Exhibit 10.41
FIRST MORTGAGE BONDS
1999 MEDIUM TERM NOTE SERIES
Up to U.S. $300,000,000
Maturities from One Year to Thirty-Five Years
PLACEMENT AGENCY AGREEMENT
By and Among
PHILADELPHIA SUBURBAN WATER COMPANY
as Issuer
and
AGENTS LISTED ON SCHEDULE I ATTACHED HERETO
Dated December 3, 1999
PHILADELPHIA SUBURBAN WATER COMPANY
U.S. $300,000,000
First Mortgage Bonds
1999 Medium Term Note Series
Maturities from One Year
to Thirty-Five Years from Date of Issue
Placement Agency Agreement
New York, New York
December 3, 1999
To Each of the Addressees Names
on Schedule I Hereto Acting
Severally and Not Jointly in the
Capacities of Agent and Purchaser
or in Either Such Capacity
Gentlemen and Ladies:
Philadelphia Suburban Water Company, a corporation organized
and existing under the laws of the Commonwealth of Pennsylvania (the "Issuer")
which is a wholly-owned subsidiary of Philadelphia Suburban Corporation, a
Pennsylvania corporation ("PSC"), confirms its agreement with you with respect
to the issue and sale by the Issuer of its First Mortgage Bonds, 1999 Medium
Term Note Series (the "Notes"). The Notes will be issued in one or more
subseries under and secured in accordance with the Thirty-Third Supplemental
Indenture dated as of November 15, 1999 (the "Supplemental Indenture") to the
Indenture of Mortgage dated as of January 1, 1941 (the "Indenture of Mortgage")
between the Issuer and Chase Manhattan Trust Company, National Association (as
successor in interest to The Pennsylvania Company for Insurance on Lives and
Granting Annuities), as Trustee (the "Trustee"). The Notes may be sold during
the five year period from November 18, 1999 through November 17, 2004 (the
"Offering Period"), by the Issuer in an aggregate principal amount of up to U.S.
$300,000,000.
It is understood, however, that the Issuer may from time to
time, if permitted under the Indenture of Mortgage and pursuant to subsequent
supplemental indentures, authorize the issuance of additional notes and that
such additional notes may be sold through or to you subject to and in accordance
with the terms of this Placement Agency Agreement (the "Agreement"), all as
though the issuance of such additional Notes or the sale of Notes after the
expiration of the Offering Period were authorized as of the date hereof. In
addition, it is understood that the Issuer may from time to time during the
Offering Period issue notes, bonds or other evidences of indebtedness to the
extent permitted by the Indenture of Mortgage and any subsequent Supplemental
Indenture.
The Notes will be offered during the Offering Period from time
to time on a private placement basis without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance upon the
exemption therefrom provided by Section 4(2) of the Securities Act. The Notes
will be offered only to "Qualified Institutional Buyers" (as defined in Rule
144A under the Securities Act) pursuant to this Placement Agreement. All Notes
having a common issue date, maturity date, interest rate and otherwise identical
terms are referred to herein as a "Tranche". This Agreement is non-exclusive as
the Notes of each Tranche may be offered through one or more Agents (hereinafter
defined) pursuant to this Agreement. The Notes will be issued, and the terms
thereof established, in accordance with the terms of the Indenture of Mortgage
and the Supplemental Indenture, and in the case of Notes sold pursuant to
Section 2(a), in accordance with the Medium Term Notes Administrative Procedures
attached hereto as Exhibit A (the "Administrative Procedures"). The Notes will
be payable in accordance with a Paying Agency Agreement dated December 3, 1999
(the "Paying Agency Agreement"), among the Issuer, Chase Manhattan Trust
Company, National Association, as paying agent (the "Paying Agent"), the Trustee
and the Agents. The Administrative Procedures set forth in Exhibit A shall
remain in effect with respect to sales solicited by the Agents until changed by
the Issuer, the Agents and the Paying Agent. For the purposes of this Agreement,
the term "Agent" shall refer to each addressee named on Schedule I hereto acting
severally and not jointly in the sole capacity as agent for the Issuer pursuant
to Section 2(a) and not as principal; the term "Agents" shall refer in general
terms to all addressees named on Schedule I acting in the capacity as agent to
the Issuer pursuant to Section 2(a); the term "Purchaser" shall refer to the
same addressees named on Schedule I hereto acting severally and not jointly in
the sole capacity as principal pursuant to Section 2(b) and not as agent; and
the term "you" shall refer to each or any addressee named on Schedule I hereto
acting severally and not jointly in both such capacities or in either such
capacity.
1. Representations and Warranties. The Issuer represents and warrants
to you as of the date hereof, and shall be deemed to represent and warrant to
you at and as of each time the Issuer gives a notice requesting you to solicit
offers as Agent, at and as of each acceptance of an offer by the Issuer, at and
as of the date of each Terms Agreement (as defined in Section 2(b)), and upon
the delivery to the purchaser (or its agent) pursuant to such offer or to the
Purchaser of any Note pursuant to such Terms Agreement, as the case may be,
that:
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(a) The Issuer confirms that it has prepared a confidential
Offering Memorandum (defined below) and authorizes you to distribute
copies thereof in connection with the offering of Notes as provided
herein. The Offering Memorandum does not and will not contain any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the foregoing representation and warranty shall not apply
to statements or omissions in the Offering Memorandum made in reliance
upon and in conformity with information furnished to the Issuer in
writing by you or on your behalf which has been furnished by a person
authorized to do so, specifically for use therein. As used in this
Agreement, the term "Offering Memorandum" means the confidential
offering memorandum dated the same date as this Agreement relating to
the Notes, as it may be amended or supplemented from time to time,
including with respect to each Tranche, the related pricing supplement
(each, a "Pricing Supplement"), any documents expressly incorporated by
reference therein and any quarterly or annual reports of the Issuer
delivered to any Agent for delivery together with the Offering
Memorandum, which amendment or supplement may be in the form of a
separate document that does not state that it is a supplement to the
Offering Memorandum, and any reference to the terms "amend",
"amendment" or "supplement" with respect to the Offering Memorandum
shall refer to and include the filings with the Securities and Exchange
Commission (the "Commission") of any documents expressly incorporated
by reference into the Offering Memorandum after the date hereof.
(b) The financial statements and schedules included in, or as
an exhibit, attachment or appendix to, the Offering Memorandum present
fairly the consolidated financial condition of the Issuer as of the
respective dates thereof, and the consolidated results of operations
and changes in financial condition of the Issuer for the respective
periods covered thereby, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
entire period involved, except as otherwise disclosed in the Offering
Memorandum. KPMG LLP (the "Accountants"), who have reported on the
annual financial statements and schedules of the Issuer, are
independent certified public accountants with respect to the Issuer and
its subsidiaries within the meaning of Rule 1.01 of the Code of
Professional Conduct of the American Institute of Certified Public
Accountants.
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(c) Subsequent to the respective dates as of which information
is given in the Offering Memorandum, except as otherwise set forth
therein, (i) there has been no material adverse change, or to the
knowledge of the Issuer any development involving a prospective
material adverse change, in the financial condition, earnings, business
or business prospects or properties of the Issuer and its subsidiaries,
considered as a single enterprise (a "Material Adverse Effect"), (ii)
neither the Issuer nor any of its subsidiaries have incurred any
material liabilities or obligations, direct or contingent, nor have any
of them entered into any material transactions other than pursuant to
this Agreement, the Supplemental Indenture and the Paying Agency
Agreement and the transactions referred to herein and therein and (iii)
no rating of any of the securities of the Issuer has been lowered by
any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) of the Securities Act) (each, a "Rating
Agency"), nor has there been any notice given by any Rating Agency of
any intended or potential decrease in any such rating or of a possible
change in any such rating where such notice does not indicate the
direction of the possible change.
(d) The Issuer and each of its subsidiaries is a corporation
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. The Issuer and each of its subsidiaries
has full power and authority to conduct all the activities conducted by
it, to own or lease all the assets owned or leased by it and to conduct
its business as described in the Offering Memorandum. The Issuer and
each of its subsidiaries is duly licensed or qualified to do business
and in good standing as a foreign corporation in all jurisdictions in
which the nature of the activities conducted by it or the character of
the assets owned or leased by it makes such license or qualification
necessary, except where the failure to so qualify or be in good
standing would not have a Material Adverse Effect.
(e) Except for stock of its subsidiaries, or as disclosed in
the Offering Memorandum, the Issuer does not own, directly or
indirectly, any shares of stock or any other equity or long-term debt
securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association or other entity, other than
equity investments made by the Issuer for business development purposes
or otherwise which are not material to the Issuer.
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(f) The Issuer has full corporate power and authority to enter
into this Agreement, the Supplemental Indenture, and the Paying Agency
Agreement, to issue the Notes, and to perform its obligations under
this Agreement, the Supplemental Indenture, the Paying Agency Agreement
and the Notes. This Agreement, the Indenture, the Supplemental
Indenture and the Paying Agency Agreement have been duly authorized,
executed and delivered by the Issuer and, when authorized, executed and
delivered by the other parties hereto and thereto, will constitute
valid and binding agreements of the Issuer and will be enforceable
against the Issuer in accordance with their terms (subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws affecting creditors' rights generally
from time to time in effect, and subject, as to enforceability, to
general principles of equity, regardless of whether such enforceability
is considered in a proceeding in equity or at law). The Supplemental
Indenture and the Paying Agency Agreement conform in all material
respects to the descriptions thereof in the Offering Memorandum.
(g) The execution and delivery of the Notes has been duly
authorized by all necessary corporate action on the part of the Issuer;
each Note, when completed, executed, authenticated and delivered in
accordance with the Indenture of Mortgage and the Supplemental
Indenture against payment of the consideration therefor will constitute
a legal, valid and binding obligation of the Issuer, enforceable
against the Issuer in accordance with the terms of such Note (subject
to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws affecting creditors'
rights generally from time to time in effect, and subject, as to
enforceability, to general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law),
and will entitle its holder to the benefits of the Indenture of
Mortgage and the Supplemental Indenture. Each Note will conform in all
material respects to the description thereof in the Offering
Memorandum.
(h) Other than the liens created by the Indenture of Mortgage
as supplemented by supplemental indentures in accordance with the terms
of the Indenture, including as supplemented by the Supplemental
Indenture, the performance by the Issuer of this Agreement and the
Paying Agency Agreement, the issuance of any Notes and the consummation
of the transactions contemplated hereby and thereby will not result in
the creation or imposition of any lien, charge or encumbrance upon any
of the assets of the Issuer or any of its subsidiaries pursuant to the
terms or provisions of, or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, or give any
other party a right to terminate any of its obligations under, or
result in the acceleration of any obligation under, the certificate of
incorporation or by-laws of the Issuer or any of its subsidiaries, any
indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement or other evidence of
indebtedness, lease, contract or other agreement or instrument to which
the Issuer or any of its subsidiaries is a party or by which the Issuer
or any of its subsidiaries or any of its properties is bound or
affected, or violate or conflict with any judgment, ruling, decree,
order, statute, rule or regulations of any court or governmental agency
or body applicable to the business or properties of the Issuer or any
of its subsidiaries.
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(i) Except as set forth in or contemplated by the Offering
Memorandum, there are no actions, suits or proceedings pending or
threatened against or affecting the Issuer or any of its subsidiaries,
or any of their respective officers or directors in their capacity as
such, before or by any Federal or state court, commission, regulatory
body, administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding is likely
that would materially and adversely affect (i) the financial condition,
earnings, business or business prospects or properties of the Issuer
and its subsidiaries, considered as a single enterprise, or (ii) the
ability of the Issuer to perform its obligations under this Agreement,
the Supplemental Indenture, the Paying Agency Agreement and the Notes.
There are no such actions, suits or proceedings pending or, to the
knowledge of the Issuer, threatened, relating to the Notes, their
offering, or the Offering Memorandum.
(j) In each of the following cases except for such exceptions
which would not have a Material Adverse Effect and do not interfere
with the conduct of the business of the Company, the Issuer and each of
its subsidiaries has (i) all governmental licenses, permits, consents,
orders, approvals and other authorizations (collectively, "Approvals")
necessary to carry on its business as described in the Offering
Memorandum, (ii) complied with all laws, regulations and orders
applicable to it or its business, and (iii) performed all its
obligations required to be performed by it, and is not in default under
any material contract or other instrument to which it is a party or by
which its property is bound or affected. To the best knowledge of the
Issuer, no other party under any material contract or other instrument
to which it is a party is in default in any respect thereunder that
would have a Material Adverse Effect. Neither the Issuer nor any of its
subsidiaries is in violation of any provision of its certificate of
incorporation or by-laws.
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(k) The Issuer and each of its subsidiaries has good and
marketable title to all properties and assets described in the Offering
Memorandum as owned by it, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the
Offering Memorandum or are not material to the business of the Issuer
or its subsidiaries. The Issuer and each of its subsidiaries has valid,
subsisting and enforceable leases for the properties described in the
Offering Memorandum as leased by it, with such exceptions as are not
material and do not materially interfere with the use made and proposed
to be made of such properties by the Issuer and such subsidiaries.
(l) No consent, approval, authorization or other order of, or
any filing with, any government, governmental or other administrative
agency or body is required in connection with the execution and
delivery by the Issuer of this Agreement, the Supplemental Indenture
and the Paying Agency Agreement, the solicitation of offers to purchase
Notes, the issuance of any Note or the performance by the Issuer of any
of its obligations hereunder or thereunder, except such as may be
required under the blue sky laws of any jurisdiction in connection with
the offering and sale of the Notes or as required by the Pennsylvania
Public Utility Commission. All necessary approvals have been obtained
from the Pennsylvania Public Utility Commission to authorize the
issuance and sale of the Notes and such approvals remain in full force
and effect on the date hereof.
(m) The Notes satisfy the requirements set forth in paragraph
(d)(3) of Rule 144A ("Rule 144A") under the Securities Act.
(n) Neither the Issuer nor any affiliate (which, for purposes
of this Agreement, shall have the meaning given in Rule 501(b) under
the Securities Act) of the Issuer has directly or indirectly, (i) sold,
offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any of the Notes or, within the six-month period prior to
the date hereof, any other debt security of the same class as the Notes
which is or will be integrated with any sale of the Notes in a manner
that would require the registration of the Notes under the Securities
Act or (ii) engaged or will engage in any form of general solicitation
or general advertising (within the meaning of Rule 502(c) under the
Securities Act) in connection with the offering of the Notes.
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(o) Assuming (A) compliance by you with the offering and
transfer procedures and restrictions described in the Offering
Memorandum and under Rule 144A and Section 4(2) of the Securities Act,
(B) the accuracy of the acknowledgments, representations, warranties
and agreements made in accordance with this Agreement and the Offering
Memorandum by you and the purchasers to whom you initially offer, sell
or resell the Notes and (C) purchasers to whom you initially offer,
sell or resell the Notes receive a copy of the Offering Memorandum
prior to such sale or resale, the offer, sale and delivery of the Notes
in the manner contemplated by this Agreement and the Offering
Memorandum will be exempt from the registration requirements of the
Securities Act by reason of Section 4(2) thereof, and the initial
resale of the Notes in the manner contemplated by this Agreement will
be exempt from the registration requirements of the Securities Act by
reason of Rule 144A thereunder or Section 4(2) thereunder, as the case
may be, and the Notes are not required to be issued pursuant to an
indenture that qualifies under the Trust Indenture Act of 1939, as
amended.
(p) Each Note will be an unconditional and direct debt
obligation of the Issuer and will rank pari passu with other senior
secured existing and future obligations of the Issuer.
(q) The Issuer is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(r) Neither the Issuer nor any agent thereof acting on behalf
of the Issuer has taken or will take any action that is reasonably
likely to cause this Agreement or the issuance or sale of the Notes to
violate Regulation T, Regulation U or Regulation X (collectively, the
"Margin Rules") of the Board of Governors of the Federal Reserve
System.
(s) The Issuer is in material compliance with all applicable
Federal, state and local environmental laws and regulations, including,
without limitation, those applicable to safe drinking water, emissions
to the environment, waste management and waste disposal (collectively,
the "Environmental Laws"), except for such noncompliance as is not
reasonably likely to have a Material Adverse Effect, or as disclosed in
the Offering Memorandum, and, to the knowledge of the Issuer, there are
no circumstances that would prevent, interfere with or materially
increase the cost of such compliance in the future.
