EXHIBIT 2
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8,595,875 Shares
Philadelphia Suburban Corporation
Common Stock
($.50 Par Value)
UNDERWRITING AGREEMENT
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September 19, 2002
Deutsche Bank Securities Inc.
UBS Warburg LLC
As Representatives of the
several Underwriters
c/o Deutsche Bank Securities Inc.
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Certain shareholders named in Schedule II hereto (the "Selling
Shareholders") of Philadelphia Suburban Corporation, a Pennsylvania corporation
(the "Company"), propose to sell to the several underwriters (the
"Underwriters") named in Schedule I hereto for whom you are acting as
representatives (the "Representatives") an aggregate of 8,595,875 shares of the
Company's Common Stock, $.50 par value (the "Firm Shares"). The respective
amounts of the Firm Shares to be so purchased by the several Underwriters are
set forth opposite their names in Schedule I hereto, and the respective amounts
to be sold by the Selling Shareholders are set forth opposite their names in
Schedule II hereto. Vivendi Water S.A. (the "Option Selling Shareholder") also
proposes to sell at the Underwriters' option an aggregate of up to 1,289,381
additional shares of the Company's Common Stock (the "Option Shares") as set
forth below.
As the Representatives, you have advised the Company and the Selling
Shareholders (a) that you are authorized to enter into this Agreement on behalf
of the several Underwriters, and (b) that the several Underwriters are willing,
acting severally and not jointly, to purchase the numbers of Firm Shares set
forth opposite their respective names in Schedule I, plus their pro rata portion
of the Option Shares if you elect to exercise the over-allotment option in whole
or in part for the accounts of the several Underwriters. The Firm Shares and the
Option Shares (to the extent the aforementioned option is exercised) are herein
collectively called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
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SHAREHOLDERS.
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(a) The Company represents and warrants to each of the
Underwriters and the Selling Shareholders as follows:
(i) A registration statement on Form S-3 (File No. 333-92050)
with respect to the Shares has been prepared by the Company in conformity with
the requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commission. The Company and the offering and sale of the Shares contemplated by
this Agreement meet the requirements and comply with the conditions for the use
of Form S-3. Copies of such registration statement, including any amendments
thereto, the preliminary prospectuses (meeting the requirements of the Rules and
Regulations) contained therein and the exhibits, financial statements and
schedules, as finally amended and revised, have heretofore been delivered by the
Company to you or your representatives or are publicly available in accordance
with the Rules and Regulations. Such registration statement, together with any
registration statement filed by the Company pursuant to Rule 462 (b) of the Act,
is herein referred to as the "Registration Statement," which shall be deemed to
include all information omitted therefrom in reliance upon Rule 430A and
contained in the Prospectus referred to below, has become effective under the
Act and no post-effective amendment to the Registration Statement has been filed
as of the date of this Agreement. "Prospectus" means the form of prospectus
first filed with the Commission pursuant to Rule 424(b). Each preliminary
prospectus included in the Registration Statement prior to the time the
Registration Statement becomes effective is herein referred to as a "Preliminary
Prospectus." Any reference herein to the Registration Statement, any Preliminary
Prospectus or to the Prospectus or to any amendment or supplement to any of the
foregoing documents shall be deemed to refer to and include any documents
incorporated by reference therein, and, in the case of any reference herein to
any Prospectus, also shall be deemed to include any documents incorporated by
reference therein, and any supplements or amendments thereto, filed with the
Commission after the date of filing of the Prospectus under Rules 424(b) or
430A, and prior to the termination of the offering of the Shares by the
Underwriters.
(ii) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the Commonwealth of
Pennsylvania, with corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement. Each of the
significant subsidiaries of the Company as listed on Schedule III (collectively,
the "Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement. The Company
and each of the Subsidiaries are duly qualified to transact business in all
jurisdictions in which the conduct of their business requires such
qualification, except for such jurisdictions where the failure to so qualify
would not have a material adverse effect on the earnings, business, management,
properties, assets, rights, operations or condition (financial or otherwise) of
the Company and of the Subsidiaries taken as a whole (a "Material Adverse
Effect"). The outstanding shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and non-assessable
and are owned by the Company or another Subsidiary free and clear of all liens,
encumbrances and equities and claims; and no options, warrants or other rights
to purchase, agreements or other obligations to issue or other rights to convert
any obligations into shares of capital stock or ownership interests in the
Subsidiaries are outstanding, other than those described in the Registration
Statement or described in any document incorporated by reference therein.
(iii) The outstanding shares of Common Stock of the Company,
including all shares to be sold by the Selling Shareholders, have been duly
authorized and validly issued and are fully paid and non-assessable and no
preemptive rights of shareholders exist with respect to any of the Shares or the
issue and sale thereof, other than those described in the Registration Statement
or described in any document incorporated by reference therein. Neither the
filing of the Registration Statement nor the offering or sale of the Shares as
contemplated by this Agreement gives rise to any rights, other than those which
have been waived or satisfied, for or relating to the registration of any shares
of Common Stock.
(iv) All of the Shares conform in all material respects to the
description thereof contained in or incorporated by reference in the
Registration Statement. The form of certificates for the Shares conforms to the
corporate law of the jurisdiction of the Company's incorporation.
(v) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed offering of the
Shares nor instituted proceedings for that purpose. As of the date it became
effective under the Act, the Registration Statement contained, and the
Prospectus and any amendments or supplements thereto will contain, as of the
date the Prospectus, such amendment or supplement is filed with the Commission,
all statements which are required to be stated therein by, and conforms to, or
will conform to, as the case may be, the requirements of the Act and the Rules
and Regulations. The documents incorporated, or to be incorporated, by reference
in the Prospectus, at the time they became effective or were or will be filed
with the Commission as the case may be, conformed or will conform, as the case
may be, in all material respects to the requirements of the Securities Exchange
Act of 1934 ("Exchange Act") or the Act, as applicable, and the rules and
regulations of the Commission thereunder. The Registration Statement did not, as
of the date it became effective, contain and any amendment thereto will not
contain, any untrue statement of a material fact and did not omit, and will not
omit, to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The Prospectus and any amendments and supplements thereto,
as of the date the Prospectus, such amendment or supplement is filed with the
Commission do not contain, and will not contain, any untrue statement of
material fact; and do not omit and will not omit, to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties as to
information contained in or omitted from the Registration Statement or the
Prospectus, or any such amendment or supplement, in reliance upon, and in
conformity with, written information furnished to the Company by or on behalf of
any Underwriter through the Representatives or the Selling Shareholders,
specifically for use in the preparation thereof.
(vi) The consolidated financial statements of the Company and
the Subsidiaries, together with related notes and schedules as set forth or
incorporated by reference in the Registration Statement, present fairly in all
material respects the financial position and the results of operations and cash
flows of the Company and the consolidated Subsidiaries, at the indicated dates
and for the indicated periods. Such financial statements and related schedules
have been prepared in accordance with generally accepted principles of
accounting, consistently applied throughout the periods involved, except as
disclosed therein in all material respects, and all adjustments necessary for a
fair presentation of results for such periods have been made. The summary
financial and statistical data included or incorporated by reference in the
Registration Statement presents fairly in all material respects the information
shown therein and such data has been compiled on a basis consistent with the
financial statements presented therein and the books and records of the company.
