Exhibit 10.2
AQUASOURCE, INC.
March 4, 2003
Philadelphia Suburban Corporation
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxxxx XxXxxxxxxxxx
Aqua Acquisition Corporation
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxxxx XxXxxxxxxxxx
Re: Amendment No. 1 to the Purchase Agreement
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Dear Xx. XxXxxxxxxxxx:
Reference is made to that certain Purchase Agreement, dated July 29, 2002,
by and between AquaSource, Inc. (the "Seller") and DQE, Inc. ("DQE"), on the one
hand, and Philadelphia Suburban Corporation ("PSC") and Aqua Acquisition
Corporation ("Acquisition" and, together with PSC, the "Buyer"), on the other
hand (the "Purchase Agreement"). Capitalized terms that are used but not
otherwise defined herein shall have the meanings ascribed to such terms in the
Purchase Agreement.
As a means of simplifying the process of transferring certain of the
Integrated Assets to the Buyer, the parties have agreed that (i) the Seller
would cause to be incorporated AquaSource Operations, Inc., a Delaware
corporation ("Operations"), (ii) the Seller would transfer certain of the
Integrated Assets to Operations prior to the Closing, and (iii) at the Closing,
PSC would acquire from the Seller all of the outstanding shares of capital stock
of Operations. In furtherance of the foregoing, the parties to the Purchase
Agreement, hereby amend the Purchase Agreement as follows:
1. The following recital is added to the Purchase Agreement as the fourth
recital:
WHEREAS, the Seller owns all of the issued and outstanding shares of
common stock (the "Operations Shares") of AquaSource Operations, Inc.,
a Delaware corporation ("Operations");
2. The last recital of the Purchase Agreement is hereby amended by
restating clause (i) of said recital in its entirety to read as
follows:
(i) the Utility Shares, the Utility Preferred Shares, the Development
Shares, the Xxxxxxxx Shares and the Operations Shares (collectively,
the "Shares") by PSC, or, with respect to the Operations Shares only,
by Acquisition, and
3. Section 1.1(a) of the Purchase Agreement is hereby amended by (i)
replacing the word "purchases" in clause (iii) thereof with the words
"purchases or owns" and (ii) by adding three new sentences at the end
of said section, which three sentences shall read in their entirety as
follows:
Notwithstanding the foregoing, (i) the Seller will have performed
its obligations under this Section 1.1(a) with respect to any
particular Integrated Asset set forth on Section 1.1(a) of the
Seller Disclosure Schedule if, prior to the Closing, the Seller
shall have transferred, or caused to be transferred, such
Integrated Asset to Operations, and (ii) the Buyer will have
performed its obligations under this Section 1.1(a) with respect
to any Integrated Asset so transferred to Operations if, at the
Closing, PSC or Acquisition shall purchase and accept from the
Seller the Operations Shares (as defined in Section 3.3). In
addition, the Parties expressly agree that at the Closing, the
Seller shall sell, convey, assign, transfer and deliver to PSC or
Acquisition, and PSC or Acquisition shall purchase and accept
from the Seller, the Operations Shares, provided, however, that
the Operations Shares shall be treated as an Integrated Asset for
all purposes whatsoever under this Purchase Agreement, including,
without limitation, for purposes of any indemnity obligations in
respect of Integrated Assets and Integrated Liabilities contained
herein. For the avoidance of doubt, the Parties agree that the
transfer of certain Integrated Assets to Operations and the
purchase of the Operations Shares by PSC or Acquisition, as
contemplated above, is for the convenience of the Seller and is
not intended to affect any Party's rights, obligations or
interests with respect to such Integrated Assets as originally
set forth in the Purchase Agreement.
4. Section 1.1(b) of the Purchase Agreement is hereby amended by
restating said section in its entirety to read as follows:
The "Integrated Assets" shall mean all of those assets set
forth in Section 1.1 of the Seller Disclosure Schedule (as
defined in Section 3.1) and the Operations Shares (as defined in
Section 3.3).
5. Section 1.1(c) of the Purchase Agreement is hereby amended by
restating said section in its entirety to read as follows:
The "Integrated Liabilities" shall mean (i) all of the
performance obligations of the Seller and any Subsidiary of the
Seller (including Operations) which relate to the Contracts
included among the Integrated
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Assets (including any Contracts assigned to Operations as
contemplated by Section 1.1(a) hereof), and (ii) all of the
liabilities of the Seller and any Subsidiary of the Seller
(including Operations), direct or indirect, known or unknown,
absolute or contingent, which relate to the Contracts included
among the Integrated Assets (including any Contracts assigned to
Operations as contemplated by Section 1.1(a) hereof) and which
arise on or after the Closing Date (as defined in Section 2.1).
