BOND PURCHASE AGREEMENT
$22,000,000
DELAWARE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
6.35% Water Facilities Revenue Bonds
due August 15, 2025
(Philadelphia Suburban Water Company Project)
Series of 1995
Bond Purchase Agreement dated August 24, 1995 among the
DELAWARE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY (the "Issuer"); PHILADELPHIA
SUBURBAN WATER COMPANY, a Pennsylvania corporation (the "Company"), and XXXX
XXXXX XXXX XXXXXX, INCORPORATED, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
(the "Underwriter").
1. Background.
(a) The Issuer proposes to enter into a Construction and
Financing Agreement (the "Financing Agreement") dated as of August 15, 1995 with
the Company, under which the Issuer will agree to loan to the Company funds to
provide financing of the costs of certain capital projects consisting of
improvements and additions to the Company's water facilities (the "Project
Facilities") located within municipalities in Delaware, Xxxxxxx, Bucks and
Xxxxxxxxxx Counties, Pennsylvania. To finance the loan under the Financing
Agreement, the Issuer proposes to issue and sell $22,000,000 aggregate principal
amount of the bonds identified above (the "Bonds") to the Underwriter, who will
in turn reoffer the Bonds for sale to the public;
(b) The Bonds will be issued pursuant to the Pennsylvania
Economic Development Financing Law, Act of August 23, 1967, P.L. 251, as amended
and supplemented (the "Act"), a resolution adopted by the Issuer on March 28,
1995 (the "Resolution") and under a Trust Indenture dated as of August 15, 1995
(the "Indenture") between the Issuer and PNC Bank, National Association, as
trustee (the "Trustee"). The Bonds will have such terms as set forth in Schedule
I attached hereto. The Bonds will be payable out of payments by the Company
under the Financing Agreement, including payments under its First Mortgage Bond,
in the principal amount of $22,000,000 (the "First Mortgage Bond") to be issued
concurrently with the Bonds pursuant to the Company's Indenture of Mortgage (the
"Original Indenture") dated as of January 1, 1941 to CoreStates Bank, N.A., as
trustee (the "Mortgage Trustee"), as heretofore amended and supplemented and as
to be further supplemented by a Thirtieth Supplemental Indenture (the "Thirtieth
Supplemental Indenture") dated as of August 15, 1995 (the Original Indenture as
so supplemented and amended is hereinafter referred to as the "First Mortgage
Indenture"). All of the Issuer's rights under the Financing Agreement to receive
and enforce repayment of its loan to the Company and to enforce payment of the
Bonds, including all of the Issuer's rights to the First Mortgage Bond, and all
of the Issuer's rights to moneys and securities in the Construction Fund, the
Debt Service Fund and the Revenue Fund established by the Indenture, except for
the Issuer's rights to reimbursement for expenses and indemnification thereunder
and rights relating to amendments of and notices under the Financing Agreement,
will be assigned to the Trustee as security for the Bonds pursuant to the
Indenture;
(c) The Project Facilities are intended to constitute
facilities for the furnishing of water for purposes of Section 142(a)(4) of the
Internal Revenue Code of 1986, as amended (the "Code"), so that the interest on
the Bonds will not be includable in gross income for federal income tax purposes
under the Code and the Underwriter may offer the Bonds for sale without
registration under the Securities Act of 1933, as amended (the "Securities Act
of 1933") or qualification of the Indenture under the Trust Indenture Act of
1939; and
(d) A Preliminary Official Statement dated July 14, 1995,
including the Appendices thereto and all documents incorporated therein by
reference (the "Preliminary Official Statement"), has been supplied to the
parties hereto, and a final Official Statement to be dated as of the date
hereof, including the Appendices thereto and all documents incorporated therein
by reference (the "Final Official Statement"), prepared for use in such offering
will be supplied to the parties hereto as soon as it is available subject to
Section 10 hereof. The Final Official Statement, as it may be amended or
supplemented with the consent of the Issuer, the Underwriter and the Company, is
hereinafter referred to as the "Official Statement".
2. Purchase, Sale and Closing. On the terms and conditions
herein set forth, the Underwriter will buy from the Issuer, and the Issuer will
sell to the Underwriter, the Bonds at a purchase price equal to 98.75% of the
principal amount thereof, plus interest accrued, if any, to the Closing date.
Payment shall be made in immediately available funds to the Trustee for the
account of the Issuer. Closing (the "Closing") will be at the offices of
Dilworth, Paxson, Xxxxxx & Xxxxxxxx, Philadelphia, Pennsylvania, at 10:00 a.m.,
Eastern Standard Time, on August 31, 1995, or at such other date, time or place
as may be agreed on by the parties hereto. The Bonds will be delivered in New
York, New York in the form of one typewritten bond maturing August 15, 2025,
registered in the name of Cede & Co., as nominee for The Depository Trust
Company.