(vii) PricewaterhouseCoopers LLP, who have certified certain
of the financial statements filed with the Commission as part of, or
incorporated by reference in, the Registration Statement, are independent public
accountants as required by the Act and the Rules and Regulations. KPMG LLP, who
have certified the financial statements for fiscal year 1999 filed with the
Commission as part of, or incorporated by reference in, the Registration
Statement, are independent public accountants as required by the Act and the
Rules and Regulations.
(viii) There are no legal or governmental proceedings pending
to which the Company or the Subsidiaries is a party or of which any property of
the Company or the Subsidiaries is the subject that are required to be disclosed
in the Registration Statement that are not so disclosed as required; and to the
Company's knowledge, no such proceedings are threatened or contemplated.
(ix) Each of the Company and the Subsidiaries has good and
marketable title to all of their respective properties and assets reflected in
the consolidated financial statements hereinabove described except where the
failure to have such title would not have a Material Adverse Effect, subject to
no lien, mortgage, pledge, charge or encumbrance of any kind except those
reflected in such financial statements or described in the Registration
Statement or which are not material in amount. Each of the Company and the
Subsidiaries occupies their leased properties under valid and existing leases,
with only such exceptions with respect to any particular lease as do not
interfere in any material respect with the conduct of the business of the
Company.
(x) Each of the Company and the Subsidiaries has filed all
material Federal, State, local and foreign tax returns, or have filed for
extensions of the due dates for such returns which have been required to be
filed and have paid all taxes indicated by such returns and all assessments
received by them or any of them to the extent that such taxes have become due,
or has received timely extensions thereof, other than any taxes which the
Company or any Subsidiary is contesting in good faith. The Company does not know
of any actual or proposed additional material tax assessments.
(xi) Since the respective dates as of which information is
given or incorporated by reference in the Registration Statement, as it may be
amended or supplemented, except as described therein or in such incorporated
information, there has not been any change or any development that has had or
will have a Material Adverse Effect, whether or not occurring in the ordinary
course of business, and there has not been any material transaction entered into
by the Company or the Subsidiaries, other than transactions in the ordinary
course of business and changes and transactions described in the Registration
Statement, as it may be amended or supplemented. Each of the Company and the
Subsidiaries has no material contingent obligations which are not disclosed in
the Company's financial statements which are included in the Registration
Statement.
(xii) Neither the Company nor any of the Subsidiaries is or
with the giving of notice or lapse of time or both, will be, in violation of or
in default under (i) its Charter or By-Laws, or (ii) under any agreement, lease,
contract, indenture or other instrument or obligation to which it is a party or
by which it, or any of its properties, is bound and, solely with respect to this
clause (ii), which violation or default would have a Material Adverse Effect.
The execution and delivery of this Agreement and the consummation of the
transactions herein contemplated and the fulfillment of the terms hereof will
not conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any material indenture, mortgage, deed of trust or
other material agreement or instrument to which the Company or any Subsidiary is
a party or by which the Company or any Subsidiary or any of their respective
properties is bound, or of the Charter or By-Laws of the Company or any law,
order, rule or regulation judgement, order, writ or decree applicable to the
Company or any Subsidiary of any court or of any government, regulatory body or
administrative agency or other governmental body having jurisdiction, except
where such breach or default would not, except with respect to the Charter or
By-laws individually or in the aggregate, have a Material Adverse Effect.
(xiii) The execution and delivery of, and the performance by
the Company of its obligations under, this Agreement has been duly and validly
authorized by all necessary corporate action on the part of the Company, and
this Agreement has been duly executed and delivered by the Company.
(xiv) Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and delivery
by the Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the Commission,
the National Association of Securities Dealers, Inc. (the "NASD") or such
additional steps as may be necessary to qualify the Shares for public offering
by the Underwriters under state securities or Blue Sky laws) has been obtained
or made and is in full force and effect.
(xv) Each of the Company and the Subsidiaries holds, has
obtained or meets the requirements for all material licenses, certificates and
permits, consents, orders, approvals and other authorizations from governmental
authorities which are necessary to the conduct of their businesses and has made
all declarations and filings with, all federal, state, local and other
governmental authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other tribunals, domestic or
foreign, necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date hereof,
except where the lack thereof would not have a Material Adverse Effect, and
neither the Company nor any such subsidiary has received any actual written
notice of any proceeding relating to revocation or modification of any such
material license, permit, certificate, consent, order, approval or other
authorization that would materially interfere with its ownership or lease, as
the case may be, or the operation of its properties or the carrying on of its
business as conducted on the date hereof, except as described in the
Registration Statement and the Prospectus; and each of the Company and its
subsidiaries is in material compliance with all laws and regulations relating to
the conduct of its business as conducted as of the date hereof, except where
such noncompliance would not have a Material Adverse Effect.
(xvi) Neither the Company, nor to the Company's knowledge,
any of its affiliates, has taken or may take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the shares of Common Stock to facilitate the sale or resale of the
Shares.
(xvii) Neither the Company nor any Subsidiary is an
"investment company" or an entity "controlled" by an "investment company" within
the meaning of such terms under the Investment Company Act of 1940, (as amended,
the "1940 Act") and the rules and regulations of the Commission thereunder.
(xviii) The Company and each of its Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that in all material respects (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xix) The Company and each of its Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks relative to the
conduct of their respective businesses as currently conducted and the value of
their respective properties and as is reasonable and customary for companies
engaged in similar businesses.
(xx) There are no existing or, to the best knowledge of the
Company, threatened labor disputes with the employees of the Company or any of
the Subsidiaries which are likely to have a Material Adverse Effect.
(xxii) Except as described in the Registration Statement or
any of the documents incorporated by reference therein, the Company and each of
its Subsidiaries (i) are in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (ii) have received or
meets the requirements for all material permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a Material Adverse Effect.
Except as described in the Registration Statement or any of the documents
incorporated by reference therein, there are no legal or governmental
proceedings pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries under any Environmental Law
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(xxiv) In the ordinary course of its business, the Company
reviews of the effect of Environmental Laws on the business, operations and
properties of the Company and each of its subsidiaries, in the course of which
it identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). Except as described in the Registration Statement
or any of the documents incorporated by reference therein, on the basis of such
review, the Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a Material Adverse
Effect.
(b) Each of the Selling Shareholders severally represents and
warrants as follows:
(i) Such Selling Shareholder now has and at the Closing Date
and the Option Closing Date, as the case may be (as such dates are hereinafter
defined) will have good and marketable title to the Firm Shares and the Option
Shares to be sold by such Selling Shareholder, free and clear of any liens,
encumbrances, equities and claims, and full right, power and authority to effect
the sale and delivery of such Firm Shares and Option Shares; and upon the
delivery of, against payment for, such Firm Shares and Option Shares pursuant to
this Agreement, the Underwriters will acquire good and marketable title thereto,
free and clear of any liens, encumbrances, equities and claims.
(ii) Such Selling Shareholder has full right, power and
authority to execute and deliver this Agreement and to perform its obligations
under this Agreement. The execution and delivery of this Agreement and the
consummation by such Selling Shareholder of the transactions herein contemplated
and the fulfillment by such Selling Shareholder of the terms hereof will not
require any consent, approval, authorization, or other order of any court,
regulatory body, administrative agency or other governmental body (except as may
be required under the Act, state securities laws or Blue Sky laws) and will not
result in a breach of any of the terms and provisions of, or constitute a
default under, organizational documents of such Selling Shareholder, or any
indenture, mortgage, deed of trust or other agreement or instrument to which
such Selling Shareholder is a party, or of any order, rule or regulation
applicable to such Selling Shareholder of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction.