(t) Except as disclosed in the Offering Memorandum, there is
no claim under any Environmental Law, including common law, pending or
threatened against the Issuer (an "Environmental Claim") which would be
reasonably likely to have a Material Adverse Effect and, to the
knowledge of the Issuer, under applicable law, there are not past or
present actions, activities, circumstances, events or incidents,
including, without limitation, releases of any material into the
environment, that are reasonably likely to form the basis of any
Environmental Claim against the Issuer which would be reasonably likely
to have a Material Adverse Effect.
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(u) No statement, representation, warranty or covenant made by
the Issuer in this Agreement, or made in any certificate or document
required by this Agreement to be delivered to any Agent was or will be,
when made, inaccurate, untrue or incorrect.
2. Appointment of an Agent; Solicitation by an Agent of Offers to
Purchase; Sales of Notes to a Purchaser.
(a) (i) The Issuer shall deliver a Request for Bids with
respect to a Tranche to each Agent via electronic transmission
substantially in the form attached as Exhibit H hereto prior to 10:00
a.m. on any Business Day. Each Agent interested in submitting a bid for
a particular Tranche shall submit such bid to the Issuer by 2:00 p.m.
on the date of receipt of the Request for Bids or such later deadline
as may be specified in writing by the Issuer. The Issuer, in its sole
discretion and subject to its right to reject any and all bids for any
reason, shall select one or more Agents to participate in offering of
each Tranche. Subject to the terms and conditions set forth herein,
Agents are to be appointed, in accordance with the terms of a Notice or
Notices of Appointment (in the form attached as Exhibit I hereto)
executed by the Issuer, to act as the Issuer's agent to accept offers
for the purchase of Notes from the Issuer. The appointment by the
Issuer of an Agent shall not authorize such Agent to take any action on
behalf of the Issuer other than as set forth in this Agreement and the
Administrative Procedures. Other than Section 4(a)(v) of this
Agreement, this Agreement shall not in any way restrict or limit the
Issuer from selling, offering to sell or accepting offers to sell any
debt securities other than the Notes.
(ii) On the basis of the representations and
warranties and subject to the terms and conditions, set forth herein,
upon appointment pursuant to Notice of Appointment each Agent agrees,
as agent of the Issuer, to use its reasonable efforts (commensurate
with those efforts customarily made in offerings of a similar nature)
to place the Notes on behalf of the Issuer upon the terms and
conditions described in the Notice of Appointment, the Offering
Memorandum and in the Administrative Procedures. In soliciting offers
as agent, each Agent is acting solely as agent of the Issuer and not as
principal. Each Agent shall use its reasonable efforts to assist the
Issuer in obtaining performance by each purchaser whose offer to
purchase Notes has been solicited by such Agent and accepted by the
Issuer, however such Agent shall not have any liability to the Issuer
in the event any such purchase is not consummated for any reason;
provided that the foregoing shall not operate to release the Agent from
any liability it may otherwise have as a result of its failure to
perform its obligations under this Agreement. Except as provided in
Section 2(b), under no circumstances will any Agent be obligated to
purchase any Notes for its own account. It is understood and agreed,
however, that any Agent may purchase Notes for its own account as
Purchaser pursuant to Section 2(b) or otherwise as may be agreed or
permitted by the Issuer and such Agent.
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(iii) The Issuer reserves the right, in its sole
discretion, to instruct the Agents to suspend at any time, for any
period of time or permanently, the solicitation of offers to purchase
Notes. Within one business day of receipt of instructions to that
effect from the Issuer, each Agent will forthwith suspend solicitation
of offers to purchase Notes from the Issuer until such time as the
Issuer has advised it that such solicitation may be resumed.
(iv) The Issuer agrees to pay each Agent a
commission, upon closing, with respect to each sale of Notes by the
Issuer as a result of a solicitation made by such Agent, including any
sale for the account of any affiliate of such Agent, in an amount equal
to that percentage of the aggregate principal amount of the Notes sold
by the Issuer specified on Schedule II hereto for Notes with the
relevant term. Such commission shall be payable as specified in the
Administrative Procedures.
(v) Subject to the provisions of this Agreement, the
Notice of Appointment and the Administrative Procedures, offers for the
purchase of Notes may be solicited by the Agent, as agent for the
Issuer, at such time and in such amounts as the Agent and the Issuer
deem advisable. The Issuer may, subject to Sections 4(a)(v) and
4(a)(xviii) of this Agreement, from time to time offer other debt
obligations for sale on its own behalf directly to purchasers otherwise
than through an Agent, in which case no commission would be payable
with respect to such sale, provided such direct sales are made in
compliance with all applicable law. As long as this Agreement shall be
in effect, the Issuer shall not solicit or accept offers to purchase
Notes through any agent other than Agents named on Schedule I hereto;
provided, however, that the Issuer may amend Schedule I hereto from
time to time to appoint additional Agents provided that the Issuer (i)
has appointed such agent as an additional Agent hereunder on the same
terms and conditions as provided herein for the Agents, and (ii) has
caused such additional agent to execute this Agreement.
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(vi) Each Agent may, in the exercise of its
reasonable discretion, reject any offer to purchase Notes received by
it as agent of the Issuer and not communicate such offer to the Issuer.
Each Agent shall communicate to the Issuer, orally or in writing, each
such offer that it does not reject and, if such Agent or any of its
affiliates shall be the offeror, shall advise the Issuer of that fact.
The Issuer shall have sole and absolute discretion to accept any offer,
and may reject any offer to purchase Notes in whole or, if permitted by
the terms of such offer, in part.
(vii) If the Issuer shall default in its obligations
to deliver Notes to a purchaser whose offer it has accepted, the Issuer
shall hold you harmless against any loss, claim or damage arising from
or as a result of such default by the Issuer (except to the extent that
such default by the Issuer shall result from the failure by you to
perform your obligations hereunder).
(b) (i) Subject to the terms and conditions stated herein,
whenever the Issuer and any one (or more) of you jointly determine that
the Issuer shall sell Notes directly to any one (or more) of you as the
Purchaser, each such sale of Notes shall be made in accordance with the
terms of this Agreement and, unless specifically waived by the
Purchaser, a supplemental agreement relating thereto between the Issuer
and the Purchaser. Each such supplemental agreement (which shall be
substantially in the form of Exhibit B) is herein referred to as a
"Terms Agreement". A Purchaser's commitment to purchase Notes pursuant
to any Terms Agreement shall be deemed to have been made on the basis
of the representations and warranties of the Issuer contained herein or
therein (if any) and shall be subject to the terms and conditions set
forth herein and in such Terms Agreement. Unless the context otherwise
requires, each reference contained herein to "this Agreement" shall be
deemed to include any applicable Terms Agreement between any one (or
more) of you and the Issuer. Each Terms Agreement shall describe the
Notes to be purchased by the Purchaser pursuant thereto, specify the
principal amount of such Notes, the price to be paid to the Issuer for
such Notes specified by reference to the principal amount of the Notes
and the discount to the Purchaser from the principal amount thereof,
the rate at which interest will be paid on such Notes, the date of
issuance of such Notes (the "Closing Date"), the place of delivery of
the Notes and payment therefor, the method of payment, any modification
of, or addition to, the requirements for the delivery of the opinions
of counsel set forth in Section 6(a)(ii), the certificates from the
Issuer or its officers and the letter from the Issuer's independent
certified public accountants, and such other terms and conditions as
may be specified therein from time to time. The discount to the
Purchaser with respect to any Notes sold pursuant to this Section 2(b)
shall be equal to that percentage of the principal amount thereof
specified in Schedule II hereto for Notes with the relevant term,
unless a higher percentage is specified in the applicable Terms
Agreement.
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(ii) The settlement details for Notes sold to a
Purchaser pursuant to any Terms Agreement shall be agreed to between
the Issuer and such Purchaser in the respective Terms Agreement. If
there is no such Terms Agreement, the settlement details specified in
the Administrative Procedures shall apply with the Purchaser filling
the roles specified therein of the Agent and the beneficial owner.
(iii) Nothing contained in this Agreement shall
obligate an Agent to enter into a Terms Agreement with the Issuer or to
otherwise agree to purchase Notes for its own account.
3. Offering and Sale of Notes. Each party hereto agrees to perform the
respective duties and obligations specifically provided to be performed by it
in the Administrative Procedures.
4. Agreements.
(a) The Issuer agrees with you that:
(i) If information that is material to an investment
in a Note is not otherwise contained in the Offering Memorandum, or if
at any time an event occurs as a result of which the Offering
Memorandum as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at such time to amend or supplement the Offering Memorandum
to comply with any applicable law, the Issuer promptly will prepare an
amendment or supplement which will correct such statement or omission
or effect such compliance, and will not effect any amendment or
supplement to the Offering Memorandum without your consent, which
consent shall not be unreasonably withheld; provided, however, that the
foregoing consent requirement shall not apply to periodic and other
filings with the Commission by the Issuer under the federal securities
laws including, without limitation, Current Reports on Form 8-K,
Quarterly Reports on Form 10-Q, or Annual Reports on Form 10-K under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")
("Federal Securities Filings"). Neither your consent to, nor your
delivery of, any such amendment or supplement shall constitute a waiver
of any of the conditions set forth in Section 5 hereto.
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(ii) The Issuer shall furnish to you such information
and documents relating to the business, operations and affairs of the
Issuer, the Offering Memorandum and any amendments thereof or
supplements thereto, the Notes, the Supplemental Indenture, this
Agreement, any Terms Agreement, the Administrative Procedures, the
Paying Agency Agreement and the performance by the parties hereto of
their respective obligations hereunder and thereunder as you may from
time to time and at any time prior to the termination of this Agreement
reasonably request in connection with soliciting offers to purchase
Notes. The Issuer shall notify you promptly (1) if at any time any
event occurs which constitutes (or after notice or lapse of time or
both would constitute) a default or an event of default under the
Notes, the Supplemental Indenture, the Paying Agency Agreement, this
Agreement or any agreement evidencing additional indebtedness of the
Issuer or (2) of any material adverse change, or to the knowledge of
the Issuer any development involving a prospective material adverse
change, in the financial condition, earnings, business or business
prospects or properties of the Issuer and its subsidiaries considered
as a single enterprise.
(iii) The Issuer shall, whether or not any sale of
Notes is consummated, (1) pay, or reimburse if paid by any Agent, all
reasonable costs and expenses incident to the performance of its
obligations under this Agreement and any Terms Agreement, including,
but not limited to, the cost of preparation, printing or other
production and delivery of the Offering Memorandum, all amendments
thereof and supplements thereto, the Supplemental Indenture, the Paying
Agency Agreement, this Agreement, any Terms Agreement and all other
documents relating to the offering of Notes pursuant hereto and
thereto, the cost of preparing, printing, packaging and delivering the
Notes, the fees and disbursements of counsel to and accountants for the
Issuer, the fees and disbursements of the Trustee, the fees and
disbursements of the Paying Agent, and the fees of any Rating Agency,
(2) reimburse you on a quarterly basis for all reasonable out-of-pocket
expenses incurred by you in connection with this Agreement and the
transactions contemplated hereby and (3) pay the reasonable fees and
expenses of your counsel incurred in connection with this Agreement and
the transactions contemplated hereby.
14
(iv) On each date of settlement for any Tranche of
Notes (a "Settlement Date"), or if at any time that the Offering
Memorandum is amended or supplemented (excluding an amendment or
supplement solely by reason of the incorporation of documents by
reference), in the reasonable judgement of the Agent the information
disclosed in such amendment or supplement is of such a nature that an
officer's certificate and an opinion of counsel need be furnished, the
Issuer shall deliver or cause to be delivered promptly to you an
officer's certificate, an opinion of counsel and an opinion of its
Senior Vice President-Law and Administration or General Counsel, dated
the Settlement Date or the date of such amendment or supplement, as the
case may be, in form reasonably satisfactory to the Agent, of the same
tenor as the certificate and opinions referred to in Sections 5(a)(ii)
and (iii), but modified to relate to the Offering Memorandum, this
Agreement and the Paying Agency Agreement, each as then in effect.
(v) Unless otherwise specified in any Terms
Agreement, the Issuer shall not, without the prior consent of the
Purchaser thereunder, issue or announce the proposed issuance of any of
its debt securities (including Notes), which are denominated in the
same currency as, and have similar maturities, similar interest rates
and other terms (including in respect of the method of computing
interest) substantially similar to those of, the Notes being purchased
pursuant to such Terms Agreement, during the period commencing on the
date on which the Issuer accepts an offer to purchase any Note in
accordance with such Terms Agreement and terminating on the Closing
Date for the sale of such Note.
(vi) The Issuer shall furnish to you without charge,
from time to time, as many copies of the following as you may
reasonably request: (A) the Offering Memorandum and any amendment or
supplement that has been prepared with respect thereto, (B) any Pricing
Supplement, and (C) any financial statements and other periodic reports
that the Issuer may furnish generally to holders of its debt
securities.
15
(vii) The Issuer shall furnish to you in written form
all quarterly financial statement information for the first three
fiscal quarterly periods of the Issuer promptly upon publication of
such quarterly information and, within two months of the end of each
such quarterly period, cause the Offering Memorandum to be supplemented
to include such financial information and corresponding information for
the comparable period of the preceding fiscal year, as well as such
other information and explanations as shall be necessary for an
understanding of such financial information, which supplement may be in
the form of a separate quarterly report, or a report filed by the
Issuer under the Exchange Act.
(viii) The Issuer shall furnish to you the audited
consolidated financial statements updating the audited consolidated
financial statements and the financial information included in the
Offering Memorandum for each corresponding fiscal year as promptly as
practicable after the publication of such financial statements, but in
any event not later than four months after the end of such fiscal year,
and cause the Offering Memorandum to be supplemented to include such
audited financial statements and the accountants' report with respect
thereto, as well as such other information and explanations as shall be
necessary for an understanding of such financial statements, which
supplement may be in the form of a separate annual report or report
filed by the Issuer under the Exchange Act.
(ix) The Issuer shall (1) furnish to you copies of
any proposed supplement or amendment to the Offering Memorandum
(including any document incorporated by reference therein) in advance
of using such supplement or amendment, such copies, to the extent
practicable, to be furnished to you five business days in advance of
using such supplement or amendment, except for Federal Securities
Filings, copies of which filings the Issuer will cause to be delivered
to the Agent by facsimile or other means of delivery, on or prior to
the date of filing with the Commission, and (2) permit you to review
and comment as to the form and content thereof and, subject to the
proviso in Section 4(a)(i), shall not use any such amendment or
supplement to which you have reasonably objected in good faith;
provided, however, that an amendment or supplement prepared to set
forth terms and conditions of any Notes, including any Pricing
Supplement, need not be furnished to or reviewed by those of you who
are not named therein, who shall not have solicited offers for such
Notes and who are not to be Purchasers of such Notes. Any Agent who
shall have an objection in good faith to such proposed amendment or
supplement may immediately terminate this Agreement as to such Agent by
notice to the Issuer. At the request of any Agent so terminating, the
Issuer shall promptly amend and supplement the Offering Memorandum and
Schedule I hereto to indicate those firms that remain Agents.
16
(x) The Issuer shall not offer or sell any securities
under circumstances which would require the registration of any of the
Notes under the Securities Act.
(xi) The Issuer will take appropriate steps to ensure
that the aggregate principal amount of Notes issued during the Offering
Period does not exceed U.S. $300,000,000, will not issue any Notes if
such issuance would cause such limit to be exceeded, will promptly
notify you in the event that at any time such limit has been reached
and will promptly notify you if such limit is increased pursuant to
this Agreement.
(xii) The Issuer shall not, without having given
prior written notice to you, consent to any amendment of the Paying
Agency Agreement. The Issuer shall promptly notify you of any
resignation or removal of the Paying Agent and the appointment of any
successor thereto.
(xiii) For so long as any of the Notes are
outstanding, the Issuer will provide to any holder of Notes that are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, and to any prospective purchaser of such Notes
designated by a holder thereof, upon the request of such holder or
prospective purchaser in connection with a transfer or proposed
transfer pursuant to Rule 144A, any information required to be provided
to such holder or prospective purchaser to comply with the conditions
set forth in Rule 144A as in effect as of the date the Notes of the
corresponding Tranche shall have been first issued (together with any
such information added by an amendment to Rule 144A after such date, to
the extent such information can be provided without unreasonable
additional expense to the Issuer).
