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PHILADELPHIA SUBURBAN CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
FEBRUARY __, 1998
X.X. Xxxxxxx & Sons, Inc.
Xxxxxx X. Xxxxx & Co., L.P.
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
As the Representatives of the
several Underwriters named in
Schedule I hereto
Ladies and Gentlemen:
PHILADELPHIA SUBURBAN CORPORATION, a Pennsylvania corporation (the
COMPANY), hereby confirms its agreement with the several Underwriters, for whom
you are acting as representatives (the REPRESENTATIVES), as follows:
1. Purchase and Sale.
(a) Firm Shares. Upon the basis of the representations and
warranties herein contained, and subject to the terms and conditions herein set
forth, the Company agrees to sell to each of the several firms or corporations
named in Schedule I hereto and any firm or corporation substituted as provided
in Section 3(e) hereof as if such firm or corporation had originally been a
party to this Agreement (each, an UNDERWRITER) and such Underwriter agrees, at
the time and place herein specified, severally and not jointly, to purchase from
the Company, the respective number of shares of Common Stock, par value $.50 per
share, of the Company (the COMMON STOCK) set forth opposite such Underwriter's
name on Schedule I hereto (the FIRM SHARES) at a purchase price of $[__] per
share (the PURCHASE PRICE).
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(b) Option Shares. Upon the basis of the representations and
warranties herein contained, and subject to the terms and conditions herein set
forth, the Company agrees to sell to the respective Underwriters named in
Schedule I hereto and the Underwriters have an option to purchase, severally and
not jointly, from the Company (the "Option") not more than an additional 150,000
shares of Common Stock (the "Option Shares") at the Purchase Price minus, if an
Option Closing Date (as defined in Section 3(c) hereof) with respect to the
delivery and payment of any Option Shares occurs after the date fixed for the
determination of stockholders entitled to receive the next dividend payable on
shares of Common Stock, an amount equal to such dividend per share of such
Option Shares, provided such Option Closing Date is after the Firm Closing Date
(as defined in Section 3(b) hereof). Option Shares may be purchased as provided
herein solely for the purpose of covering over-allotments made in connection
with the public offering of the Firm Shares. If any Option Shares are to be
purchased, each of the Underwriters agrees, severally and not jointly, to
purchase the number of Option Shares that bears the same proportion to the total
number of Option Shares to be purchased as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto bears to the total
number of Firm Shares. The Option may be exercised, in whole or in part from
time to time, within the period of 30 days from the date hereof, by written
notice from the Representatives, on behalf of the Underwriters, to the Company
(the OPTION NOTICE). The Option Notice shall set forth the aggregate number of
Option Shares as to which the Option is being exercised and the date of delivery
of, and payment for, such Option Shares pursuant to Section 3(c) hereof. As used
herein, the term SECURITIES shall mean, collectively, the Firm Shares and Option
Shares.
2. Representations and Warranties of Company. The Company
represents and warrants to, and covenants and agrees with, the several
Underwriters that:
(a) Filing of Registration Statement and any Preliminary
Prospectus with Commission. The Company meets the requirements for use of Form
S-3 under the Securities Act of 1933, as amended (the 1933 ACT), and has
transmitted for filing to the Securities and Exchange Commission (the SEC) the
Registration Statement (as defined below) and each Preliminary Prospectus (as
defined below) relating to the Securities, if any, required to be filed pursuant
to Rule 424(a) or (b) under the 1933 Act; and the Registration Statement has
been declared effective by the SEC under the 1933 Act and complies in all
material respects with Rule 430A. For purposes of this Agreement, the following
terms used herein shall have the following meanings: (i) REGISTRATION STATEMENT
shall mean the registration statement on Form S-3 (No. 333-44271) filed by the
Company with the SEC for the registration under the 1933 Act of the Securities,
as amended and supplemented to the date of this Agreement and including the
exhibits thereto, and shall be deemed to include the Incorporated Documents (as
defined below); (ii) INCORPORATED DOCUMENTS shall mean the documents filed by
the Company with the SEC under the Securities Exchange Act of 1934, as amended
(the 1934 ACT), that are, or are deemed to be, incorporated by reference in the
Prospectus (as defined herein) pursuant to Item 12 of Form S-3 under the 1933
Act; (iii) PRELIMINARY PROSPECTUS shall mean (A) any prospectus included in the
Registration Statement prior to the initial Effective Date (as defined below)
used in connection with the offering and sale of the Securities (other than
making confirmations of sales of the Securities), as such prospectus may at any
time be amended or modified (whether or
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not transmitted for filing pursuant to Rule 424(a) or (b) under the 1933 Act),
or (B) any amendment or supplement to such prospectus used in connection with
the offering and sale of the Securities (other than making confirmations of
sales of the Securities) transmitted for filing to the SEC pursuant to Rule
424(a) or (b) under the 1933 Act, and shall in each case be deemed to include
the Incorporated Documents; and (iv) EFFECTIVE DATE shall mean the date or time
that the Registration Statement or any post-effective amendment thereto was
declared effective by the SEC under the 1933 Act. For purposes of this
Agreement, the words "amend," "amendment," "amended," "supplement" or
"supplemented" with respect to the Registration Statement or the Prospectus
shall mean (i) amendments or supplements to the Registration Statement or the
Prospectus, and (ii) Incorporated Documents, in each case filed with the SEC or
sent to prospective purchasers of the Securities after the date of this
Agreement and prior to the completion of the distribution of the Securities.
