FIRST MORTGAGE BONDS
1997 MEDIUM TERM NOTE SERIES
Up to U.S. $150,000,000
Maturities from One Year to Thirty-Five Years
PLACEMENT AGENCY AGREEMENT
By and Among
PHILADELPHIA SUBURBAN WATER COMPANY
as Issuer
and
AGENTS LISTED ON SCHEDULE I ATTACHED HERETO
Dated as of July 11, 1997
PHILADELPHIA SUBURBAN WATER COMPANY
U.S. $150,000,000
First Mortgage Bonds
1997 Medium Term Note Series
Maturities from One Year
to Thirty-Five Years from Date of Issue
Placement Agency Agreement
--------------------------
New York, New York
July 11, 1997
To Each of the Addressees Named
on Schedule I Hereto Acting
Severally and Not Jointly in the
Capacities of Agent and Purchaser
or in Either Such Capacity
Gentlemen and Ladies:
Philadelphia Suburban Water Company, a corporation organized
and existing under the laws of the Commonwealth of Pennsylvania (the "Issuer")
which is a wholly-owned subsidiary of Philadelphia Suburban Corporation, a
Pennsylvania corporation ("PSC"), confirms its agreement with you with respect
to the issue and sale by the Issuer of its First Mortgage Bonds, 1997 Medium
Term Note Series (the "Notes"). The Notes will be issued in one or more
subseries under and secured in accordance with the Thirty-First Supplemental
Indenture dated as of July 1, 1997 (the "Supplemental Indenture") to the
Indenture of Mortgage dated as of January 1, 1941 (the "Indenture of Mortgage")
between the Issuer and Mellon Bank, N.A. (as successor in interest to CoreStates
Bank N.A. as successor in interest to The Pennsylvania Company for Insurance on
Lives and Granting Annuities), as Trustee (the "Trustee"). The Notes may be sold
during the two year period from June 6, 1997 through June 5, 1999 (the "Offering
Period"), by the Issuer in an aggregate principal amount of up to U.S.
$150,000,000. It is understood, however, that the Issuer may from time to time,
if permitted under the Indenture of Mortgage and pursuant to subsequent
supplemental indentures, authorize the issuance of additional notes and that
such additional notes may be sold through or to you subject to and in accordance
with the terms of this Placement Agency Agreement (the "Agreement"), all as
though the issuance of such additional Notes or the sale of Notes after the
expiration of the Offering Period were authorized as of the date hereof. The
Notes will be offered during the Offering Period from time to time on a private
placement basis without being registered under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon the exemption therefrom
provided by Section 4(2) of the Securities Act. The Notes will be offered only
to "Qualified Institutional Buyers" (as defined in Rule 144A under the
Securities Act)
pursuant to this Placement Agreement. All Notes having a common issue date,
maturity date, interest rate and otherwise identical terms are referred to
herein as a "Tranche". This Agreement is non-exclusive as the Notes of each
Tranche may be offered through one or more Agents (hereinafter defined) pursuant
to this Agreement. The Notes will be issued, and the terms thereof established,
in accordance with the terms of the Indenture of Mortgage and the Supplemental
Indenture, and in the case of Notes sold pursuant to Section 2(a), in accordance
with the Medium Term Notes Administrative Procedures attached hereto as Exhibit
A (the "Administrative Procedures"), the terms of which are incorporated herein
by this reference as if set forth herein in their entirety. The Notes will be
payable in accordance with a Paying Agency Agreement dated as of July 11, 1997
(the "Paying Agency Agreement"), among the Issuer, Mellon Bank, N.A., as paying
agent (the "Paying Agent"), the Trustee and the Agents. The Administrative
Procedures set forth in Exhibit A shall remain in effect with respect to sales
solicited by the Agents until changed by the Issuer, the Agents and the Paying
Agent. For the purposes of this Agreement, the term "Agent" shall refer to each
addressee named on Schedule I hereto acting severally and not jointly in the
sole capacity as agent for the Issuer pursuant to Section 2(a) and not as
principal; the term "Agents" shall refer in general terms to all addressees
named on Schedule I acting in the capacity as agent to the Issuer pursuant to
Section 2(a); the term "Purchaser" shall refer to the same addressees named on
Schedule I hereto acting severally and not jointly in the sole capacity as
principal pursuant to Section 2(b) and not as agent; and the term "you" shall
refer to each or any addressee named on Schedule I hereto acting severally and
not jointly in both such capacities or in either such capacity.
1. Representations and Warranties. The Issuer represents and warrants
to you as of the date hereof, and shall be deemed to represent and warrant to
you at and as of each time the Issuer gives a notice requesting you to solicit
offers as Agent, at and as of each acceptance of an offer by the Issuer, at and
as of the date of each Terms Agreement (as defined in Section 2(b)), and upon
the delivery to the purchaser (or its agent) pursuant to such offer or to the
Purchaser of any Note pursuant to such Terms Agreement, as the case may be,
that:
(a) The Issuer confirms that it has prepared a confidential
Offering Memorandum (defined below) and authorizes you to distribute
copies thereof in connection with the offering of Notes as provided
herein. The Offering Memorandum does not and will not contain any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the foregoing representation and warranty shall not apply
to statements or
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omissions in the Offering Memorandum made in reliance upon and in
conformity with information furnished to the Issuer in writing by you
or on your behalf which has been furnished by a person authorized to do
so, specifically for use therein. As used in this Agreement, the term
"Offering Memorandum" means the confidential offering memorandum dated
the same date as this Agreement relating to the Notes, as it may be
amended or supplemented from time to time, including with respect to
each Tranche, the related pricing supplement (each, a "Pricing
Supplement"), any documents expressly incorporated by reference therein
and any quarterly or annual reports of the Issuer or PSC delivered to
any Agent for delivery together with the Offering Memorandum, which
amendment or supplement may be in the form of a separate document that
does not state that it is a supplement to the Offering Memorandum, and
any reference to the terms "amend", "amendment" or "supplement" with
respect to the Offering Memorandum shall refer to and include the
filings with the Securities and Exchange Commission (the "Commission")
of any documents expressly incorporated by reference into the Offering
Memorandum after the date hereof.
(b) The financial statements and schedules included in, or as
an exhibit, attachment or appendix to, the Offering Memorandum present
fairly the consolidated financial condition of the Issuer as of the
respective dates thereof, and the consolidated results of operations
and changes in financial condition of the Issuer for the respective
periods covered thereby, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
entire period involved, except as otherwise disclosed in the Offering
Memorandum. KPMG Xxxx Xxxxxxx (the "Accountants"), who have reported on
the annual financial statements and schedules of the Issuer, are
independent certified public accountants with respect to the Issuer and
its subsidiaries within the meaning of Rule 1.01 of the Code of
Professional Conduct of the American Institute of Certified Public
Accountants.
(c) Subsequent to the respective dates as of which information
is given in the Offering Memorandum, except as otherwise set forth
therein, (i) there has been no material adverse change, or to the
knowledge of the Issuer any development involving a prospective
material adverse change, in the financial condition, earnings, business
or business prospects or properties of the Issuer and its subsidiaries,
considered as a single enterprise (a "Material Adverse Effect"), (ii)
neither the Issuer nor any of its subsidiaries have incurred any
material liabilities or obligations, direct or contingent, nor have any
of them entered into any material transactions other than pursuant to
this Agreement, the Supplemental Indenture and the Paying
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Agency Agreement and the transactions referred to herein and therein
and (iii) no rating of any of the securities of the Issuer has been
lowered by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) of the Securities Act) (each, a
"Rating Agency"), nor has there been any notice given by any Rating
Agency of any intended or potential decrease in any such rating or of a
possible change in any such rating where such notice does not indicate
the direction of the possible change.
(d) The Issuer and each of its subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation. The Issuer and each of its
subsidiaries has full power and authority to conduct all the activities
conducted by it, to own or lease all the assets owned or leased by it
and to conduct its business as described in the Offering Memorandum.
The Issuer and each of its subsidiaries is duly licensed or qualified
to do business and in good standing as a foreign corporation in all
jurisdictions in which the nature of the activities conducted by it or
the character of the assets owned or leased by it makes such license or
qualification necessary, except where the failure to so qualify or be
in good standing would not have a Material Adverse Effect.
(e) Except for stock of its subsidiaries, or as disclosed in
the Offering Memorandum, the Issuer does not own, directly or
indirectly, any shares of stock or any other equity or long-term debt
securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association or other entity, other than
equity investments made by the Issuer for business development purposes
or otherwise which are not material to the Issuer.
(f) The Issuer has full corporate power and authority to enter
into this Agreement, the Supplemental Indenture, and the Paying Agency
Agreement, to issue the Notes, and to perform its obligations under
this Agreement, the Supplemental Indenture, the Paying Agency Agreement
and the Notes. This Agreement, the Supplemental Indenture and the
Paying Agency Agreement have been duly authorized, executed and
delivered by the Issuer and, when authorized, executed and delivered by
the other parties hereto and thereto, will constitute valid and binding
agreements of the Issuer and will be enforceable against the Issuer in
accordance with their terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other
similar laws affecting creditors' rights generally from time to time in
effect, and subject, as to enforceability, to general principles of
equity, regardless of whether such
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enforceability is considered in a proceeding in equity or at law). The
Supplemental Indenture and the Paying Agency Agreement conform in all
material respects to the descriptions thereof in the Offering
Memorandum.
(g) The execution and delivery of the Notes has been duly
authorized by all necessary corporate action on the part of the Issuer;
each Note, when completed, executed, authenticated and delivered in
accordance with the Indenture of Mortgage and the Supplemental
Indenture against payment of the consideration therefor will constitute
a legal, valid and binding obligation of the Issuer, enforceable
against the Issuer in accordance with the terms of such Note (subject
to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws affecting creditors'
rights generally from time to time in effect, and subject, as to
enforceability, to general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law),
and will entitle its holder to the benefits of the Indenture of
Mortgage and the Supplemental Indenture. Each Note will conform in all
material respects to the description thereof in the Offering
Memorandum.
(h) Other than the liens created by the Indenture of Mortgage
as supplemented by supplemental indentures in accordance with the terms
of the Indenture, including as supplemented by the Supplemental
Indenture, the performance by the Issuer of this Agreement and the
Paying Agency Agreement, the issuance of any Notes and the consummation
of the transactions contemplated hereby and thereby will not result in
the creation or imposition of any lien, charge or encumbrance upon any
of the assets of the Issuer or any of its subsidiaries pursuant to the
terms or provisions of, or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, or give any
other party a right to terminate any of its obligations under, or
result in the acceleration of any obligation under, the certificate of
incorporation or by-laws of the Issuer or any of its subsidiaries, any
indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement or other evidence of
indebtedness, lease, contract or other agreement or instrument to which
the Issuer or any of its subsidiaries is a party or by which the Issuer
or any of its subsidiaries or any of its properties is bound or
affected, or violate or conflict with any judgment, ruling, decree,
order, statute, rule or regulations of any court or governmental agency
or body applicable to the business or properties of the Issuer or any
of its subsidiaries.
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(i) Except as set forth in or contemplated by the Offering
Memorandum, there are no actions, suits or proceedings pending or
threatened against or affecting the Issuer or any of its subsidiaries,
or any of their respective officers or directors in their capacity as
such, before or by any Federal or state court, commission, regulatory
body, administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding is likely
to materially and adversely affect (i) the financial condition,
earnings, business or business prospects or properties of the Issuer
and its subsidiaries, considered as a single enterprise, or (ii) the
ability of the Issuer to perform its obligations under this Agreement,
the Supplemental Indenture, the Paying Agency Agreement and the Notes.
There are no such actions, suits or proceedings pending or, to the
knowledge of the Issuer, threatened, relating to the Notes, their
offering, or the Offering Memorandum.
(j) The Issuer and each of its subsidiaries has (i) all
governmental licenses, permits, consents, orders, approvals and other
authorizations (collectively, "Approvals") necessary to carry on its
business as described in the Offering Memorandum, except where the
failure to have such Approvals; either individually or in the
aggregate, would not have a Material Adverse Effect, (ii) complied with
all laws, regulations and orders applicable to it or its business,
except where the failure to so comply would not have a Material Adverse
Effect and (iii) performed all its obligations required to be performed
by it, and is not in default under any material contract or other
instrument to which it is a party or by which its property is bound or
affected, except where the failure to so perform or the existence of
such default would not have a Material Adverse Effect. To the best
knowledge of the Issuer, no other party under any material contract or
other instrument to which it is a party is in default in any respect
thereunder that would have a Material Adverse Effect. Neither the
Issuer nor any of its subsidiaries is in violation of any provision of
its certificate of incorporation or by-laws.
(k) The Issuer and each of its subsidiaries has good and
marketable title to all properties and assets described in the Offering
Memorandum as owned by it, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the
Offering Memorandum or are not material to the business of the Issuer
or its subsidiaries. The Issuer and each of its subsidiaries has valid,
subsisting and enforceable leases for the properties described in the
Offering Memorandum as leased by it, with such exceptions as are not
material and do not materially
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interfere with the use made and proposed to be made of such properties
by the Issuer and such subsidiaries.
(l) No consent, approval, authorization or other order of, or
any filing with, any government, governmental or other administrative
agency or body is required in connection with the execution and
delivery by the Issuer of this Agreement, the Supplemental Indenture
and the Paying Agency Agreement, the solicitation of offers to purchase
Notes, the issuance of any Note or the performance by the Issuer of any
of its obligations hereunder or thereunder, except such as may be
required under the blue sky laws of any jurisdiction in connection with
the offering and sale of the Notes or as required by the Pennsylvania
Public Utility Commission. All necessary approvals have been obtained
from the Pennsylvania Public Utility Commission to authorize the
issuance and sale of the Notes and such approvals remain in full force
and effect on the date hereof.
(m) The Notes satisfy the requirements set forth in paragraph
(d)(3) of Rule 144A ("Rule 144A") under the Securities Act.
(n) Neither the Issuer nor any affiliate (which, for purposes
of this Agreement, shall have the meaning given in Rule 501(b) under
the Securities Act) of the Issuer has directly or indirectly, (i) sold,
offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any of the Notes or, within the six-month period prior to
the date hereof, any other debt security of the same class as the Notes
which is or will be integrated with any sale of the Notes in a manner
that would require the registration of the Notes under the Securities
Act or (ii) engaged in any form of general solicitation or general
advertising (within the meaning of Rule 502(c) under the Securities
Act) in connection with the offering of the Notes.
(o) Assuming (A) compliance by you with the offering and
transfer procedures and restrictions described in the Offering
Memorandum, (B) the accuracy of the acknowledgments, representations,
warranties and agreements made in accordance with this Agreement and
the Offering Memorandum by you and the purchasers to whom you initially
offer, sell or resell the Notes and (C) purchasers to whom you
initially offer, sell or resell the Notes receive a copy of the
Offering Memorandum prior to such sale or resale, the offer, sale and
delivery of the Notes in the manner contemplated by this Agreement and
the Offering Memorandum will be exempt from the registration
requirements of the Securities Act by reason of Section 4(2) thereof,
and the initial resale of the Notes in the manner contemplated by
7
this Agreement will be exempt from the registration requirements of the
Securities Act by reason of Rule 144A thereunder or Section 4(2)
thereunder, as the case may be, and the Notes are not required to be
issued pursuant to an indenture that qualifies under the Trust
Indenture Act of 1939, as amended.
(p) Each Note will be an unconditional and direct debt
obligation of the Issuer and will rank pari passu with other senior
secured existing and future obligations of the Issuer.
(q) The Issuer is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(r) Neither the Issuer nor any agent thereof acting on behalf
of the Issuer has taken or will take any action that is reasonably
likely to cause this Agreement or the issuance or sale of the Notes to
violate Regulation G, Regulation T, Regulation U or Regulation X
(collectively, the "Margin Rules") of the Board of Governors of the
Federal Reserve System.
(s) The Issuer is in material compliance with all applicable
Federal, state and local environmental laws and regulations, including,
without limitation, those applicable to safe drinking water, emissions
to the environment, waste management and waste disposal (collectively,
the "Environmental Laws"), except for such noncompliance as is not
reasonably likely to have a Material Adverse Effect, or as disclosed in
the Offering Memorandum, and, to the knowledge of the Issuer, there are
no circumstances that would prevent, interfere with or materially
increase the cost of such compliance in the future.