(iii) Such Selling Shareholder has not taken and will not
take, directly or indirectly, any action designed to, or which has constituted,
or which might reasonably be expected to cause or result in the stabilization or
manipulation of the price of the Common Stock of the Company and, other than as
permitted by the Act, such Selling Shareholder will not distribute any
prospectus or other offering material in connection with the offering of the
Shares.
(iv) Without having undertaken to determine independently the
accuracy or completeness of either the representations and warranties of the
Company contained herein or the information contained in the Registration
Statement, such Selling Shareholder has no reason to believe that the
representations and warranties of the Company contained in this Section 1 are
not true and correct, is familiar with the Registration Statement and has no
knowledge of any material fact, condition or information not disclosed in the
Registration Statement which has adversely affected or may adversely affect the
business of the Company or any of the Subsidiaries; and the sale of the Firm
Shares and the Option Shares by such Selling Shareholder pursuant hereto is not
prompted by any information concerning the Company or any of the Subsidiaries
which is not set forth in the Registration Statement or the documents
incorporated by reference therein. The information pertaining to such Selling
Shareholder under the caption "Selling Shareholders" in the Prospectus is
complete and accurate in all material respects.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
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(a) On the basis of the representations, warranties and
covenants herein contained, and subject to the conditions herein set forth, the
Selling Shareholders agree to sell to the Underwriters and each Underwriter
agrees, severally and not jointly, to purchase, at a net purchase price of
$17.47 per share (representing the public offering price of $18.25 per share
less underwriting discounts and commissions of $.78 per share), the number of
Firm Shares set forth opposite the name of each Underwriter in Schedule I
hereof, subject to adjustments in accordance with Section 9 hereof. The number
of Firm Shares to be purchased by each Underwriter from each Seller shall be as
nearly as practicable in the same proportion to the total number of Firm Shares
being sold by each Seller as the number of Firm Shares being purchased by each
Underwriter bears to the total number of Firm Shares to be sold hereunder. The
obligations of each of the Selling Shareholders shall be several and not joint.
(b) Payment for the Firm Shares to be sold hereunder is to be
made in Federal (same day) funds to an account designated by each Selling
Shareholder for the shares to be sold by such Selling Shareholder, in each case
against delivery of the Firm Shares therefor to the Representatives for the
several accounts of the Underwriters. Such payment and delivery are to be made
through the facilities of The Depository Trust Company, New York New York
("DTC") at 10:00 a.m., New York time, on the third business day after the date
of this Agreement or at such other time and date not later than five business
days thereafter as you and the Company shall agree upon, such time and date
being herein referred to as the "Closing Date." (As used herein, "business day"
means a day on which the New York Stock Exchange is open for trading and on
which banks in New York are open for business and not permitted by law or
executive order to be closed.)
(c) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Option Selling Shareholder hereby grants an option to the several
Underwriters to purchase the Option Shares at the price per share as set forth
in the first paragraph of this Section 2. No Option Shares shall be sold or
delivered by the Underwriters unless the Firm Shares previously have been, or
simultaneously with the Option Shares are, sold and delivered. The option
granted hereby may be exercised in whole or in part by giving written notice (i)
at any time before the Closing Date and (ii) only once thereafter within 30 days
after the date of this Agreement, by you, as Representatives of the several
Underwriters, to the Selling Shareholders and the Company setting forth the
number of Option Shares as to which the several Underwriters are exercising the
option and the time and date at which such Option Shares are to be delivered.
The time and date at which the Option Shares are to be delivered shall be
determined by the Representatives but shall not be later than three full
business days after written notice of the exercise of such option, nor in any
event prior to the Closing Date (such time and date being herein referred to as
the "Option Closing Date"). If the date of exercise of the option is three or
more days before the Closing Date, the notice of exercise shall set the Closing
Date as the Option Closing Date. The number of Option Shares to be purchased by
each Underwriter shall be in the same proportion to the total number of Option
Shares being purchased as the number of Firm Shares being purchased by such
Underwriter bears to the total number of Firm Shares, adjusted by you in such
manner as to avoid fractional shares. The option with respect to the Option
Shares granted hereunder may be exercised only to cover over-allotments in the
sale of the Firm Shares by the Underwriters. You, as Representatives of the
several Underwriters, may cancel such option at any time prior to its expiration
by giving written notice of such cancellation to the Selling Shareholders and
the Company. To the extent, if any, that the option is exercised, payment for
the Option Shares shall be made on the Option Closing Date in Federal (same day)
funds to an account designated by the Option Selling Shareholder for the Option
Shares to be sold by the Option Selling Shareholder against delivery of the
Option Shares through the facilities of DTC.
3. OFFERING BY THE UNDERWRITERS.
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It is understood that the several Underwriters are to make a
public offering of the Firm Shares as soon as the Representatives deem it
advisable to do so. The Firm Shares are to be initially offered to the public at
the public offering price set forth in the Prospectus. The Representatives may
from time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are purchased pursuant
to Section 2 hereof, the Underwriters will offer them to the public on the
foregoing terms.
It is further understood that you will act as the
Representatives for the Underwriters in the offering and sale of the Shares in
accordance with a Master Agreement Among Underwriters entered into by you and
the several other Underwriters.
4. COVENANTS OF THE COMPANY AND THE SELLING SHAREHOLDERS.
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(a) The Company covenants and agrees with the several
Underwriters with respect to (i) through (x) below, and with the Selling
Shareholders with respect to (i) through (v) only that:
(i) The Company will (A) use its best efforts to
cause the Registration Statement to become effective or, if the procedure in
Rule 430A of the Rules and Regulations is followed, to prepare and timely file
with the Commission under Rule 424(b) of the Rules and Regulations a Prospectus
in a form approved by the Representatives containing information previously
omitted at the time of effectiveness of the Registration Statement in reliance
on Rule 430A of the Rules and Regulations, and (B) not file any amendment to the
Registration Statement or supplement to the Prospectus or document incorporated
by reference therein of which the Representatives or the Selling Shareholders
shall not previously have been advised and furnished with a copy or to which the
Representatives or the Selling Shareholders shall have reasonably objected in
writing or which is not in compliance with the Rules and Regulations and (C)
file on a timely basis all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission subsequent to
the date of the Prospectus and prior to the termination of the offering of the
Shares by the Underwriters.
(ii) The Company will advise the Representatives
and the Selling Shareholders promptly of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or the use
of the Prospectus or of the institution of any proceedings for that purpose. The
Company will use its best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to obtain as soon as
possible the lifting thereof, if issued.
(iii) The Company will cooperate with the
Representatives and the Selling Shareholders in endeavoring to qualify the
Shares for sale under the securities laws of such jurisdictions as the
Representatives may reasonably have designated in writing and will make such
applications, file such documents, and furnish such information as may be
reasonably required for that purpose, provided the Company shall not be required
to qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or required to file
such a consent. The Company will, from time to time, prepare and file such
statements, reports, and other documents, as are or may be required to continue
such qualifications in effect for so long a period as the Representatives may
reasonably request for distribution of the Shares.