(xiv) You shall not be liable or responsible to the
Issuer for any losses, damages or liabilities suffered or incurred by
the Issuer, including any losses, damages or liabilities under the
Securities Act, arising from or relating to any resale or transfer of a
Note by a holder (other than yourself) in any manner that does not
comply with the applicable restrictions on resale and transfer or the
procedures required for resale and transfer set forth herein, in the
Offering Memorandum and in the Notes; provided that each of you,
severally and not jointly, shall remain liable for the performance of
your own obligations under this Agreement.
17
(xv) The Issuer will at all times ensure that all
approvals, authorizations, consents or other orders of, and all filings
with, any governmental or other administrative agency or body will be,
prior to the time required (taking into account any permitted
extensions), obtained or made (1) so that the Issuer may lawfully
perform its obligations under the Notes, the Supplemental Indenture,
this Agreement, the Administrative Procedures and the Paying Agency
Agreement and (2) so that performance of such obligations will, in all
respects material to the Issuer and its subsidiaries considered as a
single enterprise, or material to the Issuer's ability to perform its
obligations under the Notes, the Supplemental Indenture, this
Agreement, the Administrative Procedures and the Paying Agency
Agreement, comply with any laws, decrees, regulations, judgments or
orders of any court, government, governmental authority or agency to
which the Issuer or any of its subsidiaries or any of their respective
properties or assets is subject.
(xvi) During the Offering Period, the Issuer will
send to you a copy of every notice of a meeting of the holders of the
Notes (or any of them) that is sent by the Issuer or the Trustee to
such holders at the same time it is sent to such holders and will
promptly notify you immediately upon its becoming aware that a meeting
of the holders of the Notes (or any of them) has been convened by any
of such holders.
(xvii) During the Offering Period, the Issuer shall
promptly notify you of any lowering in the ratings of any of the
Issuer's securities by any Rating Agency, or of any notice given by any
Rating Agency of any intended or possible decrease in any such rating
or of any possible change in any such rating where such notice does not
indicate the direction of the possible change.
(xviii) During the six-month period preceding and the
six-month period following the issue date of any Note, neither the
Issuer nor any affiliate of the Issuer will directly or indirectly,
sell, offer for sale, solicit offers to buy or otherwise negotiate in
respect of, any of the Notes or any other security (as defined in the
Securities Act) which will be integrated with such sale of Notes in a
manner that would require the registration of the Notes under the
Securities Act.
18
(xix) Until the expiration of two years after the
issuance of each Tranche of Notes, the Issuer will not, and will cause
its affiliates not to resell any Notes which are "restricted
securities" (as such term is defined under Rule 144(a)(3) of the Act)
whether as beneficial owner or otherwise (except as agent acting as a
securities broker on behalf of and for the account of customers in the
ordinary course of business in unsolicited broker's transactions).
(xx) The Issuer will apply the net proceeds from the
offering and sale of the Notes in the manner set forth in the Offering
Memorandum under "Use of Proceeds".
(b) The obligations of the Issuer under Sections 4(a)(i),
(ii), (iv), (vi), (vii), (viii) and (ix) shall be suspended during any
period of time during which the Issuer shall have suspended the
solicitation of offers to purchase Notes by written notice to each
Agent; provided, however, that such obligations of the Issuer shall
remain in effect (i) for a period of two years following the date of
notice of such suspension if such Agent shall own any Notes with the
intention of reselling them as contemplated by Section 2(b) or (ii) if
the Issuer has accepted an offer to purchase Notes solicited by such
Agent pursuant to this Agreement and the settlement for such sale shall
not have occurred. At least one week prior to the end of any such
period during which solicitations shall have been suspended, the Issuer
shall notify you of any event or change contemplated by Section 4(a)(i)
or by the last sentence of Section 4(a)(ii) of which the Issuer would
have been obligated to notify you, and shall provide you all written
information, documents and supplements referred to in Sections
4(a)(ii), (iv), (vii), (viii) and (ix) that the Issuer would have been
obligated to deliver to you, had the Issuer not so suspended the
solicitation of offers.
5. Conditions to the Obligations of the Agent.
(a) The obligations of each Agent to solicit offers to
purchase any Notes shall be subject to the accuracy of the
representations and warranties on the part of the Issuer contained
herein as of the date hereof and as of each time the Issuer gives a
notice requesting any Agent to solicit offers as Agent, at and as of
each acceptance of an offer by the Issuer and upon delivery of any Note
to the purchaser (or its agent) pursuant to such offer, to the accuracy
of the statements of the Issuer made in any certificates delivered
pursuant to the provisions hereof as of the respective dates of such
certificates, to the performance and observance by the Issuer of all
covenants and agreements herein contained on its part to be performed
and observed and to the following additional conditions precedent:
19
(i) The Issuer shall have obtained all
authorizations, consents and approvals of any court or governmental or
other regulatory agency or body required in connection with the
issuance and sale of the Notes and the performance of its obligations
hereunder and under the Notes, the Notice of Appointment, the
Supplemental Indenture and the Paying Agency Agreement.
(ii) The Issuer shall have furnished to you an
accurate certificate dated as of the date thereof, signed by the Chief
Executive Officer or the Chief Financial Officer of the Issuer, in form
and substance satisfactory to you, to the effect that, to the best of
his or her knowledge after reasonable inquiry:
(1) the representations and warranties
of the Issuer in this Agreement are true and correct
in all material respects on and as of the date of the
certificate and the Issuer has performed in all
material respects all its obligations and satisfied
all the conditions on its part to be satisfied at or
prior to the date of the certificate;
(2) since the date of the most recent
financial statements included in the current Offering
Memorandum, there has been no material adverse
change, or to the knowledge of the Issuer any
development involving a prospective material adverse
change, in the financial condition, earnings,
business or business prospects or properties of the
Issuer and its subsidiaries, considered as a single
enterprise, except as set forth in the Offering
Memorandum; and
(3) the Offering Memorandum (other than
statements made therein in reliance upon and in
conformity with information furnished to the Issuer
in writing by any Agent specifically for use therein,
as to which no representation shall be made) does not
contain any untrue statement of a material fact or
omit to state any material fact necessary to make the
statements therein, in light of the circumstances
under which they were made, not misleading.
(iii) (A) The Issuer shall have furnished to each
Agent the opinion of Xxxxxxxx Xxxxxx LLP, counsel to the Issuer,
substantially in the form of Exhibit C hereto, which may be subject to
any assumptions, qualifications and limitations that are reasonably
acceptable to each Agent.
20
(B) The Issuer shall have furnished to each
Agent and to Xxxxxxxx Xxxxxx LLP the opinion of the Senior Vice
President-Law and Administration or General Counsel of the Issuer
substantially in the form of Exhibit D hereto, which may be subject to
any assumptions, qualifications and limitations that are reasonably
acceptable to each Agent.
(iv) Each Agent shall have received from Chase
Manhattan Trust Company National Association, as Trustee under the
Indenture of Mortgage and the Supplemental Indenture, a certificate
substantially in the form of Exhibit E hereto, which may be subject to
any assumptions, qualifications and limitations that are reasonably
acceptable to each Agent.
(v) Each Agent shall have received from your counsel
such opinion with respect to the proposed issue and sale of the Notes
and other related matters as the Agent may reasonably require.
(vi) KPMG LLP, independent accountants for the
Issuer, shall have furnished to the Agent an executed copy of a letter
in the form attached hereto as Exhibit F.
(vii) The Issuer shall have furnished to each Agent
such further information, certificates and documents as any Agent may
reasonably request.
(viii) The documents required to be delivered by this
Section 5 shall be delivered at, or transmitted by telecopy (with an
undertaking promptly to forward the original copies thereof) to, the
offices of Xxxxxxxx Xxxxxx LLP, counsel for the Issuer, 0000 Xxxxxx
Xxxx Xxxxxx, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000, at 4:00 P.M.,
Philadelphia time, on the date thereof, and an original of each such
document will be sent to you.
(b) Each of the conditions precedent in clauses (i) through
(viii) above shall be satisfied on each Settlement Date unless waived
by the Agent or Agents appointed for the relevant Tranche, at the sole
discretion of such Agent or Agents. Each of the items listed in clauses
(ii), (iii) and (iv) above shall be dated the applicable Settlement
Date. The items listed in clause (vi) shall be dated the applicable
Settlement Date, if the Company shall have prepared updated quarterly
or annual financial statements since the date of the last such letter
delivered to you.
21
6. Conditions to the Obligations of a Purchaser.
(a) The obligations of any Purchaser to purchase any Notes
shall be subject to the accuracy of the representations and warranties
on the part of the Issuer contained herein or in the corresponding
Terms Agreement, if any, at and as of the date of the corresponding
Terms Agreement and upon the delivery to any Purchaser of any Note
pursuant to such Terms Agreement, to the performance and observance by
the Issuer of all covenants and agreements herein or therein contained
on its part to be performed and observed and to the following
additional conditions precedent:
(i) The Issuer shall have obtained all
authorizations, consents and approvals of any court or governmental or
other regulatory agency or body required in connection with the
issuance and sale of the Notes and the performance of its obligations
hereunder and under the Notes, the Notice of Appointment, the
Supplemental Indenture and the Paying Agency Agreement.
(ii) To the extent provided by such Terms Agreement,
the Purchaser shall have received, appropriately updated, (1) a
certificate of the Issuer dated as of the Closing Date to the effect
set forth in Section 5(a)(ii), (2) the opinion of Xxxxxxxx Xxxxxx LLP
dated the Closing Date to the effect set forth in Section 5(a)(iii)(A),
(3) the opinion of the Senior Vice President-Law and Administration or
General Counsel, dated the Closing Date to the effect set forth in
Section 5(a)(iii)(B), (4) the Trustee's certificate dated the Closing
Date to the effect set forth in Section 5(a)(iv), (5) the opinion of
your counsel dated the Closing Date to the effect set forth in Section
5(a)(v) and (6) the letter of KPMG LLP dated the Closing Date to the
effect set forth in Section 5(a)(vi).
(iii) Prior to the Closing Date, the Issuer shall
have furnished to the Purchaser such further information, certificates
and documents as the Purchaser may reasonably request.
(b) If any of the conditions specified in this Section 6 shall
not have been fulfilled in all material respects when and as provided
in this Agreement and any Terms Agreement, or if any other event occurs
which permits cancellation under this Agreement, such Terms Agreement
and all obligations of the Purchaser thereunder and with respect to the
Notes subject thereto may be canceled at, or at any time prior to, the
respective Closing Date by the Purchaser. Notice of such cancellation
shall be given to the Issuer in writing or by telephone, promptly
confirmed in writing, which confirmation may be made by telex or
telecopy.
22
7. Conditions to all Purchases. The consummation of the sale of any
Note pursuant to this Agreement shall be subject to the further condition that,
at the date of issuance thereof, in the reasonable judgment of the Purchaser or
the Agent that obtained the offer, (a) each condition set forth in Section 5 or
6, as applicable, shall have been satisfied and (b) subsequent to the respective
dates as of which information is given in the Offering Memorandum (current as of
the date of such agreement to purchase a Note), except as set forth therein or
contemplated thereby, there shall not have occurred any material adverse change,
or to the knowledge of the Issuer any development involving a prospective
material adverse change, in or affecting the financial condition, earnings,
business or business prospects or properties of the Issuer and its subsidiaries,
considered as a single enterprise, the effect of which makes it impracticable or
inadvisable to market the Notes or to proceed with completion of the sale and
payment for such Notes.
8. Restrictions on Offers and Sales of the Notes. Each party hereto
represents, warrants and agrees, severally and not jointly, as follows:
(a) It will solicit offers to purchase Notes only from, and it
will offer and sell Notes only to, (i) institutional purchasers that
are, or that it reasonably believes are, "qualified institutional
buyers" as such term is defined in paragraph (a)(1) of Rule 144A
("QIBs") or (ii) any Agent. If it is an Agent, any resales or transfers
of Notes through, or arranged by, such Agent similarly will be made
only to QIBS. Neither it, its affiliates, nor any person acting on its
or their behalf (except that no representation is made with respect to
any other party to this Agreement) has engaged or will engage in any
form of general solicitation or general advertising (within the meaning
of Rule 502(c) under the Securities Act) in the United States with
respect to the Notes.
(b) It will make reasonable inquiry to determine whether a
purchaser is purchasing for such purchaser's own account as a QIB or
for the account of others and not with a view to, or for sale in
connection with, the public distribution thereof in any transaction
that would be in violation of Federal or state securities laws and, in
the case of any purchaser acting on behalf of one or more third
parties, it shall make reasonable inquiry to determine that each such
third party is a QIB and that the amount being purchased on behalf of
each such third party is not less than the authorized minimum
denomination of such Notes; provided that the Issuer shall have no duty
to make any such inquiry in connection with sales to any Agent or
pursuant to offers transmitted to it by any Agent.
23
9. Indemnification and Contribution.
(a) The Issuer agrees to indemnify and hold harmless each
Agent and each person who controls any Agent within the meaning of
either the Securities Act or Section 20 of the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to
which any such person may become subject under the law of any
jurisdiction insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement of a material fact contained in the Offering Memorandum, in
any amendment thereof or supplement thereto or in any information
provided by the Issuer and furnished to any purchaser of the Notes
pursuant to Section 4(a)(xiii), or arise out of or are based upon the
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and agrees
to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that (i) the Issuer will not be liable in
any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or
omission made in the Offering Memorandum or in any amendment thereof or
supplement thereto in reliance upon and in conformity with written
information furnished to the Issuer by the person seeking
indemnification, or on behalf of another person authorized to do so,
specifically for use in connection with the preparation thereof. This
indemnity will be in addition to any liability which the Issuer may
otherwise have.
(b) Each Agent, severally and not jointly, agrees to indemnify
and hold harmless the Issuer and each person who controls the Issuer
within the meaning of either the Securities Act or the Exchange Act, to
the same extent as the foregoing indemnity from the Issuer, but only
with reference to written information relating to the indemnifying
party furnished to the Issuer by it, or on its behalf by a person
authorized to do so, specifically for use, in the preparation of the
Offering Memorandum or any amendment thereof or supplement thereto.
This indemnity will be in addition to any liability which any Agent may
otherwise have.
24
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party
in writing of the commencement thereof; however, the omission so to
notify the indemnifying party (i) will not relieve it from any
liability under paragraph (a) or (b) above unless and to the extent it
did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of any substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. In
case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the
extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election
so to assume the defense of such action and approval by the indemnified
party of counsel (which approval shall not be unreasonably withheld),
the indemnifying party will not be liable to such indemnified party
under this Section 9 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate
counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (in addition to any
local counsel), representing the indemnified parties under paragraph
(a) of this Section 9 who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a
reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party; and except
that, if clause (i) or (iii) is applicable, such liability shall be
only in respect of the counsel referred to in such clause (i) or (iii).
The indemnifying party shall not be liable for any settlement of any
action or claim effected without its consent, which consent shall not
be unreasonably withheld.
25
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section
9 is due in accordance with its terms but is for any reason held by a
court to be unavailable on grounds of policy or otherwise, the Issuer
and each Agent shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) to which
the Issuer and any Agent may be subject in such proportion so that each
Agent is responsible only for that portion represented by the
percentage that the aggregate commissions received by each such Agent
pursuant to Section 2 in connection with the Notes from which such
losses, claims, damages and liabilities arise (or, in the case of Notes
sold to a Purchaser, the discount to such Purchaser), bears to the
aggregate principal amount of such Notes sold, and the Issuer is
responsible for the balance; provided, however, that in no case shall
any Agent be responsible for any amount in excess of the commissions
received by each such Agent in connection with the Notes from which
such losses, claims, damages and liabilities arise (or, in the case of
Notes sold to the Purchaser, the discount to such Purchaser). For
purposes of this Section 9, each person who controls any Agent within
the meaning of either the Securities Act or the Exchange Act shall have
the same rights to contribution as such Agent and each person who
controls the Issuer within the meaning of either the Securities Act or
the Exchange Act shall have the same rights to contribution as the
Issuer, subject in each case to the proviso to the preceding sentence.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
hereunder from any person who was not guilty of such fraudulent
misrepresentation. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim or
contribution may be made against another party or parties under this
paragraph (d), notify such party or parties from whom contribution may
be sought (which obligation to give notice shall be deemed to be
satisfied by the delivery of notice pursuant to paragraph (c) of this
Section 9), but the omission so to notify such party or parties shall
not relieve the party or parties from whom contribution may be sought
from any other obligation it or they may have hereunder or otherwise
than under this paragraph (d).