The Underwriter agrees to make a bona fide public offering of
the Bonds at the initial offering prices or yields set forth in the Official
Statement; provided, however, the Underwriter reserves the right (and the Issuer
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and the Company hereby expressly acknowledge such right): (i) to make
concessions to dealers; (ii) to effect transactions that stabilize or maintain
the market price of the Bonds above that which might otherwise prevail in the
open market and to discontinue at any time such stabilizing transactions; and
(iii) to change such initial offering prices, all as the Underwriter shall deem
necessary in connection with the marketing of the Bonds.
3. Issuer's Representations. The Issuer makes the following
representations, all of which shall survive Closing, that:
(a) The Issuer is a body politic and corporate, duly
created and existing under the Constitution and laws of the Commonwealth of
Pennsylvania (the "Commonwealth"), and has, and at the date of Closing will
have, full legal right, power and authority to: (i) enter into this Bond
Purchase Agreement; (ii) execute and deliver the Indenture, the Financing
Agreement, this Bond Purchase Agreement and the other various documents required
in connection therewith (collectively, the "Issuer Financing Documents"); (iii)
issue, sell and deliver the Bonds to the Underwriter as provided herein; and
(iv) carry out and to consummate the transactions contemplated by the Issuer
Financing Documents and the Official Statement to be carried out and/or
consummated by it;
(b) The Preliminary Official Statement, as it pertains to
the Issuer, as of its date, was correct and complete in all material respects
and did not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading;
(c) The Official Statement as it pertains to the Issuer as
of its date is or will be correct and complete in all material respects and does
not or will not, with respect to the Issuer, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading;
(d) The Issuer has complied, and will at the Closing be in
compliance in all material respects, with the provisions of the Act;
(e) To the extent required by law, by official action of
the Issuer prior to or concurrently with the acceptance hereof, the Issuer has
duly authorized and approved the Preliminary Official Statement and the Official
Statement, and has duly authorized and approved the execution and delivery of,
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and the performance by the Issuer of the obligations on its part contained in
the Issuer Financing Documents;
(f) To the best of the knowledge of the officer of the
Issuer executing this Bond Purchase Agreement, the Issuer is not in material
breach of or in default under any applicable law or administrative regulation of
the Commonwealth or the United States; and the execution and delivery of the
Issuer Financing Documents, and compliance with the provisions of each thereof,
will not conflict with or constitute a breach of or default under any law,
administrative regulation, judgment, decree, loan agreement, note, resolution,
agreement or other instrument to which the Issuer is a party or is otherwise
subject;
(g) All approvals, consents and orders of any governmental
authority, board, agency or commission having jurisdiction which would
constitute a condition precedent to the Issuer's legal ability to issue the
Bonds or to the performance by the Issuer of its obligations hereunder and under
the Issuer Financing Documents have been obtained or will be obtained prior to
the Closing;
(h) The Bonds, when issued, authenticated and delivered in
accordance with the Indenture and sold to the Underwriter as provided herein,
will be validly issued, and will be valid and binding limited obligations of the
Issuer enforceable in accordance with their terms (except as an enforcement of
remedies may be limited by bankruptcy, insolvency, reorganization, moratorium or
other laws or legal or equitable principles affecting the enforcement of
creditors' rights ("Creditors' Rights Limitations"));
(i) The terms and provisions of the Issuer Financing
Documents will comply in all respects with the requirements of the Act;
(j) The terms and provisions of the Issuer Financing
Documents when executed and delivered by the respective parties thereto, will
constitute the valid, legal and binding obligations of the Issuer enforceable in
accordance with their respective terms (except as enforcement of remedies may be
limited by Creditors' Rights Limitations);
(k) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, public board or
body, pending or, to the knowledge of the Issuer, threatened against the Issuer,
affecting the existence of the Issuer or the titles of its officers to their
respective offices or seeking to prohibit, restrain or enjoin the sale, issuance
or delivery of the Bonds or the revenues or assets of the Issuer pledged or to
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be pledged to pay the principal of and interest on the Bonds, or the pledge
thereof, or in any way contesting or affecting the validity or enforceability of
the Issuer Financing Documents or contesting in any way the completeness or
accuracy of the Preliminary Official Statement or the Official Statement, or
contesting the power or authority of the Issuer with respect to the issuance of
the Bonds or the execution and delivery of the Issuer Financing Documents, nor,
to the knowledge of the Issuer, is there any meritorious basis therefor, wherein
an unfavorable decision, ruling or finding would materially adversely affect the
validity or enforceability of the Issuer Financing Documents; and
(l) The net proceeds received from the Bonds and applied in
accordance with the Indenture shall be used in accordance with the Act as
described in the Official Statement.