(iv) The Company will deliver to, or upon the order
of, the Representatives, from time to time, as many copies of any Preliminary
Prospectus as the Representatives may reasonably request. The Company will
deliver to, or upon the order of, the Representatives during the period when
delivery of a Prospectus is required under the Act, as many copies of the
Prospectus in final form, or as thereafter amended or supplemented, as the
Representatives may reasonably request. The Company will deliver to each Selling
Shareholder one copy of the Registration Statement including all exhibits filed
therein and to the Representatives such number of copies of the Registration
Statement, one of which will be signed and will include all exhibits filed
therewith, and documents incorporated by reference therein, and of all
amendments thereto, as the Representatives may reasonably request.
(v) Within the time during which a prospectus
relating to the Shares is required to be delivered under the Act, the Company
will comply with the Act and the Rules and Regulations, and the Exchange Act,
and the rules and regulations of the Commission thereunder, so as to permit the
completion of the distribution of the Shares as contemplated in this Agreement
and the Prospectus. If during the period in which a prospectus is required by
law to be delivered by an Underwriter or dealer, any event shall occur as a
result of which, in the judgment of the Company or in the reasonable opinion of
the Underwriters or the Selling Shareholders, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in the light
of the circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading, or, if it is necessary at any time to amend or
supplement the Prospectus to comply with any law, the Company promptly will
either (i) prepare and file with the Commission an appropriate amendment to the
Registration Statement or supplement to the Prospectus or (ii) prepare and file
with the Commission an appropriate filing under the Exchange Act which shall be
incorporated by reference in the Prospectus so that the Prospectus as so amended
or supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with the law.
(vi) The Company will make generally available to
its security holders, as soon as it is practicable to do so, but in any event
not later than 15 months after the effective date of the Registration Statement,
an earning statement (which need not be audited) in reasonable detail, covering
a period of at least 12 consecutive months beginning after the effective date of
the Registration Statement, which earnings statement shall satisfy the
requirements of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations and will advise you in writing when such statement has been so made
available.
(vii) The Company shall not (a) issue, offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly, or
file with the SEC any registration statement relating to, any additional shares
of its common stock or securities convertible into or exchangeable or
exercisable for any shares of its common stock, enter into a transaction which
would have the same effect or publicly disclose the intention to make any such
offer, sale, pledge, disposition or filing, or (b) grant any options whatsoever
in respect of its shares, except grants of employee stock options pursuant to
the terms of a plan in effect on the date of this Agreement, in each case for a
period of 90 days after the date of this Agreement, without the prior written
consent of the Representatives. The foregoing restrictions shall not apply to
any registration statement, or any shares issued thereunder, relating to the
Company's proposed acquisition of Pennichuck Corporation, the issuance by the
Company of up to 150,000 Shares under the Company's shelf registration
statements or the issuance of shares under the Company's Dividend Reinvestment
and Direct Stock Purchase Plan.
(viii) The Company has caused each executive
officer and director of the Company to furnish to you, on or prior to the date
of this agreement, a letter or letters, in form and substance satisfactory to
the Underwriters ("Lockup Agreements"), pursuant to which each such person shall
agree not to offer, sell, sell short or otherwise dispose of, directly or
indirectly, any shares of Common Stock of the Company or other capital stock of
the Company, or any other securities convertible, exchangeable or exercisable
for Common Shares or derivative of Common Shares owned by such person or request
the registration for the offer or sale of any of the foregoing (or as to which
such person has the right to direct the disposition of) for a period of 90 days
after the date of this Agreement, directly or indirectly, except with the prior
written consent of the Representatives.
(ix) The Company will maintain a transfer
agent and, if necessary under the jurisdiction of incorporation of the Company,
a registrar for the Common Stock.
(x) The Company will not take, directly or
indirectly, any action designed to cause or result in, or that constitutes or
might reasonably be expected to constitute, the stabilization or manipulation of
the price of any securities of the Company.
(b) Each of the Selling Shareholders covenants and agrees with
each of the several Underwriters that:
(i) Each Selling Shareholder shall not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or indirectly,
any additional shares of the Company's common stock or securities convertible
into or exchangeable or exercisable for any shares of the Company's common
stock, enter into a transaction which would have the same effect or publicly
disclose the intention to make any such offer, sale, pledge, disposition or
filing for a period of 90 days after the date of this Agreement, without the
prior written consent of the Representatives. The foregoing restrictions shall
not apply to the Option Shares (to the extent the Underwriters' over-allotment
option is exercised) or the proposed purchase by the Company of 2,500,000 shares
from the Selling Shareholders, as described in the Registration and Share
Purchase Agreement between the Company and the Selling Shareholders.
(ii) In order to document the Underwriters'
compliance with the reporting and withholding provisions of the Tax Equity and
Fiscal Responsibility Act of 1982 and the Interest and Dividend Tax Compliance
Act of 1983 with respect to the transactions herein contemplated, each of the
Selling Shareholders agrees to deliver to you prior to or at the Closing Date a
properly completed and executed United States Treasury Department Form W-8 or
W-9 (or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
(iii) Such Selling Shareholder will not take,
directly or indirectly, any action designed to cause or result in, or that has
constituted or might reasonably be expected to constitute, the stabilization or
manipulation of the price of any securities of the Company.
5. COSTS AND EXPENSES.
------------------
The parties agree that the Underwriters shall not be
responsible for the following expenses (1) accounting fees of the Company; (2)
the fees and disbursements of counsel for the Company and the Selling
Shareholders; (3) the cost of printing and delivering to, or as requested by,
the Underwriters copies of the Registration Statement, Preliminary Prospectuses
and the Prospectus, and any supplements or amendments thereto; (4) the filing
fees of the Commission; (5) the filing fees and expenses (including legal fees
and disbursements) incident to securing any required review by the NASD of the
terms of the sale of the Shares; (6) and the expenses, including the fees and
disbursements of counsel for the Underwriters, incurred in connection with the
qualification of the Shares under State securities or Blue Sky laws. Nothing
herein, however, shall prevent the Company and the Selling Shareholders from
apportioning such costs among themselves under separate agreements. To the
extent, if at all, that any of the Selling Shareholders engage special legal
counsel to represent them in connection with this offering, the fees and
expenses of such counsel shall be borne by such Selling Shareholder. Any
transfer taxes imposed on the sale of the Shares to the several Underwriters
will be paid by the Selling Shareholders pro rata. The Company and the Selling
Shareholders shall not, however, be required to pay for any of the Underwriters'
expenses (other than those related to qualification under NASD regulation and
State securities or Blue Sky laws) except that, if this Agreement shall not be
consummated because the conditions in Section 6 hereof are not satisfied, or
because this Agreement is terminated by the Representatives pursuant to Section
11 hereof, or by reason of any failure, refusal or inability on the part of the
Company or the Selling Shareholders to perform any undertaking or satisfy any
condition of this Agreement or to comply with any of the terms hereof on their
part to be performed, unless such failure, refusal or inability is due primarily
to the default or omission of any Underwriter, the Selling Shareholders shall
reimburse the several Underwriters for reasonable out-of-pocket expenses,
including fees and disbursements of counsel, reasonably incurred in connection
with investigating, marketing and proposing to market the Shares or in
contemplation of performing their obligations hereunder; but the Company and the
Selling Shareholders shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits from the sale
by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
---------------------------------------------
The several obligations of the Underwriters to purchase the
Firm Shares on the Closing Date and the Option Shares, if any, on the Option
Closing Date are subject to the accuracy, as of the Closing Date or the Option
Closing Date, as the case may be, of the representations and warranties of the
Company and the Selling Shareholders contained herein, and to the performance by
the Company and the Selling Shareholders of their covenants and obligations
hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective and any and all filings required
by Rule 424 and Rule 430A of the Act shall have been made within the applicable
time period prescribed by, and in compliance with, the Rules and Regulations,
and any request of the Commission for additional information (to be included in
the Registration Statement or otherwise) shall have been disclosed to the
Representatives and complied with to their reasonable satisfaction. No stop
order suspending the effectiveness of the Registration Statement, as amended
from time to time, shall have been issued and no proceedings for that purpose
shall have been taken or, to the knowledge of the Company or the Selling
Shareholders, shall be contemplated or threatened by the Commission and no
injunction, restraining order or order of any nature by a Federal or state court
of competent jurisdiction shall have been issued as of the Closing Date which
would prevent the issuance of the Shares.