26
10. Termination.
(a) This Agreement will continue in effect until terminated as
provided in this Section 10 or Section 4(a)(ix). This Agreement may be
terminated by the Issuer as to any Agent or, in the case of any Agent
by such Agent, by giving at least 30 days' written notice of such
termination to the other parties hereto, at which time the Issuer shall
cause Schedule I hereto to be amended. Notwithstanding any such
termination, the rights and liabilities of each party under Sections
2(a)(iv) and (vii), Sections 4(a)(iii), (xiv) and (xvi), Sections 8(a)
and (b) (with respect to resales and transfers of Notes), Section 9,
Section 11 and any Terms Agreement executed prior to the date of
termination hereof shall survive any termination of this Agreement, in
whole or in part. In addition, if any termination shall occur either
(i) at a time when any Purchaser shall own any Notes, purchased under
this Agreement from the Issuer, with the intention of reselling them or
(ii) after the Issuer has accepted an offer to purchase Notes and prior
to the related settlement, all agreements, terms and conditions
relating to the purchase and sale of such Notes shall also remain in
effect.
(b) Each agreement to purchase Notes pursuant to a
solicitation by an Agent hereunder, and each agreement by a Purchaser
to purchase Notes hereunder, shall be subject to termination in the
absolute discretion of such Agent or the Purchaser (as the case may
be), by notice given to the Issuer prior to delivery of any payment for
Notes to be purchased, if prior to such time (i) trading in any
securities issued by the Issuer or by PSC shall have been suspended or
halted on any exchange (whether U.S. or foreign), or trading in
securities generally on the New York Stock Exchange shall have been
suspended or limited or minimum or maximum prices shall have been
generally established on such Exchange, or additional material
government restrictions, not in force on the date of this Agreement or
the date of any Terms Agreement with respect to such Notes, shall have
been imposed upon trading in securities generally by such Exchange or
by order of the Commission or any court or other governmental
authority, (ii) a general banking moratorium shall have been declared
by either U.S. Federal or New York State authorities, (iii) there shall
have been a lowering in the ratings of any of the Issuer's securities
by any Rating Agency or a notice given by any Rating Agency of any
intended or potential decrease in any such rating or of any possible
change in any such rating where such notice does not indicate the
direction of the possible change, or (iv) there shall have occurred any
material adverse changes in the financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis in
national or international political, financial or economic conditions
that makes it in the reasonable judgment of such Agent or Purchaser (as
the case may be) impracticable or inadvisable to market the Notes or to
proceed with completion of the sale of and payment for such Notes.
27
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Issuer or its officers and of the Agent set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Agent or by or on behalf of the Issuer or any of the
controlling persons referred to in Section 9, and will survive delivery of and
payment for the Notes.
12. Increases in the Amount of the Notes; Extension of Offering Period.
The aggregate principal amount of Notes that may be sold by the Issuer may be
increased, or the Offering Period may be extended, if permitted under the
Indenture of Mortgage and pursuant to the laws of the Commonwealth of
Pennsylvania, pursuant to (x) a subsequent supplemental indenture to the
Indenture of Mortgage and (y) an amendment to this Agreement in the form
attached hereto as Exhibit G executed by the Issuer and the Agent named in
Schedule I hereto. Upon the execution and delivery of any such amendment, to the
extent agreed upon by the Issuer and the Agent, the Issuer shall deliver to such
Agent, appropriately updated, (a) a certificate of the Issuer dated as of the
date of such amendment to the effect set forth in Section 5(a)(ii), (b) the
opinion of Xxxxxxxx Xxxxxx LLP dated the date of such amendment to the effect
set forth in Section 5(a)(iii)(A), (c) the opinion of its Senior Vice
President-Law and Administration or General Counsel, dated the Closing Date to
the effect set forth in Section 5(a)(iii)(B), (d) the certificate of the Trustee
dated the date of such amendment to the effect set forth in Section 5(a)(iv),
and (e) the letter of KPMG LLP dated the date of such amendment to the effect
set forth in Section 5(a)(vi), and the Issuer shall furnish to you such further
information, certificates and documents as you may reasonably request.
13. Notices. All communications hereunder will be in writing, and
effective only on receipt, or (but only where specifically provided in the
Administrative Procedures) by telephone and, if sent to the Agent, will be
mailed, delivered, telecopied and confirmed or telexed and confirmed to the
Agent, at the address(es) specified in Schedule I hereto; or, if sent to the
Issuer, will be mailed, delivered, telecopied and confirmed or telexed and
confirmed to it at 000 Xxxxxxxxx Xxxxxx, Xxxx Xxxx, XX 00000, Attention:
Treasurer, (telephone: (000) 000-0000; telecopy: (000) 000-0000).
28
14. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 9, and no other person will have any
right or obligation hereunder.
15. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE Commonwealth of Pennsylvania (EXCLUDING LAWS
GOVERNING CONFLICTS OF LAW).
16. Counterparts. This Agreement may be signed in counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
29
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Issuer and you.
Very truly yours,
PHILADELPHIA SUBURBAN WATER
COMPANY,
By: /s/ Xxxxx X. Xxxx
-------------------------
Name: Xxxxx X. Xxxx
Title: Vice President and
Treasurer
[confirmations and acceptances on following pages]
30
The foregoing Placement Agency Agreement is hereby confirmed and accepted as of
the date hereof.
X.X. Xxxxxxx & Sons
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Xxxxxx X. Xxxxx:
Managing Director
Investment Banking
Xxxxxx Xxxxxxxxxx Xxxxx, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
----------------------------
Xxxxxxx X. Xxxxxxxx, Xx.
Vice President
First Union Securities, Inc.
By: /s/ Xxxxxxx Xxxxxx
----------------------------
Xxxxxxx Xxxxxx
Managing Director
PaineWebber Incorporated
By: /s/ Xxxxx Xxxxx
----------------------------
Name: Xxxxx Xxxxx
Title: Senior Vice President
PNC Capital Markets, Inc.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
31
Xxxxxxx, Xxxxx, Xxxxxx, Xxxxxx & Xxxxx Incorporated
By: /s/ Xxxxx Xxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
32
INDEX OF DEFINITIONS
Term Section
---- -------
Accountants 1(b)
Administrative Procedures Introductory Paragraph
Agent Introductory Paragraph
Agreement Introductory Paragraph
Closing Date 2(b)(i)
Commission 1(a)
Exchange Act 4(a)(i)
Federal Securities Filings 4(a)(i)
Issuer Introductory Paragraph
Material Adverse Effect 1(c)
Notes Introductory Paragraph
Notice of Appointment 2(a)(i)
Offering Memorandum 1(a)
Offering Period Introductory Paragraph
Paying Agency Agreement Introductory Paragraph
Pricing Supplement 1(a)
PSC Introductory Paragraph
Purchaser Introductory Paragraph
QIBs 8(a)
Rating Agency 1(c)
Request for Bids 2(a)(i)
Rule 144A 1(m)
Securities Act Introductory Paragraph
Settlement Date 4(a)(iv)(A)
Terms Agreement 2(b)(i)
Tranche Introductory Paragraph
You Introductory Paragraph
33
SCHEDULE I
Placement Agents:
X.X. Xxxxxxx & Sons
0 Xxxxx Xxxxxxxxx
Xx. Xxxxx, XX 00000
Xxxxxx Xxxxx Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxxxx Xxxxxxxxxx Xxxxx, Inc.
Times Bldg., Suite 000
Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Xxxxxxx Xxxxxxxx Phone: (000) 000-0000
Fax: (000) 000-0000
PaineWebber Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxx Xxxxx Phone: (000) 000-0000
Fax: (000) 000-0000
First Union Securities, Inc.
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0735
Xxx Xxxxxxxx
PNC Capital Markets, Inc
One PNC Plaza
000 Xxxxx Xxxxxx
00xx Xxxxx, Xxxxxxxxxx XX 00000
Xxxxxx Xxxxxx
Xxxxxxx Xxxxx & Co.
World Financial Center
North Tower
New York, NY 10281-1311
Xxxxxxx Xxxxxxx Phone: (000) 000-0000
Fax: (000) 000-0000
34
SCHEDULE II
The Issuer agrees to pay each Agent a commission equal to the following
percentage of the principal amount of each Note sold by the Agent, and to pay
the Purchaser a commission in the form of a discount to the purchase price equal
to the following percentage of the principal amount of each Note purchased by a
Purchaser under Section 2(b):
Term Commission Rate
---- ---------------
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years up to and including 35 years .750%
35
EXHIBIT A
MEDIUM TERM NOTE ADMINISTRATIVE PROCEDURES
December 3, 1999
First Mortgage Bonds, 1999 Medium Term Notes Series (the
"Notes"), due from one year to thirty-five years, are to be offered on a
continuing basis during the five year period from November 18, 1999 through
November 17, 2004. The Agent or Agents listed on Schedule I to the Placement
Agency Agreement (collectively, the "Agent) have agreed to use reasonable
efforts to solicit offers to purchase Notes in fully registered form. The Agent
may also purchase Notes as principal for resale, but no Agent will be obligated
to purchase Notes for its own account. One or more of the Agents may participate
in the placement or purchase of the Notes of each Tranche upon their receipt of
a Notice of Appointment from the Issuer for said Xxxxxxx.
The Notes are being sold pursuant to a Placement Agency
Agreement between the Issuer and the Agent dated as of the date hereof (the
"Placement Agency Agreement"). The Notes will be issued under and secured in
accordance with the Thirty-Third Supplemental Indenture dated as of November 15,
1999 (the "Supplemental Indenture") to the Indenture of Mortgage dated as of
January 1, 1941 (the Indenture of Mortgage") between the Issuer and Chase
Manhattan Trust Company, National Association (as successor trustee to The
Pennsylvania Company for Insurance on Lives and Granting Annuities), as Trustee
(the "Trustee").
All Notes shall be represented by Global Securities (as
defined hereinafter) registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"), and beneficial ownership of such Notes will be
represented and maintained in book-entry form on the books of DTC (the
"Book-Entry Notes"). An owner of a Book-Entry Note will not be entitled to
receive a certificate representing such Note. However, if DTC is at any time
unwilling or unable to continue as depositary and a successor depositary is not
appointed by the Issuer within 90 days, the Issuer will issue Notes in
definitive registered form (the "Certificated Notes") in exchange for the Global
Security or Securities representing such Notes. In addition, the Issuer may at
any time and in its sole discretion determine not to have some of or all the
Notes represented by one or more Global Securities and, in such event, will
issue certificated Notes in exchange for all of the Global Securities
representing such Notes. In any such instance, an owner of a beneficial interest
in a Global Security will be entitled to physical delivery of Certificated Notes
represented by such Global Security equal in amount to that represented by such
beneficial interest and to have such Certificated Notes registered in its name.
The procedures to be followed during, and the specific terms
of, the solicitation of offers by each Agent and the sale as a result thereof by
the Issuer are explained below. Administrative and record-keeping
responsibilities will be handled for the Issuer by its Treasurer. The Issuer
will advise each Agent and the Trustee in writing of those persons handling
administrative responsibilities with whom the Agent and the Trustee are to
communicate regarding offers to purchase Notes and the details of their
delivery. The Issuer will promptly advise each Agent and the Trustee in writing
if any such person shall cease to handle such responsibilities or of the
authorization of any additional person to handle such responsibilities.
Administrative procedures and specific terms of the offering
are explained below. Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof, as adjusted in accordance
with changes in DTC's operating requirements, and Certificated Notes will be
issued in accordance with the administrative procedures set forth in Part II
hereof. Capitalized terms not defined herein shall have the meanings assigned in
the Placement Agency Agreement or, if not defined therein, in the Supplemental
Indenture or the Offering Memorandum. To the extent the procedures set forth
below conflict with the provisions of the Notes, the Indenture of Mortgage, the
Supplemental Indenture, DTC's operating requirements or the Placement Agency
Agreement, the relevant provisions of the Notes, the Indenture of Mortgage, the
Supplemental Indenture, DTC's operating requirements and the Placement Agency
Agreement shall control.
PART I
Administrative Procedures for
Book-Entry Notes
In connection with the qualification of the Book-Entry Notes
for eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions assigned to
it as described below, unless certain duties are otherwise designated to a duly
authorized paying agent, in accordance with its respective obligations under a
Letter of Representations from the Issuer and the Trustee to DTC dated as of the
date hereof and a Medium Term Note Certificate Agreement between The Chase
Manhattan Bank and DTC dated as of December 2, 1988, as amended, and its
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
system ("SDFS").
2
Issuance: On any date of settlement (as defined
under "Settlement" below) for one or more
Notes, the Issuer will issue a single
global security in fully registered form
without coupons (a "Global Security")
representing all such Notes that have the
same rank (senior or subordinated),
original issue date, original issue
discount provisions, if any, Interest
Payment Dates, Record Dates, Interest
Payment Period, redemption provisions, if
any, tender provisions, if any, Maturity
Date, and interest rate (collectively,
the "Terms"). Each Global Security will
be dated and issued as of the date of its
authentication by the Trustee. Each
Global Security will bear an original
issue date, which will be (i) with
respect to an original Global Security
(or any portion thereof), the original
issue date specified in such Global
Security and (ii) following a
consolidation of Global Securities, with
respect to the Global Security resulting
from such consolidation, the most recent
Interest Payment Date to which interest
has been paid or duly provided for on the
predecessor Global Securities, regardless
of the date of authentication of such
resulting Global Security. No Global
Security will represent any Certificated
Note.
Identification The Issuer has arranged with the CUSIP
Numbers: Service Bureau of Standard & Poor's (the
"CUSIP Service Bureau") for the
reservation of one series of CUSIP
numbers, which consists of approximately
900 CUSIP numbers and relates to Global
Securities representing Book-Entry Notes.
The Issuer has obtained from the CUSIP
Service Bureau a written list of such
reserved CUSIP numbers, which the Issuer
shall deliver to the Trustee and DTC. The
Issuer will assign CUSIP numbers to
Global Securities as described below
under Settlement Procedure "B". DTC will
notify the CUSIP Service Bureau
periodically of the CUSIP numbers that
the Issuer has assigned to Global
Securities. At any time when fewer than
100 of the reserved CUSIP numbers remain
unassigned to Global Securities for
either series, if it deems necessary, the
Issuer will reserve additional CUSIP
numbers for assignment to Global
Securities. Upon obtaining such
additional CUSIP numbers, the Issuer
shall deliver a list of such additional
CUSIP numbers to the Trustee and DTC.
3
Registration: Global Securities will be issued only in
fully registered form without coupons.
Each Global Security will be registered
in the name of Cede & Co., as nominee for
DTC, on the securities register for the
Notes maintained under the Indenture of
Mortgage. The beneficial owner of a
Book-Entry Note (or one or more indirect
participants in DTC designated by such
owner) will designate one or more
participants in DTC (with respect to such
Book-Entry Note, the "Participants") to
act as agent or agents for such owner in
connection with the book-entry system
maintained by DTC, and DTC will record in
book-entry form, in accordance with
instructions provided by such
Participants, a credit balance with
respect to such beneficial owner in such
Book-Entry Note in the account of such
Participants. The ownership interest of
such beneficial owner (or such
Participant) in such Book-Entry Note will
be recorded through the records of such
Participants or through the separate
records of such Participants and one or
more indirect participants in DTC.
Transfers: Transfers of a Book-Entry Note will be
accomplished by book entries made by DTC
and, in turn, by Participants (and, in
certain cases, one or more indirect
participants in DTC) acting on behalf of
beneficial transferors and transferees of
such Note.
Exchanges: The Trustee may deliver to DTC and the
CUSIP Service Bureau at any time a
written notice of consolidation (a copy
of which shall be attached to the
resulting Global Security described
below) specifying (i) the CUSIP numbers
of two or more Outstanding Global
Securities that represent fixed rate
Notes having the same Terms and for which
interest has been paid to the same date,
(ii) a date, occurring at least thirty
(30) days after such written notice is
delivered and at least thirty (30) days
before the next Interest Payment Date for
such Book-Entry Notes, on which such
Global Securities shall be exchanged for
a single replacement Global Security and
(iii) the single CUSIP number to be
assigned to such replacement Global
4
Security (which shall be the CUSIP number
previously assigned to the Global
Security with the earliest date of
issuance). Upon receipt of such a notice,
DTC will send to its Participants
(including the Trustee) a written
reorganization notice to the effect that
such exchange will occur on such date.