(t) Except as disclosed in the Offering Memorandum, there is
no claim under any Environmental Law, including common law, pending or
threatened against the Issuer (an "Environmental Claim") which would be
reasonably likely to have a Material Adverse Effect and, to the
knowledge of the Issuer, under applicable law, there are not past or
present actions, activities, circumstances, events or incidents,
including, without limitation, releases of any material into the
environment, that are reasonably likely to form the basis of any
Environmental Claim against the Issuer which would be reasonably likely
to have a Material Adverse Effect.
(u) No statement, representation, warranty or covenant made
by the Issuer in this Agreement, or made in any certificate or document
required by this Agreement to be
8
delivered to any Agent was or will be, when made, inaccurate, untrue
or incorrect.
2. Appointment of an Agent; Solicitation by an Agent of Offers to
Purchase; Sales of Notes to a Purchaser.
(a) (i) The Issuer shall deliver a Request for Bids with
respect to a Tranche to each Agent via electronic transmission
substantially in the form attached as Exhibit G hereto prior to 10:00
a.m. on any Business Day. Each Agent interested in submitting a bid for
a particular Tranche shall submit such bid (inclusive of its placement
fee) to the Issuer with the information specified in the Request for
Bids by 2:00 p.m. on the date of receipt of the Request for Bids or
such later deadline as may be specified in writing by the Issuer. The
Issuer, in its sole discretion and subject to its right to reject any
and all bids for any reason, shall select one or more Agents to
participate in offering of each Tranche. Subject to the terms and
conditions set forth herein, Agents are to be appointed, in accordance
with the terms of a Notice or Notices of Appointment (in the form
attached as Exhibit H hereto) executed by the Issuer, to act as the
Issuer's agent to accept offers for the purchase of Notes from the
Issuer. The appointment by the Issuer of an Agent shall not authorize
such Agent to take any action on behalf of the Issuer other than as set
forth in this Agreement and the Administrative Procedures. Other than
Section 4(a)(v) of this Agreement, this Agreement shall not in any way
restrict or limit the Issuer from selling, offering to sell or
accepting offers to sell any debt securities other than the Notes.
(ii) On the basis of the representations and warranties
and subject to the terms and conditions, set forth herein, upon
appointment pursuant to a Notice of Appointment each Agent agrees, as
agent of the Issuer, to use its reasonable efforts (commensurate with
those efforts customarily made in offerings of a similar nature) to
place the Notes on behalf of the Issuer upon the terms and conditions
described in the Notice of Appointment, the Offering Memorandum and in
the Administrative Procedures. In soliciting offers as agent, each
Agent is acting solely as agent of the Issuer and not as principal.
Each Agent shall use its reasonable efforts to assist the Issuer in
obtaining performance by each purchaser whose offer to purchase Notes
has been solicited by such Agent and accepted by the Issuer, however
such Agent shall not have any liability to the Issuer in the event any
such purchase is not consummated for any reason; provided that the
foregoing shall not operate to release the Agent from any liability it
may otherwise have as a result of its failure to perform its
obligations under this Agreement. Except as provided in Section 2(b),
under no
9
circumstances will any Agent be obligated to purchase any Notes for its
own account. It is understood and agreed, however, that any Agent may
purchase Notes for its own account as Purchaser pursuant to Section
2(b) or otherwise as may be agreed or permitted by the Issuer and such
Agent.
(iii) The Issuer reserves the right, in its sole
discretion, to instruct the Agents to suspend at any time, for any
period of time or permanently, the solicitation of offers to purchase
Notes. Within one business day of receipt of instructions to that
effect from the Issuer, each Agent will forthwith suspend solicitation
of offers to purchase Notes from the Issuer until such time as the
Issuer has advised it that such solicitation may be resumed.
(iv) The Issuer acknowledges that each Agent is receiving
a placement fee, upon closing, with respect to each sale of Notes by
the Issuer as a result of a solicitation made by such Agent, including
any sale for the account of any affiliate of such Agent. Such placement
fee shall be included in the bid submitted by each Agent pursuant to
paragraph 2(a)(i) above which shall have the effect of reducing the
proceeds from the sale of the Notes payable to the Issuer.
(v) Subject to the provisions of this Agreement, the
Notice of Appointment and the Administrative Procedures, offers for the
purchase of Notes may be solicited by the Agent, as agent for the
Issuer, at such time and in such amounts as the Agent and the Issuer
deem advisable. The Issuer may, subject to Sections 4(a)(v) and
4(a)(xviii) of this Agreement, from time to time offer other debt
obligations for sale on its own behalf directly to purchasers otherwise
than through an Agent, in which case no commission would be payable
with respect to such sale. As long as this Agreement shall be in
effect, the Issuer shall not solicit or accept offers to purchase Notes
through any agent other than Agents named on Schedule I hereto;
provided, however, that the Issuer may amend Schedule I hereto from
time to time to appoint additional Agents provided that the Issuer (i)
has appointed such agent as an additional Agent hereunder on the same
terms and conditions as provided herein for the Agents, and (ii) has
caused such additional agent to execute this Agreement.
(vi) Each Agent may, in the exercise of its reasonable
discretion, reject any offer to purchase Notes received by it as agent
of the Issuer and not communicate such offer to the Issuer. Each Agent
shall communicate to the Issuer, orally or in writing, each such offer
that it does not reject and, if such Agent or any of its affiliates
shall be the offeror, shall advise the Issuer of that fact.
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The Issuer shall have sole and absolute discretion to accept any offer,
and may reject any offer to purchase Notes in whole or, if permitted by
the terms of such offer, in part.
(vii) If the Issuer shall default in its obligations to
deliver Notes to a purchaser whose offer it has accepted, the Issuer
shall hold you harmless against any loss, claim or damage arising from
or as a result of such default by the Issuer (except to the extent that
such default by the Issuer shall result from the failure by you to
perform your obligations hereunder).
(b) (i) Subject to the terms and conditions stated herein,
whenever the Issuer and any one (or more) of you jointly determine that
the Issuer shall sell Notes directly to any one (or more) of you as the
Purchaser, each such sale of Notes shall be made in accordance with the
terms of this Agreement and, unless specifically waived by the
Purchaser, a supplemental agreement relating thereto between the Issuer
and the Purchaser. Each such supplemental agreement (which shall be
substantially in the form of Exhibit B) is herein referred to as a
"Terms Agreement". A Purchaser's commitment to purchase Notes pursuant
to any Terms Agreement shall be deemed to have been made on the basis
of the representations and warranties of the Issuer contained herein or
therein (if any) and shall be subject to the terms and conditions set
forth herein and in such Terms Agreement. Unless the context otherwise
requires, each reference contained herein to "this Agreement" shall be
deemed to include any applicable Terms Agreement between any one (or
more) of you and the Issuer. Each Terms Agreement shall describe the
Notes to be purchased by the Purchaser pursuant thereto, specify the
principal amount of such Notes, the price to be paid to the Issuer for
such Notes specified by reference to the principal amount of the Notes
and the discount to the Purchaser from the principal amount thereof,
the rate at which interest will be paid on such Notes, the date of
issuance of such Notes (the "Closing Date"), the place of delivery of
the Notes and payment therefor, the method of payment, any modification
of, or addition to, the requirements for the delivery of the opinions
of counsel set forth in Section 6(a)(ii), the certificates from the
Issuer or its officers and the letter from the Issuer's independent
certified public accountants, and such other terms and conditions as
may be specified therein from time to time.
(ii) The settlement details for Notes sold to a Purchaser
pursuant to any Terms Agreement shall be agreed to between the Issuer
and such Purchaser in the respective Terms Agreement. If there is no
such Terms Agreement, the settlement details specified in the
Administrative
11
Procedures shall apply with the Purchaser filling the roles specified
therein of the Agent and the beneficial owner.
(iii) Nothing contained in this Agreement shall obligate
an Agent to enter into a Terms Agreement with the Issuer or to
otherwise agree to purchase Notes for its own account.
3. Offering and Sale of Notes. Each party hereto agrees to perform the
respective duties and obligations specifically provided to be performed by it
in the Administrative Procedures.
4. Agreements.
(a) The Issuer agrees with you that:
(i) If information that is material to an investment in a Note
is not otherwise contained in the Offering Memorandum, or if at any
time an event occurs as a result of which the Offering Memorandum as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at such
time to amend or supplement the Offering Memorandum to comply with any
applicable law, the Issuer promptly will prepare an amendment or
supplement which will correct such statement or omission or effect such
compliance, and will not effect any amendment or supplement to the
Offering Memorandum without your consent, which consent shall not be
unreasonably withheld; provided, however, that the foregoing consent
requirement shall not apply to periodic and other filings with the
Commission by the Issuer or PSC under the federal securities laws
including, without limitation, Current Reports on Form 8-K, Quarterly
Reports on Form 10-Q, or Annual Reports on Form 10-K under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
("Federal Securities Filings"). Neither your consent to, nor your
delivery of, any such amendment or supplement shall constitute a waiver
of any of the conditions set forth in Section 5 hereto.
(ii) The Issuer shall furnish to you such information and
documents relating to the business, operations and affairs of the
Issuer, the Offering Memorandum and any amendments thereof or
supplements thereto, the Notes, the Supplemental Indenture, this
Agreement, any Terms Agreement, the Administrative Procedures, the
Paying Agency Agreement and the performance by the parties hereto of
their respective obligations
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xxxxxxxxx and thereunder as you may from time to time and at any time
prior to the termination of this Agreement reasonably request in
connection with soliciting offers to purchase Notes. The Issuer shall
notify you promptly (1) if at any time any event occurs which
constitutes (or after notice or lapse of time or both would constitute)
a default or an event of default under the Notes, the Supplemental
Indenture, the Paying Agency Agreement or this Agreement or (2) of any
material adverse change, or to the knowledge of the Issuer any
development involving a prospective material adverse change, in the
financial condition, earnings, business or business prospects or
properties of the Issuer and its subsidiaries considered as a single
enterprise.
(iii) The Issuer shall, whether or not any sale of Notes is
consummated, (1) pay, or reimburse if paid by any Agent, all reasonable
costs and expenses incident to the performance of its obligations under
this Agreement and any Terms Agreement, including, but not limited to,
the cost of preparation, printing or other production and delivery of
the Offering Memorandum, all amendments thereof and supplements
thereto, the Supplemental Indenture, the Paying Agency Agreement, this
Agreement, any Terms Agreement and all other documents relating to the
offering of Notes pursuant hereto and thereto, the cost of preparing,
printing, packaging and delivering the Notes, the fees and
disbursements of counsel to and accountants for the Issuer, the fees
and disbursements of the Trustee, the fees and disbursements of the
Paying Agent, and the fees of any Rating Agency, (2) reimburse you on a
monthly basis for all reasonable out-of-pocket expenses incurred by you
in connection with this Agreement and the transactions contemplated
hereby and (3) pay the reasonable fees and expenses of your counsel
incurred in connection with this Agreement and the transactions
contemplated hereby.
(iv) (A) On each date of settlement for any Tranche of Notes (a
"Settlement Date"), or if at any time that the Offering Memorandum is
amended or supplemented (including incorporation of documents by
reference), in the reasonable judgement of the Agent the information
disclosed in such amendment or supplement is of such a nature that an
officer's certificate and an opinion of counsel need be furnished, the
Issuer shall deliver or cause to be delivered promptly to you an
officer's certificate, an opinion of counsel and an opinion of its
Senior Vice President-Law and Administration or General Counsel, dated
the Settlement Date or the date of such amendment or supplement, as the
case may be, in form reasonably satisfactory to the Agent, of the same
tenor as the certificate and opinions referred to in Sections 5(a)(ii)
and (iii), but modified to relate to the
13
Offering Memorandum, this Agreement and the Paying Agency Agreement,
each as then in effect.
(B) Each time that the Offering Memorandum is amended or
supplemented to include or incorporate additional financial
information, the Issuer shall cause the Accountants promptly to furnish
you a letter, dated the date of such amendment or supplement, in form
reasonably satisfactory to the Agent, of the same tenor as the letter
referred to in Section 5(a)(vi) hereof, but modified to reflect the
amended or supplemented financial information included or incorporated
by reference in the Offering Memorandum, as amended or supplemented to
the date of such letter; provided, however, that if the Offering
Memorandum is amended or supplemented solely to include or incorporate
by reference financial information as of and for a fiscal quarter, the
Accountants may limit the scope of such letter, in form reasonably
satisfactory to the Agent, to the unaudited financial statements, the
related "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and any other information of an accounting,
financial or statistical nature included in such amendment or
supplement, unless, in the reasonable judgement of the Agent, such
letter should cover other information or changes in specific financial
statement line items.
(v) Unless otherwise specified in any Terms Agreement, the
Issuer shall not, without the prior consent of the Purchaser
thereunder, issue or announce the proposed issuance of any of its debt
securities (including Notes), which are denominated in the same
currency as, and have similar maturities, similar interest rates and
other terms (including in respect of the method of computing interest)
substantially similar to those of, the Notes being purchased pursuant
to such Terms Agreement, during the period commencing on the date on
which the Issuer accepts an offer to purchase any Note in accordance
with such Terms Agreement and terminating on the Closing Date for the
sale of such Note.
(vi) The Issuer shall furnish to you without charge, from time
to time, as many copies of the following as you may reasonably request:
(A) the Offering Memorandum and any amendment or supplement that has
been prepared with respect thereto, (B) any Pricing Supplement, and (C)
any financial statements and other periodic reports that the Issuer may
furnish generally to holders of its debt securities.
(vii) The Issuer shall furnish to you in written form all
quarterly financial statement information for the first three fiscal
quarterly periods of the Issuer and PSC
14
promptly upon publication of such quarterly information and, within two
months of the end of each such quarterly period, cause the Offering
Memorandum to be supplemented to include such financial information and
corresponding information for the comparable period of the preceding
fiscal year, as well as such other information and explanations as
shall be necessary for an understanding of such financial information,
which supplement may be in the form of a separate quarterly report, or
a report filed by the Issuer or PSC under the Exchange Act.
(viii) The Issuer shall furnish to you the audited consolidated
financial statements updating the audited consolidated financial
statements and the financial information included in the Offering
Memorandum for each corresponding fiscal year as promptly as
practicable after the publication of such financial statements, but in
any event not later than four months after the end of such fiscal year,
and cause the Offering Memorandum to be supplemented to include such
audited financial statements and the accountants' report with respect
thereto, as well as such other information and explanations as shall be
necessary for an understanding of such financial statements, which
supplement may be in the form of a separate annual report or report
filed by the Issuer or PSC under the Exchange Act.
(ix) The Issuer shall (1) use its best efforts to furnish to you
copies of any proposed supplement or amendment to the Offering
Memorandum (including any document incorporated by reference therein)
five business days (or as soon thereafter as practicable) in advance of
using such supplement or amendment, except for Federal Securities
Filings, copies of which filings the Issuer will cause to be delivered
to the Agent by facsimile or other means of delivery, on or prior to
the date of filing with the Commission, and (2) permit you to review
and comment as to the form and content thereof and, subject to the
proviso in Section 4(a)(i), shall not use any such amendment or
supplement to which you have reasonably objected in good faith;
provided, however, that an amendment or supplement prepared to set
forth terms and conditions of any Notes, including any Pricing
Supplement, need not be furnished to or reviewed by those of you who
are not named therein, who shall not have solicited offers for such
Notes and who are not to be Purchasers of such Notes. Any Agent who
shall have an objection in good faith to such proposed amendment or
supplement may immediately terminate this Agreement as to such Agent by
notice to the Issuer. At the request of any Agent so terminating, the
Issuer shall promptly amend and supplement the Offering Memorandum and
Schedule I hereto to indicate those firms that remain Agents.
15
(x) The Issuer shall not offer or sell any securities under
circumstances which would require the registration of any of the Notes
under the Securities Act.