(b) Registration Statement; Prospectus; Incorporated
Documents. (i) The Registration Statement, at the Effective Date, any
Preliminary Prospectus, at the time it is transmitted for filing to the SEC
pursuant to Rule 424(a) or (b) under the 1933 Act and when delivered to the
Underwriters for their use in marketing the Securities, and the Prospectus, at
the time it is transmitted for filing to the SEC pursuant to Rule 424(b) under
the 1933 Act and when delivered to the Underwriters for their use in making
confirmations of sales of the Securities, complied and will comply, as the case
may be, in all material respects with the applicable requirements of the 1933
Act and the rules and regulations of the SEC thereunder; (ii) the Registration
Statement, at the Effective Date, did not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; (iii) the Prospectus,
at the time it is transmitted for filing to the SEC pursuant to Rule 424(b)
under the 1933 Act and when delivered to the Underwriters for their use in
making confirmations of sales of the Securities, will not and any Preliminary
Prospectus, at the time it is transmitted for filing to the SEC pursuant to Rule
424(a) or (b) under the 1933 Act and when delivered to the Underwriters for
their use in marketing the Securities, did not include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and (iv) each Incorporated Document, at the time it is
transmitted for filing to the SEC pursuant to the 1934 Act, complied and will
comply, as the case may be, in all material respects with the applicable
requirements of the 1934 Act and the rules and regulations of the SEC
thereunder; provided, however, that, in the case of clauses (i), (ii) and (iii)
above, the Company makes no representation or warranty as to information
furnished in writing to the Company by any Underwriter through the
Representatives expressly for use in the Prospectus, which for purposes of this
Agreement shall be deemed to consist solely of (x) the statements with respect
to the delivery of the Securities in the last paragraph on the cover page of the
Prospectus, (y) the stabilization legend on the inside front cover page of the
Prospectus, and (z) the statements in the third, fifth and sixth paragraphs
under the caption "Underwriting" in the Prospectus (collectively, the
UNDERWRITER INFORMATION). For purposes of this Agreement, PROSPECTUS shall mean
the prospectus included in the Registration Statement at the initial Effective
Date, as such prospectus may at any time be amended or supplemented by the
addition of (i) the information omitted in reliance on Rule 430A under the 1933
Act and contained in the prospectus as first transmitted for filing to the SEC
pursuant to Rule 424(b) under the 1933 Act,
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and (ii) except for purposes of subsection (f) of Section 5, any Incorporated
Documents filed with the SEC after the Effective Date.
(c) Securities. The Securities have been duly and validly
authorized, and when issued and delivered against payment therefor as provided
herein, will be validly issued and fully paid and non-assessable and entitled to
the rights set forth in the Company's Articles of Incorporation, as it may be
amended (the Charter); other than as set forth in the Prospectus, there are no
preemptive rights or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any shares of Common Stock pursuant
to the Charter or Bylaws (the ORGANIZATIONAL DOCUMENTS) of the Company, or other
agreement or instrument to which the Company is a party or by which it is bound
or to which any of the property of the Company is subject; and the Common Stock,
including the Securities, and the Shareholders Rights Plan (as defined in the
Prospectus) each conforms in all material respects to the description thereof
contained in the Prospectus.
(d) Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and is a valid and legally binding
agreement of the Company enforceable against the Company in accordance with its
terms, except as may be limited by (i) bankruptcy, insolvency, fraudulent
conveyance, reorganization and other similar laws relating to or affecting
creditors' rights generally, (ii) general equitable principles (whether
considered in a proceeding in equity or at law) and (iii) requirements of
reasonableness, good faith and fair dealing (such exceptions, collectively, the
EXCEPTIONS).
(e) Due Incorporation and Qualification. The Company has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the Commonwealth of Pennsylvania, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus and to execute and deliver, and perform its
obligations under, this Agreement; PSWC (as hereinafter defined) has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the Commonwealth of Pennsylvania, with power and authority (corporate
and other) to own its properties and conduct its business as described in the
Prospectus; and the Company and PSWC are each duly qualified as a foreign
corporation to transact business and each is in good standing in each
jurisdiction in which it owns or leases substantial properties or in which the
conduct of its business requires such qualification, except where the failure to
so qualify would not have a material adverse effect on the financial condition
of the Company and PSWC taken as a whole and would not subject the Company or
PSWC to any material liability or disability. Pursuant to the Exchange Act and
the rules and regulations thereunder, Philadelphia Suburban Water Company (PSWC)
is the only subsidiary of the Company required to be listed in an exhibit to the
Company's Annual Report on Form 10-K which is incorporated by reference into the
Registration Statement. All the outstanding shares of capital stock of PSWC have
been duly authorized and validly issued, are fully paid and non-assessable, and
are beneficially owned by the Company free and clear of any lien, adverse claim,
security interest, equity, or other encumbrance.
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(f) Material Changes or Transactions. Neither the Company nor
PSWC has sustained since December 31, 1996 any material loss or interference
with its business from fire, explosion, flood or other calamity, or from any
labor dispute or court or governmental action, order or decree, otherwise than
as set forth in the Prospectus; and, since the respective dates as of which
information is given in the Prospectus, there has not been any change in the
capital stock (other than pursuant to any stock purchase, dividend reinvestment,
savings bonus, incentive, or similar plan or exercise of outstanding stock
options) or material increase in short-term debt or long-term debt of the
Company or PSWC or any material adverse change, or any development which could
reasonably be expected to involve a prospective material adverse change, in or
affecting the general affairs, management, financial position, stockholders'
equity or results of operations of the Company and PSWC taken as a whole,
otherwise than as set forth in the Prospectus.
(g) No Conflicts; No Consents Required. The offering and sale
of the Securities and the compliance by the Company with all of the provisions
of this Agreement, and the consummation of the transactions herein contemplated,
will not conflict with or result in a breach or violation of any of the material
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument to which
the Company or PSWC is a party or by which the Company or PSWC is bound or to
which any of the property or assets of the Company or PSWC is subject, nor will
such action result in any violation of the provisions of the Company's
Organizational Documents or any statute, rule, regulation or other law
applicable to the Company or PSWC, or any order or judgment of any court or
governmental agency or body having jurisdiction over the Company or PSWC or any
of their respective properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency
or body is required for the issue and sale of the Securities or the consummation
by the Company of the transactions contemplated by this Agreement, except such
as have been, or will be prior to the Firm Closing Date, obtained under the 1933
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by the
Underwriters.
(h) Capital Stock. The Company has an authorized
capitalization as set forth in the Prospectus and all of the issued shares of
capital stock of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable; and all of the issued shares of capital
stock of PSWC have been duly and validly authorized and issued, are fully paid
and non-assessable and, except as otherwise set forth in the Prospectus, are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(i) No Defaults. The Company is not in violation of the
Organizational Documents and neither the Company nor PSWC is in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement,
lease or other material agreement or instrument to which either is a party or by
which either is bound or to which any of the property or assets of either is
subject. Neither the Company nor PSWC has incurred any liability or obligation,
direct
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or contingent, or entered into any transaction, not in the ordinary course of
business, that is material to the Company and PSWC taken as a whole.