Prior to the specified exchange date, the
Trustee will deliver to the CUSIP Service
Bureau a written notice setting forth
such exchange date and such single CUSIP
number and stating that, as of such
exchange date, the CUSIP numbers of the
individual Global Securities not assigned
to the replacement Global Security will
no longer be valid. On the specified
exchange date, the Trustee will exchange
such Global Securities for a single
Global Security bearing the single CUSIP
number and the CUSIP numbers of the
individual Global Securities not assigned
will, in accordance with CUSIP Service
Bureau procedures, be retired and not
reassigned. Each Book-Entry Note will
mature on a date not less than one year
nor more than thirty-five years after the
settlement date for such Note.
Denomination: Book-Entry Notes will be issued in a
minimum principal amount of $100,000 or
an integral multiple of $1,000 in excess
thereof. Global Securities will be
denominated in principal amounts not in
excess of $150,000,000. If one or more
Book Entry Notes having an aggregate
principal amount in excess of
$150,000,000 would, but for the preceding
sentence, be represented by a single
Global Security, then one Global Security
will be authenticated and issued to
represent each $150,000,000 principal
amount of such Book-Entry or Notes and an
additional Global Security will be
authenticated and issued to represent any
remaining principal amount of such
Book-Entry Note or Notes. In such a case,
each of the Global Securities
representing such Book-Entry Note or
Notes shall be assigned the same CUSIP
number.
5
Interest: General. Interest, if any, on each
Book-Entry Note will accrue from the
original issue date for the first
interest period or the last date to which
interest has been paid, if any, for each
subsequent interest period, on the Global
Security representing such Book-Entry
Note,and will be calculated and paid in
the manner described in such Book-Entry
Note and in the Offering Memorandum (as
defined in the Placement Agency
Agreement), as supplemented by the
applicable Pricing Supplement thereto.
Unless otherwise specified therein,
eachpayment of interest on a Book-Entry
Note will include interest accrued up to
but excluding the Interest Payment Date
or up to but excluding the Maturity Date.
Interest payable upon Maturity of a
Book-Entry Note will be payable to the
Person to whom the principal of such Note
is payable. Standard & Poor's Corporation
will use the information received in the
pending deposit message described under
Settlement Procedure "C" below in order
to include the amount of any interest
payable and certain other information
regarding the related Global Security in
the appropriate (daily or weekly) bond
report published by Standard & Poor's
Corporation.
Record Dates. The Record Date with
respect to any Interest Payment Date
shall be the December 15 or June 15
immediately preceding such Interest
Payment Date, whether or not such date
shall be a Business Day.
Interest Payment Dates. Interest payments
will be made semiannually on January 1
and July 1 of each year and at Maturity
or earlier redemption or Tender;
provided, however, that in the case of a
Book-Entry Note issued between a Record
Date and an Interest Payment Date, or on
an Interest Payment Date, the first
interest payment will be made on the
Interest Payment Date following the next
succeeding Record Date. If any Interest
Payment Date for a Book-Entry Note is not
a Business Day, the payment due on such
day shall be made on the next succeeding
Business Day and no interest shall accrue
on such payment for the period from and
after such Interest Payment Date.
6
Calculation of Interest: Book-Entry Notes. Interest on Book-Entry
Notes (including interest for partial
periods) will be calculated on the basis
of a 360-day year of twelve 30-day
months.
Payments of Principal and Interest: Payment of Interest Only. Promptly after
each Record Date, the Trustee will
deliver to the Issuer and DTC a written
notice setting forth, by CUSIP number,
the amount of interest to be paid on each
Global Security on the following Interest
Payment Date (other than an Interest
Payment Date coinciding with Maturity or
earlier redemption or Tender of such
Global Security) and the total of such
amounts. DTC will confirm the amount
payable on each Global Security on such
Interest Payment Date by reference to the
appropriate (daily or weekly) bond
reports published by Standard & Poor's
Corporation. The Issuer will pay to the
Trustee, as paying agent, the total
amount of interest due on such Interest
Payment Date (other than at Maturity or
earlier redemption or Tender of such
Global Security), and the Trustee will
pay such amount to DTC, at the times and
in the manner set forth below under
"Manner of Payment".
Payments at Maturity. On or about the
last Business Day of each month, the
Trustee will deliver to the Issuer and
DTC a written list of principal, premium
(if any) and interest to be paid on each
Global Security maturing (on a Maturity
or Redemption Date or otherwise) in the
following month. The Trustee, the Issuer
and DTC will confirm the amounts of such
principal, premium (if any) and interest
payments with respect to each such Global
Security on or about the fifth Business
Day preceding the Maturity of such Global
Security. On or before the Maturity Date,
the Issuer will pay to the Trustee, as
paying agent, the principal amount of
such Global Security, together with any
7
premium and interest due at such
Maturity. The Trustee will pay such
amount to DTC at the times and in the
manner set forth below under "Manner of
Payment". If any Maturity of a Global
Security representing Book Entry Notes is
not a Business Day, the payment due on
such day shall be made on the next
succeeding Business Day and no interest
shall accrue on such payment for the
period from and after such Maturity.
Promptly after payment to DTC of the
principal, premium (if any) and interest
due at Maturity, earlier redemption or
Tender of such Global Security (the
"Cancelled Security"), the Trustee will
cancel such Global Security (the
"Cancelled Security") in accordance with
the Indenture of Mortgage and so advise
the Issuer; provided, however, if such
Global Security is not being redeemed or
tendered in its entirety, the Trustee
shall authenticate a new Global Security
in an amount equal to the principal
portion of the Cancelled Security not
paid. On the first Business Day of each
month, the Trustee will deliver to the
Issuer a written statement indicating the
total principal amount of Outstanding
Global Securities as of the immediately
preceding Business Day.
Manner of Payment. The total amount of
any principal, premium (if any) and
interest due on Global Securities on any
Interest Payment Date or at Maturity
shall be paid by the Issuer to the
Trustee in immediately available funds no
later than 9:30 a.m. (New York City time)
on such date. The Issuer will make such
payment on such Global Securities by wire
transfer of funds available for immediate
use to the Trustee. The Issuer will
confirm any such instructions in writing
to the Trustee. Prior to 10:00 a.m. (New
York City time) on the date of Maturity
or as soon as possible thereafter, the
Trustee will pay, from funds received
from the Issuer, by separate wire
transfer (using Fed wire message entry
instructions in a form previously
specified by DTC) to an account at the
Federal Reserve Bank of New York
previously specified by DTC, in funds
available for immediate use by DTC, each
payment of principal (together with any
premium and interest thereon) due on a
Global Security on such date. On each
Interest Payment Date (other than at
Maturity), interest payments shall be
made to DTC, in funds available for
immediate use by DTC, in accordance with
existing arrangements between the Trustee
and DTC. On each such date, DTC will pay,
in accordance with its SDFS operating
procedures then in effect,such amounts in
funds available for immediate use to the
respective Participants in whose names
the Book-Entry Notes represented by such
Global Securities are recorded in the
book-entry system maintained by DTC.
Neither the Issuer (as issuer or as
paying agent) nor the Trustee shall have
any direct responsibility or liability
for the payment by DTC to such
Participants of the principal of and
interest on the Book-Entry Notes.
8
Withholding Taxes. The amount of any
taxes required under applicable law to be
withheld from any interest payment on a
Book-Entry Note will be determined and
withheld by the Participant, indirect
participant in DTC or other Person
responsible for forwarding payments and
materials directly to the beneficial
owner of such Note.
Procedure for Rate Setting and The Issuer and the Agent will discuss
Posting: from time to time the aggregate principal
amount of, the issuance price of, and the
interest rates to be borne by, Book-Entry
Notes that may be sold as a result of the
solicitation of orders by the Agent. If
the Issuer decides to set prices of, and
rates borne by, any Book-Entry Notes in
respect of which the Agent is to solicit
orders (the setting of such prices and
rates to be referred to herein as
"posting")or if the Issuer decides to
change prices or rates previously posted
by it, it will promptly advise the Agent
of the prices and rates to be posted.
Acceptance and Rejection of Orders: Unless otherwise instructed by the
Issuer, each Agent will advise the Issuer
promptly by telephone of all orders to
purchase Book-Entry Notes received by
such Agent, other than those rejected by
it in whole or in part in the reasonable
exercise of its discretion. The Issuer
has the right to accept orders to
purchase Book-Entry Notes and may reject
any such orders in whole or in part.
9
Preparation of Pricing Supplement: If any order to purchase a Book-Entry
Note is accepted by or on behalf of the
Issuer, the Issuer, with the approval of
the Presenting Agent (defined below) will
prepare a supplement (a "Pricing
Supplement") reflecting the terms of such
Book-Entry Note and will supply at least
ten copies thereof (and additional copies
if requested) to the Agents which
presented the order (the "Presenting
Agent") at the address set forth on
Schedule I to the Placement Agency
Agreement, and one copy thereof to the
Trustee, to be delivered by overnight
courier or telecopy to arrive no later
than 11:00 a.m., New York City time, on
the Business Day following the date of
acceptance.
The Presenting Agent will cause an
Offering Memorandum and Pricing
Supplement to be delivered to the
purchaser of such Book-Entry Note.
Outdated Pricing Supplements (other than
those retained for files), will be
destroyed.
Suspension of Solicitation The Issuer may instruct each Agent to
suspend at any time, for any period of
time or permanently, the solicitation of
orders to purchase Book-Entry Notes. Upon
receipt of such instructions, each Agent
will forthwith suspend solicitation until
such time as the Issuer has advised them
that such solicitation may be resumed.
In the event that at the time the Issuer
suspends solicitation of purchases there
shall be any orders outstanding for
settlement, the Issuer will promptly
advise each Agent and the Trustee whether
such orders may be settled and whether
copies of the Offering Memorandum as in
effect at the time of the suspension,
together with the appropriate Pricing
Supplement, may be delivered in
connection with the settlement of such
orders. The Issuer will have the sole
responsibility for such decision and for
any arrangements that may be made in the
event that the Issuer determines that
such orders may not be settled or that
copies of such Offering Memorandum or
Pricing Supplement may not be so
delivered.
10
Procedure For Rate Changes: When the Issuer has determined to change
the interest rates of Book Entry Notes
being offered, it will promptly advise
each Agent and each Agent will forthwith
suspend solicitation of orders. Each
Agent will telephone the Issuer with
recommendations as to the changed
interest rates. At such time as the
Issuer has advised the Agent of the new
interest rates, the Agent may resume
solicitation of orders. Until such time
only "indications of interest" may be
recorded.
Delivery of Offering Memorandum: A copy of the Offering Memorandum and
Pricing Supplement relating to a
Book-Entry Note must accompany or precede
the earliest of any written offer of such
Book-Entry Note, confirmation of the
purchase of such Book-Entry Note and
payment for such Book-Entry Note by its
purchaser. If notice of a change in the
terms of the Book-Entry Notes is received
by the Agent between the time an order
for a Book-Entry Note is placed and the
time written confirmation thereof is sent
by the Presenting Agent to a customer or
his agent, such confirmation shall be
accompanied by an Offering Memorandum and
Pricing Supplement setting forth the
terms in effect when the order was
placed. Subject to "Suspension of
Solicitation" above, the Presenting Agent
will deliver an Offering Memorandum and
Pricing Supplement as herein described
with respect to each Book Entry Note sold
by it. The Issuer will make such delivery
if such Book-Entry Note is sold directly
by the Issuer to a purchaser (other than
an Agent).
Confirmation: For each order to purchase a Book Entry
Note solicited by any Agent and accepted
by or on behalf of the Issuer, the
Presenting Agent will issue a
confirmation to the purchaser, with a
copy to the Issuer, setting forth the
details set forth above and delivery and
payment instructions.
11
Settlement: The receipt by the Issuer of immediately
available funds in payment for a
Book-Entry Note and the authentication
and issuance of the Global Security
representing such Book-Entry Note shall
constitute "settlement" with respect to
such Book-Entry Note. All orders accepted
by the Issuer will be settled on the
tenth Business Day following the date of
sale of such Book-Entry Note pursuant to
the timetable for settlement set forth
below unless the Issuer and the purchaser
agree to settlement on another day which
shall be no earlier than one Business Day
following the date of sale.
Settlement Procedures: Procedures with regard to each Book-Entry
Note sold by the Issuer through any
Agent, as agent, shall be as follows:
A. The Presenting Agent will advise
the Issuer by telephone of the
following settlement information:
1. Principal amount.
2. Maturity Date.
3. The interest rate.
4. Interest Payment Dates and
the Interest Payment
Period.
5. Redemption or repayment
provisions, if any.
6. Optional Tender
Provisions, if any
7. Settlement date.
8. Price.
9. The Presenting Agent's DTC
participant account number
and commission, determined
as provided in Section 2
of the Placement Agency
Agreement.
10. Whether such Book-Entry
Note is issued at an
original issue discount
("OID") and, if so, the
total amount of OID, the
yield to maturity and the
initial accrual period
OID.
12
B. The Issuer will assign a CUSIP
number to the Global Security
representing such Book-Entry Note
and then advise the Trustee and the
Presenting Agent by telephone
(confirmed in writing at any time
on the same date) or electronic
transmission of the information set
forth in Settlement Procedure "A"
above, such CUSIP number and the
name of the Presenting Agent.
C. The Trustee will enter a pending
deposit message through DTC's
Participant Terminal System
providing the settlement
information to DTC specified in the
Letter of Representations from the
Issuer and the Trustee to DTC dated
as of the date hereof.
D. To the extent the Issuer has not
already done so, the Issuer will
deliver to the Trustee a Global
Security in a form that has been
approved by the Issuer, the Agent
and the Trustee.
E. The Trustee will complete such
Global Security, stamp the
appropriate legend, as instructed
by DTC, if not already set forth
thereon, and authenticate the
Global Security representing such
Book-Entry Note in accordance with
the terms of the written order of
the Issuer then in effect.
F. DTC will credit such Book-Entry
Note to the Trustee's participant
account at DTC.
13
G. Upon delivery of the pending
deposit message referenced in "C"
above, an SDFS deliver order
through DTC's Participant Terminal
System will be created instructing
DTC to debit such Book-Entry Note
to the Trustee's participant
account and credit such Book-Entry
Note to the Presenting Agent's
participant account and debit the
Presenting Agent's settlement
account and credit the Trustee's
settlement account for an amount
equal to the price of such
Book-Entry Note less the Presenting
Agent's commission. The entry of
such a pending deposit message by
the Trustee shall constitute a
representation and warranty by the
Trustee to DTC that (i) the Global
Security representing such
Book-Entry Note has been issued and
authenticated and (ii) the Trustee
is holding such Global Security
pursuant to the Medium Term Note
Certificate Agreement between The
Chase Manhattan Bank and DTC.
H. The Presenting Agent will enter :an
SDFS deliver order through DTC's
Participant Terminal System
instructing DTC (i) to debit such
Book-Entry Note to the Presenting
Agent's participant account and
credit such Book-Entry Note to the
participant accounts of the
Participants with respect to such
Book-Entry Note and (ii) to debit
the settlement accounts of such
Participants and credit the
settlement account of the
Presenting Agent for an amount
equal to the price of such
Book-Entry Note.
I. Transfers of funds in accordance
with SDFS deliver orders described
in Settlement Procedures "G" and
"H" will be settled in accordance
with SDFS operating procedures in
effect on the settlement date.
X. The Trustee will, upon receipt of
funds from the Agent in accordance
with Settlement Procedure "G",
credit to an account of the Issuer
maintained at Mellon Bank, N.A.,
funds available for immediate use
in the amount transferred to the
Trustee in accordance with
Settlement Procedure "G". However,
the Trustee shall not credit the
account of the Issuer unless and
until the Trustee has confirmed
receipt of the funds in the
appropriate amount transferred in
accordance with Settlement
Procedure "G".
14
K. The Presenting Agent will confirm
the purchase of such Book-Entry
Note to the purchaser either by
transmitting to the Participants
with respect to such Book-Entry
Note a confirmation order or orders
through DTC's institutional
delivery system or by mailing a
written confirmation to such
purchaser.
Settlement Procedures Timetable: For orders of Book-Entry Notes solicited
by any Agent and accepted by the Issuer
for settlement on the Business Day after
the sale date, Settlement Procedures "A"
through "K" set forth above shall be
completed as soon as possible but not
later than the respective times (New York
City time) set forth below:
Settlement
Procedure Time
---------- ----
A 11:00 a.m. on the sale date
B 12:00 Noon on the sale date
C 12:00 Noon on the Business
Day before settlement date
D 3:00 p.m. on the day before
settlement
E 9:00 a.m. on settlement date
F 10:00 a.m. on settlement date
G-H 2:00 p.m. on settlement date
I 4:30 p.m. on settlement date
J-K 5:00 p.m. on settlement date
If a sale is to be settled more than one
Business Day after the sale date,
Settlement Procedures "A", "B" and "C"
shall be completed as soon as practicable
but no later than 11:00 a.m. and 12:00
Noon on the first Business Day after the
sale date and no later than 2:00 p.m. on
the Business Day before the settlement
date, respectively. Settlement Procedure
"I" is subject to extension in accordance
with any extension of Fed wire closing
deadlines and in the other events
specified in SDFS operating procedures in
effect on the settlement date.