4. Company's Representations. The Company makes the
following representations, all of which will survive the Closing:
(a) The Company has not sustained since December 31, 1994
any material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree; and since the
respective dates as of which information is given in the Official Statement,
there have not been any material changes in the capital stock or long-term debt
of the Company or any material adverse change, or a development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company, otherwise than as set forth or contemplated in the Official
Statement;
(b) The Company has been duly organized and is existing as
a corporation under the laws of the Commonwealth, with power (corporate and
other) to own its properties and conduct its business as described in the
Official Statement;
(c) The First Mortgage Bond has been duly authorized, and,
when issued and delivered as contemplated by this Bond Purchase Agreement, will
have been duly executed, authenticated, issued and delivered and will constitute
a valid and legally binding obligation of the Company entitled to the benefits
provided by the First Mortgage Indenture;
(d) The Original Indenture has been duly authorized,
executed and delivered by the Company and the Mortgage Trustee, and the
Thirtieth Supplemental Indenture has been duly authorized. When the Thirtieth
Supplemental Indenture, in substantially the form approved by the Company, has
been executed and delivered by the Company and the Mortgage Trustee and recorded
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as required by law, the First Mortgage Indenture (i) will constitute a valid and
legally binding instrument enforceable in accordance with its terms except as
enforceability may be limited by Creditors' Rights Limitations, and (ii) will
constitute a direct, valid and enforceable first mortgage lien (except as
enforceability of such lien may be limited by Creditors' Rights Limitations),
upon all of the properties and assets of the Company (not heretofore released as
provided for in the First Mortgage Indenture) specifically or generally
described or referred to in the First Mortgage Indenture as being subject to the
lien thereof (which properties and assets constitute substantially all of the
Company's properties and assets other than securities), except for permitted
liens under the First Mortgage Indenture, and will create a similar lien upon
all properties and assets acquired by the Company after the execution and
delivery of the Thirtieth Supplemental Indenture and required to be subjected to
the lien of the First Mortgage Indenture pursuant thereto when so acquired
(which properties and assets will constitute substantially all of the Company's
properties and assets subsequently acquired other than securities), except for
permitted liens under the First Mortgage Indenture; the Original Indenture has
been, and the Thirtieth Supplemental Indenture will be duly filed, recorded or
registered in each place in the Commonwealth in which such filing, recording or
registration was or is required to protect and preserve the lien of the First
Mortgage Indenture; and all necessary approvals of regulatory authorities,
commissions and other governmental bodies having jurisdiction over the Company
required to subject to the lien of the First Mortgage Indenture, the mortgaged
property or trust estate (as defined in the First Mortgage Indenture) have been
duly obtained;
(e) The Company has good and marketable title in fee simple
to all of its real property, good and marketable title to all of its other
interests in real property (other than to certain rights of way, easements,
occupancy rights, riparian and flowage rights and real property interests of a
similar nature, the lack of good and marketable title to which in each case does
not interfere with the proper operation of its properties or the conduct of its
business) 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 Official Statement, the lien of the First Mortgage
Indenture, permitted liens under the First Mortgage Indenture or such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company; and any real
property and buildings held under lease by the Company 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;
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(f) The Company has all licenses, franchises, permits,
authorizations, rights, approvals, consents and orders of all governmental
authorities or agencies necessary for the ownership or lease of the properties
owned or leased by it and for the operation of the business carried on by it as
described in the Official Statement, and all water rights, riparian rights,
easements, rights of way and other similar interests and rights described or
referred to in the First Mortgage Indenture necessary for the operation of the
business carried on by it as described in the Official Statement, in each case
with such exceptions as are not material and do not interfere with the conduct
of the business of the Company; except as otherwise set forth in the Official
Statement, all such licenses, franchises, permits, orders, authorizations,
rights, approvals and consents are in full force and effect and contain no
unduly burdensome provisions; except as otherwise set forth in the Official
Statement, there are no legal or governmental proceedings pending or threatened
that would result in a material modification, suspension or revocation thereof;
and the Company has the legal power to exercise the rights of eminent domain for
the purposes of conducting its water utility operations;
(g) The issue and sale of the Bonds, the issue and delivery
of the First Mortgage Bond and the compliance by the Company with all of the
provisions of the Bonds, the First Mortgage Indenture, the Financing Agreement,
the Indenture, the Continuing Disclosure Agreement (as defined hereafter) and
this Bond Purchase Agreement will not conflict with or result in a breach of any
of the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance (other than the lien
of the First Mortgage Indenture) upon any of the property or assets of the
