options, warrants or
rights of any character obligating the Company to issue any shares of its
capital stock or any securities convertible or exchangeable into or evidencing
the right to purchase or subscribe for any shares of such stock; and except as
described in the Prospectus or the documents incorporated by reference therein,
no holder of any securities of the Company or any other person has the right,
contractual or otherwise, which has not been satisfied or effectively waived, to
cause the Company to sell or otherwise issue to them, or to permit them to
underwrite the sale of, any of the Shares or the right to have any Common Shares
or other securities of the Company included in the Registration Statement or the
right, as a result of the filing of the Registration Statement, to require
registration under the Act of any shares of Common Stock or other securities of
the Company.
14
(iii) Each of the Company and the Subsidiaries owns,
possesses, has obtained or meets the requirements for all licenses, permits,
certificates, consents, orders, approvals and other authorizations from, and has
made all declarations and filings with, all federal, state, local and other
governmental authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other tribunals, domestic or
foreign, necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date hereof
except where the lack thereof would not have a Material Adverse Effect, and
neither the Company nor any such Subsidiary has received any actual written
notice of any proceeding relating to revocation or modification of any such
license, permit, certificate, consent, order, approval or other authorization
that would materially interfere with its ownership or lease, as the case may be,
or the operation of its properties or the carrying on of its business as
conducted on the date hereof, except as described in the Registration Statement
and the Prospectus; and to the best of his knowledge, each of the Company and
the Subsidiaries is in material compliance with all laws and regulations
relating to the conduct of its business as conducted as of the date of the
Prospectus except where such noncompliance would not have a Material Adverse
Effect.
(d) The Underwriters shall have received from Xxxxx Xxxx &
Xxxxxxxx ("Xxxxx Xxxx"), counsel for the Underwriters, an opinion dated the
Closing Date or the Option Closing Date, as the case may be, substantially to
the effect specified in subparagraph (ix) of Paragraph (b) of this Section. In
rendering such opinion Xxxxx Xxxx may rely as to all matters governed other than
by the laws of the State of New York or Federal laws on the opinion of counsel
referred to in Paragraph (b) of this Section. In addition to the matters set
forth above, such opinion shall also include a statement to the effect that
nothing has come to the attention of such counsel which leads them to believe
that (i) the Registration Statement, or any amendment thereto, as of the date
hereof contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and (ii) the Prospectus, or any supplement thereto, on
the date hereof and as of the Closing Date or the Option Closing Date, as the
case may be, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact, necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (except that such counsel need express no view as to
financial statements, schedules and statistical information therein). With
respect to such statement, Xxxxx Xxxx may state that their belief is based upon
the procedures set forth therein, but is without independent check and
verification.
(e) You shall have received, on the Closing Date and, if
applicable, the Option Closing Date, a letter dated the Closing Date or the
Option Closing Date, as the case may be, in form and substance satisfactory to
you, of PricewaterhouseCoopers LLP confirming that they are independent public
accountants within the meaning of the Act and the applicable published Rules and
Regulations thereunder and stating that in their opinion the financial
statements and schedules examined by them and included in the Registration
Statement comply in form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and Regulations; and
containing such other statements and information as is ordinarily included in
accountants' "comfort letters" to Underwriters with respect to the financial
statements and certain financial and statistical information contained in the
Registration Statement and Prospectus.
(f) The Underwriters shall have received on the Closing Date
and, if applicable, the Option Closing Date, as the case may be, a certificate
or certificates of Xxxxxxxx XxXxxxxxxxxx, President and Chairman of the Company,
and Xxxxx Xxxxxxxx, Chief Financial Officer of the Company, solely in their
respective capacities as such, to the effect that, as of the Closing Date or the
Option Closing Date, as the case may be, each of them severally represents as
follows:
15
(i) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness of the Registration
Statement has been issued, and, to his knowledge after due inquiry, no
proceedings for such purpose have been taken or are, to his knowledge,
contemplated or threatened by the Commission;
(ii) The representations and warranties of the
Company contained in Section 1 hereof are true and correct as of the Closing
Date or the Option Closing Date, as the case may be;
(iii) All filings required to have been made pursuant
to Rule 424 under the Act have been made by the Closing Date or the Option
Closing Date as and when required by such rules;
(iv) He has carefully examined the Registration
Statement and the Prospectus and, in his opinion, as of the effective date of
the Registration Statement, the statements contained in the Registration
Statement were true and correct, and such Registration Statement and Prospectus
did not omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading, and since the effective date of the
Registration Statement, no event has occurred which should have been set forth
in a supplement to or an amendment of the Prospectus which has not been so set
forth in such supplement or amendment; and
(v) Since the respective dates as of which
information is given in the Registration Statement and Prospectus, there has not
been any change or any development that has had or will have a Material Adverse
Effect.