(b) The Representatives and the Selling Shareholders shall
have received on the Closing Date or the Option Closing Date, as the case may
be, the opinions of Xxxxxx, Xxxxx & Xxxxxxx LLP ("Xxxxxx Xxxxx"), counsel for
the Company, dated the Closing Date or the Option Closing Date, as the case may
be, addressed to the Underwriters (and stating that it may be relied upon by
counsel to the Underwriters) and the Selling Shareholders to the effect that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania, with corporate power and authority to own or lease
its properties and conduct its business as described in the Registration
Statement; each of Pennsylvania Suburban Water Company ("PSWC") and Consumers
Water Company ("CWC") has been duly organized and is validly existing as a
corporation in good standing under the laws of the Commonwealth of Pennsylvania,
with corporate power and authority to own or lease its properties and conduct
its business as described in the Registration Statement; the Company is duly
qualified to transact business in all jurisdictions in which the conduct of its
business requires such qualification, or in which the failure to qualify would
have a materially adverse effect upon the business of the Company and the
Subsidiaries taken as a whole; and the outstanding shares of capital stock of
each of PSWC and CWC have been duly authorized and validly issued and are fully
paid and non-assessable and are owned by the Company; and, to the best of such
counsel's knowledge, the outstanding shares of capital stock of each of PSWC and
CWC is owned free and clear of all liens, encumbrances and equities and claims.
(ii) The authorized shares of the Company's Common
Stock have been duly authorized; the outstanding shares of the Company's Common
Stock, including the Shares to be sold by the Selling Shareholders, have been
duly authorized and validly issued and are fully paid and non-assessable; all of
the Shares conform in all material respects as to legal matters to the
description thereof contained in the Prospectus; the certificates for the
Shares, assuming they are in the form filed with the Commission; conform to the
requirements of the Pennsylvania Business Corporation Law of 1988, as amended
(the "PBCL"); and no preemptive rights of shareholders exist with respect to any
of the Shares or the issue or sale thereof arising under the Company's Charter,
By-laws or the PBCL.
(iii) Based upon the oral advice of a member of the
Staff of the Commission, the Registration Statement has become effective under
the Act and, to the best of the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are pending or
threatened under the Act.
(iv) The Registration Statement, as of the date it
became effective, the Prospectus and each amendment or supplement thereto and
document incorporated by reference therein, as of each of their respect dates,
comply as to form in all material respects with the requirements of the Act or
the Exchange Act as applicable and the applicable rules and regulations
thereunder (except that such counsel need express no opinion as to the financial
statements and related schedules incorporated by reference therein).
(v) The statements under the captions "Recent
Developments--Pennichuck Acquisition" and "Relationship with Vivendi
Environnment S.A.--Agreement to Repurchase Shares and Financing Plan" in the
Prospectus, insofar as such statements constitute a summary of documents
referred to therein or matters of law, fairly summarize in all material respects
the information called for with respect to such documents and matters.
(vi) Such counsel does not know of any contracts
or documents required to be filed as exhibits to or incorporated by reference in
the Registration Statement or described in the Registration Statement or the
Prospectus which are not so filed, incorporated by reference or described as
required, and to counsel's knowledge, such contracts and documents as are
summarized in the Registration Statement or the Prospectus are fairly summarized
in all material respects.
(vii) Such counsel knows of no material legal or
governmental proceedings pending or threatened against the Company or any of the
Subsidiaries except as set forth in the Prospectus.
(viii) The execution and delivery of this Agreement
and the consummation of the transactions herein contemplated do not and will not
violate or result in a breach of any of the terms or provisions of, or
constitute a default under, the Charter or By-Laws of the Company, or any
material indenture, mortgage, deed of trust or other material agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which the Company or any of the Subsidiaries may be bound and which is known to
such counsel.
(ix) This Agreement has been duly authorized,
executed and delivered by the Company.
(x) No approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the execution and
delivery of this Agreement and the consummation of the transactions herein
contemplated (other than as may be required by the NASD or as required by State
securities and Blue Sky laws as to which such counsel need express no opinion)
except such as have been obtained or made, specifying the same.
(xi) The Company is not an "investment company" or
an entity "controlled" by an "investment company" within the meaning of such
terms under the 1940 Act and the rules and regulations of the Commission
thereunder.
In rendering such opinion Xxxxxx Xxxxx may rely as to matters
governed by the laws of states other than Pennsylvania, New York or Federal laws
on local counsel in such jurisdictions, provided that in each case Xxxxxx Xxxxx
shall state that they believe that they and the Underwriters are justified in
relying on such other counsel. In addition to the matters set forth above, the
Underwriters shall receive a statement from such counsel to the effect that
nothing has come to the attention of such counsel which leads them to believe
that (i) the Registration Statement, at the time it became effective under the
Act (including the information deemed to be a part of the Registration Statement
at the time it became effective pursuant to Rule 430A under the Act), as of the
date hereof and as of the Closing Date or the Option Closing Date, as the case
may be, contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading (except that such counsel need
express no view as to financial statements, schedules and statistical
information therein), and (ii) the Prospectus, or any supplement thereto, on the
date it was filed pursuant to the Rules and Regulations and as of the Closing
Date or the Option Closing Date, as the case may be, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that such
counsel need express no view as to financial statements, schedules and
statistical information therein). With respect to such statement, Xxxxxx Xxxxx
may state that their belief is based upon the procedures set forth therein, but
is without independent check and verification.
(c) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinions of Xxx X.
Xxxxx, Esq., Executive Vice President - General Counsel for the Company, dated
the Closing Date or the Option Closing Date, as the case may be, addressed to
the Underwriters (and stating that it may be relied upon by counsel to the
Underwriters) to the effect that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Pennsylvania, with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration Statement;
each of the Subsidiaries has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement; the Company
and each of the Subsidiaries are duly qualified to transact business in all
jurisdictions in which the conduct of their business requires such
qualification, or in which the failure to qualify would have a Materially
Adverse Effect; and the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued and are fully paid and
non-assessable and are owned by the Company or a Subsidiary; and, to the best of
such counsel's knowledge, the outstanding shares of capital stock of each of the
Subsidiaries is owned free and clear of all liens, encumbrances and equities and
claims, and no options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any obligations into any
shares of capital stock or of ownership interests in the Subsidiaries are
outstanding.