15
If settlement of a Book-Entry Note is
rescheduled or canceled, the Trustee, to
the extent it has received written notice
of such rescheduling or cancellation,
will deliver to DTC, through DTC's
Participant Terminal System, a
cancellation, message to such effect by
no later than 2:00 p.m. on the Business
Day immediately preceding the scheduled
settlement date.
Failure to Settle: If the Trustee has not entered an SDFS
deliver order with respect to a
Book-Entry Note pursuant to Settlement
Procedure "G", then, upon written request
(which may be by telecopy) of the Issuer,
the Trustee shall deliver to DTC, through
DTC's Participant Terminal System, as
soon as practicable, a withdrawal message
instructing DTC to debit such Book Entry
Note to the Trustee's participant
account. DTC will process the withdrawal
message, provided that the Trustee's
participant account contains a principal
amount of the Global Security
representing such Book-Entry Note that is
at least equal to the principal amount to
be debited. If a withdrawal message is
processed with respect to all the
Book-Entry Notes represented by a Global
Security, the Trustee will cancel such
Global Security in accordance with the
Indenture of Mortgage and so advise the
Issuer, and will make appropriate entries
in its records. The CUSIP number assigned
to such Global Security shall, in
accordance with CUSIP Service Bureau
procedures, be canceled and not
immediately reassigned. If a withdrawal
message is processed with respect to one
or more, but not all, of the Book-Entry
Notes represented by a Global Security,
the Trustee will exchange such Book-Entry
Note for two Global Securities, one of
which shall represent such Book Entry
Notes and shall be canceled immediately
after issuance and the other of which
shall represent the other Book-Entry
Notes previously represented by the
surrendered Global Security and shall
bear the CUSIP number of the surrendered
Global Security.
16
If the purchase price for any Book Entry
Note is not timely paid to the
Participants with respect to such Note by
the beneficial purchaser thereof (or a
Person, including an indirect participant
in DTC, acting on behalf of such
purchaser), such Participants and, in
turn, the Presenting Agent may enter SDFS
deliver orders through DTC's Participant
Terminal System debiting such Note to
such Presenting Agent's participant
account and crediting such Note free to
the participant account of the Trustee
and shall notify the Trustee and the
Issuer thereof. Thereafter, the Trustee
(i) will promptly notify the Issuer
thereof, once the Trustee has confirmed
that such Note has been credited to its
participant account, and the Issuer shall
immediately transfer by Fed wire (in
immediately available funds) to such
Agent an amount equal to the price of
such Note which was previously credited
to the account of the Issuer maintained
at Mellon Bank, N.A., or wire transferred
at the Issuer's direction in accordance
with Settlement Procedure J and (ii) the
Trustee will deliver the withdrawal
message and take the related actions
described in the preceding paragraph. If
such failure shall have occurred for any
reason other than a default by the
Presenting Agent in the performance of
its obligations hereunder and under the
Placement Agency Agreement, then the
Issuer will reimburse the Presenting
Agent or the Trustee, as applicable, on
an equitable basis for the loss of the
use of the funds during the period when
they were credited to the account of the
Issuer.
Notwithstanding the foregoing, upon any
failure to settle with respect to a
Book-Entry Note, DTC may take any actions
in accordance with its SDFS operating
procedures then in effect. In the event
of a failure to settle with respect to
one or more, but not all, of the
Book-Entry Notes to have been represented
by a Global Security, the Trustee will
provide, in accordance with Settlement
Procedure "E", for the authentication and
issuance of a Global Security
representing the other Book-Entry Notes
to have been represented by such Global
Security and will make appropriate
entries in its records.
17
Trustee Not to Risk Funds: Nothing herein shall be deemed to require
the Trustee to risk or expend its own
funds in connection with any payment to
the Issuer, DTC, the Agent or the
purchaser, it being understood by all
parties that payments made by the Trustee
to the Issuer, DTC, the Agent or the
purchaser shall be made only to the
extent that funds are provided to the
Trustee for such purpose.
Authenticity of Signatures: The Issuer will cause the Trustee to
furnish the Agent from time to time with
the specimen signatures of each of the
Trustee's officers, employees or agents
who have been authorized by the Trustee
to authenticate Book-Entry Notes, but no
Agent will have any obligation or
liability to the Issuer or the Trustee in
respect of the authenticity of the
signature of any officer, employee or
agent of the Issuer or the Trustee on any
Book-Entry Note.
Payment of Expenses: Each Agent shall forward to the Issuer,
on a monthly basis, a statement of the
out-of-pocket expenses incurred by such
Agent during that month that are
reimbursable to it pursuant to the terms
of the Placement Agency Agreement. The
Issuer will remit payment to each Agent
currently on a monthly basis.
Advertising Costs: The Issuer will determine with the Agent
the amount of advertising that may be
appropriate in soliciting offers to
purchase the Book-Entry Notes.
Advertising expenses will be paid by the
Issuer.
Periodic Statements from the Periodically, upon written request, the
Trustee: Trustee will send to the Issuer a
statement setting forth the principal
amount of Book-Entry Notes outstanding as
of that date and setting forth a brief
description of any sales of Book-Entry
Notes of which the Issuer has advised the
Trustee but which have not yet been
settled.
Restrictions on Transfers: No Note may be resold or transferred in
any manner that does not comply with the
applicable restrictions on resale or
transfer or the procedures required for
resale or transfer set forth in the
Offering Memorandum, the Placement Agency
Agreement and on the Note certificate.
18
Business Day: As used herein, "Business Day" means any
day other than a Saturday or Sunday or a
day on which the Trustee or banks in New
York, New York are generally authorized
or obligated by law or executive order to
close.
PART II
Administrative Procedures for Certificated Notes
The Trustee will serve as registrar and transfer agent,
authenticating agent and paying agent in connection with the Certificated Notes,
unless a different paying agent is duly appointed by the Issuer to carry out
certain duties.
Issuance: Each Certificated Note will be dated and
issued as of the date of its
authentication by the Trustee. Each
Certificated Note will bear an Original
Issue Date, which will be (i) with
respect to an original Certificated Note
(or any portion thereof), its original
issuance date (which will be the
settlement date) and (ii) with respect to
any Certificated Note (or portion
thereof) issued subsequently upon
transfer or exchange of a Certificated
Note or in lieu of a destroyed, lost or
stolen Certificated Note, the Original
Issue Date of the predecessor
Certificated Note, regardless of the date
of authentication of such subsequently
issued Certificated Note.
Registration: Certificated Notes will be issued only in
fully registered form without coupons.
Transfers and Exchanges: A Certificated Note may be presented for
transfer or exchange at the office
designated by the Trustee located in
Dallas, Texas or at such other office as
the Issuer may designate. Certificated
Notes will be exchangeable for other
Certificated Notes having identical terms
but different authorized denominations
without service charge. Certificated
Notes will not be exchangeable for
Book-Entry Notes.
19
Maturities: Each Certificated Note will mature on a
date not less than one year nor more than
thirty-five years after the Original
Issue Date (the settlement date) for such
Note.
Denominations: The denomination of any Certificated Note
denominated in U.S. dollars will be a
minimum of $100,000 or any amount in
excess thereof that is an integral
multiple of $1,000.
Interest: General. Interest, if any, on each
Certificated Note will accrue from the
Original Issue Date for the first
interest period or the last date to which
interest has been paid, if any, for each
subsequent interest period, and will be
calculated and paid in the manner
described in such Note and in the
Offering Memorandum, as supplemented by
the applicable Pricing Supplement. Unless
otherwise specified therein, each payment
of interest on a Certificated Note will
include interest accrued up to but
excluding the Interest Payment Date or up
to but excluding the Maturity Date.
Record Dates. The Record Date with
respect to any Interest Payment Date
shall be the December 15 or June 15
immediately preceding such Interest
Payment Date, whether or not such date
shall be a Business Day.
Interest Payment. Unless otherwise
specified pursuant to Settlement
Procedure "A" below, interest payments
will be made semiannually on on January 1
and July 1 of each year and at Maturity,
or earlier redemption or Tender;
provided, however, that in the case of a
Certificated Note issued between a Record
Date and an Interest Payment Date, or on
an Interest Payment Date, the first
interest payment will be made on the
Interest Payment Date following the next
succeeding Record Date. If any Interest
Payment Date for, or the Maturity of, a
Certificated Note is not a Business Day,
the payment due on such day shall be made
on the next succeeding Business Day and
no interest shall accrue on such payment
for the period from and after such
Interest Payment Date or Maturity, as the
case may be.
20
Calculation Interest on Certificated Notes (including
of Interest: interest for partial periods) will be
calculated on the basis of a 360 day year
of twelve 30-day months.
Payments of No later than 11:00 a.m. on the due date
Principal and Interest: for any payment of principal, premium (if
any) or interest on each Certificated
Note, the Issuer will pay to the Trustee,
as paying agent, the amount of principal,
premium (if any) and/or interest then
due. The Trustee will pay the principal
amount of each Certificated Note at
Maturity or earlier redemption or Tender
upon presentation of such Certificated
Note to the Trustee. Such payment,
together with payment of any premium and
interest due at Maturity or earlier
redemption or Tender of such Certificated
Note, will be paid to an account at a
bank in New York, New York (or other bank
consented to by the Issuer) as the
registered holder of the Notes shall
designate to the Trustee not less than
ten (10) days prior to the Record Date
for such payment, in funds available for
immediate use by the Trustee and in turn
by the Holder of such Certificated Note.
Certificated Notes presented and
surrendered to the Trustee at Maturity or
earlier redemption or Tender for payment
will be cancelled by the Trustee in
accordance with the Indenture of
Mortgage. All interest payments on a
Certificated Note (other than interest
due at Maturity or earlier redemption or
Tender) and any other payments for which
appropriate instructions for payment
shall not have been received by the
Trustee not less than ten (10) days prior
to the Record Date for such payment will
be made by check drawn on the Trustee or
another Person appointed by the Trustee
mailed by the Trustee to the Person
entitled thereto as provided in such
Note; provided, however, that the holder
21
of $10,000,000 or more of Certificated
Notes with similar tenor and terms will
be entitled to receive payment by wire
transfer in U.S. dollars upon receipt of
written instructions by the Trustee not
less than ten (10) days prior to the
Record Date for such payment. Within five
Business Days after each Record Date, the
Trustee will furnish the Issuer with a
list of interest payments to be made on
the following Interest Payment Date for
each group of Certificated Notes bearing
interest at a particular rate and in
total for all Certificated Notes.
Interest at Maturity or earlier
redemption or Tender will be payable to
the Person to whom the payment of
principal is payable. The Trustee will
provide, on or about the last Business
Day of each month, to the Issuer lists of
principal and interest, to the extent
ascertainable, to be paid on Certificated
Notes maturing (on a Maturity or
Redemption Date or otherwise) in the next
succeeding month.
The Issuer will be responsible for
withholding taxes on interest paid on
Certificated Notes as required by
applicable law.
Procedure for Rate Setting and The Issuer and the Agent will discuss
Posting: from time to time the aggregate principle
amount of, the issuance price of, and the
interest rates to be borne by, Notes that
may be sold as a result of the
solicitation of orders by any Agent. If
the Issuer decides to set prices of, and
rates borne by, any Notes in respect of
which any Agent are to solicit orders
(the setting of such prices and rates to
be referred to herein as "posting") or if
the Issuer decides to change prices or
rates previously posted by it, it will
promptly advise each Agent of the prices
and rates to be posted.
Acceptance and Rejection of Orders: Unless otherwise instructed by the
Issuer, each Agent will advise the Issuer
promptly by telephone of all orders to
purchase Certificated Notes received by
such Agent, other than those rejected by
it in whole or in part in the reasonable
exercise of its discretion and, if such
Agent or any of its affiliates shall be
the offeror, shall advise the Issuer of
that fact. Unless otherwise agreed by the
Issuer and each Agent, the Issuer has the
sole right to accept orders to purchase
Certificated Notes and may reject any
such orders in whole or in part. The
Issuer will forthwith advise such
Presenting Agent of the acceptance or
rejection of any offer received through
such Agent who shall then so advise the
offeror.
22
Preparation of Pricing Supplement: If any order to purchase a Certificated
Note is accepted by or on behalf of the
Issuer, and if so required by Section
4(a)(i) of the Placement Agency
Agreement, the Issuer, with the approval
of the Presenting Agent, will prepare a
Pricing Supplement reflecting the terms
of such Certificated Note and will supply
at least ten copies thereof (and
additional copies if requested) to the
Presenting Agent at the address set forth
on Schedule I to the Placement Agency
Agreement, and one copy thereof to the
Trustee, to be delivered by overnight
courier or telecopy to arrive no late
than 11:00 a.m., New York City time, on
the Business Day following the sale date.
The Presenting Agent will cause an
Offering Memorandum and Pricing
Supplement to be delivered to the
purchaser of such Certificated Note.
Outdated Pricing Supplements (other than
those-retained for files), will be
destroyed.
Suspension of Solicitation: Subject to the Issuer's representations,
warranties and covenants contained in the
Placement Agency Agreement, the Issuer
may instruct the Agent to suspend at any
time for any period of time or
permanently, the solicitation of orders
to purchase Certificated Notes. Upon
receipt of such instructions, each Agent
will forthwith suspend solicitation until
such time as the Issuer has advised each
Agent that such solicitation may be
resumed.
In the event that at the time the Issuer
suspends solicitation of Purchases there
shall be any orders outstanding for
settlement, the Issuer will promptly
advise each Agent and the Trustee whether
such orders may be settled and whether
copies of the Offering Memorandum as in
effect at the time of the suspension,
together with the appropriate Pricing
Supplement, may be delivered in
connection with the settlement of such
orders. The Issuer will have the sole
responsibility for such decision and for
any arrangements that may be made in the
event that the Issuer determines that
such orders may not be settled or that
copies of such Offering Memorandum may
not be so delivered. No such suspension
shall excuse any failure by the Issuer to
fulfill a contractual obligation to
deliver any Certificated Notes.
23
Procedure for Rate Changes: When the Issuer has determined to change
the interest rates of Certificated Notes
being offered, it will promptly advise
the Agent and each Agent will forthwith
suspend solicitation of orders. Each
Agent will telephone the Issuer with
recommendations as to the changed
interest rates. At such time as the
Issuer has advised the Agent of the new
interest rates, the Agent may resume
solicitation of orders. Until such time
only "indications of interest" may be
recorded.
Delivery of Offering Memorandum: A copy of the Offering Memorandum and any
Pricing Supplement relating to a
Certificated Note must accompany or
precede the earliest of any written offer
of such Certificated Note, confirmation
of the purchase of such Certificated Note
and payment for such Certificated Note by
its purchaser. If notice of a change in
the terms of the Certificated Notes is
received by the Agent between the time an
order for a Certificated Note is placed
and the time written confirmation thereof
is sent by the Presenting Agent to a
customer or his agent, such confirmation
shall be accompanied by an Offering
Memorandum and Pricing Supplement setting
forth the terms in effect when the order
was placed. Subject to "Suspension of
Solicitation" above, the Presenting Agent
will deliver an Offering Memorandum and
Pricing Supplement as herein described
with respect to each Certificated Note
sold by it. The Issuer will make such
delivery if such Certificated Note is
sold directly by the Issuer to a
purchaser (other than any Agent).
Confirmation: For each order to purchase a Certificated
Note solicited by any Agent and accepted
by or on behalf of the Issuer, the
Presenting Agent will issue a
confirmation to the purchaser, with a
copy to the Issuer, setting forth the
information specified in paragraph A
under "Settlement Procedures" and
delivery and payment instructions.
24
Settlement: The receipt by the Issuer of immediately
available funds in exchange for an
authenticated Certificated Note delivered
to the Presenting Agent and the
Presenting Agent's delivery of such
Certificated Note against receipt of
immediately available funds shall, with
respect to such Certificated Note,
constitute "settlement". All orders
accepted by the Issuer will be settled on
the tenth Business Day following the date
of sale pursuant to the timetable for
settlement set forth below, unless the
Issuer and the Purchaser agree to
settlement on another day which shall be
no earlier than one Business Day
following the date of sale.