Company pursuant to the terms of any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a party or by
which the Company is bound or to which any of the property or assets of the
Company is subject, nor will such action result in a violation of the provisions
of the Articles of Incorporation, as amended, or the By-Laws of the Company 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 property; and no
consent, approval, authorization, order, registration or qualification of or
with any court or any such regulatory authority or other governmental body
(other than those already obtained) is required for the issue and sale of the
Bonds, the issue and delivery of the First Mortgage Bond or the consummation by
the Company of the other transactions contemplated by this Bond Purchase
Agreement or the First Mortgage Indenture;
(h) The Pennsylvania Public Utility Commission by order has
duly authorized the issuance and delivery of the First Mortgage Bond on terms
not inconsistent with this Bond Purchase Agreement;
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(i) The Company is not a holding company, a registered
holding company or an affiliate of a registered holding company within the
meaning of the Public Utility Holding Company Act of 1935, as amended;
(j) There are no legal or governmental proceedings pending
to which the Company is a party or of which any property of the Company is the
subject, other than as set forth in the Official Statement and other than
litigation incident to the kind of business conducted by the Company which, if
determined adversely to the Company, would not have a material adverse effect on
the financial position, stockholders' equity or results of operations of the
Company; and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others;
(k) (i) The Project Facilities consist of either land or
property of a character subject to depreciation for federal income tax purposes
and will be used to furnish water that is or will be made available to members
of the general public (including electric utility, industrial, agricultural, or
commercial users); (ii) the rates for the furnishing or sale of the water have
been established or approved by a State or political subdivision thereof, by an
agency or instrumentality of the United States, or by a public service or public
utility commission or other similar body of any State or political subdivision
thereof; and (iii) all other information supplied by the Company with respect to
the exclusion from gross income pursuant to Section 103 of the Code of the
interest on the Bonds is correct and complete;
(l) The Company has not, within the immediately
preceding ten years, defaulted in the payment of principal or interest on any of
its bonds, notes or other securities, or any legally authorized obligation
issued by it;
(m) The information with respect to the Company and the
Project Facilities and the descriptions of the Bonds, the Indenture, the
Financing Agreement, the First Mortgage Bond, the First Mortgage Indenture and
the Continuing Disclosure Agreement contained in the Official Statement
(including Appendix A and the information incorporated therein by reference) do
not contain an untrue statement of a material fact or omit to state a material
fact necessary to make such information and descriptions, in light of the
circumstances under which they were made, not misleading; and
(n) The Company will undertake, pursuant to the Continuing
Disclosure Agreement dated as of July 15, 1995 to be entered into between the
Company and the Trustee (the "Continuing Disclosure Agreement"), to provide
annual reports and notices of certain material events in accordance with Rule
15c2-12 under the Securities Exchange Act of 1934, as amended ("Rule 15c2-12").
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A description of this undertaking and the Continuing Disclosure Agreement is set
forth in the Preliminary Official Statement and will also be set forth in the
Final Official Statement.
5. Issuer's Covenants. The Issuer will:
(a) cooperate in qualifying the Bonds for offer and sale
under the Blue Sky laws of states designated by the Underwriter, provided that
the Issuer shall not be required to qualify to do business or consent to service
of process in any state or jurisdiction other than the Commonwealth and the
Issuer's out-of-pocket costs in respect thereof are paid by the Company or are
otherwise provided for; and
(b) refrain from knowingly taking any action with regard to
which the Issuer may exercise control that would result in the loss of the
exclusion from gross income for federal income tax purposes of interest on the
Bonds referred to under the caption "Tax Matters" in the Official Statement.
6. Company's Covenants. The Company agrees that it will:
(a) refrain from taking any action, or from permitting any
action, with regard to which the Company may exercise control, to be taken, that
would result in the loss of the exclusion from gross income for federal tax
purposes of interest on the Bonds; and
(b) indemnify the Issuer, its members, directors, officers
and employees and the Underwriter, its officers, directors, officials, employees
and each person, if any, who controls the Underwriter within the meaning of
Section 15 of the Securities Act of 1933 (collectively, "Indemnified Parties")
against claims asserted against them in connection with the offering and sale of
the Bonds (i) on the ground that the Preliminary Official Statement or the
Official Statement (except for the information relating to the Issuer under the
caption "The Authority," information under the captions "Underwriting," "The
1995 Bonds - Book-Entry-Only System" and "Bond Insurance" and in Appendix E, and
any information furnished in writing by the Underwriter specifically for use
therein) contains an alleged untrue statement of material fact or an alleged
omission to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made, or (ii)
arising by virtue of the failure to register the Bonds under the Securities Act
of 1933, or to qualify the Indenture under the Trust Indenture Act of 1939.