(j) Litigation. Other than as set forth in the Prospectus,
there are no legal or governmental proceedings pending to which the Company or
PSWC is a party or of which any property of the Company or PSWC is the subject
that, if determined adversely to the Company or PSWC, would individually or in
the aggregate reasonably be expected to have a material adverse effect on the
current or future consolidated financial position, stockholders' equity or
results of operations of the Company and PSWC taken as a whole; and, to the
Company's knowledge, no such proceedings are threatened or contemplated.
(k) 1940 Act. The Company is not and, after giving effect to
the offering and sale of the Securities, will not be an "investment company" or
an entity "controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended (the 1940 ACT).
(l) Independent Public Accountants. KPMG Peat Marwick LLP (the
ACCOUNTANTS), who have audited certain financial statements of the Company and
PSWC, are independent public accountants as required by the 1933 Act and the
rules and regulations of the SEC thereunder.
(m) No Right to Require Registration. No holder of any
security of the Company has any right to require registration of shares of
Common Stock or any other security of the Company because of the filing of the
Registration Statement or consummation of the transactions contemplated by this
Agreement.
(n) Notification of SEC Requests or Stop Orders; Notification
of Change in Condition. The Company will advise the Representatives promptly
and, if requested by the Representatives, will confirm such advice in writing:
(i) of any request by the SEC for amendment of the Registration Statement, any
Preliminary Prospectus or the Prospectus or for additional information; (ii) of
the issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Securities
for offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) until the earlier of (x) notification from the
Representatives that the distribution of the Securities has been completed, and
(y) 60 days following the date hereof, of any change in the Company's condition
(financial or other), business, prospects, properties, net worth or results of
operations, or of the happening of any event, which makes any statement of a
material fact made in the Registration Statement or the Prospectus (as then
amended) untrue or which requires the making of any additions to or changes in
the Registration Statement or the Prospectus (as then amended) in order to state
a material fact required by the Act or the regulations thereunder to be stated
therein or necessary in order to make the statements therein not misleading, or
of the necessity to amend the Prospectus (as then amended) to comply with the
Act or any other law. If at any time the SEC shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will
make every reasonable effort to obtain the withdrawal of such order at the
earliest possible time.
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3. Offering; Delivery of Securities; Defaulting Underwriters.
(a) Offering. The Company is advised by the Representatives
that the Underwriters propose to make a public offering of their respective
portions of the Securities as soon after the effectiveness of this Agreement as
in their judgment is advisable. The Company is further advised by the
Representatives that the Securities will be offered to the public at the initial
public offering price specified in the Prospectus as amended.
(b) Delivery of Firm Shares. Delivery of the Firm Shares,
against payment of the Purchase Price in immediately available funds by wire
transfer, shall be made prior to 1:00 P.M. New York City time on February __,
1998 to the Underwriters or at such other time and date as may be agreed upon by
the Company and the Representatives. Delivery of the documents required by
Section 5 hereof shall be made at such time and date at the offices of Winthrop,
Stimson, Xxxxxx & Xxxxxxx, Xxx Xxxxxxx Xxxx Xxxxx, Xxx Xxxx, XX 00000, or at
such other location as may be agreed upon in writing by the Company and the
Representatives. For purposes of this Agreement, FIRM CLOSING DATE shall mean
the hour and date of such delivery and payment.
(c) Delivery of Option Shares. If any Option Shares are to be
purchased, delivery of such Option Shares, against payment of the Purchase Price
in immediately available funds by wire transfer, shall be made prior to 1:00
P.M. New York City time on the date (which may be the same as the Firm Closing
Date but shall in no event be earlier than the Firm Closing Date nor later than
three business days after the giving of the Option Notice) specified in the
Option Notice, to the Underwriters or at such other time and date as may be
agreed upon in writing by the Company and the Representatives. Delivery of the
documents required by Section 5 hereof shall be made at such time and date at
the offices of Winthrop, Stimson, Xxxxxx & Xxxxxxx, Xxx Xxxxxxx Xxxx Xxxxx, Xxx
Xxxx, XX 00000, or at such other location as may be agreed upon by the Company
and the Representatives. For purposes of this Agreement, OPTION CLOSING DATE
shall mean the hour and date of such delivery and payment.
(d) Certificates for Securities. The certificates for the Firm
Shares and any Option Shares shall be delivered to the Representatives for the
respective accounts of the Underwriters in such denominations and registered in
such names as the Representatives may reasonably request in writing not later
than 10:00 A.M. New York City time on the business day prior to the Firm Closing
Date and any Option Closing Date, respectively, or to the extent not so
requested, registered in the names of the respective Underwriters in such
authorized denominations as the Company shall determine. For the purpose of
expediting the checking of the certificates for the Firm Shares and such Option
Shares by the Representatives on behalf of the Underwriters, the Company agrees
to make such certificates available to the Representatives for such purpose at
the offices of The Depository Trust Company, New York, NY, or at such other
location in New York, NY, as may be agreed upon between the Company and the
Representatives, not later than 2:00 P.M. New York City time on the business day
preceding the Firm Closing Date and such Option Closing Date, respectively.
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(e) Defaulting Underwriters. If any Underwriter shall default
in its obligation to purchase the Securities that it has agreed to purchase
under this Agreement, the Representatives may in their discretion arrange for
themselves or another firm or corporation or firms or corporations (including
any other Underwriters) to purchase such Securities on the terms contained
herein. If, within thirty-six hours after such default by any Underwriter, the
Representatives do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another firm or corporation or firms or corporations (including any
other Underwriters) which are members in good standing of the National
Association of Securities Dealers, Inc. and reasonably satisfactory to the
Representatives to purchase such Securities on such terms. In the event that,
within the respective prescribed period, the Representatives shall notify the
Company that they have so arranged for the purchase of such Securities, or the
Company notifies Representatives that it has so arranged for the purchase of
such Securities, the Representatives or the Company shall have the right to
postpone the Firm Closing Date or any Option Closing Date for such Securities,
as the case may be, for a period of not more than seven days in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus that in the opinion of the Representatives may thereby be made
necessary. If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by the Representatives
and the Company, the number of such Securities that remains unpurchased does not
exceed one-tenth of the total number of Securities, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
Securities that such Underwriter agreed to purchase under this Agreement and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Securities that such Underwriter agreed to
purchase under this Agreement) of the Securities of such defaulting Underwriter
or Underwriters for which such arrangements have not been made; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
If, after giving effect to any arrangements for the purchase of the Securities
of a defaulting Underwriter or Underwriters by the Representatives and the
Company, the number of Securities that remains unpurchased exceeds one-tenth of
the total number of Securities, or if the Company shall not exercise the right
to require non-defaulting Underwriters to purchase the Securities of a
defaulting Underwriter or Underwriters, then this Agreement shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 4(j) hereof and the indemnity and
contribution agreements in Section 6 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
4. Covenants of Company. The Company covenants and agrees with
the several Underwriters that:
(a) Filing of Prospectus. If required by the 1933 Act or the
rules and regulations promulgated thereunder, the Company will promptly transmit
copies of the Prospectus, and any amendments thereto, to the SEC for filing
pursuant to Rule 424(b) under the 1933 Act.