Settlement Procedures: Settlement Procedures with regard to each
Certificated Note sold by the Issuer
through any Agent, as agent, shall be as
follows:
A. The Presenting Agent will advise
the Issuer by telephone of the
following settlement information:
1. Name in which such
Certificated Note is to be
registered ("Registered
Owner").
2. Address of the Registered
Owner and address for
payment of principal and
interest.
3. Taxpayer identification
number of the Registered
Owner (if available).
4. Rank (senior or
subordinated).
5 Principal amount.
6. Maturity Date.
25
7. Interest Payment Dates and
the Interest Payment
Period.
8. Redemption or repayment
provisions, if any.
9. Optional Tender
Provisions, if any.
10. The settlement date.
11. Price (including
currency).
12. Presenting Agent's
commission, determined as
provided in Section 2 of
the Placement Agency
Agreement.
13. Whether such Certificated
Note is issued at an
original issue discount
("OID"), and, if so, the
total amount of OID, the
yield to maturity and the
initial accrual period
OID.
B. The Issuer will advise the Trustee
by telephone (confirmed in writing
at any time on the sale date) or
electronic transmission of the
information set forth in Settlement
Procedure "A" above and the name of
the Presenting Agent.
C. The Issuer will deliver to the
Trustee an original Certificated
Note with customer confirmation in
triplicate in forms that have been
approved by Issuer, the Agent and
the Trustee.
D. The Trustee will complete such
Certificated Note and will
authenticate such Certificated Note
and deliver it (with the
confirmation) and two copies
thereof (clearly marked as such) to
the Presenting Agent, and the
Presenting Agent will acknowledge
receipt of the Note by stamping or
otherwise marking the first copy
and returning it to the Trustee.
Such delivery will be made only
against such acknowledgment of
receipt. In the event that the
instructions given by the
Presenting Agent for payment to the
account of the Issuer are revoked,
the Issuer will as promptly as
possible wire transfer to the
account of the Presenting Agent an
amount of immediately available
funds equal to the amount of such
payment made.
26
E. The Presenting Agent will deliver
such Certificated Note (with the
confirmation) to the customer
against payment in immediately
payable funds. The Presenting Agent
will obtain the acknowledgement of
receipt of such Certificated Note
by retaining the second copy
thereof.
F. Upon verification by the Presenting
Agent that a Note has been prepared
and properly authenticated by the
Trustee and registered in the name
of the purchaser in the proper
principal amount, payment will be
made to the Issuer by the
Presenting Agent the same day in
immediately available funds. Such
payment shall be made only upon
prior receipt by the Presenting
Agent of immediately available
funds from or on behalf of the
purchaser unless the Presenting
Agent decides, at its option,
exercised in its sole discretion,
to advance its own funds for such
payment against subsequent receipt
of funds from the purchaser. The
Presenting Agent shall immediately
notify the Issuer of its decision
to advance its own funds for
payment against subsequent receipt
of funds from a purchaser.
G. The Trustee will send a third copy
of the Certificated Note (clearly
marked as such) to the Issuer by
first-class mail.
Settlement Procedures Timetable: For orders of Certificated Notes
solicited by any Agent, as agent, and
accepted by the Issuer, Settlement
Procedures "A" through "G" set forth
above shall be -completed on or before
the respective times (New York City time)
set forth below:
27
Settlement
Procedure Time
---------- ----
A 2:00 p.m. on the day
before settlement
B-C 3:00 p.m. on the day
before settlement
D 2:15 p.m. on settlement
date
E 3:00 p.m. on settlement
date
F-G 5:00 p.m. on settlement
date
Failure to Settle: If a purchaser fails to accept delivery
of and make payment for any Certificated
Note, the Presenting Agent will notify
the Issuer and the Trustee by telephone
and return such Certificated Note to the
Trustee. Upon receipt of such notice, the
Issuer will immediately wire transfer to
the account of the Presenting Agent an
amount equal to the amount previously
credited to the account of Issuer in
respect of such Certificated Note. Such
wire transfer will be made on the
settlement date, if possible, and in any
event not later than the Business Day
following the settlement date. If the
failure shall have occurred for any
reason other than a default by the
Presenting Agent in the performance of
its obligations hereunder and under the
Placement Agency Agreement, then the
Issuer will reimburse the Presenting
Agent on an equitable basis for its loss
of the use of the funds during the period
when they were credited to the account of
the Issuer. Immediately upon receipt of
the Certificated Note in respect of which
such failure occurred, the Trustee will
cancel such Certificated Note in
accordance with the Indenture of
Mortgage, as supplemented, and so advise
the Issuer and will make appropriate
entries in its records.
Trustee Not to Risk Funds: Nothing herein shall be deemed to require
the Trustee to risk or expend its own
funds in connection with any payment to
the Issuer, the Agent or the purchaser,
it being understood by all parties that
payments made by the Trustee to the
Issuer, the Agent or the purchaser shall
be made only to the extent that funds are
provided to the Trustee for such purpose.
28
Authenticity of Signatures: The Issuer will cause the Trustee to
furnish the Agent from time to time with
the specimen signatures of each of the
Trustee's officers, employees or agents
who has been authorized by the Trustee to
authenticate Certificated Notes, but no
Agent will have any obligation or
liability to the Issuer or the Trustee in
respect of the authenticity of the
signature of any officer, employee or
agent of the Issuer or the Trustee on any
Certificated Note.
Payment of Expenses: Each Agent shall forward to the Issuer,
on a monthly basis, a statement of the
out-of-pocket expenses incurred by such
Agent during that month that are
reimbursable to it pursuant to the terms
of the Placement Agency Agreement. The
Issuer will remit payment to each Agent
currently on a monthly basis.
Advertising Costs: The Issuer will determine with the Agent
the amount of advertising that may be
appropriate in soliciting orders to
purchase the Certificated Notes.
Advertising expenses will be paid by the
Issuer.
Periodic Statements from the Periodically, upon written request, the
Trustee: Trustee will send to the Issuer a
statement setting forth the principal
amount of Certificated Notes outstanding
as of that date and setting forth a brief
description of any sales of Certificated
Notes of which the Issuer has advised the
Trustee but which have not yet been
settled.
Restrictions of Transfer: No Note may be resold or transferred in
any manner that does not comply with the
applicable restrictions on resale or
transfer or the procedures required for
resale or transfer set forth on the Note
certificate.
Business Day: As used herein, "Business Day" means
any day other than a Saturday or Sunday
or a day on which the Trustee or banks in
New York, New York are generally
authorized or obligated by law or
executive order to close.
29
EXHIBIT B
TERMS AGREEMENT
[Date]
To: PHILADELPHIA SUBURBAN WATER COMPANY
Subject in all respects to the terms and conditions of the
Placement Agency Agreement (the "Agreement") dated December 3, 1999 between the
Placement Agents and you, the undersigned agrees to purchase the following Notes
of Philadelphia Suburban Water Company:
Principal Amount:
Interest Rate:
Maturity Date:
Discount to the Purchaser: ___% of Principal Amount
Purchase Price:
Commission:
Agent DTC No.:
CUSIP No.:
Closing Date and Time:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Reduction Percentage:
Optional Tender Date
Requirements to deliver the
documents specified in
Section 6(a)(ii) of the Agreement:
Certificate contemplated by
clause (1): [Required/Not Required]
Opinion contemplated by
clause (2): [Required/Not Required]
Opinion contemplated by
clause (3): [Required/Not Required]
Certificate contemplated by
clause (4): [Required/Not Required]
Opinion contemplated by
clause (5): [Required/Not Required]
Letter contemplated by
clause (6): [Required/Not Required]
Period during which additional Notes may not be sold
if not period between trade date and Closing Date
as specified in Section 4(a)(v) of the Agreement:
Other Provisions:
________________________________
By
________________________________
Name:
Title:
Accepted:
PHILADELPHIA SUBURBAN WATER COMPANY
by____________________________
Name:
Title:
2
EXHIBIT C
(000) 000-0000
_______, 20__
To each of the Addressees on Schedule 1 of the Placement Agency Agreement Acting
Severally and Not Jointly in the Capacities of Agent or Purchaser or in Either
such Capacity
Re: Philadelphia Suburban Water Company
$300,000,000 First Mortgage Bonds,
1999 Medium Term Note Series, Subseries _
Ladies and Gentlemen:
We have acted as special counsel to Philadelphia Suburban Water
Company, a Pennsylvania corporation (the "Company"), in connection with the
transactions contemplated by (i) the Placement Agency Agreement dated December
3, 1999 (the "Placement Agency Agreement") between the Company and the Agents
identified therein (the "Agents"); (ii) the Paying Agency Agreement dated
December 3, 1999 (the "Paying Agency Agreement"), among the Company, Chase
Manhattan Trust Company, National Association, as paying agent and the Agents;
(iii) the Indenture of Mortgage dated as of January 1, 1941 (the "Original
Indenture"), between the Company, and Chase Manhattan Trust Company, National
Association (as successor in interest to The Philadelphia Company for Insurance
on Lives and Exacting Annuities), as trustee (the "Trustee"), as amended and
supplemented by thirty-three supplements thereto (the Original Indenture, as so
amended and supplemented, the "Indenture"); (iv) the Thirty-Third Supplemental
Indenture dated as of November 15, 1999 (the "Thirty-Third Supplemental
Indenture") between the Company and the Trustee; (v) the First Mortgage Bonds,
1999 Medium Term Note Series to be issued in one or more subseries pursuant to
the Thirty-Third Supplemental Indenture (the "Notes"); (vi) the Confidential
Offering Memorandum, dated December 3, 1999 relating to the offering of the
Notes, including the exhibits thereto (the "Offering Memorandum") and including
any quarterly or annual reports, if any, incorporated therein by reference (such
quarterly and annual reports referred to as "Incorporated Documents") and (vii)
the issuance of $___,000,000 aggregate principal amount of the Company's First
Mortgage Bonds, 1999 Medium Term Note Series, Subseries __ (the "Global Bond").
This opinion is being rendered to you pursuant to Section 4(a)(iv)(A) of the
Placement Agency Agreement. Unless otherwise specified, capitalized terms not
otherwise defined herein shall have the meanings specified in the Placement
Agency Agreement, the Original Indenture or the Thirty-Third Supplemental
Indenture.
2
In connection with this opinion, we have examined the following
documents:
(a) the Placement Agency Agreement;
(b) the Paying Agency Agreement;
(c) the Indenture (including the Thirty-Third Supplemental Indenture);
(d) the Global Bond;
(e) the Offering Memorandum;
(f) a copy of the Articles of Incorporation of the Company, as amended
and restated and now in effect;
(g) a copy of the Bylaws of the Company as now in effect;
(h) the Securities Certificate relating to the issuance and sale of the
Notes, filed by the Company with the Pennsylvania Public Utility Commission (the
"PUC") pursuant to the provisions of Chapter 19 of the Pennsylvania Public
Utility Code and a copy of the Order of the PUC dated November 18, 1999
registering said Securities Certificate, and certified by the Secretary of the
PUC;
(i) evidence satisfactory to us of the due recordation of the Original
Indenture and the Thirty-Third Supplemental Indenture in the Counties of Berks,
Bucks, Chester, Delaware and Xxxxxxxxxx in the Commonwealth of Pennsylvania;
(j) the resolutions of the Executive Committee of the Board of
Directors of the Company dated October 15, 1999 authorizing the issuance of up
to $300,000,000 aggregate principal amount of Notes and the execution of the
Thirty-Third Supplemental Indenture, the Placement Agency Agreement and the
Paying Agency Agreement;
3
(k) the certificates of the Company and other documents delivered at
the Closing and in connection with the issuance of the Global Bond; and
(l) public records and other publicly available documents.
In rendering the opinions set forth below, we have assumed the
genuineness of all signatures on documents and instruments examined by us
(except signatures of the Company on the Placement Agency Agreement, the
Thirty-Third Supplemental Indenture, the Paying Agency Agreement and the Global
Bond) and that all documents submitted to us as copies conform with the
originals thereof. We have also relied, to the extent we have deemed such
reliance to be necessary and proper, on the factual matters contained in
certificates of public officials and officers of the Company.
To the extent any opinion below is made to our knowledge, such
knowledge shall mean the actual knowledge of attorneys within our firm who have
provided substantive representation to the Company, based solely upon such
limited investigation and inquiry as is set forth herein, and does not include
matters of which such attorneys could be deemed to have constructive knowledge.
Based upon the foregoing and such other examination of fact and law as
we have deemed necessary for purposes of this opinion, and subject to the
assumptions and qualifications set forth herein, we are of the opinion that:
1. The Company is duly incorporated and subsisting under the laws of
the Commonwealth of Pennsylvania. The Company has full corporate power and
authority to conduct all the activities conducted by it, to own or lease all the
assets owned or leased by it and to conduct its business as described in the
Offering Memorandum.
2. The Company, on December 3, 1999, had full corporate power and
authority to enter into the Placement Agency Agreement and the Paying Agency
Agreement, to issue an aggregate principal amount of $300,000,000 of the Notes,
and to perform its obligations under the Placement Agency Agreement, the Paying
Agency Agreement and the Notes. The Placement Agency Agreement was duly
authorized, executed and delivered by the Company and, assuming the due
authorization, execution and delivery by the other parties thereto, did, on the
date of execution and delivery thereof, and does, on the date hereof, constitute
a legal, valid and binding agreement of the Company. The Paying Agency Agreement
was duly authorized, executed and delivered by the Company and, assuming the due
authorization, execution and delivery by the other parties thereto, did, on the
date of execution and delivery thereof, and does, on the date hereof, constitute
a legal, valid and binding agreement of the Company and is enforceable against
the Company in accordance with its terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other similar
laws relating to creditors' rights generally from time to time in effect, and
subject, as to enforceability, to general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law).
4
3. An aggregate principal amount of $300,000,000 of the Notes was duly
authorized for issuance and sale pursuant to the Indenture (including the
Thirty-Third Supplemental Indenture) and the Placement Agency Agreement, and the
Global Bond when executed by the Company and authenticated by the Trustee and
delivered pursuant to the provisions of the Indenture (including the
Thirty-Third Supplemental Indenture) and the Placement Agency Agreement against
payment of the consideration therefor specified in the Placement Agency
Agreement, will constitute the legal, valid and binding obligations of the
Company, entitled to the benefits and security of the Indenture (including,
without limitation, the Thirty-Third Supplemental Indenture) in accordance with
its terms, secured thereby equally and ratably with all First Mortgage Bonds of
the Company outstanding under the Indenture, and enforceable against the Company
in accordance with its terms (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws relating
to creditors' rights generally from time to time in effect, and subject, as to
enforceability, to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law).
4. The Company had full corporate power and authority to enter into the
Thirty-Third Supplemental Indenture on the date of execution and delivery
thereof. The Thirty-Third Supplemental Indenture was duly authorized, executed
and delivered by the Company and, assuming the due authorization, execution and
delivery by the other parties thereto, the Indenture, as supplemented by the
Thirty-Third Supplemental Indenture, did, on the date of execution and delivery
thereof and does, on the date hereof constitute a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms (subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws relating to creditors' rights
generally from time to time in effect, and subject, as to enforceability, to
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law). The Original Indenture and the
Thirty-Third Supplemental Indenture were properly recorded in the Counties of
Berks, Bucks, Chester, Delaware and Xxxxxxxxxx in the Commonwealth of
Pennsylvania and such recordations are the only recordations and filings
necessary in order to establish, preserve, protect and perfect the lien of the
Indenture on all real estate and fixed property of the Company (excluding
easements and other similar rights) described in the Indenture as subject to the
lien thereof. The Indenture creates the valid, binding and direct lien which it
purports to create upon the interest of the Company in the real estate and fixed
property of the Company specifically described therein as subject to the lien
thereof.
5
5. The execution, delivery and performance of the Thirty-Third
Supplemental Indenture, the Placement Agency Agreement, the Paying Agency
Agreement and the Notes and the consummation of the transactions contemplated
thereby did not, on the date of execution and delivery thereof, does not, on the
date hereof, and will not (with or without the giving of notice or lapse of
time) conflict with or result in a breach of or default under the Articles of
Incorporation or Bylaws of the Company or the Indenture.