6. Section 2.2(a)(i) of the Purchase Agreement is hereby amended by
adding a new sentence at the end of said section, which sentence shall
read in its entirety as follows:
Notwithstanding the foregoing, if prior to the Closing PSC
shall have directed the Seller, in writing, to deliver the
Operations Shares to Acquisition instead of PSC, then, at the
Closing, the Seller shall not deliver the Operations Shares to
PSC as contemplated by the immediately preceding sentence, but
instead shall, at the Closing, deliver to Acquisition, free and
clear of any Encumbrances, except for Permitted Encumbrances,
certificates representing the Operations Shares, each such
certificate to be duly and validly endorsed in favor of
Acquisition or accompanied by a separate stock power duly and
validly executed by the Seller and otherwise sufficient to vest
in Acquisition good title to the Operations Shares.
7. Each of Sections 3.1, 3.4, 3.6, 3.7, 3.8, 3.10, 3.11, 3.12, 3.15,
3.16, 3.17 and 3.18 shall be amended by (i) replacing the phrase
"Utility, Development and Xxxxxxxx" each time it appears in each such
Section with the phrase "Utility, Development, Xxxxxxxx and
Operations", (ii) replacing the phrase "Utility, Development or
Xxxxxxxx" each time it appears in each such Section with the phrase
"Utility, Development, Xxxxxxxx or Operations", and (iii) replacing
the phrase "Utility, Development nor Xxxxxxxx" each time it appears in
each such Section with the phrase "Utility, Development, Xxxxxxxx nor
Operations."
8. Section 3.3 of the Purchase Agreement is hereby amended by adding
thereto a new Section 3.3(f), which shall read in its entirety as
follows:
(f) As of the date hereof, (i) the authorized capital stock
of Operations consists of 100 shares of common stock, no par
value (the "Operations Stock"), (ii) all 100 shares of Operations
Stock (the "Operations Shares") have been validly issued to the
Seller and are fully paid and nonassessable, (iii) the Seller
owns all of the Operations Shares free and clear of any
Encumbrances, except for Permitted Encumbrances, and (iv) there
are no options, warrants, calls, rights, commitments or
agreements (other than this Agreement) of any character to which
the Seller or Operations is a party or by which the Seller or
Operations is bound obligating the Seller or Operations to issue,
deliver or sell, or cause to be issued, delivered or sold,
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additional shares of capital stock of Operations, or obligating
the Seller or Operations to grant, extend or enter into any such
option, warrant, call, right, commitment or agreement.
9. Section 5.5 of the Purchase Agreement is hereby amended by adding
thereto a new Section 5.5(c), which shall read in its entirety as
follows:
(c) PSC is acquiring, or is causing Acquisition to acquire,
the Operations Shares for investment and not with a view toward,
or for sale in connection with, any distribution thereof, nor
with any present intention of distributing or selling the
Operations Shares. PSC and Acquisition acknowledge that the
Operations Shares have not been registered under the Securities
Act and agree that the Operations Shares may not be sold,
transferred, offered for sale, pledged, hypothecated or otherwise
disposed of without registration under the Securities Act and any
applicable state securities laws, except pursuant to an exemption
from such registration under the Securities Act and any
applicable state securities laws. Each of PSC and Acquisition is
able to bear the economic risk of holding the Operations Shares
for an indefinite period, and has knowledge and experience in
financial and business matters such that it is capable of
evaluating the risks of the investment in the Operations Shares.
10. Section 6.1 of the Purchase Agreement is hereby amended by adding to
said section a new Section 6.1(o), which shall read in its entirety as
follows:
(o) Operations shall not (i) amend its articles of
incorporation or by-laws, (ii) split, combine or reclassify its
outstanding shares of capital stock, (iii) declare set aside or
pay any dividend payable in cash, stock or property in respect of
any of its capital stock, except for dividends of Excluded Assets
to the Seller as contemplated by Section 6.3, or (iv) issue,
pledge, dispose of or encumber any shares of its capital stock.
11. Section 10.5 of the Purchase Agreement is hereby amended by (i)
restating clause (b) to read in its entirety "(b) upon delivery by
reputable overnight courier service", (ii) replacing both of
AquaSource, Inc.'s and DQE, Inc.'s telephone number and contact person
with Telephone No: 000-000-0000 and Attention: General Counsel,
respectively, and (iii) replacing the counsel who is to receive a copy
of notices for both of PSC and Acquisition with Xxxxx Xxxxxxx LLP,
3400 Two Xxxxx Square, 00xx xxx Xxxx Xxxxxxx, Xxxxxxxxxxxx, XX 00000,
Telecopier No.: (000) 000-0000, Telephone No.: (000) 000-0000,
Attention: Xxxxx X. Xxxxx, Esq.
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If the foregoing accurately reflects our agreement, please so indicate by
causing a duly authorized officer of PSC and Acquisition to sign in the spaces
provided below.
Very truly yours,
AQUASOURCE, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
President
DQE, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
Executive Vice President
AGREED AS OF THE DATE
FIRST ABOVE WRITTEN:
PHILADELPHIA SUBURBAN CORPORATION
By: /s/ Xxx X. Xxxxx
--------------------------------
Xxx X. Xxxxx
Executive Vice President
AQUA ACQUISITION CORPORATION
By: /s/ Xxx X. Xxxxx
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Xxx X. Xxxxx
Vice President
cc: Xxxxx X. Xxxxx, Esq.
Xxxxx Xxxx, Esq.
(412779)
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