(xi) The Issuer will take appropriate steps to ensure that the
aggregate principal amount of Notes issued during the Offering Period
does not exceed U.S. $150,000,000, will not issue any Notes if such
issuance would cause such limit to be exceeded, will promptly notify
you in the event that at any time such limit has been reached and will
promptly notify you if such limit is increased pursuant to this
Agreement.
(xii) The Issuer shall not, without having given prior written
notice to you, consent to any amendment of the Paying Agency Agreement.
The Issuer shall promptly notify you of any resignation or removal of
the Paying Agent and the appointment of any successor thereto.
(xiii) For so long as any of the Notes are outstanding, the
Issuer will provide to any holder of Notes that are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities
Act, and to any prospective purchaser of such Notes designated by a
holder thereof, upon the request of such holder or prospective
purchaser in connection with a transfer or proposed transfer pursuant
to Rule 144A, any information required to be provided to such holder or
prospective purchaser to comply with the conditions set forth in Rule
144A as in effect as of the date the Notes of the corresponding Tranche
shall have been first issued (together with any such information added
by an amendment to Rule 144A after such date, to the extent such
information can be provided without unreasonable additional expense to
the Issuer).
(xiv) You shall not be liable or responsible to the Issuer for
any losses, damages or liabilities suffered or incurred by the Issuer,
including any losses, damages or liabilities under the Securities Act,
arising from or relating to any resale or transfer of a Note by a
holder (other than yourself) in any manner; provided that each of you,
severally and not jointly, shall remain liable for the performance of
your own obligations under this Agreement.
(xv) The Issuer will at all times ensure that all approvals,
authorizations, consents or other orders of, and all filings with, any
governmental or other administrative agency or body will be, prior to
the time required (taking into account any permitted extensions),
obtained or made (1) so that the Issuer may lawfully perform its
obligations under the Notes, the Supplemental Indenture, this
Agreement, the Administrative Procedures and the Paying
16
Agency Agreement and (2) so that performance of such obligations will,
in all respects material to the Issuer and its subsidiaries considered
as a single enterprise, or material to the Issuer's ability to perform
its obligations under the Notes, the Supplemental Indenture, this
Agreement, the Administrative Procedures and the Paying Agency
Agreement, comply with any laws, decrees, regulations, judgments or
orders of any court, government, governmental authority or agency to
which the Issuer or any of its subsidiaries or any of their respective
properties or assets is subject.
(xvi) The Issuer will send to each Placement Agent, unless this
Agreement has been terminated as to such Placement Agent in accordance
with Section 10(a) hereof, a copy of every notice of a meeting of the
holders of the Notes (or any of them) that is sent by the Issuer or the
Trustee to such holders at the same time it is sent to such holders and
will promptly notify you immediately upon its becoming aware that a
meeting of the holders of the Notes (or any of them) has been convened
by any of such holders.
(xvii) The Issuer shall promptly notify each Placement Agent,
unless this Agreement has been terminated as to such Placement Agent in
accordance with Section 10(a) hereof, of any lowering in the ratings of
any of the Issuer's securities by any Rating Agency, or of any notice
given by any Rating Agency of any intended or possible decrease in any
such rating or of any possible change in any such rating where such
notice does not indicate the direction of the possible change.
(xviii) During the six-month period preceding and the six-month
period following the issue date of any Note, neither the Issuer nor any
affiliate of the Issuer will directly or indirectly, sell, offer for
sale, solicit offers to buy or otherwise negotiate in respect of, any
of the Notes or any other security (as defined in the Securities Act)
which will be integrated with the solicitation of offers to purchase
Notes or the sale of Notes hereunder in a manner that would require the
registration of the Notes under the Securities Act.
(xix) The Issuer will apply the net proceeds from the offering
and sale of the Notes in the manner set forth in the Offering
Memorandum under "Use of Proceeds".
(xx) The Company will cooperate with the Agents in their
endeavor to qualify the Notes for offering and sale under the
securities or "Blue Sky" laws of such
17
jurisdictions of the United States as the Agents may reasonably
request.
(b) The obligations of the Issuer under Sections 4(a)(i), (ii),
(iv), (vi), (vii), (viii) and (ix) shall be suspended during any period
of time during which the Issuer shall have suspended the solicitation
of offers to purchase Notes by written notice to each Agent; provided,
however, that such obligations of the Issuer shall remain in effect (i)
for a period of two years following the date of notice of such
suspension if such Agent shall own any Notes with the intention of
reselling them as contemplated by Section 2(b) or (ii) if the Issuer
has accepted an offer to purchase Notes solicited by such Agent
pursuant to this Agreement and the settlement for such sale shall not
have occurred. At least one week prior to the end of any such period
during which solicitations shall have been suspended, the Issuer shall
notify you of any event or change contemplated by Section 4(a)(i) or by
the last sentence of Section 4(a)(ii) of which the Issuer would have
been obligated to notify you, and shall provide you all written
information, documents and supplements referred to in Sections
4(a)(ii), (iv), (vii), (viii) and (ix) that the Issuer would have been
obligated to deliver to you, had the Issuer not so suspended the
solicitation of offers.
5. Conditions to the Obligations of the Agent.
(a) The obligations of each Agent to solicit offers to purchase any
Notes shall be subject to the accuracy of the representations and
warranties on the part of the Issuer contained herein as of the date
hereof and as of each time the Issuer gives a notice requesting any
Agent to solicit offers as Agent, at and as of each acceptance of an
offer by the Issuer and upon delivery of any Note to the purchaser (or
its agent) pursuant to such offer, to the accuracy of the statements of
the Issuer made in any certificates delivered pursuant to the
provisions hereof as of the respective dates of such certificates, to
the performance and observance by the Issuer of all covenants and
agreements herein contained on its part to be performed and observed
and to the following additional conditions precedent:
(i) The Issuer shall have obtained all authorizations, consents
and approvals of any court or governmental or other regulatory agency
or body required in connection with the issuance and sale of the Notes
and the performance of its obligations hereunder and under the Notes,
the Notice of Appointment, the Supplemental Indenture and the Paying
Agency Agreement.
18
(ii) The Issuer shall have furnished to you an accurate
certificate dated as of the date hereof, signed by the Chief Executive
Officer or the Chief Financial Officer of the Issuer, in form and
substance satisfactory to you, to the effect that, to the best of his
or her knowledge after reasonable inquiry:
(1) the representations and warranties of the Issuer in
this Agreement are true and correct in all material respects on
and as of the date of the certificate and the Issuer has
performed in all material respects all its obligations and
satisfied all the conditions on its part to be satisfied at or
prior to the date of the certificate;
(2) since the date of the most recent financial statements
included in the current Offering Memorandum, there has been no
material adverse change, or to the knowledge of the Issuer any
development involving a prospective material adverse change, in
the financial condition, earnings, business or business
prospects or properties of the Issuer and its subsidiaries,
considered as a single enterprise, except as set forth in the
Offering Memorandum; and
(3) the Offering Memorandum (other than statements made
therein in reliance upon and in conformity with information
furnished to the Issuer in writing by any Agent specifically for
use therein, as to which no representation shall be made) does
not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
(iii) (A) The Issuer shall have furnished to each Agent the
opinion of Xxxxxxxx, Xxxxxx, Xxxxxx & Xxxxxxxx LLP, counsel to the
Issuer, substantially in the form of Exhibit C hereto, which may be
subject to any assumptions, qualifications and limitations that are
reasonably acceptable to each Agent.
(B) The Issuer shall have furnished to each Agent the
opinion of the Senior Vice President-Law and Administration or General
Counsel of the Issuer substantially in the form of Exhibit D hereto,
which may be subject to any assumptions, qualifications and limitations
that are reasonably acceptable to each Agent.
19
(iv) Each Agent shall have received from Mellon Bank, N.A., as
Trustee under the Indenture of Mortgage and the Supplemental Indenture,
a certificate substantially in the form of Exhibit E hereto, which may
be subject to any assumptions, qualifications and limitations that are
reasonably acceptable to each Agent.
(v) Each Agent shall have received from your counsel such
opinion with respect to the proposed issue and sale of the Notes and
other related matters as the Agent may reasonably require.
(vi) KPMG Peat Marwick, independent accountants for the Issuer,
shall have furnished to the Agent an executed copy of a letter in the
form heretofore agreed to by the Agent.
(vii) The Issuer shall have furnished to each Agent such further
information, certificates and documents as any Agent may reasonably
request.
(viii) The documents required to be delivered by this Section 5
shall be delivered at, or transmitted by telecopy (with an undertaking
promptly to forward the original copies thereof) to, the offices of
Dilworth, Paxson, Xxxxxx & Xxxxxxxx LLP, counsel for the Issuer, 0000
Xxxxxx Xxxx Xxxxxx, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000, at 4:00
P.M., Philadelphia time, on the date hereof, and an original of each
such document will be sent to you.
6. Conditions to the Obligations of a Purchaser.
(a) The obligations of any Purchaser to purchase any Notes shall be
subject to the accuracy of the representations and warranties on the
part of the Issuer contained herein or in the corresponding Terms
Agreement, if any, at and as of the date of the corresponding Terms
Agreement and upon the delivery to any Purchaser of any Note pursuant
to such Terms Agreement, to the performance and observance by the
Issuer of all covenants and agreements herein or therein contained on
its part to be performed and observed and to the following additional
conditions precedent:
(i) The Issuer shall have obtained all authorizations, consents
and approvals of any court or governmental or other regulatory agency
or body required in connection with the issuance and sale of the Notes
and the performance of its obligations hereunder and under the Notes,
the Notice of Appointment, the Supplemental Indenture and the Paying
Agency Agreement.
20
(ii) To the extent provided by such Terms Agreement, the
Purchaser shall have received, appropriately updated, (1) a certificate
of the Issuer dated as of the Closing Date to the effect set forth in
Section 5(a)(ii), (2) the opinion of Xxxxxxxx, Xxxxxx, Xxxxxx &
Xxxxxxxx LLP dated the Closing Date to the effect set forth in Section
5(a)(iii)(A), (3) the opinion of the Senior Vice President-Law and
Administration or General Counsel, dated the Closing Date to the effect
set forth in Section 5(a)(iii)(B), (4) the Trustee's certificate dated
the Closing Date to the effect set forth in Section 5(a)(iv), (5) the
opinion of your counsel dated the Closing Date to the effect set forth
in Section 5(a)(v) and (6) the letter of KPMG Peat Marwick dated the
Closing Date to the effect set forth in Section 5(a)(vi).
(iii) Prior to the Closing Date, the Issuer shall have furnished
to the Purchaser such further information, certificates and documents
as the Purchaser may reasonably request.
(b) If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in
this Agreement and any Terms Agreement, or if any other event occurs
which permits cancellation under this Agreement, such Terms Agreement
and all obligations of the Purchaser thereunder and with respect to the
Notes subject thereto may be canceled at, or at any time prior to, the
respective Closing Date by the Purchaser. Notice of such cancellation
shall be given to the Issuer in writing or by telephone, promptly
confirmed in writing, which confirmation may be made by telex or
telecopy.
7. Conditions to all Purchases. The consummation of the sale of any
Note pursuant to this Agreement shall be subject to the further condition that,
at the date of issuance thereof, in the reasonable judgment of the Purchaser or
the Agent that obtained the offer, (a) each condition set forth in Section 5 or
6, as applicable, shall have been satisfied and (b) subsequent to the respective
dates as of which information is given in the Offering Memorandum (current as of
the date of such agreement to purchase a Note), except as set forth therein or
contemplated thereby, there shall not have occurred any material adverse change,
or to the knowledge of the Issuer any development involving a prospective
material adverse change, in or affecting the financial condition, earnings,
business or business prospects or properties of the Issuer and its subsidiaries,
considered as a single enterprise, the effect of which makes it impracticable or
inadvisable to market the Notes or to proceed with completion of the sale and
payment for such Notes.
21
8. Restrictions on Offers and Sales of the Notes. Each party hereto
represents, warrants and agrees, severally and not jointly, as follows:
(a) It will solicit offers to purchase Notes only from, and it will
offer and sell Notes only to, (i) institutional purchasers that are, or
that it reasonably believes are, "qualified institutional buyers" as
such term is defined in paragraph (a)(1) of Rule 144A ("QIBs") or (ii)
any Agent. If it is an Agent, any resales or transfers of Notes
through, or arranged by, such Agent similarly will be made only to
QIBS. Neither it, its affiliates, nor any person acting on its or their
behalf (except that no representation is made with respect to any other
party to this Agreement) has engaged or will engage in any form of
general solicitation or general advertising (within the meaning of Rule
502(c) under the Securities Act) in the United States with respect to
the Notes.
(b) It will make reasonable inquiry to determine whether a purchaser
is purchasing for such purchaser's own account as a QIB or for the
account of others and not with a view to, or for sale in connection
with, the public distribution thereof in any transaction that would be
in violation of Federal or state securities laws and, in the case of
any purchaser acting on behalf of one or more third parties, it shall
make reasonable inquiry to determine that each such third party is a
QIB and that the amount being purchased on behalf of each such third
party is not less than the authorized minimum denomination of such
Notes; provided that the Issuer shall have no duty to make any such
inquiry in connection with sales to any Agent or pursuant to offers
transmitted to it by any Agent.
9. Indemnification and Contribution.
(a) The Issuer agrees to indemnify and hold harmless each Agent and
each person who controls any Agent within the meaning of either the
Securities Act or Section 20 of the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which any
such person may become subject under the law of any jurisdiction
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Offering
Memorandum, in any amendment thereof or supplement thereto or in any
information provided by the Issuer and furnished to any purchaser of
the Notes pursuant to Section 4(a)(xiii), or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and agrees to
22
reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that (i) the Issuer will not be liable in
any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made in the
Offering Memorandum or in any amendment thereof or supplement thereto
in reliance upon and in conformity with written information furnished
to the Issuer by the person seeking indemnification, or on behalf of
another person authorized to do so, specifically for use in connection
with the preparation thereof. This indemnity will be in addition to any
liability which the Issuer may otherwise have.
(b) Each Agent, severally and not jointly, agrees to indemnify and
hold harmless the Issuer and each person who controls the Issuer within
the meaning of either the Securities Act or the Exchange Act, to the
same extent as the foregoing indemnity from the Issuer, but only with
reference to written information relating to the indemnifying party
furnished to the Issuer by it, or on its behalf by a person authorized
to do so, specifically for use, in the preparation of the Offering
Memorandum or any amendment thereof or supplement thereto. This
indemnity will be in addition to any liability which any Agent may
otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party
in writing of the commencement thereof; however, the omission so to
notify the indemnifying party (i) will not relieve it from any
liability under paragraph (a) or (b) above unless and to the extent it
did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of any substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. In
case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the
extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include
23
both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or other indemnified parties which
are different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select
separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel (which approval
shall not be unreasonably withheld), the indemnifying party will not be
liable to such indemnified party under this Section 9 for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party
shall have employed separate counsel in connection with the assertion
of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel
(in addition to any local counsel), representing the indemnified
parties under paragraph (a) of this Section 9 who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the identified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or
(iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party; and
except that, if clause (i) or (iii) is applicable, such liability shall
be only in respect of the counsel referred to in such clause (i) or
(iii). The indemnifying party shall not be liable for any settlement of
any action or claim effected without its consent, which consent shall
not be unreasonably withheld.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section
9 is due in accordance with its terms but is for any reason held by a
court to be unavailable on grounds of policy or otherwise, the Issuer
and each Agent shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) to which
the Issuer and any Agent may be subject in such proportion so that each
Agent is responsible only for that portion represented by the
percentage that the aggregate commissions received by each such Agent
pursuant to Section 2 in connection with the Notes from which such
losses, claims, damages and liabilities arise (or, in the case of Notes
sold to a
24
Purchaser, the discount to such Purchaser), bears to the aggregate
principal amount of such Notes sold, and the Issuer is responsible for
the balance; provided, however, that in no case shall any Agent be
responsible for any amount in excess of the commissions received by
each such Agent in connection with the Notes from which such losses,
claims, damages and liabilities arise (or, in the case of Notes sold to
the Purchaser, the discount to such Purchaser). For purposes of this
Section 9, each person who controls any Agent within the meaning of
either the Securities Act or the Exchange Act shall have the same
rights to contribution as such Agent and each person who controls the
Issuer within the meaning of either the Securities Act or the Exchange
Act shall have the same rights to contribution as the Issuer, subject
in each case to the proviso to the preceding sentence. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution hereunder from
any person who was not guilty of such fraudulent misrepresentation. Any
party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in
respect of which a claim or contribution may be made against another
party or parties under this paragraph (d), notify such party or parties
from whom contribution may be sought (which obligation to give notice
shall be deemed to be satisfied by the delivery of notice pursuant to
paragraph (c) of this Section 9), but the omission so to notify such
party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may
have hereunder or otherwise than under this paragraph (d).