(g) The Company shall have furnished to the Underwriters such
further certificates and documents confirming the representations and
warranties, covenants and conditions contained herein and related matters as the
Underwriters may reasonably have requested.
(h) The Firm Shares and Option Shares, if any, have been duly
listed on the New York Stock Exchange. The Lockup Agreements described in
Section 4(a)(ix) are in full force and effect.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they are
in all material respects satisfactory to the Underwriters and to Xxxxx Xxxx,
counsel for the Underwriters.
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, the obligations of the Underwriters hereunder may be terminated
by the Underwriters by notifying the Company of such termination in writing or
by telegram at or prior to the Closing Date or the Option Closing Date, as the
case may be.
16
In such event, the Company and the Underwriters shall not be
under any obligation to each other (except to the extent provided in Sections 5
and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to sell and deliver the portion
of the Shares required to be delivered as and when specified in this Agreement
are subject to the conditions that at the Closing Date or the Option Closing
Date, as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
8. INDEMNIFICATION.
(a) The Company agrees:
(1) to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act, against
any losses, claims, damages or liabilities to which such Underwriter or
any such controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus
or any amendment or supplement thereto, or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light
of the circumstances under which they were made; provided, however,
that the Company will 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 the Registration Statement, the Prospectus or
such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by or through the
Underwriters specifically for use in the preparation thereof; and
(2) to reimburse each Underwriter and each such controlling
person upon demand for any legal or other out-of-pocket expenses
reasonably incurred by such Underwriter or such controlling person in
connection with investigating or defending any such loss, claim, damage
or liability, action or proceeding or in responding to a subpoena or
governmental inquiry related to the offering of the Shares, whether or
not such Underwriter or controlling person is a party to any action or
proceeding. In the event that it is finally judicially determined that
the Underwriters were not entitled to receive payments for legal and
other expenses pursuant to this subparagraph, the Underwriters will
promptly return all sums that had been advanced pursuant hereto.
(b) Each Underwriter severally and not jointly will indemnify
and hold harmless the Company, each of its directors, each of its
officers who have signed the Registration Statement, and each person,
if any, who controls the Company within the meaning of the Act, against
any losses, claims, damages or liabilities to which the Company or any
such director, officer, or controlling person may become subject under
the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of
or are based upon (i) any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, the
Prospectus or any amendment or supplement thereto, or (ii) the omission
or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were
made; and will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, or controlling
person in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however, that
each Underwriter will be liable in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission has been made in the Registration
Statement, the Prospectus or such amendment or supplement, in reliance
upon and in conformity with written information furnished to the
Company by or through the Underwriters specifically for use in the
preparation thereof. This indemnity agreement will be in addition to
any liability which such Underwriter may otherwise have.
17
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to this Section 8, such person
(the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a) or (b) shall be available
to any party who shall fail to give notice as provided in this Section
8(c) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially
prejudiced by the failure to give such notice, but the failure to give
such notice shall not relieve the indemnifying party or parties from
any liability which it or they may have to the indemnified party for
contribution or otherwise than on account of the provisions of Section
8(a) or (b). In case any such proceeding 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 and shall
pay as incurred the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel at its own expense.