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(b) Copies of Registration Statement and Prospectus; No Stop
Orders. The Company will deliver to each of the Representatives, and to
Winthrop, Stimson, Xxxxxx & Xxxxxxx (UNDERWRITERS COUNSEL), (i) one copy of the
Registration Statement certified by an officer of the Company to be in the form
originally filed, including copies of exhibits thereto (other than any exhibits
incorporated by reference therein), (ii) copies (so certified) of any amendments
to the Registration Statement, (iii) copies of the Incorporated Documents (other
than exhibits thereto), and (iv) a signed copy of each consent and certificate
included or incorporated by reference in, or filed as an exhibit to, the
Registration Statement as so amended; the Company will deliver to the
Underwriters through the Representatives as soon as practicable after the date
of this Agreement as many copies of the Prospectus as the Representatives may
reasonably request for the purposes contemplated by the 1933 Act and the Blue
Sky laws of any jurisdiction in which the Securities are offered; the Company
will promptly advise the Representatives of the issuance of any stop order under
the 1933 Act with respect to the Registration Statement (as amended) or the
institution of any proceedings therefor, or the suspension of the qualification
of the Securities for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose, of which the Company shall have received
notice or otherwise have knowledge prior to the completion of the distribution
of the Securities; and the Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to secure the prompt removal
thereof.
(c) Filing of Amendments. During the period when a prospectus
relating to any of the Securities is required to be delivered under the 1933 Act
by any Underwriter or dealer, the Company will not file any amendment to the
Registration Statement, the Prospectus or any Incorporated Document to which the
Representatives or Underwriters Counsel shall reasonably object on legal grounds
in writing.
(d) Compliance with 1933 Act. During the period when a
prospectus relating to any of the Securities is required to be delivered under
the 1933 Act by any Underwriter or dealer, the Company will comply, at its own
expense, with all requirements imposed by the 1933 Act, as now and hereafter
amended, and by the rules and regulations of the SEC thereunder, as from time to
time in force, so far as necessary to permit the continuance of sales of or
dealing in the Securities during such period in accordance with the provisions
hereof and as contemplated by the Prospectus.
(e) Certain Events and Amendments. If, during the period when
a prospectus relating to any of the Securities is required to be delivered under
the 1933 Act by any Underwriter or dealer, (i) any event relating to or
affecting the Company or of which the Company shall be advised in writing by the
Representatives shall occur as a result of which, in the opinion of the Company
or the Representatives, the Prospectus as then amended would include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading or (ii) it shall be necessary to amend the
Registration Statement or the Prospectus to comply with the 1933 Act, the 1934
Act or the rules and regulations of the SEC thereunder, the Company will
forthwith at its expense prepare and furnish to the Representatives a
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reasonable number of copies of such amendment that will correct such statement
or omission or effect such compliance.
(f) Blue Sky Qualifications. During the period when a
prospectus relating to any of the Securities is required to be delivered under
the 1933 Act by any Underwriter or dealer, the Company will furnish such proper
information as may be lawfully required and otherwise cooperate in qualifying
the Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives may reasonably designate and will file and
make in each year such statements or reports as are or may be reasonably
required by the laws of such jurisdictions; provided, however, that the Company
shall not be required to qualify as a foreign corporation or shall be required
to qualify as a dealer in securities or to file a general consent to service of
process under the laws of any jurisdiction.
(g) Earning Statement. In accordance with Rule 158 under the
1933 Act, the Company will make generally available to its security holders and
to holders of the Securities, as soon as practicable, an earning statement
(which need not be audited) in reasonable detail covering the 12 months
beginning not later than the first day of the month next succeeding the month in
which occurred the effective date (within the meaning of Rule 158 under the 0000
Xxx) of the Registration Statement.
(h) Exchange Act Documents; Ratings Notification. During the
period when a prospectus relating to any of the Securities is required to be
delivered under the 1933 Act by any Underwriter or dealer, the Company will file
promptly all documents required to be filed with the SEC pursuant to Section
13(a), 13(c), 14 or 15(d) of the 1934 Act; and the Company will promptly notify
the Representatives of any written notice given to the Company by any
"nationally recognized statistical rating organization" within the meaning of
Rule 436(g)(2) under the 1933 Act (a RATING AGENCY) of any intended decrease in
any rating of any securities of the Company or of any intended change in any
such rating that does not indicate the direction of the possible change of any
such rating, in each case by any such Rating Agency.
(i) No Issuance Period. During the period beginning from the
date of this Agreement and continuing to and including the earlier of (i) the
termination of trading restrictions on the Securities, as determined by the
Underwriters, and (ii) 90 days after the Firm Closing Date, the Company will
not, without the prior written consent of the Representatives, offer for sale,
sell or enter into any agreement to sell, or otherwise dispose of any Common
Stock (except for the Securities), or any other securities of the Company that
are substantially similar to the Common Stock or which are convertible or
exchangeable into securities which are substantially similar to the Common Stock
(other than sales of Common Stock pursuant to PSWC's 1994 Equity Compensation
Plan, its Employee Stock Repurchase Plan, its Shareholder Rights Plan and its
Dividend Reinvestment and Direct Stock Purchase Plan, as such plans are in
effect as of the date hereof); provided, however, that the Company may issue up
to 45,000 shares of the Common Stock in conjunction with its acquisition of the
Flying Hills Water Company.