10. Termination.
(a) This Agreement will continue in effect until terminated as
provided in this Section 10 or Section 4(a)(ix). This Agreement may be
terminated by the Issuer as to any Agent or, in the case of any Agent
by such Agent, by giving at least 30 days' written notice of such
termination to the other parties hereto, at which time the Issuer shall
cause Schedule I hereto to be amended. Notwithstanding any such
termination, the rights and liabilities of each party under Sections
2(a)(iv) and (vii), Sections 4(a)(iii), (xiv) and (xvi), Sections 8(a)
and (b) (with respect to resales and transfers of Notes), Section 9,
Section 11 and any Terms Agreement executed prior to the date of
termination hereof shall survive any termination of this Agreement, in
whole or in part. In addition, if any termination shall occur either
(i) at a time when any Purchaser shall own any Notes, purchased under
this Agreement from the Issuer, with the intention of reselling them or
(ii) after the Issuer has
25
accepted an offer to purchase Notes and prior to the related
settlement, all agreements, terms and conditions relating to the
purchase and sale of such Notes shall also remain in effect.
(b) Each agreement to purchase Notes pursuant to a solicitation by
an Agent hereunder, and each agreement by a Purchaser to purchase Notes
hereunder, shall be subject to termination in the absolute discretion
of such Agent or the Purchaser (as the case may be), by notice given to
the Issuer prior to delivery of any payment for Notes to be purchased,
if prior to such time (i) trading in any securities issued by the
Issuer or by PSC shall have been suspended or halted on any exchange
(whether U.S. or foreign), or trading in securities generally on the
New York Stock Exchange shall have been suspended or limited or minimum
or maximum prices shall have been generally established on such
Exchange, or additional material government restrictions, not in force
on the date of this Agreement or the date of any Terms Agreement with
respect to such Notes, shall have been imposed upon trading in
securities generally by such Exchange or by order of the Commission or
any court or other governmental authority, (ii) a general banking
moratorium shall have been declared by either U.S. Federal or New York
State or Commonwealth of Pennsylvania authorities, (iii) there shall
have been a lowering in the ratings of any of the Issuer's securities
by any Rating Agency or a notice given by any Rating Agency of any
intended or potential decrease in any such rating or of any possible
change in any such rating where such notice does not indicate the
direction of the possible change, or (iv) there shall have occurred, in
the reasonable judgment of such Agent or Purchaser (as the case may
be), a material change in national or international political,
financial or economic conditions that makes it impracticable or
inadvisable to market the Notes or to proceed with completion of the
sale of and payment for such Notes.
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Issuer or its officers and of the Agent set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Agent or by or on behalf of the Issuer or any of the
controlling persons referred to in Section 9, and will survive delivery of and
payment for the Notes.
12. Increases in the Amount of the Notes; Extension of Offering Period.
The aggregate principal amount of Notes that may be sold by the Issuer may be
increased, or the Offering Period may be extended, if permitted under the
Indenture of Mortgage, pursuant to (x) a subsequent supplemental indenture to
the
26
Indenture of Mortgage and (y) an amendment to this Agreement in the form
attached hereto as Exhibit F executed by the Issuer and the Agent named in
Schedule I hereto. Upon the execution and delivery of any such amendment, to the
extent agreed upon by the Issuer and the Agent, the Issuer shall deliver to such
Agent, appropriately updated, (a) a certificate of the Issuer dated as of the
date of such amendment to the effect set forth in Section 5(a)(ii), (b) the
opinion of Xxxxxxxx, Xxxxxx, Xxxxxx & Xxxxxxxx LLP dated the date of such
amendment to the effect set forth in Section 5(a)(iii)(A), (c) the opinion of
its Senior Vice President-Law and Administration or General Counsel, dated the
Closing Date to the effect set forth in Section 5(a)(iii)(B), (d) the
certificate of the Trustee dated the date of such amendment to the effect set
forth in Section 5(a)(iv), and (e) the letter of KPMG Peat Marwick dated the
date of such amendment to the effect set forth in Section 5(a)(vi), and the
Issuer shall furnish to you such further information, certificates and documents
as you may reasonably request.
13. Notices. All communications hereunder will be in writing, and
effective only on receipt, or (but only where specifically provided in the
Administrative Procedures) by telephone and, if sent to the Agent, will be
mailed, delivered, telecopied and confirmed or telexed and confirmed to the
Agent, at the address(es) specified in Schedule I hereto; or, if sent to the
Issuer, will be mailed, delivered, telecopied and confirmed or telexed and
confirmed to it at 000 Xxxxxxxxx Xxxxxx, Xxxx Xxxx, XX 00000, Attention: Chief
Financial Officer, (telephone: (000) 000-0000; telecopy: (000) 000-0000).
14. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 9, and no other person will have any
right or obligation hereunder.
15. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (EXCLUDING LAWS GOVERNING
CONFLICTS OF LAW).
16. Counterparts. This Agreement may be signed in counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Issuer and you.
Very truly yours,
PHILADELPHIA SUBURBAN WATER
COMPANY,
by
Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr VP Finance and Treasurer
The foregoing Agreement
is hereby confirmed and
accepted as of the date
hereof.
X.X. Xxxxxxx & Sons, Inc.
by
Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
Xxxxxx Xxxxxxxxxx Xxxxx, Inc.
by
Xxxxxxx X. Rulow-Xxxxxx
------------------------------
Name: Xxxxxxx X. Rulow-Xxxxxx
Title: Sr. Vice President
HSBC Securities, Inc.
by
X. Xxxxxxx Xxxxxxx
------------------------------
Name: X. Xxxxxxx Xxxxxxx
Title: Sr. Vice President
28
PaineWebber Incorporated
by
Xxxxxx X. Xxxxx, III
------------------------------
Name: Xxxxxx X. Xxxxx, III
Title: Managing Director
29
INDEX OF DEFINITIONS
Term Section
---- -------
Accountants 1(b)
Administrative Procedures Introductory Paragraph
Agent Introductory Paragraph
Agreement Introductory Paragraph
Closing Date 2(b)(i)
Commission 1(a)
Exchange Act 4(a)(i)
Federal Securities Filings 4(a)(i)
Issuer Introductory Paragraph
Material Adverse Effect 1(c)
Notes Introductory Paragraph
Notice of Appointment 2(a)(i)
Offering Memorandum 1(a)
Offering Period Introductory Paragraph
Paying Agency Agreement Introductory Paragraph
Pricing Supplement 1(a)
PSC Introductory Paragraph
Purchaser Introductory Paragraph
QIBs 8(a)
Rating Agency 1(c)
Request for Bids 2(a)(i)
Rule 144A 1(m)
Securities Act Introductory Paragraph
Settlement Date 4(a)(iv)(A)
Terms Agreement 2(b)(i)
Tranche Introductory Paragraph
You Introductory Paragraph
SCHEDULE I
Agents:
X.X. Xxxxxxx & Sons
0 Xxxxx Xxxxxxxxx
Xx. Xxxxx, XX 00000
Xxxxxx Xxxxx Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxxxx Xxxxxxxxxx Xxxxx, Inc.
Times Bldg., Suite 000
Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Xxxxxxx Xxxxxxxx Phone: (000) 000-0000
Fax: (000) 000-0000
HSBC Securities, Inc.
000 Xxxxxxxx
Xxx Xxxx, XX 00000
MTN Desk Phone: (000) 000-0000
Fax: (000) 000-0000
PaineWebber Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxx, III Phone: (000) 000-0000
Fax:(000) 000-0000
EXHIBIT A
MEDIUM TERM NOTE ADMINISTRATIVE PROCEDURES
July 11, 1997
First Mortgage Bonds, 1997 Medium Term Notes Series (the
"Notes"), due from one year to thirty-five years, are to be offered on a
continuing basis during the two year period from June 6, 1997 through June 5,
1999. The Agent or Agents listed on Schedule I to the Placement Agency Agreement
(collectively, the "Agent) have agreed to use reasonable efforts to solicit
offers to purchase Notes in fully registered form. The Agent may also purchase
Notes as principal for resale, but no Agent will be obligated to purchase Notes
for its own account. One or more of the Agents may participate in the placement
or purchase of the Notes of each Tranche upon their receipt of a Notice of
Appointment from the Issuer for said Xxxxxxx. Each such notice of Appointment
shall constitute an affirmation by the Issuer of the matters set forth in
Section 5(a)(ii)(1)-(3) of the Placement Agency Agreement to the same extent as
if the Issuer delivered the certificate described in Section 5(a)(ii) of the
Placement Agency Agreement along with, and dated the date of, such Notice of
Appointment.
The Notes are being sold pursuant to a Placement Agency
Agreement between the Issuer and the Agent dated as of the date hereof (the
"Placement Agency Agreement"). The Notes will be issued under and secured in
accordance with the Thirty-First Supplemental Indenture dated as of July 1, 1997
(the "Supplemental Indenture") to the Indenture of Mortgage dated as of January
1, 1941 (the Indenture of Mortgage") between the Issuer and Mellon Bank, N.A.
(as successor trustee to The Pennsylvania Company for Insurance on Lives and
Granting Annuities), as Trustee (the "Trustee").
All Notes shall be represented by Global Securities (as
defined hereinafter) registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"), and beneficial ownership of such Notes will be
represented and maintained in book-entry form on the books of DTC (the
"Book-Entry Notes"). An owner of a Book-Entry Note will not be entitled to
receive a certificate representing such Note. However, if DTC is at any time
unwilling or unable to continue as depositary and a successor depositary is not
appointed by the Issuer within 90 days, the Issuer will issue Notes in
definitive registered form (the "Certificated Notes") in exchange for the Global
Security or Securities representing such Notes. In addition, the Issuer may at
any time and in its sole discretion determine not to have some of or all the
Notes represented by one or more Global Securities and, in such event, will
issue certificated Notes in exchange for all of the Global Securities
representing such Notes. In any such instance, an owner of a beneficial interest
in a Global Security
will be entitled to physical delivery of Certificated Notes represented by such
Global Security equal in amount to that represented by such beneficial interest
and to have such Certificated Notes registered in its name.
The procedures to be followed during, and the specific terms
of, the solicitation of offers by each Agent and the sale as a result thereof by
the Issuer are explained below. Administrative and record-keeping
responsibilities will be handled for the Issuer by its Treasurer. The Issuer
will advise each Agent and the Trustee in writing of those persons handling
administrative responsibilities with whom the Agent and the Trustee are to
communicate regarding offers to purchase Notes and the details of their
delivery. The Issuer will promptly advise each Agent and the Trustee in writing
if any such person shall cease to handle such responsibilities or of the
authorization of any additional person to handle such responsibilities.
Administrative procedures and specific terms of the offering
are explained below. Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof, as adjusted in accordance
with changes in DTC's operating requirements, and Certificated Notes will be
issued in accordance with the administrative procedures set forth in Part II
hereof. Capitalized terms not defined herein shall have the-meanings assigned in
the Placement Agency Agreement or, if not defined therein, in the Supplemental
Indenture or the Offering Memorandum. To the extent the procedures set forth
below conflict with the provisions of the Notes, the Indenture of Mortgage, the
Supplemental Indenture, DTC's operating requirements or the Placement Agency
Agreement, the relevant provisions of the Notes, the Indenture of Mortgage, the
Supplemental Indenture, DTC's operating requirements and the Placement Agency
Agreement shall control.
PART I
Administrative Procedures for
Book-Entry Notes
In connection with the qualification of the Book-Entry Notes
for eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions described
below, unless certain duties are otherwise designated to a duly authorized
paying agent, in accordance with its respective obligations under a Letter of
Representations from the Issuer and the Trustee to DTC dated as of the date
hereof and a Medium Term Note Certificate Agreement between the Trustee and DTC
dated as of September 22, 1994, as amended, and its obligations as a participant
in DTC, including DTC's Same-Day Funds Settlement system ("SDFS").
2
Issuance: On any date of settlement (as defined under "Settlement"
below) for one or more Notes, the Issuer will issue a single
global security in fully registered form without coupons (a
"Global Security") representing all such Notes that have the
same rank (senior or subordinated), original issue date,
original issue discount provisions, if any, Interest Payment
Dates, Record Dates, Interest Payment Period, redemption
provisions, if any, tender provisions, if any, Maturity
Date, and interest rate (collectively, the "Terms"). Each
Global Security will be dated and issued as of the date of
its authentication by the Trustee. Each Global Security will
bear an original issue date, which will be (i) with respect
to an original Global Security (or any portion thereof), the
original issue date specified in such Global Security and
(ii) following a consolidation of Global Securities, with
respect to the Global Security resulting from such
consolidation, the most recent Interest Payment Date to
which interest has been paid or duly provided for on the
predecessor Global Securities, regardless of the date of
authentication of such resulting Global Security. No Global
Security will represent any Certificated Note.
Identification The Issuer has arranged with the CUSIP Service Bureau of
Numbers: Standard & Poor's Corporation (the "CUSIP Service Bureau")
for the reservation of one series of CUSIP numbers, which
consists of approximately 900 CUSIP numbers and relates to
Global Securities representing Book-Entry Notes. The Issuer
has obtained from the CUSIP Service Bureau a written list of
such reserved CUSIP numbers, which the Issuer shall deliver
to the Trustee and DTC. The Issuer will assign CUSIP numbers
to Global Securities as described below under Settlement
Procedure "B". DTC will notify the CUSIP Service Bureau
periodically of the CUSIP numbers that the Issuer has
assigned to Global Securities. At any time when fewer than
100 of the reserved CUSIP numbers remain unassigned to
Global Securities for either series, if it deems necessary,
the Issuer will reserve additional CUSIP numbers for
assignment to Global Securities. Upon obtaining such
additional
3
CUSIP numbers, the Issuer shall deliver a list of such
additional CUSIP numbers to the Trustee and DTC.
Registration: Global Securities will be issued only in fully registered
form without coupons. Each Global Security will be
registered in the name of Cede & Co., as nominee for DTC, on
the securities register for the Notes maintained under the
Indenture of Mortgage. The beneficial owner of a Book-Entry
Note (or one or more indirect participants in DTC designated
by such owner) will designate one or more participants in
DTC (with respect to such Book-Entry Note, the
"Participants") to act as agent or agents for such owner in
connection with the book-entry system maintained by DTC, and
DTC will record in book-entry form, in accordance with
instructions provided by such Participants, a credit balance
with respect to such beneficial owner in such Book-Entry
Note in the account of such Participants. The ownership
interest of such beneficial owner (or such participant) in
such Book-Entry Note will be recorded through the records of
such Participants or through the separate records of such
Participants and one or more indirect participants in DTC.
Transfers: Transfers of a Book-Entry Note will be accomplished by book
entries made by DTC and, in turn, by Participants (and, in
certain cases, one or more indirect participants in DTC)
acting on behalf of beneficial transferrers and transferees
of such Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP Service Bureau
at any time a written notice of consolidation (a copy of
which shall be attached to the resulting Global Security
described below) specifying (i) the CUSIP numbers of two or
more Outstanding Global Securities that represent fixed rate
Notes having the same Terms and for which interest has been
paid to the same date, (ii) a date, occurring at least
thirty (30) days after such written notice is delivered and
at least thirty (30) days before the next Interest Payment
Date for such Book-Entry Notes, on which such Global
Securities shall be exchanged for a single replacement
Global
4
Security and (iii) the single CUSIP number to be assigned to
such replacement Global Security (which shall be the CUSIP
number previously assigned to the Global Security with the
earliest date of issuance). Upon receipt of such a notice,
DTC will send to its Participants (including the Trustee) a
written reorganization notice to the effect that such
exchange will occur on such date. Prior to the specified
exchange date, the Trustee will deliver to the CUSIP Service
Bureau a written notice setting forth such exchange date and
such single CUSIP number and stating that, as of such
exchange date, the CUSIP numbers of the individual Global
Securities not assigned to the replacement Global Security
will no longer be valid. On the specified exchange date, the
Trustee will exchange such Global Securities for a single
Global Security bearing the single CUSIP number and the
CUSIP numbers of the individual Global Securities not
assigned will, in accordance with CUSIP Service Bureau
procedures, be retired and not reassigned.