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7. Underwriter's Covenants. By acceptance hereof the
Underwriter agrees to indemnify and hold harmless the Issuer, its members,
officers, directors and employees and the Company, its officers, directors and
employees, and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act of 1933 (collectively, "Indemnified
Parties") against claims, losses, damages, liabilities and expenses asserted
against them, or any of them, in connection with (i) the offering and sale of
the Bonds on the grounds that the information under the caption "Underwriting"
or the information furnished by the Underwriter in writing specifically for use
in the Preliminary Official Statement or the Official Statement contains an
untrue statement of a material fact or omits to state any material fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, or (ii) failure on the part of the
Underwriter to deliver an Official Statement to any purchaser; and will
reimburse any legal or other expenses reasonably incurred by an Indemnified
Party in connection with investigating or defending any such loss, claim,
damage, liability or action. This indemnity agreement will be in addition to any
liability which the Underwriter may otherwise have. The Underwriter shall not be
liable for any settlement of any such action effected without its consent.
8. Notice of Indemnification; Settlement. Promptly after
receipt by an Indemnified Party of notice of the commencement of any action
against an Indemnified Party hereunder in respect of which indemnity is to be
sought against the Company or the Underwriter, as the case may be (the
"Indemnifying Party"), such Indemnified Party will notify the Indemnifying Party
in writing of such action and the Indemnifying Party may assume the defense
thereof, including the employment of counsel and the payment of all expenses;
but the omission so to notify the Indemnifying Party will not relieve the
Indemnifying Party from any liability which it may have to any Indemnified Party
otherwise than hereunder. The Indemnifying Party shall not be liable for any
settlement of any such action effected without its consent, but if settled with
the consent of the Indemnifying Party or if there is a final judgment for the
plaintiff in any such action, the Indemnifying Party will indemnify and hold
harmless any Indemnified Party from and against any loss or liability by reason
of such settlement or judgment. The indemnity agreements contained in this Bond
Purchase Agreement shall include reimbursement for expenses reasonably incurred
by an Indemnified Party in investigating the claim and in defending it if the
Indemnifying Party declines to assume the defense and shall survive delivery of
the Bonds.
9. Equitable Contribution. If the indemnification provided for
in Section 6(b) is unavailable to the Underwriter (or any controlling person
thereof) in respect of any losses, claims, damages or liabilities referred to
therein, then the Company shall, in lieu of indemnifying the Underwriter,
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contribute to the amount paid or payable by the Underwriter as a result of such
losses, claims, damages or liabilities in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Underwriter,
respectively, from the offering of the Bonds. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then the Company shall contribute to such amount paid or payable by the
Underwriter in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the
Underwriter, respectively, in connection with the statements or omission which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefit received by the Company
or the Underwriter shall be deemed to be in the same proportion as the total
proceeds from the offering (before deducting issuance costs and expenses other
than underwriting fees and commissions) received by the Company, on the one
hand, bear to the total underwriting fees and commissions received by the
Underwriter, on the other hand. 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
related to information supplied by the Company or the Underwriter and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriter
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 9. The amount paid or payable by the Underwriter as a
result of the losses, claims, damages or liabilities referred to above in this
Section 9 shall be deemed to include any legal or other expenses reasonably
incurred by the Underwriter in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 9, the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Bonds underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which the Underwriter has otherwise been required to pay by reason of
such untrue or allegedly untrue statement or omission or alleged omission.
10. Official Statement; Public Offering.
(a) In order to enable the Underwriter to comply with Rule
15c2-12 (i) the Company has prepared or caused the preparation of the
Preliminary Official Statement, which the Company and the Issuer (but only with
respect to the information therein with respect to the Issuer under the headings
"The Authority," "Introductory Statement" and "Absence of Material Litigation")
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deem final and complete as of its date; (ii) the Company shall provide to the
Underwriter sufficient copies of the Official Statement in sufficient time to
accompany any confirmation that requires payment from any customer and in any
event within seven business days after the date of this Bond Purchase Agreement;
and (iii) the Company agrees to notify the Underwriter of any developments that
would render the Official Statement misleading in any material respect during
the period that the Official Statement is required to be delivered in connection
with the sale of the Bonds and for a period of 25 days thereafter. The Issuer
and the Company hereby authorize the use of the Preliminary Official Statement
and the Official Statement by the Underwriter in connection with the offering of
the Bonds.