(j) Payment of Expenses. Whether or not any sale of the
Securities is consummated, the Company will pay or cause to be paid the
following: (i) the fees,
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disbursements and expenses of Xxxxxx, Xxxxx & Xxxxxxx, LLP (COMPANY COUNSEL) and
the Accountants in connection with the registration of the Securities under the
1933 Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any agreement among the Underwriters, this Agreement, any Blue Sky memorandum,
closing documents (including any compilations thereof) and other documents in
connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 4(f)
hereof, including the reasonable fees and disbursements of Underwriters Counsel
in connection with such qualification and in connection with any such Blue Sky
memorandum; (iv) any filing fees incident to, and the fees and disbursements of
Underwriters Counsel in connection with, any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (v) the cost of preparing the Securities; (vi) the fees and expenses
in connection with the listing of the Securities on the New York Stock Exchange
and the Philadelphia Stock Exchange; and (vii) all other costs and expenses
incident to the performance of the Company's obligations hereunder that are not
otherwise specifically provided for in this Section 4(j); provided, however,
that if this Agreement shall be terminated pursuant to Section 3(e) hereof and
could not have been terminated pursuant to Section 5 hereof, the Company shall
then not be under any liability to any Underwriter with respect to the
Securities except as provided in this Section 4(j) and Section 6 hereof; but, if
for any other reason the Securities are not delivered by or on behalf of the
Company as provided herein, the Company will reimburse the Underwriters through
the Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of Underwriters Counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Securities, but the Company shall then be under no
further liability to any Underwriter with respect to the Securities except as
provided in this Section 4(j) and Section 6 hereof. It is understood that,
except as provided in this Section 4(j) and Section 6 hereof, the Underwriters
will pay all of their own costs and expenses, including the fees of Underwriters
Counsel and any advertising expenses connected with any offers they may make.
(k) Listing of Securities. The Company will use its best
efforts to cause the Securities to be duly authorized for listing on the New
York Stock Exchange and the Philadelphia Stock Exchange, subject to notice of
issuance.
(l) Provision of Information. During the period of two years
from the date hereof, the Company will furnish to the Representatives (i) as
soon as available, a copy of each report of the Company mailed to stockholders
or filed with the SEC, and (ii) from time to time such other information
concerning the Company as the Representatives may reasonably request.
(m) Application of Proceeds. The Company will apply the net
proceeds from the sale of the Securities substantially in accordance with the
description set forth in the Prospectus.
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(n) "Lock-up Letters". The Company has furnished or will
furnish to the Representatives prior to the Firm Closing Date "lock-up" letters,
in form attached as Exhibit __ hereto, signed by Compagnie Generale des Eaux (or
its nominee).
(o) Abstention from Price-affecting Transactions. Except as
stated in this Agreement and in the Preliminary Prospectus and Prospectus, the
Company has not effected, nor will it effect, directly or indirectly, any
transaction in the Common Stock designed to or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Securities.
5. Conditions to Underwriters' Obligations. The obligations of
the several Underwriters under this Agreement shall be subject, in the
discretion of the Representatives, to the condition that all representations and
warranties of the Company contained in this Agreement are, at and as of the Firm
Closing Date and, if any Option Shares are to be purchased, at and as of any
Option Closing Date, true and correct (i) in the case of representations and
warranties that are qualified as to materiality, in all respects, and (ii) as to
all other representations and warranties, in all material respects to the
condition that the Company shall have performed all of its obligations hereunder
in all material respects on or prior to the Firm Closing Date or such Option
Closing Date, as the case may be, and to the following additional conditions:
(a) Filing of Prospectus with SEC; No Stop Order. If, at the
time this Agreement is executed and delivered, it is necessary for a
post-effective amendment to the Registration Statement to be declared effective
before the offering of the Securities may commence, such post-effective
amendment shall have become effective not later than 5:30 P.M. New York City
time on the date hereof, or at such later date and time as shall be consented to
in writing by you; the Prospectus, and any amendments thereto, shall have been
transmitted for filing to the SEC within the time period prescribed for such
filing by Rule 424(b) under the 1933 Act and in accordance with Section 4(a)
hereof; no stop order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the SEC; and all requests for
additional information on the part of the SEC shall have been complied with to
the reasonable satisfaction of the Representatives.
(b) Opinion of Underwriters Counsel. At the Closing Date,
Underwriters Counsel shall have furnished to the Representatives an opinion,
dated such Closing Date, with respect to the Securities, the Prospectus and the
Registration Statement and such other related matters as the Representatives may
reasonably request, and Underwriters Counsel shall have received such papers and
information as it may reasonably request to enable it to pass upon such matters.
(c) Opinion of Company Counsel. The Representatives shall have
received on the Closing Date, an opinion of Xxxxxx, Xxxxx & Bockius, LLP, dated
the Closing Date, in form and substance (including as to qualifications and
assumptions) satisfactory to the Representatives, which opinion shall state that
it is being rendered at the request of the Company and shall be to the effect
that:
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(i) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the Commonwealth of
Pennsylvania with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus, and is duly registered and qualified to conduct its
business and is in good standing in the Commonwealth of Pennsylvania
(which is the only jurisdiction in which such registration or
qualification is required);
(ii) PSWC is a corporation duly incorporated and validly
existing in good standing under the laws of the Commonwealth of
Pennsylvania, with full corporate power and authority to own, lease,
and operate its properties and to conduct its business as described in
the Prospectus; and all the outstanding shares of capital stock of PSWC
have been duly authorized and validly issued, are fully paid and
non-assessable, and are beneficially owned by the Company free and
clear of any perfected security interest, or, to the knowledge of such
counsel, any Adverse Claim (as defined in Title 13 of the Pennsylvania
Uniform Consolidated Statutes Annotated (the PA UCC));
(iii) The capital stock and Shareholders Rights Plan of the
Company each conforms in all material respects as to legal matters to
the description thereof contained in the Prospectus under the caption
"Description of Capital Stock";
(iv) All the shares of capital stock of the Company
outstanding prior to the issuance of the Shares have been duly
authorized and validly issued, and are fully paid and non-assessable;
(v) The Shares have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor in accordance
with the terms hereof, will be validly issued, fully paid and
non-assessable and free of any preemptive, or to the knowledge of such
counsel, similar rights that entitle or will entitle any person to
acquire any Shares upon the issuance thereof by the Company;
(vi) The form of certificates for the Shares conforms to the
requirements of the Pennsylvania Business Corporation Law of 1988, as
amended;
(vii) The Registration Statement and all post-effective
amendments, if any, have become effective under the Act and, to the
knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for
that purpose are pending before or contemplated by the Commission; and
the required filing of the Prospectus pursuant to Rule 424(b) has been