Maturities: Each Book-Entry Note will mature on a date not less than one
year nor more than thirty-five years after the settlement
date for such Note.
Denomination: Book-Entry Notes will be issued in a minimum principal
amount of $100,000 or an integral multiple of $1,000 in
excess thereof. Global Securities will be denominated in
principal amounts not in excess of $150,000,000. If one or
more Book Entry Notes having an aggregate principal amount
in excess of $150,000,000 would, but for the preceding
sentence, be represented by a single Global Security, then
one Global Security will be authenticated and issued to
represent each $150,000,000 principal amount of such
Book-Entry or Notes and an additional Global Security will
be authenticated and issued to represent any remaining
principal amount of such Book-Entry Note or Notes. In such a
case, each of the Global Securities representing such
Book-Entry Note or Notes shall be assigned the same CUSIP
number.
Interest: General. Interest, if any, on each Book-Entry Note will
accrue from the original
5
issue date for the first interest period or the last date to
which interest has been paid, if any, for each subsequent
interest period, on the Global Security representing such
Book-Entry Note,and will be calculated and paid in the
manner described in such Book-Entry Note and in the Offering
Memorandum (as defined in the Placement Agency Agreement),
as supplemented by the applicable Pricing Supplement
thereto. Unless otherwise specified therein, xxxxx payment
of interest on a Book-Entry Note will include interest
accrued up to but excluding the Interest Payment Date or up
to but excluding the Maturity Date. Interest payable upon
Maturity of a Book-Entry Note will be payable to the Person
to whom the principal of such Note is payable. Standard &
Poor's Corporation will use the information received in the
pending deposit message described under Settlement Procedure
"C" below in order to include the amount of any interest
payable and certain other information regarding the related
Global Security in the appropriate (daily or weekly) bond
report published by Standard & Poor's Corporation.
Record Dates. The Record Date with respect to any Interest
Payment Date shall be the February 1 or August 1 immediately
preceding such Interest Payment Date, whether or not such
date shall be a Business Day.
Interest Payment Dates. Interest payments will be made
semiannually on February 15 and August 15 of each year and
at Maturity or earlier redemption or Tender; provided,
however, that in the case of a Book-Entry Note issued
between a Record Date and an Interest Payment Date, or on an
Interest Payment Date, the first interest payment will be
made on the Interest Payment Date following the next
succeeding Record Date. If any Interest Payment Date for a
Book-Entry Note is not a Business Day, the payment due on
such day shall be made on the next succeeding Business Day
and no interest shall accrue on such payment for the period
from and after such Interest Payment Date.
Calculation of Book-Entry Notes. Interest on Book-Entry Notes (including
Interest: interest for partial
6
periods) will be calculated on the basis of a 360-day year
of twelve 30-day months.
Payments of Payment of Interest Only. Promptly after each Record Date,
Principal and the Trustee will deliver to the Issuer and DTC a written
Interest: notice setting forth, by CUSIP number, the amount of
interest to be paid on each Global Security on the following
Interest Payment Date (other than an Interest Payment Date
coinciding with Maturity or earlier redemption or Tender of
such Global Security) and the total of such amounts. DTC
will confirm the amount payable on each Global Security on
such Interest Payment Date by reference to the appropriate
(daily or weekly) bond reports published by Standard &
Poor's Corporation. The Issuer will pay to the Trustee, as
paying agent, the total amount of interest due on such
Interest Payment Date (other than at Maturity or earlier
redemption or Tender of such Global Security), and the
Trustee will pay such amount to DTC, at the times and in the
manner set forth below under "Manner of Payment".
Payments at Maturity. On or about the last Business Day of
each month, the Trustee will deliver to the Issuer and DTC a
written list of principal, premium (if any) and interest to
be paid on each Global Security maturing (on a Maturity or
Redemption Date or otherwise) in the following month. The
Trustee, the Issuer and DTC will confirm the amounts of such
principal, premium (if any) and interest payments with
respect to each such Global Security on or about the fifth
Business Day preceding the Maturity of such Global Security.
On or before the Maturity Date, the Issuer will pay to the
Trustee, as paying agent, the principal amount of such
Global Security, together with any premium and interest due
at such Maturity. The Trustee will pay such amount to DTC at
the times and in the manner set forth below under "Manner of
Payment". If any Maturity of a Global Security representing
Book Entry Notes is not a Business Day, the payment due on
such day shall be made on the next succeeding Business Day
and no interest shall accrue on such payment for the period
from and after such Maturity. Promptly after payment to DTC
of the principal, premium (if any) and
7
interest due at Maturity, earlier redemption or Tender of
such Global Security (the "Cancelled Security"), the Trustee
will cancel such Global Security (the "Cancelled Security")
in accordance with the Indenture of Mortgage and so advise
the Issuer; provided, however, if such Global Security is
not being redeemed or tendered in its entirety, the Trustee
shall authenticate a new Global Security in an amount equal
to the principal portion of the Cancelled Security not paid.
On the first Business Day of each month, the Trustee will
deliver to the Issuer a written statement indicating the
total principal amount of Outstanding Global Securities as
of the immediately preceding Business Day.
Manner of Payment. The total amount of any principal,
premium (if any) and interest due on Global Securities on
any Interest Payment Date or at Maturity shall be paid by
the Issuer to the Trustee in immediately available funds no
later than 9:30 a.m. (New York City time) on such date. The
Issuer will make such payment on such Global Securities by
wire transfer of funds available for immediate use to the
Trustee. The Issuer will confirm any such instructions in
writing to the Trustee. Prior to 10:00 a.m. (New York City
time) on the date of Maturity or as soon as possible
thereafter, the Trustee will pay, from funds received by the
Issuer, by separate wire transfer (using Fed wire message
entry instructions in a form previously specified by DTC) to
an account at the Federal Reserve Bank of New York
previously specified by DTC, in funds available for
immediate use by DTC, each payment of principal (together
with any premium and interest thereon) due on a Global
Security on such date. On each Interest Payment Date (other
than at Maturity), interest payments shall be made to DTC,
in funds available for immediate use by DTC, in accordance
with existing arrangements between the Trustee and DTC. On
each such date, DTC will pay, in accordance with its SDFS
operating procedures then in effect,such amounts in funds
available for immediate use to the respective Participants
in whose names the Book-Entry Notes represented by such
8
Global Securities are recorded in the book-entry system
maintained by DTC. Neither the Issuer (as issuer or as
paying agent) nor the Trustee shall have any direct
responsibility or liability for the payment by DTC to such
Participants of the principal of and interest on the
Book-Entry Notes.
Withholding Taxes. The amount of-any taxes required under
applicable law to be withheld from any interest payment on a
Book-Entry Note will be determined and withheld by the
Participant, indirect participant in DTC or other Person
responsible for forwarding payments and materials directly
to the beneficial owner of such Note.
Procedure for The Issuer and the Agent will discuss from time to time the
Rate Setting and aggregate principal amount of, the issuance price of, and
Posting: the interest rates to be borne by, Book-Entry Notes that may
be sold as a result of the solicitation of orders by the
Agent. If the Issuer decides to set prices of, and rates
borne by, any Book-Entry Notes in respect of which the Agent
is to solicit orders (the setting of such prices and rates
to be referred to herein as "posting")or if the Issuer
decides to change prices or rates previously posted by it,
it will promptly advise the Agent of the prices and rates to
be posted.
Acceptance and Unless otherwise instructed by the Issuer, each Agent will
Rejection of advise the Issuer promptly by telephone of all orders to
Orders: purchase Book-Entry Notes received by such Agent, other than
those rejected by it in whole or in part in the reasonable
exercise of its discretion. The Issuer has the right to
accept orders to purchase Book-Entry Notes and may reject
any such orders in whole or in part.
Preparation of If any order to purchase a Book-Entry Note is accepted by or
Pricing on behalf of the Issuer, the Issuer, with the approval of
Supplement: the Presenting Agent (defined below) will prepare a
supplement (a "Pricing Supplement") reflecting the terms of
such Book-Entry Note and will supply at least ten copies
thereof (and additional copies if requested) to the Agent
which presented the order
9
(the "Presenting Agent") at the address set forth on
Schedule I to the Placement Agency Agreement, and one copy
thereof to the Trustee, to be delivered by overnight courier
or telecopy to arrive no later than 11:00 a.m., New York
City time, on the Business Day following the date of
acceptance.
The Presenting Agent will cause an Offering Memorandum and
Pricing Supplement to be delivered to the purchaser of such
Book-Entry Note.
Outdated Pricing Supplements (other than those retained for
files), will be destroyed.
Suspension of The Issuer may instruct each Agent to suspend at any time,
Solicitation for any period of time or permanently, the solicitation of
orders to purchase Book-Entry Notes. Upon receipt of such
instructions, each Agent will forthwith suspend solicitation
until such time as the Issuer has advised them that such
solicitation may be resumed.
In the event that at the time the Issuer suspends
solicitation of purchases there shall be any orders
outstanding for settlement, the Issuer will promptly advise
each Agent and the Trustee whether such orders may be
settled and whether copies of the Offering Memorandum as in
effect at the time of the suspension, together with the
appropriate Pricing Supplement, may be delivered in
connection with the settlement of such orders. The Issuer
will have the sole responsibility for such decision and for
any arrangements that may be made in the event that the
Issuer determines that such orders may not be settled or
that copies of such Offering Memorandum or Pricing
Supplement may not be so delivered.
Procedure For When the Issuer has determined to change the interest rates
Rate Changes: of Book Entry Notes being offered, it will promptly advise
each Agent and each Agent will forthwith suspend
solicitation of orders. Each Agent will telephone the Issuer
with recommendations as to the changed interest rates. At
such time as the Issuer has advised the Agent of the new
interest rates, the Agent may resume
10
solicitation of orders. Until such time only "indications of
interest" may be recorded.
Delivery of A copy of the Offering Memorandum any Pricing Supplement
Offering relating a Book-Entry Note must accompany or precede the
Memorandum: earliest of any written offer of such Book-Entry Note,
confirmation of the purchase of such Book-Entry Note and
payment for such Book-Entry Note by its purchaser. If notice
of a change in the terms of the Book-Entry Notes is received
by the Agent between the time an order for a Book-Entry Note
is placed and the time written confirmation thereof is sent
by the Presenting Agent to a customer or his agent, such
confirmation shall be accompanied by a Offering Memorandum
and Pricing Supplement setting forth the terms in effect
when the order was placed. Subject to "Suspension of
Solicitation" above, the Presenting Agent will deliver a
Offering Memorandum and Pricing Supplement as herein
described with respect to each Book Entry Note sold by it.
The Issuer will make such delivery if such Book-Entry Note
is sold directly by the Issuer to a purchaser (other than an
Agent).
Confirmation: For each order to purchase a Book Entry Note solicited by
any Agent and accepted by or on behalf of the Issuer, the
Presenting Agent will issue a confirmation to the purchaser,
with a copy to the Issuer, setting forth the details set
forth above and delivery and payment instructions.
Settlement: The receipt by the Issuer of immediately available funds in
payment for a Book-Entry Note and the authentication and
issuance of the Global Security representing such Book-Entry
Note shall constitute "settlement" with respect to such
Book-Entry Note. All orders accepted by the Issuer will be
settled on the tenth Business Day following the date of sale
of such Book-Entry Note pursuant to the timetable for
settlement set forth below unless the Issuer and the
purchaser agree to settlement on another day which shall be
no earlier than one Business Day following the date of sale.
11
Settlement Procedures with regard to each Book-Entry Note sold by the
Procedures: Issuer through any Agent, as agent, shall be as follows:
A. The Presenting Agent will advise the Issuer by telephone
of the following settlement information:
1. Principal amount.
2. Maturity Date.
3. The interest rate.
4. Interest Payment Dates and the Interest Payment
Period.
5. Redemption or repayment provisions, if any.
6. Optional Tender Provisions, if any
7. Settlement date.
8. Price.
9. The Presenting Agent's DTC participant account number
and commission, determined as provided in Section 2 of
the Placement Agency Agreement.
10. Whether such Book-Entry Note is issued at an original
issue discount ("OID") and, if so, the total amount of
OID, the yield to maturity and the initial accrual
period OID.
B. The Issuer will assign a CUSIP number to the Global
Security representing such Book-Entry Note and then
advise the Trustee and the Presenting Agent by telephone
(confirmed in writing at any time on the same date) or
electronic transmission of the information set forth in
Settlement Procedure "A" above, such CUSIP number and the
name of the Presenting Agent.
C. The Trustee will enter a pending deposit message through
DTC's Participant Terminal System providing the
settlement
12
information to DTC specified in the Letter of
Representations from the Issuer and the Trustee to DTC
dated as of the date hereof.
D. To the extent the Issuer has not already done so, the
Issuer will deliver to the Trustee a Global Security in a
form that has been approved by the Issuer, the Agent and
the Trustee.
E. The Trustee will complete such Global Security, stamp the
appropriate legend, as instructed by DTC, if not already
set forth thereon, and authenticate the Global Security
representing such Book-Entry Note in accordance with the
terms of the written order of the Issuer then in effect.
F. DTC will credit such Book-Entry Note to the Trustee's
participant account at DTC.
G. Upon delivery of the pending deposit message referenced
in "C" above, an SDFS deliver order through DTC's
Participant Terminal System will be created instructing
DTC to debit such Book-Entry Note to the Trustee's
participant account and credit such Book-Entry Note to
the Presenting Agent's participant account and debit the
Presenting Agent's settlement account and credit the
Trustee's settlement account for an amount equal to the
price of such Book-Entry Note less the Presenting Agent's
commission. The entry of such a pending deposit message
by the Trustee shall constitute a representation and
warranty by the Trustee to DTC that (i) the Global
Security representing such Book-Entry Note has been
issued and authenticated and (ii) the Trustee is holding
such Global Security pursuant to the Medium Term Note
Certificate Agreement between the Trustee and DTC.
H. The Presenting Agent will enter :an SDFS deliver order
through DTC's Participant Terminal System instructing DTC
(i) to debit such Book-Entry Note to the Presenting
Agent's participant account and credit such Book-Entry
Note to the
13
participant accounts of the Participants with respect to
such Book-Entry Note and (ii) to debit the settlement
accounts of such Participants and credit the settlement
account of the Presenting Agent for an amount equal to
the price of such Book-Entry Note.
I. Transfers of funds in accordance with SDFS deliver orders
described in Settlement Procedures "G" and "H" will be
settled in accordance with SDFS operating procedures in
effect on the settlement date.
X. The Trustee will, upon receipt of funds from the Agent in
accordance with Settlement Procedure "G", credit to an
account of the Issuer maintained at Mellon Bank, N.A.,
funds available for immediate use in the amount
transferred to the Trustee in accordance with Settlement
Procedure "G". However, the Trustee shall not credit the
account of the Issuer unless and until the Trustee has
confirmed receipt of the funds in the appropriate amount
transferred in accordance with Settlement Procedure "G".
K. The Presenting Agent will confirm the purchase of such
Book-Entry Note to the purchaser either by transmitting
to the Participants with respect to such Book-Entry Note
a confirmation order or orders through DTC's
institutional delivery system or by mailing a written
confirmation to such purchaser.