6. The Indenture (including, without limitation, the Thirty-Third
Supplemental Indenture) and the Global Bond conform in all material respects as
to legal matters to the descriptions thereof in the Offering Memorandum. The
descriptions in the Offering Memorandum (but not including Incorporated
Documents) of statutes, regulations or legal or governmental proceedings
accurately summarize the information purported to be summarized therein.
7. The authorization, execution and delivery of the Thirty-Third
Supplemental Indenture and the issuance and sale of the Global Bond is not,
under the circumstances described in the Placement Agency Agreement, subject to
the provisions of the Public Utility Holding Company Act of 1935 in any respect,
and, as to the Thirty-Third Supplemental Indenture did not and, as to the Global
Bonds, does not require that (a) a declaration with respect thereto shall have
become effective under Section 7 of the Public Utility Holding Company Act of
1935 or (b) other authorization or approval of the Securities and Exchange
Commission shall have become effective under the provisions of said Act.
8. To the best of our knowledge, there are no actions, suits or
proceedings, pending or threatened, relating to the Notes, their offering, or
the Offering Memorandum.
9. The PUC has entered an Order dated November 18, 1999 (the "PUC
Order"), registering the Securities Certificate filed by the Company with
respect to the issuance and sale of the Notes, which order, on the date hereof,
is in effect and is final and nonappealable. Except for the PUC Order and the
recording of the Thirty-Third Supplemental Indenture as described in paragraph 4
hereof, no other consent, approval, authorization or order of, or any filing
with, any government, governmental or other administrative agency or body is
required as of the date hereof in connection with the execution and delivery by
the Company of the Placement Agency Agreement, the Paying Agency Agreement and
the Thirty-Third Supplemental Indenture, the solicitation of offers for the
Global Bond, the issuance of the Global Bond or the performance by the Company
of any of its obligations thereunder, except such as may be required under the
blue sky laws of any jurisdiction in connection with the issuance and sale of
the Global Bond.
6
10. The Global Bond may be offered, issued, sold and delivered to the
Agents and the first subsequent purchaser(s), in the manner contemplated by the
Placement Agency Agreement, the Thirty-Third Supplemental Indenture and the
Offering Memorandum without registration thereof under the Securities Act of
1933, as amended, and without qualification of an indenture in respect of the
Notes under the Trust Indenture Act of 1939, as amended, it being understood
that no opinion is expressed as to any subsequent resale of any Notes by any
Person or any other person. In rendering this opinion, we have assumed that the
first subsequent purchaser(s) is a Qualified Institutional Buyer or an offeree
that you reasonably believe is a Qualified Institutional Buyer, and we have
further assumed the accuracy of (i) your representations in the Placement
Agreement and (ii) those of the Company in the Placement Agreement regarding the
absence of any general solicitation in connection with the sale of the Notes.
11. Upon the issuance of the Global Bond and the payment of the
consideration therefor, the Trustee will have a valid and perfected security
interest, for the benefit of the Trustee and the holders of the Global Bond, to
secure the full and punctual performance of the Global Bond and all obligations
of the Company under the Indenture (including the Thirty-Third Supplemental
Indenture), in all real estate and fixed property (excluding easements and other
similar rights) specifically described in the Indenture (other than properties
released from the Indenture in accordance with the terms thereof).
12. We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Offering Memorandum and take
no responsibility therefor, except to the extent referred to in paragraph 6
hereof and in this paragraph. In the course of the preparation by the Company of
the Offering Memorandum, we participated in conferences with certain officers
and employees of the Company, examined the Offering Memorandum and made certain
inquiries in connection with the preparation of the Offering Memorandum. We took
no part in the preparation of any of the Incorporated Documents and we did not
conduct any independent investigation or make any inquiries with regard to the
Incorporated Documents and the information contained therein. Subject to the
foregoing, we have no reason to believe that the Offering Memorandum contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that we express
no opinion with respect to the financial statements and the notes thereto,
schedules and other financial, statistical data or operating information
included or incorporated by reference therein).
7
The foregoing opinions are subject to the following qualifications:
a. We express no opinion as to the adequacy of any
notice with respect to the disposition of any collateral. We also express no
opinion as to the effectiveness or enforceability of provisions relating to
waivers of notice or waivers of other rights, severability, prepayment fees or
penalties, choice of law, or any provisions which release or limit the Company's
liability or relate to cumulative remedies or, to the extent they purport to or
would have the effect of compensating the Company in amounts in excess of any
actual loss suffered by the Company, provisions relating to the payment of a
default rate of interest.
b. We express no opinion as to the enforceability
with respect to any provisions in the Indenture executed by the Company
purporting to waive the effect of applicable laws and remedies and any
provisions releasing any party from, or requiring indemnification for, liability
for gross negligence, recklessness or wilful misconduct.
c. Any requirements in the Indenture specifying that
provisions of the Indenture may only be waived in writing may not be enforced to
the extent that an oral agreement or an implied agreement by trade practice or
course of conduct has been created modifying any provision of the Indenture.
d. This opinion is limited to the matters set forth
herein, no opinion may be inferred or implied beyond the matters expressly
stated herein, and our statements contained in the opinion portion of this
letter must be read in conjunction with the assumptions, limitations, exceptions
and qualifications set forth in this letter.
8
e. The opinions herein are expressed as of the date
hereof only and not as of some future date. We undertake no responsibility to
advise you of any change in law or new laws, regulations or judicial decisions
in the future. Nor do we assume any obligation to update or supplement this
opinion to reflect any facts or circumstances which may hereafter come to our
attention. References to "laws," "regulations" and "judicial decisions" herein
shall include only officially published federal laws and regulations of the
United States of America and the officially published laws and regulations of
the Commonwealth of Pennsylvania.
Our opinions expressed above are limited to the laws of the
Commonwealth of Pennsylvania and the federal law of the United States of
America.
This opinion is furnished by us solely for your benefit and the
purchasers of the Global Bond and may not be relied upon by any other person
without the express written consent of our firm.
Very truly yours,
9
EXHIBIT D
[Letterhead of PSWC]
_____________, 1999
To Each of the Addresses Named
on Schedule I of the Placement Agency
Agreement Acting Severally and Not
Jointly in the Capacities of Agent
and Purchaser or in Either Such Capacity
Xxxxxxxx Xxxxxx LLP
0000 Xxxxxx Xxxxxx
0000 Xxxxxx Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
RE: $300,000,000 First Mortgage Bonds,
1998 Medium Term Note Series ("Notes")
--------------------------------------
Ladies and Gentlemen:
I am Senior Vice President-Law and Administration for Philadelphia
Suburban Water Company (the "Company").
Pursuant to Section 5(a)(iii)(B) of the Placement Agency Agreement
between you and the Company of December 3, 1999 relating to the $300,000,000
First Mortgage Bonds, 1999 Medium Term Note Series, I have been asked to render
an opinion to you regarding certain matters involving the Company.
In my opinion:
(i) To the best of my knowledge, the Company has all governmental
licenses, permits, consents, orders, approvals and other authorizations
necessary to carry on its business as described in the Confidential Offering
Memorandum dated December 3, 1999 with respect to the Notes, except where the
failure to do so would not have a material adverse effect on the financial
condition of the Company.
(ii) Except as set forth in the Confidential Offering Memorandum, there
are no actions, suits or proceedings pending (and of which the Company has
received notice) or, to the best of my knowledge, threatened against or
affecting the Company or any of its officers in their capacity as such, before
or by any Federal or state court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, wherein an unfavorable
ruling, decision or finding is likely that would materially and adversely affect
(i) the financial condition of the Company, or (ii) the ability of the Company
to perform its obligations under the Placement Agency Agreement, the Paying
Agency Agreement, the Original Indenture (as supplemented by the Thirty-Third
Supplemental Indenture) or the Notes.
(iii) The Company (a) is not in violation of its Articles of
Incorporation, by-laws or other charter documents, (b) to the best of my
knowledge, is not in default in the performance of any obligation, agreement or
condition contained in any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, note, debenture, note agreement or other evidence of
indebtedness, lease, contract or other agreement or instrument known to me to
which the Company is a party or by which it or its properties is bound or
affected where such default would likely have a material adverse effect on the
financial condition of the Company, and (c) to the best of my knowledge the
Company is not in violation of any judgment, ruling, decree, order, franchise,
license or permit known to me or any statute, rule or regulation of any court or
other governmental agency or body applicable to the business or properties of
the Company, where such violation would likely have a material adverse effect on
the financial condition of the Company.
(iv) The execution, delivery and performance of the Placement Agency
Agreement, the Thirty-Third Supplemental Indenture, the Paying Agency Agreement
and the consummation of the transactions therein contemplated will not, of
themselves, or upon notice, lapse of time, or both, conflict with or result in a
breach of any of the terms, conditions, or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of the Company (except as
contemplated by the Indenture) pursuant to the terms of the charter or bylaws of
the Company, or, to the best of my knowledge, any indenture, mortgage, deed of
trust or other agreement or instrument known to me to which the Company is a
party or by which the Company may be bound and, to the best of my knowledge,
will not materially violate any judgment, ruling, decree, order, franchise,
license or permit known to me or any statute, rule or regulation of any court or
other governmental agency or body applicable to the business or properties of
the Company.
2
(v) Each of the Indenture of Mortgage dated as of January 1, 1941 (the
"Original Indenture"), between the Company and The Philadelphia Company for
Insurance on Lives and Exacting Annuities (now Chase Manhattan Trust Company,
National Association, as successor in interest), as trustee (the "Trustee") and
the thirty-three indentures supplemental thereto, including the Thirty-Third
Supplemental Indenture dated as of November 15, 1999 between the Company and the
Trustee (the Original Indenture as so supplemented and amended, the "Indenture")
was duly authorized, executed and delivered by the Company and the Indenture
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws relating to creditors' rights generally from time to time in
effect, and subject, as to enforceability, to general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law).
The information set forth herein is as of the date set forth above and
the Company and I disclaim any undertaking to provide any updates or changes
which thereafter may be brought to our attention.
This opinion is solely for your benefit and may not be relied upon by
any other person or for any other purpose.
Very truly yours,
Xxx X. Xxxxx
/sw
3
EXHIBIT E
TRUSTEE'S CERTIFICATE
The undersigned, Chase Manhattan Trust Company, National Association
(hereinafter referred to as the "Bank"), does hereby certify that:
1. It is Trustee under the Indenture of Mortgage dated as of January 1,
1941, of Philadelphia Suburban Water Company (the "Company"), as supplemented
and amended by thirty two supplemental indentures and by a Thirty-Third
Supplemental Indenture dated as of November 15, 1999 (the "Thirty-Third
Supplemental Indenture") between the Company and the Bank relating to the
authentication and delivery of a global bond representing the aggregate
principal amount of $__________ of the Company's First Mortgage Bonds, 1999
Medium Term Note Series (Subseries "_")(the "Global Bond")
2. The Thirty-Third Supplemental Indenture has been duly executed on
behalf of the Bank by__________, its Vice President; the corporate seal of the
Bank has been duly affixed thereto and attested by , its ___________________;
and the Thirty-Third Supplemental Indenture has been duly delivered on behalf of
the Bank.
3. The Bank, as Trustee, has:
a. pursuant to Section 5 of Article I of the ThirtyThird
Supplemental Indenture, authenticated the Global Bond, which consist of a fully
registered Bond as set forth in Exhibit "A" hereto, in the aggregate principal
amount of $________, bearing the interest rate and maturity date as set forth in
Section I of Article 1 of the Thirty-Third Supplemental Indenture, by the
execution of the Trustee's Certificate of Authentication thereon by , its
____________________; and
b. registered said Global Bond in the name of Cede & Co,
nominee of the Depository Trust Company ("DTC"), as the registered owner of the
Global Bond, which Global Bond is to be held by The Chase Manhattan Bank as so
authenticated and registered on behalf of DTC pursuant to the Medium Term Note
Certificate Agreement dated as of December 2, 1988.
4. Set forth below, opposite the names and titles of the above
mentioned officers of the Bank, are specimens of their respective signatures.
Name Title Specimen Signatures
---- ----- -------------------
_________________ ___________________
_________________ ___________________
5. and were, at the time of the acts referred to in paragraph 2 above,
and are at the date hereof, duly elected or appointed, qualified and acting
officers of the Bank, holding the offices indicated above and were duly
authorized to perform such acts, and the signatures appearing on the
Thirty-Third Supplemental Indenture are their genuine signatures; and was at the
time of the acts referred to in paragraph 3(a) above, and is at the date hereof,
a duly elected or appointed, qualified and acting Corporate Trust Officer of the
Bank duly authorized to perform such acts, and the signature appearing on said
Xxxxx is her genuine signature.
6. Attached hereto as Exhibit "B" is a true and correct copy of
resolutions as adopted by the Board of Directors of the Bank which, at the date
hereof, are still in full force and effect, giving requisite authority to such
officers to execute and deliver the Thirty-Third Supplemental Indenture and to
authenticate the Bonds.
IN WITNESS WHEREOF, Chase Manhattan Trust Company, National Association
has caused this Trustee's Certificate to be executed by its duly authorized
officer, this _____ day of__________, ______.
Chase Manhattan Trust Company,
National Association
______________________________
Title:
2
EXHIBIT "A"
Maturity
Cert. Registered Principal Interest Date
No. Owner Amount Rate ( 1)
--- ----- ------ ---- ----------
R-1 Cede & Co., as nominee of the
Depository Trust Company
3
EXHIBIT F
Form of KPMG LLP Letter
EXHIBIT G
PHILADELPHIA SUBURBAN WATER COMPANY
U.S. $
First Mortgage Bonds
1999 Medium Term Note Series
Maturities From One Year to
Thirty-Five Years From Date of Issue
Amendment to Placement Agency Agreement
New York, New York
[Date]
To Each of the Addressees Named
on Schedule I of the Placement Agency
Agreement Acting Severally and Not
Jointly in the Capacities of Agent and
Purchaser or in Either Such Capacity
Ladies and Gentlemen:
The Placement Agency Agreement dated December 3, 1999 (the
"Agreement"), between you and Philadelphia Suburban Water Company, a corporation
organized and existing under the laws of the Commonwealth of Pennsylvania (the
"Issuer"), is hereby amended to increase the aggregate principal amount of Notes
(as defined in the Agreement) at any time outstanding to up to U.S. $ .
[The documents referred to in the second sentence of Section 12 of the
Agreement shall be delivered simultaneously herewith.]
In all other respects the Agreement shall remain in full force and
effect.
This amendment to the Agreement may be executed in counterparts, and
the executed counterparts shall together constitute a single instrument.
3
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter shall represent a binding agreement between the Issuer and each of you.
This letter shall not constitute a binding agreement unless and until it is
executed by the Issuer and each of you.
Very truly yours,
PHILADELPHIA SUBURBAN WATER
COMPANY,
by _________________________
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
by _________________________
Name:
Title:
4
EXHIBIT H
PHILADELPHIA SUBURBAN WATER COMPANY
FIRST MORTGAGE BONDS
1999 MEDIUM TERM NOTE SERIES
REQUEST FOR BIDS
Pursuant to Paragraph 2(a)(i) of the Placement Agency Agreement between
PSWC ("PSWC") and the agents listed on Schedule I attached thereto dated
December 3, 1999 (the "Agreement"), PSWC is requesting bids for Subseries ______
of the above-referenced notes (the "Subseries") to be issued by PSWC on or about
________, ____, subject to the terms set forth in the Agreement including
Exhibit A thereto.
The Subseries is to be structured based on the following:
1. Principal Amount of Notes $___________________
2. Maturity _______________________
3. [Optional Tender Provision ___________________]
PHILADELPHIA SUBURBAN WATER COMPANY
DATE: ____________ BY:_____________________
TITLE:__________________
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EXHIBIT I
PHILADELPHIA SUBURBAN WATER COMPANY
FIRST MORTGAGE BONDS
1999 MEDIUM TERM NOTE SERIES
NOTICE OF APPOINTMENT
Pursuant to Paragraph 2 of the Placement Agency Agreement between PSWC
("PSWC") and the Agents listed on Schedule I attached thereto dated December 3,
1999 (the "Agreement"), ________________________ is hereby appointed as
Placement Agent for the issuance of $___________ of Subseries ______ of the
above-referenced notes to be issued by PSWC on or about _____________________,
____, subject to the terms set forth on the attached Exhibit A [to be furnished
by Issuer at issuance of Notice of Appointment] and further subject to the terms
and conditions of the Agreement.
PHILADELPHIA SUBURBAN WATER COMPANY
DATE:______________ BY:________________________________
TITLE:_____________________________
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