(b) After the Closing, and until the Underwriter has
informed the Issuer and the Company that the Underwriter has sold all the Bonds,
the Issuer and the Company will not adopt or distribute any amendment of or
supplement to the Final Official Statement, except with the prior written
consent of the Underwriter; and if any event relating to or affecting the
Issuer, the Company or the Bonds shall occur, the result of which shall make it
necessary, in the reasonable opinion of the Underwriter, to amend or supplement
the Official Statement in order to make it not misleading in light of the
circumstances existing at that time, the Company shall forthwith prepare, and
the Company shall approve for distribution, a reasonable number of copies of an
amendment of or supplement to the Official Statement, in form and substance
satisfactory to the Underwriter, so that the Official Statement then will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances existing
at that time, not misleading. The Issuer shall cooperate with the Company in the
issuance and distribution of any such amendment or supplement.
(c) The Underwriter agrees to promptly provide a nationally
recognized municipal securities information repository and the Municipal
Securities Rulemaking Board ("MSRB") with a copy of the Final Official Statement
for filing in accordance with Rule 15c2-12.
11. Conditions of Underwriter's Obligations. The Underwriter's
obligations to purchase and pay for the Bonds and the Issuer's obligation to
issue and deliver the Bonds are subject to fulfillment of the following
conditions at or before Closing:
(a) The representations of the Issuer and the Company
herein shall be true on and as of the date of the Closing and shall be confirmed
by appropriate certificates at Closing;
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(b) Neither the Issuer nor the Company shall be in default
in the performance of any of their respective covenants herein;
(c) The Underwriter shall have received:
(i) Opinions of Dilworth, Paxson, Xxxxxx & Xxxxxxxx,
Bond Counsel, dated the date of Closing, in the forms attached as
Exhibits A and B hereto, addressed to the Issuer, the Trustee and
the Underwriter;
(ii) An opinion of Lastowka & Xxxxxxx, P.C., counsel
for the Issuer, dated the date of Closing with respect to the
matters set forth in Exhibit C hereto, addressed to the Trustee
and the Underwriter;
(iii) Opinions of Dilworth, Paxson, Xxxxxx & Xxxxxxxx
and Company Counsel, dated the date of Closing, in the forms
attached as Exhibit D hereto, addressed to the Underwriter and
the Issuer and, in the case of the opinion of Company Counsel, to
Bond Counsel;
(iv) An opinion of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll,
counsel for the Underwriter, in form and substance satisfactory
to the Underwriter;
(v) An opinion of counsel to Financial Guaranty
Insurance Company ("FGIC"), in form and substance satisfactory to
the Underwriter, relating to the enforceability of the Municipal
Bond New Issue Insurance Policy and the information concerning
FGIC in the Official Statement;
(vi) An agreed upon procedures letter dated the date of
Closing, from KPMG Peat Marwick LLP, the Company's independent
certified public accountants, with respect to the Official
Statement, in form satisfactory to the Underwriter;
(vii) A certificate dated the date of Closing executed
by the Chairman of the Issuer to the effect that:
(A) the representations, warranties and covenants
of the Issuer contained herein, to the best of the knowledge
of such Chairman, are true and correct in all material
respects on and as of the date of Closing with the same
effect as if made on the date of Closing; and
(B) to the best of the knowledge of such Chairman,
the Issuer has complied in all material respects with all
agreements and satisfied in all material respects all of the
13
conditions on its part to be performed or satisfied at or
prior to the Closing;
(viii) A certificate dated the date of Closing executed
by the chief financial officer of the Company to the effect that:
(A) the representations and warranties of the
Company in this Bond Purchase Agreement are true and correct
in all material respects as of the date of Closing;
(B) the Preliminary Official Statement and the
Official Statement, as of their respective dates, insofar as
they relate to the Company do not contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading; and
(C) no event affecting the Company occurred since
the date of the Bond Purchase Agreement which is required to
be disclosed in the Official Statement in order to make the
statements and information therein not misleading in any
material respect;
(ix) Two executed copies of the Indenture, the
Financing Agreement, the Bond Purchase Agreement, the Thirtieth
Supplemental Indenture and the Continuing Disclosure Agreement;
(x) Two copies of the Articles of Incorporation and
By-laws of the Company, as amended to the date of Closing, and of
the resolutions of the Board of Directors of the Company
authorizing and approving the execution and delivery of this Bond
Purchase Agreement, the Financing Agreement, the First Mortgage
Bond, the Thirtieth Supplemental Indenture, the Continuing
Disclosure Agreement and the incurrence of indebtedness with
respect thereto and all transactions described in the Official
Statement and contemplated by this Bond Purchase Agreement, all
certified by its Secretary or Assistant Secretary;
(xi) Two copies of the Resolution;