(ii) Except as described in or contemplated by the
Prospectus or the documents incorporated by reference therein, there are no
outstanding securities of the Company convertible or exchangeable into or
evidencing the right to purchase or subscribe for any shares of capital stock of
the Company and there are no outstanding or authorized options, warrants or
rights of any character obligating the Company to issue any shares of its
capital stock or any securities convertible or exchangeable into or evidencing
the right to purchase or subscribe for any shares of such stock; and except as
described in the Prospectus or the documents incorporated by reference therein,
no holder of any securities of the Company or any other person has the right,
contractual or otherwise, which has not been satisfied or effectively waived, to
cause the Company to sell or otherwise issue to them, or to permit them to
underwrite the sale of, any of the Shares or the right to have any Common Shares
or other securities of the Company included in the Registration Statement or the
right, as a result of the filing of the Registration Statement, to require
registration under the Act of any shares of Common Stock or other securities of
the Company.
(iii) Each of the Company and the Subsidiaries
owns, possesses, has obtained or meets the requirements for all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal, state, local
and other governmental authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other tribunals, domestic or
foreign, necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date hereof
except where the lack thereof would not have a Material Adverse Effect, and
neither the Company nor any such Subsidiary has received any actual written
notice of any proceeding relating to revocation or modification of any such
license, permit, certificate, consent, order, approval or other authorization
that would materially interfere with its ownership or lease, as the case may be,
or the operation of its properties or the carrying on of its business as
conducted on the date hereof, except as described in the Registration Statement
and the Prospectus; and to the best of his knowledge, each of the Company and
the Subsidiaries is in material compliance with all laws and regulations
relating to the conduct of its business as conducted as of the date of the
Prospectus except where such noncompliance would not have a Material Adverse
Effect.
(d) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinion of Cleary,
Gottlieb, Xxxxx & Xxxxxxxx ("Xxxxxx Xxxxxxxx"), counsel for the Selling
Shareholders, dated the Closing Date or the Option Closing Date, as the case may
be, addressed to the Underwriters (and stating that it may be relied upon by
counsel to the Underwriters) to the effect that:
(i) This Agreement has been duly authorized,
executed and delivered on behalf of the Selling Shareholders and is a valid and
binding agreement of each Selling Shareholder.
(ii) Each Selling Shareholder has full legal right,
power and authority, and any approval required by law (other than as required by
State securities and Blue Sky laws as to which such counsel need express no
opinion), to sell, assign, transfer and deliver the portion of the Shares to be
sold by such Selling Shareholder.
(iii) Assuming that (a) DTC is a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code
(the "UCC"), and (b) each of the Underwriters acquires its interest in the
Shares it has purchased without notice of any adverse claim (within the meaning
of Section 8-105 of the UCC), each Underwriter that has purchased Shares from
the Selling Shareholders, made payment therefor pursuant to this Agreement and
has had such Shares credited to a securities account of such Underwriter
maintained with DTC will have acquired a securities entitlement (within the
meaning of Section 8-102(a)(17) of the UCC) to such Shares, and no action based
on an adverse claim may be asserted against such Underwriter with respect to
such security entitlement.
In rendering such opinion, Xxxxxx Xxxxxxxx may rely as to matters
governed by the laws of states other than New York or Federal laws on local
counsel in such jurisdictions, provided that in each case Xxxxxx Xxxxxxxx shall
state that they believe that they and the Underwriters are justified in relying
on such other counsel.
(e) The Representatives shall have received from Xxxxx Xxxx &
Xxxxxxxx ("Xxxxx Xxxx"), counsel for the Underwriters, an opinion dated the
Closing Date or the Option Closing Date, as the case may be, substantially to
the effect specified in subparagraph (x) of Paragraph (b) of this Section 6 and
subparagraph (i) of Paragraph (d) of this Section 6. In rendering such opinion
Xxxxx Xxxx may rely as to all matters governed other than by the laws of the
State of New York or Federal laws on the opinion of counsel referred to in
Paragraph (b) of this Section 6. In addition to the matters set forth above,
such opinion shall also include a statement to the effect that nothing has come
to the attention of such counsel which leads them to believe that (i) the
Registration Statement, or any amendment thereto, as of the time it became
effective under the Act (including the information deemed to be a part of the
Registration Statement at the time it became effective pursuant to Rule 430A
under the Act) as of the Closing Date or the Option Closing Date, as the case
may be, contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (ii) the Prospectus, or any
supplement thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date, as the case
may be, contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact, necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (except that such counsel need express no view as to financial
statements, schedules and statistical information therein). With respect to such
statement, Xxxxx Xxxx may state that their belief is based upon the procedures
set forth therein, but is without independent check and verification.
(f) You shall have received, on each of the date hereof, the
Closing Date and, if applicable, the Option Closing Date, a letter dated the
date hereof, the Closing Date or the Option Closing Date, as the case may be, in
form and substance satisfactory to you, of PricewaterhouseCoopers LLP confirming
that they are independent public accountants within the meaning of the Act and
the applicable published Rules and Regulations thereunder and stating that in
their opinion the financial statements and schedules examined by them and
included in the Registration Statement comply in form in all material respects
with the applicable accounting requirements of the Act and the related published
Rules and Regulations; and containing such other statements and information as
is ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial and statistical
information contained in the Registration Statement and Prospectus. You shall
also have received, on each of the date hereof, the Closing Date and, if
applicable, the Option Closing Date, a letter dated the date hereof, the Closing
Date or the Option Closing Date, as the case may be, in form and substance
satisfactory to you, of KPMG with regard to certain financial information for
fiscal year 1999.
(g) The Representatives and the Selling Shareholders shall
have received on the Closing Date and, if applicable, the Option Closing Date,
as the case may be, a certificate or certificates of Xxxxxxxx XxXxxxxxxxxx,
President and Chairman of the Company, and Xxxxx Xxxxxxxx, Chief Financial
Officer of the Company, solely in their respective capacities as such, to the
effect that, as of the Closing Date or the Option Closing Date, as the case may
be, each of them severally represents as follows:
(i) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness of the Registration
Statement has been issued, and, to his knowledge after due inquiry, no
proceedings for such purpose have been taken or are, to his knowledge,
contemplated or threatened by the Commission;
(ii) The representations and warranties of the
Company contained in Section 1 hereof are true and correct as of the Closing
Date or the Option Closing Date, as the case may be;
(iii) All filings required to have been made pursuant
to Rules 424 or 430A under the Act have been made as and when required by
such rules;
(iv) He has carefully examined the Registration
Statement and the Prospectus and, in his opinion, as of the effective date of
the Registration Statement, the statements contained in the Registration
Statement were true and correct, and such Registration Statement and Prospectus
did not omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading, and since the effective date of the
Registration Statement, no event has occurred which should have been set forth
in a supplement to or an amendment of the Prospectus which has not been so set
forth in such supplement or amendment; and
(v) Since the respective dates as of which
information is given in the Registration Statement and Prospectus, there has not
been any change or any development that has had or will have a Material Adverse
Effect.
(h) The Company and the Selling Shareholders shall have
furnished to the Representatives such further certificates and documents
confirming the representations and warranties, covenants and conditions
contained herein and related matters as the Representatives my reasonably have
requested.