Settlement For orders of Book-Entry Notes solicited by any Agent and
Procedures accepted the Issuer for settlement on the Business Day after
Timetable: the sale date, Settlement Procedures "A" through "K" set
forth above shall be completed as soon as possible but not
later than the respective times (New York City time) set
forth below:
Settlement
Procedure Time
--------- ----
A 11:00 a.m. on the sale date
B 12:00 Noon on the sale date
14
C 2:00 p.m. on the sale date
D 3:00 p.m. on the day before settlement
E 9:00 a.m. on settlement date
F 10:00 a.m. on settlement date
G-H 2:00 p.m. on settlement date
I 4:30 p.m. on settlement date
J-K 5:00 p.m. on settlement date
If a sale is to be settled more than one Business Day after
the sale date, Settlement Procedures "A", "B" and "C" shall
be completed as soon as practicable but no later than 11:00
a.m. and 12:00 Noon on the first Business Day after the sale
date and no later than 2:00 p.m. on the Business Day before
the settlement date, respectively. Settlement Procedure "I"
is subject to extension in accordance with any extension of
Fed wire closing deadlines and in the other events specified
in SDFS operating procedures in effect on the settlement
date.
If settlement of a Book-Entry Note is rescheduled or
canceled, the Trustee will deliver to DTC, through DTC's
Participant Terminal System, a cancellation message to such
effect by no later than 2:00 p.m. on the Business Day
immediately preceding the scheduled settlement date.
Failure to If the Trustee has not entered an SDFS deliver order with
Settle: respect to a Book-Entry Note pursuant to Settlement
Procedure "G", then, upon written request (which may be by
telecopy) of the Issuer, the Trustee shall deliver to DTC,
through DTC's Participant Terminal System, as soon as
practicable, a withdrawal message instructing DTC to debit
such Book Entry Note to the Trustee's participant account.
DTC will process the withdrawal message, provided that the
Trustee's participant account contains a principal amount of
the Global Security representing such Book-Entry Note that
is at least equal to the principal amount to be
15
debited. If a withdrawal message is processed with respect
to all the Book-Entry Notes represented by a Global
Security, the Trustee will cancel such Global Security in
accordance with the Indenture of Mortgage and so advise the
Issuer, and will make appropriate entries in its records.
The CUSIP number assigned to such Global Security shall, in
accordance with CUSIP Service Bureau procedures, be canceled
and not immediately reassigned. If a withdrawal message is
processed with respect to one or more, but not all, of the
Book-Entry Notes represented by a Global Security, the
Trustee will exchange such Book-Entry Note for two Global
Securities, one of which shall represent such Book Entry
Notes and shall be canceled immediately after issuance and
the other of which shall represent the other Book-Entry
Notes previously represented by the surrendered Global
Security and shall bear the CUSIP number of the surrendered
Global Security.
If the purchase price for any Book Entry Note is not timely
paid to the Participants with respect to such Note by the
beneficial purchaser thereof (or a Person, including an
indirect participant in DTC, acting on behalf of such
purchaser), such Participants and, in turn, the Presenting
Agent may enter SDFS deliver orders through DTC's
Participant Terminal System debiting such Note to such
Presenting Agent's participant account and crediting such
Note free to the participant account of the Trustee and
shall notify the Trustee and the Issuer thereof. Thereafter,
the Trustee (i) will promptly notify the Issuer thereof,
once the Trustee has confirmed that such Note has been
credited to its participant account, and the Issuer shall
immediately transfer by Fed wire (in immediately available
funds) to such Agent an amount equal to the price of such
Note which was previously credited to the account of the
Issuer maintained at Mellon Bank, N.A., or wire transferred
at the Issuer's direction in accordance with Settlement
Procedure J and (ii) the Trustee will deliver the withdrawal
message and take the related actions described in the
preceding paragraph. If such failure shall have occurred for
any reason
16
other than a default by the Presenting Agent in the
performance of its obligations hereunder and under the
Placement Agency Agreement, then the issuer will reimburse
the Presenting Agent or the Trustee, as applicable, on an
equitable basis for the loss of the use of the funds during
the period when they were credited to the account of the
Issuer.
Notwithstanding the foregoing, upon any failure to settle
with respect to a Book-Entry Note, DTC may take any actions
in accordance with its SDFS operating procedures then in
effect. In the event of a failure to settle with respect to
one or more, but not all, of the Book-Entry Notes to have
been represented by a Global Security, the Trustee will
provide, in accordance with Settlement Procedure "E", for
the authentication and issuance of a Global Security
representing the other Book-Entry Notes to have been
represented by such Global Security and will make
appropriate entries in its records.
Trustee Not to Nothing herein shall be deemed to require the Trustee to
Risk Funds: risk or expend its own funds in connection with any payment
to the Issuer, DTC, the Agent or the purchaser, it being
understood by all parties that payments made by the Trustee
to the Issuer, DTC, the Agent or the purchaser shall be made
only to the extent that funds are provided to the Trustee
for such purpose.
Authenticity of The Issuer will cause the Trustee to furnish the Agent from
Signatures: time to time with the specimen signatures of each of the
Trustee's officers, employees or agents who have been
authorized by the Trustee to authenticate Book-Entry Notes,
but no Agent will have any obligation or liability to the
Issuer or the Trustee in respect of the authenticity of the
signature of any officer, employee or agent of the Issuer or
the Trustee on any Book-Entry Note.
Payment of Each Agent shall forward to the Issuer, on a monthly basis,
Expenses: a statement of the out-of-pocket expenses incurred by such
Agent during that month that are reimbursable to it pursuant
to the terms of the Placement Agency
17
Agreement. The Issuer will remit payment to each Agent
currently on a monthly basis.
Advertising The Issuer will determine with the Agent the amount of
Costs: advertising that may be appropriate in soliciting offers to
purchase the Book-Entry Notes. Advertising expenses will be
paid by the Issuer.
Periodic Periodically, upon written request, the Trustee will send to
Statements from the Issuer a statement setting forth the principal amount of
the Trustee: Book-Entry Notes outstanding as of that date and setting
forth a brief description of any sales of Book-Entry Notes
of which the Issuer has advised the Trustee but which have
not yet been settled.
Restrictions on No Note may be resold or transferred in any manner that does
Transfers: not comply with the applicable restrictions on resale or
transfer or the procedures required for resale or transfer
set forth in the Offering Memorandum, the Placement Agency
Agreement and on the Note certificate.
Business Day: As used herein, "Business Day" means any day other than a
Saturday or Sunday or a day on which the Trustee or banks in
New York, New York are generally authorized or obligated by
law or executive order to close.
PART II
Administrative Procedures for Certificated Notes
The Trustee will serve as registrar and transfer agent,
authenticating agent and paying agent in connection with the Certificated Notes,
unless a different paying agent is duly appointed by the Issuer to carry out
certain duties.
Issuance: Each Certificated Note will be dated and issued as of the
date of its authentication by the Trustee. Each Certificated
Note will bear an Original Issue Date, which will be (i)
with respect to an original Certificated Note (or any
portion thereof), its original issuance date (which will be
the settlement date) and (ii) with respect to any
Certificated Note (or portion thereof) issued subsequently
upon transfer or exchange of a
18
Certificated Note or in lieu of a destroyed, lost or stolen
Certificated Note, the Original Issue Date of the
predecessor Certificated Note, regardless of the date of
authentication of such subsequently issued Certificated
Note.
Registration: Certificated Notes will be issued only in fully registered
form without coupons.
Transfers and A Certificated Note may be presented for transfer or
Exchanges: exchange at the office designated by the Trustee located in
Pittsburgh, Pennsylvania, or at such other office as the
Issuer may designate. Certificated Notes will be
exchangeable for other Certificated Notes having identical
terms but different authorized denominations without service
charge. Certificated Notes will not be exchangeable for
Book-Entry Notes.
Maturities: Each Certificated Note will mature on a date not less than
one year nor more than thirty-five years after the Original
Issue Date (the settlement date) for such Note.
Denominations: The denomination of any Certificated Note denominated in
U.S. dollars will be a minimum of $100,000 or any amount in
excess thereof that is an integral multiple of $1,000.
Interest: General. Interest, if any, on each Certificated Note will
accrue from the Original Issue Date for the first interest
period or the last date to which interest has been paid, if
any, for each subsequent interest period, and will be
calculated and paid in the manner described in such Note and
in the Offering Memorandum, as supplemented by the
applicable Pricing Supplement. Unless otherwise specified
therein, each payment of interest on a Certificated Note
will include interest accrued up to but excluding the
Interest Payment Date or up to but excluding the Maturity
Date.
Record Dates. The Record Date with respect to any Interest
Payment Date shall be the February 1 or August 1 immediately
preceding such Interest Payment Date, whether or not such
date shall be a Business Day.
19
Interest Payment. Unless otherwise specified pursuant to
Settlement Procedure "A" below, interest payments will be
made semiannually on February 15 and August 15 of each year
and at Maturity, or earlier redemption or Tender; provided,
however, that in the case of a Certificated Note issued
between a Record Date and an Interest Payment Date, or on an
Interest Payment Date, the first interest payment will be
made on the Interest Payment Date following the next
succeeding Record Date. If any Interest Payment Date for, or
the Maturity of, a Certificated Note is not a Business Day,
the payment due on such day shall be made on the next
succeeding Business Day and no interest shall accrue on such
payment for the period from and after such Interest Payment
Date or Maturity, as the case may be.
Calculation Certificated Notes (including interest for partial periods)
of Interest: will be calculated on the basis of a 360 day year of twelve
30-day months.
Payments of No later than 11:00 a.m. on the due date for any payment of
Principal and principal, premium (if any) or interest on each Certificated
Interest: Note, the Issuer will pay to the Trustee, as paying agent,
the amount of principal, premium (if any) and/or interest
then due. The Trustee will pay the principal amount of each
Certificated Note at Maturity or earlier redemption or
Tender upon presentation of such Certificated Note to the
Trustee. Such payment, together with payment of any premium
and interest due at Maturity or earlier redemption or Tender
of such Certificated Note, will be paid to an account at a
bank in Pittsburgh, Pennsylvania (or other bank consented to
by the Issuer) as the registered holder of the Notes shall
designate to the Trustee not less than ten (10) days prior
to the date of payment, in funds available for immediate use
by the Trustee and in turn by the Holder of such
Certificated Note. Certificated Notes presented and
surrendered to the Trustee at Maturity or earlier redemption
or Tender for payment will be cancelled by the Trustee in
accordance with the Indenture of Mortgage. All interest
20
payments on a Certificated Note (other than interest due at
Maturity or earlier redemption or Tender) and any other
payments for which appropriate instructions for payment
shall not have been received by the Trustee not less than
ten (10) days prior to payment will be made by check drawn
on the Trustee or another Person appointed by the Trustee
mailed by the Trustee to the Person entitled thereto as
provided in such Note; provided, however, that the holder of
$10,000,000 or more of Certificated Notes with similar tenor
and terms will be entitled to receive payment by wire
transfer in U.S. dollars upon receipt of written
instructions by the Trustee not less than ten (10) days
prior to payment. Within five Business Days after each
Record Date, the Trustee will furnish the Issuer with a list
of interest payments to be made on the following Interest
Payment Date for each group of Certificated Notes bearing
interest at a particular rate and in total for all
Certificated Notes. Interest at Maturity or earlier
redemption or Tender will be payable to the Person to whom
the payment of principal is payable. The Trustee will
provide, on or about the last Business Day of each month, to
the Issuer lists of principal and interest, to the extent
ascertainable, to be paid on Certificated Notes maturing (on
a Maturity or Redemption Date or otherwise) in the next
succeeding month.
The Issuer will be responsible for withholding taxes on
interest paid on Certificated Notes as required by
applicable law.
Procedure for The Issuer and the Agent will discuss from time to time the
Rate Setting and aggregate principle amount of, the issuance price of, and
Posting: the interest rates to be borne by, Notes that may be sold as
a result of the solicitation of orders by any Agent. If the
Issuer decides to set prices of, and rates borne by, any
Notes in respect of which any Agent are to solicit orders
(the setting of such prices and rates to be referred to
herein as "posting") or if the Issuer decides to change
prices or rates previously posted by it, it will promptly
advise each Agent of the prices and rates to be posted.
21
Acceptance and Unless otherwise instructed by the Issuer, each Agent will
Rejection of advise the Issuer promptly by telephone of all orders to
Orders: purchase Certificated Notes received by such Agent, other
than those rejected by it in whole or in part in the
reasonable exercise of its discretion and, if such Agent or
any of its affiliates shall be the offeror, shall advise the
Issuer of that fact. Unless otherwise agreed by the Issuer
and each Agent, the Issuer has the sole right to accept
orders to purchase Certificated Notes and may reject any
such orders in whole or in part. The Issuer will forthwith
advise such Presenting Agent of the acceptance or rejection
of any offer received through such Agent who shall then so
advise the offeror.
Preparation of If any order to purchase a Certificated Note is accepted by
Pricing or on behalf of the Issuer, and if so required by Section
Supplement: 4(a)(i) of the Placement Agency Agreement, the Issuer, with
the approval of the Presenting Agent, will prepare a Pricing
Supplement reflecting the terms of such Certificated Note
and will supply at least ten copies thereof (and additional
copies if requested) to the Presenting Agent at the address
set forth on Schedule I to the Placement Agency Agreement,
and one copy thereof to the Trustee, to be delivered by
overnight courier or telecopy to arrive no late than 11:00
a.m., New York City time, on the Business Day following the
sale date. The Presenting Agent will cause a Offering
Memorandum and Pricing Supplement to be delivered to the
purchaser of such Certificated Note. Outdated Pricing
Supplements (other than those-retained for files), will be
destroyed.
Suspension of Subject to the Issuer's representations, warranties and
Solicitation: covenants contained in the Placement Agency Agreement, the
Issuer may instruct the Agent to suspend at any time for any
period of time or permanently, the solicitation of orders to
purchase Certificated Notes. Upon receipt of such
instructions, each Agent will forthwith suspend solicitation
until such time as the Issuer has advised each Agent that
such solicitation may be resumed.
22
In the event that at the time the Issuer suspends
solicitation of Purchases there shall be any orders
outstanding for settlement, the Issuer will promptly advise
each Agent and the Trustee whether such orders may be
settled and whether copies of the Offering Memorandum as in
effect at the time of the suspension, together with the
appropriate Pricing Supplement, may be delivered in
connection with the settlement of such orders. The Issuer
will have the sole responsibility for such decision and for
any arrangements that may be made in the event that the
Issuer determines that such orders may not be settled or
that copies of such Offering Memorandum may not be so
delivered. No such suspension shall excuse any failure by
the Issuer to fulfill a contractual obligation to deliver
any Certificated Notes.
Procedure for When the Issuer has determined to change the interest rates
Rate Changes: of Certificated Notes being offered, it will promptly advise
the Agent and each Agent will forthwith suspend solicitation
of orders. Each Agent will telephone the Issuer with
recommendations as to the changed interest rates. At such
time as the Issuer has advised the Agent of the new interest
rates, the Agent may resume solicitation of orders. Until
such time only "indications of interest" may be recorded.
Delivery of A copy of the Offering Memorandum and any Pricing Supplement
Offering relating to a Certificated Note must accompany or precede
Memorandum: the earliest of any written offer of such Certificated Note,
confirmation of the purchase of such Certificated Note and
payment for such Certificated Note by its purchaser. If
notice of a change in the terms of the Certificated Notes is
received by the Agent between the time an order for a
Certificated Note is placed and the time written
confirmation thereof is sent by the Presenting Agent to a
customer or his agent, such confirmation shall be
accompanied by a Offering Memorandum and Pricing Supplement
setting forth the terms in effect when the order was placed.
Subject to "Suspension of Solicitation"
23
above, the Presenting Agent will deliver a Offering
Memorandum and Pricing Supplement as herein described with
respect to each Certificated Note sold by it. The Issuer
will make such delivery if such Certificated Note is sold
directly by the Issuer to a purchaser (other than any
Agent).
Confirmation: For each order to purchase a Certificated Note solicited by
any Agent and accepted by or on behalf of the Issuer, the
Presenting Agent will issue a confirmation to the purchaser,
with a copy to the Issuer, setting forth the information
specified in paragraph A under "Settlement Procedures" and
delivery and payment instructions.
Settlement: The receipt by the Issuer of immediately available funds in
exchange for an authenticated Certificated Note delivered to
the Presenting Agent and the Presenting Agent's delivery of
such Certificated Note against receipt of immediately
available funds shall, with respect to such Certificated
Note, constitute "settlement". All orders accepted by the
Issuer will be settled on the tenth Business Day following
the date of sale pursuant to the timetable for settlement
set forth below, unless the Issuer and the Purchaser agree
to settlement on another day which shall be no earlier than
one Business Day following the date of sale.