made in accordance with Rule 424(b);
(viii) The Company has the requisite corporate power and
authority to enter into this Agreement and to issue, sell and deliver
the Shares to the Underwriters as provided herein, and this Agreement
has been duly authorized, executed and delivered by the Company and is
a valid, legal and binding agreement of the Company, enforceable
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against the Company in accordance with its terms, except as enforcement
of rights to indemnity and contribution hereunder may be limited by
Federal or state securities laws or principles of public policy and
subject to the qualification that the enforceability of the Company's
obligations hereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws
relating to or affecting creditors' rights generally, and by general
equitable principles;
(ix) Neither the offer, sale or delivery of the Shares, the
execution, delivery or performance of this Agreement, compliance by the
Company with the provisions hereof nor consummation by the Company of
the transactions contemplated hereby conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the
certificate or articles of incorporation or bylaws of the Company or
PSWC or any agreement, indenture, lease or other instrument known to
such counsel to which the Company or PSWC is a party or by which any of
them or any of their respective properties is bound nor will any such
action result in any violation of any existing law, regulation, ruling
(assuming compliance with all applicable state securities and Blue Sky
laws), judgment, injunction, order or decree known to such counsel
applicable to the Company, PSWC or any of their respective properties;
(x) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency, or official is required on
the part of the Company (except as have been obtained under the Act and
the Exchange Act or such as may be required under state securities or
Blue Sky laws governing the purchase and distribution of the Shares)
for the valid issuance and sale of the Shares to the Underwriters as
contemplated by this Agreement;
(xi) The Registration Statement, at the Effective Date
(including the information deemed included therein pursuant to Rule
430A) and the Prospectus, when filed pursuant to Rule 424(b) (except
for the financial statements and the notes thereto and the schedules
and other financial and statistical data included therein, as to which
such counsel need not express any opinion), complied as to form in all
material respects with the requirements of the Act; and each of the
Incorporated Documents (except for the financial statements and the
notes thereto and the schedules and other financial and statistical
data included therein, as to which counsel need not express any
opinion) when it was filed with the Commission pursuant to the Exchange
Act complied as to form in all material respects with the Exchange Act
and the rules and regulations of the Commission thereunder;
(xii) To the knowledge of such counsel, (A) other than as
described or contemplated in the Prospectus, there are no legal or
governmental proceedings pending or threatened against the Company or
PSWC, or to which the Company or PSWC, or any of their property, is
subject, which are required to be described in the Registration
Statement or Prospectus and (B) there are no agreements, contracts,
indentures, leases or other instruments, that are required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement or any Incorporated
Document that are not described or filed as required, as the case may
be;
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(xiii) The statements in the Registration Statement and
Prospectus, insofar as they are descriptions of contracts, agreements
or other legal documents, or refer to statements of law or legal
conclusions, are accurate and present fairly in all material respects
the information required to be shown; and
(xiv) Although counsel has not undertaken, except as otherwise
indicated in their opinion, to determine independently, and does not
assume any responsibility for, the accuracy or completeness of the
statements in the Registration Statement, such counsel has participated
in the preparation of the Registration Statement and the Prospectus,
including review and discussion of the contents thereof (including
review and discussion of the contents of all Incorporated Documents),
and nothing has come to the attention of such counsel that has caused
them to believe that the Registration Statement, at the Effective Date
(including the information deemed included therein pursuant to Rule
430A), 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 or that the Prospectus, as
of the date it was filed pursuant to Rule 424(b) and as of the Firm
Closing Date or the Option Closing Date, as the case may be, contained
or contains any 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 (it being understood that such counsel need express no
opinion with respect to the financial statements and the notes thereto
and the schedules and other financial and statistical data included in
the Registration Statement or the Prospectus or any Incorporated
Document).
(d) Opinion of General Counsel. The Representatives shall have
received on the Closing Date, an opinion of Xxx X. Xxxxx, Esq., Senior Vice
President & General Counsel for the Company (GENERAL COUNSEL), dated such
Closing Date and addressed to the Representatives which opinion shall state that
it is being rendered at the request of the Company which shall be to the effect
set forth in clause (xiv) of subsection (c) and which shall be to the further
effect that:
(i) The Company and PSWC each have full corporate power and
authority, and all necessary governmental authorizations, approvals,
orders, licenses, certificates, franchises and permits of and from all
governmental regulatory officials and bodies (except where the failure
so to have any such authorizations, approvals, orders, licenses,
certificates, franchises or permits, individually or in the aggregate,
would not have a material adverse effect on the business, properties,
operations or financial condition of the Company and PSWC taken as a
whole), to own their respective properties and to conduct their
respective businesses as now being conducted, as described in the
Prospectus;
(ii) The Company owns of record, directly or indirectly, all
the outstanding shares of capital stock of PSWC free and clear of any
Adverse Claim (as defined in the PA UCC);
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(iii) Other than as described or contemplated in the
Prospectus (or any supplement thereto), there are no legal or
governmental proceedings pending or, to such counsel's knowledge,
threatened against the Company or PSWC, or to which the Company or
PSWC, or any of their property, is subject, which are required to be
described in the Registration Statement or Prospectus (or any amendment
or supplement thereto);
(iv) To such counsel's knowledge, there are no agreements,
contracts, indentures, leases or other instruments, that are required
to be described in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) or to be filed as an exhibit to the
Registration Statement or any Incorporated Document that are not
described or filed as required, as the case may be;
(v) To the knowledge of such counsel, neither the Company nor
PSWC is in violation of any Pennsylvania law or regulation known to
such counsel to be generally applicable to the businesses of such
companies or of any decree of any court or governmental agency or body
having jurisdiction over the Company or PSWC, except where such
violations, considering all such cases in the aggregate, do not involve
a material risk to the business, properties, financial position or
results of operations of the Company and PSWC taken as a whole;
(vi) Except as described in the Prospectus, there are no
outstanding options, warrants or other rights calling for the issuance
by the Company of, and such counsel does not know of any commitment,
plan or arrangement to issue, any shares of capital stock of the
Company or any security convertible into or exchangeable or exercisable
for capital stock of the Company; and
(vii) To the knowledge of such counsel, except as described in
the Prospectus, there is no holder of any security of the Company or
any other person who has the right, contractual or otherwise, to cause
the Company to sell or otherwise issue to them, or to permit them to
underwrite the sale of, the Shares or the right to have any Common
Stock 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.