(i) The Lockup Agreements described in Section 4(a)(viii)
are in full force and effect.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they are
in all material respects satisfactory to the Representatives and to Xxxxx Xxxx,
counsel for the Underwriters.
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, the obligations of the Underwriters hereunder may be terminated
by the Representatives by notifying the Company and the Selling Shareholders of
such termination in writing or by telegram at or prior to the Closing Date or
the Option Closing Date, as the case may be.
In such event, the Selling Shareholders, the Company and the
Underwriters shall not be under any obligation to each other (except to the
extent provided in Sections 5 and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE SELLING SHAREHOLDERS.
---------------------------------------------------------
The obligations of the Selling Shareholders to sell and
deliver the portion of the Shares required to be delivered as and when specified
in this Agreement are subject to the conditions that at the Closing Date or the
Option Closing Date, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and in effect
or proceedings therefor initiated or threatened and the Selling Shareholders
shall have been furnished the opinion described in Section 6(b) and the
certificate described in Section 6(g).
8. INDEMNIFICATION.
---------------
(a) The Company agrees:
(1) to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act, against
any losses, claims, damages or liabilities to which such Underwriter or
any such controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or
(ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which
they were made; provided, however, that the Company will not be liable
in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement, or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or
such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by or through the
Representatives or the Selling Shareholders specifically for use in the
preparation thereof; and
(2) to reimburse each Underwriter and each such controlling
person upon demand for any legal or other out-of-pocket expenses
reasonably incurred by such Underwriter or such controlling person in
connection with investigating or defending any such loss, claim, damage
or liability, action or proceeding or in responding to a subpoena or
governmental inquiry related to the offering of the Shares, whether or
not such Underwriter or controlling person is a party to any action or
proceeding. In the event that it is finally judicially determined that
the Underwriters were not entitled to receive payments for legal and
other expenses pursuant to this subparagraph, the Underwriters will
promptly return all sums that had been advanced pursuant hereto.
(b) The Selling Shareholders agree to indemnify the
Underwriters and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any
losses, claims, damages or liabilities to which such Underwriter or controlling
person may become subject under the Act or otherwise to the same extent as
indemnity is provided by the Company pursuant to Section 8(a) above; provided,
however, that each Selling Shareholders' indemnity obligation shall be limited
to losses, claims, damages or liabilities arising out of or based upon an untrue
statement or alleged untrue statement, or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through such Selling Shareholder
specifically for use in the preparation thereof. In no event shall the liability
of any Selling Shareholder for indemnification under Section 8(a) exceed the
proceeds received by such Selling Shareholder from the Underwriters in the
offering. This indemnity obligation will be in addition to any liability which
the Company may otherwise have.
(c) Each Underwriter severally and not jointly will indemnify
and hold harmless the Company, each of its directors, each of its officers who
have signed the Registration Statement, the Selling Shareholders, and each
person, if any, who controls the Company or the Selling Shareholders within the
meaning of the Act, against any losses, claims, damages or liabilities to which
the Company or any such director, officer, Selling Shareholder or controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
or (ii) the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made; and
will reimburse any legal or other expenses reasonably incurred by the Company or
any such director, officer, Selling Shareholder or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding; provided, however, that each Underwriter will
be liable in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission has been
made in the Registration Statement, any Preliminary Prospectus, the Prospectus
or such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representatives
specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability which such Underwriter may otherwise have.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 8, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a), (b) or (c) shall be available to
any party who shall fail to give notice as provided in this Section 8(d) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of the
provisions of Section 8(a), (b) or (c). In case any such proceeding shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own counsel
at its own expense. Notwithstanding the foregoing, the indemnifying party shall
pay as incurred (or within 30 days of presentation) the fees and expenses of the
counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them or (iii) the
indemnifying party shall have failed to assume the defense and employ counsel
acceptable to the indemnified party within a reasonable period of time after
notice of commencement of the action. It is understood that the indemnifying
party shall not, in connection with any proceeding or related proceedings in the
same jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm for all such indemnified parties. Such firm shall be
designated in writing by you in the case of parties indemnified pursuant to
Section 8(a) or (b) and by the Company and the Selling Shareholders in the case
of parties indemnified pursuant to Section 8(c). The indemnifying party shall
not be liable for any settlement of any proceeding effected without its written
consent but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or judgment. In
addition, the indemnifying party will not, without the prior written consent of
the indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.
(e) To the extent the indemnification provided for in this
Section 8 is unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a), (b) or (c) above in respect of any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company and the Selling Shareholders on the
one hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the Selling Shareholders
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus; provided however, that nothing herein shall be construed to prevent
the Company and the Selling Shareholders from allocating any such losses,
claims, damages or liabilities among themselves pursuant to a separate agreement
between such parties. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Shareholders on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Selling Shareholders and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 8(e) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 8(e). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to above in this Section 8(e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (e), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter, (ii) no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation, and (iii) no
Selling Shareholder shall be required to contribute any amount in excess of the
proceeds received by such Selling Shareholder from the Underwriters in the
offering. The Underwriters' obligations in this Section 8(e) to contribute are
several in proportion to their respective underwriting obligations and not
joint.
(f) In any proceeding relating to the Registration Statement,
any Preliminary Prospectus, the Prospectus or any supplement or amendment
thereto, each party against whom contribution may be sought under this Section 8
hereby consents to the jurisdiction of any court having jurisdiction over any
other contributing party, agrees that process issuing from such court may be
served upon it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join it as an
additional defendant in any such proceeding in which such other contributing
party is a party.
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any persons
controlling the Company, (ii) acceptance of any Shares and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter, or any person controlling any Underwriter, or to the Company, its
directors or officers, or any person controlling the Company, shall be entitled
to the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 8.
9. DEFAULT BY UNDERWRITERS.
-----------------------
If on the Closing Date or the Option Closing Date, as the case
may be, any Underwriter shall fail to purchase and pay for the portion of the
Shares which such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the Company or a Selling
Shareholder), you, as Representatives of the Underwriters, shall use your
reasonable efforts to procure within 36 hours thereafter one or more of the
other Underwriters, or any others, to purchase from the Company and the Selling
Shareholders such amounts as may be agreed upon and upon the terms set forth
herein, the Shares which the defaulting Underwriter or Underwriters failed to
purchase. If during such 36 hours you, as such Representatives, shall not have
procured such other Underwriters, or any others, to purchase the Shares agreed
to be purchased by the defaulting Underwriter or Underwriters, then (a) if the
aggregate number of shares with respect to which such default shall occur does
not exceed 10% of the Shares to be purchased on the Closing Date or the Option
Closing date, as the case may be, the other Underwriters shall be obligated,
severally, in proportion to the respective numbers of Shares which they are
obligated to purchase hereunder, to purchase the Shares which such defaulting
Underwriter or Underwriters failed to purchase, or (b) if the aggregate number
of shares of Shares with respect to which such default shall occur exceeds 10%
of the Shares to be purchased on the Closing Date or the Option Closing Date, as
the case may be, the Company and the Selling Shareholders or you as
Representatives will have the right, by written notice given within the next
36-hour period to the parties to this Agreement, to terminate this Agreement
without liability on the part of the non-defaulting Underwriters or of the
Company or of the Selling Shareholders except to the extent provided in Sections
5 and 8 hereof. In the event of a default by any Underwriter or Underwriters, as
set forth in this Section 9, the Closing Date or Option Closing Date, as the
case may be, may be postponed for such period, not exceeding seven days, as the
Company or you, as Representatives, may determine in order that the required
changes in the Registration Statement or in the Prospectus or in any other
documents or arrangements may be effected. The term "Underwriter" includes any
person substituted for a defaulting Underwriter. Any action taken under this
Section 9 shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
10. NOTICES.
-------
All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered, telecopied or
telegraphed and confirmed as follows: if to the Underwriters, to Deutsche Bank
Securities Inc., Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000; Attention:
Syndicate Manager, with a copy to Deutsche Bank Securities Inc., 00 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel.