(xii) A letter from KPMG Peat Marwick dated the date of
Closing and addressed to the Underwriter consenting to the use of
the financial statements prepared by such firm and all references
to such firm contained in the Preliminary Official Statement and
the Official Statement;
14
(xiii) Evidence of the issuance of the Municipal Bond
New Issue Insurance Policy by FGIC which unconditionally and
irrevocably guarantees the payment when due of the principal of
and interest on the 1995 Bonds;
(xiv) Evidence satisfactory to the Underwriter of a
rating of "AAA" assigned by Standard & Poor's and a rating of
"AAA" assigned by Fitch Investors Service, Inc., and that such
ratings are in full force and effect as of the date of Closing;
and
(xv) Such additional documentation as the Underwriter
or its counsel or Bond Counsel may reasonably request to evidence
compliance with applicable law and the validity of the Bonds, the
Financing Agreement, the Indenture, this Bond Purchase Agreement,
the First Mortgage Indenture, the First Mortgage Bond and the
Continuing Disclosure Agreement, and to evidence that the
interest on the Bonds is not includable in gross income under the
Code and the status of the offering under the Securities Act of
1933 and the Trust Indenture Act of 1939.
(d) At Closing there shall not have been any material
adverse change in the financial condition of the Company or any adverse
development concerning the business or assets of the Company which would result
in a material adverse change in the prospective financial condition or results
of operations of the Company from that described in the Official Statement
which, in the judgment of the Underwriter, makes it inadvisable to proceed with
the sale of the Bonds; and the Underwriter shall have received certificates of
the Company certifying that no such material adverse change has occurred or, if
such a change has occurred, full information with respect thereto; and
(e) The Underwriter shall deliver at Closing a certificate
in form acceptable to Bond Counsel to the effect that the Underwriter has sold
to the public (excluding bond houses and brokers) a substantial amount of the
Bonds at initial offering prices no higher than, or yields no lower than, those
shown on the cover page of the Official Statement and that such certificate may
be relied upon for purposes of determining compliance with Section 148 of the
Code.
12. Events Permitting the Underwriter to Terminate. The
Underwriter may terminate its obligation to purchase the Bonds at any time
before Closing if any of the following occurs:
(a) A legislative, executive or regulatory action or
proposed action or a court decision which, in the judgment of the Underwriter,
casts sufficient doubt on the legality of, or the exclusion from gross income
for federal income tax purposes of interest on obligations such as the Bonds so
15
as to materially impair the marketability or materially lower the market price
thereof; or
(b) Any action by the Securities and Exchange Commission or
a court which would require registration of the Bonds or the First Mortgage Bond
under the Securities Act of 1933 or qualification of the Indenture under the
Trust Indenture Act of 1939; or
(c) Any general suspension of trading in securities on the
New York Stock Exchange or the establishment, by the New York Stock Exchange, by
the Securities and Exchange Commission, by any federal or state agency, or by
the decision of any court, of any limitation on prices for such trading, or any
outbreak of hostilities or other national or international calamity or crisis,
or any material escalation in any such hostilities, calamity or crisis, the
effect of which on the financial markets of the United States shall be such as
to make it impracticable for the Underwriter to enforce contracts for the sale
of the Bonds; or
(d) Any event or condition which, in the reasonable
judgment of the Underwriter, renders untrue or incorrect, in any material
respect as of the time to which the same purports to relate, the information
contained in the Official Statement, or which requires that information not
reflected in the Official Statement or Appendices thereto should be reflected
therein in order to make the statements and information contained therein not
misleading in any material respect as of such time; provided that the Issuer,
the Company and the Underwriter will use their best efforts to amend or
supplement the Official Statement to reflect, to the satisfaction of the
Underwriter, such changes in or additions to the information contained in the
Official Statement; or
(e) pending or threatened litigation affecting or arising
out of the ownership of the Project Facilities or any other facilities of the
Company or the issuance of the Bonds which in the reasonable judgment of the
Underwriter would materially impair the marketability or materially lower the
market price of the Bonds; or
(f) Sufficient quantities of the Official Statement are not
delivered to the Underwriter in a timely manner as required by Section 10
hereof.
If the Underwriter terminates its obligation to purchase the
Bonds because any of the conditions specified in Section 11 or this Section 12
shall not have been fulfilled at or before the Closing, such termination shall
not result in any liability on the part of the Issuer, the Underwriter, or,
16
except for the payment of such costs of issuance described in Section 13 hereof
which are due and payable, the Company.