(e) Letter of Accountants. On the date of this Agreement at a
time prior to the execution of this Agreement and at the Firm Closing Date and
such Option Closing Date, the Accountants shall have furnished to the
Representatives letters, dated the date of this Agreement and the Firm Closing
Date and such Option Closing Date, respectively, in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants within the meaning of the 1933 Act and the rules and regulations of
the SEC thereunder with respect to the Company and PSWC and stating in effect
that:
(i) in the opinion of the Accountants, the consolidated
financial statements and schedules included or incorporated by
reference in the Prospectus and audited by them
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comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1934 Act and the rules
and regulations of the SEC thereunder;
(ii) on the basis of a reading of the unaudited consolidated
financial statements, if any, included or incorporated by reference in
the Prospectus and the latest available interim unaudited consolidated
financial statements of the Company, the performance of the procedures
specified by the American Institute of Certified Public Accountants for
a review of any such financial statements as described in Statement on
Auditing Standards No. 71, inquiries of officials of the Company
responsible for financial and accounting matters and a reading of the
minutes of meetings of the stockholders and the Board of Directors of
the Company and the [_____] Committees thereof through a specified date
not more than five days prior to the date of the applicable letter,
nothing came to the attention of the Accountants that caused them to
believe that: (A) any material modification should be made to the
unaudited consolidated financial statements, if any, included or
incorporated by reference in the Prospectus for them to be in
conformity with generally accepted accounting principles or any such
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act or the 1934
Act and the rules and regulations of the SEC thereunder; (B) for the
twelve months ended as of the date of the most recent available
financial statements of the Company, there were any decreases in
revenues, earnings on common stock or earnings per common share as
compared with the comparable period of the preceding year; or (C) at
the date of the most recent available financial statements of the
Company and at a subsequent date not more than five days prior to the
date of such letter, there was any change in the capital stock (except
for sales under the Company's 1994 Equity Compensation Plan, its
Shareholder Rights Plan, its Dividend Reinvestment and Optional Stock
Purchase Plan and its Customer Stock Purchase Plan) or long-term debt
of the Company or any decrease in its net assets as compared with the
amounts shown in the most recent consolidated balance sheet included or
incorporated by reference in the Prospectus, except in all instances
for changes or decreases that the Prospectus discloses have occurred or
may occur, or for changes or decreases that are described in such
letter that are reasonably satisfactory to the Representatives; and
(iii) if unaudited pro forma financial statements are included
or incorporated by reference in the Prospectus, on the basis of a
reading of such financial statements, carrying out certain specified
procedures, inquiries of certain officials of the Company and the
company or business acquired or to be acquired who have responsibility
for financial and accounting matters and proving the arithmetic
accuracy of the application of the adjustments to the historical
amounts in such financial statements, nothing came to the attention of
the Accountants that caused them to believe that such financial
statements do not comply in form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or
that such pro forma adjustments have not been properly applied to such
historical amounts in the compilation of such financial statements.
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Such letter shall also cover such other matters as the Representatives
shall reasonably request, including but not limited to the "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained in the financial statements included or incorporated by reference in
the Prospectus and any other information of an accounting, financial or
statistical nature included therein.
(f) No Material Changes. Since the respective dates as of
which information is given in the Prospectus there shall not have been any
change in the capital stock (other than pursuant to any stock purchase, dividend
reinvestment, savings bonus, incentive, or similar plan or exercise of
outstanding stock options) or material increase in short-term debt or long-term
debt of the Company or PSWC or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and PSWC,
otherwise than as set forth in the Prospectus, the effect of which is in the
judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities on the terms and in the manner contemplated in the Prospectus.
(g) Non-occurrence of Certain Events. On or after the date of
this Agreement there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange or on the Philadelphia Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New York Stock
Exchange or on the Philadelphia Stock Exchange; (iii) a general moratorium on
commercial banking activities declared by Federal or New York State or
Pennsylvania State authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if the effect of any such event specified in
this clause (iv) in the judgment of the Representatives makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the Prospectus.
(h) Listing of Securities. The Securities shall have been
listed (subject to official notice of issuance) on the New York Stock Exchange
or on the Philadelphia Stock Exchange.
(i) Certificates. At the Firm Closing Date and such Option
Closing Date, the Company shall have furnished or caused to be furnished to the
Representatives a certificate of officers of the Company satisfactory to the
Representatives as to the accuracy of the representations and warranties of the
Company herein on and as of the Firm Closing Date and on and as of such Option
Closing Date, as to the performance by the Company of all of its obligations
hereunder to be performed on or prior to the Firm Closing Date and such Option
Closing Date, as to the matters set forth in Sections 5(a) and 5(e) hereof and
as to such other matters as the Representatives may reasonably request.
In case any of the conditions specified above in this Section 5 shall
not have been fulfilled, this Agreement may be terminated by the Representatives
upon mailing or delivering written notice thereof to the Company. Any such
termination shall be without liability of either
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party to the other party except as otherwise provided in Section 4(j) hereof and
except for any liability under Section 6 hereof.
6. Indemnification and Contribution
(a) Indemnification by Company. The Company will indemnify and
hold harmless each Underwriter for and against any losses, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the 1933 Act or otherwise, insofar as such losses, damages or liabilities
(or actions or claims in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus, or any
amendment thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred (including such losses, damages, liabilities or expenses
to the extent of the aggregate amount paid in settlement of any such action or
claim provided that (subject to Section 6(c) hereof) any such settlement is
effected with the written consent of the Company); provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement, the Prospectus, or any such amendment,
in reliance upon and in conformity with the Underwriter Information; and
provided, further, that the Company shall not be liable in any such case under
the indemnity agreement in this Section 6(a) with respect to any Preliminary
Prospectus or the Prospectus, to the extent that any such losses, damages or
liabilities result from the fact that the Underwriter sold Securities to a
person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus or of the Prospectus as then
amended or supplemented (excluding any Incorporated Documents) in any case where
such delivery is required by the 1933 Act if the Company has previously
furnished copies thereof to the Underwriter and the loss, claim, liability,
expense or damage of the Underwriter results from an untrue statement, alleged
untrue statement, omission or alleged omission of a material fact contained (x)
in a Preliminary Prospectus which was corrected in the Prospectus, or (y) in the
Prospectus which was corrected in an amendment or supplement thereto. The
foregoing indemnity agreement shall be in addition to any liability which the
Company may otherwise have.