Notwithstanding the foregoing, the indemnifying party shall pay as
incurred (or within 30 days of presentation) the fees and expenses of
the counsel retained by the indemnified party in the event (i) the
indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel, (ii) the named parties to any such
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them or (iii) the indemnifying
party shall have failed to assume the defense and employ counsel
acceptable to the indemnified party within a reasonable period of time
after notice of commencement of the action. It is understood that the
indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm for all
such indemnified parties. Such firm shall be designated in writing by
you in the case of parties indemnified pursuant to Section 8(a) and by
the Company in the case of parties indemnified pursuant to Section
8(b). The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but if settled with
such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
In addition, the indemnifying party will not, without the prior written
consent of the indemnified party, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding of which indemnification may be sought hereunder (whether or
not any indemnified party is an actual or potential party to such
claim, action or proceeding) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party
from all liability arising out of such claim, action or proceeding.
18
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or (b) above in respect of any
losses, claims, damages or liabilities (or actions or proceedings 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 or proceedings 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
Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law 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 or proceedings 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 Section 8(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 Section
8(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this Section 8(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), (i) no Underwriter shall
be required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this Section 8(d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
19
(e) In any proceeding relating to the Registration Statement,
the Prospectus or any supplement or amendment thereto, each party against whom
contribution may be sought under this Section 8 hereby consents to the
jurisdiction of any court having jurisdiction over any other contributing party,
agrees that process issuing from such court may be served upon it by any other
contributing party and consents to the service of such process and agrees that
any other contributing party may join it as an additional defendant in any such
proceeding in which such other contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any persons
controlling the Company, (ii) acceptance of any Shares and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter, or any person controlling any Underwriter, or to the Company, its
directors or officers, or any person controlling the Company, shall be entitled
to the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 8.
9. DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the case
may be, any Underwriter shall fail to purchase and pay for the portion of the
Shares which such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the Company) (the
"Defaulting Underwriter"), the other Underwriter (the "non-Defaulting
Underwriter), shall use its reasonable efforts to procure within 36 hours
thereafter a substitute to purchase from the Company such amounts as may be
agreed upon and upon the terms set forth herein, the Shares which the Defaulting
Underwriter failed to purchase. If during such 36 hours you, as the
non-Defaulting Underwriter, shall not have procured the non-Defaulting
Underwriter, or any others, to purchase the Shares agreed to be purchased by the
Defaulting Underwriter, then (a) if the aggregate number of shares with respect
to which such default shall occur does not exceed 10% of the Shares to be
purchased on the Closing Date or the Option Closing date, as the case may be,
the non-Defaulting Underwriter shall be obligated to purchase the Shares which
such Defaulting Underwriter failed to purchase, or (b) if the aggregate number
of shares of Shares with respect to which such default shall occur exceeds 10%
of the Shares to be purchased on the Closing Date or the Option Closing Date, as
the case may be, the Company or the non-Defaulting Underwriter will have the
right, by written notice given within the next 36-hour period to the parties to
this Agreement, to terminate this Agreement without liability on the part of the
non-Defaulting Underwriter or of the Company except to the extent provided in
Sections 5 and 8 hereof. In the event of a default by any Underwriter or
Underwriters, as set forth in this Section 9, the Closing Date or Option Closing
Date, as the case may be, may be postponed for such period, not exceeding seven
days, as the Company or the non-Defaulting Underwriter may determine in order
that the required changes in the Registration Statement or in the Prospectus or
in any other documents or arrangements may be effected. The term "Underwriter"
includes any person substituted for a defaulting Underwriter. Any action taken
under this Section 9 shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
20
10. NOTICES.
All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered, telecopied or
telegraphed and confirmed as follows: if to the Underwriters, to Xxxxxx X. Xxxxx
& Co., L.P., 00000 Xxxxxxxxxx Xxxx, Xx. Xxxxx, Xxxxxxxx 00000; one copy
Attention: Syndicate Manager, and a second copy Attention: General Counsel.