Settlement Settlement Procedures with regard to each Certificated Note
Procedures: sold by the Issuer through any Agent, as agent, shall be as
follows:
A. The Presenting Agent will advise the Issuer by telephone
of the following settlement information:
1. Name in which such Certificated Note is to be
registered ("Registered Owner").
2. Address of the Registered Owner and address for
payment of principal and interest.
3. Taxpayer identification number of the Registered Owner
(if available).
24
4. Rank (senior or subordinated).
5 Principal amount.
6. Maturity Date.
7. Interest Payment Dates and the Interest Payment
Period.
8. Redemption or repayment provisions, if any.
9. Optional Tender Provisions, if any.
10. The settlement date.
11. Price (including currency).
12. Presenting Agent's commission, determined as provided
in Section 2 of the Placement Agency Agreement.
13. Whether such Certificated Note is issued at an
original issue discount ("OID"), and, if so, the total
amount of OID, the yield to maturity and the initial
accrual period OID.
B. The Issuer will advise the Trustee by telephone
(confirmed in writing at any time on the sale date) or
electronic transmission of the information set forth in
Settlement Procedure "A" above and the name of the
Presenting Agent.
C. The Issuer will deliver to the Trustee an original
Certificated Note with customer confirmation in
triplicate in forms that have been approved by Issuer,
the Agent and the Trustee.
D. The Trustee will complete such Certificated Note and will
authenticate such Certificated Note and deliver it (with
the confirmation) and two copies thereof (clearly marked
as such) to the Presenting Agent, and the Presenting
Agent will acknowledge receipt of the Note by stamping or
otherwise marking the first copy and returning it to the
Trustee. Such delivery will be made only against such
acknowledgment of receipt. In the event
25
that the instructions given by the Presenting Agent for
payment to the account of the Issuer are revoked, the
Issuer will as promptly as possible wire transfer to the
account of the Presenting Agent an amount of immediately
available funds equal to the amount of such payment made.
E. The Presenting Agent will deliver such Certificated Note
(with the confirmation) to the customer against payment
in immediately payable funds. The Presenting Agent will
obtain the acknowledgement of receipt of such
Certificated Note by retaining the second copy thereof.
F. Upon verification by the Presenting Agent that a Note has
been prepared and properly authenticated by the Trustee
and registered in the name of the purchaser in the proper
principal amount, payment will be made to the Issuer by
the Presenting Agent the same day in immediately
available funds. Such payment shall be made only upon
prior receipt by the Presenting Agent of immediately
available funds from or on behalf of the purchaser unless
the Presenting Agent decides, at its option, exercised in
its sole discretion, to advance its own funds for such
payment against subsequent receipt of funds from the
purchaser. The Presenting Agent shall immediately notify
the Issuer of its decision to advance its own funds for
payment against subsequent receipt of funds from a
purchaser.
G. The Trustee will send a third copy of the Certificated
Note (clearly marked as such) to the Issuer by
first-class mail.
Settlement For orders of Certificated Notes solicited by any Agent, as
Procedures agent, and accepted by the Issuer, Settlement Procedures "A"
Timetable: through "G" set forth above shall be -completed on or before
the respective times (New York City time) set forth below:
26
Settlement
Procedure Time
---------- ----
A 2:00 p.m. on the day before settlement
B-C 3:00 p.m. on the day before settlement
D 2:15 p.m. on settlement date
E 3:00 p.m. on settlement date
F-G 5:00 p.m. on settlement date
Failure to If a purchaser fails to accept delivery of and make payment
Settle: for any Certificated Note, the Presenting Agent will notify
the Issuer and the Trustee by telephone and return such
Certificated Note to the Trustee. Upon receipt of such
notice, the Issuer will immediately wire transfer to the
account of the Presenting Agent an amount equal to the
amount previously credited to the account of Issuer in
respect of such Certificated Note. Such wire transfer will
be made on the settlement date, if possible, and in any
event not later than the Business Day following the
settlement date. If the failure shall have occurred for any
reason other than a default by the Presenting Agent in the
performance of its obligations hereunder and under the
Placement Agency Agreement, then the Issuer will reimburse
the Presenting Agent on an equitable basis for its loss of
the use of the funds during the period when they were
credited to the account of the Issuer. Immediately upon
receipt of the Certificated Note in respect of which such
failure occurred, the Trustee will cancel such Certificated
Note in accordance with the Indenture of Mortgage, as
supplemented, and so advise the Issuer and will make
appropriate entries in its records.
Trustee Not to Nothing herein shall be deemed to require the Trustee to
Risk Funds: risk or expend its own funds in connection with any payment
to the Issuer, the Agent or the purchaser, it being
understood by all parties that payments made by the Trustee
to the Issuer, the Agent or the purchaser shall be made only
to the extent that funds are provided to the Trustee for
such purpose.
27
Authenticity of The Issuer will cause the Trustee to furnish the Agent from
Signatures: time to time with the specimen signatures of each of the
Trustee's officers, employees or agents who has been
authorized by the Trustee to authenticate Certificated
Notes, but no Agent will have any obligation or liability to
the Issuer or the Trustee in respect of the authenticity of
the signature of any officer, employee or agent of the
Issuer or the Trustee on any Certificated Note.
Payment of Each Agent shall forward to the Issuer, on a monthly basis,
Expenses: a statement of the out-of-pocket expenses incurred by such
Agent during that month that are reimbursable to it pursuant
to the terms of the Placement Agency Agreement. The Issuer
will remit payment to each Agent currently on a monthly
basis.
Advertising The Issuer will determine with the Agent the amount of
Costs: advertising that may be appropriate in soliciting orders to
purchase the Certificated Notes. Advertising expenses will
be paid by the Issuer.
Periodic Periodically, upon written request, the Trustee will send to
Statements from the Issuer a statement setting forth the principal amount of
the Trustee: Certificated Notes outstanding as of that date and setting
forth a brief description of any sales of Certificated Notes
of which the Issuer has advised the Trustee but which have
not yet been settled.
Restrictions of No Note may be resold or transferred in any manner that does
Transfer: not comply with the applicable restrictions on resale or
transfer or the procedures required for resale or transfer
set forth on the Note certificate.
Business Day: As used herein, "Business Day" means any day other than a
Saturday or Sunday or a day on which the Trustee or banks in
New York, New York are generally authorized or obligated by
law or executive order to close.
28
EXHIBIT B
TERMS AGREEMENT
[Date]
To: PHILADELPHIA SUBURBAN WATER COMPANY
Subject in all respects to the terms and conditions of the
Placement Agency Agreement (the "Agreement") dated as of July 11, 1997 between
the Placement Agents and you, the undersigned agrees to purchase the following
Notes of Philadelphia Suburban Water Company:
Principal Amount:
Interest Rate:
Maturity Date:
Discount to the Purchaser: ___% of Principal Amount
Purchase Price:
Commission:
Agent DTC No.:
CUSIP No.:
Closing Date and Time:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Reduction Percentage:
Optional Tender Date
Requirements to deliver the
documents specified in
Section 6(a)(ii) of the Agreement:
Certificate contemplated by
clause (1): [Required/Not Required]
Opinion contemplated by
clause (2): [Required/Not Required]
Opinion contemplated by
clause (3): [Required/Not Required]
Certificate contemplated by
clause (4): [Required/Not Required]
Opinion contemplated by
clause (5): [Required/Not Required]
Letter contemplated by
clause (6): [Required/Not Required]
Period during which additional Notes may not be sold
if not period between trade date and Closing Date
as specified in Section 4(a)(v) of the Agreement:
Other Provisions:
______________________________
By
______________________________
Name:
Title:
Accepted:
PHILADELPHIA SUBURBAN WATER COMPANY
by
______________________________
Name:
Title:
(000) 000-0000
________________, 1997
To Each of the Addressees Named
on Schedule I of the Placement Agency
Agreement Acting Severally and Not
Jointly in the Capacities of Agent
and Purchaser or in Either Such Capacity
Re: Philadelphia Suburban Water Company
$150,000,000 First Mortgage Bonds,
1997 Medium Term Note Series
------------------------------------
Gentlemen:
We have acted as special counsel to Philadelphia Suburban Water
Company, a Pennsylvania corporation (the "Company"), in connection with the
transactions contemplated by (i) the Placement Agency Agreement dated July 11,
1997 (the "Placement Agency Agreement") between the Company and the Agents
identified therein (the "Agents"); (ii) the Paying Agency Agreement dated as of
July 11, 1997 (the "Paying Agency Agreement"), among the Company, Mellon Bank,
N.A., as paying agent and the Agents; (iii) the Indenture of Mortgage dated as
of January 1, 1941 (the "Original Indenture"), between the Company and Mellon
Bank, N.A. (as successor in interest to The Philadelphia Company for Insurance
on Lives and Exacting Annuities), as trustee (the "Trustee"), as amended and
supplemented by thirty-one supplements thereto (the Original Indenture, as so
amended and supplemented, the "Indenture"); (iv) the Thirty-First Supplemental
Indenture dated as of July 1, 1997 (the "Thirty-First Supplemental Indenture")
between the Company and the Trustee; (v) the First Mortgage Bonds, 1997 Medium
Term Note Series to be issued in one or more subseries pursuant to the
Thirty-First Supplemental Indenture (the "Notes"); and (vi) the Confidential
Offering Memorandum, dated as of July 11, 1997 relating to the offering of
Xxxxxxxx, Xxxxxx, Xxxxxx & Xxxxxxxx LLP Page 2
To: Placement Agents
the Notes, as amended or supplemented through the date hereof, including any
documents filed with the Securities and Exchange Commission as of the date
hereof and incorporated therein by reference, and any quarterly or annual
reports of the Company or the Company's parent, Philadelphia Suburban
Corporation, a Pennsylvania corporation ("PSC"), delivered therewith (the
"Incorporated Documents" and, together with the Confidential Offering
Memorandum, the "Offering Memorandum"). This opinion is being rendered to you
pursuant to Section 5(a)(iii) of the Placement Agency Agreement. Unless
otherwise specified, capitalized terms not otherwise defined herein shall have
the meanings specified in the Placement Agency Agreement, the Original Indenture
or the Thirty-First Supplemental Indenture.
In connection with this opinion, we have examined the following
documents:
(a) the Placement Agency Agreement;
(b) the Paying Agency Agreement;
(c) the Indenture (including the Thirty-First Supplemental
Indenture);
(d) the form of Note;
(e) the Offering Memorandum;
(f) a copy of the Articles of Incorporation of the Company,
as amended and restated and now in effect;
(g) a copy of the Bylaws of the Company as now in effect;
(h) the Securities Certificate relating to the issue and sale of the
Notes, filed by the Company with the Pennsylvania Public Utility Commission (the
"PUC") pursuant to the provisions of Chapter 19 of the Pennsylvania Public
Utility Code and a copy of the Order of the PUC dated June 5, 1997 registering
said Securities Certificate, and certified by the Secretary of the PUC;
(i) evidence satisfactory to us of the due recordation of the Original
Indenture and the Thirty-First Supplemental Indenture in the Counties of Bucks,
Chester, Delaware and Xxxxxxxxxx in the Commonwealth of Pennsylvania;
(j) the resolutions of the Board of Directors of the Company dated
March 4, 1997 authorizing the issuance of up to $150,000,000 aggregate principal
amount of Notes and the execution of the Thirty-First Supplemental Indenture,
the Placement Agency Agreement and the Paying Agency Agreement; and
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To: Placement Agents
(k) the certificates of the Company and other documents delivered to
you at the Closing.
In rendering the opinions set forth below, we have assumed the
genuineness of all signatures on documents and instruments examined by us
(except signatures of the Company on the Placement Agency Agreement, the
Thirty-First Supplemental Indenture and the Paying Agency Agreement) and that
all documents submitted to us as copies conform with the originals thereof. We
have also relied, to the extent we have deemed such reliance to be necessary and
proper, on the factual matters contained in certificates of public officials and
officers of the Company.
To the extent any opinion below is made to our knowledge, such knowledge shall
mean the actual knowledge of attorneys within our firm who have provided
substantive representation to the Company, based solely upon such limited
investigation and inquiry as is set forth herein, and does not include matters
of which such attorneys could be deemed to have constructive knowledge.
Based upon the foregoing and such other examination of fact and law as we have
deemed necessary for purposes of this opinion, and subject to the assumptions
and qualifications set forth herein, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Pennsylvania. The Company
has full corporate power and authority to conduct all the activities conducted
by it, to own or lease all the assets owned or leased by it and to conduct its
business as described in the Offering Memorandum.
2. The Company has full corporate power and authority to enter into the
Placement Agency Agreement and the Paying Agency Agreement, to issue an
aggregate principal amount of $150,000,000 of the Notes, and to perform its
obligations under the Placement Agency Agreement, the Paying Agency Agreement
and the Notes. The Placement Agency Agreement has been duly authorized, executed
and delivered by the Company and, assuming the due authorization, execution and
delivery by the other parties thereto, constitutes a legal, valid and binding
agreement of the Company. The Paying Agency Agreement has been duly authorized,
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by the other parties thereto, constitutes a legal, valid
and binding agreement of the Company and is enforceable against the Company in
accordance with its terms (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws relating
to creditors' rights generally from time to time in effect, and subject, as to
enforceability, to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Xxxxxxxx, Xxxxxx, Xxxxxx & Xxxxxxxx LLP Page 4
To: Placement Agents
3. An aggregate principal amount of $150,000,000 of the Notes has been
duly authorized for issuance and sale pursuant to the Placement Agency Agreement
and, when executed by the Company and authenticated by the Trustee and delivered
pursuant to the provisions of the Indenture (including the Thirty-First
Supplemental Indenture) and the Placement Agency Agreement against payment of
the consideration therefor specified in the Placement Agency Agreement, the
Notes will constitute legal, valid and binding obligations of the Company, are
entitled to the benefits and security of the Indenture (including, without
limitation, the Thirty-First Supplemental Indenture) in accordance with its
terms and are secured thereby equally and ratably with all First Mortgage Bonds
of the Company outstanding under the Indenture, and are enforceable against the
Company in accordance with their terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other similar
laws relating to creditors' rights generally from time to time in effect, and
subject, as to enforceability, to general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law).
4. The Company has full corporate power and authority to enter into the
Thirty-First Supplemental Indenture. The Thirty-First Supplemental Indenture has
been duly authorized, executed and delivered by the Company and, assuming the
due authorization, execution and delivery by the other parties thereto, the
Indenture, as supplemented by the Thirty-First Supplemental Indenture,
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws relating to creditors' rights generally from time to time in
effect, and subject, as to enforceability, to general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law). The Original Indenture and the Thirty-First Supplemental
Indenture have been properly recorded in the Counties of Bucks, Chester,
Delaware and Xxxxxxxxxx in the Commonwealth of Pennsylvania and are the only
recordations and filings necessary in order to establish, preserve, protect and
perfect the lien of the Indenture on all real estate and fixed property of the
Company (excluding easements and other similar rights) described in the
Indenture as subject to the lien thereof. The Indenture creates the valid,
binding and direct lien which it purports to create upon the interest of the
Company in the real estate and fixed property of the Company specifically
described therein as subject to the lien thereof.
Xxxxxxxx, Xxxxxx, Xxxxxx & Xxxxxxxx LLP Page 5
To: Placement Agents
5. The execution, delivery and performance of the Thirty-First
Supplemental Indenture, the Placement Agency Agreement, the Paying Agency
Agreement and the Notes and the consummation of the transactions contemplated
thereby do not and will not (with or without the giving of notice or lapse of
time) conflict with or result in a breach of or default under the Articles of
Incorporation or Bylaws of the Company or the Indenture.
6. The Indenture (including, without limitation, the Thirty-First
Supplemental Indenture) and the form of Note conforms in all material respects
as to legal matters to the descriptions thereof in the Offering Memorandum. The
descriptions in the Confidential Offering Memorandum not including documents
incorporated by reference therein of statutes, regulations or legal or
governmental proceedings accurately summarize the information purported to be
summarized therein.