(b) Indemnification by Underwriters. Each Underwriter will
indemnify and hold harmless the Company for and against any losses, damages or
liabilities to which the Company may become subject, under the 1933 Act or
otherwise, insofar as such losses, damages or liabilities (or actions or claims
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment
thereto, or arise out of are based upon the omission or alleged
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omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any such amendment,
in reliance upon and in conformity with the Underwriter Information in respect
of such Underwriter, and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred (including such
losses, damages, liabilities or expenses to the extent of the aggregate amount
paid in settlement of any such action or claim provided that (subject to Section
6(c) hereof) any such settlement is effected with the written consent of the
Underwriters). The foregoing indemnity agreement shall be in addition to any
liability which the Underwriters may otherwise have.
(c) General. Promptly after receipt by an indemnified party
under Section 6(a) or 6(b) hereof of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under Section 6(a) or 6(b) hereof, notify such
indemnifying party in writing of the commencement thereof, but the failure so to
notify such indemnifying party shall not relieve such indemnifying party from
any liability except to the extent that it has been prejudiced in any material
respect by such failure or from any liability that it may have to any such
indemnified party otherwise than under Section 6(a) or 6(b) hereof. In case any
such action shall be brought against any such indemnified party and it shall
notify such indemnifying party of the commencement thereof, such indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party under Section 6(a) or 6(b)
hereof similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of such indemnified party, be counsel to such indemnifying party), and, after
notice from such indemnifying party to such indemnified party of its election so
to assume the defense thereof, such indemnifying party shall not be liable to
such indemnified party under Section 6(a) or 6(b) hereof for any legal expenses
of other counsel or any other expenses, in each case subsequently incurred by
such indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. If at any time such indemnified party shall
have requested such indemnifying party under Section 6(a) or 6(b) hereof to
reimburse such indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a) or 6(b) hereof effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of such request for reimbursement, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request for reimbursement prior to the date of such
settlement. No such indemnifying party shall, without the written consent of
such indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not such indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (A)
includes an unconditional release of such indemnified party from all liability
arising out of such action or claim and (B) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party. In no event shall such indemnifying parties be liable for
the fees and expenses of more than one counsel, including any local counsel, for
all such
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indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
(d) Contribution. If the indemnification provided for in this
Section 6 is unavailable to or insufficient to indemnify or hold harmless an
indemnified party under Section 6(a) or 6(b) hereof in respect of any losses,
damages or liabilities (or actions or claims in respect thereof) referred to
therein, then each indemnifying party under Section 6(a) or 6(b) hereof shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, damages or liabilities (or actions or claims 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 hand from the
offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if such
indemnified party failed to give the notice required under Section 6(c) hereof,
and such indemnifying party was prejudiced in a material respect by such
failure, then each such 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 hand in connection
with the statements or omissions that resulted in such losses, damages or
liabilities (or actions or claims in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and such Underwriters on the other hand shall be deemed to be in
the same proportion as the total net proceeds from such offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault of
the Company on the one hand and the Underwriters on the other hand 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 or the
Underwriters 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
contribution pursuant to this Section 6(d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to above in this Section 6(d). The amount paid
or payable by such an indemnified party as a result of the losses, damages or
liabilities (or actions or claims in respect thereof) referred to above in this
Section 6(d) shall be deemed to include any legal or other expenses incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6(d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The obligations of the
Underwriters in this Section 6(d) to contribute are several in proportion to
their respective underwriting obligations with respect to the Securities and not
joint.
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(e) Scope of Obligations. The obligations of the Company under
this Section 6 shall be in addition to any liability that the Company may
otherwise have and shall extend, upon the same terms and conditions, to each
officer, director, employee, agent or other representative and to each person,
if any, who controls any Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act; and the obligations of the Underwriters
under this Section 6 shall be in addition to any liability that the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company who signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act.
7. Representations, Warranties and Agreements to Survive
Delivery. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter, any officer, director, employee, agent or other
representative of the Underwriters or any controlling person of any Underwriter,
or the Company, any officer or director of the Company who signed the
Registration Statement or any controlling person of the Company, and shall
survive delivery of and payment for the Securities. The obligations of the
Company contained in Section 4(j) (to the extent provided for therein) and
Section 6 hereof shall survive termination of this Agreement.
8. Authority to Act; Notices. In all dealings hereunder, the
Representatives shall act on behalf of each of the Underwriters, and the parties
hereto shall be entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Underwriter made or given by such Representatives
jointly or by such of the Representatives, if any, as may be designated for such
purpose in this Agreement.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to X.X.
Xxxxxxx & Sons, Inc. at the address set forth on the first page of this
Agreement, Attention: Xxxxxx X. Xxxxx; notice to the Company shall be directed
to Philadelphia Suburban Corporation, 000 X. Xxxxxxxxx Xxxxxx, Xxxx Xxxx, XX
00000-0000, Attention: Senior Vice President and General Counsel.
9. Miscellaneous. The rights and duties of the parties to this
Agreement shall, pursuant to New York General Obligations Law Section 5-1401, be
governed by the law of the State of New York. This Agreement shall be binding
upon, and inure solely to the benefit of, the Underwriters and the Company,
except to the extent provided in Section 6(e) hereof, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Securities from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase. This Agreement may be
executed by any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
The word "or"
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shall not be exclusive, and all references in this Agreement to the words
"herein," "hereof," "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular Section or subdivision hereof,
and the captions to such Sections and subdivisions are for convenience only and
shall not affect the construction hereof.
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If the foregoing is in accordance with your understanding, please sign
and return to the Company the enclosed duplicate hereof, whereupon this
Agreement will become a binding agreement between the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
PHILADELPHIA SUBURBAN CORPORATION
Name:
Title:
Accepted as of the date hereof:
X.X. XXXXXXX & SONS, INC.
BY:__________________________________
NAME:
TITLE:
XXXXXX X. XXXXX & CO., L.P.
BY:__________________________________
NAME:
TITLE:
As the Representatives of the several
Underwriters named in Schedule I hereto
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