To the Company:
Philadelphia Suburban Corporation
000 X. Xxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Xxx X. Xxxxx, Esq.
Executive Vice President and General Counsel
Fax: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
To the Selling Shareholders:
Vivendi Water S.A.
00, xxx x'Xxxxx
00000 Xxxxx
Xxxxxx
Attention: Xxxxxx Xxxxxxxx
Fax: (+33.1) 49.24.69.11
Vivendi North America Company
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Contamine
Fax: (+33.1) 71.75.10.09
with a copy to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
00, xxxxxx xx Xxxxxxxxx
00000 Xxxxx
Xxxxxx
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Fax: 00 0 0000 0000
11. TERMINATION.
-----------
This Agreement may be terminated by you, as Representatives,
by written notice to the Company and the Selling Shareholders (a) at any time
prior to the Closing Date or any Option Closing Date (if different from the
Closing Date and then only as to Option Shares) if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or any
development occurs that has had a Material Adverse Effect (ii) any outbreak or
escalation of hostilities or declaration of war or national emergency or other
national or international calamity or crisis or change in economic or political
conditions if the effect of such outbreak, escalation, declaration, emergency,
calamity, crisis or change on the financial markets of the United States would,
in your reasonable judgment, make it impracticable or inadvisable to market the
Shares or to enforce contracts for the sale of the Shares, or (iii) suspension
of trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market or limitation on prices (other than
limitations on hours or numbers of days of trading) for securities on either
such Exchange, (iv) the enactment, publication, decree or other promulgation of
any statute, regulation, rule or order of any court or other governmental
authority which in your reasonable opinion would create a Material Adverse
Effect (v) the declaration of a banking moratorium by United States or New York
State authorities, (vi) any downgrading, or placement on any watch list for
possible downgrading, in the rating of any of the Company's debt securities by
any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Exchange Act); (vii) the suspension of trading
of the Company's common stock by the New York Stock Exchange, the Commission, or
any other governmental authority or, (viii) the taking of any action by any
governmental body or agency in respect of its monetary or fiscal affairs which
in your reasonable opinion has a material adverse effect on the securities
markets in the United States; or
(b) as provided in Sections 6 and 9 of this Agreement.
Any such termination shall be without liability of any party
to any other party except that the provisions of Section 5 and 8 hereof shall at
all times be effective.
12. SUCCESSORS.
----------
This Agreement has been and is made solely for the benefit of
the Underwriters, the Company and the Selling Shareholders and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other person will
have any right or obligation hereunder. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign merely because of such
purchase.
13. INFORMATION PROVIDED BY UNDERWRITERS AND SELLING SHAREHOLDERS.
-------------------------------------------------------------
The Company, the Selling Shareholders and the Underwriters
acknowledge and agree that the only information furnished or to be furnished by
any Underwriter to the Company for inclusion in any Prospectus or the
Registration Statement consists of the information set forth under the caption
"Underwriting" in the Prospectus. The Company, the Selling Shareholders and the
Underwriters acknowledge and agree that the only information furnished or to be
furnished by any Selling Shareholder to the Company for inclusion in any
Prospectus or the Registration Statement consists of the information set forth
under the captions "Selling Shareholders" and "Relationship with Vivendi
Environnement S.A.--General" in the Prospectus.
14. MISCELLANEOUS.
-------------
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers and (c) delivery of and payment for the Shares under
this Agreement.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
15. SUBMISSION TO JURISDICTION
Except as set forth below, no claim arising out of or in any
way relating to this Agreement may be commenced, prosecuted or continued in any
court other than the courts of the State of New York located in the City and
County of New York or in the United States District Court for the Southern
District of New York, which courts shall have jurisdiction over the adjudication
of such matters, and each of the Company and the Selling Shareholders consents
to the jurisdiction of such courts and personal service with respect thereto.
Each of the Company and the Selling Shareholders hereby consents to personal
jurisdiction, service and venue in any court in which any claim arising out of
or in any way relating to this Agreement is brought by any third party against
UBS Warburg LLC, Deutsche Bank Securities Inc. or any indemnified party. Each of
UBS Warburg LLC, Deutsche Bank Securities Inc., the Company (on its behalf and,
to the extent permitted by applicable law, on behalf of its shareholders and
affiliates) and the Selling Shareholders waives all right to trial by jury in
any action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. Each of the
Company and Selling Shareholders agrees that a final judgment in any such
action, proceeding or counterclaim brought in any such court shall be conclusive
and binding upon the Company or such Selling Shareholder and may be enforced in
any other courts in the jurisdiction of which the Company or such Selling
Shareholder is or may be subject, by suit upon such judgment.
* * *
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Shareholders, the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
PHILADELPHIA SUBURBAN CORPORATION
By:/s/ Xxxxxxxx X. XxXxxxxxxxxx
---------------------------------
Title: Chairman and Chief Executive
Officer
VIVENDI WATER S.A. VIVENDI NORTH AMERICA COMPANY
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx Contamine
------------------------- --------------------------------
Title: Chairman and Chief Title: President and Sole Director
Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted
as of the date first above written.
DEUTSCHE BANK SECURITIES INC.
UBS WARBURG LLC
As Representatives of the several
Underwriters listed on Schedule I
DEUTSCHE BANK SECURITIES INC. UBS WARBURG LLC
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. XxXxxxxx
------------------------ -------------------------------
Title: Managing Director Title: Executive Director
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
Title: Executive Director
SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm Shares
Underwriter to be Purchased
----------- ------------------------
Deutsche Bank Securities Inc. 2,885,953
UBS Warburg LLC 2,885,953
X.X. Xxxxxxx & Sons, Inc. 769,587
Xxxxxx X. Xxxxx & Co., L.P. 577,191
Xxxxxx Xxxxxxxxxx Xxxxx LLC 577,191
BOE Securities Inc. 100,000
Cantor Xxxxxxxxxx & Co. 100,000
Xxxxxxxxxx & Co. Inc. 100,000
Gabelli & Company, Inc. 100,000
Xxxxxxxx Xxxxx Inc. 100,000
Xxxxxxxxx & Company, Inc. 100,000
Xxxx, Xxxx & Co., Inc. 100,000
XX Xxxxx Securities Corporation 100,000
Xxxxxx Xxxxxx Partners LLC 100,000
---------
Total 8,595,875
SCHEDULE II
SCHEDULE OF SELLING SHAREHOLDERS
Number of Firm
Selling Shareholder Shares to be Sold
------------------- ------------------
Vivendi Water S.A. 7,834,220
Vivendi North America Company 761,655
-------------------
Total 8,595,875
SCHEDULE III
SIGNIFICANT SUBSIDIARIES
------------------------
Pennsylvania Suburban Water Company
Consumers Water Company