13. Expenses. All expenses and costs of the authorization,
issuance, sale and delivery of the Bonds including, without limitation, the
preparation of and furnishing to the Underwriter of the Preliminary Official
Statement and the Official Statement, the preparation and execution of the
Bonds, the Financing Agreement, the Indenture, the First Mortgage Bond, the
Thirtieth Supplemental Indenture and this Bond Purchase Agreement, rating agency
fees, the issuance and closing fees of the Issuer, the fees and disbursements of
Bond Counsel, the fees and disbursements of counsel to the Underwriter and the
expenses incurred in connection with qualifying the Bonds for sale under the
securities laws of various jurisdictions and preparing Blue Sky and legal
investment memoranda shall be paid by the Company as provided in this Bond
Purchase Agreement. The Issuer shall bear no out-of-pocket expense in connection
with the transactions contemplated by this Bond Purchase Agreement. The
Underwriter will pay all other expenses of the Underwriter in connection with
the public offering of the Bonds.
14. Execution in Counterparts. This Bond Purchase Agreement
may be executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and any of the parties hereto may
execute this Bond Purchase Agreement by signing any such counterpart.
15. Notices and Other Actions. All notices, requests, demands
and formal actions hereunder will be in writing mailed, telegraphed or delivered
to:
The Underwriter:
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, III
Vice President
The Company:
Philadelphia Suburban Water Company
000 Xxxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Senior Vice President and Treasurer
17
The Issuer:
Delaware County Industrial Development
Authority
00 Xxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
16. Governing Law. This Bond Purchase Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania and may not be assigned by the Issuer, the Company or the
Underwriter.
17. Successors. This Bond Purchase Agreement will inure to the
benefit of and be binding upon the parties and their respective successors and,
as to Sections 6 and 7 above, the directors, officers, employees and agents of
the Issuer, and will not confer any rights upon any other person. The term
"successor" shall not include any holder of any Bonds merely by virtue of such
holding.
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IN WITNESS WHEREOF, the Issuer, the Company and the
Underwriter have caused their duly authorized representatives to execute and
deliver this Bond Purchase Agreement as of the date first written above.
DELAWARE COUNTY INDUSTRIAL
DEVELOPMENT AUTHORITY
By: Xxxxx Xxxxxx
---------------------------------
Chairman
PHILADELPHIA SUBURBAN WATER
COMPANY
By: Xxxxxxx X. Xxxxxx
---------------------------------
Senior Vice President-Finance
Treasurer
XXXX XXXXX XXXX XXXXXX, INCORPORATED
By: Xxxxxx Xxxxxx
---------------------------------
Vice President
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SCHEDULE I
Terms of Bonds
Day to Date: August 15, 1995
Maturity Date: August 15, 2005
Interest Payment Dates: February 15 and February 15,
commencing February 15, 1996
Rate of Interest: 6.35%
Redemption provisions:
The Bonds are subject to redemption as follows:
Optional Redemption. The Bonds are subject to redemption prior
to maturity at the option of the Issuer, upon direction of the Company, on or
after August 15, 2005, as a whole or in part at any time, at the redemption
prices (stated as a percentage of the principal amount) set forth below, plus
interest accrued to the date fixed for redemption.
Optional Redemption Periods (inclusive) Redemption Prices
--------------------------------------- -----------------
August 15, 2005 through August 14, 2006 102%
August 15, 2006 through August 14, 2007 101
August 15, 2007 and thereafter 100
Extraordinary Optional Redemption. The Bonds are subject to
redemption at the option of the Company as a whole at any time prior to maturity
at a redemption price of 100% of the principal amount thereof plus accrued
interest to the redemption date upon the occurrence of the following events:
(a) the Project Facilities are partially or totally damaged or
destroyed by fire or other casualty and the Company determines within sixty (60)
days after such damage or destruction that satisfactory restoration of the
Project Facilities may not be made; or
(b) all or substantially all of the Project Facilities are
taken or condemned as a whole by a public body in the exercise of its power of
eminent domain, or any portion of the Project Facilities are so taken or
condemned and the Company determines that the remaining portion of the Project
Facilities is unsuitable for the Company's business; or
(c) if changes in the economic availability or raw materials,
operating supplies, labor or facilities necessary for the operation of the
Facilities or the water supply and distribution system of which they are part as
an efficient facility or technological or other changes shall have occurred
which, in the Company's opinion, render the Facilities or such system
uneconomical for their intended purposes.
Schedule I-2