7. The authorization, execution and delivery of the Thirty-First
Supplemental Indenture and the issuance and sale of the Notes under the
circumstances described in the Placement Agency Agreement are not subject to the
provisions of the Public Utility Holding Company Act of 1935 in any respect, and
do not require that (a) a declaration with respect thereto shall have become
effective under Section 7 of the Public Utility Holding Company Act of 1935 or
(b) other authorization or approval of the Securities and Exchange Commission
shall have become effective under the provisions of said Act.
8. To the best of our knowledge, there are no actions, suits or
proceedings, pending or threatened, relating to the Notes, their offering, or
the Offering Memorandum.
9. The PUC has entered an Order dated June 5, 1997 (the "PUC Order"),
registering the Securities Certificate filed by the Company with respect to the
issuance and sale of the Notes, which order, on the date hereof, is in effect
and is final and nonappealable. Except for the PUC Order and the recording of
the Thirty-First Supplemental Indenture as described in paragraph 4 hereof, no
other consent, approval, authorization or order of, or any filing with, any
government, governmental or other administrative agency or body is required as
of the date hereof in connection with the execution and delivery by the Company
of the Placement Agency Agreement, the Paying Agency Agreement and the
Thirty-First Supplemental Indenture, the solicitation of offers to purchase
Notes, the issuance of any Note or the performance by the Company of any of its
obligations thereunder, except such as may be required under the blue sky laws
of any jurisdiction in connection with the issue and sale of the Notes.
10. The Notes may be offered, issued, sold and delivered in the manner
contemplated by the Placement Agency Agreement, the
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To: Placement Agents
Thirty-First Supplemental Indenture and the Offering Memorandum without
registration thereof under the Securities Act of 1933, as amended, and without
qualification of an indenture in respect of the Notes under the Trust Indenture
Act of 1939, as amended, it being understood that no opinion is expressed as to
any subsequent resale of any Notes by any Person or any other person.
11. Upon the issuance of the Notes and the payment of the consideration
therefore, the Trustee will have a valid and perfected security interest, for
the benefit of the Trustee and the holders of the Notes, to secure the full and
punctual performance of the Notes and all obligations of the Company under the
Indenture (including the Thirty-First Supplemental Indenture), in all real
estate and fixed property (excluding easements and other similar rights)
specifically described in the Indenture (other than properties released from the
Indenture in accordance with the terms thereof).
12. We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Offering Memorandum and take
no responsibility therefor, except to the extent referred to paragraph 5 hereof
and in this paragraph. In the course of the preparation by the Company of the
Confidential Offering Memorandum, we participated in conferences with certain
officers and employees of the Company, examined the Offering Memorandum and made
certain inquiries in connection with the preparation of the Confidential
Offering Memorandum. We took no part in the preparation of any of the
Incorporated Documents and we did not conduct any independent investigation or
make any inquiries with respect to the Incorporated Documents and the
information contained therein. Subject to the foregoing, we have no reason to
believe that the Offering Memorandum contains any untrue statement of a material
fact or omits to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that we express no opinion with respect to
the financial statements and the notes thereto, schedules and other financial,
statistical data or operating information included or incorporated by reference
therein).
The foregoing opinions are subject to the following qualifications:
a. We express no opinion as to the adequacy of any notice with
respect to the disposition of any collateral. We also express no opinion as to
the effectiveness or enforceability of provisions relating to waivers of notice
or waivers of other rights, severability, prepayment fees or penalties, choice
of law, or any provisions which release or limit the Company's liability or
relate to cumulative remedies or, to the extent they purport to or would have
the effect of compensating the Company
Xxxxxxxx, Xxxxxx, Xxxxxx & Xxxxxxxx LLP Page 7
To: Placement Agents
in amounts in excess of any actual loss suffered by the Company, provisions
relating to the payment of a default rate of interest.
b. We express no opinion as to the enforceability with respect
to any provisions in the Indenture executed by the Company purporting to waive
the effect of applicable laws and remedies and any provisions releasing any
party from, or requiring indemnification for, liability for gross negligence,
recklessness or wilful misconduct.
c. Any requirements in the Indenture specifying that provisions
of the Indenture may only be waived in writing may not be enforced to the extent
that an oral agreement or an implied agreement by trade practice or course of
conduct has been created modifying any provision of the Indenture.
d. This opinion is limited to the matters set forth herein, no
opinion may be inferred or implied beyond the matters expressly stated herein,
and our statements contained in the opinion portion of this letter must be read
in conjunction with the assumptions, limitations, exceptions and qualifications
set forth in this letter.
e. The opinions herein are expressed as of the date hereof only
and not as of some future date. We undertake no responsibility to advise you of
any change in law or new laws, regulations or judicial decisions in the future.
Nor do we assume any obligation to update or supplement this opinion to reflect
any facts or circumstances which may hereafter come to our attention. References
to "laws," "regulations" and "judicial decisions" herein shall include only
officially published federal laws and regulations of the United States of
America and the officially published laws and regulations of the Commonwealth of
Pennsylvania.
Our opinions expressed above are limited to the laws of the
Commonwealth of Pennsylvania and the Federal law of the United States of
America.
This opinion is furnished by us solely for your benefit and the
purchasers of the Notes and may not be relied upon by any other person without
the express written consent of our firm.
Very truly yours,
XXXXXXXX, XXXXXX, XXXXXX &
XXXXXXXX LLP
/mdb
EXHIBIT D
[Letterhead of PSWC]
_____________, 199
To Each of the Addressees Named
on Schedule I of the Placement Agency
Agreement Acting Severally and Not
Jointly in the Capacities of Agent
and Purchaser or in Either Such Capacity
RE: $150,000,000 First Mortgage Bonds,
1997 Medium Term Note Series ("Notes")
--------------------------------------
Ladies and Gentlemen:
I am Senior Vice President-Law and Administration for Philadelphia
Suburban Water Company (the "Company").
Pursuant to Section 5(a)(iii)(B) of the Placement Agency Agreement
between you and the Company of even date herewith relating to the $150,000,000
First Mortgage Bonds, 1997 Medium Term Note Series, I have been asked to render
an opinion to you regarding certain matters involving the Company.
In my opinion:
(i) To the best of my knowledge, the Company has all governmental
licenses, permits, consents, orders, approvals and other authorizations
necessary to carry on its business as described in the Confidential Offering
Memorandum dated July 11, 1997 with respect to the Notes (the "Confidential
Offering Memorandum, the "Offering Memorandum"), including any documents filed
with the Securities and Exchange Commission as of the date hereof and
incorporated therein by reference, and any quarterly or annual reports of the
Company or the Company's parent, Philadelphia Suburban Corporation delivered
therewith (the "Incorporated Documents" and, together with the Confidential
Offering Memorandum, the "Offering Memorandum"), except where the failure to do
so would not have a material adverse effect on the financial condition of the
Company.
(ii) Except as set forth in the Offering Memorandum, there are no
actions, suits or proceedings pending (and of which the Company has received
notice) or, to the best of my knowledge, threatened against or affecting the
Company or any of its officers in their capacity as such, before or by any
Federal or state court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, wherein an
unfavorable ruling, decision or finding is likely which would materially or
adversely affect (i) the financial condition of the Company, or (ii) the ability
of the Company to perform its obligations under the Placement Agency Agreement,
the Paying Agency Agreement, the Original Indenture (as supplemented by the
Thirty-First Supplemental Indenture) or the Notes.
(iii) The Company (a) is not in violation of its Articles of
Incorporation, by-laws or other charter documents, (b) to the best of my
knowledge, is not in default in the performance of any obligation, agreement or
condition contained in any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, note, debenture, note agreement or other evidence of
indebtedness, lease, contract or other agreement or instrument known to me to
which the Company is a party or by which it or its properties is bound or
affected where such default would likely have a material adverse effect on the
financial condition of the Company, and (c) to the best of my knowledge the
Company is not in violation of any judgment, ruling, decree, order, franchise,
license or permit known to me or any statute, rule or regulation of any court or
other governmental agency or body applicable to the business or properties of
the Company, where such violation would likely have a material adverse effect on
the financial condition of the Company:
(iv) To the best of my knowledge, the execution, delivery and
performance of the Placement Agency Agreement, the Thirty-First Supplemental
Indenture, the Paying Agency Agreement and the consummation of the transactions
therein contemplated will not, of themselves, or upon notice, lapse of time, or
both, conflict with or result in a breach of any of the terms, conditions, or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the property or assets
of the Company (except as contemplated by the Indenture) pursuant to the terms
of the charter or bylaws of the Company, or any indenture, mortgage, deed of
trust or other agreement or instrument known to me to which the Company is a
party or by which the Company may be bound.
(v) As counsel for the Company I participated in the preparation of the
Incorporated Documents (except for the financial statements and the notes
thereto and the schedules and other financial and statistical data included in
the Incorporated Documents). Although I have not undertaken, except as otherwise
indicated in my opinion, to determine independently, and do not assume any
responsibility for, the accuracy or completeness of the statements in the
Offering Memorandum, nothing has come to my attention that has caused me to
believe that the Offering Memorandum as of the date hereof contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that I as counsel express no opinion with
respect to the financial statements and the notes thereto and the schedules and
other financial and statistical data included in the Offering Memorandum or
incorporated therein by reference).
The information set forth herein is as of the date set forth above and
the Company and I disclaim any undertaking to provide any updates or changes
which thereafter may be brought to our attention.
This opinion is solely for your benefit and may not be relied upon by
any other person or for any other purpose.
Very truly yours,
Xxx X. Xxxxx
/sw
EXHIBIT E
TRUSTEE'S CERTIFICATE
---------------------
The undersigned, Mellon Bank, N.A. (hereinafter referred to as the
"Bank"), does hereby certify that:
1. It is Trustee under the Indenture of Mortgage dated as of January 1,
1941, of Philadelphia Suburban Water Company (the "Company"), as supplemented
and amended by Thirty-One Supplemental Indentures and by a Thirty-First
Supplemental Indenture dated as of July 1, 1997 (the "Thirty-First Supplemental
Indenture") between the Company and the Bank relating to the authentication and
delivery of a global bond representing the aggregate principal amount of
$__________ of the Company's First Mortgage Bonds, 1997 Medium Term Note Series
(the "Global Bond")
2. The Thirty-First Supplemental Indenture has been duly executed on
behalf of the Bank by__________, its Vice President; the corporate seal of the
Bank has been duly affixed thereto and attested by ______________________,
its ___________________; and the Thirty-First Supplemental Indenture has been
duly delivered on behalf of
the Bank.
3. The Bank, as Trustee, has:
a. pursuant to Section 5 of Article I of the Thirty-First
Supplemental Indenture, authenticated the Global Bond, which consist of a fully
registered Bond as set forth in Exhibit "A" hereto, in the aggregate principal
amount of $________, bearing the interest rate and maturity date as set forth in
Section I of Article 1 of the Thirty-First Supplemental Indenture, by the
execution of the Trustee's Certificate of Authentication thereon by
___________________________, its ____________________; and
b. registered said Global Bond in the name of Cede & Co,
nominee of the Depository Trust Company ("DTC"), as the registered owner of the
Global Bond, which Global Bond is to be held by the Trustee as so authenticated
and registered on behalf of DTC pursuant to the Medium Term Note Certificate
Agreement dated as of ______________________.
4. Set forth below, opposite the names and titles of the above
mentioned officers of the Bank, are specimens of their respective signatures.
Name Title Specimen Signatures
---- ----- -------------------
-------------------- --------------------
-------------------- --------------------
5. ___________________ and _____________ were, at the time of the acts
referred to in paragraph 2 above, and are at the date hereof, duly elected or
appointed, qualified and acting officers of the Bank, holding the offices
indicated above and were duly authorized to perform such acts, and the
signatures appearing on the Thirty-First Supplemental Indenture are their
genuine signatures; and was at the time of the acts referred to in paragraph
3(a) above, and ____________________ is at the date hereof, a duly elected or
appointed, qualified and acting Corporate Trust Officer of the Bank duly
authorized to perform such acts, and the signature appearing on said Xxxxx is
her genuine signature.
6. Attached hereto as Exhibit "B" is a true and correct copy of
resolutions as adopted by the Board of Directors of the Bank which, at the date
hereof, are still in full force and effect, giving requisite authority to such
officers to execute and deliver the Thirty-First Supplemental Indenture and to
authenticate the Bonds.
IN WITNESS WHEREOF, Mellon Bank, N.A. has caused this Trustee is
Certificate to be executed by its duly authorized officer, this _____ day
of__________, 199___ .
Mellon Bank, N.A
________________________
Title:
2
EXHIBIT "A"
Maturity
Cert. Registered Principal Interest Date
No. Owner Amount Rate ( )
--- ----- ----- ---- ---------
R-1 Cede & Co., as
nominee of the
Depository Trust
Company
1
EXHIBIT F
PHILADELPHIA SUBURBAN WATER COMPANY
U.S. $
First Mortgage Bonds
1997 Medium Term Note Series
Maturities From One Year to
Thirty Years From Date of Issue
Amendment to Placement Agency Agreement
---------------------------------------
New York, New York
[Date]
To Each of the Addressees Named
on Schedule I of the Placement Agency
Agreement Acting Severally and Not
Jointly in the Capacities of Agent and
Purchaser or in Either Such Capacity
Dear Sirs:
The Placement Agency Agreement dated July 11, 1997 (the "Agreement"),
between you and Philadelphia Suburban Water Company, a corporation organized and
existing under the laws of the Commonwealth of Pennsylvania (the "Issuer"), is
hereby amended to increase the aggregate principal amount of Notes (as defined
in the Agreement) at any time outstanding to up to U.S. $__________.
[The documents referred to in the second sentence of Section 12 of the
Agreement shall be delivered simultaneously herewith.]
In all other respects the Agreement shall remain in full force and
effect.
This amendment to the Agreement may be executed in counterparts, and
the executed counterparts shall together constitute a single instrument.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate
hereof, whereupon this letter shall represent a binding agreement between the
Issuer and each of you. This letter shall not constitute a binding agreement
unless and until it is executed by the Issuer and each of you.
Very truly yours,
PHILADELPHIA SUBURBAN WATER
COMPANY,
by
---------------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
by
--------------------------
Name:
Title:
3
EXHIBIT G
PHILADELPHIA SUBURBAN WATER COMPANY
FIRST MORTGAGE BONDS
1997 MEDIUM TERM NOTE SERIES
REQUEST FOR BIDS
Pursuant to Paragraph 2(a)(i) of the Placement Agency Agreement between
PSWC ("PSWC") and the agents listed on Schedule I attached thereto dated July
11, 1997 (the "Agreement"), PSWC is requesting bids for Subseries ______ of the
above-referenced notes (the "Subseries") to be issued by PSWC on or about
________, 199__, subject to the terms set forth in the Agreement including
Exhibit A thereto.
The Subseries is to be structured based on the following:
1. Principal Amount of Notes: $___________________
2. Maturity: _______________________
3. Minimum price to PSWC as a % of principal:
-------------------
[4. Optional Tender Provision: ___________________]
Your bid must provide the following:
1. Treasury security bid is based on [describe Treasury
Security] ________________.
2. Treasury yield at time of bid: __________________.
3. Reoffered spread to Treasury: _________________.
4. All-in spread to Treasury: _______________.
PHILADELPHIA SUBURBAN WATER COMPANY
DATE: __________________________ BY:_____________________
TITLE:__________________
EXHIBIT H
PHILADELPHIA SUBURBAN WATER COMPANY
FIRST MORTGAGE BONDS
1997 MEDIUM TERM NOTE SERIES
NOTICE OF APPOINTMENT
Pursuant to Paragraph 2 of the Placement Agency Agreement between PSWC
("PSWC") and the Agents listed on Schedule I attached thereto dated July ___,
1997 (the "Agreement"), ________________________ is hereby appointed as
Placement Agent for the issuance of $___________ of Subseries ______ of the
above-referenced notes to be issued by PSWC on or about _____________________,
199__, subject to the terms set forth on the attached Exhibit A [to be furnished
by PSWC at issuance of Notice of Appointment] and further subject to the terms
and conditions of the Agreement.
PHILADELPHIA SUBURBAN WATER COMPANY
DATE:______________ BY:________________________________
TITLE:_____________________________