To the Company:
Philadelphia Suburban Corporation
000 X. Xxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxx X. Xxxxx, Esq.
Executive Vice President and General Counsel
Fax: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
11. TERMINATION.
This Agreement may be terminated by either Underwriter by
written notice to the Company (a) at any time prior to the Closing Date or any
Option Closing Date (if different from the Closing Date and then only as to
Option Shares) if any of the following has occurred: (i) since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, any material adverse change or any development occurs that has had a
Material Adverse Effect (ii) any outbreak or escalation of hostilities or
declaration of war or national emergency or other national or international
calamity or crisis or change in economic or political conditions if the effect
of such outbreak, escalation, declaration, emergency, calamity, crisis or change
on the financial markets of the United States would, in your reasonable
judgment, make it impracticable or inadvisable to market the Shares or to
enforce contracts for the sale of the Shares, or (iii) suspension of trading in
securities generally on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq National Market or limitation on prices (other than limitations on
hours or numbers of days of trading) for securities on either such Exchange,
(iv) the enactment, publication, decree or other promulgation of any statute,
regulation, rule or order of any court or other governmental authority which in
your reasonable opinion would create a Material Adverse Effect (v) the
declaration of a banking moratorium by United States or New York State
authorities, (vi) any downgrading, or placement on any watch list for possible
downgrading, in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Exchange Act); (vii) the suspension of trading of the
Company's common stock by the New York Stock Exchange, the Commission, or any
other governmental authority or, (viii) the taking of any action by any
governmental body or agency in respect of its monetary or fiscal affairs which
in your reasonable opinion has a material adverse effect on the securities
markets in the United States; or
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(b) as provided in Sections 6 and 9 of this Agreement.
Any such termination shall be without liability of any party
to any other party except that the provisions of Section 5 and 8 hereof shall at
all times be effective.
12. SUCCESSORS.
This Agreement has been and is made solely for the benefit of
the Underwriters and the Company and their respective successors, executors,
administrators, heirs and assigns, and the officers, directors and controlling
persons referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign merely because of such purchase.
13. INFORMATION PROVIDED BY UNDERWRITERS.
The Company and the Underwriters acknowledge and agree that
the only information furnished or to be furnished by any Underwriter to the
Company for inclusion in any Prospectus Supplement consists of the information
set forth in under the caption "Underwriting" in the Prospectus Supplement.
14. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers and (c) delivery of and payment for the Shares under
this Agreement.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
15. SUBMISSION TO JURISDICTION
Except as set forth below, no claim arising out of or in any
way relating to this Agreement may be commenced, prosecuted or continued in any
court other than the courts of the State of New York located in the City and
County of New York or in the United States District Court for the Southern
District of New York, which courts shall have jurisdiction over the adjudication
of such matters, and the Company consents to the jurisdiction of such courts and
personal service with respect thereto. The Company hereby consents to personal
jurisdiction, service and venue in any court in which any claim arising out of
or in any way relating to this Agreement is brought by any third party against
Xxxxxx X. Xxxxx & Co., L.P., Xxxxxx Xxxxxxxxxx Xxxxx LLC or any indemnified
party. Each of Xxxxxx X. Xxxxx & Co., L.P., Xxxxxx Xxxxxxxxxx Xxxxx LLC and the
Company (on its behalf and, to the extent permitted by applicable law, on behalf
of its shareholders and affiliates) waives all right to trial by jury in any
action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The Company
agrees that a final judgment in any such action, proceeding or counterclaim
brought in any such court shall be conclusive and binding upon the Company and
may be enforced in any other courts in the jurisdiction of which the Company is
or may be subject, by suit upon such judgment.
* * *
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If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
PHILADELPHIA SUBURBAN CORPORATION
By: /s/ Xxxxxxxx XxXxxxxxxxxx
----------------------------
Name: Xxxxxxxx XxXxxxxxxxxx
Title: Chairman, President and
Chief Executive Officer
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
XXXXXX X. XXXXX & CO., X.X.
XXXXXX XXXXXXXXXX XXXXX LLC
------------------------------------
By: Xxxxxx X. Xxxxx & Co., L.P.
XXXXXX X. XXXXX & CO., L.P.
By: /s/ T. Xxxxxxx Xxxxx, Xx.
--------------------------------
Name: T. Xxxxxxx Xxxxx, Xx.
Title: Principal
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SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm Shares
Underwriter to be Purchased
----------- ----------------------
Xxxxxx X. Xxxxx & Co., L.P. 780,000
Xxxxxx Xxxxxxxxxx Xxxxx LLC 520,000
----------
Total 1,300,000
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SCHEDULE II
SIGNIFICANT SUBSIDIARIES
Pennsylvania Suburban Water Company
Consumers Water Company
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